<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
J. C. PENNEY COMPANY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-5583779
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
6501 LEGACY DRIVE
PLANO, TEXAS 75024-3698
(214) 431-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
C. R. LOTTER, ESQ.
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
J. C. PENNEY COMPANY, INC.
6501 LEGACY DRIVE, PLANO, TEXAS 75024-3698
(214) 431-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
------------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /X/
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. / /
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. / /
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT* OFFERING PRICE* FEE
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Debt Securities and Warrants to
Purchase Debt Securities...... $1,500,000,000** 100%*** $1,500,000,000 $517,242
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</TABLE>
* Estimated solely for the purpose of determining the registration fee.
** In U.S. dollars or the equivalent thereof denominated in foreign currency or
composite currencies such as the European Currency Unit ("ECU").
*** Exclusive of accrued interest, if any.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 26, 1996
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PROSPECTUS
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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 , 1996
<PAGE> 3
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, as amended ("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 (Citicorp 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. In addition,
the Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the Commission. 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 part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended ("1933
Act"). 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 (i) its Annual Report on Form
10-K for the fiscal year ended January 27, 1996, (ii) the J. C. Penney Funding
Corporation ("Funding Corporation") Annual Report on Form 10-K for such fiscal
year, (iii) the Company's Quarterly Report on Form 10-Q for the thirteen weeks
ended April 27, 1996, and (iv) Funding Corporation's Quarterly Report on Form
10-Q for the thirteen weeks ended April 27, 1996. The aforesaid reports have
heretofore been filed by the Company and Funding Corporation with the Commission
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, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, UPON 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 UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
SUCH DOCUMENTS). WRITTEN REQUESTS SHOULD BE DIRECTED TO: J. C. PENNEY COMPANY,
INC., PUBLIC INFORMATION, P. O. BOX 10001, DALLAS, TEXAS 75301-4302. TELEPHONE
REQUESTS SHOULD BE DIRECTED TO (214) 431-1488.
2
<PAGE> 4
THE COMPANY
The Company is a major retailer, with department stores in all 50 states,
Puerto Rico, Mexico and Chile. The major 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
------------------------------------------- -------------- --------------
APR. 27 JAN. 27 JAN. 28 JAN. 29 JAN. 30 JAN. 25
1996 1996 1995 1994 1993 1992
------- ------- ------- ------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratios of available
income to fixed
charges............... 3.6 3.7 5.1 4.9 3.8 2.1
Ratios of available
income to combined
fixed charges and
preferred stock
dividend
requirement........... 3.3 3.4 4.5 4.3 3.4 1.8
</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.
3
<PAGE> 5
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 First Trust of California, National Association, Successor Trustee
to Bank of America National Trust and Savings Association ("Trustee"). The
Indenture in the form in which it was executed is incorporated by reference 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
4
<PAGE> 6
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; 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
5
<PAGE> 7
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 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
6
<PAGE> 8
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 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)
7
<PAGE> 9
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 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.
8
<PAGE> 10
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.
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. 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 incorporated by
reference 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.
9
<PAGE> 11
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 April 30, 1996, Mr. Lotter owned 31,591 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 April 30, 1996, he had
outstanding options to purchase 73,540 shares of Common Stock.
EXPERTS
The financial statements and schedules as of January 27, 1996, January 28,
1995 and January 29, 1994, 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 27, 1996 and (b) Funding Corporation's Annual
Report on Form 10-K for the fiscal year ended January 27, 1996 have been
incorporated herein by reference in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants (which reports each dated
February 22, 1996 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
LLP 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. 109, Accounting for
Income Taxes, adopted by the Company in 1993, to the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt and Equity Securities, adopted
by the Company in 1994, and to the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, adopted by the Company in 1995. To the extent that KPMG Peat
Marwick LLP 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
10
<PAGE> 12
by them and any profit realized by them on resale of the Securities may be
deemed to be underwriting discounts and commissions, under the 1933 Act.
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 1933 Act.
