PRICING AGREEMENT
EXHIBIT 1(a)
PRICING AGREEMENT
December 12, 2006
Goldman Sachs International
Citigroup Global Markets Limited
Morgan Stanley & Co. International Limited
Barclays Bank PLC
Deutsche Bank AG, London Branch
The Royal Bank of Scotland plc
c/o Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
Ladies and Gentlemen:
WAL-MART STORES, INC., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated May 19, 2006, (the “Underwriting Agreement”), between the Company, on the one hand, and you, as parties which are signatories or deemed to be signatories to the Underwriting Agreement, 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 Pricing Agreement to the same extent as if such provisions were set forth in full herein; 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 (it being understood that that each representation and warranty in Section 2 of the Underwriting Agreement that refers to the Pricing Prospectus or the Prospectus shall be deemed to be a representation or warranty as of the date of this Pricing Agreement in relation to the Pricing Prospectus or the Prospectus relating to the Designated Securities). Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to the Representatives named in Schedule II hereto (the “Representatives”). Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined.
The Prospectus (including, for the avoidance of doubt, a prospectus supplement relating to the Designated Securities), in all material respects in the form heretofore delivered to you, is now proposed to be filed with the Commission.
1
Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, 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.
2
If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company.
| Very truly yours, | ||
| WAL-MART STORES, INC. | ||
| By: | /s/ RICK W. BRAZILE | |
| Name: Rick W. Brazile | ||
| Title: Vice President, Finance & Planning | ||
3
| Accepted as of the date hereof: | ||
| GOLDMAN SACHS INTERNATIONAL | ||
| By: | /s/ TIM GRAYSON | |
| Name: Tim Grayson | ||
| Title: Attorney-in-fact | ||
| CITIGROUP GLOBAL MARKETS LIMITED | ||
| By: | /s/ IVAN BROWNE | |
| Name: Ivan Browne | ||
| Title: Duly Authorized Attorney | ||
| MORGAN STANLEY & CO. INTERNATIONAL LIMITED | ||
| By: | /s/ JAMES WALTER | |
| Name: James Walter | ||
| Title: Executive Director | ||
| BARCLAYS BANK PLC DEUTSCHE BANK AG, LONDON BRANCH THE ROYAL BANK OF SCOTLAND PLC | ||
| By: | /s/ TIM GRAYSON | |
| Name: Tim Grayson | ||
| Title: Attorney-in-fact | ||
4
SCHEDULE I
| Underwriter | Principal Amount of Designated Securities to be Purchased | ||
| Goldman Sachs International | £ | 260,000,000 | |
| Citigroup Global Markets Limited | 250,000,000 | ||
| Morgan Stanley & Co. International Limited | 250,000,000 | ||
| Barclays Bank PLC | 80,000,000 | ||
| Deutsche Bank AG, London Branch | 80,000,000 | ||
| The Royal Bank of Scotland plc | 80,000,000 | ||
| TOTAL | £ | 1,000,000,000 | |
Schedule I - Page 1
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
4.875% Notes Due 2039 (the “Designated Securities”).
AGGREGATE PRINCIPAL AMOUNT:
£1,000,000,000 of the Designated Securities.
PRICE TO PUBLIC:
98.038% of the principal amount of the Designated Securities, plus accrued interest, if any, from December 19, 2006.
PURCHASE PRICE TO UNDERWRITERS:
97.413% of the principal amount of the Designated Securities, plus accrued interest, if any, from December 19, 2006; and the selling concession shall be 0.40% and the reallowance concession shall be 0.225%, in each case of the principal amount of the Designated Securities.
INDENTURE:
Indenture dated as of July 19, 2005, between the Company and J.P. Morgan Trust Company, National Association, as Trustee, as supplemented by the First Supplemental Indenture, dated as of December 1, 2006, between the Company and The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), as Trustee.
MATURITY:
January 19, 2039.
INTEREST RATE:
4.875% from and including December 19, 2006.
INTEREST PAYMENT DATES:
January 19 and July 19 of each year, commencing on July 19, 2007.
INTEREST PAYMENT RECORD DATES:
January 15 and July 15 of each year.
Schedule II - Page 1
REDEMPTION PROVISIONS:
No mandatory redemption provisions.
The Company may, at its option, redeem the Designated Securities upon the occurrence of certain events relating to U.S. taxation as described under the caption “Description of the Debt Securities–Redemption upon Tax Event” in the Prospectus dated December 21, 2005 (the “Base Prospectus”) and under the caption “Description of the Notes–Redemption upon Tax Event” in the Prospectus Supplement dated the date hereof relating to the Designated Securities (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”).
