Exhibit 1.1
July 11, 2000
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, N.Y. 10036
Dear Sirs:
The May Department Stores Company, a New York corporation (hereinafter
called the "Company"), proposes to issue $200,000,000 principal amount of 8.000%
Debentures Due 2012 (the "Securities") to be issued pursuant to the provisions
of an Indenture, dated as of June 17, 1996, between the Company, The May
Department Stores Company, a Delaware corporation (the "Guarantor") and Bank One
Trust Company, National Association, as successor in interest to The First
National Bank of Chicago, Trustee. The Securities are to be unconditionally
guaranteed (the "Guarantee") as to payment of principal and interest by the
Guarantor. The Company and the Guarantor have filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file no. 333-
71413) with respect to the Securities and Guarantees which has been declared
effective by the Commission; and the Company and the Guarantor have filed or
will file with the Commission a prospectus supplement specifically relating to
the Securities pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Act"). The term Registration Statement means the registration statements
as amended to the date of this Agreement. The term Basic Prospectus means the
prospectus included in the Registration Statement. The term Prospectus means the
Basic Prospectus together with the prospectus supplement specifically relating
to the Securities, as filed with, or mailed for filing to, the Commission
pursuant to Rule 424. The term preliminary prospectus means a preliminary
prospectus supplement specifically relating to the Securities together with the
Basic Prospectus. As used herein, the terms "Registration Statement", "Basic
Prospectus", "Prospectus" and "preliminary prospectus" shall include in each
case the material, if any, incorporated by reference therein.
I.
The Company hereby agrees to sell to the several Underwriters named below, and
the Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree to purchase
from the Company, severally and not jointly, the principal amounts of Securities
set forth below opposite their names, at 99.226% of their principal amount plus
accrued interest, if any, from July 14, 2000, in each case to the date of
payment and delivery. Such Securities shall be unconditionally guaranteed as to
the payment of principal and interest by the Guarantor.
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Name Principal Amounts
Morgan Stanley & Co. Incorporated $ 92,000,000
Chase Securities Inc. $ 54,000,000
Salomon Smith Barney Inc. $ 54,000,000
Total . . . . . . . . . . . . . . . . . $200,000,000
II.
The Company and the Guarantor are advised by you that the Underwriters
propose to make a public offering of their respective portions of the Securities
as soon after this Agreement is entered into as in your judgment is advisable.
The terms of the public offering of the Securities are set forth in the
Prospectus.
III.
Payment for the Securities shall be made by wire transfer of same day funds
to an account specified by the Company not less than two full business days
prior to the date of payment at 10:00 A.M., New York City time, on July 14,
2000, or at such other time on the same or such other date, not later than July
21,2000, as shall be designated by you, upon delivery to you for the respective
accounts of the several Underwriters of the Securities registered in such names
and in such denominations as you shall request in writing not less than two full
business days prior to the date of delivery. The time and date of such payment
and delivery are herein referred to as the Closing Date.
IV.
The several obligations of the Underwriters hereunder are subject to the
following conditions:
(a) (i) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission, and there shall have been no
material adverse change in the condition of the Guarantor and its subsidiaries,
taken as a whole, from that set forth in the Registration Statement and the
Prospectus, and you shall have received, on the Closing Date, a certificate,
dated the Closing Date and signed by executive officers of the Company and the
Guarantor, to the foregoing effect. The officers making such certificate may
rely upon the best of their knowledge as to proceedings pending or threatened;
and
(ii) subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any downgrading in the rating
accorded any of the Company's or the Guarantor's securities by Moody's Investors
Service, Inc. or Standard & Poor's Corporation.
