<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 29, 1994.
JCPenney
J. C. Penney Company, Inc.
$225,000,000 6 7/8% Notes Due 1999
$275,000,000 7 3/8% Notes Due 2004
Interest on the Notes is payable June 15 and December 15
------------------
The 6 7/8% Notes will mature on June 15, 1999, and the 7 3/8% Notes will mature
on June 15, 2004. The 6 7/8% Notes and the 7 3/8% Notes are collectively
referred to herein as the "Notes." The Notes may not be redeemed by
the Company prior to maturity. See "Description of Notes."
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Company(1)(2)
------------- ------------- -------------
<S> <C> <C> <C>
Per 6 7/8% Note.............................. 99.646% .625% 99.021%
Per 7 3/8% Note.............................. 99.480% .650% 98.830%
Total........................................ $497,773,500 $3,193,750 $494,579,750
</TABLE>
(1) Plus accrued interest, if any, from June 15, 1994.
(2) Before deduction of expenses payable by the Company, estimated at $150,000.
------------------
The Notes are offered by the several Underwriters when, as and if issued by
the Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that the Notes, in
temporary or definitive fully registered form, will be ready for delivery on or
about June 15, 1994.
CS First Boston
Merrill Lynch & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co.
Incorporated
The date of this Prospectus Supplement is June 7, 1994.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT.
RECENT DEVELOPMENTS
The following financial information should be read in conjunction with the
financial information contained in the Company's Annual Report on Form 10-K for
the 52 weeks ended January 29, 1994.
<TABLE>
<CAPTION>
13 WEEKS ENDED
-----------------------
APRIL 30, MAY 1,
1994 1993
--------- ---------
(IN MILLIONS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Retail sales.............................................................. $ 4,350 $ 3,964
Income before extraordinary charge and cumulative effect of accounting
change.................................................................. $ 223 $ 172
Net income................................................................ $ 223 $ 206
Per fully diluted common share:
Income before extraordinary charge and cumulative effect of accounting
change............................................................... $ .84 $ .65
Net income.............................................................. $ .84 $ .78
</TABLE>
The Company's retail sales for the thirteen week period ended April 30,
1994 increased 9.7% from the prior year's comparable period. Sales of JCPenney
stores for the thirteen week period increased 7.6%, while catalog sales
increased 19.7% over the comparable 1993 period. Net income for the thirteen
weeks ended April 30, 1994 of $223 million increased 29.8% over the prior year's
income, before the effect of an extraordinary charge and an accounting change,
of $172 million. Including these items in 1993, net income in the 1994 first
quarter increased 8.2% over the prior year's period.
Gross margin dollars improved $115 million or 8.9% in the first quarter,
reflecting the strong sales performance of both stores and catalog. As a percent
of retail sales, gross margin declined 20 basis points from last year's level to
32.1%. Selling, general, and administrative ("SG&A") expenses, as a percent of
retail sales, declined to 25.1% in the first quarter from 25.9% in the 1993
comparable period. SG&A expenses increased 6.4% in dollars in the first quarter
as a result of planned increases in store and catalog advertising and greater
sales incentive compensation in stores. The effective income tax rate was 38.7%
in the 1994 first quarter compared with 37.8% in the same period last year.
The Company's retail sales for the four week period ended May 28, 1994,
increased 6.8% to $1,328 million from $1,244 million in the comparable 1993
period. Sales of JCPenney stores for the four week period increased 5.6%, while
catalog sales increased 10.1% over the prior year's comparable period.
On March 9, 1994, the Board of Directors declared a 16.7% increase in the
regular quarterly dividend to $.42 per share, or an indicated annual rate of
$1.68 per share, as compared with $1.44 per share in 1993. The Board also
approved the purchase, from time to time, of up to 10 million shares of the
Company's Common Stock of $.50 par value ("Common Stock") to offset dilution
caused by the issuance of Common Stock under the Company's equity compensation
and benefit plans. As of April 30, 1994, the Company had purchased approximately
1.3 million shares of Common Stock at a cost of $71 million. All shares were
retired and returned to the status of authorized but unissued shares of Common
Stock.
At the Company's Annual Meeting of Stockholders held on May 20, 1994,
stockholders approved an amendment to the Company's Restated Certificate of
Incorporation, as amended, authorizing an increase in the total authorized
number of shares of Common Stock of the Company from 500 million to 1.250
billion and an increase in the total authorized number of shares from 525
million to 1.275 billion.
S-2
<PAGE> 3
The Company's annual earnings depend to a significant extent on the results
of operations for the last quarter of its fiscal year. Accordingly, interim
results may not be indicative of the results for the entire fiscal year.
