<PAGE>
RULE NO.424(b)(5)
REGISTRATION NO. 33-46021
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 16, 1992)
$200,000,000
The May Department Stores Company
8 3/8% DEBENTURES DUE 2024
----------------
Interest payable February 1 and August 1
----------------
THE DEBENTURES WILL BE REDEEMABLE ON 30 DAYS' NOTICE (A) THROUGH THE OPERATION
OF THE SINKING FUND COMMENCING ON AUGUST 1, 2005 AT 100%, AND (B) AT THE OPTION
OF THE COMPANY, AS A WHOLE OR IN PART AT ANY TIME ON OR AFTER AUGUST 1, 2004, TO
AUGUST 1, 2005, AT 104.188%, AND AT DECREASING PRICES THEREAFTER TO AUGUST 1,
2014, AND THEREAFTER AT 100%, TOGETHER IN EACH CASE WITH ACCRUED INTEREST.
----------------
The Debentures are subject to mandatory annual sinking fund payments
sufficient to retire $10,000,000 aggregate principal amount of the Debentures
on each August 1 commencing August 1, 2005. Such mandatory sinking fund
payments are calculated to retire 95% of the aggregate principal amount of the
Debentures prior to maturity. The Company has the non-cumulative option to
increase any sinking fund payment by an additional amount not exceeding
$20,000,000 and may credit against mandatory sinking fund payments Debentures
delivered by the Company for cancellation or redeemed other than through the
mandatory sinking fund.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
PRICE 100% AND ACCRUED INTEREST
----------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
--------- -------------- -------------
<S> <C> <C> <C>
Per Debenture......................... 100% .875% 99.125%
Total................................. $200,000,000 $1,750,000 $198,250,000
</TABLE>
- --------
(1) Plus accrued interest from August 1, 1994.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933.
(3) Before deducting expenses payable by the Company estimated at $125,000.
----------------
The Debentures are offered, subject to prior sale, when, as and if accepted
by the Underwriters named herein, and subject to approval of certain legal
matters by Davis Polk & Wardwell, counsel for the Underwriters. It is expected
that delivery of the Debentures will be made on or about August 11, 1994, at
the office of Morgan Stanley & Co. Incorporated, New York, N.Y., against
payment therefor in New York funds.
----------------
MORGAN STANLEY & CO. MERRILL LYNCH & CO.
Incorporated
August 4, 1994
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debentures
for capital expenditures, working capital needs and other general corporate
purposes.
RECENT DEVELOPMENTS
The Company reported preliminary sales of $728.4 million for the four-week
period ended July 30, 1994, a 6.3% increase over $685.1 million in the similar
fiscal period last year. Sales for the first six months of fiscal 1994 were
$5.15 billion, up 8.8% from sales of $4.73 billion during the same period a
year ago. Department store sales for the month of July totaled $588.0 million,
up 7.6% or $41.6 million from last year. Sales for Payless ShoeSource were
$140.4 million, an increase of 1.2% or $1.7 million from last year's similar
period.
July and year-to-date sales compared to 1993 sales were as follows:
<TABLE>
<CAPTION>
JULY SALES (MILLIONS)
-------------------------------------------
FISCAL FISCAL PERCENT STORE-FOR-STORE*
1994 1993 INCREASE INC/(DEC)
-------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Department stores................... $ 588.0 $ 546.4 7.6% 5.0%
Payless ShoeSource.................. 140.4 138.7 1.2 (5.0)
-------- -------- --- ----
Total............................. $ 728.4 $ 685.1 6.3% 3.0%
======== ======== === ====
<CAPTION>
YEAR-TO-DATE SALES (MILLIONS)
-------------------------------------------
FISCAL FISCAL PERCENT STORE-FOR-STORE*
1994 1993 INCREASE INCREASE
-------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Department stores................... $4,087.5 $3,760.4 8.7% 6.0%
Payless ShoeSource.................. 1,061.2 970.3 9.4 2.5
-------- -------- --- ----
Total............................. $5,148.7 $4,730.7 8.8% 5.3%
======== ======== === ====
</TABLE>
- --------
* Store-for-store sales represent sales of those stores open during both years.
Sales have been restated to exclude the sales of stores that have been closed
and not replaced. Year-to-date revenues, including sales of nonreplaced closed
stores and finance charge revenue, were $5.33 billion in 1994 and $5.01 billion
in 1993.
DESCRIPTION OF SECURITIES
The Debentures are to be issued under an Amended and Restated Indenture (the
"Indenture"), dated as of January 15, 1991, between the Company and The First
National Bank of Chicago (the "Trustee"). This description supplements the
description of the general terms and provisions of the Debentures and the
Indenture set out in the accompanying Prospectus under the heading "Description
of Debt Securities." The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular sections or
defined terms of the Indenture are referred to, it is intended that such
sections or defined terms shall be incorporated herein by reference.
GENERAL
The Debentures will be limited to $200,000,000 aggregate principal amount and
will mature on August 1, 2024.
S-2
<PAGE>
The Debentures will bear interest at the rate per annum shown on the cover
page of this Prospectus Supplement from August 1, 1994, or from the most
recent Interest Payment Date to which interest has been paid or provided for,
payable semi-annually on February 1 and August 1 of each year to the persons
in whose names the Debentures are registered at the close of business on the
fifteenth day of January or July, as the case may be, next preceding such
Interest Payment Date. The Debentures will be payable at, and may be presented
for transfer or exchange to, the Corporate Trust Office of the Trustee in The
City of New York or at any other office or agency maintained by the Company
for such purpose, provided that, at the option of the Company, payment of
interest may be made by check mailed to the registered Holders of the
Debentures at their addresses appearing in the Debenture Register (Sections
301, 305 and 902).