Underwriters and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
11
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses (exclusive of underwriting discounts and commissions) in
connection with the issuance and distribution of the Securities registered
hereunder.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee...................... $ 517,242
"Blue Sky" expenses...................................................... 35,000*
Printing and engraving expenses.......................................... 100,000*
Trustee's fees and expense............................................... 25,000*
Accounting fees.......................................................... 30,000*
Rating agency fees....................................................... 250,000*
Miscellaneous expenses................................................... 42,758*
----------
Total............................................................... $1,000,000
==========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware permits
indemnification of the directors and officers of the Company involved in a civil
or criminal action, suit or proceeding, including, under certain circumstances,
suits by or in the right of the Company, for any expenses, including attorneys'
fees, and (except in the case of suits by or in the right of the Company) any
liabilities which they may have incurred in consequence of such action, suit or
proceeding under the conditions stated in said Section.
Article X of the Company's Bylaws provides, in substance, for
indemnification by the Company of its directors and officers in accordance with
the provisions of the General Corporation Law of Delaware. The Company has
entered into indemnification agreements with its current directors and certain
of its current officers which generally provide for indemnification by the
Company except as prohibited by applicable law. To provide some assurance of
payment to the indemnitees of amounts to which they may become entitled pursuant
to the aforesaid agreements, the Company has funded a trust.
In addition, the Company has purchased insurance coverage under policies
which insure the Company for amounts which the Company is required or permitted
to pay as indemnification of directors and certain officers of the Company and
its subsidiaries, and which insure directors and certain officers of the Company
and its subsidiaries against certain liabilities which might be incurred by them
in such capacities and for which they are not entitled to indemnification by the
Company.
Furthermore, the Company, as well as its directors and officers, may be
entitled to indemnification by any underwriters named in the Prospectus
Supplement against certain civil liabilities under the 1933 Act under agreements
entered into between the Company and such underwriters.
II-1
<PAGE> 14
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1(a) Form of proposed Underwriting Agreement (including form of proposed Delayed Delivery
Contract) (filed as Exhibit 1 to Registrant's Registration Statement on Form S-3,
SEC File No. 2-79577, and incorporated herein by reference)
(b) Form of Proposed Agency Agreement
4(a) Indenture, dated as of April 1, 1994, between the Company and First Trust of
California, National Association, Successor Trustee to Bank of America National
Trust and Savings Association (filed as Exhibit 4(a) to the Registrant's
Registration Statement on Form S-3, SEC File No. 33-53275, and incorporated herein
by reference)
(b) Forms of Debt Securities registered hereunder may include the following, among
others:
(i) Form of % Note Due (filed as Exhibit 4(b)(i) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(ii) Form of Zero Coupon Note Due (filed as Exhibit 4(b)(ii) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(iii) Form of % Debenture Due (Original Issue Discount) (filed as
Exhibit 4(b)(iii) to the Registrant's Registration Statement on Form S-3, SEC File
No. 33-53275, and incorporated herein by reference)
(iv) Form of % Debenture Due (filed as Exhibit 4(b)(iv) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(v) Form of % Sinking Fund Debenture Due (filed as Exhibit 4(b)(v)
to the Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(vi) Form of Extendible Note (filed as Exhibit 4(b)(vi) to the Registrant's
Registration Statement on Form S-3, SEC File No. 33-53275, and incorporated herein
by reference)
(vii) Form of Medium-Term Note, Series (Fixed Rate) (filed as Exhibit 4(b)(vii)
to the Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(viii) Form of Medium-Term Note, Series (Floating Rate) (filed as Exhibit
4(b)(viii) to the Registrant's Registration Statement on Form S-3, SEC File No.
