PRICING AGREEMENT
Published on September 24, 2002
Exhibit 1(a)
PRICING AGREEMENT
September 17, 2002
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Dear Sirs:
WAL-MART STORES, INC., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated July 26, 2001, (the "Underwriting Agreement"), between the
Company, on the one hand, and you, on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities").
Each of the provisions of the Underwriting Agreement is incorporated herein
by reference in its entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein;
provided that for purposes of this Pricing Agreement, Section 9(i) of the
Underwriting Agreement, as incorporated by reference herein, shall be amended as
set forth in paragraph (D) under the caption "Other Matters" in Schedule II
hereto; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty that refers to the Prospectus in
Section 2 or 3 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities that are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined.
A supplement to the Prospectus, relating to the Designated Securities, in
the form heretofore delivered to you, is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, as amended as described
above, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agree, severally and not jointly, to purchase from the
Company, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the principal amount of Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, as amended as described above, shall
constitute a binding agreement between each of the Underwriters and the Company
and the Finance Subsidiaries (as defined below).
Very truly yours,
WAL-MART STORES, INC.
By: /s/ Rick W. Brazile
---------------------------------
Name: Rick W. Brazile
Title: Vice President - Planning and
Analysis
Acknowledged and agreed as
of the date hereof:
WAL-MART CAYMAN (EURO) FINANCE CO.
By: /s/ Rick W. Brazile
---------------------------------------
Name: Rick W. Brazile
Title: Vice President - Planning and Analysis
WAL-MART CAYMAN (CANADIAN) FINANCE CO. Approved as to legal terms only:
By: /s/ Rick W. Brazile By: /s/ Allison D. Garrett
--------------------------------------- ------------------------
Name: Rick W. Brazile Wal-Mart Legal Team
Title: Vice President - Planning and Analysis Date: September 17, 2002
WAL-MART CAYMAN (STERLING) FINANCE CO.
By: /s/ Rick W. Brazile
---------------------------------------
Name: Rick W. Brazile
Title: Vice President - Planning and Analysis
Accepted as of the date hereof:
/s/ Goldman, Sachs & Co.
- -----------------------------------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By: /s/ Carl J. Mehldau Jr.
------------------------------------------------
Name: Carl J. Mehldau Jr.
Title: Vice President
LEHMAN BROTHERS INC.
By: /s/ Allen B. Cutler
------------------------------------------------
Name: Allen B. Cutler
Title: Managing Director
For themselves and as Representatives of the several
SCHEDULE I
Underwriter Principal Amount
of Notes to be
Purchased
-----------------
Goldman, Sachs & Co. ...................................... $83,334,000
J.P. Morgan Securities Inc. ............................... $83,333,000
Lehman Brothers Inc. ...................................... $83,333,000
Banc of America Securities LLC ............................ $50,000,000
Barclays Bank PLC ......................................... $50,000,000
Fleet Securities, Inc. .................................... $50,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated ........ $50,000,000
TD Securities (USA) Inc. .................................. $50,000,000
-----------------
TOTAL .......................... $500,000,000
-----------------
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
4.375% Notes Due 2007 (the "Notes").
AGGREGATE PRINCIPAL AMOUNT:
$500,000,000.
PRICE TO PUBLIC:
104.019% of the principal amount of the Notes, plus accrued interest
from July 12, 2002, equal to 0.8263888% of such principal amount (total
initial offering price to public, including such accrued interest, of
104.8453888% of such principal amount).
PURCHASE PRICE TO UNDERWRITERS, SELLING CONCESSIONS AND REALLOWANCE CONCESSIONS:
The purchase price to the Underwriters shall be 103.669% of the
principal amount of the Notes, plus accrued interest from July 12,
2002, equal to 0.8263888% of such principal amount (total purchase
price to the Underwriters, including such accrued interest, of
104.4953888% of such principal amount). Accordingly, the aggregate
purchase price payable by the Underwriters to the Company will be
$518,345,000, plus accrued interest from July 12, 2002 totaling
$4,131,944.44, which equals $522,476,944.44.
The selling concession shall be 0.200% and the reallowance concession
shall be 0.125%, in each case of the principal amount of the Notes.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds by wire.
INDENTURE:
Indenture dated as of July 5, 2001, among the Company, Wal-Mart Cayman
(Euro) Finance Co., Wal-Mart Cayman (Canadian) Finance Co., Wal-Mart
Cayman (Sterling) Finance Co. (the "Finance Subsidiaries"), as
Issuers, Wal-Mart Stores, Inc., as Guarantor, and Bank One Trust
Company, NA, as Trustee.
MATURITY:
July 12, 2007.
INTEREST RATE:
4.375% from and including July 12, 2002.
Accrued and unpaid interest shall be payable semi-annually in arrears
and shall be calculated on the basis of a 360-day year of twelve 30-day
months.