The Debentures will be issued in fully registered form without coupons in
denominations of $1,000 or any multiple thereof.
SINKING FUND
The Company will provide for the retirement by redemption of $10,000,000 of
the principal amount of the Debentures on August 1 of each of the years 2005
to and including 2023 at the principal amount thereof, together with accrued
interest to the date of redemption. The Company may also provide for the
redemption, at the principal amount thereof, together with accrued interest to
the date of redemption, of up to an additional $20,000,000 principal amount of
the Debentures annually through the operation of the sinking fund, such
optional right being non-cumulative. The Company may (1) deliver outstanding
Debentures (other than Debentures previously called for redemption) and (2)
apply as a credit Debentures which have been acquired or redeemed either at
the election of the Company or through the application of a permitted optional
sinking fund payment, in each case in satisfaction of all or any part of any
required sinking fund payment, provided that such Debentures have not been
previously so credited.
OPTIONAL REDEMPTION
In addition, the Debentures will be subject to redemption, at the option of
the Company upon at least 30 and not more than 60 days' notice by mail, at any
time on or after August 1, 2004 and prior to maturity, as a whole, or from
time to time in part, at prices equal to the percentages of principal amount
set forth below, if optionally redeemed otherwise than through operation of
the sinking fund, during the twelve month period beginning August 1 of the
years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2004................................... 104.188%
2005................................... 103.769%
2006................................... 103.350%
2007................................... 102.931%
2008................................... 102.513%
2009................................... 102.094%
2010................................... 101.675%
2011................................... 101.256%
2012................................... 100.838%
2013................................... 100.419%
</TABLE>
and at 100% if redeemed on or after August 1, 2014, together in each case,
with interest accrued to the date fixed for redemption (subject to the right
of Holders of record on relevant Record Dates to receive interest due on an
Interest Payment Date).
APPLICATION OF DEFEASANCE PROVISIONS
The Debentures are subject to defeasance and covenant defeasance as
described under "Description of Debt Securities--Defeasance and Covenant
Defeasance" in the accompanying Prospectus.
To elect defeasance or covenant defeasance the Company is required to
deliver to the Trustee an opinion of counsel to the effect that the deposit of
money and/or U.S. Government Obligations (as defined) in the trust created
when the Company elects defeasance or covenant defeasance will not cause the
Holders of the Debentures to recognize income, gain or loss for Federal income
tax purposes.
S-3
<PAGE>
UNDERWRITERS
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated August 4, 1994, the Underwriters named below have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
respective principal amount of Debentures set forth below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF
NAME DEBENTURES
---- ------------
<S> <C>
Morgan Stanley & Co. Incorporated........................... $100,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................... 100,000,000
------------
Total..................................................... $200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Debentures are subject to,
among other things, the approval of certain legal matters by counsel and to
certain other conditions.
The Underwriters propose to offer part of the Debentures directly to the
public at the public offering price set forth on the cover page hereof and part
to certain dealers at a price which represents a concession, not in excess of
.50% of the principal amount of the Debentures. Any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of .25% of the principal
amount of the Debentures.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Company has agreed not to offer, sell, contract to sell or otherwise
dispose of any of its debt securities substantially similar to the Debentures
during the period beginning on the date of this Prospectus Supplement and
continuing to and including the date the Debentures are delivered to the
Underwriters, without the prior written consent of Morgan Stanley & Co.
Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Company does not intend to apply for listing of the Debentures on a
national securities exchange, but has been advised by the several Underwriters
that such firms presently intend to make a market in the Debentures as
permitted by applicable laws and regulations. The Underwriters are not
obligated, however, to make a market in the Debentures, and any such market
making may be discontinued at any time at the sole discretion of the
Underwriters. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Debentures.
EXPERTS
The consolidated financial statements and schedules of the Company included
or incorporated by reference in its Annual Report on Form 10-K for the fiscal
year ended January 29, 1994, incorporated herein by reference, have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in their reports with respect thereto. The reports referred to above have been
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
LEGAL MATTERS
The validity of the Debentures offered hereby will be passed upon for the
Company by Skadden, Arps, Slate, Meagher & Flom and for the Underwriters by
Davis Polk & Wardwell. A member of Skadden, Arps, Slate, Meagher & Flom
beneficially owns 4,000 shares of the Company's common stock, $.50 par value
per share, with the associated rights attached thereto. Helene Kaplan, of
counsel to Skadden, Arps, Slate, Meagher & Flom, is a member of the Company's
board of directors and owns 7,600 shares of the Company's common stock, with
the associated rights attached thereto.
S-4
<PAGE>
$750,000,000
The May Department Stores Company
DEBT SECURITIES
The May Department Stores Company (the "Company") from time to time may offer
its senior debt securities (the "Debt Securities") in a principal amount
sufficient to result in proceeds to the Company of up to $750,000,000 (or the
equivalent in foreign denominated currencies or composite currencies, based
upon the applicable exchange rate at the time of sale), of which up to
$300,000,000 aggregate principal amount may be offered by the Company as
medium-term notes due from 9 months to 60 years from the date of issue. The
Debt Securities may be offered as separate series under one or more Indentures
in amounts, at prices and on terms to be set forth in supplements to this
Prospectus. The Company may sell Debt Securities directly or through agents
designated from time to time or to or through one or more underwriters who will
be named in a Prospectus Supplement (the "Prospectus Supplement"), or an
underwriting syndicate including and represented by such firms. See "Plan of
Distribution."