RATIOS OF AVAILABLE INCOME TO FIXED CHARGES
FOR THE COMPANY AND ALL SUBSIDIARIES
<TABLE>
<CAPTION>
53
WEEKS
52 WEEKS ENDED ENDED 52 WEEKS ENDED
------------------- ------- -----------------------------
APRIL 30 JAN. 29 JAN. 30 JAN. 25 JAN. 26 JAN. 27
1994 1994 1993 1992 1991 1990
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Ratios of available income to fixed charges.... 5.2 4.9 3.8 2.1 2.9 3.6
Ratios of available income to combined fixed
charges and preferred stock dividend
requirement.................................. 4.6 4.3 3.4 1.8 2.6 3.2
</TABLE>
For purposes of computing the ratios of available income to fixed charges,
available income is determined by adding fixed charges to income before income
taxes and before capitalized interest. For purposes of computing the ratios of
available income to combined fixed charges and preferred stock dividend
requirement, available income is determined by adding fixed charges and the
preferred stock dividend requirement to income before taxes, before capitalized
interest, but after the preferred stock dividend requirement. Fixed charges are
interest expense and a portion of rental expense representative of interest. The
interest cost of the LESOP notes guaranteed by the Company is not included in
fixed charges.
The Company believes that due to the seasonal nature of its business,
ratios for a period other than a 52 or 53 week period are inappropriate.
DESCRIPTION OF NOTES
GENERAL
The 6 7/8% Notes offered hereby will be limited to $225,000,000 aggregate
principal amount and will mature on June 15, 1999. The 6 7/8% Notes will bear
interest from June 15, 1994 at the rate of 6 7/8% per annum. Interest on the
6 7/8% Notes will be payable semi-annually on June 15 and December 15 of each
year, commencing December 15, 1994, to the persons in whose names the 6 7/8%
Notes are registered on the first day of June or December preceding such June 15
or December 15. The 6 7/8% Notes will be issued in fully registered form and in
denominations of $1,000 and integral multiples thereof. The 6 7/8% Notes may not
be redeemed by the Company prior to maturity.
The 7 3/8% Notes offered hereby will be limited to $275,000,000 aggregate
principal amount and will mature on June 15, 2004. The 7 3/8% Notes will bear
interest from June 15, 1994 at the rate of 7 3/8% per annum. Interest on the
7 3/8% Notes will be payable semi-annually on June 15 and December 15 of each
year, commencing December 15, 1994, to the persons in whose names the 7 3/8%
Notes are registered on the first day of June or December preceding such June 15
or December 15. The 7 3/8% Notes will be issued in fully registered form and in
denominations of $1,000 and integral multiples thereof. The 7 3/8% Notes may not
be redeemed by the Company prior to maturity.
SATISFACTION AND DISCHARGE PRIOR TO MATURITY
Pursuant to an election by the Company under the Indenture, the Company has
the right at any time to satisfy and discharge its obligations under the Notes
by depositing in trust with the Trustee money or U.S. Government Obligations.
For federal income tax purposes, such deposit and discharge with respect to any
Notes may be treated as a taxable exchange of such Notes for interests in the
trust. For a description of the applicable provisions and the tax effects, see
"Description of Securities -- Satisfaction and Discharge Prior to Maturity" in
the Prospectus.
S-3
<PAGE> 4
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
relating to the Notes, the Company has agreed to sell to the Underwriters named
below ("Underwriters") and the Underwriters have severally agreed to purchase
from the Company, the following respective principal amounts of Notes:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 6 7/8% NOTES 7 3/8% NOTES
--------------------------------------------------------- ------------ ------------
<S> <C> <C>
CS First Boston Corporation.............................. $ 56,250,000 $ 68,750,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................ 56,250,000 68,750,000
J.P. Morgan Securities Inc............................... 56,250,000 68,750,000
Morgan Stanley & Co. Incorporated........................ 56,250,000 68,750,000
------------ ------------
Total.......................................... $225,000,000 $275,000,000
=========== ===========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, and that the
Underwriters will be obligated to purchase all of the Notes if any are
purchased.
The Company has been advised by the Underwriters that they propose to offer
the Notes to the public initially at the offering price set forth on the cover
page of this Prospectus Supplement and to certain dealers at such price less a
concession of .375% of the principal amount of the 6 7/8% Notes and .40% of the
principal amount of the 7 3/8% Notes; that the Underwriters and such dealers may
allow a discount of .25% of such principal amounts on sales to other dealers;
and that, after the initial public offering, the public offering prices and
concessions and discounts to dealers may be changed by the Underwriters.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes, but that they are not obligated to do so and may
discontinue making a market in the Notes at any time without notice. No
assurance can be given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments which any Underwriter may be required to make in respect
thereof.
In the ordinary course of their respective businesses, certain affiliates
of the Underwriters have engaged, and may in the future engage, in commercial
banking and investment banking transactions with the Company and affiliates of
the Company.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by C. R.
Lotter, Executive Vice President, Secretary and General Counsel of the Company,
and for the Underwriters by Sullivan & Cromwell, New York, New York. As of April
30, 1994, Mr. Lotter owned 29,341 shares of Common Stock and Common Stock voting
equivalents of the Company, including shares credited to his account under the
Company's Savings and Profit-Sharing Retirement Plan and the Savings,
Profit-Sharing and Stock Ownership Plan as of March 31, 1994. As of April 30,
1994, Mr. Lotter had outstanding options to purchase 49,540 shares of Common
Stock.