33-53275, and incorporated herein by reference)
(c) Form of proposed Warrant Agreement (including form of proposed Warrant Certificate)
(filed as Exhibit 4(c) to the Registrant's Registration Statement on Form S-3, SEC
File No. 33-53275, and incorporated herein by reference)
5 Opinion of C. R. Lotter with respect to the validity of the Securities
12 Computation of ratios (Computation of Ratios of Available Income to Combined Fixed
Charges and Preferred Stock Dividend Requirement and Computation of Ratios of
Available Income to Fixed Charges for the 52 weeks ended April 27, 1996, January 27,
1996, January 28, 1995, and January 29, 1994, for the 53 weeks ended January 30,
1993, and for the 52 weeks ended January 25, 1992, respectively, were filed as
Exhibits 12 (a) and 12(b), respectively, to the Registrant's Quarterly Report on
Form 10-Q for the 13 weeks ended April 27, 1996, and the Registrant's Annual Reports
on Form 10-K for each of the years ended January 27, 1996, January 28, 1995, January
29, 1994, January 30, 1993, and January 25, 1992, respectively (SEC File No. 1-777),
which Reports are incorporated herein by reference)
</TABLE>
II-2
<PAGE> 15
<TABLE>
<S> <C>
23(a) Consent of KPMG Peat Marwick LLP
(b) Consent of C. R. Lotter (see Exhibit 5)
24 Powers of Attorney
25 Statement of Eligibility on Form T-1 of First Trust of California, National
Association, as Successor Trustee under the Indenture pursuant to which the Debt
Securities registered hereunder are to be issued
99 Form of Pricing Supplement (filed as Exhibit 99 to the Registrant's Registration
Statement on Form S-3, SEC File No. 33-53275, and incorporated herein by reference)
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 16
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE> 17
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PLANO AND STATE OF TEXAS, ON THE 26TH DAY OF JUNE,
1996.
J. C. PENNEY COMPANY, INC.
By: /s/ D. A. MCKAY
-------------------------------
D. A. MCKAY
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
W. R. HOWELL* Chairman of the Board;
- ----------------------------------------- Director June 26, 1996
W. R. HOWELL
Vice Chairman of the
Board and Chief Executive
Officer (principal
J. E. OESTERREICHER* executive officer);
- ----------------------------------------- Director June 26, 1996
J. E. OESTERREICHER
President and Chief
W. B. TYGART* Operating Officer;
- ----------------------------------------- Director June 26, 1996
W. B. TYGART
Senior Vice President
and Chief Financial
/s/ D. A. MCKAY* Officer (principal
- ----------------------------------------- financial officer) June 26, 1996
D. A. MCKAY
Vice President
and Controller
W. J. ALCORN* (principal accounting
- ----------------------------------------- officer) June 26, 1996
W. J. ALCORN
M. A. BURNS*
- ----------------------------------------- Director June 26, 1996
M. A. BURNS
C. H. CHANDLER*
- ----------------------------------------- Director June 26, 1996
C. H. CHANDLER
V. E. JORDAN, JR.*
- ----------------------------------------- Director June 26, 1996
V. E. JORDAN, JR.
GEORGE NIGH*
- ----------------------------------------- Director June 26, 1996
GEORGE NIGH
</TABLE>
II-5
<PAGE> 18
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
J. C. PFEIFFER*
- ----------------------------------------- Director June 26, 1996
J. C. PFEIFFER
A. W. RICHARDS*
- ----------------------------------------- Director June 26, 1996
A. W. RICHARDS
C. S. SANFORD, JR.*
- ----------------------------------------- Director June 26, 1996
C. S. SANFORD, JR.
R. G. TURNER*
- ----------------------------------------- Director June 26, 1996
R. G. TURNER
J. D. WILLIAMS*
- ----------------------------------------- Director June 26, 1996
J. D. WILLIAMS
*By: /s/ D. A. MCKAY
-------------------------------------
D. A. MCKAY
ATTORNEY-IN-FACT
</TABLE>
COPIES OF POWERS OF ATTORNEY AUTHORIZING W. J. ALCORN, R. B. CAVANAUGH, C.
R. LOTTER, AND D. A. MCKAY, AND EACH OF THEM, TO SIGN THIS REGISTRATION
STATEMENT ON BEHALF OF THE ABOVE NAMED DIRECTORS AND OFFICERS, ARE BEING FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION SIMULTANEOUSLY HEREWITH.