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations, maturity, premium, if
any, interest rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption at the option of the Company or the
holder, terms for sinking fund payments, the name of the trustee under the
indenture relating to the Debt Securities, the initial public offering price,
the names of any underwriters or agents, the applicable compensation of such
underwriters or agents and the other terms in connection with the offering and
sale of the Debt Securities in respect of which this Prospectus is being
delivered, will be set forth in an accompanying Prospectus Supplement.
As used herein, Debt Securities shall include securities denominated in
United States dollars or, at the option of the Company if so specified in the
applicable Prospectus Supplement, in any other currency or in composite
currencies or in amounts determined by reference to an index.
------------
March 16, 1992
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE DEBT SECURITIES
OFFERED BY THIS PROSPECTUS IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
----------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as the following regional offices: 1400
Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661; and
Room 1400, 75 Park Place, New York, New York 10007; and copies of such material
can be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549 at prescribed rates. In addition, certain of the
Company's securities are listed on the New York and Pacific Stock Exchanges and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of those Exchanges.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are, as of
their respective dates, incorporated into this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
February 2, 1991.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended May
4, 1991.
(c)The Company's Quarterly Report on Form 10-Q for the quarter ended
August 3, 1991.
(d)The Company's Quarterly Report on Form 10-Q for the quarter ended
November 2, 1991.
(e) The Company's Current Report on Form 8-K dated February 7, 1991.
(f) The Company's Current Report on Form 8-K dated February 8, 1991.
(g) The Company's Current Report on Form 8-K dated February 28, 1991.
(h) The Company's Current Report on Form 8-K dated April 11, 1991.
(i) The Company's Current Report on Form 8-K dated April 25, 1991.
(j) The Company's Current Report on Form 8-K dated June 19, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. This Prospectus does not contain all
information set forth in the registration statement of which this Prospectus
forms a part and Registration Statement Nos. 33-37966 and 33-38585 and Exhibits
thereto, which the Company has filed with the Commission and to which reference
is hereby made.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO: THE
MAY DEPARTMENT STORES COMPANY, 611 OLIVE STREET, ST. LOUIS, MISSOURI 63101,
ATTENTION: CORPORATE COMMUNICATIONS DEPARTMENT, OR BY TELEPHONE TO THE
CORPORATE COMMUNICATIONS DEPARTMENT AT 314-342-6300.
2
<PAGE>
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE DEBT
SECURITIES OFFERED HEREBY OR OTHER DEBT SECURITIES OF THE COMPANY AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR THE PACIFIC STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
The May Department Stores Company (the "Company") is one of the nation's
largest retailing companies. The Company's principal retail segments consist of
12 department store companies across the United States and a national specialty
shoe store company.
The Company's 318 department stores are operated by 12 department store
divisions and subsidiaries in 30 states and the District of Columbia under the
following trade names: Lord & Taylor, New York City; Hecht's, Washington, D.C.;
Foley's, Houston; May Company, California, Los Angeles; Famous-Barr, St. Louis;
Kaufmann's, Pittsburgh; Robinson's, Los Angeles; Filene's, Boston; G. Fox,
Hartford; May Company, Ohio, Cleveland; May D&F, Denver; and Meier & Frank,
Portland, Oregon.
The Company, through its Payless ShoeSource, Inc. subsidiary, operates 3,295
specialty stores nationwide. Payless ShoeSources's chain of self-service family
shoe stores operates in 47 states, the District of Columbia and Puerto Rico.
During the third quarter of 1991, the Company announced that it would
consolidate its Thalhimers division with its Hecht's division and its L.S.
Ayres division with its Famous-Barr division, effective February 1, 1992.
The Company was organized under the laws of the State of New York on June 4,
1910. The Company employs approximately 115,000 people in 48 states, the
District of Columbia, Puerto Rico and 13 offices overseas. The Company's
principal office is at 611 Olive Street, St. Louis, Missouri 63101, and the
Company's telephone number is 314-342-6300.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be added to the
general funds of the Company and will be available to retire a portion of its
outstanding commercial paper and other short-term indebtedness, to finance its
operations, and for general corporate purposes, including investments and
acquisitions. Any specific allocation of the net proceeds of an offering of
Debt Securities to a specific purpose will be described in the applicable
Prospectus Supplement.
3
<PAGE>
SUMMARY FINANCIAL INFORMATION--HISTORICAL
The following summary financial information presents the historical operating
results of the Company for the 39 week periods ended November 2, 1991 and
November 3, 1990 and for each of the five fiscal years in the period ended
February 2, 1991 and the historical balance sheet as of November 2, 1991,
February 2, 1991 and February 3, 1990. The following financial information
should be read in conjunction with the consolidated financial statements and
related notes contained in the Company's Annual Report on Form 10-K for the
fiscal year ended February 2, 1991 and the Company's Quarterly Report on Form
10-Q for the period ended November 2, 1991 incorporated herein by reference.
Operating results of periods which exclude the Christmas season may not be
indicative of the operating results that may be expected for the full fiscal
year.