S-4
<PAGE> 5
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
JCPenney
J. C. PENNEY COMPANY, INC.
DEBT SECURITIES
AND
WARRANTS TO PURCHASE DEBT SECURITIES
------------------------
J. C. Penney Company, Inc. ("Company") may offer from time to time in one
or more series up to $1,500,000,000 (or the equivalent thereof denominated in
foreign currency or composite currencies such as the European Currency Unit
("ECU")) aggregate principal amount of its senior debt securities consisting of
unsecured debentures, notes and/or other evidences of indebtedness ("Debt
Securities"), each series of which will be offered on terms to be determined at
the time of sale. The Company from time to time may also offer Debt Securities
with warrants ("Warrants") to purchase Debt Securities (Debt Securities and
Warrants being hereinafter collectively called "Securities"). A Supplement to
this Prospectus ("Prospectus Supplement") will be delivered together with this
Prospectus in respect of any Debt Securities, including any related Warrants,
then being offered and will set forth certain specific terms with respect to
such Securities, which may include, among other items:
- title;
- authorized denominations;
- aggregate principal amount;
- initial public offering price;
- maturity;
- currency or currency unit in which the Debt Securities will be
denominated;
- rate or rates or formula to determine such rate or rates, and time
or times of payment of interest, if any;
- redemption and sinking fund terms, if any;
- exercise prices and expiration dates of any Warrants;
- listing, if any, on a securities exchange;
- underwriter or underwriters, if any, respective amounts to be
purchased by them, their compensation and the resulting net
proceeds to the Company.
Securities may be sold to underwriters for public offering pursuant to
terms of offering fixed at the time of sale. In addition, Securities may be sold
by the Company directly or through agents. See "Plan of Distribution".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS APRIL 29, 1994
<PAGE> 6
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN
CONNECTION WITH ANY OFFERING MADE THEREBY, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED THEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE THEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("1934 Act") and in accordance therewith, files reports,
proxy statements and other information with the Securities and Exchange
Commission ("Commission"). Such reports, proxy statements and other information
can 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; and
at the Commission's Regional Offices in Chicago (Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661) and New York (Seven
World Trade Center, 13th Floor, New York, N.Y. 10048). Copies of such material
can also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N. W., Washington, D. C. 20549 at prescribed rates. Reports, proxy
statements and other information concerning the Company can also be inspected at
the office of The New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933. This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Securities offered pursuant hereto. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference its Annual Report on Form 10-K
for the fiscal year ended January 29, 1994, which incorporates by reference the
J. C. Penney Funding Corporation ("Funding Corporation") Annual Report on Form
10-K for such fiscal year. The aforesaid Report has heretofore been filed by the
Company with the Commission (File No. 1-777) pursuant to applicable provisions
of the 1934 Act.
All reports and any definitive proxy or information statements filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act,
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Securities, shall be deemed to be incorporated in this
Prospectus by reference and to be a part hereof from the date of the filing of
such documents.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS WHICH HAVE BEEN OR MAY BE INCORPORATED
HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS). WRITTEN REQUESTS
SHOULD BE DIRECTED TO: J. C. PENNEY COMPANY, INC., PUBLIC INFORMATION, P. O. BOX
10001, DALLAS, TEXAS 75301-2304. TELEPHONE REQUESTS SHOULD BE DIRECTED TO (214)
431-1488.
2
<PAGE> 7
THE COMPANY
The Company is a major retailer, with department stores in all 50 states
and Puerto Rico. The dominant portion of the Company's business consists of
providing merchandise and services to consumers through department stores that
include catalog departments. The Company markets predominantly family apparel,
shoes, jewelry, accessories and home furnishings. The Company finances a portion
of its operations through Funding Corporation, a wholly-owned consolidated
subsidiary.
The Company was founded by James Cash Penney in 1902 and incorporated in
Delaware in 1924. Its principal executive offices are located at 6501 Legacy
Drive, Plano, Texas 75024-3698, and its telephone number is (214) 431-1000. As
used in this Prospectus, except as otherwise indicated by the context, the term
"Company" means J. C. Penney Company, Inc. and its consolidated subsidiaries.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be used for general corporate purposes, which may include
working capital, capital expenditures, repayment of borrowings and investments.
Unless otherwise specified in the Prospectus Supplement accompanying this
Prospectus, specific allocations of the proceeds will not have been made at the
date of the Prospectus Supplement. Pending any specific application, the net
proceeds may be initially invested in short term marketable securities or
applied to the reduction of short term indebtedness.
The Company or its subsidiaries may from time to time borrow additional
funds or issue additional equity securities, as appropriate. The amounts, terms
and timing of any such financings or issuances will depend upon a number of
factors, including the operations of the Company and the condition of the
financial markets.
