WASHINGTON, D.C. 20549
___________________
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
BROADWAY STORES, INC.
(Name of Issuer)
BROADWAY STORES, INC.
FEDERATED DEPARTMENT STORES, INC.
(Name of Persons Filing Statement)
6-1/4% Convertible Senior Subordinated Notes Due 2000
of Broadway Stores, Inc.
(Title of Class of Securities)
146227 AM 5
(CUSIP Number of Class of Securities)
___________________
DENNIS J. BRODERICK, Esq.
Senior Vice President, General Counsel, and Secretary
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, Ohio 45202
(513) 579-7560
(Name, Address and Telephone Number of Person Authorized to Receive Notice
and Communications on Behalf of the Persons Filing Statement)
Copy to:
MARK E. BETZEN, Esq.
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
(214) 220-3939
November 8, 1995
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation Amount of Filing Fee
$147,693,142.36* $29,538.63
* The valuation shown is only for the purpose of calculating the filing fee.
This amount assumes the purchase of $143,750,000 principal amount of 6-1/4%
Convertible Senior Subordinated Notes due 2000 of Broadway Stores, Inc. at
an aggregate purchase price equal to the principal amount thereof plus
accrued and unpaid interest thereon to December 8, 1995. Accrued and unpaid
interest on such principal amount to December 8, 1995 will equal
$3,943,142.36.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
<PAGE>
This Schedule 13E-4 Issuer Tender Offer Statement (this "Schedule 13E-4")
relates to a tender offer by Broadway Stores, Inc. ("Broadway") to purchase any
and all of its 6-1/4% Convertible Senior Subordinated Notes Due 2000 (the
"Notes") at a purchase price equal to the principal amount thereof plus accrued
and unpaid interest thereon to December 8, 1995, on the terms set forth in
Broadway's Notice of Change in Control and Offer to Purchase dated November 8,
1995 (the "Offer to Purchase") and in the related Change in Control Purchase
Notice and Letter of Transmittal (the "Letter of Transmittal"), and is intended
to satisfy the reporting requirements of Section 13(e) of the Securities
Exchange Act of 1934, as amended. Copies of the Offer to Purchase and the
related Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2),
respectively, hereto.
Item 1. Security and Issuer
(a) The name of the issuer is Broadway Stores, Inc. and its principal
executive office is located at 3880 North Mission Road, Los Angeles, California
90031.
(b) The class of securities to which this Schedule 13E-4 relates is
Broadway's 6-1/4% Convertible Senior Subordinated Notes Due 2000. The
information set forth in "Introduction" and "The Offer -- Payment for Notes" in
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "The Offer -- Absence of Organized Trading
Market" in the Offer is incorporated herein by reference.
(d) This Schedule 13E-4 is being filed by Broadway and Federated Department
Stores, Inc. ("Federated"). Broadway is a subsidiary of Federated. Federated's
principal executive offices are located at 151 West 34th Street, New York,
New York 10001, and at 7 West Seventh Street, Cincinnati, Ohio 45202.
Item 2. Source and Amount of Funds or Other Consideration
(a)-(b) The information set forth in "The Offer -- Source and Amount of
Funds" in the Offer to Purchase is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate
(a)-(j) The information set forth in "Introduction" in the Offer is
incorporated herein by reference.
Item 4. Interest in Securities of the Issuer
Not applicable.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
to the Issuer's Securities
The information set forth in "Introduction" in the Offer to Purchase is
incorporated herein by reference.
Item 6. Persons Retained, Employed or to be Compensated
Not applicable.
Item 7. Financial Information
(a)-(b) The information set forth in "Certain Information Concerning
Broadway and Federated -- Unaudited Pro Forma Financial Information" and
"Certain Information Concerning Broadway and Federated -- Recent Results of
Operations" in the Offer to Purchase is incorporated herein by reference. In
addition, the following financial information is incorporated herein by
reference:
-2-
<PAGE>
(1) Audited Financial Statements of Broadway as of and for the 52 weeks
ended January 28, 1995 and January 29, 1994 set forth at pages 32 through 58 in
Broadway's Annual Report on Form 10-K for the year ended January 28, 1995, a
copy of which is filed as Exhibit (g)(1) hereto;
(2) Unaudited Financial Statements of Broadway as of and for the 26
weeks ended July 29, 1995 and July 30, 1994 set forth at pages 4 through 7 in
Broadway's Quarterly Report on Form 10-Q for the quarter ended July 29, 1995, a
copy of which is filed as Exhibit (g)(2) hereto;
(3) Audited Financial Statements of Federated as of and for the 52 weeks
ended January 28, 1995 and January 29, 1994 set forth at pages F-1 through F-34
in Federated's Annual Report on Form 10-K for the year ended January 28, 1995, a
copy of which is filed as Exhibit (g)(3) hereto;
(4) Unaudited Financial Statements of Federated as of and for the 26
weeks ended July 29, 1995 and July 30, 1994 set forth at pages 2 through 8 in
Federated's Quarterly Report on Form 10-Q for the quarter ended July 29, 1995, a
copy of which is filed as Exhibit (g)(4) hereto;
Item 8. Additional Information
(a)-(d) Not applicable.
(e) All of the information set forth in the Offer to Purchase and the
Letter of Transmittal is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits
(a) (1) Notice of Change in Control and Offer to Purchase dated November
8, 1995
(2) Change in Control Purchase Notice and Letter of Transmittal
(3) Notice of Guaranteed Delivery
(4) Notice of Withdrawal
(5) Letter to Brokers, Dealers, Commercial Banks, Trust Companies,
and Other Nominees
(6) Form of Letter for use by Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees
(7) Guidelines for Certification of Taxpayer Identification Number
Substitute Form W-9
(8) Text of Summary Advertisement published on November 8, 1995
(b) Not applicable.
(c)(1) Indenture, dated as of December 21, 1993, between Broadway
(formerly known as Carter Hawley Hale Stores, Inc.) and Bankers
Trust Company, as Trustee (successor in such capacity to
Continental Bank, National Association), relating to the Notes
(incorporated by reference to Exhibit 4.1 to Broadway's
Registration Statement on Form S-3 filed with the Securities and
Exchange Commission (the "Commission") on January 7, 1994)
(2) Supplemental Indenture, dated as of October 11, 1995, between
Broadway and Bankers Trust Company, as Trustee, relating to the
Notes
(d)-(f) Not applicable.
-3-
<PAGE>
(g) (1) Audited Financial Statements of Broadway as of and for the 52
weeks ended January 28, 1995 and January 29, 1994 (incorporated
by reference to pages 32 through 58 in Broadway's Annual Report
on Form 10-K for the fiscal year ended January 28, 1995 filed
with the Commission)
(2) Unaudited Financial Statements of Broadway as of July 29, 1995
and for the 26 weeks ended July 29, 1995 and July 30, 1994
(incorporated by reference to pages 4 through 7 in Broadway's
Quarterly Report on Form 10-Q for the fiscal quarter ended July
29, 1995 filed with the Commission)
(3) Audited Financial Statements of Federated as of and for the 52
weeks ended January 28, 1995 and January 29, 1994 (incorporated
by reference to pages F-1 through F-34 in Federated's Annual
Report on Form 10-K for the fiscal year ended January 28, 1995
filed with the Commission)
(4) Unaudited Financial Statements of Federated as of July 29, 1995
and for the 26 weeks ended July 29, 1995 and July 30, 1994
(incorporated by reference to pages 2 through 8 in Federated's
Quarterly Report on Form 10-Q for the fiscal quarter ended July
28, 1995 filed with the Commission)
-4-
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 8, 1995 BROADWAY STORES, INC.
By: /s/ Dennis J. Broderick
-------------------------------
Dennis J. Broderick
Vice President
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Dennis J. Broderick
-------------------------------
Dennis J. Broderick
Senior Vice President
-5-
<PAGE>
Exhibit Index
-------------
Sequentially
Numbered
Exhibits Page
--------
(a)(1) Notice of Change in Control and Offer to Purchase
dated November 8, 1995 . . . . . . . . . . . . . . .
(a)(2) Change in Control Purchase Notice and Letter of
Transmittal . . . . . . . . . . . . . . . . . . . . .
(a)(3) Notice of Guaranteed Delivery . . . . . . . . . . . .
(a)(4) Notice of Withdrawal . . . . . . . . . . . . . . . .
(a)(5) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies, and Other Nominees . . . . . . . . . . . .
(a)(6) Form of Letter for use by Brokers, Dealers,
Commercial Banks, Trust Companies, and Other Nominees
(a)(7) Guidelines for Certification of Taxpayer
Identification Number Substitute Form W-9 . . . . . .
(a)(8) Text of Summary Advertisement published on
November 8, 1995 . . . . . . . . . . . . . . . . . .
(c)(1) Indenture, dated as of December 21, 1993, between
Broadway (formerly known as Carter Hawley Hale
Stores, Inc.) and Bankers Trust Company, as Trustee
(successor in such capacity to Continental Bank,
National Association), relating to the Notes
(incorporated by reference to Exhibit 4.1 to
Broadway's Registration Statement on Form S-3 filed
with the Securities and Exchange Commission (the
"Commission") on January 7, 1994) . . . . . . . . . . N/A
(c)(2) Supplemental Indenture, dated as of October 11, 1995,
between Broadway and Bankers Trust Company, as
Trustee, relating to the Notes . . . . . . . . . . .
(g)(1) Audited Financial Statements of Broadway as of and
for the 52 weeks ended January 28, 1995 and January
29, 1994 (incorporated by reference to pages 32
through 58 in Broadway's Annual Report on Form 10-K
for the fiscal year ended January 28, 1995 filed with
the Commission) . . . . . . . . . . . . . . . . . . . N/A
(g)(2) Unaudited Financial Statements of Broadway as of
July 29, 1995 and for the 26 weeks ended July 29,
1995 and July 30, 1994 (incorporated by reference to
pages 4 through 7 in Broadway's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 29, 1995
filed with the Commission) . . . . . . . . . . . . . N/A
(g)(3) Audited Financial Statements of Federated as of and
for the 52 weeks ended January 28, 1995 and January
29, 1994 (incorporated by reference to pages F-1
through F-34 in Federated's Annual Report on Form
10-K for the fiscal year ended January 28, 1995 filed
with the Commission) . . . . . . . . . . . . . . . . N/A
(g)(4) Unaudited Financial Statements of Federated as of
July 29, 1995 and for the 26 weeks ended July 29,
1995 and July 30, 1994 (incorporated by reference to
pages 2 through 8 in Federated's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 28, 1995
filed with the Commission) . . . . . . . . . . . . . N/A
-6-
Exhibit (a)(1)
BROADWAY STORES, INC.
Notice of Change in Control
and
Offer to Purchase for Cash
Any and All of Its
6-1/4% Convertible Senior Subordinated Notes Due 2000
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT AS
REQUIRED BY APPLICABLE LAW.
- ---------------------------------------------------------------------------
Broadway Stores, Inc. ("Broadway") hereby offers to purchase for cash
any and all of its 6-1/4% Convertible Senior Subordinated Notes Due 2000
(the "Notes") at a purchase price equal to the principal amount thereof
plus accrued and unpaid interest thereon to December 8, 1995 (the "Change
in Control Purchase Date"), which will be $1,027.43 per $1,000 principal
amount of Notes (the "Change in Control Purchase Price"), on the terms and
subject to the conditions set forth in this Notice of Change in Control and
Offer to Purchase (this "Offer to Purchase") and in the related Change in
Control Purchase Notice and Letter of Transmittal (the "Letter of
Transmittal") (which together constitute the "Offer").
Any holder of Notes (a "Holder") desiring to tender all or any portion
of such Holder's Notes should either (i) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions
set forth in the Letter of Transmittal and mail or deliver such manually
signed Letter of Transmittal (or such manually signed facsimile thereof),
together with the certificates representing the tendered Notes and any
other required documents, to Bankers Trust Company (the "Paying Agent") or
transfer such Notes into the account of the Paying Agent at a Book-Entry
Transfer Facility (as defined below) pursuant to the procedure for book-
entry transfer set forth in "The Offer -- Procedures for Tendering Notes" or
(ii) request such Holder's broker, dealer, commercial bank, trust company,
or other nominee to effect the transaction for such Holder.
Any person who beneficially owns Notes through an account or other
arrangement with a broker, dealer, commercial bank, trust company, or other
nominee must contact that entity if such person desires to tender his, her,
or its Notes. Any Holder who desires to tender such Holder's Notes and
whose certificates representing such Notes are not immediately available or
who cannot comply with the procedures for book-entry transfer on a timely
basis may tender such Notes by following the procedures for guaranteed
delivery set forth in "The Offer -- Procedures for Tendering Notes."
Any questions or requests for assistance or for additional copies of
this Offer to Purchase, the Letter of Transmittal, or other offer materials
may be directed to the Paying Agent at the telephone number and addresses
set forth on the back cover of this Offer to Purchase. You may also
contact your broker, dealer, commercial bank, or trust company for
assistance concerning the Offer.
November 8, 1995
<PAGE>
To the Holders of 6-1/4% Convertible
Senior Subordinated Notes of
Broadway Stores, Inc.:
INTRODUCTION
Broadway hereby offers to purchase for cash any and all of the Notes
at the Change in Control Purchase Price on the terms and subject to the
conditions of the Offer. All Notes validly tendered and not withdrawn
prior to 5:00 p.m., New York City time, on the Change in Control Purchase
Date will be purchased at the Change in Control Purchase Price on the terms
and subject to the conditions of the Offer. As of the date of this Offer
to Purchase, Notes having an aggregate principal amount of $143,750,000 are
outstanding.
The Offer is being made pursuant to the Indenture governing the Notes
(as amended and supplemented, the "Indenture"), which requires Broadway to
purchase the Notes, at the option of the Holder thereof, following a Change
in Control (as defined in the Indenture). A Change in Control occurred on
October 11, 1995, when a subsidiary of Federated Department Stores, Inc.