SUMMARY OF OPERATIONS
<TABLE>
<CAPTION>
39 WEEKS ENDED FISCAL YEAR (1)
----------------------- ------------------------------------
NOVEMBER 2, NOVEMBER 3,
(DOLLARS IN MILLIONS, EXCEPT 1991 1990 1990 1989 1988 1987 1986
PER SHARE) ----------- ----------- ------- ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.................... $7,253 $6,782 $10,066 $9,602 $8,874 $7,480 $7,437
Cost and Expenses:
Cost of sales............. 5,057 4,728 6,978 6,581 6,098 5,186 5,202
Selling, general and ad-
ministrative expenses.... 1,572 1,477 2,046 1,989 1,888 1,563 1,572
Interest expense, net..... 235 198 280 233 198 80 92
------ ------ ------- ------ ------ ------ ------
Total Cost and Expenses. 6,864 6,403 9,304 8,803 8,184 6,829 6,866
------ ------ ------- ------ ------ ------ ------
Earnings From Continuing Op-
erations Before Income Tax-
es......................... 389 379 762 799 690 651 571
Provision for Income Taxes.. 140 131 262 284 242 258 238
------ ------ ------- ------ ------ ------ ------
Net Earnings From Continuing
Operations................. 249 248 500 515 448 393 333
Net Earnings From Discontin-
ued Operations............. -- -- -- 6 57 51 48
Gain (loss) on Disposal of
Discontinued Operations.... -- -- -- (23) 29 -- --
------ ------ ------- ------ ------ ------ ------
Net Earnings................ $ 249 $ 248 $ 500 $ 498 $ 534 $ 444 $ 381
====== ====== ======= ====== ====== ====== ======
Primary Earnings per Share:
Continuing Operations..... $ 1.90 $ 1.88 $ 3.88 $ 3.75 $ 3.05 $ 2.56 $ 2.11
Discontinued Operations... -- -- -- .05 .38 .33 .31
Gain (loss) on Disposal of
Discontinued Operations.. -- -- -- (.17) .20 -- --
------ ------ ------- ------ ------ ------ ------
Primary Earnings per Share.. $ 1.90 $ 1.88 $ 3.88 $ 3.63 $ 3.63 $ 2.89 $ 2.42
====== ====== ======= ====== ====== ====== ======
Fully Diluted Earnings per
Share:
Continuing Operations..... $ 1.86 $ 1.83 $ 3.74 $ 3.64 $ 3.04 $ 2.56 $ 2.10
Discontinued Operations... -- -- -- .05 .38 .33 .31
Gain (loss) on Disposal of
Discontinued Operations.. -- -- -- (.17) .20 -- --
------ ------ ------- ------ ------ ------ ------
Fully Diluted Earnings per
Share...................... $ 1.86 $ 1.83 $ 3.74 $ 3.52 $ 3.62 $ 2.89 $ 2.41
====== ====== ======= ====== ====== ====== ======
Ratio of Earnings to Fixed
Charges(2).................. 2.0 2.1 2.7 3.1 3.2 4.3 3.7
====== ====== ======= ====== ====== ====== ======
</TABLE>
- -------
(1) Fiscal years 1990, 1989, 1988, 1987 and 1986 ended on February 2, 1991,
February 3, 1990, January 28, 1989, January 30, 1988 and January 31, 1987,
respectively.
(2) For purposes of computing the ratios of earnings to fixed charges for the
Company and its subsidiaries, earnings have been calculated by adding to pretax
earnings from continuing operations (a) fixed charges (excluding capitalized
interest and the pretax equivalent of preferred stock dividend requirements)
and (b) the total of adjustments to recognize only distributed earnings for
less than 50% owned persons accounted for under the equity method and
amortization of previously capitalized interest and then subtracting dividends
on unallocated ESOP Preference Shares. Fixed charges have been calculated by
adding gross interest expense (including interest on long-term, short-term and
ESOP debt, and amortization of debt discount and debt issue expense), that
portion of rent expense deemed representative of the interest factor in such
rent expense, preferred stock dividend requirements (pretax equivalent) and the
Company's proportionate share of interest of unconsolidated 50% owned persons
and the Company's proportionate share of interest of a less than 50% owned
person for which a subsidiary of the Company has guaranteed the debt.
4
<PAGE>
CONSOLIDATED BALANCE SHEET DATA
<TABLE>
<CAPTION>
AS OF AS OF AS OF
NOVEMBER 2, 1991 FEBRUARY 2, 1991 FEBRUARY 3, 1990
(IN MILLIONS) ---------------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C>
Total Current Assets......... $4,567 $4,318 $3,981
Total Current Liabilities.... 1,646 1,683 1,922
Working Capital.............. 2,921 2,635 2,059
Total Assets................. 8,636 8,236 7,730
Long-Term Debt............... 3,908 3,565 3,003
Deferred Income Taxes........ 346 352 329
Other Liabilities............ 162 160 153
ESOP Preference Shares....... 395 397 400
Unearned Compensation........ (388) (388) (396)
Shareowners' Equity.......... 2,567 2,467 2,319
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under one or more indentures, the terms
of which will be substantially identical other than as described herein, with
one or more trustees. The indentures may include an Amended and Restated
Indenture dated as of January 15, 1991 (the "First Chicago Indenture") with The
First National Bank of Chicago, as trustee ("First Chicago"), which provides
that the amount of Debt Securities issuable thereunder is unlimited and an
Indenture dated as of January 15, 1991 (the "Citibank Indenture"), with
Citibank, N.A., as trustee ("Citibank"), which provides that the amount of Debt
Securities issuable thereunder is unlimited. The Citibank Indenture and the
First Chicago Indenture are referred to hereinafter each as an "Indenture" and
together as the "Indentures" and Citibank and First Chicago are referred to
hereinafter each as a "Trustee" and together as the "Trustees."
