<PAGE>
As filed with the Securities and Exchange Commission on July 15, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WAL-MART STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 71-0415188
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
702 S.W. Eighth Street
Bentonville, Arkansas 72716
(501) 273-4000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
----------------
ALLISON D. GARRETT, ESQ.
Assistant General Counsel
Wal-Mart Stores, Inc.
702 S.W. Eighth Street
Bentonville, Arkansas 72716
(501) 273-4000
(Name, address, and telephone number,
including area code, of agent for service)
----------------
Copies to:
DUDLEY W. MURREY, ESQ. GLENN M. REITER, ESQ.
Hughes & Luce, L.L.P. Simpson Thacher & Bartlett
1717 Main Street, Suite 2800 425 Lexington Avenue
Dallas, Texas 75201 New York, New York 10017-3954
(214) 939-5500 (212) 455-2000
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Proposed Proposed
Title of each class Amount Maximum Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered/1/ per Share/1/ Offering Price/2/ Fee
- ------------------------------------------------------------------------------------------------
Debt Securities.................. $10,000,000,000 100% $10,000,000,000 $2,780,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that relates in part to
$500,700,000 of debt securities of the Registrant being carried forward
from and that were registered pursuant to the Registrant's Registration
Statement on Form S-3, Registration No. 333-52045. The amount of the
filing fee associated with those debt securities and that was paid with
that registration statement was $147,707.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
EXPLANATORY NOTE
The prospectus contained in this Registration Statement is a combined
prospectus as contemplated by Rule 429 under the Securities Act of 1933. The
prospectus will be used in connection with the offer and sale of up to an
aggregate of US$500,700,000 in principal amount of the Registrant's debt
securities registered pursuant to the Registrant's Registration Statement on
Form S-3, Registration No. 333-52045, and the offer and sale of up to an
aggregate of US$10,000,000,000 in principal amount of the Registrant's debt
securities being registered pursuant to this Registration Statement.
Consequently, the prospectus contained in this Registration Statement reflects
the fact that, in accordance with Rule 429 under the Securities Act of 1933,
the Registrant may offer up to an aggregate of US$10,500,700,000 in principal
amount of the Registrant's debt securities by means of the prospectus contained
in this Registration Statement.
This Registration Statement also includes a prospectus supplement
supplementing the prospectus referred to above under which the Registrant will
offer and sell certain of the debt securities being registered under this
Registration Statement. The sale of those debt securities is anticipated to
occur shortly after the Registration Statement is declared effective by the
Securities and Exchange Commission.
- i -
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus supplement and the accompanying prospectus +
+is not complete and may be changed. This prospectus supplement and the +
+accompanying prospectus is not an offer to sell these securities or our +
+solicitation of your offer to buy these securities, nor will we sell them or +
+accept your offer to buy them, in any state or other jurisdiction where that +
+would not be permitted or legal prior to registration or qualification in +
+that state or other jurisdiction. We may not sell these securities until the +
+registration statement filed with the Securities and Exchange Commission is +
+effective. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 15, 1999
PROSPECTUS SUPPLEMENT
(To prospectus dated August , 1999)
U.S.$5,000,000,000
Wal-Mart Stores, Inc.
U.S.$1,000,000,000 % Notes due 2001
U.S.$2,000,000,000 % Notes due 2004
U.S.$2,000,000,000 % Notes due 2009
- --------------------------------------------------------------------------------
We are offering U.S. $1,000,000,000 of our % notes due 2001,
U.S.$2,000,000,000 of our % notes due 2004 and U.S.$2,000,000,000 of our %
notes due 2009.
We will pay interest on February and August of each year, beginning on
February , 2000.
The notes will be our senior unsecured debt obligations, will not be
redeemable prior to maturity, except in the case of a specified tax event, and
will not be convertible or exchangeable.
We will apply to list the notes on the Luxembourg Stock Exchange.
We expect to deliver the notes on or about August , 1999 through the book-
entry facilities of The Depository Trust Company.
<TABLE>
<CAPTION>
Public
offering Underwriting Net proceeds
price discount to Wal-Mart
-------- ------------ ------------
<S> <C> <C> <C>
Per % note due 2001......................
Total.......................................
Per % note due 2004......................
Total.......................................
Per % note due 2009......................
Total.......................................
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission or other regulatory body has approved or disapproved of these
securities or determined that this prospectus supplement or the attached
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
Lehman Brothers
August , 1999
<PAGE>
<TABLE>
<CAPTION>
Page
----
TABLE OF CONTENTS
Prospectus Supplement
<S> <C>
Wal-Mart Stores, Inc....................................................... S-3
Recent Developments........................................................ S-3
Use of Proceeds of the Notes............................................... S-3
Capitalization............................................................. S-4
Selected Financial Data.................................................... S-5
Directors and Executive Officers........................................... S-6
Description of the Notes................................................... S-7
Book-Entry Issuance........................................................ S-9
U.S. Federal Income Tax Consequences to United States Aliens............... S-11
Underwriting............................................................... S-13
Validity of the Notes...................................................... S-14
General Information........................................................ S-14
Prospectus
Where You Can Find More Information........................................ 2
Special Note Regarding Forward-Looking Statements.......................... 3
Wal-Mart Stores, Inc. ..................................................... 4
Ratio of Earnings to Fixed Charges......................................... 4
Use of Proceeds............................................................ 5
Description of the Debt Securities......................................... 5
U.S. Federal Income Tax Considerations..................................... 11
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the attached prospectus. No one has
been authorized to provide you with different information. If this prospectus
supplement is inconsistent with the attached prospectus, you should rely on
this prospectus supplement.
The notes are not being offered in any jurisdiction in which the offering is
not permitted.
The Luxembourg Stock Exchange takes no responsibility for the contents of
this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss however arising from
or in reliance upon the whole or any part of the contents of this prospectus
supplement and the attached prospectus.
Wal-Mart accepts responsibility for the information contained in this
prospectus supplement and the attached prospectus.
This prospectus supplement and the attached prospectus, including the
documents incorporated by reference, will be available free of charge at the
office of Kredietbank S.A., Luxembourgeoise, 43, Boulevard Royal, L-2955
Luxembourg. See "Where You Can Find More Information" in the attached
prospectus.
S-2
<PAGE>
WAL-MART STORES, INC.
We are the world's largest retailer as measured by total net sales for
fiscal 1999. We had total net sales of U.S.$137.6 billion in fiscal 1999, over
90% of which was generated in the United States. We operate mass merchandising
stores that serve our customers primarily through the operation of three
segments:
. Wal-Mart stores, which include our discount stores and Supercenters in
the United States;
. SAM'S Clubs, which include the warehouse membership clubs in the United
States; and
. the international segment of our business.
We currently operate in all 50 states of the United States, Puerto Rico,
Argentina, Brazil, Canada, Germany and Mexico, and in China and Korea under
joint venture agreements. In addition, through our subsidiary McLane Company,
Inc., we provide products and distribution services to retail industry and
institutional food service customers. At January 31, 1999, we operated in the
United States:
. 1,869 Wal-Mart stores;
. 564 Supercenters; and
. 451 SAM'S Clubs.
As of January 31, 1999, we also operated 153 Canadian Wal-Mart stores, 13
units in Argentina, 14 units in Brazil, five units in China, 95 units in
Germany, 416 units in Mexico, four units in Korea and 15 units in Puerto Rico.
The units operated by our International Division represent a variety of retail
formats.
Wal-Mart Stores, Inc. was incorporated in 1969.
RECENT DEVELOPMENTS
On June 29, 1999, Wal-Mart made a public bid to purchase the outstanding
shares of Asda Group PLC, an English company that owns 229 grocery stores in
the United Kingdom. The grocery stores also carry non-food items, including
clothing. Asda is the third largest grocery chain in the United Kingdom and
regularly serves over 6.5 million customers per week. For its fiscal year ended
May 1, 1999, Asda reported unaudited consolidated operating profit of
(Pounds)436 million, or approximately U.S.$679 million, on sales of
(Pounds)8.198 billion, or approximately U.S.$12.77 billion. At May 1, 1999,
Asda had net assets of (Pounds)2.517 billion, or approximately U.S.$3.92
billion. If we acquire Asda, Asda will serve as our initial entry into the U.K.
retail market.
We have offered to buy the shares of Asda for 220 English pence, or
approximately U.S.$3.43, per share. We expect to pay a total of approximately
U.S.$10.72 billion for the Asda shares. We have excluded persons who live in
the United States from our bid and will not acquire shares from any Asda
shareholder who is a U.S. person for purposes of the U.S. securities laws. We
anticipate that, if our bid succeeds, our purchase of the Asda shares will be
substantially complete by the middle of August, 1999.
As of July 13, 1999, we have acquired Asda shares in the open market
representing 29.2 percent of Asda's issued and outstanding common shares.
We will finance all of our purchases of Asda shares using the proceeds of
short-term borrowings and issuances of debt securities, including the notes,
and funds generated from operations. See "Use of Proceeds of the Notes."
We have made all conversions from British pounds to U.S. dollars in this
section using the exchange rate as of July 13, 1999 which was U.S.$1.5577 per
(Pounds)1.00.
USE OF PROCEEDS OF THE NOTES
We estimate that the net proceeds from the sale of the notes will be
approximately $ after underwriting discounts and payment of
transaction expenses.
We will use all of these net proceeds to pay a significant portion of the
cost of acquiring the Asda shares. See "--Recent Developments." We expect to
fund remaining costs of the Asda shares with short-term borrowings and funds
generated from operations.
S-3
<PAGE>
CAPITALIZATION
The following table presents the consolidated capitalization of Wal-Mart and
its subsidiaries at April 30, 1999 and as adjusted to give effect to the
offering of the notes.
<TABLE>
<CAPTION>
April 30, 1999
------------------------
Actual As Adjusted
----------- -----------
(in millions)
<S> <C> <C>
Short-term debt
Long-term debt due within one year................. U.S.$ 877 U.S.$ 877
Obligations under capital leases due within one
year.............................................. 115 115
----------- -----------
Total short-term debt and capital lease
obligations..................................... 992 992
----------- -----------
Long-term debt
Long-term debt..................................... 6,933 6,933
% notes due 2001............................... -- 1,000
% notes due 2004............................... -- 2,000
% notes due 2009............................... -- 2,000
Long-term capital lease obligations................ 2,846 2,846
----------- -----------
Total long-term debt and capital lease
obligations..................................... 9,779 14,779
----------- -----------
Shareholders' equity
Common stock....................................... 445 445
Capital in excess of par value..................... 433 433
Retained earnings.................................. 21,620 21,620
Other accumulated comprehensive income............. (481) (481)
----------- -----------
Total shareholders' equity....................... 22,017 22,017
----------- -----------
Total long-term debt and capital lease
obligations and shareholders' equity............ U.S.$32,788 U.S.$37,788
=========== ===========
</TABLE>
The above table does not give effect to (Pounds)594 million, or
approximately U.S.$956 million, of outstanding debt of Asda at May 1, 1999,
which will become part of our consolidated capitalization if we acquire Asda,
or up to U.S.$5.0 billion of additional short-term borrowings that we may incur
in connection with the Asda acquisition. We converted the amount in British
pounds in the preceding sentence to the amount in U.S. dollars using the April
30, 1999 exchange rate of U.S. $1.6095 per (Pounds)1.00. See "Recent
Developments."
Except as noted above, there has been no material change in the consolidated
capitalization of Wal-Mart and its subsidiaries since April 30, 1999.
S-4
<PAGE>
SELECTED FINANCIAL DATA
The following table presents selected financial data of Wal-Mart and its
subsidiaries for the periods specified.