("Federated") merged with and into Broadway, with Broadway being the
surviving corporation in such merger (the "Merger"). The Merger was
effected in accordance with the provisions of an Agreement and Plan of
Merger, dated as of August 14, 1995, which was approved by Broadway's Board
of Directors and adopted by the requisite vote of Broadway's stockholders.
At the effective time of the Merger, each outstanding share of Common
Stock of Broadway ("Broadway Common Stock") not owned directly or
indirectly by Federated was converted into the right to receive 0.27 shares
of Common Stock of Federated ("Federated Common Stock"). Consequently, on
the terms and subject to the conditions set forth in the Indenture, each
Note is now convertible into the number of shares of Federated Common Stock
that would have been received in the Merger by a holder of the number of
shares of Broadway Common Stock deliverable upon such conversion
immediately prior to the Merger. For example, a Note in the principal
amount of $1,000 that was convertible immediately prior to the Merger into
82.03 shares of Broadway Common Stock (i.e., at a conversion price of
$12.19 per share of Broadway Common Stock) is now convertible into 22.15
shares of Federated Common Stock (i.e., at a conversion price of $45.15 per
share of Federated Common Stock) (subject to adjustment from time to time
as provided in the Indenture and the right to make cash payments in lieu of
fractional shares). On November 7, 1995, the last reported sale price per
share of Federated Common Stock on the New York Stock Exchange was $26.875.
Additional information regarding Federated and Federated Common Stock is
contained in the Proxy Statement/Prospectus, dated September 12, 1995,
delivered to Broadway's stockholders in connection with the Merger, a copy
of which is being provided to Holders herewith solely for their information
(and without any implication that there has been no change in the affairs
of Federated or Broadway since the date thereof or that the information
contained therein is correct as of any time subsequent to the date
thereof).
In connection with the Merger, a supplement to the Indenture was
executed by Bankers Trust Company, as trustee, Broadway, and Federated,
pursuant to which Federated agreed to provide Broadway with a number of
shares of Federated Common Stock sufficient to permit the conversion of all
outstanding Notes into shares of Federated Common Stock as provided in the
Indenture.
Bankers Trust Company serves as both the Paying Agent and the
Conversion Agent (as defined in the Indenture) for the Notes. The
telephone number and addresses of Bankers Trust Company for use in
connection with the Offer are set forth on the back cover of this Offer to
Purchase.
Following the valid tender of Notes pursuant to one of the procedures
described in "The Offer -- Procedures for Tendering Notes," the Holder of
the Notes so tendered will have no further rights in respect of such Notes
except the right to receive the Change in Control Purchase Price therefor,
without any interest thereon. Any Holder that has tendered Notes will have
the right to withdraw such Notes by presenting a Notice of Withdrawal, in
the form provided herewith, properly completed and signed, prior to
5:00 p.m., New York City time, on the Change in Control Purchase Date. See
"The Offer -- Withdrawal Rights." Notes validly tendered pursuant to the
Offer may thereafter be converted into shares of Federated Common Stock
only to the extent that they have been validly withdrawn. In addition, in
order to convert Notes into shares of Federated Common Stock, the Holder of
such Notes must satisfy the additional requirements set forth in the
Indenture and the Notes.
Holders should carefully read and follow the instructions set forth in
this Offer to Purchase, the Letter of Transmittal, and, if applicable, the
enclosed Notice of Withdrawal.
-2-
<PAGE>
THE OFFER
Payment for Notes
On the terms and subject to the conditions of the Offer, Broadway will
purchase for cash any and all Notes validly tendered and not withdrawn
prior to the expiration of the Offer at the Change in Control Purchase
Price ($1,027.43 for each $1,000 principal amount of outstanding Notes
tendered). The Offer will expire at 5:00 p.m., New York City time, on the
Change in Control Purchase Date (Friday, December 8, 1995) and may not be
extended except as required by applicable law.
Following the valid tender of Notes pursuant to the Offer, unless such
Notes are validly withdrawn as described in "The Offer -- Withdrawal
Rights," the Holder of the Notes so tendered will have no further rights in
respect of such Notes except the right to receive the Change in Control
Purchase Price therefor, without any interest thereon. On the terms and
subject to the conditions of the Offer, the Change in Control Purchase
Price for validly tendered Notes will be paid to Holders promptly following
the later of (i) the Change in Control Purchase Date and (ii) the time of
delivery of such Notes to the Paying Agent. In all cases, payment for
Notes purchased pursuant to the Offer will be made only after timely
receipt by the Paying Agent of (a) certificates representing such Notes or
timely confirmation (a "Book-Entry Confirmation") of the book-entry
transfer of such Notes into the Paying Agent's account at The Depository
Trust Company, the Midwest Securities Trust Company, or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility" and,
collectively, the "Book-Entry Transfer Facilities") in accordance with the
procedures described in "-- Procedure for Tendering Notes," (b) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or an Agent's Message (as hereafter
defined) in the case of a book-entry transfer, and (c) all other documents
required by the Letter of Transmittal. The term "Agent's Message" means a
message, transmitted by a Book-Entry Transfer Facility to, and received by,
the Paying Agent and forming a part of a Book-Entry Confirmation, which
states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Notes which are the subject of such Book-Entry Confirmation,
that such participant has received and agrees to be bound by the terms of
the Letter of Transmittal, and that Broadway may enforce such agreement
against such participant.
Payment for Notes pursuant to the Offer will be made by deposit of the
purchase price therefor with the Paying Agent on or before the business day
following the Change in Control Purchase Date. If on the business day
following the Change in Control Purchase Date the Paying Agent holds, in
accordance with the terms of the Indenture, money sufficient to pay the
Change in Control Purchase Price for Notes validly tendered and not
withdrawn pursuant to the Offer, then, on and after the Change in Control
Purchase Date, such Notes will cease to be outstanding and interest on such
Notes will cease to accrue and will be deemed paid, and all other rights of
the Holder in respect thereof will terminate (other than the right to
receive the Change in Control Purchase Price upon delivery of such Notes).
Procedure for Tendering Notes
Introduction. Notes may be tendered only in denominations of $1,000
principal amount or integral multiples thereof. For Notes to be validly
tendered pursuant to the Offer, a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message in the case of a book-entry transfer, and
all other documents required by the Letter of Transmittal, must be received
by the Paying Agent at one of its addresses set forth on the back cover of
this Offer to Purchase, and either (i) certificates representing Notes must
be received by the Paying Agent, together with the Letter of Transmittal
(or facsimile thereof), at either such address, or such Notes must be
tendered pursuant to the procedures for book-entry tender described below
and a Book-Entry Confirmation received by the Paying Agent, in each case
prior to 5:00 p.m., New York City time, on the Change in Control Purchase
Date, or (ii) the guaranteed delivery procedure described below must be
complied with.
Notes may be tendered only by the registered holder (which, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a securities position listing as
the owner) thereof or by person(s) authorized to become registered
holder(s) of such Notes by endorsements or documents transmitted with the
Letter of Transmittal.
-3-
<PAGE>
The Notes are presently represented by a global security which was
issued in the name of The Depository Trust Company or its nominee and
deposited with or on behalf of The Depository Trust Company. As a result,
The Depository Trust Company is considered the sole registered owner of the
Notes for all purposes under the Indenture, and each beneficial owner of
Notes must rely on the procedures of The Depository Trust Company and, if
such beneficial owner is not a participant therein, on the participant
therein through which such beneficial owner beneficially owns Notes, to
tender Notes pursuant to the Offer. Any person who beneficially owns Notes
through an account or other arrangement with a broker, dealer, commercial
bank, trust company, or other nominee must contact that entity if such
person desires to tender his, her, or its Notes pursuant to the Offer.
Book-Entry Transfer. The Paying Agent has established, or promptly
after the date of this Offer to Purchase will establish, accounts with
respect to the Notes at the Book-Entry Transfer Facilities for purposes of
the Offer. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Notes by causing
such Book-Entry Transfer Facility to transfer such Notes into the Paying
Agent's account in accordance with such Book-Entry Transfer Facility's
procedure for such transfer. Although delivery of Notes may be effected
through book-entry transfer to the Paying Agent's account at a Book-Entry
Transfer Facility, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or an Agent's Message, and all other documents required by the Letter of
Transmittal, must, in any case, be transmitted to and received by the
Paying Agent at its address set forth on the back cover of this Offer to
Purchase prior to 5:00 p.m., New York City time, on the Change in Control
Purchase Date, or the guaranteed delivery procedure described below must be
complied with.
Signature Guarantees. All signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution unless the Notes are tendered
(i) by a registered holder of such Notes, and neither the "Special Payment
Instructions" box nor the "Special Delivery Instructions" box in the Letter
of Transmittal is completed, or (ii) for the account of a member (each, an
"Eligible Institution") of a signature guarantee program within the meaning
of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If the certificates representing Notes are registered in
the name of a person other than the signer of the Letter of Transmittal or
if payment is to be made or certificates for unpurchased Notes are to be
issued or returned to a person other than the registered holder, the
certificates representing Notes must be endorsed or accompanied by
appropriate note powers, in either case signed exactly as the name or names
of the registered holder or holders appear on the certificates, with the
signatures on the certificates or note powers guaranteed as provided in the
Letter of Transmittal.
The method of delivery of all required documents is at the election
and risk of each Holder. If delivery is by mail, the use of registered
mail with return receipt requested, properly insured, is recommended.
Guaranteed Delivery. If a Holder desires to tender Notes pursuant to
the Offer and such Holder's certificates representing Notes are not
immediately available or such Holder cannot deliver such Holder's
certificates and all other required documents to the Paying Agent prior to
5:00 p.m., New York City time, on the Change in Control Purchase Date, or
if the procedure for book-entry transfer cannot be completed on a timely
basis, such Notes may nevertheless be tendered if all of the following
guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided herewith,
is received by the Paying Agent as provided below prior to 5:00
p.m., New York City time, on the Change in Control Purchase Date,
and
(iii) the certificates for all physically delivered
Notes in proper form for transfer or a Book-Entry Confirmation,
together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message in the case of a book-entry
transfer, and all other documents required by the Letter of
Transmittal, are received by the Paying Agent within three
business days after the date of such Notice of Guaranteed
Delivery.
-4-
<PAGE>
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission, or mail to the Paying Agent and must
include a signature guarantee by an Eligible Institution in the form set
forth in such Notice of Guaranteed Delivery unless such tender is for the
account of an Eligible Institution (in which case no signature guarantee is
required).
In all cases, payment for Notes tendered pursuant to the Offer will be
made only after timely receipt by the Paying Agent of certificates
representing such Notes or of a Book-Entry Confirmation relating to such
Notes and a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message in the case of a book-entry transfer, and all other documents
required by the Letter of Transmittal.
Backup Withholding. Under the federal income tax backup withholding
rules, unless an exception applies under the applicable laws and
regulations, the Paying Agent will be required to withhold, and will
withhold, 31% of the gross proceeds otherwise payable to a Holder or other
payee pursuant to the Offer, unless the Holder or other payee provides such
Holder's taxpayer identification number ("TIN") and certifies that such
number is correct and that such Holder or other payee is not subject to
backup withholding. Therefore, unless such an exception applies and is
proved in a manner satisfactory to Broadway and the Paying Agent, each
tendering Holder and, if applicable, each other payee, should complete and
sign the Substitute Form W-9 included as part of the Letter of Transmittal,
in order to provide the information and certification necessary to avoid
backup withholding.
General. In order for any tender of Notes to be valid, it must be in
proper form. All questions as to the form of documents and the validity,
eligibility (including time of receipt), and acceptance for payment of any
tender of Notes will be determined by Broadway, in its sole discretion,
which determination will be final and binding on all parties, in the
absence of manifest error. Broadway reserves the right to waive any defect
or irregularity in the tender of any Notes. No tender of Notes will be
deemed to have been validly made until all defects and irregularities have
been cured or waived. None of Broadway, Federated, the Paying Agent, or
any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any
such notification. Broadway's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and instructions thereto)
will be final and binding, in the absence of manifest error.
The tender of Notes pursuant to one of the procedures described above
will constitute a binding agreement between the tendering Holder and
Broadway on the terms and subject to the conditions of the Offer, including
the tendering Holder's representation and warranty that (i) such Holder has
full power and authority to tender, sell, assign, and transfer such Notes
and (ii) when the same are paid for, Broadway will acquire good,
marketable, and unencumbered title thereto, free and clear of all liens,
restrictions, charges, and encumbrances and will not be subject to any
adverse claim.
Withdrawal Rights
Notes tendered pursuant to the Offer may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Change in Control Purchase
Date. For a withdrawal to be effective, a written, telegraphic, or
facsimile Notice of Withdrawal, in the form provided by Broadway herewith,
must be timely received by the Paying Agent at its address set forth on the
back cover of this Offer to Purchase. The Notice of Withdrawal must
specify the name of the person who tendered the Notes to be withdrawn, the
principal amount of Notes to be withdrawn, and the principal amount of
Notes to remain tendered. If certificates representing Notes have been
delivered or otherwise identified to the Paying Agent, then, prior to the
release of such certificates, the tendering Holder must also submit the
serial numbers shown on the particular certificates representing the Notes
to be withdrawn and, unless such Notes have been tendered for the account
of an Eligible Institution, the signature(s) on the Notice of Withdrawal
must be guaranteed by an Eligible Institution. If Notes have been tendered
pursuant to the procedures for book-entry transfer described in "--
Procedure for Tendering Notes," any Notice of Withdrawal must also specify
the name and number of the account at the appropriate Book-Entry Transfer
Facility to be credited with the withdrawn Notes and otherwise comply with
the procedures of such facility.