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities"), the
trustee with respect to the Offered Debt Securities and the extent, if any, to
which such general provisions may apply to the Offered Debt Securities will be
described in the Prospectus Supplement relating to such Offered Debt
Securities. The Indentures contain, among other things, the following
provisions. Except as otherwise specified, all of the provisions described
below appear in each of the Indentures. The following summaries of certain
provisions of the Indentures do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indentures, including the definitions therein of certain terms. Wherever
particular sections or defined terms of the Indentures are referred to it is
intended that such sections or defined terms shall be incorporated herein by
reference.
GENERAL
The Indentures provide for the issuance of Debt Securities from time to time,
in one or more series. Reference is made to the Prospectus Supplement which
will describe the following terms of the Offered Debt Securities: (a) the
designation of the Offered Debt Securities; (b) any limit on the aggregate
principal amount of the Offered Debt Securities; (c) the date or dates on which
the Offered Debt Securities will mature; (d) the rate or rates (which may be
fixed or variable) per annum at which the Offered Debt Securities will bear
interest, if any, and the date from which such interest will accrue; (e) the
dates on which such interest, if any, will be payable and the Regular Record
Dates for such Interest Payment Dates; (f) any mandatory or optional sinking
fund or purchase fund or analogous provisions; (g) if applicable, the date
after which and the price or prices at which the
5
<PAGE>
Offered Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed at the option of the Company or the Holder thereof and
the other detailed terms and provisions of such optional or mandatory
redemption; (h) the place or places of payment of principal of (and premium, if
any) and interest on the Offered Debt Securities; (i) whether the Offered Debt
Securities are issuable as Bearer Securities and, if so, whether Registered
Securities are issuable; (j) special provisions relating to the issuance of any
Bearer Securities of any series; (k) the currency in Dollars, Foreign Currency
or any composite currency of any series; (l) any deletions from, changes in or
additions to Events of Default or covenants of the Company in the Indentures;
(m) the form of Debt Securities and Coupons, if any; and (n) any other terms of
the Offered Debt Securities. (Section 301)
The Debt Securities will be issuable as Registered Securities, as Bearer
Securities or both. Debt Securities of a series may be issuable in global form,
as described below under "Global Securities." Unless the Prospectus Supplement
relating thereto specifies otherwise, Registered Securities denominated in U.S.
dollars will be issued only in denominations of $1,000 or any integral multiple
thereof, and Bearer Securities denominated in U.S. dollars will be issued only
in denominations of $5,000. The Prospectus Supplement relating to a series of
Debt Securities denominated in a foreign or composite currency will specify the
denomination thereof. (Section 302)
At the option of the Holder and subject to the terms of the applicable
Indenture, Bearer Securities (with all unmatured coupons, except as provided
below) of any series will be exchangeable into an equal aggregate principal
amount of Registered Securities or Bearer Securities of the same series (with
the same interest rate and maturity date) and Registered Securities of any
series will be exchangeable into an equal aggregate principal amount of
Registered Securities of the same series (with the same interest rate and
maturity date) of different authorized denominations. If a Holder surrenders
Bearer Securities in exchange for Registered Securities between a Regular
Record Date or, in certain circumstances, a Special Record Date, and the
relevant interest payment date, such Holder will not be required to surrender
the coupon relating to such interest payment date. Registered Securities may
not be exchanged for Bearer Securities. (Section 305)
Debt Securities may be presented for exchange, and Registered Securities
(other than a Book-Entry Security) may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed), at the
office of any transfer agent or at the office of the Security Registrar,
without service charge and upon payment of any taxes and other governmental
charges as described in the Indentures. Such registration of transfer or
exchange will be effected upon the transfer agent or the Security Registrar, as
the case may be, being satisfied with the documents of title and identity of
the person making the request. (Section 305) Bearer Securities will be
transferable by delivery.
Debt Securities may be issued under the Indentures as Original Issue Discount
Securities to be offered and sold at a substantial discount from the principal
amount thereof. If the Offered Debt Securities are Original Issue Discount
Securities, the special Federal income tax, accounting and other considerations
applicable thereto will be described in the Prospectus Supplement relating
thereto. "Original Issue Discount Security" means any security which provides
for an amount less than the principal amount thereof to be due and payable upon
the declaration of acceleration of the maturity thereof upon the occurrence of
an Event of Default and the continuation thereof. (Section 502)
Unless otherwise indicated in a Prospectus Supplement, the covenants
contained in the Indentures and the Debt Securities would not necessarily
afford Holders of the Debt Securities protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
Holders.