<TABLE>
<CAPTION>
Fiscal Years Ended January 31, Quarter Ended April 30,
-------------------------------------------------------------- -----------------------
1995 1996 1997 1998 1999 1998 1999
----------- ----------- ------------ ------------ ------------ ----------- -----------
(in millions) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales............... U.S.$82,494 U.S.$93,627 U.S.$104,859 U.S.$117,958 U.S.$137,634 U.S.$29,819 U.S.$34,717
Non-interest expense.... 78,444 89,526 100,456 112,796 131,088 28,599 33,129
Interest expense........ 706 888 845 784 797 194 191
Total expense........... 79,150 90,414 101,301 113,580 131,885 28,793 33,320
Income before income
taxes, minority
interest and equity in
unconsolidated
subsidiaries........... 4,258 4,359 4,877 5,719 7,323 1,364 1,803
Net income.............. 2,681 2,740 3,056 3,526 4,430 828 1,110
Balance Sheet Data:
Cash and cash
equivalents............ 45 83 883 1,447 1,879 771 1,967
Inventories............. 14,064 15,989 15,897 16,497 17,076 17,512 18,149
Total current assets.... 15,338 17,331 17,993 19,352 21,132 19,690 22,346
Net property, plant and
equipment.............. 14,308 17,098 18,333 21,469 23,674 21,815 24,310
Net property under
capital leases and
other assets and
deferred charges....... 3,173 3,112 3,278 4,563 5,190 4,539 5,367
Total assets............ 32,819 37,541 39,604 45,384 49,996 46,044 52,023
Accounts payable........ 5,907 6,442 7,628 9,126 10,257 9,765 11,235
Commercial paper........ 1,795 2,458 -- -- -- 527 --
Long-term debt due
within
one year............... 23 271 523 1,039 900 281 877
Obligations under
capital leases due
within one year........ 64 69 95 102 106 105 115
Total current
liabilities............ 9,973 11,454 10,957 14,460 16,762 14,833 17,745
Long-term debt.......... 7,871 8,508 7,709 7,191 6,908 7,193 6,933
Long-term obligations
under capital leases... 1,838 2,092 2,307 2,483 2,699 2,555 2,846
Total liabilities....... 20,093 22,785 22,461 26,881 28,884 27,225 30,006
Total shareholders'
equity................. 12,726 14,756 17,143 18,503 21,112 18,819 22,017
Total liabilities and
shareholders' equity... 32,819 37,541 39,604 45,384 49,996 46,044 52,023
</TABLE>
S-5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Wal-Mart are as follows:
Principal Occupation
<TABLE>
<CAPTION>
Directors
<S> <C>
Jeronimo Arango......... Chairman of Cifra S.A. de C.V.
John A. Cooper, Jr...... Chairman of Cooper Communities, Inc.
Stephen Friedman........ Former Chairman of Goldman, Sachs & Co.
Stanley C. Gault........ Former Chairman and Chief Executive Officer of Goodyear Tire
& Rubber Company
David D. Glass.......... President and Chief Executive Officer of Wal-Mart Stores,
Inc.
Roland A. Hernandez..... Chairman and Chief Executive Officer of Telemundo Group,
Inc.
Dr. Frederick S.
Humphries.............. President of Florida A & M University
E. Stanley Kroenke...... Chairman of The Kroenke Group
Elizabeth A. Sanders.... Management Consultant with The Sanders Group
Jack C. Shewmaker....... International Consultant, Rancher and Retired Wal-Mart
Executive
Donald G. Soderquist.... Senior Vice Chairman of the Board of Directors of Wal-Mart
Stores, Inc.
Dr. Paula Stern......... President of The Stern Group, Inc.
Jose H. Villarreal...... Partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
John T. Walton.......... Chairman of Quantum Partners, L.L.C.
S. Robson Walton........ Chairman of the Board of Directors of Wal-Mart Stores, Inc.
Executive Officers
S. Robson Walton........ Chairman of the Board
David D. Glass.......... President and Chief Executive Officer
Donald G. Soderquist.... Senior Vice Chairman
H. Lee Scott, Jr........ Vice Chairman and Chief Operating Officer
Paul R. Carter.......... Executive Vice President and President--Wal-Mart Realty
Bob Connolly............ Executive Vice President--Merchandising
Thomas M.Coughlin....... Executive Vice President and Chief Executive Officer--Wal-
Mart Stores Division
David Dible............. Executive Vice President--Speciality Division
Thomas Grimm............ Executive Vice President and President and Chief Executive
Officer--SAM'S Club Division
John B. Menzer.......... Executive Vice President and President and Chief Executive
Officer--International Division
Nick White.............. Executive Vice President--Food Division
James A. Walker, Jr..... Senior Vice President and Controller
</TABLE>
S-6
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the terms and conditions of the notes
supplements the more general terms and conditions of Wal-Mart's debt securities
contained in the attached prospectus.
The notes will be issued under the indenture and will constitute our senior
unsecured debt obligations.
The % notes due 2001 will mature on August , 2001, the % notes due
2004 will mature on August , 2004 and the % notes due 2009 will mature on
August , 2009, in each case at 100% of their principal amount. The notes will
not be redeemable prior to maturity, except in the case of a tax event, as
explained below. The notes will not be convertible or exchangeable. We will pay
principal of and interest and any premium on the notes in U.S. dollars.
The notes will bear interest from August , 1999, at the annual interest
rates specified on the cover page of this prospectus supplement. Interest will
be payable semi-annually in arrears on February and August of each year,
beginning on February , 2000, to the person in whose name the note is
registered at the close of business on the preceding or ,
as the case may be. Interest on the notes will be computed on the basis of a
360-day year of twelve 30-day months.
Notices to holders of the notes will be published in a leading daily
newspaper in The City of New York, in London, and, so long as the notes are
listed on the Luxembourg Stock Exchange, in Luxembourg. We expect that
publication will be made in The City of New York in The Wall Street Journal, in
London in the Financial Times, and in Luxembourg in the Luxembourger Wort. Any
notice shall be deemed to have been given on the date of publication or, if
published more than once, on the date of first publication.
We may, without the consent of the holders of the notes, create and issue
additional notes ranking equally with any series of notes that we are offering
and otherwise similar in all respects to the notes of that series so that these
further notes will be consolidated and form a single series with the notes of
that series. No additional notes may be issued if an event of default under the
indenture has occurred.
The indenture and the notes will be governed by New York law.
Same-Day Settlement and Payment
We will make all payments of principal of and interest on the notes to The
Depository Trust Company ("DTC") in immediately available funds.
The notes will trade in same-day funds settlement system until maturity.
Purchases of notes in secondary market trading must be in immediately available
funds.
Payment of Additional Amounts
We will pay to the holder of any note who is a United States Alien, as
defined below, additional amounts as may be necessary so that every net payment
of principal of and interest on that note, after deduction or withholding for
or on account of any present or future tax, assessment or other governmental
charge imposed upon that holder by the United States or any taxing authority
thereof or therein, will not be less than the amount provided in that note to
be then due and payable. We will not be required, however, to make any payment
of additional amounts for or on account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (1) the existence of any present or former
connection between that holder, or between a fiduciary, settlor,
beneficiary of, member or shareholder of, or possessor of a power over,
that holder, if that holder is an estate, trust, partnership or
corporation, and the United States including, without limitation, that
holder, or that fiduciary, settlor, beneficiary, member, shareholder or
possessor, being or having been a citizen or resident or treated as a
resident of the U.S. or being or having been engaged in trade or business
or present
S-7
<PAGE>
in the U.S. or (2) the presentation of a note for payment on a date more
than 30 days after the later of the date on which that payment becomes due
and payable and the date on which payment is duly provided for;
(b) any estate, inheritance, gift, sales, transfer, excise, personal
property or similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of that holder's past or present status as a passive foreign investment
company, a controlled foreign corporation, a personal holding company or
foreign personal holding company with respect to the United States, or as a
corporation which accumulates earnings to avoid United States federal
income tax;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payment of principal of or interest on
that note;
(e) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any note if that payment can be made without withholding by any other
paying agent;
(f) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
the holder or beneficial owner of that note, if such compliance is required
by statute or by regulation of the U.S. Treasury Department as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed on
interest received by (i) a 10% shareholder (as defined in Section
871(h)(3)(B) of the U.S. Internal Revenue Code of 1986 and the regulations
that may be promulgated thereunder) of our company or (ii) a controlled
foreign corporation with respect to our company within the meaning of the
Internal Revenue Code; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g);
nor will we pay any additional amounts to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of that note to the extent
that a beneficiary or settlor with respect to that fiduciary, or a member of
that partnership or a beneficial owner thereof would not have been entitled to
the payment of those additional amounts had that beneficiary, settlor, member
or beneficial owner been the holder of that note.
"United States Alien" means any corporation, partnership, individual or
fiduciary that is, as to the United States, a foreign corporation, a non-
resident alien individual who has not made a valid election to be treated as a
United States resident, a non-resident fiduciary of a foreign estate or trust,
or a foreign partnership one or more of the members of which is, as to the
United States, a foreign corporation, a non-resident alien individual or a non-
resident fiduciary of a foreign estate or trust.
Redemption upon a Tax Event
The notes of either series may be redeemed at our option in whole, but not
in part, on not more than 60 days' and not less than 30 days' notice, at a
redemption price equal to 100% of their principal amount, if we determine that
as a result of any change in or amendment to the laws, treaties, regulations or
rulings of the United States or any political subdivision or taxing authority
thereof, or any proposed change in such laws, treaties, regulations or rulings,
or any change in the official application, enforcement or interpretation of
those laws, treaties, regulations or rulings, including a holding by a court of
competent jurisdiction in the United States, or any other action, other than an
action predicated on law generally known on or before August , 1999 except
for proposals before the Congress before that date, taken by any taxing
authority or a court of competent jurisdiction in the United States, or the
official proposal of any action, whether or not such action or proposal was
taken or made with respect to our company, (A) we have or will become obligated
to pay
S-8
<PAGE>
additional amounts as described under "--Payment of Additional Amounts" on any
note of that series or (B) there is a substantial possibility that we will be
required to pay those additional amounts. Prior to the publication of any
notice of redemption, we will deliver to the Trustee (1) an officers'
certificate stating that we are entitled to effect a redemption and setting
forth a statement of facts showing that the conditions precedent to the right
of our company so to redeem have occurred and (2) an opinion of counsel to that
effect based on that statement of facts.
BOOK-ENTRY ISSUANCE
The notes will be represented by one or more global securities that will be
deposited with and registered in the name of DTC or its nominee. Thus, we will
not issue certificated securities to you for the notes, except in the limited
circumstances described below. Each global security will be issued to DTC,
which will keep a computerized record of its participants whose clients have
purchased the notes. Each participant will then keep a record of its clients.
Unless it is exchanged in whole or in part for a certificated security, a
global security may not be transferred. DTC, its nominees and their successors
may, however, transfer a global security as a whole to one another, and these
transfers are required to be recorded on our records or a register to be
maintained by the trustee.
Beneficial interests in a global security will be shown on, and transfers of
beneficial interests in the global security will be made only through, records
maintained by DTC and its participants. DTC has provided us with the following
information: DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its direct
participants deposit with DTC. DTC also records the settlements among direct
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for direct participants'
accounts. This eliminates the need to exchange certificated securities. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
direct participant. The rules that apply to DTC and its participants are on
file with the SEC.
DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
When you purchase notes through the DTC system, the purchases must be made
by or through a direct participant, which will receive credit for the notes on
DTC's records. When you actually purchase the notes, you will become their
beneficial owner. Your ownership interest will be recorded only on the direct
or indirect participants' records. DTC will have no knowledge of your
individual ownership of the notes. DTC's records will show only the identity of
the direct participants and the amount of the notes held by or through them.
