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EXHIBIT 1.2
PRICING AGREEMENT
Xxxxxxx, Xxxxx & Co.
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
As Representatives of the several
Underwriters named in Schedule 1 hereto
November 13, 1998
Ladies and Gentlemen:
Aetna Services, Inc., a Connecticut corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated November 13 , 1998 (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). The
Securities specified in Schedule II hereto shall be guaranteed by Aetna Inc., a
Connecticut corporation (the "Guarantor"), as set forth in the Indenture
identified in Schedule II hereto. 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. Each reference to the Representatives herein and
in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of each of the Underwriters of the
Designated Securities pursuant to Section 12 of the Underwriting Agreement and
the address of the Representatives referred to in such Section 12 are set forth
at the end of Schedule II hereto.
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An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, 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 to 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 Schedules II
hereto, the principal amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto, and the Guarantor agrees to issue
its Guarantees with respect to such Designated Securities.
At the time of the closing of the sale and purchase of the Designated
Securities, and subject thereto, Xxxxxxx, Xxxxx & Co. will pay to the Company,
in immediately available funds, $6,780,000 in respect of the call option granted
to Xxxxxxx, Sachs & Co. pursuant to the terms of the Designated Securities.
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If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company and the Guarantor for examination upon
request.
Very truly yours,
AETNA SERVICES, INC.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice Chairman for Strategy
and Finance
AETNA INC.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice Chairman for Strategy
and Finance
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
On behalf of each of the
Underwriters
By: /s/ Xxxxxxx, Sachs & Co.
Xxxxxxx, Xxxxx & Co.
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SCHEDULE I
Principal Amount of Designated Securities to be Purchased
Xxxxxxx, Sachs & Co. $ 180,000,000
Deutsche Bank Securities Inc. 24,000,000
X.X. Xxxxxx Securities Inc. 24,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & 24,000,000
Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated 24,000,000
Xxxxxxx Xxxxx Barney Inc. 24,000,000
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Total $ 300,000,000
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SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
5.66% Puttable Reset Securities PURS(SM) due 2009 ("PURS")
AGGREGATE PRINCIPAL AMOUNT:
$300,000,000
PRICE TO PUBLIC:
100% of the principal amount of PURS, plus accrued interest, if any,
from November 18, 1998
PURCHASE PRICE BY UNDERWRITERS:
99.8% of the principal amount of PURS, plus accrued interest, if any,
from November 18, 1998
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately Available Funds
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INDENTURE:
Indenture (Senior Debt Securities) dated July 1, 1996 among
the Company, the Guarantor and State Street Bank and Trust
Company of Connecticut, National Association, as Trustee
MATURITY:
November 15, 2009
INTEREST RATE:
5.66% (initial interest rate)
INTEREST PAYMENT DATES:
Interest is payable semi-annually on May 15 and November 15, commencing
May 15, 1999 (except that the November 1999 interest payment will be
made on November 29, 1999)
REDEMPTION PROVISIONS:
As provided in paragraph 6 of the form of PURS attached
hereto as Exhibit A
SINKING FUND PROVISIONS:
No sinking fund provisions
OPTIONAL REPAYMENT PROVISIONS:
Put Option as provided in paragraph 3 of the form of
PURS attached hereto as Exhibit A
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TIME OF DELIVERY:
November 18, 1998
CLOSING LOCATION:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
DELAYED DELIVERY:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Xxxxxxx, Sachs & Co.
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Barney Inc.
Address for Notices, etc.: x/x Xxxxxxx, Xxxxx & Xx.
Xxxx: Registration Department
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
OTHER TERMS:
As provided in paragraphs 2, 3, 4, 5 and 10 of the form of PURS
attached hereto as Exhibit A
At the time of the closing of the sale and purchase of the Designated
Securities, and subject thereto, Xxxxxxx, Sachs & Co. will pay to the
Company, in immediately available funds, $6,780,000 in respect of the
call option granted to Xxxxxxx, Xxxxx & Co. pursuant to the terms of
the Designated Securities.
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The opinions in section 7(b), 7(c) and 7(d) of the Underwriting
Agreement will also cover the validity, binding effect and
enforceability of the Calculation Agency Agreement to be entered into
in connection with the Designated Securities.
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