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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 17, 1996
KMART CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
(State or Other Jurisdiction of Incorporation)
1-32738-0729500
(Commission File Number)(I.R.S. Employer Identification No.)
3100 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084
(Address of Principal Executive Offices) (Zip Code)
(810) 643-1000
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 7. EXHIBITS
The following exhibits are filed in connection with the Company's Registration
Statement on Form S-3 (Registration No. 33-12534):
5(d) Opinion of Skadden, Arps, Slate, Meagher & Flom
5(e) Opinion of A. N. Palizzi
23(d) Consent of Skadden, Arps, Slate, Meagher & Flom (included in
Exhibit 5(d))
23(e) Consent of A. N. Palizzi (included in Exhibit 5(e))
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KMART CORPORATION
(Registrant)
By: /s/ Nancie W. LaDuke
------------------------
Nancie W. LaDuke
Vice President and Secretary
Date: June 17, 1996
3
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<TABLE>
<CAPTION>
<S> <C>
Exhibit
No. Description
- ------- ------------
5 (d) Opinion of Skadden, Arps, Slate,
Meagher & Flom
5 (e) Opinion of A.N. Palizzi
</TABLE>
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EXHIBIT (d)
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
June 17, 1996
Kmart Corporation
Kmart Financing I
c/o Kmart Corporation
3100 West Big Beaver Road
Troy, Michigan 48084
Ladies and Gentlemen:
We have acted as special counsel to (1) Kmart Financing I (the "Trust"), a
statutory business trust formed under the Business Trust Act of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sec. 3801, et
seq.) (the "Delaware Trust Act"), and (2) Kmart Corporation ("Kmart"), a
corporation organized under the laws of the State of Michigan, in connection
with the preparation of a Registration Statement on Form S-3 (No. 33-64905)
filed with the Securities and Exchange Commission (the "Commission") on
December 11, 1995 under the Securities Act of 1933, as amended (the "Act"),
Amendment No. 1 thereto filed with the Commission on February 16, 1996,
Amendment No. 2 thereto filed with the Commission on March 14, 1996 and
Amendment No. 3 thereto filed with the Commission on March 22, 1996 (such
Registration Statement, as so amended, being hereinafter referred to as the
"Registration Statement"), in connection with the public offering of 17,400,000
of the Trust's 7 3/4% trust convertible preferred securities (liquidation
amount of $50 per trust convertible preferred security) (the "Firm Preferred
Securities") and certain other securities, plus an option granted by Kmart and
the Trust to the U.S. Underwriters (as hereinafter defined) to purchase up to
an additional 2,600,000 7 3/4% trust convertible preferred securities (the
"Additional Preferred Securities") to cover over-allotments. The Firm
Preferred Securities and the Additional Preferred Securities are collectively
referred to herein as the "Preferred Securities".
The Preferred Securities are being issued pursuant to the Amended and
Restated Declaration of Trust, dated as of June 6, 1996 (the "Declaration"),
among Kmart, as sponsor, The Bank of New York, as the institutional trustee (in
such capacity, the "Institutional Trustee"), The Bank of New York (Delaware),
as
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 2
Delaware trustee (the "Delaware Trustee"), and Marvin P. Rich, Martin E.
Welch III and Michael J. Viola, as regular trustees (together, the "Regular
Trustees").
The Preferred Securities are guaranteed by Kmart with respect to
distributions and payments upon liquidation and redemption pursuant to and to
the extent set forth in the Preferred Securities Guarantee Agreement, dated as
of June 17, 1996 (the "Preferred Securities Guarantee Agreement"), between
Kmart and The Bank of New York, as guarantee trustee (in such capacity, the
"Guarantee Trustee").
In connection with the issuance of the Preferred Securities, the Trust is
also issuing 618,557 of its common securities (liquidation amount of $50 per
common security)(the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities"), representing common undivided beneficial
interests in the assets of the Trust.
The entire proceeds from the sale of the Trust Securities are to be used
by the Trust to purchase $1,030,927,850 principal amount of 7 3/4% convertible
junior subordinated debentures (the "Junior Subordinated Debt Securities")
being issued by Kmart. The Junior Subordinated Debt Securities are being
issued pursuant to an indenture, dated as of June 6, 1996, between Kmart and
The Bank of New York, as indenture trustee (in such capacity, the "Indenture
Trustee"), as supplemented by a First Supplemental Indenture, dated as of June
6, 1996 (such indenture, as so supplemented, being hereinafter referred to as
the "Indenture").
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) the certificate of trust of the Trust, dated February 16, 1996
(the "Certificate of Trust"), as filed with the Secretary of State of the State
of Delaware; (iii) the Declaration (including the designations of the terms of
the Pre-
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 3
ferred Securities annexed thereto); (iv) the form of the Preferred
Securities and a specimen certificate thereof; (v) the Preferred Securities
Guarantee Agreement; (vi) the Indenture; (vii) the form of the Junior
Subordinated Debt Securities and a specimen thereof; and (viii) the
Underwriting Agreement, dated June 6, 1996 (the "Underwriting Agreement"),
among Kmart, the several U.S. Underwriters named in Schedule I thereto and the
several International Underwriters named in Schedule II thereto. We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such other records of Kmart and the Trust and such agreements,
certificates or receipts of public officials, certificates of officers or
representatives of Kmart and the Trust, and such other documents, certificates
and records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust, we have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that, except to the extent set forth in
paragraphs 2 and 3 below, such documents constitute valid and binding
obligations of such parties. As to any facts material to the opinions
expressed herein which were not independently established or verified, we have
relied upon oral or written statements and representations of officers and
other representatives of Kmart, the Trust, the Delaware Trustee, the
Institutional Trustee, the Guarantee Trustee, the Regular Trustees and others.