You will not receive a written confirmation of your purchase or sale or any
periodic account statement directly from DTC. You should instead receive these
from your direct or indirect participant. As a result, the direct or indirect
participants are responsible for keeping accurate account of the holdings of
their customers. The trustee will wire payments on the notes to DTC's nominee.
We and the trustee will treat DTC's nominee as the owner of each global
security for all purposes. Accordingly, we, the trustee and any paying agent
will have no direct responsibility or liability to pay amounts due on a global
security to you or any other beneficial owners in that global security. Any
redemption notices will be sent by us directly to DTC, which will, in turn,
inform the direct participants (or the indirect participants), which will then
contact you as a beneficial holder.
S-9
<PAGE>
It is DTC's current practice, upon receipt of any payment of distributions
or liquidation amounts, to proportionately credit direct participants' accounts
on the payment date based on their holdings. In addition, it is DTC's current
practice to pass through any consenting or voting rights to such participants
by using an omnibus proxy. Those participants will, in turn, make payments to
and solicit votes from you, the ultimate owner of notes, based on their
customary practices. Payments to you will be the responsibility of the
participants and not of DTC, the trustee or our company.
Notes represented by one or more global securities will be exchangeable for
certificated securities with the same terms in authorized denominations only
if:
. DTC is unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under applicable law, and a successor is not
appointed by us within 90 days; or
. we decide to discontinue the book-entry system.
If the global security is exchanged for certificated securities, the trustee
will keep the registration books for the notes at its corporate office and
follow customary practices and procedures regarding those certificated
securities.
DTC's management is aware that some computer applications, systems and the
like for processing data that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program so that its
systems, as the same relate to the timely payment of distributions (including
principal and interest payments) to security holders, book-entry deliveries,
and settlement of trades within DTC, continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which
is complete. Additionally, DTC's plan includes a testing phase, which is
expected to be completed within appropriate time frames.
However, DTC's ability to perform its services properly is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third-party vendors from whom DTC licenses software and hardware, and
third-party vendors on whom DTC relies for information of the provision of
services, including telecommunications and electrical utility service
providers, among others. DTC has informed its participants and other members of
the financial community that it is contacting, (and will continue to contact),
third-party vendors from whom DTC acquires services to impress upon them the
importance of such service being Year 2000 compliant, and determine the extent
of their efforts for Year 2000 remediation and, as appropriate, testing, of
their services. In addition, DTC is in the process of developing contingency
plans as it deems appropriate.
Euroclear And Cedelbank
Links have been established among DTC, Cedelbank and Euroclear (two European
book-entry depositaries similar to DTC) to facilitate the initial issuance of
the notes sold outside of the United States and cross-market transfers of the
notes associated with secondary market trading.
Although DTC, Cedelbank and Euroclear have agreed to the procedures provided
below in order to facilitate transfers, they are under no obligation to perform
these procedures, and these procedures may be modified or discontinued at any
time.
Cedelbank and Euroclear will record the ownership interests of their
participants in much the same way as DTC, and DTC will record the total
ownership of each of the U.S. agents of Cedelbank and Euroclear, as
participants in DTC.
When notes are to be transferred from the account of a DTC participant to
the account of a Cedelbank participant or a Euroclear participant, the
purchaser must send instructions to Cedelbank or Euroclear through a
participant at least one business day prior to settlement. Cedelbank or
Euroclear, as the case may be, will instruct its U.S. agent to receive notes
against payment. After settlement, Cedelbank or Euroclear will credit its
participant's account. Credit for the notes will appear on the next day
(European time).
S-10
<PAGE>
Because settlement is taking place during New York business hours, DTC
participants will be able to employ their usual procedures for sending notes to
the relevant U.S. agent acting for the benefit of Cedelbank or Euroclear
participants. The sale proceeds will be available to the DTC seller on the
settlement date. As a result, to the DTC participant, a cross-market
transaction will settle no differently than a trade between two DTC
participants.
When a Cedelbank or Euroclear participant wishes to transfer notes to a DTC
participant, the seller will be required to send instructions to Cedelbank or
Euroclear through a participant at least one business day prior to settlement.
In these cases, Cedelbank or Euroclear will instruct its U.S. agent to transfer
these notes against payment for them. The payment will then be reflected in the
account of the Cedelbank or Euroclear participant the following day, with the
proceeds back-valued to the value date, which would be the preceding day, when
settlement occurs in New York. If settlement is not completed on the intended
value date, that is, the trade fails, proceeds credited to the Cedelbank or
Euroclear participant's account will instead be valued as of the actual
settlement date.
U.S. FEDERAL INCOME TAX CONSEQUENCES TO UNITED STATES ALIENS
In the opinion of Hughes & Luce, L.L.P., our counsel, the following is a
discussion of the material U.S. federal income tax consequences for beneficial
owners of the notes that are United States Aliens. This discussion is based on
current law which is subject to change. This discussion may not represent a
detailed description of the U.S. federal income tax consequences to you in
light of your particular circumstances. In addition, it may not represent a
detailed description of the U.S. federal income tax consequences applicable to
you if you are subject to special treatment under the U.S. federal income tax
laws, including if you are a "controlled foreign corporation," "passive foreign
investment company" or "foreign personal holding company" or, in some cases, an
expatriate of the United States. We cannot assure you that a change in law will
not alter significantly the tax considerations that we describe in this
discussion.
You should consult your own tax advisor concerning the particular U.S.
federal income tax consequences to you of the ownership of the notes, as well
as the consequences to you arising under the laws of any other tax
jurisdiction.
U.S. Federal Withholding Tax
The 30% U.S. federal withholding tax will not apply to any payment of
principal of or interest, including original issue discount, on a particular
series of notes, provided that:
. you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Internal Revenue Code and U.S. Treasury regulations;
. you are not a controlled foreign corporation that is related to us
through stock ownership;
. you are not a bank whose receipt of interest on the notes is described in
Section 881(c)(3)(A) of the Internal Revenue Code; and
. (1) you provide your name and address on an IRS Form W-8, and certify,
under penalty of perjury, that you are not a U.S. person or (2) a
financial institution holding the notes on your behalf certifies, under
penalty of perjury, that it has received an IRS Form W-8 from the
beneficial owner and provides us with a copy.
If you cannot satisfy the requirements described above, payments of premium,
if any, and interest, including original issue discount, made to you will be
subject to the 30% U.S. federal withholding tax, unless you provide us with a
properly executed (1) IRS Form 1001 claiming an exemption from withholding
under the benefit of a tax treaty or (2) IRS Form 4224 stating that interest
paid on the note is not subject to withholding tax because it is effectively
connected with your conduct of a trade or business in the United States.
S-11
<PAGE>
The 30% U.S. federal withholding tax generally will not apply to any gain or
income that you realize on the sale, exchange, retirement or other disposition
of the note.
U.S. Federal Estate Tax
Your estate will not be subject to U.S. federal estate tax on notes of a
series beneficially owned by you at the time of your death, provided that (1)
you do not own, within the meaning of the Internal Revenue Code and the U.S.
Treasury regulations, 10% or more of the total combined voting power of those
classes of our voting stock and (2) interest on those notes would not have
been, if received at the time of your death, effectively connected with the
conduct by you of a trade or business in the United States.
U.S. Federal Income Tax
If you are engaged in a trade or business in the United States and interest
on the notes is effectively connected with the conduct of that trade or
business (although exempt from the 30% withholding tax), you will be subject to
U.S. federal income tax on that interest on a net income basis in the same
manner as if you were a U.S. person as defined under the Internal Revenue Code.
In addition, if you are a foreign corporation, you may be subject to a branch
profits tax equal to 30% (or lower applicable treaty rate) of your earnings and
profits for the taxable year, subject to adjustments, that are effectively
connected with the conduct by you of a trade or business in the United States.
For this purpose, interest on notes will be included in your earnings and
profits.
Any gain or income realized on the disposition of a note generally will not
be subject to U.S. federal income tax unless (1) that gain or income is
effectively connected with the conduct of a trade or business in the United
States by you, or (2) you are an individual who is present in the United States
for 183 days or more in the taxable year of that disposition and certain other
conditions are met.
Information Reporting and Backup Withholding
In general, you will not be subject to information reporting and backup
withholding with respect to payments that we make to you provided that we do
not have actual knowledge that you are a U.S. person and we have received from
you the statement described above under "--U.S. Federal Withholding Tax."
In addition, you will not be subject to backup withholding and information
reporting with respect to the proceeds of the sale of a note within the United
States or conducted through certain U.S.-related financial intermediaries, if
the payor receives the statement described above and does not have actual
knowledge that you are a U.S. person, as defined under the Internal Revenue
Code, or you otherwise establish an exemption.
U.S. Treasury regulations were recently issued that generally modify the
information reporting and backup withholding rules applicable to certain
payments made after December 31, 2000. In general, the new U.S. Treasury
regulations would not significantly alter the present rules discussed above,
except in certain special situations.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the Internal Revenue Service.
S-12
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement,
we have agreed to sell to the underwriters named below, severally and not
jointly, the principal amount of notes set forth opposite their respective
names:
<TABLE>
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Underwriter % Notes due 2001 % Notes due 2004 % Notes due 2009
----------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
Lehman Brothers Inc..... U.S.$ U.S.$ U.S.$
------------------ ------------------ ------------------
Total................. U.S.$1,000,000,000 U.S.$2,000,000,000 U.S.$2,000,000,000
================== ================== ==================
</TABLE>
The underwriters have advised us that they propose to offer the notes to the
public initially at the public offering prices set forth on the cover page of
this prospectus supplement. The underwriters may also offer notes to dealers at
that price less concessions not in excess of 0. % of the principal amount of
the % notes due 2001, 0. % of the principal amount of the % notes due 2004
and 0. % of the principal amount of the % notes due 2009. After the initial
public offering of the notes is completed, the public offering prices and these
concessions may be changed.
In connection with the offering, SEC rules permit the underwriters to engage
in certain transactions that stabilize the price of the notes. These
transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the notes. If the underwriters create a
short position in the notes in connection with the offering by selling larger
principal amounts of notes than as set forth on the cover page of this
prospectus supplement, the underwriters may reduce that short position by
purchasing notes in the open market. In general, purchases of a security for
the purpose of stabilization or to reduce a short position could cause the
price of the security to be higher than it might otherwise be in the absence of
such purchases. Neither we nor any of the underwriters can make any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the notes. In
addition, neither we nor any of the underwriters make any representation that
the underwriters will engage in such transactions, or that such transactions,
once begun, will not be discontinued without notice.
Some of the underwriters and their affiliates may from time to time in the
ordinary course of business provide, and have provided in the past, investment
or commercial banking services to Wal-Mart and its affiliates.
We will pay transaction expenses, estimated to be approximately
U.S.$ , relating to the offering of the notes.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
Each underwriter has represented and agreed that (1) it has not offered or
sold and prior to the date six months after the date of issue of the notes will
not offer or sell notes 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
S-13
<PAGE>
Regulations 1995; (2) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done by
it in relation to the notes in, from or otherwise involving the United Kingdom;
and (3) it has only issued or passed on, and will only issue or pass on, in the
United Kingdom any document received by it in connection with the issue of the
notes to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisement) (Exemptions) Order 1996 (as
amended) or is a person to whom the document may otherwise lawfully be issued
or passed on.
VALIDITY OF THE NOTES
The validity of the notes will be passed on for us by Hughes & Luce, L.L.P.,
Dallas, Texas, and for the underwriters by Simpson Thacher & Bartlett, New
York, New York.