(b) You shall have received on the Closing Date an opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Company and the Guarantor,
dated the Closing Date, to the effect that (i) the Company has been duly
organized and is subsisting and in good standing as a corporation under the laws
of the State of New York, (ii) the Guarantor has been duly organized and is
subsisting and in good standing as a corporation under the laws of the State of
Delaware, (iii) the Indenture has been duly authorized, executed and delivered
by each of the Company
<PAGE>
and the Guarantor and is a valid and binding agreement, enforceable against the
Company and the Guarantor in accordance with its terms, except to the extent
that enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (iv) the sale and issuance of the Securities have been duly authorized
by all requisite corporate action on the part of the Company, and the
Securities, when executed and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be valid and binding obligations of the
Company, entitled to the benefit of the Indenture and enforceable in accordance
with their terms, except to the extent that enforcement thereof may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to creditors' rights generally and
(b) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity), (v) the Guarantees have been
duly authorized by all requisite corporate action on the part of the Guarantor
and duly executed and delivered by the Guarantor and constitute valid and
binding obligations of the Guarantor enforceable in accordance with their terms,
except to the extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereafter
in effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity), (vi) this Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor, and (vii) the Registration
Statement, as of its effective date, and the Basic Prospectus, as supplemented
by the prospectus supplement, as of the date of the prospectus supplement,
appeared on their face to be appropriately responsive, in all material respects
relevant to the offering of the Securities, to the requirements of the Act, and
the applicable rules and regulations of the Commission thereunder.
In addition, such counsel shall state that no facts have come to the
attention of such counsel in the course of their review that have led them to
believe that, insofar as relevant to the offering of the Securities, the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Basic Prospectus, as supplemented by the prospectus supplement, on the
date of the prospectus supplement, contained an untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such opinion may state that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, any post-effective amendment thereto,
the Basic Prospectus or the prospectus supplement except for those made under
the captions "Description of Debt Securities" in the Basic Prospectus and
"Description of Securities" and "Underwriters" in the prospectus supplement,
insofar as they relate to provisions of documents therein described, and that
they do not express any opinion or belief as to the financial statements,
schedules or other financial data included or incorporated by reference in or
excluded from the Registration Statement, any post-effective amendment thereto,
<PAGE>
the Basic Prospectus or the prospectus supplement, or as to the statement of the
eligibility and qualification of the Trustee under the Indenture under which the
Securities are being issued.
(c) You shall have received on the Closing Date an opinion of Alan
E.Charlson, Chief Counsel for the Company and the Guarantor, dated the Closing
Date, to the effect that (i) each of the Company and the Guarantor is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of property
requires such qualification, (ii) the performance of this Agreement will not
contravene any provision of the certificate of incorporation or by-laws of the
Company or the Guarantor or, to the actual knowledge of such counsel, any
agreement or other instrument binding upon either the Company or the Guarantor
and no consent, approval or authorization of any governmental body is required
for the performance of this Agreement, except such as are specified and have
been obtained, and such consents, approvals or authorizations as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters, and (iii) the documents
filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
incorporated by reference in the Prospectus, when they were filed with the
Commission, 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 he has no reason to believe that any of such
documents when so filed contained 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. Such opinion may state that such
counsel does not express any opinion or belief as to the financial statements or
other financial data contained therein.
(d) You shall have received on the Closing Date from Davis Polk & Wardwell,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the validity of the Indenture, the Securities, the Guarantees,
this Agreement, the Registration Statement, the Prospectus, and other related
matters as you 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.
(e) You shall have received on the Closing Date, a letter dated the Closing
Date, in form and substance satisfactory to you, from Arthur Andersen LLP,
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference in the Prospectus.
V.
In further consideration of the agreements of the Underwriters herein
contained, the Company and the Guarantor, jointly and severally, covenant as
follows:
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(a) To furnish to you without charge three conformed copies of the
Registration Statement (including exhibits and documents incorporated by
reference) and to each other Underwriter a copy of the Registration Statement
(without exhibits but including documents incorporated by reference) and, during
the period mentioned in paragraph (c) below, to furnish to each Underwriter as
many copies of the Prospectus and any supplements and amendments thereto and any
documents incorporated by reference as you may reasonably request. The terms
"supplement" and "amendment" or "amend" as used in this Agreement include or
refer to all documents filed by the Company and/or the Guarantor with the
Commission subsequent to the date of the Basic Prospectus pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act which are deemed to be incorporat-
ed by reference in the Prospectus from the date of filing such documents in
accordance with Form S-3.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish you a copy of each such proposed amendment or supplement.
(c) If, during such period after the first date of the public offering of
the Securities as in the opinion of your counsel the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to which
Securities may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably re-
quest and to pay all expenses (including fees not exceeding $10,000 and
disbursements of counsel) in connection with such qualification and in
connection with the determination of the eligibility of the Securities for
investment under the laws of such jurisdictions as you may designate.
(e) To make generally available to the Company's security holders as soon
as practicable an earnings statement covering the twelve month period beginning
after the date of this Agreement, which shall satisfy the provisions of Section
11(a) of the Act.