Members of our firm are admitted to the Bar in the States of Delaware and
New York, and we do not express any opinion as to the laws of any other
jurisdiction. We have assumed that no other law would affect any of the
conclusions set forth herein.
Based upon and subject to the foregoing, we are of the opinion that:
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 4
1 . The Preferred Securities have been duly authorized by the Declaration
and, subject to the qualification set forth below, when executed by the Trust
and authenticated by the Institutional Trustee in accordance with the
Declaration and delivered and paid for in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; and the holders of
the Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware. We bring to your
attention, however, that the holders of Preferred Securities may be obligated,
pursuant to the Declaration, to (i) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from transfers of
Preferred Securities and the issuance of replacement Preferred Securities, and
(ii) provide security and indemnity in connection with requests of or
directions to the Institutional Trustee to exercise its rights and powers under
the Declaration.
2 . The Preferred Securities Guarantee Agreement is a valid and binding
agreement of Kmart, enforceable against Kmart in accordance with its terms,
except as enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance 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).
3 . When executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Trust, the Junior
Subordinated Debt Securities will be valid and binding obligations of Kmart,
enforceable against Kmart in accordance with their terms, except as enforcement
thereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance 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).
We hereby consent to the filing of this opinion with the Commission as an
exhibit to a Current Report on Form 8-K of the Registrants. In giving this
consent, we do not thereby admit that we are within the category of persons
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 5
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise expressly stated, and we
disclaim any undertaking to advise you of any subsequent changes in the facts
stated or assumed herein or in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom
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EXHIBIT 5(e)
Kmart Corporation
3100 West Big Beaver Road
Troy, Michigan 48084
June 17, 1996
Kmart Corporation
Kmart Financing I
c/o Kmart Corporation
3100 West Big Beaver Road
Troy, Michigan 48084
Ladies and Gentlemen:
I am General Counsel of Kmart Corporation ("Kmart"), a corporation
organized under the laws of the State of Michigan, and have acted in such
capacity in connection with the preparation of a Registration Statement on Form
S-3 (No. 33-64905) filed by Kmart Financing I (the "Trust"), Kmart Financing
II, Kmart Financing III and Kmart Financing IV (together with the Trust, the
"Kmart Trusts"), each a statutory business trust formed under the Business
Trust Act of the State of Delaware (Chapter 38, Title 12, of the Delaware Code,
12 Del. C. Sec. 3801, et seq.) (the "Delaware Trust Act"), and Kmart (together
with the Kmart Trusts, the "Registrants"), with the Securities and Exchange
Commission (the "Commission") on December 11, 1995 under the Securities Act of
1933, as amended (the "Act"), Amendment No. 1 thereto filed with the Commission
on February 16, 1996, Amendment No. 2 thereto filed with the Commission on
March 14, 1996 and Amendment No. 3 thereto filed with the Commission on March
22, 1996 (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"), in connection with the public
offering of 17,400,000 of the Trust's 7 3/4% trust convertible preferred
securities (liquidation amount of $50 per trust convertible preferred security)
(the "Firm Preferred Securities") and certain other securities, plus an option
granted by Kmart and the Trust to the U.S. Underwriters to purchase up to an
additional 2,600,000 7 3/4% trust convertible preferred securities (the
"Additional Preferred Securities") to cover over-allotments. The Firm
Preferred Securities and the Additional Preferred Securities are collectively
referred to herein as the "Preferred Securities."
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 2
The Preferred Securities are being issued pursuant to the Amended and
Restated Declaration of Trust, dated as of June 6, 1996 (the "Declaration"),
among Kmart, as sponsor, The Bank of New York, as the institutional trustee (in
such capacity, the "Institutional Trustee"), The Bank of New York (Delaware),
as Delaware trustee (the "Delaware Trustee"), and Marvin P. Rich, Martin E.
Welch III and Michael J. Viola, as regular trustees (together, the "Regular
Trustees").
The Preferred Securities are guaranteed by Kmart with respect to
distributions and payments upon liquidation and redemption pursuant to and to
the extent set forth in the Preferred Securities Guarantee Agreement, dated as
of June 17, 1996 (the "Preferred Securities Guarantee Agreement"), between
Kmart and The Bank of New York, as guarantee trustee (in such capacity, the
"Guarantee Trustee").
In connection with the issuance of the Preferred Securities, the Trust is
also issuing 618,557 of its common securities (liquidation amount of $50 per
common security)(the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities"), representing common undivided beneficial
interests in the assets of the Trust. The Common Securities are also
guaranteed by Kmart with respect to distributions and payments upon liquidation
and redemption pursuant to and to the extent set forth in the Common Securities
Guarantee Agreement, dated as of June 17, 1996 (the "Common Securities
Guarantee Agreement"), executed by Kmart.