GENERAL INFORMATION
We have applied to list the notes on the Luxembourg Stock Exchange. In
connection with the listing application, Wal-Mart has deposited its certificate
of incorporation and by-laws and a legal notice relating to the issuance of the
notes with Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg,
where copies may be obtained upon request. So long as any of the notes is
outstanding, copies of these documents together with this prospectus supplement
and the attached prospectus, the indenture and our current annual and quarterly
reports, and all future annual reports and quarterly reports, will be made
available for inspection at the main office of Kredietbank S.A. Luxembourg, in
Luxembourg. Kredietbank S.A. Luxembourg will act as intermediary between the
Luxembourg Stock Exchange and Wal-Mart and the holders of the notes. In
addition, copies of our annual reports and quarterly reports may be obtained
free of charge at that office.
Except as disclosed in the prospectus supplement or the attached prospectus,
including the documents incorporated by reference, there has been no material
adverse change in the financial position of Wal-Mart since April 30, 1999.
The independent auditors of Wal-Mart are Ernst & Young LLP, Tulsa, Oklahoma.
Neither Wal-Mart nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the offering of the notes. We are not aware of
any material litigation, arbitration or administrative proceedings pending or
threatened.
Resolutions authorizing the issue and sale of the notes were adopted by the
executive committee of Wal-Mart's board of directors on July 13, 1999.
The notes have been accepted for clearance through Euroclear and Cedelbank
and have been assigned the following identification numbers:
<TABLE>
<CAPTION>
Common Code ISIN Number CUSIP Number
----------- ----------- ------------
<S> <C> <C> <C>
% notes due 2001...................
% notes due 2004...................
% notes due 2009...................
</TABLE>
S-14
<PAGE>
PRINCIPAL EXECUTIVE OFFICES OF WAL-MART STORES, INC.
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville, Arkansas 72716
U.S.A.
TRUSTEE
The First National Bank of Chicago
One First National Plaza
Suite 126
Chicago, Illinois 60670
U.S.A.
LUXEMBOURG LISTING AND PAYING AGENT
Kredietbank S.A. Luxembourgeoise
43, Boulevard Royal
L-2955 Luxembourg
LEGAL ADVISERS
To the Company To the Underwriters
Hughes & Luce, L.L.P. Simpson Thacher & Bartlett
1717 Main Street 425 Lexington Avenue
Dallas, Texas 75201 New York, New York 10017
U.S.A. U.S.A.
INDEPENDENT AUDITORS
Ernst & Young LLP
3900 One Williams Center
Tulsa, Oklahoma 74172
U.S. A.
<PAGE>
U.S.$5,000,000,000
Wal-Mart Stores, Inc.
U.S.$1,000,000,000 % Notes due 2001
U.S.$2,000,000,000 % Notes due 2004
U.S.$2,000,000,000 % Notes due 2009
----------------
Prospectus Supplement
August , 1999
----------------
Lehman Brothers
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ The information in this prospectus is not complete and may be changed. +
+This prospectus is not an offer to sell these securities or our solicitation +
+of your offer to buy these securities, nor will we sell them or accept your +
+offer to buy them, in any state or other jurisdiction where that would not be +
+permitted or legal prior to registration or qualification in that state or +
+other jurisdiction. We may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 15, 1999
PROSPECTUS
Wal-Mart Stores, Inc.
U.S.$10,500,700,000
DEBT SECURITIES
This prospectus forms part of shelf registration statements that we filed
with the SEC. We may use these registration statements to offer and sell, in
one or more offerings at various times, up to a total of U.S.$10,500,700,000 of
our debt securities. We may sell the debt securities in different series which
have different terms and conditions.
This prospectus provides you with a general description of the debt
securities that we may offer. When we sell a particular series of the debt
securities, we will provide a prospectus supplement describing the specific
terms and conditions of that series of debt securities, including:
. the public offering price;
. the maturity date;
. the interest rate or rates, which may be fixed or variable;
. the times for payment of principal, interest and any premium; and
. any redemption provisions of the debt securities in the series.
The prospectus supplement may also contain, in the case of some series of
debt securities, important information about U. S. federal income tax
consequences to which you may become subject if you acquire the debt securities
being offered by that prospectus supplement. The prospectus supplement may also
update or change information contained in this prospectus.
You should read both this prospectus and any prospectus supplement together
with the additional information described under the heading "Where You Can Find
More Information."
We maintain our principal executive offices at:
702 S.W. 8th Street
Bentonville, Arkansas 72716
Telephone: (501) 273-4000.
Neither the Securities and Exchange Commission nor any state securities
commission or other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is August , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 2
Special Note Regarding Forward-Looking Statements.......................... 3
Wal-Mart Stores, Inc....................................................... 4
Ratio of Earning to Fixed Charges.......................................... 4
Use of Proceeds............................................................ 5
Description of the Debt Securities......................................... 5
U.S. Federal Income Tax Considerations..................................... 11
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
You should rely only on the information contained or incorporated by
reference in this prospectus and in any accompanying prospectus supplement. We
have not authorized anyone to provide you with different information.
We are not offering the debt securities in any jurisdiction in which the
offer is not permitted.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Instead of repeating the information that we have
already filed with the SEC, the SEC allows us to "incorporate by reference" in
this prospectus information contained in documents we have filed with the SEC.
Those documents form an important part of this prospectus. Any documents that
we file with the SEC in the future will also be considered to be part of this
prospectus and will automatically update and supersede the information
contained in this prospectus.
We incorporate by reference in this prospectus the documents listed below
and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until we complete or terminate the
offering of debt securities by this prospectus.
. our Annual Report on Form 10-K for our fiscal year ended January 31,
1999; and
. our Quarterly Report on Form 10-Q for our quarter ended April 30, 1999.
As allowed by the SEC's rules, we have not included in this prospectus all
of the information that is included in the registration statement. At your
request we will provide you, free of charge, with a copy of the registration
statement, any of the exhibits to the registration statement or a copy of any
other filing we have made with the SEC. If you want more information, write in
care of or call:
Allison D. Garrett, Esq.
Assistant General Counsel and Assistant Secretary
Wal-Mart Stores, Inc.
Corporate Offices
702 S.W. 8th Street
Bentonville, Arkansas 72716
Telephone: (501) 273-4505
You may also obtain a copy of any filing we have made with the SEC directly
from the SEC. You may either:
. read and copy any materials we file with the SEC at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
its offices in New York, New York and Chicago, Illinois; or
2
<PAGE>
. visit the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
issuers that file electronically.
You can obtain more information about the SEC's public reference room by
calling the SEC at 1-800-SEC-0330.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference certain statements
that may be deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
may be included, for example, under "Wal-Mart Stores, Inc." and "Use of
Proceeds," and in certain portions of our reports and other information
incorporated in this prospectus by reference. These forward-looking statements
may include statements that address activities, events or developments that we
expect or anticipate will or may occur in the future, including:
. future capital expenditures, including the amount and nature of those
expenditures;
. expansion and other development trends of industry segments in which we
are active;
. our business strategy;
. expansion and growth of our business; and
. operations and other similar matters.
Although we believe the expectations expressed in the forward-looking
statements are based on reasonable assumptions within the bounds of our
knowledge of our business, a number of factors could cause actual results to
differ materially from those expressed in any forward-looking statements,
whether oral or written, made by us or on our behalf. Many of these factors
have previously been identified in filings or statements made by us or on our
behalf.
Our business operations are subject to factors outside our control. Any one,
or a combination, of these factors could materially affect our financial
performance. These factors include:
. the costs of goods;
. competitive pressures;
. inflation;
. consumer debt levels;
. currency exchange fluctuations;
. trade restrictions;
. changes in tariff and freight rates;
. Year 2000 issues;
. unemployment levels;
. interest rate fluctuations; and
. other capital market and economic conditions.
Forward-looking statements that we make or that are made by others on our
behalf are based on a knowledge of our business and the environment in which we
operate, but because of the factors listed above, actual results may differ
from those in the forward-looking statements. Consequently, all of the forward-
looking statements made are qualified by these cautionary statements. We cannot
assure you that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
consequences to or effects on us or our business or operations. Prospective
investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. We assume no obligation to
update any of the forward-looking statements.
3
<PAGE>
WAL-MART STORES, INC.
We are the world's largest retailer as measured by total net sales for
fiscal 1999. We had total net sales of US$137.6 billion in fiscal 1999, over
90% of which was generated in the United States. We operate mass merchandising
stores that serve our customers primarily through the operation of three
segments:
. Wal-Mart stores, which include our discount stores and Supercenters in
the United States;
. SAM'S Clubs, which include the warehouse membership clubs in the United
States; and
. the international segment of our business.
We currently operate in all 50 states of the United States, Puerto Rico,
Argentina, Brazil, Canada, Germany and Mexico, and in China and Korea under
joint venture agreements. In addition, through our subsidiary, McLane Company,
Inc., we provide products and distribution services to retail industry and
institutional food service customers. At January 31, 1999, we operated in the
United States:
. 1,869 Wal-Mart stores;
. 564 Supercenters; and
. 451 SAM'S Clubs.
As of January 31, 1999, we also operated 153 Canadian Wal-Mart stores, 13
units in Argentina, 14 units in Brazil, five units in China, 95 units in
Germany, 416 units in Mexico, four units in Korea and 15 units in Puerto Rico.
The units operated by our International Division represent a variety of retail
formats.
Wal-Mart Stores, Inc. was incorporated in 1969.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of our earnings to fixed charges,
for the periods indicated:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Three Months
Ended
Year Ended January 31, April 30,
---------------------------------------------------------------- --------------------------
<CAPTION>
1995 1996 1997 1998 1999 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
4.62x 4.15x 4.59x 5.33x 6.24x 4.98x 6.11x
</TABLE>
For the purpose of computing our ratios of earnings to fixed charges, we
have defined "earnings" to mean:
. our earnings before income taxes and fixed charges, excluding capitalized
interest; plus
. the earnings before taxes and fixed charges, excluding capitalized
interest, of our majority-owned subsidiaries.
We have also defined "fixed charges" to mean:
. the interest that we pay; plus
. the capitalized interest that we show on our accounting records; plus
. the portion of the rental expense for real and personal property that we
believe represents the interest factor in those rentals.
We have not disclosed ratios of earnings to fixed charges and preferred
stock dividends because we do not have any shares of preferred stock
outstanding.
4
<PAGE>
USE OF PROCEEDS
Except as we otherwise specifically describe in the applicable prospectus
supplement, we will use the net proceeds from the sale of the debt securities:
. to repay the short-term borrowings that we have incurred to acquire land
and construct stores and other facilities;
. to repay short-term borrowings that we have incurred to acquire other
companies and assets; and
. to meet our other general working capital requirements.
Before we apply the net proceeds to one or more of these uses, we may invest
those net proceeds in short-term marketable securities.
We may also incur from time to time additional debt other than through the
offering of debt securities under this prospectus.
DESCRIPTION OF THE DEBT SECURITIES
We will issue the debt securities in one or more series under an indenture,
dated as of April 1, 1991, that was supplemented by a supplemental indenture
dated as of September 9, 1992 (which we refer to together as the "indenture"),
between us and The First National Bank of Chicago, as the trustee.
The indenture is a contract between us and the trustee. The trustee has two
main roles. First, the trustee can enforce your rights against us if an "event
of default," as that term is described below, occurs. Second, the trustee
performs certain administrative duties for us.
We have summarized below the material provisions of the debt securities to
which this prospectus relates and the indenture. However, you should understand
that this is only a summary, and we have not included all of the provisions of
the indenture. We have filed the indenture with the SEC, and we suggest that
you read the indenture. We are incorporating by reference the provisions of the
indenture referred to in the following summary, whether by reference to
articles, sections or defined terms. The summary is qualified in its entirety
by those provisions of the indenture. The section numbers set forth below refer
to the sections of the indenture.