-5-
<PAGE>
All questions as to the form and validity (including time of receipt)
of any Notice of Withdrawal will be determined by Broadway, in its sole
discretion, which determination will be final and binding on all parties in
the absence of manifest error. None of Broadway, Federated, the Paying
Agent, or any other person will be under any duty to give notification of
any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give such notification.
Withdrawals may not be rescinded, and any Notes properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer,
but may be retendered at any subsequent time prior to 5:00 p.m., New York
City time, on the Change in Control Purchase Date by again following the
procedures described in "-- Procedure for Tendering Notes."
Pursuant to the terms of the Indenture, any Note that is tendered in
the Offer may not be converted into shares of Federated Common Stock unless
and until such Note is withdrawn, and the additional requirements for
conversion set forth in the Notes and the Indenture are satisfied.
Source and Amount of Funds
Assuming that Broadway purchases all of the outstanding Notes at the
Change in Control Purchase Price, the Company expects the aggregate cost of
the Offer, including all fees and expenses applicable to the Offer, to be
approximately $147.8 million, which would be funded by equity contributions
made by Federated to Broadway. Federated has made or will make such equity
contributions from the net proceeds of the offering and sale by Federated
of $350.0 million aggregate principal amount of its 5% Convertible
Subordinated Notes Due 2003 (the "New Federated Convertible Notes"), which
offering was completed in September 1995.
Absence of Organized Trading Market
The Notes are not listed or admitted to trading on any national
securities exchange or other securities market. Accordingly, neither sales
prices nor bid quotations with respect to the Notes are reported in the
consolidated transaction reporting system of any exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System or any
comparable system. Any person who beneficially owns Notes is urged to
contact his, her, or its broker, dealer, commercial bank, trust company, or
other financial professional to seek to obtain information regarding the
prices at which recent transactions, if any, involving the purchase and
sale of Notes have been effected.
Condition to the Offer
Notwithstanding any other provision of this Offer, no Notes will be
purchased pursuant to the Offer if there shall have occurred (prior to, on,
or after, as the case may be, the tender of Notes pursuant to the Offer)
and be continuing an Event of Default (as defined in the Indenture) other
than a default in the payment of the Change in Control Purchase Price with
respect to the Notes.
Certain Federal Income Tax Considerations
The following discussion summarizes certain federal income tax
consequences of the Offer. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated
thereunder, Internal Revenue Service ("IRS") rulings, and judicial
decisions, all as in effect on the date of this Offer to Purchase, and all
of which are subject to change, possibly with retroactive effect. No
ruling as to any matter discussed in this summary has been requested or
received from IRS. This summary does not address all of the federal income
tax consequences that may be relevant to a Holder in light of such Holder's
particular tax situation or to certain classes of Holders subject to
special treatment under the federal income tax laws (for example, dealers
in securities, banks, insurance companies, subchapter S corporations,
nonresident aliens, foreign corporations, tax-exempt entities, employee
stock ownership plans, individual retirement and other tax deferred
accounts, and persons who hold the Notes as a hedge, who have otherwise
hedged the risk of holding Notes, who hold the Notes as part of a straddle
with other investments, or who hold the Notes in connection with a
conversion transaction), nor does it address any aspect of gift,
-6-
<PAGE>
estate, state, local, or foreign taxation. This discussion is directed at
Holders who are United States persons and assumes that the Notes are held
as "capital assets" within the meaning of section 1221 of the Code.
Holders of Notes are urged to consult their own tax advisors regarding
the tax consequences of tendering or failing to tender their Notes,
including the application and effect of any gift, estate, applicable state,
local, or foreign income or other tax laws.
The receipt of cash by a Holder in a sale pursuant to the Offer will
be a taxable transaction to such Holder for federal income tax purposes. A
Holder will generally recognize capital gain (subject to the market
discount rules discussed below) or loss on the sale of a Note in an amount
equal to the difference between (i) the amount of cash received for such
Note, other than the portion of such amount that is properly allocable to
accrued interest, which will be taxed as ordinary income, and (ii) the
Holder's "adjusted tax basis" for such Note at the time of the sale. Such
capital gain or loss will be long-term if the Holder held the Note for more
than one year at the time of such sale. Generally, a Holder's adjusted tax
basis for a Note will be equal to the cost of the Note to such Holder, less
payments (other than interest payments) made on the Notes. If applicable,
a Holder's tax basis in a Note also would be increased by any market
discount previously included in income by such Holder pursuant to an
election to include market discount in gross income currently as it
accrues, and would be reduced by the accrual of amortizable bond premium
which the Holder has previously elected to deduct from gross income on an
annual basis. Tendering Holders should consult their own tax advisors with
respect to the tax consequences to them of the receipt of cash in a sale
pursuant to the Offer.
An exception to the capital gain treatment described above may apply
to a Holder who purchased a Note at a "market discount." Subject to a
statutory de minimis exception, market discount is the excess of the face
amount of a Note over the Holder's tax basis in such Note immediately after
its acquisition by such holder. In general, unless the Holder has elected
to include market discount in income currently as it accrues, any gain
realized by a Holder on the sale of a Note having market discount in excess
of a de minimis amount will be treated as ordinary income to the extent of
the market discount that has accrued (on a straight line basis or, at the
election of the Holder, on a constant interest basis), while such Note was
held by the Holder.
Information statements will be provided to the IRS and to Holders
whose Notes are sold pursuant to the Offer reporting the payment of the
Offer consideration (except with respect to Holders that are exempt from
the information reporting rules, such as corporations).
For a discussion of the potential application of federal backup
withholding, see "-- Procedures For Tendering Notes."
Fees and Expenses
Bankers Trust Company serves as Paying Agent for the Notes and will
receive reasonable and customary compensation for such services. Broadway
will also reimburse the Paying Agent for out-of-pocket expenses including
reasonable attorney's fees, in connection with the Offer.
Broadway will not pay fees or commissions to brokers, dealers,
commercial banks, trust companies, or other persons for soliciting
acceptances of the Offer. Broadway will, however, on request, reimburse
such persons for customary handling and mailing expenses incurred in
forwarding materials in respect of the Offer.
-7-
<PAGE>
CERTAIN INFORMATION CONCERNING BROADWAY AND FEDERATED
General
Broadway is an operator of department stores in California and the
Southwestern United States, with 82 department stores in five states as of
the date of this Offer to Purchase. As a result of the Merger, on
October 11, 1995, Broadway became a subsidiary of Federated.
Federated is one of the leading operators of full-line department
stores in the United States, with 441 department stores in 34 states as of
the date of this Offer to Purchase, including the 82 stores acquired in its
acquisition of Broadway. As of the date of this Offer to Purchase,
Federated also operates 152 specialty and clearance stores and a mail order
catalog business. Federated's department stores sell a wide range of
merchandise, including men's, women's, and children's apparel and
accessories, cosmetics, home furnishings, and other consumer goods, and are
diversified by size of store, merchandising character, and character of
community served. Federated's department stores are located at urban or
suburban sites, principally in densely populated areas across the United
States. Federated has announced that it intends to close all of its six
remaining Macy's close-out stores by the end of fiscal 1995 and that it
intends to explore the possibility of selling the specialty store
operations that were acquired in Federated's acquisition of R.H. Macy &
Co., Inc. ("Macy's") in December 1994. In addition, Federated anticipates
that a number of the stores acquired in its acquisition of Broadway will be
disposed of (although, as of the date of this Offer to Purchase, Federated
has not entered into any agreement providing for such disposition and there
can be no assurance that Federated will do so or as to the timing or terms
thereof), and that Broadway's retained department stores will be converted
into Macy's or Bloomingdale's stores commencing in 1996.
The principal executive office of Broadway is located at 3880 North
Mission Road, Los Angeles, California 90031, and the principal executive
offices of Federated are located at 151 West 34th Street, New York, New
York 10001 and 7 West Seventh Street, Cincinnati, Ohio 45202.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial statements of Federated
gives effect to (i) the consummation of the Merger, (ii) the purchase (the
"Debt Purchase") by a subsidiary of Federated ("FNC II") from The
Prudential Insurance Company of America of certain mortgage indebtedness of
Broadway (the "Broadway/Prudential Mortgage Debt") for consideration
consisting of a $242,322,613 promissory note of FNC II and 6,751,055 shares
of Federated Common Stock, and (iii) the issuance and sale of $350.0
million aggregate principal amount of New Federated Convertible Notes and
$400.0 million aggregate principal amount of 8.125% Senior Notes due 2002
of Federated (the "New Senior Notes") pursuant to public offerings
(collectively, the "Debt Offerings") and the application of the net
proceeds thereof to prepay and redeem the entire outstanding principal
amount of Senior Convertible Discount Notes Due 2004 of Federated (the "Old
Federated Convertible Notes"), to repurchase the entire outstanding
principal amount of the Notes pursuant to the Offer, and to temporarily
reduce Federated's revolving credit borrowings, in each case as if the
foregoing transactions had been consummated on July 29, 1995, in the case
of the Unaudited Pro Forma Balance Sheet at July 29, 1995, and on
January 30, 1994, in the case of the Unaudited Pro Forma Statements of
Operations for the 26 weeks ended July 29, 1995 and the 52 weeks ended
January 28, 1995. Because Federated's acquisition of Macy's on
December 19, 1994 was accounted for under the purchase method of
accounting, Federated's historical statements of operations give effect to
the results of operations of the Macy's business only from and after such
date. The Unaudited Pro Forma Statements of Operations for the 52 weeks
ended January 28, 1995 gives effect to Federated's acquisition of Macy's as
if such acquisition had been consummated on January 30, 1994 rather than on
December 19, 1994.
Although certain unaudited historical financial information of
Broadway is included in the following unaudited pro forma financial
statements of Federated, separate unaudited pro forma financial statements
of Broadway are not presented herein. As the surviving corporation in the
Merger, Broadway continues to exist as a separate legal entity with sole
responsibility for the performance and discharge of its obligations and
liabilities, including without limitation the Notes. In connection with
the Merger, among other things, the size of Broadway's working capital
credit facility was increased to $250.0 million from $225.0 million and
approximately $88.4 million of Broadway's mortgage
-8-
<PAGE>
indebtedness was converted from nonrecourse indebtedness to recourse
indebtedness. It is anticipated that Broadway will incur various
non-recurring charges in connection with the Merger and the consolidation
of its business with Federated's other businesses, and that a number of
Broadway's stores will be sold or otherwise disposed of (although, as of
the date of this Offer to Purchase, Federated has not entered into any
agreement providing for such disposition and there can be no assurance that
Federated will do so or as to the timing or terms thereof). The purchase
by Broadway of all of the Notes would have the effect of reducing
Broadway's total indebtedness by approximately $143.8 million (see "The
Offer -- Source and Amount of Funds") and reducing Broadway's annual
interest expense by approximately $9.0 million.
The following unaudited pro forma financial information is presented
for illustrative purposes only and is not necessarily indicative of what
Federated's actual financial position or results of operations would have
been had the foregoing transactions, including the acquisition of Macy's,
been consummated on such dates, nor does it give effect to (i) any
transactions other than those discussed in the first paragraph above or in
the accompanying Notes to Summary Unaudited Pro Forma Financial
Information, (ii) Federated's or Broadway's results of operations since
July 29, 1995, (iii) the synergies, cost savings, and non-recurring charges
expected to result from the Merger and from the acquisition of Macy's, or
(iv) the effects of sales of stores which may occur subsequent to the
Merger. Accordingly, the pro forma financial information does not purport
to be indicative of Federated's financial position or results of operations
as of the date of this Offer to Purchase or for any period ended on the
date of this Offer to Purchase or as of or for any other future date or
period.
The following unaudited pro forma financial information is based in
part on the historical financial statements of Federated and Broadway (and,
with respect to the 52 weeks ended January 28, 1995, certain financial data
of Macy's) and should be read in conjunction with such historical financial
statements, the related notes, and the other information contained herein.
The historical financial statements of Federated, Broadway, and Macy's are
contained in their respective Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q which may be obtained in the manner set forth in
"-- Additional Information." Certain items derived from Broadway's
historical financial statements have been reclassified to conform to the
pro forma presentation.
In the preparation of the following unaudited pro forma financial
information, it has been generally assumed that the historical book value
of Broadway's assets approximates the fair value thereof, as an independent
valuation has not been completed. Federated will be required to determine
the fair value of the assets of Broadway (including intangible assets) as
of the effective time of the Merger. Although such determination of fair
value is not presently expected to result in values that are materially
greater or less than the values assumed in the preparation of the following
unaudited pro forma financial information, there can be no assurance with
respect thereto.
The retail business is seasonal in nature, with a higher proportion of
sales and earnings usually being generated in the months of November and
December than in other periods. Because of this seasonality and other
factors, results of operations for an interim period are not necessarily
indicative of results of operations for an entire fiscal year.