The Company may, at its option, redeem the Designated Securities, in whole or in part, as described under the caption “Description of the Debt Securities–Optional Redemption–Redemption at Our Option” in the Base Prospectus and under the caption “Description of the Notes–Optional Redemption” in the Prospectus Supplement.
SINKING FUND PROVISIONS:
None.
OTHER PROVISIONS:
As to be set forth in the Prospectus.
TIME OF DELIVERY:
10:00 a.m. (London time), December 19, 2006
CLOSING LOCATION:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
NAMES AND ADDRESSES OF REPRESENTATIVES:
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
Citigroup Global Markets Limited
Citigroup Centre
Canada Square
Canary Wharf
London E145 LB
Schedule II - Page 2
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
ADDRESSES FOR NOTICES:
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
Attention: Syndicate Desk
Fax: +44 20 7774 2330
Citigroup Global Markets Limited
Citigroup Centre
Canada Square
Canary Wharf
London E145 LB
Attention: Debt Syndicate Desk
Fax: +44 20 7986 1913
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
Attention: Global Capital Markets - Head of Transaction Management Group
Fax: +44 20 7677 7999
APPLICABLE TIME
(For purposes of Sections 2(d) and 8(c) of the Underwriting Agreement):
2:30 p.m., December 12, 2006 (London time).
LIST OF FREE WRITING PROSPECTUSES
(Pursuant to Section 2(f) of Underwriting Agreement):
Final Term Sheet, dated December 12, 2006, substantially in the form of Annex I hereto.
OTHER MATTERS:
| (A) | In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Underwriter hereby represents and agrees that with effect from and including the |
Schedule II - Page 3
| date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the Designated Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Designated Securities which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of the Designated Securities to the public in that Relevant Member State at any time: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or (c) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. The expression an “offer of the Designated Securities to the public” in relation to any Designated Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Designated Securities to be offered so as to enable an investor to decide to purchase or subscribe the Designated Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. |
| (B) | Each Underwriter hereby represents and agrees that: (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business, and it has not offered or sold and will not offer or sell the Designated Securities other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Designated Securities would otherwise constitute a contravention of Section 19 of the Financial Services and Markets Act 2000 (“FSMA”) by the Company; (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Designated Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Designated Securities in, from or otherwise involving the United Kingdom. |
| (C) | Each Underwriter hereby represents and agrees that it has not offered or sold, and will not offer or sell, any Designated Securities by means of any document other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to |
Schedule II - Page 4
| the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the Designated Securities may be issued, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Designated Securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder. |
| (D) | The Designated Securities have not been and will not be registered under the Securities and Exchange Law of Japan (the “Securities and Exchange Law”) and each Underwriter hereby represents and agrees that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan. |
| (E) | Each Underwriter hereby represents and agrees that the Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Designated Securities may not be circulated or distributed, nor may the Designated Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Designated Securities are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor), the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the Designated Securities under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law. |
| (F) | Each Underwriter hereby represents, warrants and agrees that: (a) it will not underwrite the issue of, or place the Designated Securities, otherwise than in |
Schedule II - Page 5
| conformity with the provisions of the Irish Investment Intermediaries Act 1995 (as amended), including, without limitation, Sections 9 and 23 thereof and any codes of conduct rules made under Section 37 thereof and the provisions of the Investor Compensation Act 1998; (b) it will not underwrite the issue of, or place, the Designated Securities, otherwise than in conformity with the provisions of the Irish Central Bank Acts 1942-1999 (as amended) and any codes of conduct rules made under Section 117(1) thereof; (c) it will not underwrite the issue of, or place, or do anything in Ireland in respect of the Designated Securities otherwise than in conformity with the provisions of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 and any rules issued under Section 51 of the Irish Investment Funds, Companies and Miscellaneous Provisions Act 2005, by the Irish Central Bank and Financial Services Regulatory Authority (“IFSRA”); and (d) it will not underwrite the issue of, place or otherwise act in Ireland in respect of the Designated Securities, otherwise than in conformity with the provisions of the Irish Market Abuse (Directive 2003/6/EC) Regulations 2005 and any rules issued under Section 34 of the Irish Investment Funds, Companies and Miscellaneous Provisions Act 2005 by IFSRA. |
| (G) | Each Underwriter hereby acknowledges that the Designated Securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the U.S. Securities Act of 1933 (the “Securities Act”) or pursuant to the registration requirements of the Securities Act. Each Underwriter hereby severally represents and agrees that it has offered and sold, and will offer and sell, the Designated Securities (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering of the Designated Securities and the closing date of the offering of the Designated Securities, only in accordance with Rule 903 of Regulation S under the Securities Act or pursuant to the registration requirements of the Securities Act. Accordingly, neither such Underwriter nor any of its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Designated Securities, and such Underwriter, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S, except, in each case, pursuant to the registration requirements of the Securities Act. Each Underwriter severally agrees that, at or prior to confirmation of sale of the Designated Securities, such Underwriter will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases any Designated Securities from it during the applicable distribution compliance period a confirmation or notice to substantially the following effect: |
“The Securities covered hereby may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S under the U.S. Securities Act of 1933 (the “Securities Act”) or pursuant to the registration requirements of the Securities Act. Terms used above have the meanings given to them by Regulation S.”