We will describe the particular terms and conditions of any series of debt
securities offered in the applicable prospectus supplement. The prospectus
supplement, which we will file with the SEC, may or may not modify the general
terms found in this prospectus. For a complete description of any series of
debt securities, you should read both this prospectus and the prospectus
supplement relating to that series of debt securities.
General
As a holder of these debt securities, you will be one of our unsecured
creditors and will have a right to payment equal to that of the other unsecured
creditors of Wal-Mart Stores, Inc.
The debt securities offered by this prospectus will be limited to a total of
US$10,500,700,000, or the equivalent amount in any currency. The indenture,
however, does not limit the amount of debt securities that may be issued under
it and provides that debt securities may be issued under it from time to time
in one or more series.
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<PAGE>
The prospectus supplement will describe the following terms of each series
of debt securities:
. the title of the series;
. the aggregate principal amount of the debt securities of the series;
. the date or dates on which the principal will be paid;
. the percentage of the principal amount at which the debt securities in
the series will be issued and, if less than the face amount, the portion
of the principal amount payable if the holders or the trustee accelerates
the maturity of those debt securities;
. the annual interest rate or rates payable on the debt securities in the
series, which may be fixed or variable;
. the date or dates from which interest, if any, will accrue;
. the dates on which interest will be payable and the record dates for the
interest payment dates;
. the place or places where principal, interest, and any premium will be
paid;
. the times when we may redeem some or all of the debt securities in the
series or you may cause us to redeem some or all of those debt securities
and terms of any of those redemptions;
. the price at which we may redeem, at our option, the debt securities in
the series;
. whether we will be obligated to redeem or purchase any of the debt
securities in the series with funds from a sinking fund and the times and
terms, including price, on which we must redeem or purchase, those debt
securities;
. if other than denominations of US$1,000 or a multiple of US$1,000, the
denominations, which may include other currencies, in which the debt
securities in the series will be issuable and payable;
. the currency of payment of principal of and interest and any premium on
the debt securities in the series;
. any index, formula or other method that we must use to determine the
amount of payment of principal of and interest and any premium on the
debt securities in the series;
. the portion of the principal amount of the debt securities in the series
which will be payable upon the acceleration of their maturity if the
principal amount payable will be less than the total unpaid principal
amount;
. whether you may elect to be paid or we may pay you in a currency other
than the currency in which the debt securities in the series are stated
to be payable, and when and on what terms we must or may make that
payment;
. whether the debt securities in the series will be issued in certificated
or book-entry form;
. the applicability, if any, of the defeasance provisions of the indenture,
or any modification thereof; and
. any other specific terms and conditions of the series of debt securities.
If we sell any series of debt securities for, that we may pay in, or that
are denominated in, one or more foreign currencies, currency units or composite
currencies, we will disclose applicable restrictions, elections, tax
consequences, specific terms and other information with respect to that series
of debt securities and the relevant currencies, currencies units or composite
currencies in the prospectus supplement relating to the offer of that series.
We may also offer and sell a series of the debt securities as original issue
discount securities, bearing no interest or interest at a rate which at the
time of issuance is below market rates, at a substantial discount below their
stated principal amount. We will describe the U.S. federal income tax
consequences and other special considerations applicable to any original issue
discount securities of that kind described in the prospectus supplement
relating to that series.
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Covenants
We summarize below the covenants contained in the indenture. Following the
summary of these covenants, we provide the definitions of the capitalized terms
that are used in the summary.
Restrictions on Liens. We will not, and will not permit any of our
subsidiaries to issue, assume or guarantee any debt for money we borrow if that
debt is secured by any mortgage, deed of trust, security interest, pledge, lien
or other encumbrance upon any Operating Property belonging to us or of any of
our subsidiaries or any shares of stock or indebtedness of any of our
subsidiaries, whether owned at the date of the indenture or thereafter
acquired, without effectively securing the debt securities equally and ratably
with that debt. This restriction does not, however, apply to:
. mortgages on any property acquired, constructed or improved by us or any
of our subsidiaries after January 31, 1991, created or assumed within 60
months after the acquisition, or construction or improvement is complete,
or within six months after completion pursuant to a firm commitment for
financing arrangement that we enter into within that 60-month period, to
secure or provide for the payment of the purchase price or cost;
. mortgages existing on any property at the time of its acquisition;
. mortgages existing on any property, shares of stock or debt acquired from
a corporation merged with or into us or one of our subsidiaries;
. mortgages on property of any corporation existing at the time it becomes
our subsidiary;
. mortgages to secure debt of any of our subsidiaries to us or to another
of our subsidiaries;
. mortgages in favor of governmental bodies to secure partial progress,
advance or other payments pursuant to any contract or statute or to
secure indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to those mortgages; or
. mortgages for extending, renewing or replacing debt secured by any
mortgage referred to in the foregoing items or in this item or any
mortgages existing on January 31, 1991.
This restriction does not apply to the issuance, assumption or guarantee by us
or any of our subsidiaries of debt secured by a mortgage which would otherwise
be subject to the restrictions described above up to an aggregate amount which,
together with all of our and our subsidiaries' secured debt, not including
secured debt permitted under the foregoing exceptions, and the Value of Sale
and Lease-back Transactions existing at that time other than those Sale and
Lease-back Transactions the proceeds of which have been applied to the
retirement of certain long-term debt or to the purchase of other operating
property, and other than those Sale and Lease-back Transactions in which the
property involved would have been permitted to be mortgaged under the principle
described in the first item above, does not exceed the greater of 10% of our
Consolidated Net Tangible Assets or 15% of Consolidated Capitalization.
(Section 3.03)
Restrictions on Sale and Lease-back Transactions. We will not and will not
permit any of our subsidiaries to, engage in Sale and Lease-back Transactions
relating to any Operating Property, except for temporary leases for a term,
including renewals, of not more than 48 months and except for leases between us
and one of our subsidiaries or between our subsidiaries. However, we or our
subsidiaries can engage in that type of transaction if the net proceeds of the
Sale and Lease-back Transaction are at least equal to the sum of all costs
incurred by us in connection with the acquisition of, and construction of any
improvement on, the Operating Property to be leased and either:
. we or our subsidiary would be entitled to incur debt secured by a
mortgage on the property to be leased without securing the debt
securities pursuant to the first exception to the prohibition on liens
stated under "Restrictions on Liens" above; or
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<PAGE>
. the Value thereof would be an amount permitted under the last sentence
under "Restrictions on Liens" above; or
. we apply an amount equal to the sum of all costs incurred by us in
connection with the acquisition of, and the construction of any
improvements on, that property (1) to the payment or other retirement of
certain of our or one of our subsidiary's long-term debt or (2) to the
purchase of Operating Property, other than that involved in that Sale and
Lease-back Transaction. (Section 3.04)
Mergers, Consolidations and Sale of Our Assets. We may merge with or
consolidate into another corporation or sell or convey all or substantially all
of our property to another corporation that is authorized to purchase and
operate our property, as long as:
. immediately after the merger, consolidation, sale or conveyance, the
surviving or acquiring corporation is not in default under the indenture;
. the surviving or acquiring corporation is a U.S. corporation; and
. the surviving or acquiring corporation assumes, by a supplemental
indenture satisfactory to the trustee, the obligation to pay the
principal of and interest and any premium on all of the debt securities
and to perform our covenants under the indenture.
In the case of a merger or consolidation or a sale or conveyance of all or
substantially all of our assets and the assumption of our liabilities under the
indenture by a successor corporation, the successor corporation will assume our
place in the indenture as if it had originally been a party to the indenture.
The successor corporation may then issue debt securities under the indenture.
Definitions. The indenture contains the following defined terms that are
used in the covenants. (Section 1.01)
"Consolidated Capitalization" means the total of all the assets appearing on
our and our subsidiaries' consolidated balance sheets less current liabilities
and deferred income taxes.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on our and our subsidiaries' consolidated balance sheets less:
. current liabilities;
. reserves for depreciation and other asset valuation reserves;
. intangible assets such as goodwill, trademarks, trade names, patents, and
unamortized debt discount and expense; and
. appropriate adjustments on account of minority interests of other persons
holding stock in any of our majority-owned subsidiaries.
"Operating Property" means any manufacturing or processing plant, office
facility, retail store, wholesale club, Supercenter, hypermart, warehouse,
distribution center or equipment located within the United States of America or
its territories or possessions and owned and operated now or hereafter by us or
any of our subsidiaries and having a book value on the date as of which the
determination is being made of more than 0.60% of Consolidated Net Tangible
Assets; provided, however, that separate items of equipment with an aggregate
book value in excess of US$200,000,000 that are secured pursuant to the same
financing transaction will constitute one "Operating Property."
"Sale and Lease-back Transaction" means any arrangement with any person
providing for the leasing to us or any of our subsidiaries of any Operating
Property, except for temporary leases for a term, including any renewal
thereof, of not more than 48 months and except for leases between us and one of
our subsidiaries or between our subsidiaries, which Operating Property has been
or is to be sold or transferred by us or one of our subsidiaries to that
person.
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"Value" means, with respect to a Sale and Lease-back Transaction, as of any
particular time, the amount equal to the greater of:
. the net proceeds from the sale or transfer of the property leased
pursuant to that Sale and Lease-back Transaction; or
. the sum of all of our costs incurred in connection with the acquisition
of that property and the construction of any improvements thereon, as
determined in good faith by us at the time of entering into that Sale
and Lease-back Transaction,
in either case multiplied by a fraction, the numerator of which shall be equal
to the number of full years of the term of the lease remaining at the time of
determination and the denominator of which shall be equal to the number of full
years of that term, without regard to any renewal or extension options
contained in the lease.
Events of Default, Notice and Waiver
An event of default with respect to any series of debt securities is:
. a default in payment of principal or premium, if any, at maturity;
. a default for 30 days in payment of any interest;
. our failure for 60 days after notice to perform any other of the
covenants or agreements in the indenture;
. our default in the payment of any of our debt or acceleration of any of
that debt under the terms of the instrument under which that debt is
issued, if that default in payment is not cured or that acceleration is
not annulled within 10 days after written notice;
. certain events in the case of our bankruptcy, insolvency or
reorganization; or
. any other event of default provided with respect to any series of debt
securities. (Section 5.01)
If an event of default occurs and is continuing with respect to any series
of debt securities and be continuing, either the trustee or the holders of 25%
in principal amount then outstanding of the debt securities of that series may
declare the principal of all the debt securities to be due and payable
immediately, but upon certain conditions that declaration may be annulled. The
holders of a majority in principal amount then outstanding of the debt
securities of a series may waive defaults, except an uncured default in the
payment of principal of or interest or any premium on the debt securities.
(Sections 5.01 and 5.06)
We are required to file annually with the trustee a certificate either
stating the absence of any default or specifying any default that exists.
(Section 3.09) The trustee is required, within 90 days after the occurrence of
a default with respect to the debt securities of any series, to give to the
holders of the debt securities notice of all uncured defaults known to it.