RATIOS OF AVAILABLE INCOME TO FIXED CHARGES
FOR THE COMPANY AND ALL SUBSIDIARIES
<TABLE>
<CAPTION>
52 WEEKS ENDED 53 WEEKS ENDED 52 WEEKS ENDED
-------------- -------------- -------------------------------
JAN. 29 JAN. 30 JAN. 25 JAN. 26 JAN. 27
1994 1993 1992 1991 1990
-------------- -------------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Ratios of available income to
fixed charges............... 4.9 3.8 2.1 2.9 3.6
Ratios of available income to
combined fixed charges and
preferred stock dividend
requirement................. 4.3 3.4 1.8 2.6 3.2
</TABLE>
For purposes of computing the ratios of available income to fixed charges,
available income is determined by adding fixed charges to income from continuing
operations before income taxes and before capitalized interest. Fixed charges
are interest expense and a portion of rental expense representative of interest.
For purposes of computing the ratios of available income to combined fixed
charges and preferred dividend requirement, fixed charges are further increased
by the preferred stock dividend requirement. The interest cost of the LESOP
notes guaranteed by the Company is not included in fixed charges.
The Company believes that due to the seasonal nature of its business,
ratios for a period other than a 52 or 53 week period are inappropriate.
DESCRIPTION OF SECURITIES
DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of April
1, 1994 (said Indenture being herein called the "Indenture"), between the
Company and Bank of America National Trust and Savings Association, as Trustee
("Trustee"). A copy of the Indenture substantially in the form in which it is to
be
3
<PAGE> 8
executed is included as an exhibit to the Registration Statement of which this
Prospectus forms a part. The following statements are subject to the detailed
provisions of the Indenture, including the definitions therein of certain terms
used herein without definition. Wherever particular provisions of the Indenture
are referred to below, such provisions are incorporated by reference as a part
of the statement made, and the statement is qualified in its entirety by such
reference.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder. Under the Indenture, Debt Securities may be issued in one or
more series, each in an aggregate principal amount (in U.S. dollars or the
equivalent thereof denominated in foreign currency or composite currencies such
as the ECU) authorized by the Company prior to issuance.
Reference is made to the Prospectus Supplement for certain specified terms
with respect to the Debt Securities being offered hereby, including, but not
limited to (1) the terms set forth on the cover page of this Prospectus; (2) the
obligation, if any, of the Company to redeem or purchase the Debt Securities
pursuant to any sinking fund or analogous provisions or at the option of the
holder thereof and the period or periods within and the price or prices at which
the Debt Securities will be redeemed or purchased, in whole or in part, pursuant
to such obligation, and the other detailed terms and provisions of such
obligation; (3) if the amount of payments of principal of or any premium or
interest on any of the Debt Securities may be determined with reference to an
index, the manner in which such amounts shall be determined; and (4) whether any
of the Debt Securities shall be issuable in whole or in part in the form of one
or more Global Securities (as described below) and, if so, the Depository for
such Global Security or Securities, and the circumstances under which any such
Global Security or Securities may be exchanged for Debt Securities registered in
the name of, and any transfer of such Global Security or Securities may be
registered to, a person other than such Depository or its nominee.
The Debt Securities offered hereby will be unsecured and will rank pari
passu with all other unsecured and unsubordinated indebtedness of the Company.
Unless otherwise provided in the Prospectus Supplement, the Debt Securities
will be issued only in registered form without coupons and may be issued (in the
case of dollar denominated Debt Securities) in denominations of $1,000 and any
integral multiple thereof. The Debt Securities of a series may be represented,
in whole or in part, by one or more permanent Global Securities in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities of the series to be represented
by such Global Security or Securities. Any such Global Security deposited with a
Depository or its nominee and bearing the legend required by the Indenture may
not be surrendered for transfer or exchange except by the Depository for such
Global Security or any nominee of such Depository, except if the Depository
notifies the Company that it is unwilling or unable to continue as Depository,
or the Depository ceases to be qualified as required by the Indenture, or the
Company instructs the Trustee in accordance with the Indenture that such Global
Security shall be so registrable and exchangeable, or there shall exist such
other circumstances, if any, as may be specified in the applicable Prospectus
Supplement.
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by one or more Global
Securities will be described in the applicable Prospectus Supplement. Beneficial
interests in Global Securities will only be evidenced by, and transfers thereof
will only be effected through, records maintained by the Depository and the
institutions that are participants in the Depository.
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Debt Securities of any series will
be exchangeable for other Debt Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. The Debt
Securities may be transferred or exchanged without payment of any service
charge, other than any tax or other governmental charge payable in connection
therewith. (Article Two)
The principal of (and premium, if any) and interest, if any, on the Debt
Securities will be payable, and the transfer of the Debt Securities will be
registrable, at the agency or agencies maintained by the Company;
4
<PAGE> 9
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as it appears
in the Security Register. (Sections 2.07 and 2.10)
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rate) to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto. Debt Securities may
also be issued under the Indenture upon the exercise of Warrants. See "Warrants"
below.