6
<PAGE>
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of (and premium, if any) and interest, if any, on Registered
Securities will be made in the designated currency at the office of such Paying
Agent or Paying Agents as the Company may designate from time to time, except
that at the option of the Company payment of any interest may be made (i) by
check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security
Register. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on Registered Securities will be made to
the Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest. (Sections 307 and 902)
Payment of principal of and premium, if any, and interest on Bearer
Securities will be payable in the currency and in the manner designated in the
Prospectus Supplement, subject to any applicable laws and regulations, at such
paying agencies outside the United States as the Company may appoint from time
to time. The paying agents outside the United States initially appointed by the
Company for a series of Debt Securities will be named in the Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents, except that, if Securities of a
series are issuable as Registered Securities, the Company will be required to
maintain at least one paying agent in each Place of Payment for such series
and, if Securities of a series are issuable as Bearer Securities, the Company
will be required to maintain a Paying Agent in a Place of Payment outside the
United States where Debt Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the
Securities of such series are listed on The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent in
London or Luxembourg or any other required city located outside the United
States, as the case may be, for the Securities of such series. (Section 902)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
Debt Security may be issued in either registered or bearer form and in either
temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole by the Depositary for such Debt Security to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
If any Debt Security of a series is issuable in global form, the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Security may exchange such
interests for definitive Debt Securities of such series of like tenor and
principal amount in any authorized form and denomination, the manner of payment
of principal of and interest, if any, on any such global Debt Security and the
specific terms of the depositary arrangement with respect to any such global
Debt Security. (Section 305)
OPTIONAL REDEMPTION
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities for any optional redemption provisions relating to such
Offered Debt Securities.
SINKING FUND
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities for any sinking fund provisions relating to such
Offered Debt Securities.
7
<PAGE>
RESTRICTED AND UNRESTRICTED SUBSIDIARIES; CERTAIN DEFINITIONS
The restrictive provisions of the Indentures applicable to the Company and
its Restricted Subsidiaries do not apply to Unrestricted Subsidiaries. The
assets and indebtedness of Unrestricted Subsidiaries are not consolidated with
those of the Company and its Restricted Subsidiaries in calculating
Consolidated Net Tangible Assets, Funded Debt or Secured Indebtedness under the
Indentures. Investments by the Company or by its Restricted Subsidiaries in
Unrestricted Subsidiaries are excluded in computing Consolidated Net Tangible
Assets. "Unrestricted Subsidiaries" are those Subsidiaries defined as such by
the Indentures, i.e., The May Department Stores Credit Company and other
finance Subsidiaries acquired or formed subsequent to the date of the
Indentures, certain foreign Subsidiaries, certain real estate Subsidiaries and
those Subsidiaries which are designated as Unrestricted Subsidiaries by the
Board of Directors from time to time pursuant to the Indentures (in each case,
unless and until designated as Restricted Subsidiaries by the Board of
Directors pursuant to the Indentures). "Restricted Subsidiaries" are all
Subsidiaries other than Unrestricted Subsidiaries. A "Wholly-owned Restricted
Subsidiary" is a Restricted Subsidiary all of the outstanding Funded Debt and
capital stock of which (except directors' qualifying shares) is owned by the
Company and its other Wholly-owned Restricted Subsidiaries. (Section 101)
"Consolidated Net Tangible Assets" means the total amount of assets of the
Company and its Restricted Subsidiaries (less applicable reserves and other
properly deductible items and after excluding Investments made in Unrestricted
Subsidiaries or in corporations while they are Unrestricted Subsidiaries but
which are not Subsidiaries at the time of computation) after deducting (i) all
liabilities and liability items (including amounts in respect of capitalized
leases), except Funded Debt, capital stock and surplus, surplus reserves,
deferred income taxes and deferred investment tax credits, and (ii) goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles. (Section 101)
"Funded Debt" includes indebtedness maturing more than 12 months after the
time of computation of the amount thereof or which is extendible or renewable
at the option of the obligor on such indebtedness to a time more than 12 months
after the time of the computation of the amount thereof, guarantees of such
indebtedness or of such obligations of others or of dividends (except
guarantees in connection with the sale or discount of accounts receivable,
trade acceptances and other paper arising in the ordinary course of business),
and in the case of any Subsidiary all Preferred Stock of such Subsidiary.
Funded Debt does not include any obligations in respect of lease rentals
whether or not such obligations would be included as liabilities on a
consolidated balance sheet of the Company and its Restricted Subsidiaries. The
Company or any Restricted Subsidiary shall be deemed to have assumed Funded
Debt secured by any Mortgage upon any of its properties or assets whether or
not it has actually done so. (Section 101)
"Secured Indebtedness" means any Indebtedness which is secured by a Mortgage
upon any assets of the Company or a Restricted Subsidiary, including in such
assets, without limitation, shares of stock or indebtedness of any Subsidiary
owned by the Company or a Restricted Subsidiary, provided that Indebtedness
secured by a Mortgage incurred or assumed in connection with an issuance of
revenue bonds the interest on which is exempt from Federal income tax pursuant
to Section 103 of the Internal Revenue Code of 1986, as amended, shall not be
deemed Secured Indebtedness. (Section 101)
LIMITATION ON LIENS
Unless the aggregate principal amount of all outstanding Secured Indebtedness
of the Company and its Restricted Subsidiaries, the unsecured Funded Debt of
the Restricted Subsidiaries (exclusive of any unsecured Funded Debt or Secured
Indebtedness owed to the Company or a Wholly-owned Restricted Subsidiary), and
the Indebtedness to be secured does not exceed 15% of Consolidated Net Tangible
Assets, the Company may not, and may not permit any Restricted Subsidiary to,
mortgage,
8
<PAGE>
pledge or create (by merger or otherwise) any lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance on any of the assets of the Company or any of its Restricted
Subsidiaries (except to secure Indebtedness to the Company or any of its
Wholly-owned Restricted Subsidiaries) without making effective provision to
secure the Debt Securities at least equally and ratably with such Indebtedness,
so long as such Indebtedness is so secured. The foregoing provision, however,
does not prevent certain purchase money mortgage liens or the refunding or
extension thereof, certain non-recourse liens on real property to reimburse the
Company or any of its Restricted Subsidiaries for the cost or acquisition of or
improvements to such real property, existing Mortgages, tax liens and other
liens incurred in the ordinary course of business which do not materially limit
the use of the property subject thereto in the operation of the business of the
Company or of any Restricted Subsidiary or impair the value of such property
for the purposes of such business, Mortgages on assets of a Restricted
Subsidiary existing on the date it became a Subsidiary, or any refundings or
extensions thereof not exceeding the principal amount of the Indebtedness so
refunded, or extended, and applying only to the same property or assets.