However, except in the case of default in the payment of principal and premium,
if any, or interest on any of the debt securities of that series, the trustee
will be protected in withholding that notice if the trustee in good faith
determines that the withholding of that notice is in the interest of the
holders of the debt securities of that series. The term "default" for the
purpose of this provision only will mean the occurrence of any of the events of
default specified above excluding any grace periods. (Section 5.07)
The trustee is entitled, subject to the duty of the trustee during a default
to act with the required standard of care, to be indemnified by the holders of
the debt securities of any series before proceeding to exercise any right or
power under the indenture at the request of those holders. The indenture
provides that the holders of a majority in principal amount of each series of
outstanding debt securities may direct, with regard to that series, the time,
method and place of conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the trustee, provided
that the trustee may decline to act if that direction is contrary to law or if
the trustee determines in good faith that the proceeding so directed would be
illegal or would involve it in personal liability. (Section 5.06)
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Modification of the Indenture
The trustee and we, with the consent of the holders of not less than 66 2/3%
in aggregate principal amount of each series of the debt securities at the time
outstanding affected thereby, may execute supplemental indentures amending,
changing or eliminating the provisions of the indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of those debt
securities. However, no supplemental indenture of that kind may:
. extend the fixed maturity of any debt securities or the time of payment
of interest, reduce the interest rate, the principal amount or any
premium to be paid upon redemption or the amount of principal of an
original issue discount security that would be payable upon acceleration
of maturity, or impair or affect the right of any debt security holder
to institute suit for payment or the right of repayment, if any, at the
option of the holder of debt securities, without the consent of the
holder of each debt securities so affected; or
. reduce the above percentage of debt securities, the holders of which are
required to consent to any supplemental indenture of that kind, without
the consent of the holders of all the affected debt securities then
outstanding.
(Section 9.02) In some circumstances, the holders of a majority in aggregate
principal amount of each series of debt securities may waive all defaults and
rescind and annul a declaration that the series of debt securities has become
due and payable and the consequences of a declaration of that kind. (Section
5.01)
The trustee and we, without the consent of the holders of the debt
securities, may execute an indenture or supplemental indentures to:
. evidence the succession of another corporation to us and our successor's
assumption to our agreements and obligations with respect to the debt
securities and the indenture;
. add to our covenants further restrictions or conditions that our board
of directors and the trustee consider to be for the protection of
holders of all or any series of the debt securities and to make the
occurrence of a default in any of those additional covenants,
restrictions or conditions a default or an event of default permitting
enforcement of all or any of the several remedies provided in the
indenture with some permissible limitations;
. cure ambiguities or correct or supplement any provision contained in the
indenture or any supplemental indenture that may be defective or
inconsistent with another provision;
. provide for the issuance of debt securities whether or not then
outstanding under the indenture in coupon form and to provide for
exchangeability of the coupon form securities with debt securities
issued under the indenture in fully registered form;
. establish the form or terms and to provide for the issuance of any
series of debt securities under the indenture; and
. evidence and provide for the acceptance of appointment of a successor
trustee and to change the indenture as necessary to have more than one
trustee under the indenture. (Section 9.01)
Defeasance of Offered Debt Securities in Certain Circumstances
The indenture provides that our board of directors may provide by resolution
that we will be discharged from any and all obligations in respect of the debt
securities of any series upon the deposit with the trustee, in trust, of money
and/or obligations of, or obligations the principal of and interest on which
are fully guaranteed by, the United States of America, which through the
payment of interest and principal those debt securities in accordance with
their terms will provide money in an amount sufficient to pay any installment
of principal of and interest on the debt securities of that series on the
stated maturity of that payments in accordance with the terms of the indenture
and those debt securities. A discharge may only occur if we have received from,
or there has been published by, the U. S. Internal Revenue Service a ruling to
the effect that the discharge will not be deemed, or result in, a taxable event
with respect to holders of the debt securities of that series. (Section 11.05)
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Global Securities
Unless otherwise stated in a prospectus supplement, the debt securities of
a series will be issued in whole or in part in the form of one or more global
securities that will be deposited with, or on behalf of, a depositary
identified in the applicable prospectus supplement relating to that series.
The global securities may be issued in either registered or bearer form and in
either temporary or permanent form. The specified terms of the depositary
arrangement with respect to a series of debt securities will be described in
the applicable prospectus supplement relating to that series.
Concerning the Trustee
The First National Bank of Chicago, a national banking association with its
principal offices in Chicago, Illinois, is the trustee under the indenture and
will also serve as paying agent and registrar.
The First National Bank of Chicago also serves as trustee under an
indenture dated as of December 1, 1986 covering secured bonds issued in the
aggregate principal amount of U.S.$137,082,000 by the owner-trustees of
approximately 24 Sam's Clubs store properties which are leased to us. We have
issued notes in the aggregate principal amount of U.S.$1.00 billion under this
indenture as originally executed and, as of the date of this prospectus,
U.S.$7.05 billion under the indenture as supplemented. First Chicago Leasing
Corporation, an affiliate of The First National Bank of Chicago, established a
business trust which purchased 15 Wal-Mart discount department stores for
U.S.$53,661,785 and leased the stores back to us for an initial term of 20
years in a transaction which was consummated on December 22, 1992. On November
10, 1994, a second business trust of which First Chicago Leasing Corporation
is a beneficiary purchased an additional 23 Wal-Mart discount department
stores for U.S.$128,842,5000 and leased the stores back to us for an initial
term of 20 years. We expect that we will also maintain banking relationships
in the ordinary course of business with The First National Bank of Chicago.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
A prospectus supplement may describe the principal U. S. federal income tax
consequences of acquiring, owning and disposing of debt securities of some
series in the following circumstances:
. payment of the principal, interest and any premium in a currency other
than the U. S. dollar;
. the issuance of any debt securities with "original issue discount," as
defined for U. S. federal income tax purposes; and
. the inclusion of any special terms in debt securities that may have a
material effect for U. S. federal income tax purposes.
PLAN OF DISTRIBUTION
General
We may sell the debt securities being offered hereby:
. directly to purchasers;
. through agents;
. through dealers;
. through underwriters; or
. through a combination of any of those methods of sale.
We may effect the distribution of the debt securities from time to time in
one or more transactions either:
. at a fixed price or prices which may be changed;
. at market prices prevailing at the time of sale; or
. at prices related to the prevailing market prices; or
. at negotiated prices.
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We may directly solicit offers to purchase the debt securities. Offers to
purchase debt securities may also be solicited by agents designated by us from
time to time. Any of those agents, who may be deemed to be an "underwriter," as
that term is defined in the Securities Act of 1933, involved in the offer or
sale of the debt securities in respect of which this prospectus is delivered
will be named, and any commissions payable by us to that agent will be set
forth in the prospectus supplement.
If a dealer is utilized in the sale of the debt securities in respect of
which this prospectus is delivered, we will sell those debt securities to the
dealer, as principal. The dealer, who may be deemed to be an "underwriter", as
that term is defined in the Securities Act of 1933, may then resell those debt
securities to the public at varying prices to be determined by that dealer at
the time of resale.
If we use an underwriter or underwriters in the sales, we will execute an
underwriting agreement with those underwriters at the time of sale of the debt
securities and the name of the underwriters will be set forth in the prospectus
supplement, which will be used by the underwriters to make resales of the debt
securities in respect of which this prospectus is delivered to the public. The
compensation of any underwriters will also be set forth in the prospectus
supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with us, to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to our contributing to payments those underwriters, dealers, agents
and other persons are required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or any of our subsidiaries in the ordinary course of business.
LEGAL MATTERS
The validity of the debt securities offered by this prospectus and any
prospectus supplement will be passed upon for us by Hughes & Luce, L.L.P., our
counsel.
EXPERTS
The consolidated financial statements of Wal-Mart Stores, Inc. and
subsidiaries incorporated by reference in our Annual Report on Form 10-K for
the fiscal year ended January 31, 1999, have been audited by Ernst & Young,
LLP, independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included in subsequently
filed documents will be, incorporated herein in reliance upon the reports of
Ernst & Young LLP pertaining to such financial statements (to the extent
covered by consents filed with the Securities and Exchange Commission) given
upon the authority of such firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......... $2,780,000
*Printing and engraving....................................... 25,000
*Legal fees and charges ...................................... 50,000
*Trustees' fees and expenses.................................. 7,500
*Accounting fees and expenses................................. 20,000
*Miscellaneous................................................ 200,000
----------
$3,082,500
==========
</TABLE>
- --------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's By-Laws provide that each person who was or is made a party
to, or is involved in, any action, suit or proceeding by reason of the fact
that he or she was a director or officer of the Registrant (or was serving at
the request of the Registrant as a director, officer, employee or agent for
another entity) will be indemnified and held harmless by the Registrant, to the
full extent authorized by the Delaware General Corporation Law (the "DGCL").
DGCL Section 145 provides, among other things, that the Registrant may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding (other
than an action by or in the right of the Registrant) by reason of the fact that
the person is or was a director, officer, agent, or employee of the Registrant
or is or was serving at the Registrant's request as a director, officer, agent,
or employee of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit, or proceeding. The power to indemnify
applies only if such person acted in good faith and in a manner he reasonably
believed to be in the best interest, or not opposed to the best interest, of
the Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of the
Registrant as well, but only to the extent of defense expenses (including
attorneys' fees but excluding amounts paid in settlement) actually and
reasonably incurred and not to any satisfaction of a judgment or settlement of
the claim itself, and with the further limitation that in such actions no
indemnification shall be made in the event of any adjudication of liability to
the Registrant, unless the court believes that in light of all the
circumstances indemnification should apply.
To the extent a present or former director or officer of the Registrant is
successful on the merits or otherwise in defense of any action, suit, or
proceeding described in the preceding two paragraphs, such person is entitled,
pursuant to DGCL Section 145, to indemnification against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
The Registrant's Certificate of Incorporation provides that to the fullest
extent permitted by Delaware General Corporation Law as the same exists or may
hereafter be amended, a director of the Registrant shall not be liable to the
Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director. The Delaware General Corporation Law permits Delaware
corporations to include in their certificates of incorporation a provision
eliminating or limiting director liability for monetary damages arising from
breaches
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<PAGE>
of their fiduciary duty. The only limitations imposed under the statute are
that the provision may not eliminate or limit a director's liability (i) for
breaches of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or involving
intentional misconduct or known violations of law, (iii) for the payment of
unlawful dividends or unlawful stock purchases or redemptions, or (iv) for
transactions in which the director received an improper personal benefit.
The Registrant is insured against liabilities which it may incur by reason
of its indemnification of officers and directors in accordance with its By-
Laws. In addition, directors and officers are insured, at the Registrant's
expense, against certain liabilities which might arise out of their employment
and are not subject to indemnification under the By-Laws.
The foregoing summaries are necessarily subject to the complete text of the
statute, Certificate of Incorporation, By-Laws and agreements referred to above
and are qualified in their entirety by reference thereto.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1(a) Form of Underwriting Agreement
1(b) Form of Pricing Agreement
4(a) Indenture dated as of April 1, 1991 between the Registrant and The
First National Bank of Chicago, as Trustee (incorporated herein by
reference from Exhibit 4(a) to Registration Statement on Form S-3
(File Number 33-51344))
4(b) First Supplemental Indenture dated September 9, 1992 to the Indenture
dated as of April 1, 1991, between the Registrant and The First
National Bank of Chicago, as Trustee (incorporated herein by
reference from Exhibit 4(b) to Registration Statement on Form S-3
(File Number 33-61858)).
5 Opinion of Hughes & Luce, L.L.P. with respect to the legality of the
securities being registered
8 Opinion of Hughes & Luce, L.L.P. with respect to tax matters
12 Statement regarding computation of ratios
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hughes & Luce, L.L.P. (included in Exhibit 5)
24 Power of Attorney, included in signature pages hereto
25 Statement of Eligibility of Trustee on Form T-1
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
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<PAGE>
the total dollar amount of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated offering range may be reflected in the form of a prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints S. Robson Walton, David D. Glass and James A.