-9-
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA BALANCE SHEET
July 29, 1995
(in thousands)
Historical Pro Forma Adjustments
------------------------- -----------------------
Federated Broadway Debit Credit Pro Forma
--------- --------- -------- ------ ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Current Assets:
Cash . . . . . . . . . . . . . . . . $ 238,173 $ 15,901 $ $ 8,000(b) $ 246,074
Accounts receivable . . . . . . . . . 2,157,512 559,939 2,717,451
Merchandise inventories . . . . . . . 2,694,564 390,825 12,313(b) 3,054,164
18,912(b)
Supplies and prepaid expenses . . . . 107,509 25,418 15,800(b) 117,127
Deferred income taxes . . . . . . . . 198,123 198,123
----------- ---------- -----------
Total Current Assets . . . . . . . . 5,395,881 992,083 6,332,939
Property and Equipment - net . . . . . 5,261,698 885,002 6,146,700
Intangible Assets - net . . . . . . . . 1,027,033 ------ 123,831(b) 1,150,864
Notes Receivable . . . . . . . . . . . 407,276 ------ 407,276
Other Assets . . . . . . . . . . . . . 365,436 34,521 20,725(a) 20,757(b) 399,925
------------ ----------- ---------- -------- ----------
Total Assets . . . . . . . . . . . $12,457,324 $ 1,911,606 $ 144,556 $75,782 $14,437,704
=========== =========== ========== ======== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current Liabilities:
Short-term debt . . . . . . . . . . . $ 259,988 $ 58,426 $ 251,676(a) $ 66,738
Accounts payable and accrued
liabilities . . . . . . . . . . . . 2,139,335 220,324 1,173(a) 2,358,486
Income taxes . . . . . . . . . . . . 35,729 824 36,553
----------- ---------- -----------
Total Current Liabilities . . . . . 2,435,052 279,574 2,463,667
Long-Term Debt . . . . . . . . . . . . 5,121,445 1,208,648 421,150(c) 242,323(c) 6,423,667
477,599(a) 750,000(a)
Deferred Income Taxes . . . . . . . . 873,285 14,850 888,135
Other Liabilities . . . . . . . . . . 503,223 103,121 4,300(b) 7,718(b) 607,579
2,183(b)
Shareholders' Equity . . . . . . . . . 3,524,319 305,413 305,413(b) 352,227(b) 4,056,546
180,000(c)
----------- ---------- --------- ---------- -----------
Total Liabilities and
Shareholders' Equity . . . . . . $12,457,324 $ 1,911,606 $1,463,494 $1,532,268 $14,437,704
=========== =========== ========== ========== ===========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Information.
-10-
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the 26 Weeks Ended July 29, 1995
(in thousands, except for per share data)
Historical Pro Forma Adjustments
----------------------- ---------------------
Federated Broadway Debit Credit Pro Forma
--------- -------- ----- ------ ----------
<S> <C> <C> <C> <C> <C>
Net sales, including leased
department sales . . . . . . $ 6,035,255 $ 884,550 $ $ $ 6,919,805
----------- ---------- -----------
Cost of sales . . . . . . . . 3,686,836 676,550 ---- (a) 103,075 (d) 4,276,111
15,800 (b)
Selling, general and admini-
strative expenses . . . . . . 2,137,846 226,247 3,096 (c) 2,470,264
103,075 (d)
Business integration and
consolidation expenses . . . 172,345 ---- 172,345
Charitable contribution to
Federated Department Stores
Foundation . . . . . . . . . 25,581 ---- 25,581
----------- ----------- ------------
Operating income (loss). . . . 12,647 (18,247) (24,496)
Interest expense . . . . . . . (223,558) (62,499) 8,983 (e) 28,486 (f) (2,471)
4,083 (g)
Interest income . . . . . . . 22,790 ---- 22,790
----------- ----------- ------------
Loss before income taxes . . . (188,121) (80,746) (264,177)
Federal, state and local
income tax benefit . . . . . 64,196 ---- 29,914 (h) 94,110
----------- ----------- ------------
Net loss . . . . . . . . . . . $ (123,925) $ (80,746) $ (170,067)
=========== =========== ============
<CAPTION>
OTHER INCOME STATEMENT DATA
<S> <C> <C> <C>
EBITDA (i) . . . . . . . . . . $ 441,354 $ 425 $ 425,979
Loss per share of common stock (0.68) (1.72) (0.84)
Deficiency of earnings to fixed
charges . . . . . . . . . . 188,807 81,260 265,377
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Information.
-11-
<PAGE>
<TABLE><CAPTION>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the 52 Weeks Ended January 28, 1995
(in thousands, except for per share data)
Pro Forma Adjustments Pro Forma Adjustments for
for Macy's Acquisition the Merger, the Debt Purchase
------------------------- -----------------------------
and the Debt Offerings
----------------------
Historical Historical
Federated Debit Credit Pro Forma Broadway Debit Credit Pro Forma
---------- ----- ------ --------- ---------- ----- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales, including
leased department sales . . . $8,315,877 $ $5,631,177(A) $13,947,054 $2,086,804 $ $ $16,033,858
---------- ----------- -----------
Cost of sales . . . . . . . . . 5,131,363 3,405,824(A) 8,537,187 1,560,035 295(a) 201,242(d) 9,896,275
Selling, general and
administrative expenses . . . . 2,549,122 2,110,615(A) 22,682(D) 4,575,351 463,075 6,192(c) 5,245,860
22,975(B) 84,679(E) 201,242(d)
Unusual items . . . . . . . . . 85,867 195,719(A) 281,586 --- ---------
Operating income . . . . . . . 549,525 552,930 63,694 610,137
Interest expense . . . . . . . (262,115) 146,104(A) (465,217) (100,904) 17,123(e) 54,253(f) (537,118)
56,998(C) 8,127(g)
Interest income . . . . . . . 43,874 255(A) 44,129 --- 44,129
---------- ---------- --------- --------
Income (loss) before earthquake
loss, reorganization items
and income taxes . . . . . . 331,284 131,842 (37,210) 117,148
Earthquake loss . . . . . . . --- 15,000 (A) (15,000) --- (15,000)
Reorganization items . . . . . --- 50,914(A) 50,914 --- 50,914
---------- ---------- --------- ---------
Income (loss) before income
taxes . . . . . . . . . . . . 331,284 167,756 (37,210) 153,062
Federal, state and local
income tax expense . . . . . (143,668) 31,003(F) (86,011) (150) 3,336(h) (82,825)
26,654 (A)
---------- ---------- --------- ---------
Income (loss) from continuing
operations . . . . . . . . . $ 187,616 $ 81,745 $(37,360) $ 70,237
========== ========== ========= =========
<CAPTION>
OTHER INCOME STATEMENT DATA
<S> <C> <C> <C> <C>
EBITDA (i) . . . . . . . . . . $ 921,253 $ 1,303,359 $ 95,770 $1,398,834
Income (loss) from continuing
operations per share of
common stock . . . . . . . . $ 1.41 $ 0.45 $ (0.80) $ 0.35
Ratio of earnings to fixed
charges . . . . . . . . . . . 1.99x 1.28x --- 1.22x
Deficiency of earnings to
fixed charges . . . . . . . . --- --- 40,022 ---
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Information.
-12-
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Note 1. Unaudited Pro Forma Balance Sheet Adjustments
(a) To record the receipt of net proceeds of the Debt Offerings in the
amount of $733.9 million and the application of $307.4 million of such
proceeds to prepay and redeem the entire outstanding principal amount
of the Old Federated Convertible Notes and the application of $147.7
million of such proceeds to repurchase the entire outstanding
principal amount of the Notes.
(b) To record: (i) the Merger, which will be accounted for under the
purchase method of accounting, and the assumed issuance of 12,692,852
shares of Federated Common Stock at an assumed per share price of
$27.75 (which was the closing price of such shares on the New York
Stock Exchange on October 10, 1995); (ii) adjustments to reflect the
net assets acquired at fair value; and (iii) the excess of cost over
net assets acquired, all as set forth below:
<TABLE><CAPTION>
Debit Credit Description
----- ------ -----------
(in thousands)
<S> <C> <C> <C>
Cash . . . . . . . . . . . . . . $ $ 8,000 Payment of transaction costs
Merchandise inventories . . . . . 12,313 Elimination of Broadway's last-in,
first-out ("LIFO") adjustment
18,912 Elimination of indirect costs
capitalized in Broadway's inventory
Supplies and prepaid expenses . . 15,800 Elimination of deferred expenses of
Broadway
Intangible assets - net . . . . . 123,831 To record excess of cost over net assets
Other assets . . . . . . . . . . 20,757 Elimination of deferred financing costs
of Broadway
Other liabilities . . . . . . . . 7,718 Adjustment to fair value of Broadway's
pension liability
4,300 Adjustment to fair value of Broadway's
other postretirement benefits liabilities
2,183 Elimination of Broadway's rent abatement
reserve
Shareholders' equity . . . . . . 305,413 Elimination of Broadway's shareholders'
equity
352,227 Issuance of equity pursuant to the Merger
-------- --------
$435,727 $435,727
======== ========
</TABLE>
(c) To record the purchase by FNC II of the Broadway/Prudential Mortgage
Debt for consideration assumed to consist of a $242,322,613 promissory
note of FNC II and 6,751,055 shares of Federated Common Stock.
Note 2. Unaudited Pro Forma Statements of Operations for the 26 Weeks
Ended July 29, 1995 and the 52 Weeks Ended January 28,
1995--Adjustments for the Merger, the Debt Purchase, and the Debt
Offerings.
(a) To adjust Broadway's cost of sales to eliminate the effects of the
capitalization of inventory costs which will be expensed subsequent to
the Merger.
(b) To adjust Broadway's cost of sales to eliminate the effects of
deferred expenses written off in connection with the Merger.
-13-
<PAGE>
(c) To record amortization of estimated excess of cost over net assets
acquired over an assumed 20-year period.
(d) To reclassify buying and occupancy costs as selling, general, and
administrative expenses consistent with Federated's accounting
policies.
(e) To record interest expense on the promissory note issued by FNC II in
connection with the purchase of the Broadway/Prudential Mortgage Debt
at assumed rates per annum of 7.41% for the 26 weeks ended July 29,
1995 and 7.07% for the 52 weeks ended January 28, 1995.
(f) To reverse historical interest expense on the Broadway/Prudential
Mortgage Debt purchased by FNC II and to reverse amortization of
deferred financing costs.
(g) To record interest expense on the New Federated Convertible Notes and
the New Federated Senior Notes at interest rates per annum of 5.000%
and 8.125% respectively, to reverse historical expense interest at the
blended rate of 9.35% per annum for the 26 weeks ended July 29, 1995
and 6.00% per annum for the 52 weeks ended January 28, 1995 on the Old
Federated Convertible Notes, to reverse historical interest expense at
the rate of 6.25% per annum on the Notes, and reduce interest expense
on revolving credit borrowings.
(h) To adjust income tax expense (benefit) based upon an assumed composite
(federal, state, and local) income tax rate of 41%.
(i) EBITDA is defined for purposes of the pro forma information as
earnings before interest, taxes, depreciation, amortization, and
unusual items. EBITDA does not represent and should not be considered
as an alternative to net income or cash flow as determined by
generally accepted accounting principles.
Note 3. Unaudited Pro Forma Statement of Operations for the 52 Weeks
Ended January 28, 1995 -- Adjustments for the Macy's Acquisition
(A) To record historical results of Macy's prior to December 19, 1994.
(B) To record amortization of excess of cost over net assets acquired over
a 20-year period and the fair value of Macy's trade names over a 40-
year period.
(C) To record interest expense on the indebtedness incurred in connection
with the acquisition of Macy's and to reverse historical interest
expense on certain indebtedness of Macy's and Federated.
(D) To reverse amortization of deferred expense items eliminated in
connection with the acquisition of Macy's.
(E) To adjust depreciation of Macy's property and equipment to amounts
based on fair market value.
(F) To adjust income tax expense (benefit) based upon an assumed composite
(federal, state, and local) income tax rate of 40%.
(G) Although no adjustments have been recorded in the Unaudited Pro Forma
Statements of Operations, it is estimated that Federated will have
incurred expenses in connection with the consolidation of Federated's
and Macy's operations of approximately $270.0 million in the 52 weeks
subsequent to the acquisition of Macy's (of which approximately $190.0
million had been expensed through July 29, 1995).
-14-
<PAGE>
Recent Results of Operations
On the date of this Offer to Purchase, Federated issued a press
release announcing, among other things, that its net income for the 13-week
period ended October 28, 1995 was $45.2 million or $0.25 per share, with
operating income of $186.6 million or 5.6% of sales, excluding (i) the
impact of the Broadway acquisition, which is included in Federated's
operating results for the quarter, and (ii) $39.1 million in business
integration and consolidation expenses related to the Macy's and Broadway
acquisitions and divisional consolidations. Including these items,
Federated posted a net loss of $46.4 million or $0.24 per share on
operating income of $105.0 million. (Comparisons with the third fiscal
quarter of 1994 are not meaningful because of Federated's subsequent
acquisitions of Macy's and Broadway.)
For the first 39 weeks of 1995, Federated reported a net loss of
$170.3 million or $0.91 per share, and operating income of $117.6 million
or 1.2% of sales. Excluding the impact of the Broadway acquisition,
business integration and consolidations expenses, and a pre-tax charitable
contribution of $25.6 million to the Federated Department Stores
Foundation, Federated would have posted net income of $41.6 million or
$0.23 per share for the first nine months of fiscal 1995, with operating
income of $397.2 million or 4.2% of sales.
Sales for the third fiscal quarter of 1995 totaled $3,748.4 million
($3,333.5 million excluding Broadway), compared to sales of $1,926.8
million in the same period of 1994. For the first 39 weeks of fiscal 1995,
sales totaled $9,783.6 million ($9,368.8 million excluding Broadway),
compared to sales of $5,176.5 million for the first nine months of 1994.
For comparative and analytical purposes, total 1994 sales for
Federated and Macy's stores -- excluding I. Magnin, which has been closed --
were $3,352.6 million in the third fiscal quarter and $9,221.4 million for
the first nine months. On this basis, comp-store sales would have
increased 1.5% in the third fiscal quarter and 2.9% in the first 39 weeks
of 1995.
Additional Information
Each of Federated and Broadway is (and Macy's previously was) subject
to the information and reporting requirements of the Exchange Act, and in
accordance therewith files (or, in the case of Macy's, previously filed)
periodic reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Broadway and
Federated have also filed an Issuer Tender Offer Statement on Schedule 13E-
4 (the "Schedule 13E-4") with the Commission, which includes certain
additional information relating to the Offer.
Such reports, proxy statements, and other information may be inspected
and copied at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; 7 World Trade
Center, Suite 1300, New York, New York 10048; and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
reports, proxy statements, and other information also can be obtained by
mail from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Schedule 13E-4 will
not be available at the Commission's regional offices.
-15-
<PAGE>
MISCELLANEOUS
The Offer is not being made to, nor will Broadway accept tenders from,
Holders of Notes in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or Blue Sky laws of such jurisdiction.