(f) During the period beginning on the date of this Agreement and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company substantially
similar to the Securities, without your prior written consent.
VI.
The Company and the Guarantor, jointly and severally, represent and warrant
to each Underwriter that (i) each document, if any,filed or to be filed pursuant
<PAGE>
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with such Act and the rules
and regulations thereunder, (ii) each part of the Registration Statement, when
such part became effective, did not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) each preliminary
prospectus, if any, filed pursuant to Rule 424 under the Act complied when so
filed in all material respects with such Act and the applicable rules and
regulations thereunder, (iv) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and the applicable rules and regulations
thereunder and (v) the Registration Statement and the Prospectus do not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that these representations and warranties
do not apply to statements or omissions in the Registration Statement, any
preliminary prospectus or the Prospectus based upon information furnished to the
Company in writing by or on behalf of any Underwriter expressly for use therein.
The Company and the Guarantor, jointly and severally, agree to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (if used
within the period set forth in paragraph (c) of Article V hereof and as amended
or supplemented if the Company or the Guarantor shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information furnished in writing to the Company by any Underwriter
expressly for use therein; provided that the foregoing indemnification with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Securities to a person to whom
there was not sent or given, if required by the Act, at or prior to the written
confirmation of the sale of such Securities to such person, a copy of the
Prospectus (excluding documents incorporated by reference) correcting the
untrue statement or omission of a material fact if the Company has previously
furnished copies thereof to such Underwriter.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantor, their respective directors, their
respective officers who sign the Registration Statement and any person
controlling the Company or the Guarantor to the same extent as the foregoing
indemnity from the Company and the Guarantor to each Underwriter, but only with
reference to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus.
<PAGE>
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the "indemni-
fied party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding.In any such proceeding,
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii)the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate firm
(in addition to any local counsel necessary for appearing in any proceeding) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by you
in the case of parties indemnified pursuant to the second preceding paragraph
and by the Company in the case of parties indemnified pursuant to the
immediately preceding paragraph. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 business days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in this Article VI is unavailable to
an indemnified party under the second or third paragraphs hereof or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantor on the one hand and the Underwriters on the other from the offering of
<PAGE>
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Guarantor on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantor on the one hand and the Underwriters on the other in connection with
the offering of the Securities shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company and the Guarantor on the one
hand and of the Underwriters on the other 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 or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Guarantor and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Article VI 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 which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, 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 Article VI, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which 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 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Article VI are several in proportion to their respective
underwriting percentages (as defined in the Agreement Among Underwriters) and
notjoint.
The indemnity and contribution agreements contained in this Article VI and
the representations and warranties of the Company and the Guarantor in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company or the Guarantor, their respective directors or officers or any
person controlling the Company or the Guarantor and (iii) acceptance of and
payment for any of the Securities.
<PAGE>
VII.
This Agreement shall be subject to termination in your absolute discretion,
by notice given to the Company, if prior to the Closing Date (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iii) there shall have
occurred any material outbreak or escalation of hostilities or any material
adverse change in financial markets or any calamity or crisis the effect of
which is such as to make it, in your judgment, impracticable to market the
Securities.
VIII.
If any one or more of the Underwriters shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder, and the aggregate
principal amount of Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Securities, the other Underwriters shall be
obligated severally in the proportions which the amounts of Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the principal amount of Securities which any Underwriter
has agreed to purchase pursuant to Article I hereof be increased pursuant to
this Article VIII by an amount in excess of one-ninth of such principal amount
of Securities without the written consent of such Underwriter. If any Under-
writer or Underwriters shall fail or refuse to purchase Securities which it or
they have agreed to purchase hereunder, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Securities and arrangements satisfactory
to you and the Company for the purchase of such Securities are not made within
36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or of the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or the Guarantor to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company or the Guarantor shall be unable to perform its
obligations under this Agreement, the Company and the Guarantor will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with the Securities.
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This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
THE MAY DEPARTMENT STORES COMPANY,
a New York corporation
By: /s/ Jan R. Kniffen
THE MAY DEPARTMENT STORES COMPANY,
a Delaware corporation
By: /s/ Jan R. Kniffen
Accepted, July 11, 2000:
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
SALOMON SMITH BARNEY INC.
Acting severally on behalf of themselves
By MORGAN STANLEY & CO. INCORPORATED
By: /s/ Michael Fusco