Walker, Jr., and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her in
his or her name, place and stead, in any and all capacities, to sign any or all
amendments to this Registration Statement and additional Registration
Statements relating to the same offering, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bentonville, State of Arkansas, on July 15, 1999.
WAL-MART STORES, INC.
By: /s/ David D. Glass
----------------------------------
David D. Glass
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C>
</TABLE>
/s/ S. Robson Walton Chairman of the July 15, 1999
- ----------------------------------- Board
S. Robson Walton
/s/ David D. Glass President, Chief July 15, 1999
- ----------------------------------- Executive Officer
David D. Glass and Director
(Principal
Executive Officer)
/s/ Donald G. Soderquist Senior Vice Chairman July 15, 1999
- ----------------------------------- and Director
Donald G. Soderquist
/s/ J. J. Fitzsimmons Senior Vice July 15, 1999
- ----------------------------------- President
J. J. Fitzsimmons (Co-Principal
Financial Officer)
II-4
<PAGE>
/s/ James A. Walker, Jr. Senior Vice July 15, 1999
- ----------------------------------- President and
James A. Walker, Jr. Controller (Co-
Principal Financial
Officer and
Principal
Accounting Officer)
/s/ Jeronimo Arango Director July 15, 1999
- -----------------------------------
Jeronimo Arango
/s/ John A. Cooper, Jr. Director July 15, 1999
- -----------------------------------
John A. Cooper, Jr.
Director July 15, 1999
- -----------------------------------
Stephen Friedman
/s/ Stanley C. Gault Director July 15, 1999
- -----------------------------------
Stanley C. Gault
Director July 15, 1999
- -----------------------------------
Roland A. Hernandez
Director July 15, 1999
- -----------------------------------
Frederick S. Humphries
Director July 15, 1999
- -----------------------------------
E. Stanley Kroenke
/s/ Elizabeth A. Sanders Director July 15, 1999
- -----------------------------------
Elizabeth A. Sanders
/s/ Jack C. Shewmaker Director July 15, 1999
- -----------------------------------
Jack C. Shewmaker
Director July 15, 1999
- -----------------------------------
Paula Stern
/s/ Jose H. Villareal Director July 15, 1999
- -----------------------------------
Jose H. Villareal
Director July 15, 1999
- -----------------------------------
John T. Walton
II-5
<PAGE>
EXHIBIT 1(a)
WAL-MART STORES, INC.
Debt Securities
---------------
Form of Underwriting Agreement
------------------------------
[Date]
The Underwriters listed
on Schedule I hereto
Dear Sirs:
From time to time WAL-MART STORES, INC., a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of the Underwriter to purchase the Securities. The obligation of the Company to
issue and sell any of the Securities shall be evidenced by the Pricing Agreement
with respect to the Designated Securities specified therein. Each Pricing
Agreement shall specify the aggregate principal amount of such Designated
Securities, the initial public offering price of such Designated Securities, the
purchase price to the Underwriters of such Designated Securities, the names of
the Underwriters of such Designated Securities, the names of the Representatives
of such Underwriters and the principal amount of such Designated Securities to
be purchased by each Underwriter and shall set forth the date, time and manner
of delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
<PAGE>
2
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) [A] [R]egistration statement[s] in respect of the Securities have
been filed with the Securities and Exchange Commission (the "Commission");
such registration statement[s] and any post-effective amendments thereto,
[each] in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement[s]
but including all documents incorporated by reference in the prospectus
contained therein, delivered to the Representatives for each of the other
Underwriters has [have] been declared effective by the Commission in such
form; no other document with respect to such registration statement[s] or
document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; and no stop order suspending
the effectiveness of such registration statement[s] has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement[s] or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Securities Act of 1933,
as amended (the "Act"), being hereinafter called a "Preliminary
Prospectus"); the various parts of such registration statement[s],
including all exhibits thereto and the documents incorporated by reference
in the prospectus contained in the registration statement[s] at the time
such part of the registration statement[s] became effective but excluding
Form T-1, [each] as amended at the time such part of the registration
statement[s] became effective, being hereinafter called the "Registration
Statement[s]," [and the registration statement having the latter effective
date being hereinafter called the "Registration Statement"]; the prospectus
relating to the Securities, in the form in which it has most recently been
fled, or transmitted for filing, with the Commission on or prior to the
date of this Agreement, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or the Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement[s] shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the [applicable] effective date[s] of the
Registration Statement[s] that is incorporated by reference in the
Registration Statement[s]; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance
<PAGE>
3
with Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing;
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement[s] and the Prospectus conform, and any
further amendments or supplements to the Registration Statement[s] or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date[s] as to the
Registration Statement[s] and any amendments thereto and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Securities through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement[s] and the
Prospectus, there has not been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management financial position,
stockholders'
<PAGE>
4
equity or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not individually or in the aggregate materially affect the
consolidated financial position, stockholders' equity or results of
operation of the Company and its subsidiaries and do not interfere with the
use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(f) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct the business now operated by them, and neither the
Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names that, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
materially adversely affect the conduct of the business, operations,
financial condition or income of the Company and its subsidiaries
considered as one enterprise;
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
nonassessable and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and nonassessable and (except for directors' qualifying
shares and except as otherwise set forth in the Prospectus) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) The Securities have been duly authorized, and, when the
Designated Securities are issued and delivered pursuant to this Agreement
and the Pricing Agreement
<PAGE>
5
with respect to such Designated Securities, such Designated Securities will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, which will be substantially in the
form filed as an exhibit to [each of] the Registration Statement[s]; the
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and, at the Time of Delivery for such Designated Securities
(as defined in Section 4 hereof), the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms, and
the Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Securities;
(j) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Restated Certificate of
Incorporation, as amended, or Bylaws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or the Indenture, except such as have
been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and
(l) Ernst & Young, LLP, who have certified certain financial
statements of the Company and its subsidiaries, are, to the best knowledge
of management of the Company,
<PAGE>
6
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such name as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Company in the funds specified in such Pricing Agreement,
all at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Company may
agree upon in writing, such time and date being herein called the "Time of
Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission' s close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement[s] or Prospectus
as amended or supplemented after the date of the Pricing Agreement relating
to such Securities and prior to the Time of Delivery for such Securities
that shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after such Time of Delivery
and furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of such Securities, and
during such same period to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement[s] has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement[s] or Prospectus or for
additional information; and, in the event of the issuance of any such stop
<PAGE>
7
order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus that will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)),
an earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Company by the Representatives
and (ii) the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company that mature more than one year after such Time of Delivery and that
are substantially similar to such Designated Securities, without the prior
written consent of the Representatives;
<PAGE>
8
(f) To furnish to the holders of the Securities, upon such holders'
request, as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders'
equity and cash flow of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the
Registration Statement[s]), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail; and
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial information and
statements to be on a consolidated basis in reports furnished to its
stockholders generally or to the Commission).
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement[s], any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the cost of preparing the Securities; (vi) the fees
and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 10 hereof, the Underwriters will
pay all of their own costs and expenses including the fees of their counsel,
transfer taxes on resale of any of the Securities by them and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such
<PAGE>
9
Designated Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement[s] or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated the
Time of Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture, the Designated
Securities, the Registration Statement[s], the Prospectus as amended or
supplemented and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Allison D. Garrett, Esq., Assistant General Counsel for the
Company, shall have furnished to the Representatives her written opinion,
dated the Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Representatives, to the effect that the
Company and its subsidiaries have good and marketable title in fee simple
to all real property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not individually or in the aggregate materially
affect the consolidated financial position, stockholders' equity or results
of operation of the Company and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries (in giving the
opinion in this clause, such counsel may state that no examination of
record titles for the purpose of such opinion has been made, and that she
is relying upon a general review of the titles of the Company and its
subsidiaries, upon opinions of local counsel and abstracts, reports and
policies of title rendered or issued at or subsequent to the time of
acquisition of such property by the Company or its subsidiaries, upon
opinions of counsel to the lessors of such property and, in respect of
matters of fact, upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that she believes that
both the Representatives and she are justified in relying upon such
opinions, abstracts, reports, policies and certificates);
<PAGE>
10
(d) Hughes & Luce, L.L.P., outside counsel for the Company, shall
have furnished to the Representatives their written opinion, dated the Time
of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both the Representatives
and they are justified in relying upon such opinions and
certificates);
(iv) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; and all of the issued
shares of capital stock of each such subsidiary have been duly and
validly authorized and issued, are fully paid and nonassessable, and
(except for directors' qualifying shares and except as otherwise set
forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company or its subsidiaries,
provided that such counsel shall state that they believe that both the
Representatives and they are justified in relying upon such opinions
and certificates);
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders'
<PAGE>
11
equity or results of operations of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
(vii) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture; and the Designated Securities and the
Indenture conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act;
(ix) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor
will such actions result in any violation of the provisions of the
Restated Certificate of Incorporation, as amended, or Bylaws of the
Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
(x) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Designated Securities
or the consummation by the Company of the transactions contemplated by
this Agreement or such Pricing Agreement or the Indenture, except such
as have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Designated Securities by the Underwriters;
<PAGE>
12
(xi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement that became
effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents that were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(xii) The Registration Statement[s] and the Prospectus as
amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the Trust Indenture Act and the rules and regulations
thereunder; they have no reason to believe that, as of its [their
respective] effective date[s], the Registration Statement[s] or any
further amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they
were made, not misleading or that, as of the Time of Delivery, either
the Registration Statement[s] or the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement[s] required to be filed or any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement[s] or required to be incorporated by
reference into the
<PAGE>
13
Prospectus as amended or supplemented or required to be described in
the Registration Statement[s] or the Prospectus as amended or
supplemented that are not filed or incorporated by reference or
described as required;
(e) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities,
Ernst & Young LLP shall have furnished to the Representatives a letter,
dated the effective date of the Registration Statement or the date of the
most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement[s],
if the date of such report is later than such effective date, and a letter
or letters dated such Time of Delivery, respectively, as to such matters as
the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which information
is given in the Prospectus as amended or supplemented there shall not have
been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus as amended or supplemented, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make 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;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
(h) 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 general moratorium on commercial
banking activities in New York declared by either Federal or New York State
authorities; or (iii) 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
(iii) in the
<PAGE>
14
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; and
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (f) of this Section and as to such other matters as
the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement[s], the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement[s], the Prospectus as amended or supplemented and
any other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter of Designated Securities
expressly for use in the Prospectus as amended or supplemented relating to
such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement[s], the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
<PAGE>
15
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement[s], the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
that it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters of the Designated Securities on the other
from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in connection with
the statement or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
<PAGE>
16
Company on the one hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions-in respect
thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Designated Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to
such securities and are not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities that it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may
in their discretion arrange for themselves or another party or other
parties to purchase such Designated Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter
the Representatives do not arrange for the purchase of such Designated
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Designated Securities
on such terms. In the event that, within the respective prescribed
<PAGE>
17
period, the Representatives notify the Company that they have so arranged
for the purchase of such Designated Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to
postpone the Time of Delivery for such Designated Securities for a period
of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement[s] or the
Prospectus as amended or may thereby be made necessary in the Registration
Statement[s] or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement[s] or the
Prospectus that in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such
person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of such Designated Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Designated Securities that such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share
(based on the principal amount of Designated Securities that such
Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of Designated Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating
to such Designated Securities shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, pursuant to this Agreement,
shall remain in full force and effect,
<PAGE>
18
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
13. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives at
[_______________], Attention: [______]; and if to the Company shall be delivered
or sent by mail, telex or facsimile transmission to the address of the Company
set forth in the Registration Statement[s], Attention: Chief Executive Officer,
with a copy to the Company's general counsel; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
14. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
15. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
<PAGE>
19
16. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
17. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
[The rest of this page has been left blank
intentionally; the signature page follows.]