Broadway is not aware of any jurisdiction in which the making of the Offer
or the tender of Notes would not be in compliance with the laws of such
jurisdiction. However, Broadway reserves the right to exclude Holders in
any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. So long as Broadway makes a good faith effort to comply with any
state law deemed applicable to the Offer, if it cannot do so, Broadway
believes that the exclusion of holders residing in such jurisdiction is
permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act.
BROADWAY STORES, INC.
November 8, 1995
-16-
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and
validly executed, will be accepted. Letters of Transmittal, certificates
for Notes, and any other required documents should be sent or delivered by
each Holder of Notes or such Holder's broker, dealer, commercial bank,
trust company, or other nominee to the Paying Agent at one of its addresses
set forth below.
The Paying Agent for the Offer is:
Bankers Trust Company
By Facsimile Transmission:
(212) 250-3290
(212) 250-6275
For Information Call:
(212) 250-6270
By Mail: By Hand or Overnight Courier:
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Corporate Trust and
Group Agency Group
Reorganization Department Reorganization
P.O. Box 1458, Church Department
Street Station 123 Washington Street, 1st Floor
New York, New York 10008 New York, New York 10006
Any questions or requests for assistance or for additional copies of
the Offer to Purchase, the Letter of Transmittal, or other offer materials
may be directed to the Paying Agent at the telephone number and addresses
set forth above. You may also contact your broker, dealer, commercial
bank, or trust company for assistance concerning the Offer.
Exhibit 99(a)(2)
CHANGE IN CONTROL PURCHASE NOTICE
AND
LETTER OF TRANSMITTAL
To Tender 6-1/4% Convertible Senior
Subordinated Notes Due 2000
of
BROADWAY STORES, INC.
Pursuant to the Notice of Change in Control
and Offer to Purchase dated November 8, 1995
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT AS
REQUIRED BY APPLICABLE LAW.
The Paying Agent for the Offer is:
Bankers Trust Company
By Facsimile Transmission:
(212) 250-3290
(212) 250-6275
For Information Call:
(212) 250-6270
By Mail: By Hand or Overnight Courier:
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Department Reorganization Department
P.O. Box 1458, Church Street Station 123 Washington Street, 1st Floor
New York, New York 10008 New York, New York 10006
Delivery of this Change in Control Purchase Notice and Letter of
Transmittal (this "Letter of Transmittal") to an address other than as set forth
above, or transmission of it to a facsimile number other than as set forth
above, will not constitute a valid delivery. The instructions set forth in this
Letter of Transmittal should be read carefully before this Letter of Transmittal
is completed.
Only registered holders (which term, for purposes hereof, shall include any
participant in a Book-Entry Transfer Facility (as defined below) whose name
appears on a security position listing as the owner) of Notes (as defined below)
or persons authorized to become registered holders by endorsements and documents
transmitted herewith may use this Letter of Transmittal to tender Notes pursuant
to the Offer (as defined below). Any person who beneficially owns Notes through
an account or other arrangement with a broker, dealer, commercial bank, trust
company, or other nominee must contact that entity if such person desires to
tender his, her, or its Notes pursuant to the Offer.
This Letter of Transmittal is to be used if (i) certificates representing
Notes are to be delivered herewith or (ii) unless an Agent's Message (as defined
in the Offer to Purchase (as defined below)) is utilized, if delivery of the
Notes is to be made by book-entry transfer to an account maintained by the
Paying Agent at The Depository Trust Company,
<PAGE>
Midwest Securities Trust Company or Philadelphia Depository Trust Company (each,
a "Book-Entry Transfer Facility") as described under the caption "The Offer --
Procedure for Tendering Notes" in the Offer to Purchase.
Holders who desire to tender Notes and who cannot deliver the certificates
representing their Notes and all other required documents to the Paying Agent
prior to 5:00 p.m., New York City time, on the Change in Control Purchase Date
(as defined in the Offer to Purchase), or who cannot complete the procedure for
book-entry transfer of such Notes on a timely basis, must tender their Notes
pursuant to the guaranteed delivery procedure described under the caption "The
Offer -- Procedure for Tendering Units" in the Offer to Purchase. See
Instruction 2.
The name(s) and address(es) of registered holder(s) should be printed
below. The certificate(s) and the aggregate principal amount of Notes that the
holder(s) wish(es) to tender should be indicated in the appropriate boxes below.
<TABLE><CAPTION>
DESCRIPTION OF NOTES TENDERED
Notes Tendered
(Attach additional list if necessary)
<S> <C> <C> <C>
Name(s) and Address(es) of Registered Holder(s) Principal Amount
(Please fill in, if blank, exactly as name(s) appear(s) Certificate Represented by Principal Amount to
on Note(s) or security position listing) Number(s)* Certificate(s)* be Tendered**
Total Aggregate
Principal Amount
of Notes Tendered:
* Need not be completed by holders delivering Notes by book-entry transfer.
** If less than the entire principal amount of any certificate listed is to
be tendered, please indicate in this column the principal amount thereof
to be tendered (which must be an integral multiple of $1,000).
Otherwise, the entire principal amount of each certificate listed above
will be deemed to have been tendered. See Instruction 4.
</TABLE>
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE PAYING AGENT WITH A BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-
ENTRY TRANSFER FACILITY MAY DELIVER NOTES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
----------------------------------------------
Check box of applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
-------------------------------------------------------------
Transaction Code Number
----------------------------------------------------
-2-
<PAGE>
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE PAYING AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Owner(s)
---------------------------------------------------------
Window Ticket Number (if any)
-----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------------
Name of Institution which Guaranteed Delivery
-------------------------------
If delivered by book-entry transfer, check box of applicable Book-Entry
Transfer Facility:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
--------------------------------------------------------------
Transaction Code Number (if delivered by Book-Entry Transfer)
---------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Broadway Stores, Inc. ("Broadway") the 6-
1/4% Convertible Senior Subordinated Notes due 2000 of Broadway listed above
(the "Notes") pursuant to Broadway's offer to purchase any and all Notes at a
purchase price equal to the principal amount thereof plus accrued and unpaid
interest to December 8, 1995 (the "Change-in-Control Purchase Date"), which will
be $1,027.43 per $1,000 principal amount of Notes (the "Change-in-Control
Purchase Price"), on the terms and subject to the conditions set forth in the
Notice of Change in Control and Offer to Purchase dated November 8, 1995 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer").
Subject to and effective upon provision for payment for the Notes tendered
herewith in accordance with the terms of the Offer, the undersigned hereby
sells, assigns, and transfers to or upon the order of Broadway all right, title,
and interest in and to all of the Notes that are being tendered hereby and
hereby irrevocably constitutes and appoints the Paying Agent the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Notes, with
full power of substitution and resubstitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
certificates representing such Notes, or transfer ownership of such Notes on the
account books maintained by a Book-Entry Transfer Facility, together, in any
such case, with all accompanying evidences of transfer and authenticity, to or
upon the order of Broadway; (ii) present certificates representing such Notes
for transfer on the Note register; and (iii) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Notes, all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that: (i) the undersigned
has full power and authority to tender, sell, assign, and transfer the Notes
tendered hereby; and (ii) upon provision for payment for the Notes tendered
herewith in accordance with the terms of the Offer, Broadway will acquire good,
marketable, and unencumbered title thereto, free and clear of all liens,
restrictions, charges, and encumbrances, and the same will not be subject to any
adverse claim.
-3-
<PAGE>
The undersigned, upon request, will execute and deliver any additional documents
Broadway or the Paying Agent deems necessary or desirable to complete the
assignment, transfer, and purchase of the Notes tendered hereby.
The undersigned understands that the valid tender of Notes pursuant to any
one of the procedures described under the caption "The Offer -- Procedure for
Tendering Notes" in the Offer to Purchase and in the instructions hereto will
constitute a binding agreement between the undersigned and Broadway on the terms
and subject to the conditions of the Offer.
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned,
and any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors, and assigns of the undersigned.
Unless otherwise indicated herein under the box entitled "Special Issuance
Instructions" and/or "Special Delivery Instructions" below, please issue any and
all checks and, in the event that less than the entire principal amount of any
Note is tendered for purchase or purchased, the replacement certificate in
respect of the principal amount not so tendered or purchased due to the
undersigned in the name of the undersigned, and deliver the same to the
undersigned at the address shown above. In the case of book-entry delivery of
Notes, please credit the account maintained by the Book-Entry Transfer Facility
indicated above with any of the principal amount of any Note not purchased. If
any Notes to be tendered are registered in different names, it will be necessary
to complete, sign, and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Notes.
-4-
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 3, and 5) (See Instructions 1, 3, and 5)
To be completed ONLY if any checks To be completed ONLY if any
and/or any certificates for Notes in checks and/or any certificates for
a principal amount not tendered or Notes in a principal amount not
not purchased are to be issued in tendered or not purchased are to be
the name of and sent to someone sent to someone other than the
other than the person(s) whose undersigned or to the undersigned
name(s) appear(s) in the "Description at an address other than that shown
of Notes Tendered" box above. in the "Description of Notes
Tendered above.
Issue and mail any checks and/or any Mail or deliver any checks and/or
Notes to: any Notes to:
Name: _____________________________ Name: _____________________________
(Please Type or Print) (Please Type or Print)
_____________________________ _____________________________
(Please Type or Print) (Please Type or Print)
Address: __________________________ Address: __________________________
__________________________ __________________________
Zip Code Zip Code
Is this a permanent address change?
___________________________________
Employer Identification or Social [ ] Yes [ ] No (check one box)
Security No.
See Substitute Form W-9
Credit purchased Notes tendered by
book-entry transfer to:
[ ] The Depositary Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depositary Trust Company
Account Number _____________________
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS
REGARDLESS OF WHETHER NOTES ARE BEING
PHYSICALLY DELIVERED HEREWITH)
(See Instructions 1, 2, and 3 and the following paragraph)
X _______________________________________ , _________________________________
X _______________________________________ , _________________________________
signature(s) of Registered Holder(s) Date
Must be signed by the registered holder(s) as the name(s) appear(s) on
certificates representing the Notes or on a security position listing or by
person(s) authorized to become registeredholder(s) by endorsements and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, officer, or other person acting in a fiduciary or representative
capacity, please set forth full title. See Instructions 2 and 3.
______________________________________________________________________
Name(s): ______________________________________________________________________
(Please Type or Print)
Capacity
(Full Title):__________________________________________________________________
Address: ______________________________________________________________________
______________________________________________________________________
(Include Zip Code)
Phone No.:_____________________________________________________________________
SIGNATURE GUARANTEE
(If required by Instruction 1)
Signature(s) Guaranteed by
an Eligible Institution: _____________________________________________________
(Authorized Signature)
______________________________________________________
(Title)
______________________________________________________
(Name of Firm)
Phone No.: ___________________________________________
Dated: _______________________________________________
-5-
<PAGE>
INSTRUCTIONS FOR TENDERING NOTES
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal if (i) this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner) of the Notes tendered herewith, and
neither the "Special Issuance Instructions" box nor the "Special Delivery
Instructions" box of this Letter of Transmittal has been completed, or (ii) the
Notes are tendered for the account of a member in good standing of a signature
guarantee program within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (each an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 3.
2. Delivery of this Letter of Transmittal and the Notes. This Letter of
Transmittal is to be completed by holders either if certificates representing
Notes are to be forwarded herewith or, unless an Agent's Message is utilized,
if delivery of Notes is to be made pursuant to the procedures for book-entry
transfer set forth under the caption "The Offer -- Procedure for Tendering
Notes" in the Offer to Purchase. For Notes to be validly tendered pursuant
to the Offer, (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or an Agent's
Message in the case of a book-entry transfer, and any other documents required
by this Letter of Transmittal, must be received by the Paying Agent at one of
its addresses set forth herein and either certificates representing Notes in
proper form for transfer must be received by the Paying Agent at one of such
addresses or a book-entry transfer of such Notes into the Paying Agent's
account at a Book-Entry Transfer Facility must be confirmed, in each case prior
to 5:00 p.m., New York City time, on the Change in Control Purchase Date or
(b) the tendering holder must comply with the guaranteed delivery procedure
set forth below.
Holders whose certificates representing Notes are not immediately
available or who cannot deliver their certificates representing Notes and all
other required documents to the Paying Agent prior to 5:00 p.m., New York City
time, on the Change in Control Purchase Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Notes
pursuant to the guaranteed delivery procedures set forth under the caption
"The Offer -- Procedure for Tendering Notes" in the Offer to Purchase.
Pursuant to such procedures, (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by Broadway, must be
received by the Paying Agent prior to 5:00 p.m., New York City time, on the
Change in Control Purchase Date, and (iii) the certificates representing Notes
for all physically delivered Notes in proper form for transfer, or book-entry
transfer of such Notes into the Paying Agent's account at a Book-Entry Transfer
Facility, as the case may be, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in the case of a book-entry
transfer, and any other documents required by this Letter of Transmittal,
must be received by the Paying Agent within three business days after the
date of such Notice of Guaranteed Delivery, all as provided in the Offer to
Purchase under the caption "The Offer -- Procedure for Tendering Notes."
The method of delivery of Notes and all other required documents is at the
election and risk of the tendering holder. If delivery is by mail, registered
mail with return receipt requested, properly insured, is recommended.
No alternative, conditional, or contingent tenders will be accepted, and
no Notes will be purchased other than in integral multiples of $1,000. None of
Broadway, the Paying Agent, or any other person is obligated to give notice of
defects or irregularities in any tender, nor will any of them incur any
liability for failure to give any such notice.
3. Signature(s) on Letter of Transmittal; Endorsement(s) and Instruments
of Transfer. (a) If this Letter of Transmittal is signed by the registered
holder(s) of the Notes tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates representing Notes or as
appearing on a securities position listing as the owner of the Notes without
alteration, enlargement, or any change whatsoever.