RESTRICTIVE COVENANTS
Limitations on Liens. The Indenture provides that the Company may not, nor
may it permit any Restricted Subsidiary to, issue, assume or guarantee evidences
of indebtedness for money borrowed which are secured by any mortgage, security
interest, pledge or lien ("mortgage") of or upon any Principal Property or of or
upon any shares of stock or evidences of indebtedness for borrowed money issued
by any Restricted Subsidiary and owned by the Company or any Restricted
Subsidiary, whether owned at the date of the Indenture or thereafter acquired,
without effectively providing that the Principal Amount of the Debt Securities
from time to time Outstanding shall be secured equally and ratably by such
mortgage, except that this restriction will not apply to (1) mortgages on any
property existing at the time of its acquisition; (2) mortgages on property of a
corporation existing at the time such corporation is merged into or consolidated
with, or disposes of substantially all its properties (or those of a division)
to, the Company or a Restricted Subsidiary; (3) mortgages on property of a
corporation existing at the time such corporation first becomes a Restricted
Subsidiary; (4) mortgages securing indebtedness of a Restricted Subsidiary to
the Company or to another Restricted Subsidiary; (5) mortgages to secure the
cost of acquisition, construction, development or substantial repair, alteration
or improvement of property if the commitment to extend the credit secured by any
such mortgage is obtained within 12 months after the later of the completion or
the placing in operation of the acquired, constructed, developed or
substantially repaired, altered or improved property; (6) mortgages securing
current indebtedness (as defined); or (7) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or in part, of
any mortgage referred to in clauses (1) through (6) provided, however, that the
principal amount of indebtedness secured thereby and not otherwise authorized by
said clauses (1) to (6), inclusive, shall not exceed the principal amount of
indebtedness, plus any premium or fee payable in connection with any such
extension, renewal or replacement, so secured at the time of such extension,
renewal or replacement. However, the Company or any Restricted Subsidiary may
issue, assume or guarantee indebtedness secured by mortgages which would
otherwise be subject to the foregoing restriction in any aggregate amount which,
together with all other such indebtedness outstanding, all attributable debt
outstanding under the provisions described in the last sentence under
Limitations on Sale and Lease-Back Transactions below and all Senior Funded
Indebtedness issued, assumed or guaranteed by any Restricted Subsidiary, does
not exceed 5% of Stockholders' Equity. (Section 5.08)
Limitations on Sale and Lease-Back Transactions. The Indenture provides
that neither the Company nor any Restricted Subsidiary may enter into any Sale
and Lease-Back Transaction with respect to any Principal Property (except for
transactions involving leases for a term, including renewals, of not more than
three years and except for transactions between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries), if the purchaser's commitment is
obtained more than 12 months after the later of the acquisition or completion or
the placing in operation of such Principal Property or of such Principal
Property as constructed or developed or substantially repaired, altered or
improved. This restriction will not apply if either (a) the Company or such
Restricted Subsidiary would be entitled pursuant to the provision described in
the first sentence under Limitations on Liens above to issue, assume or
guarantee debt secured by a mortgage on such Principal Property without equally
and ratably securing the Debt Securities from time to time outstanding or (b)
the Company applies within 180 days an amount equal to, in the case of a sale or
transfer for cash, the net proceeds (not exceeding the net book value) and,
otherwise, an amount equal to the fair value (as determined by its Board of
Directors) of the Principal Property so leased to the retirement of Debt
Securities or other Senior Funded Indebtedness of the Company or a Restricted
Subsidiary, subject to
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<PAGE> 10
reduction as set forth in the Indenture in respect of Debt Securities and other
Senior Funded Indebtedness retired during such 180-day period otherwise than
pursuant to mandatory sinking fund or prepayment provisions and payments at
maturity. The Company or any Restricted Subsidiary, however, may enter into a
Sale and Lease-Back Transaction which would otherwise be subject to the
foregoing restriction so as to create an aggregate amount of attributable debt
(as defined) which, together with all other such attributable debt outstanding,
all indebtedness outstanding under the provision described in the last sentence
under Limitations on Liens above and all Senior Funded Indebtedness issued,
assumed or guaranteed by any Restricted Subsidiary, does not exceed 5% of
Stockholders' Equity. (Section 5.09)
Waiver of Covenants. The Indenture provides that the Holders of a majority
(unless a greater requirement with respect to any series of Debt Securities is
specified for this purpose, in which case the requirement specified) in
Principal Amount of the Outstanding Debt Securities of a particular series may
waive compliance as to such series with certain covenants or conditions set
forth in the Indenture, including those described above. (Section 5.10)
Consolidation, Merger or Sale of Assets of the Company. The Indenture
provides that the Company may not consolidate with or merge into any other
corporation or sell its assets substantially as an entirety, unless (1) the
corporation formed by such consolidation or into which the Company is merged or
the Person which acquires its assets is a corporation organized in the United
States and expressly assumes the due and punctual payment of the principal of
(and premium, if any) and interest, if any, on all the Debt Securities and the
performance of every covenant of the Indenture on the part of the Company, and
(2) immediately after giving effect to such transaction, no Event of Default,
and no event which, after notice or lapse of time, or both, would become an
Event of Default, shall have happened and be continuing. Upon any such
consolidation, merger or sale, the successor corporation formed by such
consolidation or into which the Company is merged or to which such sale is made
will succeed to, and be substituted for, the Company under the Indenture, and
the predecessor corporation shall be released from all obligations and covenants
under the Indenture and the Debt Securities. (Article Eleven)
Unless otherwise provided in the Prospectus Supplement, the covenants
contained in the Indenture and the Debt Securities would not necessarily afford
Holders of the Debt Securities protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect such Holders.