<PAGE>
20
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof.
Very truly yours.
WAL-MART STORES, INC.
By:
------------------------------
Name:
Title:
Accepted as of the date hereof:
[_____________]
By:
---------------------------------
For itself and as Representative
of the several Underwriters
named in Schedule I hereto
<PAGE>
EXHIBIT 1(b)
ANNEX I
FORM OF PRICING AGREEMENT
[Date]
[Name of Underwriter]
- ------------------
[Address]
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 [date] (the "Underwriting Agreement"), between the
Company and __________ and _____________ to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). Except that references to
[the] "registration statement[s]" in the Underwriting Agreement shall be deemed
to be references to the Company's registration statement[s] on Form S-3 (File
No.['s] 333-52045 [and 333-______]), 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; 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 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
as incorporated by reference in this Pricing Agreement 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, 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.
If the foregoing is in accordance with your understanding, please sign
and return to us two 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.
<PAGE>
2
Very truly yours,
Wal-mart Stores, Inc.
By:
----------------------------
Name:
Title:
Accepted as of the date hereof:
- --------------------
By:
------------------------------
Authorized Representative
For itself and as Representative
of the several Underwriters
named in Schedule I hereto
Date:
<PAGE>
SCHEDULE I
Principal Amount of
Designated Securities
Underwriter to be Purchased
- ----------- ---------------------
.................................................$
.................................................
.................................................---------------------
Total............................................
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
__% Notes due ____ (the "____ Notes")
AGGREGATE PRINCIPAL AMOUNT:
$________ of the ____ Notes
PRICE TO PUBLIC:
__.___% of the principal amount of the ____ Notes, plus accrued interest,
if any, from ________.
PURCHASE PRICE TO UNDERWRITERS:
__.___% of the principal amount of the ____ Notes, plus accrued interest,
if any, from ________.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately-available funds by wire.
INDENTURE:
Indenture dated as of April 1, 1991, as amended by the First Supplemental
Indenture, dated as of September 9, 1992, in each case between the Company
and The First National Bank of Chicago, as Trustee.
MATURITY:
__________.
INTEREST RATE:
_.__% from and including the original issue date.
INTEREST PAYMENT DATES:
_____ and _____ of each year, commencing ________, 200_.
<PAGE>
INTEREST PAYMENT RECORD DATES:
_____ and _____ of each year, commencing ________, 200_ for the Interest
Payment Date of _____, 200_.
REDEMPTION PROVISIONS:
[_____]
SINKING FUND PROVISIONS:
[_____]
OPINIONS OF COUNSEL:
The opinions of counsel for the Underwriters referred to in section 7(b) of
the Underwriting Agreement will be delivered by Simpson Thacher & Bartlett.
The opinion of counsel for the Company referred to in section 7(c) will be
delivered by Allison D. Garrett, Esq., Assistant General Counsel.
The opinions of the outside counsel for the Company referred to in section
7(d) of the Underwriting Agreement will be delivered by Hughes & Luce,
L.L.P. With respect to matters of New York law, Hughes & Luce, L.L.P. will
rely on the opinion of ________.
TIME OF DELIVERY:
10:00 a.m., _______.
CLOSING LOCATION:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
NAMES AND ADDRESSES OF REPRESENTATIVES:
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
<PAGE>
ADDRESSES FOR NOTICES.:
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Attention: Syndicate Department
Fax: (212) 528-8822
<PAGE>
EXHIBIT 5
Letterhead of Hughes & Luce, L.L.P.
July 15, 1999
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville, Arkansas 72716
Ladies and Gentlemen:
We have acted as special counsel to Wal-Mart Stores, Inc., a Delaware
corporation (the "Company"), in connection with the Company's shelf registration
of $10,000,000,000 principal amount of its debt securities (the "Securities")
pursuant to a Registration Statement on Form S-3 (the "Registration Statement")
as filed with the Securities and Exchange Commission (the "Commission") on July
15, 1999 under the Securities Act of 1933, as amended (the "Act"). The
Securities are to be issued pursuant to an indenture, dated as of April 1, 1991,
that was supplemented by a supplemental indenture, dated as of September 9, 1992
(the indenture and supplemental indenture, collectively the "Indenture"),
between the Company and The First National Bank of Chicago, as trustee.
In rendering this opinion, we have examined and relied upon executed
originals, counterparts or copies of such documents, records and certificates
(including certificates of public officials and officers of the Company) as we
considered necessary or appropriate for enabling us to express the opinions set
forth herein. In all such examinations, we have assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity to
authentic and complete original documents of all documents submitted to us as
photostatic, conformed, notarized or certified copies.
Based on the foregoing, we are of the opinion that the Securities have
been duly authorized and, when the Registration Statement has become effective,
the specific terms of a particular series of the Securities have been
established in accordance with the Indenture and each Security in the particular
series of the Securities has been duly executed, authenticated, issued and
delivered in accordance with the Indenture against payment therefor, that
Security will be legally issued and will constitute the valid and legally
binding obligation of the Company in accordance with its terms.
In connection with our opinion above, we have assumed that at or prior
to the time of delivery of each Security, the authorization of the Securities
and the series of the Securities to which that Security belongs will be
applicable to that Security, will not have been modified or rescinded and that
there will not have occurred any change in law affecting the validity or
enforceability of that Security. We have also assumed that none of the terms of
any Security to be established subsequent to the date hereof nor the issuance
and delivery of that Security will violate any applicable law or will result in
a violation of any provision of any instrument or agreement then binding on the
Company or any restriction imposed by any court or governmental body having
jurisdiction over the Company.
<PAGE>
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having passed on the validity
of the Securities under the caption "Validity of the Notes" and "Legal Matters"
in the Registration Statement. In giving this consent, we do not admit that we
are included in the category of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Hughes & Luce, L.L.P.
<PAGE>
EXHIBIT 8
Letterhead of Hughes & Luce, L.L.P.
July 15, 1999
Wal-Mart Stores, Inc.
702 S.W. 8/th/ Street
Bentonville, Arkansas 72716
Ladies and Gentlemen:
We have acted as special counsel to Wal-Mart Stores, Inc., a Delaware
corporation (the "Company"), in connection with the Company's shelf registration
of $10,000,000,000 principal amount of its debt securities (the "Securities")
pursuant to a Registration Statement on Form S-3 (the "Registration Statement")
as filed with the Securities and Exchange Commission (the "Commission") on
July 15, 1999 under the Securities Act of 1933, as amended (the "Act"). The
Securities are to be issued pursuant to an indenture, dated as of April 1, 1991,
that was supplemented by a supplemental indenture, dated as of September 9, 1992
(the indenture and supplemental indenture, collectively the "Indenture), between
the Company and The First National Bank of Chicago, as trustee.
In connection with that representation we have reviewed the discussion
contained in the Registration Statement under the caption "U.S. Federal Income
Tax Consequences to United States Aliens." We are of the opinion that such
discussion fairly describes the material United States federal income tax
consequences for United States Aliens (as defined in the Registration Statement)
who are beneficial owners of the notes of the Company described in the
prospectus supplement forming a part of the Registration Statement (the
"Notes").
This opinion is based on the law as in effect on the date of this
opinion. That law is subject to change, possibly retroactively, and a change in
law could materially affect the U.S. federal income tax consequences for
beneficial owners of the Notes.
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having opined as to the United
States federal income tax consequences for such beneficial owners under the
caption "U.S. Federal Income Tax Consequences to United States Aliens" in the
Registration Statement. In giving this consent, we do not admit that we are
included in the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Hughes & Luce, L.L.P.
<PAGE>
EXHIBIT 12
Statement of Computation of Ratios
<TABLE>
<CAPTION>
Quarter Ended April 30, Fiscal years ended
----------------------------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before income taxes 1,803 1,364 7,323 5,719 4,877 4,359 4,258
Capitalized interest (10) (8) (41) (33) (44) (50) (70)
Minority interest (33) (31) (153) (78) (27) (13) 4
Adjusted profit before tax 1,760 1,325 7,129 5,608 4,806 4,296 4,192
Fixed Charges
Debt Interest 127 122 529 555 629 692 520
Capital lease interest 64 72 268 229 216 196 186
Capitalized interest 10 8 41 33 44 50 70
Interest componet of Rent 143 131 523 477 449 425 383
Total fixed expense 344 333 1,361 1,294 1,338 1,363 1,159
Profit before taxes and fixed expenses 2,104 1,658 8,490 6,902 6,144 5,659 5,351
Fixed charge coverage 6.11 4.98 6.24 5.33 4.59 4.15 4.62
Operating rent expense 179 164 654 596 561 531 479
Interest portion ratio 80% 80% 80% 80% 80% 80% 80%
Interest portion of rents 143 131 523 477 449 425 383
</TABLE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Wal-Mart Stores,
Inc. for the registration of $10,000,000,000 of debt securities of Wal-Mart
Stores, Inc. and to the incorporation by reference therein of our report dated
March 24, 1999, with respect to the consolidated financial statements of Wal-
Mart Stores, Inc. incorporated by reference in its Annual Report (Form 10-K)
for the year ended January 31, 1999, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Tulsa, Oklahoma
July 15, 1999
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
Wal-Mart Stores, Inc.
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of 71-0415188
incorporation or organization (I.R.S. employer identification number)
702 S.W. Eighth Street
Bentonville, Arkansas 72716
(Address of principal executive (Zip Code)
offices)
Debt Securities
(Title of Indenture Securities)
Item 1. General Information. Furnish the following
--------------------
<PAGE>
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of the Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; and The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
------------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 13th day of July, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
--------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 13, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the indenture between Wal-Mart Stores,
Inc. and The First National Bank of Chicago, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Sandra L. Caruba
--------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency ----
and coin(1)...................................................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)..................................... 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule
RC-B, column A).................................................. 1754 0 2.a
b. Available-for-sale securities (from Schedule
RC-B, column D).................................................. 1773 12,885,728 2.b
3. Federal funds sold and securities purchased
under agreements to resell 1350 4,684,756 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
----
(from Schedule RC-C)............................................. 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 3,884 4.c
d. Loans and leases, net of unearned income, RCFD
----
allowance, and reserve (item 4.a minus 4.b and 4.c).............. 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D).................................. 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................. 2170 68,940,410 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address:` One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C.............. RCON
----
from Schedule RC-E, part 1)........................................ 2200 22,163,664 13.a
(1) Noninterest-bearing(1)......................................... 6631 9,740,100 13.a1
(2) Interest-bearing............................................... 6636 12,423,564 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and........... RCFN
----
IBFs (from Schedule RC-E, part II)................................. 2200 19,273,426 13.b
(1) Noninterest bearing............................................ 6631 334,741 13.b1
(2) Interest-bearing............................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold
under agreements to repurchase:........................................ RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury........................... RCON 2840 173,505 15.a
b. Trading Liabilities(from Schedule RC-D)............................ RCFD 3548 4,824,567 15.b
16. Other borrowed money:.................................................. RCFD
----
a. With original maturity of one year or less......................... 2332 7,453,761 16.a
b. With original maturity of more than one year...................... A547 330,300 16.b
c. With original maturity of more than three years ................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding................ 2920 265,041 18.
19. Subordinated notes and debentures...................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)................................. 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)......................... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......................... 3838 0 23.
24. Common stock........................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)............... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves............................. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on
available-for-sale securities...................................... 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow hedges................. 4336 0 26.c
27. Cumulative foreign currency translation adjustments.................... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)...................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28)........................... 3300 68,940,410 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1996
. . . . . . . . . . . . . . . . . . .RCFD 6724 N/A Number M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