(b) If any of the Notes are registered in the name of two or more persons,
all such persons must sign this Letter of Transmittal.
-6-
<PAGE>
(c) If any of the Notes are registered in different names, it will be
necessary to complete, sign, and submit as many separate Letters of Transmittal
and any necessary accompanying documents as there are different registrations of
such Notes.
(d) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates representing Notes listed, such
certificates must be endorsed or accompanied by appropriate note powers
satisfactory to Broadway and the Paying Agent, and in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificates. Signatures on any such certificates or note powers must be
guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
(e) If this Letter of Transmittal or any certificates or note powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and proper
evidence satisfactory to Broadway and the Paying Agent of the authority of such
person to so act must be submitted with this Letter of Transmittal.
4. Partial Tenders. (Not applicable to holders who tender by book-entry
transfer.) If less than the entire principal amount of Notes evidenced by any
certificates submitted are to be tendered, fill in the principal amount thereof
that is to be tendered in the "Description of Tendered Notes" box. In such
case, a new certificate for the untendered principal amount of such Note will be
issued in and sent to the name of the person signing this Letter of Transmittal,
unless otherwise provided in the appropriate boxes in this Letter of
Transmittal. The entire principal amount of the Notes listed will be deemed to
have been tendered unless otherwise indicated.
5. Special Payment and Delivery Instructions. If any checks and/or Notes
are to be issued in the name of a person other than the person(s) signing this
Letter of Transmittal or if any checks and/or Notes are to be sent to someone
other than to the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal but at an address other than that
shown in the "Description of Notes Tendered" box in this Letter of Transmittal,
the appropriate boxes in this Letter of Transmittal must be completed. If no
such instructions are given, all checks and, if applicable, Notes will be issued
in the name of and sent to the address appearing in the "Description of Notes
Tendered" box in this Letter of Transmittal.
6. Transfer Taxes. Broadway will pay all transfer taxes, if any,
applicable to the transfer of Notes to it pursuant to the Offer. If, however,
tendered Notes are registered in the name of any person(s) other than the
person(s) signing this Letter of Transmittal, and accordingly the check for the
purchase price is to be issued, or certificates for Notes not tendered or not
purchased are to be registered, in the name of the person(s) signing this Letter
of Transmittal and not the registered holder(s), the amount of any transfer
taxes (whether imposed on the registered holder(s) or the person(s) signing this
Letter of Transmittal) payable on account of the transfer to the person(s)
signing this Letter of Transmittal will be deducted from the purchase price
unless satisfactory evidence of payment of such taxes, or exemption therefrom,
is submitted. Except as provided in this Instruction 6, it will not be
necessary for transfer tax stamps or funds to cover such stamps to be provided
with this Letter of Transmittal.
7. Mutilated, Lost, Stolen, or Destroyed Certificates. If any certificate
representing Notes has been mutilated, lost, stolen, or destroyed, the holder
should promptly notify the Paying Agent as indicated above for further
instructions.
8. Requests for Assistance or Additional Copies. All questions relating
to procedures for tendering Notes, as well as requests for assistance or
additional copies of this Letter of Transmittal, should be directed to the
Paying Agent at one of the addresses or the telephone number set forth above.
-7-
<PAGE>
IMPORTANT TAX INFORMATION
Backup Withholding. Federal income tax law requires that a tendering holder
provide the Paying Agent with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9, which in the case of a surrendering
holder who is an individual is his or her social security number, and to certify
that the holder is not subject to backup withholding. If the Paying Agent is
not provided with the correct TIN, such holder may be subject to a $50 penalty
imposed by the Internal Revenue Service (the "IRS"). In addition, payments that
are made to such holder may be subject to 31% backup withholding.
Certain holders (including, among others, corporations and certain foreign
persons) are not subject to backup withholding and reporting requirements and
should indicate their status by writing "exempt" across the face of the
Substitute Form W-9. In order for a foreign person to qualify as an exempt
recipient, the holder must submit a Form W-8, signed under penalties of perjury,
attesting to that individual's exempt status. A Form W-8 can be obtained from
the Paying Agent. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Paying Agent is required to withhold 31%
of any payment made to the holder. Backup withholding is not an additional tax.
Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of such withholding. If backup
withholding results in an overpayment of taxes, a refund may be obtained from
the IRS.
Purpose of Substitute Form W-9. To prevent backup withholding, each holder
tendering Notes must provide such holder's correct TIN by completing the form
below, certifying that the TIN provided on the Substitute Form W-9 is correct
(or that such holder is awaiting a TIN) and that the holder is not subject to
backup withholding because (i) the holder is exempt from backup withholding, or
(ii) the holder has not been notified by the IRS that the holder is subject to
backup withholding as a result of a failure to report all interest or dividends,
or (iii) the IRS has notified the holder that the holder is no longer subject to
backup withholding.
The holder is required to give the TIN (e.g., the social security number or
employer identification number) of the registered owner of the tendered Notes or
of the most recent transferee of the tendered Notes as evidenced by endorsements
on the certificates representing such Notes or any accompanying instruments of
transfer. If the Notes are in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional information on
which TIN to report. The box in Part 2 of the Substitute Form W-9 may be
checked if you have not been issued a TIN and have applied for a TIN or intend
to apply for a TIN in the near future. If the box in Part 2 is checked and the
Paying Agent is not provided with a TIN within 60 days, backup withholding will
begin and continue until you furnish your TIN to the Paying Agent.
-8-
<PAGE>
<TABLE><CAPTION>
PAYOR'S NAME: BANKERS TRUST COMPANY
<S> <C> <C>
SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN IN TIN:
Form W-9 THE BOX AT RIGHT AND CERTIFY BY -------------------------
SIGNING AND DATING BELOW Social Security Number or
Employer Identification Number
Department of the Treasury
Internal Revenue Service
<CAPTION>
<C> <C>
NAME (Please Print)
Part 2 --
Awaiting
Payor's Request for Taxpayer ADDRESS TIN [ ]
Identification Number (TIN)
and Certification
CITY STATE ZIP CODE
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do
so in the near future), (2) I am not subject to backup withholding
either because I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends or the IRS has
notified me that I am no longer subject to backup withholding, and (3)
all other information provided on this firm is true, correct and
complete.
Signature: Date:
----------------------------------- ----------------
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be withheld
until I provide a number.
- -------------------------------------------- ----------------------------------
Signature Date
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
- --------------------------------------------------------------------------------
-9-
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
for
Tender of 6-1/4% Convertible Senior Subordinated Notes Due 2000
of
BROADWAY STORES, INC.
This form or one substantially equivalent hereto must be used to
accept the Offer (as defined below) if certificates for the 6-1/4%
Convertible Senior Subordinated Notes Due 2000 (the "Notes") of Broadway
Stores, Inc. are not immediately available or time will not permit all
required documents to reach the Paying Agent prior to 5:00 p.m., New York
City time, on Friday, December 8, 1995 or if the procedure for book-entry
transfer cannot be completed on a timely basis. Such form may be delivered
by hand or sent by telegram, facsimile transmission, or mail to the Paying
Agent and must include a guarantee by an Eligible Institution (as defined
in the Offer to Purchase (as defined below)).
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT AS
REQUIRED BY APPLICABLE LAW.
- ---------------------------------------------------------------------------
The Paying Agent for the Offer is:
Bankers Trust Company
By Facsimile Transmission:
(212) 250-3290
(212) 250-6275
For Information Call:
(212) 250-6270
By Mail: By Hand or Overnight
Courier:
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Corporate Trust and
Group Agency Group
Reorganization Department Reorganization
P.O. Box 1458, Church Department
Street Station 123 Washington Street,
New York, New York 10008 1st Floor
New York, New York 10006
Delivery of this Notice of Guaranteed Delivery to and address other
than as set forth above, or transmission of it to a facsimile other than as
set forth above, will not constitute a valid delivery.
Only registered holders (which term, for purposes hereof, shall
include any participant in a Book-Entry Transfer Facility (as defined
below) whose name appears on a security position listing as the owner) of
Notes (as defined below) or persons authorized to become registered holders
by endorsements and documents to be transmitted to the Paying Agent may use
this Notice of Guaranteed Delivery to tender Notes pursuant to the Offer
(as defined below). Any person who beneficially owns Notes through an
account or other arrangement with a broker, dealer, commercial bank, trust
company, or other nominee must contact that entity if such person desires
to withdraw the tender of his, her, or its Notes pursuant to the Offer.
This form is not to be used to guarantee signatures. If a signature
on a Letter of Transmittal is required to be guaranteed by an Eligible
Institution under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter
of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Broadway Stores, Inc. on the terms
and subject to the conditions set forth in the Notice of Change in Control
and Offer to Purchase dated November 8, 1995 (the "Offer to Purchase") and
in the related Letter of Transmittal (which together constitute the
"Offer"), receipt of which is hereby acknowledged, the principal amount of
Notes indicated below pursuant to the guaranteed delivery procedures set
forth under the caption "The Offer -- Procedure for Tendering Notes" in the
Offer to Purchase.
(Please Type or Print)
Principal Amount of Notes Name(s):
--------------------------
Tendered (must be an integral
multiple of $1,000):
-------------- -----------------------------------
Certificate No(s). Address:
(if applicable): --------------------------
----------------
- ----------------------------------- -----------------------------------
Zip Code
- ----------------------------------- Area Code and
Telephone Number:
-----------------
If Notes will be delivered by Signature(s):
---------------------
book-entry transfer, check one box:
-----------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / The Philadelphia Depository
Trust Company
Name of Tendering
Institution:
----------------------
Account Number:
-------------------
Dated:
-----------------------------
2
<PAGE>
GUARANTEE
(not to be used for signature guarantee)
The undersigned, a member of a signature guarantee program within the
meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, hereby guarantees to deliver to the Paying Agent the certificates
representing the Notes tendered hereby, in proper form for transfer, or a
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect
to such Notes, together with a properly completed and duly executed Letter
of Transmittal or facsimile thereof, with any required signature
guarantees, or an Agent's Message (as defined in the Offer to Purchase) in
the case of a book-entry transfer, and any other required documents, all
within three business days after the date hereof.
- ----------------------------------- -----------------------------------
Name of Firm Authorized Signature
- ----------------------------------- -----------------------------------
Address Name (Please Type or Print)
- ----------------------------------- -----------------------------------
City, State Zip Code Title
- ----------------------------------- -----------------------------------
Area Code and Telephone Number Date
DO NOT SEND CERTIFICATES WITH THIS FORM. CERTIFICATES
SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL.
3
Exhibit (a)(4)
NOTICE OF WITHDRAWAL
of
Tender of
6-1/4% CONVERTIBLE SENIOR
SUBORDINATED NOTES DUE 2000
of
BROADWAY STORES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT AS
REQUIRED BY APPLICABLE LAW.
The Paying Agent for the Offer is:
Bankers Trust Company
By Facsimile Transmission:
(212) 250-3290
(212) 250-6275
For Information Call:
(212) 250-6270
By Mail: By Hand or Overnight Courier:
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Department Reorganization Department
P.O. Box 1458, Church Street Station 123 Washington Street, 1st Floor
New York, New York 10008 New York, New York 10006
Delivery of this Notice of Withdrawal to an address other than as set forth
above, or transmission to a facsimile number other than as set forth above, will
not constitute a valid delivery. The instructions set forth in this Notice of
Withdrawal should be read carefully before this Notice of Withdrawal is
completed.
Only registered holders (which term, for purposes hereof, shall include any
participant in a Book-Entry Transfer Facility (as defined below) whose name
appears on a security position listing as the owner) of Notes (as defined below)
or persons authorized to become registered holders by endorsements and documents
previously transmitted to the Paying Agent may use this Notice of Withdrawal to
withdraw the tender of Notes pursuant to the Offer (as defined below). Any
person who beneficially owns Notes through an account or other arrangement with
a broker, dealer, commercial bank, trust company, or other nominee must contact
that entity if such person desires to withdraw the tender of his, her, or its
Notes pursuant to the Offer.
This Notice of Withdrawal is to be completed by holders of Notes desiring
to withdraw the tender of such Notes pursuant to the Offer if (i) certificates
representing such Notes have been previously forwarded to the Paying Agent, (ii)
delivery of such Notes has been previously made by book-entry transfer to the
Paying Agent's account at The Depository Trust Company, Midwest Securities Trust
Company, or Philadelphia Depository Trust Company (each, a "Book-Entry Transfer
Facility") pursuant to the book-entry transfer procedure described under the
caption "The Offer -- Procedures for Tendering Notes" in the Offer to Purchase
(as defined below), or (iii) a Notice of Guaranteed Delivery has been
<PAGE>
previously guaranteed to the Paying Agent with respect to such Notes pursuant
to the guaranteed delivery procedure described under the caption "The Offer --
Procedures for Tendering Notes" in the Offer to Purchase.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
Ladies and Gentlemen:
The undersigned hereby withdraws the undersigned's tender to Broadway
Stores, Inc. ("Broadway") of the principal amount of 6-1/4% Convertible Senior
Subordinated Notes Due 2000 of Broadway (the "Notes") described below, which
Notes were previously tendered pursuant to Broadway's offer to purchase any and
all of the Notes, at a purchase price equal to the principal amount thereof plus
accrued and unpaid interest thereon to December 8, 1995, which will be $1,027.43
per $1,000 principal amount of Notes, on the terms and subject to the conditions
set forth in Broadway's Notice of Change in Control and Offer to Purchase dated
November 8, 1995 (the "Offer to Purchase") and related Change in Control
Purchase Notice and Letter of Transmittal (the "Letter of Transmittal") (which
together constitute the Offer), receipt of which are hereby acknowledged.
The undersigned hereby acknowledges that the withdrawal of Notes from the
Offer effected by this Notice of Withdrawal may not be rescinded and that such
Notes will no longer be deemed to be validly tendered for purposes of the Offer.