In addition, the Company shall pay Additional Amounts to holders of the
Notes as, and to the
extent set forth under the caption "Description of the Notes--Payment
of Additional Amounts" in the Prospectus Supplement dated the date
hereof relating to the Notes.
INTEREST PAYMENT DATES:
January 12 and July 12 of each year, commencing on January 12, 2003.
INTEREST PAYMENT RECORD DATES:
January 1 and July 1 of each year, commencing on January 1, 2003.
REDEMPTION PROVISIONS:
No mandatory redemption provisions.
The Company may, at its option, redeem the Notes in whole, but not in
part, as set forth under the caption "Description of the
Notes--Redemption upon a Tax Event" in the Prospectus Supplement dated
the date hereof relating to the Notes.
SINKING FUND PROVISIONS:
None.
OTHER PROVISIONS:
As set forth in the Prospectus Supplement dated September 17, 2002 (the
"Prospectus Supplement") to the Prospectus dated July 25, 2001 (the
"Prospectus").
TIME OF DELIVERY:
9:30 a.m. (New York City time) on September 20, 2002.
CLOSING LOCATION:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
NAMES AND ADDRESSES OF REPRESENTATIVES:
ADDRESSES FOR NOTICES:
Retail Group
Fax: (646) 758-5932
OTHER MATTERS:
(A) Each of the underwriters hereby represents to, and agrees with, the
Company that: (1) it has not offered or sold and, prior to the expiry
of the period of six months after the date of issue of the notes, will
not offer or sell any notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (2) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of
any notes in circumstances in which section 21(1) of the FSMA does not
apply to us; and (3) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it
in relation to the notes in, from or otherwise involving the United
Kingdom.
(B) Each Underwriter hereby acknowledges and agrees that the Notes have
not been registered under the Securities and Exchange Law of Japan and
are not being offered or sold and may not be offered or sold, directly
or indirectly, in Japan or to or for the account of any resident of
Japan, except (i) pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and (ii) in
compliance with any other applicable requirements of Japanese law.
(C) Each of the underwriters hereby represents to, and agrees with, the
Company that it has not offered or sold and will not offer or sell the
notes, nor will it circulate or distribute this Prospectus Supplement
and the Prospectus or any other offering document or material in
connection with the offer of the notes, whether directly or
indirectly, to the public or any member of the public in Singapore
other than (i) to an institutional investor or other person specified
in Section 106C of the Singapore Companies Act, (ii) to a
sophisticated investor, and in accordance with the conditions,
specified in Section 106D of the Singapore Companies Act or (iii)
otherwise pursuant to, and in accordance with the conditions of, any
other applicable provision of the Singapore Companies Act.
(D) Section 9(i) of the Underwriting Agreement is amended and restated to
read as follows: "On or after the date of the Pricing Agreement
relating to the Designated Securities there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities in New York declared by either
Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Designated Securities on the terms and in the
manner contemplated in the prospectus as amended or
supplemented."
(E) The Underwriters hereby severally confirm, and the Company hereby
acknowledges, that the sole information furnished in writing to the
Company by, or on behalf of, the Underwriters specifically for
inclusion in the Prospectus Supplement is as follows:
(1) the names of the Underwriters on the front cover page of the
Prospectus Supplement;
(2) the fourth paragraph of text under the caption "Table of
Contents" in the Prospectus Supplement concerning stabilization,
overallotment and related activities by the Underwriters.
(3) the first sentence of the second paragraph of text under the
caption "Underwriting" in the Prospectus Supplement concerning certain
terms of the offering by the Underwriters; and
(4) the third paragraph of text under the caption "Underwriting"
in the Prospectus Supplement concerning stabilization, overallotment
and related activities by the Underwriters.
(F) With respect to matters of New York law, Hughes & Luce, L.L.P. may
rely on a written opinion of Fulbright & Jaworski L.L.P., a true and
correct copy of which is to be delivered to the Designated
Underwriters at the Time of Delivery.
(G) Notwithstanding Section 7(e) of the Underwriting Agreement, Ernst &
Young LLP shall deliver a single letter in accordance with such
Section 7(e) at the Time of Delivery (and not the date hereof), which
shall be in form and substance satisfactory to the Representatives.
(H) Notwithstanding any provision of this Pricing Agreement, the
Underwriting Agreement or the Indenture to the contrary, the Notes
shall constitute part of the same series as the $1,000,000,000
aggregate principal amount of 4.375% Notes due 2007 issued and sold by
the Company on July 12, 2002 (the "Original Notes"). Without limiting
the generality of the preceding sentence, the Notes to be issued and
sold pursuant to this Pricing Agreement shall bear the same CUSIP
(931142BR3), ISIN (US931142BR37) and Common Code (015150769) numbers
as the Original Notes.