1
Exhibit 1.1(b)
Pricing Agreement
April 1, 1998
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Solomon Brothers Inc.
Bear, Xxxxxxx & Co. Inc.
Chase Securities Inc.
X.X. Xxxxxx Securities Inc.
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The Equitable Companies Incorporated, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated April 1, 1998 (the "Underwriting Agreement"),
a signed copy of which has been delivered to you, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth in the Underwriting Agreement shall be
deemed to have been made at and as of the date of this Pricing Agreement, except
that each representation and warranty which 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 which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of
2
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.
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 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 10 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. 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 for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
2
3
Very truly yours,
THE EQUITABLE COMPANIES
INCORPORATED
By: /s/ Xxxxx X. Xxxxx
-------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
and Treasurer
Accepted as of the date hereof:
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Salomon Brothers Inc
Bear, Xxxxxxx & Co. Inc.
Chase Securities Inc.
X.X. Xxxxxx Securities Inc.
By: Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
By: /s/ Xxxxx Xxxxxxx
------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
On behalf of each of the Underwriters
4
SCHEDULE I
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
SENIOR NOTES SENIOR
TO BE DEBENTURES TO
UNDERWRITER PURCHASED BE PURCHASED
------------ ------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation $ 53,125,000 $ 74,375,000
Xxxxxxx, Sachs & Co. 53,125,000 74,375,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 53,125,000 74,375,000 74,375,000
Salomon Brothers Inc. 53,125,000 74,375,000
Bear, Xxxxxxx & Co. Inc. 12,500,000 17,500,000
Chase Securities Inc. 12,500,000 17,500,000
X.X. Xxxxxx Securities Inc. 12,500,000 17,500,000
Total $250,000,000 $350,000,000
============ ============
5
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
6.5% Senior Notes due 2008 (the "Senior Notes") 7% Senior Debentures due
2028 (the "Senior Debentures")
AGGREGATE PRINCIPAL AMOUNT:
$250,000,000 of Senior Notes
$350,000,000 of Senior Debentures
PRICE TO PUBLIC:
99.672% of the principal amount of the Senior Notes and 99.242% of the
principal amount of the Senior Debentures, plus in each case accrued interest,
if any, from the date of issuance
PURCHASE PRICE BY UNDERWRITERS:
99.022% of the principal amount of the Senior Notes and 98.367% of the
principal amount of the Senior Debentures, plus in each case accrued interest,
if any, from the date of issuance
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian for
trading in the Same Day Funds Settlement System of DTC, and to be made
available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds by wire transfer to the account of the Company.
TIME OF DELIVERY:
10:00 a.m. (New York City time), April 6, 1998
6
INDENTURE:
Indenture dated as of December 1, 1993 between the Company and The Chase
Manhattan Bank (formerly Chemical Bank), as Trustee, as supplemented by the
Fourth Supplemental Indenture dated as of April 1, 1998 between the Company
and the Trustee
MATURITY:
April 1, 2008 in the case of the Senior Notes April 1, 2028 in the case of
the Senior Debentures
INTEREST RATE:
6.5% per annum in the case of the Senior Notes
7% per annum in the case of the Senior Debentures
INTEREST PAYMENT DATES:
April 1 and October 1, commencing October 1, 1998
REDEMPTION PROVISIONS:
The Senior Notes and the Senior Debentures may be redeemed by the Company,
in whole or in part, at any time prior to maturity at a price (the
"Redemption Price") equal to the sum of (i) the aggregate principal amount
being redeemed plus accrued interest thereon to the date of redemption and
(ii) the Make-Whole Amount (as defined below), if any, with respect to such
Designated Securities.
Notice of an optional redemption of any Designated Securities will be
given to holders thereof at their addresses, as shown in the register, not
more than 60 nor less than 30 days prior to the date fixed for redemption.
The notice of redemption will specify, among other items, the date fixed for
redemption and the principal amount of the Designated Securities of the
applicable series held by such holder to be redeemed.
If funds for the redemption of any Designated Securities called for
redemption have been made available on such redemption date, such Designated
Securities will cease to bear interest on the date fixed for such redemption
specified in the notice of redemption and the only right of the holders
thereof will be to receive payment of the Redemption Price.
If fewer than all of the outstanding Designated Securities of a series are
to be redeemed, the Designated Securities of such series shall be redeemed
pro rata based on the outstanding principal amount of Designated Securities
of such series being redeemed.
2
7
Certain Definitions Applicable to Optional Redemption. "Make-Whole Amount"
means, in connection with any optional redemption of the Designated
Securities of a series, the excess, if any, of (i) the aggregate present
value as of the date of such redemption of each dollar of principal being
redeemed and the amount of interest that would have been payable in respect
of such dollar if such prepayment had not been made determined by
discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (determined on the business day immediately preceding the
date of such redemption) from the respective dates on which such principal
and interest would have been payable if such prepayment had not been made,
over (ii) the aggregate principal amount of the Designated Securities of the
applicable series being redeemed or paid plus accrued interest to the date
of redemption.
The term "Reinvestment Rate" means the arithmetic mean of the yields for
the two weeks set forth under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the Weighted
Average Life to Maturity of the principal being prepaid or paid plus 15
basis points in the case of the Senior Notes and 20 basis points in the case
of the Senior Debentures. If no maturity exactly corresponds to such
Weighted Average Life to Maturity, yields for the two published maturities
most closely corresponding to such Weighted Average Life to Maturity shall
be calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of determination
of the Make-Whole Amount shall be used.
The term "Remaining Dollar-Years" means, at any time, with respect to any
Senior Note or Senior Debenture, as the case may be, the result obtained by
multiplying (i) an amount equal to the then remaining principal payment at
final maturity of such Senior Note or Senior Debenture, as the case may be,
unpaid immediately prior to such time by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such time
and the date such required principal payment at final maturity is due.
The term "Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded U.S.
government securities adjusted to constant maturities or if such statistical
release is not published at the time of any determination under the
Indenture, then such other reasonably comparable index which shall be
designated by the Company.
The term "Weighted Average Life to Maturity" means, at any time, with
respect to any Senior Note or Senior Debenture, as the case may be, the
number of years obtained by dividing the then Remaining Dollar-Years at such
time of such Senior Note or Senior Debenture, as the case may be, by the
then outstanding principal amount of such Senior Note or Senior Debenture,
as the case may be.
3
8
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
The provisions of Article 4 of the Indenture will be applicable to each
series of Designated Securities.
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
OTHER PERMITTED DEBT:
For purposes of Section 2(d) of the Underwriting Agreement the amount of
Other Permitted Debt is $150,000,000 (exclusive of interest accruals) issued
by Xxxxxxxxx, Lufkin & Xxxxxxxx, Inc. on March 23, 1998 and other long-term
debt not in excess of $1,000,000,000.
COMPLETED AND PENDING INSURANCE EXAMINATIONS:
For purposes of Section 2(o) of the Underwriting Agreement, the Company has
delivered to the Representatives a certificate dated April 1, 1998 with
respect to significant examinations completed and filed since January 1,
1997 and all pending significant examinations.
Names and addresses of Representatives:
Designated Representatives: Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Address for Notices, etc.: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
4