Such withdrawn Notes may be retendered only by following the procedures set
forth in "The Offer -- Procedures for Tendering Notes" in the Offer to Purchase.
<TABLE>
<CAPTION>
DESCRIPTION OF NOTES WITHDRAWN
Notes Withdrawn
(Attach additional list if necessary)
Name(s) and Address(es) of Registered Holder(s) Certificate Principal Amount Principal Principal Amount
(Please fill in, if blank, exactly as name(s) appear(s) Number(s)* Represented Amount to be to Remain
on Note(s) or security position listing) by Certificate(s)* Withdrawn* Tendered**
<S> <C> <C> <C> <C>
Total Principal
Amount of
Notes Withdrawn
Total Principal Amount
of Notes
Remaining Tendered:
</TABLE>
* Need not be completed by holders who delivered their Notes by book-entry
transfer.
** If less than the entire principal amount of any certificate previously
delivered to the Paying Agent is to be withdrawn, please indicate the
principal amount thereof to be withdrawn and the principal amount thereof
to remain tendered (which in each case must be an integral multiple of
$1,000). Otherwise, the entire principal amount of each Note listed above
will be deemed to have been withdrawn. See Instruction 4.
[ ] CHECK HERE IF TENDERED NOTES HAVE BEEN PREVIOUSLY DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE PAYING AGENT WITH A BOOK-
ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution________________________________________
-2-
<PAGE>
Check box of applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number _________________________________________________________
Transaction Code Number ________________________________________________
[ ] CHECK HERE IF A NOTICE OF GUARANTEED DELIVERY HAS BEEN PREVIOUSLY SENT TO
THE PAYING AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Owner(s) ____________________________________________________
Window Ticket Number (if any) __________________________________________
Date of Execution of Notice of Guaranteed Delivery _____________________
Name of Institution which Guaranteed Delivery __________________________
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL WITHDRAWING HOLDERS REGARDLESS OF
WHETHER NOTES HAVE BEEN PHYSICALLY DELIVERED TO THE PAYING AGENT)
(See Instructions 1,2, and 3 and the following paragraph)
X _____________________________________________________, _______________
X _____________________________________________________, _______________
Signature(s) of Registered Holder(s) Date
Must be signed by the registered holder(s) as the name(s) appear(s) on the Notes
or on a securities position listing or by person(s) authorized to become
registered holder(s) by endorsements and documents previously transmitted to the
Paying Agent. If signature is by a trustee, executor, administrator, guardian,
officer, or other person acting in a fiduciary or representative capacity,
please set forth full title. See Instructions 2 and 3.
Name(s):________________________________________________________________
________________________________________________________________
(Please Type or Print)
Capacity _______________________________________________________________
(Full Title): __________________________________________________________
Address: _______________________________________________________________
(Include Zip Code)
Phone No.: _____________________________________________________________
SIGNATURE GUARANTEE
(If required by Instruction 1)
Signature(s) Guaranteed by
an Eligible Institution: _______________________________________________
(Authorized Signature)
_______________________________________________
(Title)
_______________________________________________
(Name of Firm)
Phone No.: ____________________________________
Dated: ________________________________________
-3-
<PAGE>
INSTRUCTIONS FOR WITHDRAWING NOTES
1. Guarantee of Signatures. No signature guarantee is required on this
Notice of Withdrawal if (i) this Notice of Withdrawal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
securities position listing as the owner) of the Notes or (ii) the Notes are
tendered for the account of a member in good standing of a signature guarantee
program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended (each an "Eligible Institution"). In all other cases, all
signatures on this Notice of Withdrawal must be guaranteed by an Eligible
Institution.
2. Delivery of this Notice of Withdrawal. This Notice of Withdrawal,
properly completed and signed, must be received by the Paying Agent prior to
5:00 p.m., New York City time, on Friday, December 8, 1995. The method of
delivery of this Notice of Withdrawal is at the election and risk of the
holder of the Notes. If such delivery is by mail, registered mail with
return receipt requested, is recommended. Delivery of this Notice of
Withdrawal may be validly made to the Paying Agent only at one of the
addresses shown on this Notice of Withdrawal.
3. Signature(s) on Notice of Withdrawal. If this Notice of Withdrawal is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and proper
evidence satisfactory to Broadway and the Paying Agent of the authority of such
person to so act must be submitted with this Notice of Withdrawal.
4. Partial Withdrawals. If less than the entire principal amount
of Notes previously tendered are to be withdrawn, fill in the principal
amount of Notes to be withdrawn and the principal amount of Notes to remain
tendered in the "Description of Notes Withdrawn" box in this Notice of
Withdrawal. The entire principal amount of the Notes previously tendered
will be deemed to have been withdrawn unless otherwise indicated.
5. Requests for Assistance or Additional Copies. All questions
relating to procedures for withdrawing previously tendered Notes, as well
as requests for assistance or additional copies of this Notice of Withdrawal,
should be directed to the Paying Agent at one of the addresses or the
telephone number set forth above.
-4-
Exhibit (a)(5)
BROADWAY STORES, INC.
Offer to Purchase for Cash
Any and All of Its
6-1/4% Convertible Senior Subordinated Notes Due 2000
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE
EXTENDED EXCEPT AS REQUIRED BY APPLICABLE LAW.
November 8, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees:
We are enclosing the material listed below relating to the offer by
Broadway Stores, Inc. ("Broadway") to purchase for cash any and all of its
6-1/4% Convertible Senior Subordinated Notes Due 2000 (the "Notes") at a
purchase price equal to the principal amount thereof plus accrued and unpaid
interest thereon to December 8, 1995, which will be $1,027.43 per $1,000
principal amount of Notes, on the terms and subject to the conditions set forth
in the Notice of Change in Control and Offer to Purchase dated November 8, 1995
(this "Offer to Purchase") and in the related Change in Control Purchase Notice
and Letter of Transmittal (the "Letter of Transmittal") (which together
constitute the "Offer").
We are asking you to contact your clients for whom you hold Notes
registered in your name (or in the name of your nominee). Please bring the
Offer to their attention as promptly as possible.
Enclosed are copies of the following documents:
1. Notice of Change in Control and Offer to Purchase dated November 8,
1995;
2. Proxy Statement of Broadway Stores, Inc. and Prospectus of Federated
Department Stores dated September 8, 1995, included solely for the
information of holders of the Notes.
3. Letter of Transmittal to be used by holders of Notes to tender Notes;
4. A form of letter which may be sent to your clients for whose accounts
you hold Notes registered in your name (or the name of your nominee),
with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Notice of Withdrawal;
6. Notice of Guaranteed Delivery;
7. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
8. Return envelope addressed to Bankers Trust Company, the Paying Agent
for the Offer.
PLEASE CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE
OFFER AND WITHDRAWAL RIGHTS EXPIRE AS 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY,
DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT AS REQUIRED BY APPLICABLE LAW.
<PAGE>
Broadway will not pay any fees or commissions to any broker or dealer or
other person for soliciting tenders of Notes pursuant to the Offer. You will be
reimbursed for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients.
Any requests for additional copies of the enclosed material and any
inquiries you may have with respect to the Offer should be addressed to Bankers
Trust Company, the Paying Agent for the Offer, at the telephone number and
addresses set forth on the back cover of the Offer to Purchase.
Very truly yours,
BROADWAY STORES, INC.
_____________________________________
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF BROADWAY, ANY AFFILIATE OF BROADWAY, OR THE
PAYING AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR
MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT
FOR STATEMENTS EXPRESSLY MADE IN THE MATERIAL ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED HEREIN.
-2-
Exhibit (a)(6)
BROADWAY STORES, INC.
Offer to Purchase for Cash
Any and All of Its
6-1/4% Convertible Senior Subordinated Notes Due 2000
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE
EXTENDED EXCEPT AS REQUIRED BY APPLICABLE LAW.
To Our Clients:
Enclosed for your consideration is a Notice of Change in Control and Offer
to Purchase dated November 8, 1995 (the "Offer to Purchase") and the related
Change in Control Purchase Notice and Letter of Transmittal (which together
constitute the "Offer") relating to the offer by Broadway Stores, Inc.
("Broadway") to purchase for cash any and all of its 6-1/4% Convertible Senior
Subordinated Notes Due 2000 (the "Notes") at a purchase price equal to the
principal amount thereof plus accrued and unpaid interest thereon to December 8,
1995, which will be $1,027.43 per $1,000 principal amount of Notes, on the terms
and subject to the conditions of the Offer.
This material is being forwarded to you as the beneficial owner of Notes
held by us for your account. A tender of such Notes can be made only by us and
only pursuant to your instructions. The enclosed Change in Control Purchase
Notice and Letter of Transmittal is furnished to you for your information only
and cannot be used by you to tender Notes held by us for your account.
We request instructions as to whether you wish to have us tender any or all
such Notes held by us for your account, on the terms and subject to the
conditions of the Offer.
Your attention is invited to the following:
1. The tender offer is for $1,027.43 per $1,000 principal amount of
Notes.
2. The Offer is being made for any and all outstanding Notes.
3. You will not be obligated to pay any brokerage fees or commissions or,
except as set forth in Instruction 6 of the Letter of Transmittal, any
transfer taxes on the purchase of Notes by Broadway pursuant to the
Offer.
4. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Friday, December 8, 1995.
If you wish to have us tender any or all of your Notes, please so instruct
us by completing, executing, detaching, and returning to us the attached
instruction form. If you authorize us to tender your Notes, all such Notes will
be tendered unless otherwise indicated. Your instructions to us should be
forwarded to us promptly to permit us to submit a tender on your behalf prior to
the expiration of the Offer.
The enclosed material contains important information with respect to the
Offer and you are urged to read it carefully.
<PAGE>
(Detach and Return)
Instructions With Respect to
Offer to Purchase for Cash
Any and All
6-1/4% Convertible Senior Subordinated Notes Due 2000
of
Broadway Stores, Inc.
The undersigned acknowledge(s) receipt of your letter enclosing the Notice
of Change in Control and Offer to Purchase dated November 8, 1995 (the "Offer to
Purchase") and the related Change of Control Purchase Notice and Letter of
Transmittal (the "Letter of Transmittal"), relating to the offer by Broadway
Stores, Inc. to purchase for cash any and all of its 6-1/4% Convertible Senior
Subordinated Notes Due 2000.
This will instruct you to tender the principal amount of Notes indicated
below held by you for the account of the undersigned on the terms and subject to
the conditions set forth in the Offer to Purchase and the Letter of Transmittal.
------------------------------
------------------------------
Principal Amount of Signature(s)
Notes to be Tendered
(must be an integral
multiple of $1,000):* ------------------------------
$
------------------------ ------------------------------
Please Print Name(s)
* I (we) understand that Dated:
if I (we) sign these ----------------------
instructions without
indicating a lesser
principal amount of
Notes in the space
above, the entire
principal amount of
Notes held by you for my
(our) account will be
tendered.
Exhibit (a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-000. Employer Identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE><CAPTION>
For this type of Give the SOCIAL For this type of Give the EMPLOYER
account: SECURITY number of-- account: IDENTIFICATION number of--
<S> <C> <C> <C> <C>
1. Individual The individual 6. Sole proprietorship The owner(3)
2. Two or more The actual owner of the 7. A valid trust, The legal entity (Do not
individuals (joint account or, if combined estate, or pension furnish the identifying
account) funds, any one of the trust number of the personal
individuals(1) representative or trustee
unless the legal entity
itself is not designated
in the account title.)(4)
3. Custodian account The minor(2) 8. Corporate The corporation
of a minor (Uniform
Gift to Minors Act)
4. a. The usual The grantor-trustee(1) 9. Association, club, The organization
revocable savings religious,
trust (grantor is charitable,
also trustee) educational or
other tax-exempt
The actual owner(1) organization
b. So-called trust
account that is
not a legal or
valid trust under
state law.
5. Sole proprietorship The owner(3) 10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or
prison) that
receives
agriculture program
payments
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
<PAGE>
<TABLE><CAPTION>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
<S> <C>
Section references are to the Internal Revenue Code. Payments of interest generally not subject to backup
withholding include the following:
Obtaining a Number
- Payments of interest on obligations issued by;
If you don't have a taxpayer identification number or individuals.
you don't know your number, obtain Form SS-5,
Application for a Social Security Number Card, or Form Note: You may be subject to backup withholding if
SS-4, Application for Employer Identification Number, at this interest is $600 or more and is paid in the
the local office of the Social Security Administration course of the payer's trade or business and you have
or the Internal Revenue Service (the "IRS") and apply not provided your correct taxpayer identification
for a number. number to the payer.
Payees Exempt from Backup Withholding - Payments of tax-exempt interest (including exempt
interest dividends under section 852).
The following is a list of payees exempt from backup
withholding and for which no information reporting is - Payments described in section 6049(b)(5) to
required. For interest and dividends, all listed payees nonresident aliens.
are exempt except item (9). For broker transactions,
payees listed in (1) through (13) and a person - Payments on tax-free covenant bonds under section
registered under the Investment Advisers Act of 1940 who 1451.
regularly acts as a broker are exempt. Payments subject
to reporting under sections 6041 and 6041A are generally - Payments made by certain foreign organizations.
exempt from backup withholding only if made to payees
described in items (1) through (7), except that a - Mortgage interest paid by you.
corporation that provides medical and health care
services or bills and collects payments for such Payments that are not subject to information reporting
services is not exempt from backup withholding or are also not subject tobackup withholding. For details
information reporting. Only payees described in items see sections 6041, 6041(A)(a), 6042, 6044, 6045, 6049,
(2) through (6) are exempt from backup withholding for 6050A and 6050N, and the regulations under such
barter exchange transactions, patronage dividends, and sections.
payments by certain fishing boat operators.