DEFINITIONS
"Principal Amount" means, when used with respect to any Debt Security, the
amount of principal thereof that could then be declared due and payable as a
result of an Event of Default with respect to such Debt Security. "Principal
Property" means all real and tangible property owned by the Company or a
Restricted Subsidiary constituting a part of any store, warehouse or
distribution center located within the United States, exclusive of motor
vehicles, mobile materials-handling equipment and other rolling stock, cash
registers and other point of sale recording devices and related equipment, and
data processing and other office equipment, provided the net book value of all
real property (including leasehold improvements) and store fixtures constituting
a part of such store, warehouse or distribution center exceeds 0.25% of
Stockholders' Equity. "Restricted Subsidiary" means any Subsidiary (as defined)
of the Company or of a Restricted Subsidiary which the Company designates as a
Restricted Subsidiary, which designation shall not have been canceled. However,
no subsidiary for which the designation of Restricted Subsidiary has been
canceled may be redesignated as such if during any period following cancellation
of its previous designation as a Restricted Subsidiary, such Subsidiary shall
have entered into a Sale and Lease-Back Transaction which would have been
prohibited had it been a Restricted Subsidiary at the time of such Transaction.
"Senior Funded Indebtedness" of the Company means any Funded Indebtedness of the
Company unless in any instruments evidencing or securing such Funded
Indebtedness it is provided that such Funded Indebtedness is subordinate in
right of payment to the Debt Securities to the extent provided in the Indenture.
"Senior Funded Indebtedness" of a Restricted Subsidiary means Funded
Indebtedness of the Restricted Subsidiary and the aggregate preference on
involuntary liquidation of preferred stock of such Subsidiary. "Funded
Indebtedness" of a corporation means the principal of (a) indebtedness for money
borrowed or evidenced by an instrument given in connection with an acquisition
which is not payable on demand and which matures, or which such
6
<PAGE> 11
corporation has the right to renew or extend to a date, more than one year after
the date of determination, (b) any indebtedness of others of the kinds described
in the preceding clause (a) for the payment of which such corporation is
responsible or liable as a guarantor or otherwise, and (c) amendments, renewals
and refundings of any such indebtedness. For the purposes of the definition of
"Funded Indebtedness", the term "principal" when used at any date with respect
to any indebtedness means the amount of principal of such indebtedness that
could be declared to be due and payable on that date pursuant to the terms of
such indebtedness. "Stockholders' Equity" means the aggregate of (a) capital and
reinvested earnings, after deducting the cost of shares of capital stock of the
Company held in its treasury, of the Company and consolidated Subsidiaries plus
(b) deferred tax effects. (Section 1.01)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that if an Event of Default shall have occurred and
be continuing with respect to any series of Debt Securities at the time
Outstanding, either the Trustee or the Holders of not less than 25% (unless a
different percentage with respect to any series of Debt Securities is specified
for this purpose, in which case the percentage specified) in Outstanding
Principal Amount of such series may declare to be due and payable immediately
the Principal Amount (or specified portion thereof) of such series, together
with interest, if any, accrued thereon. (Section 7.02)
The Indenture defines an Event of Default with respect to any series of
Debt Securities as any one of the following events: (a) default for 30 days in
payment of any interest due with respect to any Debt Security of such series;
(b) default for 30 days in making any sinking fund payment due with respect to
any Debt Security of such series; (c) default in payment of principal of (or
premium, if any, on) any Debt Security of such series when due; (d) default for
90 days after notice to the Company by the Trustee or by Holders of not less
than 25% in Principal Amount of the Debt Securities then Outstanding of such
series in the performance of any other covenant for the benefit of such series;
(e) certain events of bankruptcy, insolvency and reorganization; and (f) any
additional event specified as an "Event of Default" for the benefit of such
series. (Section 7.01) No Event of Default with respect to a particular series
of Debt Securities issued under the Indenture necessarily constitutes an Event
of Default with respect to any other series of Debt Securities issued
thereunder.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default, give to the Holders of the Debt Securities of each
series as to which such default has occurred notice of such default known to it,
unless cured or waived; provided that, except in the case of default in the
payment of principal of (or premium, if any) or interest, if any, or in the
payment of any sinking fund installment in respect of any of the Debt
Securities, the Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interests of
the Holders of the series as to which such default has occurred. The term
"default" for the purpose of this provision means any event which is, or after
notice or lapse of time, or both, would become, an Event of Default. (Section
8.02)
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during the continuance of an Event of Default to act with
the required standard of care, to be indemnified by the Holders of Debt
Securities before proceeding to exercise any right or power under the Indenture
at the request of such Holders. (Section 8.03) The Indenture provides that the
Holders of a majority (unless a greater requirement with respect to any series
of Debt Securities is specified for this purpose, in which case the requirement
specified) in Outstanding Principal Amount of a series of Debt Securities may,
subject to certain exceptions, on behalf of the Holders of the Debt Securities
of such series direct the time, method and place of conducting proceedings for
remedies available to the Trustee, or exercising any trust or power conferred on
the Trustee. (Section 7.12)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default, or specifying any default that exists.