Schedule II - Page 6
| (H) | Each Underwriter hereby represents and agrees that it has not offered, sold or delivered and will not offer, sell or deliver any of the Designated Securities directly or indirectly or distribute the Prospectus or any other offering material relating to the Designated Securities in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as set forth in the Underwriting Agreement and the Pricing Agreement. |
| (I) | 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 and back cover pages of the Prospectus Supplement; |
| (2) | the two paragraphs of text under the caption “Stabilization” in the Prospectus Supplement concerning stabilization, overallotment and related activities by the Underwriters; |
| (3) | the second paragraph of text under “Risk Factors – Market Risks” in the Prospectus Supplement relating to market-making activity by the Underwriters; |
| (4) | the third paragraph of text under the caption “Underwriting” in the Prospectus Supplement concerning certain terms of the offering by the Underwriters; |
| (5) | the fourth paragraph of text under the caption “Underwriting” in the Prospectus Supplement concerning stabilization, overallotment and related activities by the Underwriters; and |
| (6) | the third sentence of the seventeenth paragraph of text under the caption “Underwriting” in the Prospectus Supplement relating to market-making activity by the Underwriters. |
Schedule II - Page 7
ANNEX I
FINAL TERM SHEET
Dated December 12, 2006
WAL-MART STORES, INC.
£1,000,000,000 4.875% Due 2039
Name of Issuer: Wal-Mart Stores, Inc.
Title of Securities: 4.875% Notes Due 2039
Aggregate Principal Amount: £1,000,000,000
Issue Price (Price to Public): 98.038% of principal amount
Maturity: January 19, 2039
Coupon (Interest Rate): 4.875%
Benchmark Gilt: 4.75% Treasury Stock due December 7, 2038
Benchmark Gilt Yield: 4.118%
Yield to Maturity: 4.998%
Interest Payment Dates: January 19 and July 19 of each year, commencing on July 19, 2007
Interest Payment Record Dates: January 15 and July 15 of each year
| Redemption Provisions: | No mandatory redemption provisions. | |
| Wal-Mart may, at its option, redeem the Notes, in whole or in part. | ||
| Wal-Mart may, at its option, redeem the Notes upon the occurrence of certain events relating to U.S. taxation. | ||
Sinking Fund Provisions: None
Legal Format: SEC Registered/Regulation S
Proceeds to Wal-Mart: £974,130,000
Settlement Date: T + 5 days; December 19, 2006
ANNEX 1 - Page 1
| Booking-Running Managers: | Goldman Sachs International | |
| Citigroup Global Markets Limited | ||
| Morgan Stanley & Co. International Limited |
| Co-Managers: | Barclays Bank PLC | |
| Deutsche Bank AG, London Branch | ||
| The Royal Bank of Scotland plc |
Selling Restrictions: European Economic Area, UK, Hong Kong, Japan, Singapore, Ireland
ISIN: XS0279211832
Common Code: 027921183
Listing: Irish Stock Exchange
Ratings: Ratings for Wal-Mart’s Long-term debt securities: S&P, AA; Moody’s, Aa2; Fitch, AA; and Dominion, AA. Wal-Mart has applied for specific ratings for the Notes and expects that the ratings for the Notes will be the same as for Wal-Mart’s other long-term debt securities.
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
The offer and sale of the Notes in the United States to which this Final Term Sheet relates have been registered by Wal-Mart Stores, Inc. by means of a registration statement on Form S-3 (SEC File No. 333-130569).
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering in the United States to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering in the United States. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free ###-###-####.
ANNEX 1 - Page 2