(Section 905)
RESTRICTIONS ON DISPOSITIONS OF AND BY SUBSIDIARIES (FIRST CHICAGO INDENTURE)
The First Chicago Indenture provides that the Company may not part with
control of (except to a Wholly-owned Restricted Subsidiary or for directors'
qualifying shares) and may not permit any Restricted Subsidiary to part with
control of (except to the Company or a Wholly-owned Restricted Subsidiary or
for directors' qualifying shares) any stock of a Restricted Subsidiary, unless,
among other things, the entire Funded Debt and stock of such Subsidiary at the
time owned by the Company and its Restricted Subsidiaries is disposed of at the
same time for a consideration at least equal to the fair value thereof.
(Section 908) No Restricted Subsidiary may (i) issue or sell any of its Common
Stock, except to the Company or to a Wholly-owned Restricted Subsidiary or for
directors' qualifying shares and except for issuances and sales of Common Stock
of such Restricted Subsidiary if the pro rata interest of the Company and its
Restricted Subsidiaries in the outstanding Common Stock of such Restricted
Subsidiary is not reduced, (ii) have outstanding more than one class or series
of Common Stock unless the Company and its other Restricted Subsidiaries shall
own a majority in interest of the outstanding Common Stock of such Restricted
Subsidiary, (iii) merge or consolidate, except that any Restricted Subsidiary
may merge or consolidate with or into the Company or any other Restricted
Subsidiary if the Company or a Wholly-owned Restricted Subsidiary is the
surviving corporation, or (iv) sell, lease or otherwise dispose of all or
substantially all of its properties and assets, except to the Company or a
Wholly-owned Restricted Subsidiary or in connection with a sale for a
consideration at least equal to the fair value thereof. (Section 909)
RESTRICTIONS ON MERGERS
The Company may not consolidate or merge with or into any other corporation
or sell, lease or transfer all or substantialy all of its properties and assets
to another corporation, unless (i) the successor corporation is a corporation
organized and existing under the laws of the United States of America or a
state thereof or the District of Columbia and assumes payment of the principal
of (and premium, if any) and interest, if any, on the Debt Securities and the
performance and observance of the applicable Indenture and (ii) such successor
corporation shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any covenant or
condition of the applicable Indenture. (Section 701)
WAIVER, MODIFICATION AND AMENDMENT
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any particular series may waive certain past defaults. (Section
511) The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities (voting as a class and not by
9
<PAGE>
individual series) or, in case less than all of the several series of
Outstanding Securities are affected, the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of each series affected
(voting as a single class in the case of the Citibank Indenture), may waive the
Company's compliance with certain restrictive provisions. (Section 906--
Citibank Indenture and Section 911--First Chicago Indenture) In order to
determine the aggregate principal amount of any Outstanding Debt Securities not
payable in U.S. dollars, the principal amount of the Debt Securities shall be
deemed to be that amount of Dollars that could be obtained for such principal
amount on the basis of the spot rate of exchange for such Foreign Currency or
such currency unit as determined by the Company or by an authorized exchange
rate agent. (Section 101)
Modification and amendment of the applicable Indenture may be made by the
Company and the applicable Trustee with the consent (i) of the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities
(voting as a class and not by individual series), or (ii) in case less than all
of the several series of Debt Securities then Outstanding are affected by the
modification or amendment, of the Holders of a majority in principal amount of
the Outstanding Debt Securities of each series so affected (voting as a single
class in the case of the Citibank Indenture), provided that no such
modification or amendment may, without the consent of the Holder of each Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security; (b)
reduce the principal amount of, or the rate of interest, if any, on, or any
premium payable upon the redemption of any Debt Security, or reduce the amount
of the principal of a Discounted Debt Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof; (c) change the
place or currency of payment of principal or premium or interest on any Debt
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (e) reduce the percentages
of Holders of Debt Securities (in the case of the First Chicago Indenture) or
of Holders of Debt Securities of any particular series (in the case of both
Indentures) specified in this or the preceding paragraph. Any modification or
amendment which changes or eliminates any covenant or other provision of the
applicable Indenture which has expressly been included solely for the benefit
of one or more particular series of Debt Securities, or which modifies the
rights of the Holders of Debt Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under the
applicable Indenture of the Holders of Debt Securities of any other series.