(Section 5.06)
In certain cases, the Holders of a majority (unless a greater requirement
with respect to any series of Debt Securities is specified for this purpose, in
which case the requirement specified) in Outstanding Principal Amount of a
series of Debt Securities may on behalf of the Holders of the Debt Securities of
such series
7
<PAGE> 12
rescind, as to such series, a declaration of acceleration or waive, as to such
series, any past default or Event of Default relating to the Debt Securities of
such series, except a default not theretofore cured in payment of the principal
of (or premium, if any) or interest, if any, on any of such Debt Securities or
in respect of a provision which under the Indenture cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series. (Sections 7.02 and 7.13)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of 66 2/3% (unless a different percentage with
respect to any series of Debt Securities is specified for this purpose, in which
case the percentage specified) in Principal Amount of the Outstanding Debt
Securities of each series affected by such modification, to execute supplemental
indentures adding any provisions to or changing or eliminating any provisions of
the Indenture or modifying the rights of the Holders of such Debt Securities,
except that no such supplemental indenture may, without the consent of all
Holders of affected Debt Securities, (i) change the Stated Maturity of any Debt
Security or reduce the principal payable at Stated Maturity or which could be
declared due and payable prior thereto or change any redemption price thereof,
(ii) reduce the rate of interest payable on any Debt Security, (iii) adversely
affect the terms and provisions, if any, applicable to the conversion or
exchange of any Debt Securities, (iv) reduce the aforesaid percentage of Debt
Securities of any series or the percentage of Debt Securities of any series
specified in Section 5.10 or 7.13, (v) change any place or the currency of
payment of principal of (or premium, if any) or interest, if any, on any Debt
Security, or (vi) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security. (Section 10.02)
SATISFACTION AND DISCHARGE PRIOR TO MATURITY
The Company may elect to provide with respect to any series of Debt
Securities that the Company may satisfy its obligations with respect to any
payment of principal (and premium, if any) or interest due on such series of
Debt Securities by depositing in trust with the Trustee money or U.S. Government
Obligations or a combination thereof sufficient to make such payment when due.
If such deposit is sufficient to make all payments of (1) interest on such
series of Debt Securities prior to their redemption or maturity, as the case may
be, and (2) principal of (and premium, if any) and interest on such series of
Debt Securities when due upon redemption or at maturity, as the case may be, all
the obligations of the Company under such series of Debt Securities and the
Indenture as it relates to such series of Debt Securities will be discharged and
terminated except as otherwise provided in the Indenture. "U.S. Government
Obligations" are defined to mean (i) securities backed by the full faith and
credit of the United States and (ii) depository receipts issued by a bank or
trust company as custodian and evidencing ownership by the holders of such
depository receipts of future payments of interest or principal, or both, on
such securities backed by the full faith and credit of the United States held by
such custodian.
For United States income tax purposes, it is likely that any such deposit
and discharge with respect to any Debt Securities will be treated as a taxable
exchange of such Debt Securities for interests in the trust. In that event, a
Holder will recognize gain or loss equal to the difference between the Holder's
cost or other tax basis for the Debt Securities and the value of the Holder's
interest in such trust; and thereafter will be required to include in income a
share of the income, gain and loss of the trust. Purchasers of the Debt
Securities should consult their own advisers with respect to the tax
consequences to them of such deposit and discharge, including the applicability
and effect of tax laws other than the United States income tax law.
In addition, the Company may elect to provide with respect to any series of
Debt Securities that the Company may be released from certain of its covenants
upon the satisfaction of certain conditions applicable to the securities of such
series.
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<PAGE> 13
CONCERNING THE TRUSTEE
The Company and Funding Corporation maintain substantial lines of credit
and have other customary banking relationships with Bank of America National
Trust and Savings Association, the Trustee under the Indenture.
WARRANTS
The Company may issue with any Debt Securities being offered by it Warrants
for the purchase of other Debt Securities. Each issue of Warrants will be issued
under, and will be governed by, a Warrant Agreement ("Warrant Agreement"), to be
entered into between the Company and a warrant agent ("Warrant Agent"), to be
described in the Prospectus Supplement relating to the Debt Securities with
which the Warrants are to be issued. A copy of the proposed Warrant Agreement,
including the form of proposed Warrant Certificate representing the Warrants,
substantially in the form in which it is to be executed, is included as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
following summaries of certain provisions of the Warrant Agreement and Warrant
Certificates do not purport to be complete and are subject to and qualified in
their entirety by reference to all the provisions set forth in the Warrant
Agreement and Warrant Certificates, respectively, including the definitions
thereof of certain terms.