(1) A corporation. Privacy Act Notice
(2) An organization exempt from tax under section
501(a), or an individual retirement plan Section 6109 requires you to give your correct taxpayer
("IRA"), or a custodial account under identification number to persons who must file
403(b)(7). information returns with the IRS to report interest,
(3) The United States or any of its agencies or dividends, and certain other income paid to you,
instrumentalities. mortgage interest you paid, the acquisition or
(4) A State, the District of Columbia, a possession abandonment of secured property, cancellation of debt,
of the United States, or any of their political or contributions you made to an IRA. The IRS uses the
subdivisions or instrumentalities. numbers for identification purposes and to help verify
(5) A foreign government or any of its political the accuracy of your tax return. You must provide your
subdivisions, agencies or instrumentalities. taxpayer identification number whether or not you are
(6) An international organization or any of its qualified to file a tax return. Payers must generally
agencies or instrumentalities. withhold 31% of taxable interest, dividend, and certain
(7) A foreign central bank of issue. other payments to a payee who does not furnish a
(8) A dealer in securities or commodities required taxpayer identification number to a payer. Certain
to register in the United States or a penalties may also apply.
possession of the United States.
(9) A futures commission merchant registered with Penalties
the Commodity Futures Trading Commission.
(10) A real estate investment trust. (1) Penalty for Failure to Furnish Taxpayer
(11) An entity registered at all times during the Identification Number. If you fail to furnish your
tax year under the Investment Company Act of taxpayer identification number to a payer, you are
1940. subject to a penalty of $50 for eachsuch failure unless
(12) A common trust fund operated by a bank under your failure is due to reasonable cause and not to
section 584(a). willful neglect.
(13) A financial institution.
(14) A middleman known in the investment community (2) Civil Penalty for False Information With Respect to
as a nominee or listed in the most recent Withholding. If you make a false statement with no
publication of the American Society of reasonable basis that results in no backup withholding,
Corporate Secretaries, Inc., Nominee List. you are subject to a $500 penalty.
(15) A trust exempt from tax under section 664 or
described in section 4947. (3) Criminal Penalty for Falsifying Information.
Falsifying certifications or affirmations may subject
Payments of dividends and patronage dividends generally you to criminal penalties including fines and/or
not subject to backup withholding also include the imprisonment.
following:
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT
- - Payments to nonresident aliens subject to withholding OR THE INTERNAL REVENUE SERVICE
under section 1441.
- - Payments to partnerships not engaged in a trade or
business in the United States and that have at least
one nonresident partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
</TABLE>
Exhibit (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Notes. The Offer is made solely by the Notice of Change in Control and
Offer to Purchase dated November 8, 1995 (the "Offer to Purchase") and the
related Change in Control Purchase Notice and Letter of Transmittal (the "Letter
of Transmittal"). Capitalized terms not defined in this announcement have the
respective meanings ascribed to such terms in the Offer to Purchase. The Offer
is not being made to, nor will Broadway accept tenders from, Holders of Notes in
any jurisdiction in which the Offer or its acceptance would not comply with the
securities or Blue Sky laws of such jurisdiction.
Notice of Change in Control
and of
Offer to Purchase for Cash
by
Broadway Stores, Inc.
Any and All of its 6-1/4% Convertible
Senior Subordinated Notes Due 2000
Broadway Stores, Inc. ("Broadway") is offering to purchase for cash any
and all of its 6-1/4% Convertible Senior Subordinated Notes Due 2000 (the
"Notes") at a purchase price equal to the principal amount thereof plus accrued
and unpaid interest thereon to December 8, 1995 (the "Change in Control
Purchase Date"), which will be $1,027.43 per $1,000 principal amount of Notes
(the "Change in Control Purchase Price"), on the terms and subject to the
conditions set forth in the Offer to Purchase and in the Letter of Transmittal
(which together constitute the "Offer"). As of the date of this announcement,
Notes having an aggregate principal amount of $143,750,000 are outstanding.
The information contained in the Offer to Purchase and the Letter of
Transmittal is incorporated herein in its entirety.
The Offer is being made pursuant to the Indenture governing the Notes (the
"Indenture"), which requires Broadway to purchase the Notes, at the option of
the holder thereof (each, a "Holder"), following a Change in Control (as
defined in the Indenture). A Change in Control occurred on October 11, 1995,
when a subsidiary of Federated Department Stores, Inc. ("Federated") merged
with and into Broadway, with Broadway being the surviving corporation in such
merger (the "Merger"). The Merger was effected in accordance with the
provisions of an Agreement and Plan of Merger, dated as of August 14, 1995,
which was approved by Broadway's Board of Directors and adopted by the
requisite vote of Broadway's stockholders.
At the effective time of the Merger, each outstanding share of Common
Stock of Broadway ("Broadway Common Stock") not owned directly or indirectly by
Federated was converted into the right to receive 0.27 shares of Common Stock
of Federated ("Federated Common Stock"). Consequently, on the terms and
subject to the conditions set forth in the Indenture, each Note is now
convertible into the number of shares of Federated Common Stock that would have
been received in the Merger by a holder of the number of shares of Broadway
Common Stock deliverable upon such conversion immediately prior to the Merger.
For example, a Note in the principal amount of $1,000 that was convertible
immediately prior to the Merger into 82.03 shares of Broadway Common Stock
(i.e., at a conversion price of $12.19 per share of Broadway Common Stock) is
now convertible into 22.15 shares of Federated Common Stock (i.e., at a
conversion price of $45.15 per share of Federated Common Stock) (subject to
adjustment from time to time as provided in the Indenture and the right to make
cash payments in lieu of fractional shares). On November 7, 1995, the last
reported sale price per share of Federated Common Stock on the New York Stock
Exchange was $26.875.
<PAGE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 8, 1995 AND MAY NOT BE EXTENDED EXCEPT
AS REQUIRED BY APPLICABLE LAW.
On the terms and subject to the conditions of the Offer, Broadway will
purchase for cash any and all Notes as are validly tendered and not withdrawn
prior to the expiration of the Offer at the Change in Control Purchase Price.
Notes must be tendered in denominations of $1,000 principal amount or
integral multiples thereof. For Notes to be validly tendered pursuant to the
Offer, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message in the case of a book-entry transfer, and all other documents required
by the Letter of Transmittal, must be received by the Paying Agent at one of
the addresses set forth below, and either (i) certificates representing Notes
must be received by the Paying Agent, together with the Letter of Transmittal
(or facsimile thereof), at either such address, or such Notes must be tendered
pursuant to the procedures for book-entry tender described in the Offer to
Purchase and a Book-Entry Confirmation received by the Paying Agent, in each
case prior to 5:00 p.m., New York City time, on the Change in Control Purchase
Date, or (ii) the guaranteed delivery procedure described in the Offer to
Purchase must be complied with. See "The Offer -- Procedure for Tendering
Notes" in the Offer to Purchase.
Following the timely tender of Notes pursuant to the Offer, the Holder of
the Notes so tendered will have no further rights in respect of such Notes
except the right to receive the Change in Control Purchase Price therefor,
without any interest thereon. Any Holder that has tendered Notes will have the
right to withdraw such Notes by presenting to the Paying Agent a Notice of
Withdrawal, in the form provided by Broadway together with the Offer to
Purchase and Letter of Transmittal, properly completed and signed, prior to
5:00 p.m., New York City time, on the Change in Control Purchase Date. See
"The Offer -- Withdrawal Rights" in the Offer to Purchase. Notes validly
tendered pursuant to the Offer may thereafter be converted into shares of
Federated Common Stock only to the extent that they have been validly
withdrawn. In addition, in order to convert Notes into shares of Federated
Common Stock, the Holder of such Notes must satisfy the additional requirements
set forth in the Indenture and the Notes.
On the terms and subject to the conditions of the Offer, such Change in
Control Purchase Price will be paid to Holders promptly following the later of
(i) the Change in Control Purchase Date and (ii) the time of delivery of such
Notes to the Paying Agent. In all cases, payment for Notes purchased pursuant
to the Offer will be made only after timely receipt by the Paying Agent of (i)
certificates representing such Notes or timely confirmation of the book-entry
transfer of such Notes into the Paying Agent's account at one of the Book-Entry
Transfer Facilities, (ii) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or
an Agent's Message in the case of a book-entry transfer, and (iii) all other
documents required by the Letter of Transmittal.
Any person who beneficially owns Notes through an account or other
arrangement with a broker, dealer, commercial bank, trust company, or other
nominee must contact that entity if such person desires to tender his, her, or
its Notes pursuant to the Offer.
-2-
<PAGE>
Bankers Trust Company serves as both the Paying Agent and the Conversion
Agent (as defined in the Indenture) for the Notes. The telephone number and
addresses of Bankers Trust Company for use in connection with the Offer are as
follows:
Bankers Trust Company
By Facsimile Transmission:
(212) 250-3290
(212) 250-6275
For Information Call:
(212) 250-6270
<TABLE><CAPTION>
By Mail: By Hand or Overnight Courier:
<S> <C>
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Department Reorganization Department
P.O. Box 1458, Church Street Station 123 Washington Street, 1st Floor
New York, New York 10008 New York, New York 10006
</TABLE>
The Offer to Purchase and the Letter of Transmittal contain important
information, which should be read carefully before Holders decide whether or
not to tender their Notes pursuant to the Offer. These materials are being
furnished to brokers, dealers, commercial banks, trust companies, and similar
persons for transmittal to beneficial owners of Notes.
The information required to be disclosed by Rule 13e-4(d)(1) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated in this announcement by reference.
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, the Letter of Transmittal, the Notice of Withdrawal, or
other tender offer materials may be directed to the Paying Agent at the
telephone number and addresses set forth above. Such copies will be furnished
promptly at Broadway's expense.
November 8, 1995
-3-
Exhibit (c)(2)
Supplemental Indenture
----------------------
This Supplemental Indenture, dated as of October 11, 1995 (this
"Supplemental Indenture"), between Broadway Stores, Inc., a Delaware corporation
(the "Company"), and Bankers Trust Company, as Trustee (the "Trustee"),
supplements the Indenture, dated as of October 23, 1993 (the "Indenture"),
between the Company (f/k/a Carter Hawley Hale Stores, Inc.) and the Trustee
(successor in such capacity to Continental Bank, National Association) under
which the Company's 6 1/4% Convertible Senior Subordinated Notes due 2000 were
issued and are outstanding.
RECITALS
A. This Supplemental Indenture is being entered into pursuant to
Section 4.12 of the Indenture in connection with the merger (the "Merger") of a
wholly owned subsidiary ("Newco") of Federated Department Stores, Inc.
("Federated") with and into the Company pursuant to an Agreement and Plan of
Merger, dated as of August 14, 1995, among the Company, Federated, and Newco.
B. At the effective time of the Merger, subject to certain exceptions,
each outstanding share of Common Stock will be converted into the right to
receive 0.27 shares of common stock of Federated ("Federated Common Stock").
C. In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
to comply with Section 4.12 of the Indenture, the Company and the Trustee hereby
agree as follows:
Section 1. Defined Terms. Capitalized terms used and not otherwise
-------------
defined herein have the respective meanings assigned to such terms in the
Indenture.
Section 2. Adjustment to Conversion Privilege. From and after the
----------------------------------
effective time of the Merger (the "Effective Time"), on the terms and subject to
the conditions set forth in the Indenture, a Holder of a Security may convert it
into Federated Common Stock. The number of shares of Federated Common Stock
issuable upon conversion of a Security will be determined by dividing the
principal amount converted by the conversion price therefor in effect on the
conversion date. Effective as of the Effective Time, the conversion price for
shares of Federated Common Stock will be $45.15. Thereafter, the conversion
price for shares of Federated Common Stock will be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in Article IV of the
Indenture.
<PAGE>
Section 3. Ratification. The Indenture as hereby supplemented is in all
------------
respects ratified and confirmed by each of the Company and the Trustee, and all
of the rights and powers created thereby or thereunder shall be and remain in
full force and effect.
Section 4. Governing Law. The laws of the State of New York shall govern
-------------
this Supplemental Indenture without regard to principles of conflict of laws.
Section 5. Successors. All agreements of the Company in this Supplemental
----------
Indenture shall bind its successors. All agreements of the Trustee in this
Supplemental Indenture shall bind its successors.
Section 6. Multiple Counterparts. The parties may sign multiple
---------------------
counterparts of this Supplemental Indenture. Each signed counterpart shall be
deemed an original, but all of them together represent the same agreement.
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be executed by its duly authorized officer as of the date first
above written.
BROADWAY STORES, INC.
Attest: /s/William A. Groll By: /s/John C. Haeckel
----------------------- -----------------------
Name: William A. Groll Name: John C. Haeckel
Title: Attorney-in-Fact Title: Executive Vice
President
BANKERS TRUST COMPANY, Trustee
Attest: /s/Marie P. Merrit By: /s/John Wallace
------------------------- --------------------------
Name: Marie P. Merritt Name: John Wallace
Title: Vice President Title: Asst. Vice Pres.
UNDERTAKING OF FEDERATED DEPARTMENT STORES, INC.
By executing this Supplemental Indenture below, Federated hereby (i)
undertakes to (A) reserve and keep available, free from preemptive rights, out
of its authorized but unissued capital stock, solely for the purpose of issuance
upon the conversion of Securities as provided in this Supplemental Indenture and
the Indenture, a number of shares of Federated Common Stock sufficient to permit
the conversion of all outstanding Securities and (B) to issue and cause to be
delivered in accordance with this Supplemental Indenture, the Indenture, and the
Company's instructions shares of Federated Common Stock upon the conversion of
any Security and (ii) warrants that all shares of Federated Common Stock that
may be issued upon the conversion of any Security, when so issued, shall be duly
authorized, validly issued, fully paid and nonassessable.
FEDERATED DEPARTMENT STORES, INC.
By: /s/Dennis J. Broderick
----------------------------------------------
Name: Dennis J. Broderick
Title: Senior Vice President
-3-