(Section 802)
EVENTS OF DEFAULT
The following events are defaults under the Indentures with respect to any
particular series of Debt Securities: (a) failure to pay the principal of (or
premium, if any, on) any Debt Security of that series, or to make any sinking
fund payment on any Debt Security of that series, when due; (b) failure to pay
any interest installment on any Debt Security of that series when due,
continued for 30 days; (c) failure to perform any other covenant of the Company
(other than a covenant included in the applicable Indenture solely for the
benefit of series of Debt Securities other than that series), continued for 60
days after written notice; (d) certain events of bankruptcy, insolvency, or
reorganization; and (e) any other defaults provided with respect to Debt
Securities of that series. (Section 501)
If a default with respect to Debt Securities of any series at the time
Outstanding shall occur and be continuing, then and in every such case (unless
the principal of all the Debt Securities of that series shall have already
become due and payable) the applicable Trustee or the Holders of at least 25%
in principal amount of the Outstanding Debt Securities of that series may
declare to be due and payable immediately by a notice in writing to the Company
(and to the applicable Trustee if given by Holders) the entire principal
amount, or, in the case of Original Issue Discount Securities, such portion of
the principal amount as may be provided for in such Debt Securities, of all the
Debt Securities of that series. At any time after such declaration of
acceleration has been made, but before a judgment or decree for payment of the
money due has been obtained by the applicable Trustee, the
10
<PAGE>
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series, by written notice to the Company and the applicable Trustee, may,
in certain circumstances, rescind and annul such declaration. (Section 502)
No Holder of any Debt Securities of any particular series shall have any
right to institute any proceeding with respect to either of the Indentures or
for any remedy thereunder, unless such Holder previously shall have given to
the applicable Trustee written notice of a default with respect to that series
and unless also the Holders of at least 25% of the principal amount of
Outstanding Debt Securities of that series shall have made written request upon
the applicable Trustee, and have offered reasonable indemnity, to institute
such proceeding as trustee, and the applicable Trustee shall not have received
direction inconsistent with such request in writing by the Holders of a
majority in principal amount of Outstanding Debt Securities of that series and
shall have neglected or refused to institute such proceeding within 60 days.
However, the right of any Holder of any Debt Security to enforce the payment of
principal and interest due on such Debt Security on or after the dates
expressed in such Debt Security, may not be impaired or affected. (Sections 506
and 509)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide, if such provision is made applicable to the Debt
Securities of any series pursuant to Section 301 of the applicable Indenture,
that the Company may elect either (A) to defease and be discharged from any and
all obligations with respect to such Debt Securities (except as otherwise
provided in the applicable Indenture) ("defeasance") or (B) to be released from
its obligations with respect to such Securities described above under
"Limitations on Liens", "Restrictions on Mergers" and "Restrictions on
Dispositions of and by Subsidiaries" (with respect to the First Chicago
Indenture) ("covenant defeasance"), upon the irrevocable deposit with the
applicable Trustee, in trust for such purpose, of money, and/or U.S. Government
Obligations or Foreign Government Securities (each as defined) which through
the payment of principal and interest in accordance with their terms will
provide money, in an amount sufficient to pay the principal of (and premium, if
any) and interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor. The Prospectus
Supplement may further describe the provisions, if any, permitting such
defeasance or covenant defeasance with respect to the Debt Securities of a
particular series and the effect of such defeasance or covenant defeasance
under Federal tax law.
REGARDING THE TRUSTEE
The Company maintains deposit accounts with Citibank and engages in banking
transactions in the ordinary course of business with First Chicago and
Citibank.
PLAN OF DISTRIBUTION
General. The Company may sell Debt Securities directly or to or through one
or more underwriters, agents or dealers who will be named in the Prospectus
Supplement or an underwriting syndicate, represented by one or more managing
underwriters, that would be named in the Prospectus Supplement relating to an
issue of Offered Debt Securities.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities to underwriters, underwriters
may receive compensation in the form of discounts, concessions or commissions
from the Company or from
11
<PAGE>
purchasers of Debt Securities for whom they may act as agents. Underwriters and
dealers that participate in the distribution of Debt Securities may be deemed
to be underwriters and any discounts or commissions received by them and any
profit on the resale of Debt Securities by them may be deemed to be
underwriting discounts and commissions, under the Securities Act of 1933, as
amended (the "Act"). Any such underwriter will be identified, and any such
compensation will be described, in the Prospectus Supplement.
Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Debt Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
As one of the means of direct issuance of the Debt Securities, the Company
may utilize the services of CapitaLink Bond Auctions, Inc. to conduct an
electronic "dutch auction" of the Debt Securities among potential purchasers
who are eligible to participate in the auction of such Debt Securities, if so
described in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
agents and dealers who participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Act.
The Debt Securities are a new issue of securities with no established trading
market. In the event that Debt Securities of a series offered hereunder are not
listed on a national securities exchange, certain broker-dealers may make a
market in the Debt Securities, but will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given that any broker-dealer will make a market in the Debt Securities of any
series or as to the liquidity of the trading market for the Debt Securities.
EXPERTS
The consolidated financial statements and schedules of the Company included
or incorporated by reference in its Annual Report on Form 10-K for the fiscal
year ended February 2, 1991, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, have been audited by Arthur Andersen &
Co., independent public accountants, as indicated in their reports with respect
thereto. The reports referred to above have been incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports.
VALIDITY OF THE OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed upon for the
Company by Skadden, Arps, Slate, Meagher & Flom, New York, New York, and for
the underwriters or agents by counsel to be identified in the Prospectus
Supplement. A member of Skadden, Arps, Slate, Meagher & Flom beneficially owns
2,000 shares of the Company's common stock, $1.00 par value per share, with the
associated rights attached thereto. Helene Kaplan, of counsel to Skadden, Arps,
Slate, Meagher & Flom, is a member of the Company's board of directors and owns
3,100 shares of the Company's common stock, with the associated rights attached
thereto.
12