Reference is made to the Prospectus Supplement relating to the Securities,
the Warrant Agreement relating to the Warrants and the Warrant Certificates
representing the Warrants for certain specific terms of the Warrants, which may
include: (1) designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of the Warrants; (2) designation and terms
of any related Debt Securities with which the Warrants are issued and the number
of Warrants issued with each such Debt Security; (3) date, if any, on and after
which the Warrants and the related Debt Securities will be separately
transferable; (4) principal amount of Debt Securities purchasable upon exercise
of one Warrant and the price at which such principal amount of Debt Securities
may be purchased upon such exercise; (5) date on which the right to exercise the
Warrants shall commence ("Commencement Date") and date on which such right shall
expire ("Expiration Date"); and (6) whether the Warrants represented by the
Warrant Certificates will be issued in registered or bearer form.
Warrant Certificates will be exchangeable for new Warrant Certificates of
different denominations, and Warrants may be exercised, at the agency or
agencies maintained for such purposes. Prior to the exercise of their Warrants,
holders of Warrants will not have any of the rights of Holders of the Debt
Securities purchasable upon such exercise and will not be entitled to payments
of principal of (or premium, if any) or interest, if any, on the Debt Securities
purchasable upon such exercise.
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth, or be determinable as set forth, in the Prospectus Supplement relating to
the Securities. Each Warrant may be exercised in whole but not in part at any
time on and after the Commencement Date and up to the close of business on the
Expiration Date set forth in the Prospectus Supplement relating to the
Securities. After the close of business on the Expiration Date, unexercised
Warrants will become void.
The exercise price of the Warrants will be that price applicable on the
date of receipt of payment therefor determined as set forth in the Prospectus
Supplement relating to the Securities. Upon receipt of payment of the exercise
price and the Warrant Certificate properly completed and duly executed at the
agency or agencies maintained by the Company for such purpose, the Company will,
as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
Warrants remaining unexercised.
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<PAGE> 14
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by C. R.
Lotter, Executive Vice President, Secretary and General Counsel of the Company,
and for any underwriters, agents or purchasers by Sullivan & Cromwell, New York,
New York. As of March 31, 1994, Mr. Lotter owned 31,241 shares of Common Stock
and Common Stock voting equivalents of the Company, including shares credited to
his accounts under the Company's Savings and Profit-Sharing Retirement Plan and
Savings, Profit-Sharing and Stock Ownership Plan as of March 31, 1994. As of
March 31, 1994, he had outstanding options to purchase 49,540 shares of Common
Stock.
EXPERTS
The financial statements and schedules as of January 29, 1994, January 30,
1993 and January 25, 1992, and for each of the years then ended contained or
incorporated by reference in (a) the Company's Annual Report on Form 10-K for
the fiscal year ended January 29, 1994 and (b) Funding Corporation's Annual
Report on Form 10-K for the fiscal year ended January 29, 1994 have been
incorporated herein by reference in reliance upon the reports of KPMG Peat
Marwick, independent certified public accountants (which reports each dated
February 24, 1994 are incorporated herein by reference to the aforementioned
Annual Reports on Form 10-K), and upon the authority of said firm as experts in
accounting and auditing. The Independent Auditors' Reports of KPMG Peat Marwick
covering the aforementioned consolidated financial statements and schedules of
the Company refer to the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 106, Employers'
Accounting for Postretirement Benefits Other Than Pensions, adopted by the
Company in 1991, and to the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, adopted by the Company in 1993. To the extent that KPMG Peat
Marwick audits and reports on financial statements of the Company and Funding
Corporation issued at future dates, and consents to the use of their reports
thereon, such financial statements also will be incorporated by reference herein
in reliance upon their reports and said authority.
PLAN OF DISTRIBUTION
The Company may offer the Securities from time to time (i) through
underwriters or dealers, (ii) directly to one or more institutional purchasers,
or (iii) through agents.
Sales of Securities through underwriters may be through underwriting
syndicates led by one or more managing underwriters. The specific managing
underwriter or underwriters which may act with respect to the offer and sale of
any series of Securities are set forth on the cover of the Prospectus Supplement
in respect of such series and the members of the underwriting syndicate, if any,
are named in such Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of Securities, underwriters may
be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Securities for whom they may act as agents. Underwriters may sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, are set forth in
the Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act of 1933.
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<PAGE> 15
If so indicated in an applicable Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase Securities from the Company pursuant to delayed
delivery contracts. The Prospectus Supplement relating thereto will also set
forth the price to be paid for Securities pursuant to such contracts, the
commissions payable for solicitation of such contracts, the date or dates in the
future for delivery of Securities pursuant to such contracts and any conditions
to which such contracts will be subject.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act of
1933.
Underwriters and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
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<PAGE> 16
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NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments.................... S-2
Ratios of Available Income to Fixed
Charges for the Company and All
Subsidiaries......................... S-3
Description of Notes................... S-3
Underwriting........................... S-4
Validity of Notes...................... S-4
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratios of Available Income to Fixed
Charges for the Company and All
Subsidiaries......................... 3
Description of Securities.............. 3
Validity of Securities................. 10
Experts................................ 10
Plan of Distribution................... 10
</TABLE>
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JCPenney
$225,000,000
6 7/8% Notes Due 1999
$275,000,000
7 3/8% Notes Due 2004
PROSPECTUS SUPPLEMENT
CS First Boston
Merrill Lynch & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co.
Incorporated
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