The entire proceeds from the sale of the Trust Securities are to be used
by the Trust to purchase $1,030,927,850 principal amount of 7 3/4% convertible
junior subordinated debentures (the "Junior Subordinated Debt Securities")
being issued by Kmart. The Junior Subordinated Debt Securities are being
issued pursuant to an indenture, dated as of June 6, 1996 between Kmart and The
Bank of New York, as indenture trustee (in such capacity, the "Trustee"), as
supplemented by a First Supplemental Indenture, dated as of June 6, 1996 (the
"Supplemental Indenture") (such indenture, as so supplemented, being
hereinafter referred to as the"Indenture").
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 3
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement; (ii) the Base Prospectus, dated June 6, 1996 (the "Base
Prospectus"), and the Prospectus Supplement, dated June 6, 1996 (the
"Prospectus Supplement"), relating to the Preferred Securities, the Preferred
Securities Guarantee Agreement and the Junior Subordinated Debt Securities, in
the form filed with the Commission pursuant to Rule 424(b) under the General
Rules and Regulations ("Rules and Regulations") under the Act (such Base
Prospectus, as so supplemented by the Prospectus Supplement, being herein
referred to as the "Prospectus"); (iii) the certificate of trust of the Trust,
dated February 16, 1996 (the "Certificate of Trust"), as filed with the
Secretary of State of the State of Delaware; (iv) the Declaration (including
the designations of the terms of the Preferred Securities and the Common
Securities annexed thereto); (v) the form of the Preferred Securities and a
specimen certificate thereof; (vi) the Preferred Securities Guarantee
Agreement; (vii) the Indenture; (viii) the form of the Junior Subordinated Debt
Securities and a specimen certificate thereof; and (ix) the Underwriting
Agreement, dated June 6, 1996 (the "Underwriting Agreement"), among Kmart, the
several U.S. Underwriters named in Schedule I thereto (collectively, the "U.S.
Underwriters"), for whom Morgan Stanley & Co. Incorporated, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, CS First Boston Corporation, Lehman
Brothers Inc. and Salomon Brothers Inc are acting as representatives (in such
capacity, the "U.S. Representatives"), and the several International
Underwriters named in Schedule II thereto (collectively, the "International
Underwriters" and, together with the U.S. Underwriters, the "Underwriters"),
for whom Morgan Stanley & Co. International Limited, Merrill Lynch
International, CS First Boston Limited, Lehman Brothers International (Europe)
and Salomon Brothers International Limited are acting as representatives. I
have also examined originals or copies, certified or otherwise identified to my
satisfaction, of such other records of Kmart and the Trust and such agreements
certificates or receipts of public officials, certificates of officers or
representatives of Kmart and
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 4
the Trust, and such other documents, certificates and records as I have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. In making my examination of
documents executed by parties other than the Trust and Kmart, I have assumed
that such parties had the power, corporate or other, to enter into and perform
all obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. As to any facts material to the opinions
expressed herein which were not independently established or verified, I have
relied upon oral or written statements and representations of officers and
other representatives of Kmart, the Trust, the Delaware Trustee, the Regular
Trustees and others.
I am admitted to the Bar in the State of Michigan, and I do not express
any opinion as to the laws of any other jurisdiction other than the laws of the
United States of America.
Based upon and subject to the foregoing, I am of the opinion that:
1. The shares of Kmart Common Stock initially issuable upon the conversion
of the Junior Subordinated Debt Securities and/or the Preferred Securities have
been duly authorized by requisite corporate action on the part of Kmart and
reserved for issuance upon such conversion and, when issued upon such
conversion in accordance with the terms thereof, will be duly issued, fully
paid and nonassessable and will not be subject to any preemptive or similar
rights.
2. The Declaration and the Preferred Securities Guarantee Agreement have
each been duly authorized by requisite corporate action on the part of Kmart,
and duly executed and delivered by Kmart, and the Declaration is a valid and
binding agreement of Kmart and the Kmart Trustees, respectively,
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Kmart Corporation
Kmart Financing I
June 17, 1996
Page 5
and the Preferred Securities Guarantee Agreement is a valid and binding
agreement of Kmart, in each case enforceable against Kmart and, in the case of
the Declaration, the Kmart Trustees, except as enforcement thereof may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Indenture has been duly authorized by requisite corporate action on
the part of Kmart, and duly executed and delivered by Kmart and is a valid and
binding agreement of Kmart enforceable in accordance with its terms, except as
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity).
I hereby consent to the filing of this opinion with the Commission as an
exhibit to a Current Report on Form 8-K of the Registrants. In giving this
consent, I do not thereby admit that I am within the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the Commission promulgated thereunder. This opinion is expressed as of the
date hereof unless otherwise expressly stated, and I disclaim any undertaking
to advise you of any subsequent changes in the facts stated or assumed herein
or in the applicable law.
Very truly yours,
/s/ A. N. Palizzi
