PRICING AGREEMENT
Goldman, Sachs & Co.
BancAmerica Securities, Inc.
NationsBanc Capital Markets, Inc.
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
June 18, 1997
Ladies and Gentlemen:
The Toro Company, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated June 18, 1997 (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").
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 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 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 six 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.
Very truly yours,
THE TORO COMPANY
By: /s/ STEPHEN P. WOLFE
------------------------------------
Name: Stephen P. Wolfe
Title: Vice President Finance, Treasurer
and Chief Financial Officer
Accepted as of the date hereof in New York, New York:
Goldman, Sachs & Co.
BancAmerica Securities, Inc.
NationsBanc Capital Markets, Inc.
By: /s/ GOLDMAN, SACHS & CO.
------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
PRINCIPAL AMOUNT PRINCIPAL
OF DEBENTURES TO AMOUNT OF NOTES
BE PURCHASED TO
UNDERWRITER ------------ BE PURCHASED
----------- ------------
Goldman, Sachs & Co. ............... $ 60,000,000 $ 45,000,000
BancAmerica Securities, Inc. ........ 20,000,000 15,000,000
NationsBanc Capital Markets, Inc. ... 20,000,000 15,000,000
----------- -----------
Total ............................ $100,000,000 $ 75,000,000
------------ ------------
------------ ------------
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
7.80% Debentures due June 15, 2027
7.125% Notes due June 15, 2007
AGGREGATE PRINCIPAL AMOUNT:
$100,000,000 Debentures
$ 75,000,000 Notes
PRICE TO PUBLIC:
99.308% of the principal amount of the Debentures, plus accrued interest
from June 15, 1997 to June 24, 1997.
99.497% of the principal amount of the Notes, plus accrued interest from
June 15, 1997 to June 24, 1997.
PURCHASE PRICE BY UNDERWRITERS:
98.433% of the principal amount of the Debentures, plus accrued interest
from June 15, 1997 to June 24, 1997.
98.847% of the principal amount of the Notes, plus accrued interest from
June 15, 1997 to June 24, 1997.
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
TIME OF DELIVERY:
9:00 a.m. (Chicago time), June 24, 1997
INDENTURE:
Indenture dated as of January 31, 1997 between the Company and First
Trust National Association, as Trustee
MATURITY:
Debentures: June 15, 2027
Notes: June 15, 2007
INTEREST RATE:
Debentures: 7.80%
Notes: 7.125%
INTEREST PAYMENT DATES:
Debentures and Notes: Semi-annually on each June 15 and December 15,
commencing December 15, 1997
REDEMPTION PROVISIONS:
Optional Repayment: No provision for repayment at the option of holders
of Designated Securities.
Optional Redemption: The Debentures and the Notes may be redeemed, in
each case at any time, in whole or in part at the option of the Company,
upon not less than 30 and not more than 60 days' notice mailed to each
holder of Designated Securities to be redeemed at the holder's address
appearing in the official register for such Designated Securities, on
any date prior to maturity at a price equal to the greater of (i) 100%
of the principal amount of the Notes or Debentures (as applicable) plus
accrued interest thereon to the date of redemption or (ii) as determined
by a Quotation Agent (as defined in Exhibit A hereto), the sum of (x)
the present value of the remaining scheduled payments of principal and
interest thereon (not including the portion of any such payments of
interest accrued as of the date of redemption) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined in Exhibit A hereto) plus (y) interest thereon, if any, accrued
as of the date of redemption. See Exhibit A hereto. Unless the Company
defaults in payment of the redemption price, on and after the redemption
date, interest will cease to accrue on the Notes or Debentures (as
applicable) or portions thereof called for redemption.
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
The defeasance provisions described under the caption "Description of
Debt Securities -- Defeasance and Covenant Defeasance" in the Prospectus
dated June 18, 1997 shall apply to the Notes and the Debentures.
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Sonnenschein Nath & Rosenthal, 8000 Sears Tower, Chicago, Illinois 60606
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Goldman, Sachs & Co.
BancAmerica Securities, Inc.
NationsBanc Capital Markets, Inc.
Address for Notices, etc.:
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
EXHIBIT A
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus (A) 0.15% in the case of the Notes
or (B) 0.20% in the case of the Debentures.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes or Debentures (as applicable) to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations or (B) if the Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company. "Reference Treasury Dealer"
means (a) Goldman, Sachs & Co. and their successors; provided, however, that
if the foregoing shall cease to be a primary U.S. government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer; and (b) any other
Primary Treasury Dealer selected by the Trustee after consultation with the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. (New
York City time) on the third business day preceding such redemption date.