II-6
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<S> <C>
1(a) Form of proposed Underwriting Agreement (including form of proposed Delayed Delivery
Contract) (filed as Exhibit 1 to Registrant's Registration Statement on Form S-3,
SEC File No. 2-79577, and incorporated herein by reference)
(b) Form of Proposed Agency Agreement
4(a) Indenture, dated as of April 1, 1994, between the Company and First Trust of
California, National Association, Successor Trustee to Bank of America National
Trust and Savings Association (filed as Exhibit 4(a) to the Registrant's
Registration Statement on Form S-3, SEC File No. 33-53275, and incorporated herein
by reference)
(b) Forms of Debt Securities registered hereunder may include the following, among
others:
(i) Form of % Note Due (filed as Exhibit 4(b)(i) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(ii) Form of Zero Coupon Note Due (filed as Exhibit 4(b)(ii) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(iii) Form of % Debenture Due (Original Issue Discount) (filed as
Exhibit 4(b)(iii) to the Registrant's Registration Statement on Form S-3, SEC File
No. 33-53275, and incorporated herein by reference)
(iv) Form of % Debenture Due (filed as Exhibit 4(b)(iv) to the
Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(v) Form of % Sinking Fund Debenture Due (filed as Exhibit 4(b)(v)
to the Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(vi) Form of Extendible Note (filed as Exhibit 4(b)(vi) to the Registrant's
Registration Statement on Form S-3, SEC File No. 33-53275, and incorporated herein
by reference)
(vii) Form of Medium-Term Note, Series (Fixed Rate) (filed as Exhibit 4(b)(vii)
to the Registrant's Registration Statement on Form S-3, SEC File No. 33-53275, and
incorporated herein by reference)
(viii) Form of Medium-Term Note, Series (Floating Rate) (filed as Exhibit
4(b)(viii) to the Registrant's Registration Statement on Form S-3, SEC File No.
33-53275, and incorporated herein by reference)
(c) Form of proposed Warrant Agreement (including form of proposed Warrant Certificate)
(filed as Exhibit 4(c) to the Registrant's Registration Statement on Form S-3, SEC
File No. 33-53275, and incorporated herein by reference)
5 Opinion of C. R. Lotter with respect to the validity of the Securities
12 Computation of ratios (Computation of Ratios of Available Income to Combined Fixed
Charges and Preferred Stock Dividend Requirement and Computation of Ratios of
Available Income to Fixed Charges for the 52 weeks ended April 27, 1996, January 27,
1996, January 28, 1995, and January 29, 1994, for the 53 weeks ended January 30,
1993, and for the 52 weeks ended January 25, 1992, respectively, were filed as
Exhibits 12 (a) and 12(b), respectively, to the Registrant's Quarterly Report on
Form 10-Q for the 13 weeks ended April 27, 1996, and the Registrant's Annual Reports
on Form 10-K for each of the years ended January 27, 1996, January 28, 1995, January
29, 1994, January 30, 1993, and January 25, 1992, respectively (SEC File No. 1-777),
which Reports are incorporated herein by reference)
23(a) Consent of KPMG Peat Marwick LLP
(b) Consent of C. R. Lotter (see Exhibit 5)
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
24 Powers of Attorney
25 Statement of Eligibility on Form T-1 of First Trust of California, National
Association, as Successor Trustee under the Indenture pursuant to which the Debt
Securities registered hereunder are to be issued
99 Form of Pricing Supplement (filed as Exhibit 99 to the Registrant's Registration
Statement on Form S-3, SEC File No. 33-53275, and incorporated herein by reference)
</TABLE>
<PAGE> 1
EXHIBIT 1(b)
$1,500,000,000
J. C. PENNEY COMPANY, INC.
Medium-Term Notes
AGENCY AGREEMENT
_______ ___, 1996
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower,
World Financial Center,
New York, New York 10281-1310
Morgan Stanley & Co. Incorporated,
1221 Avenue of the Americas,
New York, New York 10020.
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
1. Introduction. J. C. PENNEY COMPANY, INC., a Delaware corporation
("Issuer"), confirms its agreement with each of you (individually, an "Agent",
and collectively, "Agents") with respect to the issue and sale from time to
time by the Issuer of its medium-term notes registered under the Registration
Statement referred to in Section 2(a) (any such medium-term notes being
hereinafter referred to as the "Securities", which expression shall, if the
context so admits, include any permanent global Security), but the Issuer
reserves the right to sell Securities on its own behalf directly or through
affiliates, and upon notice to each of you, to enter into agreements
substantially identical hereto with other agents. Securities may be sold
pursuant to Section 3 of this Agreement or as contemplated by Section 11 of
this Agreement in an aggregate amount not to exceed the amount of Registered
Securities (as defined in Section 2(a) hereof)
<PAGE> 2
registered pursuant to such Registration Statement reduced by the aggregate
amount of any other Registered Securities sold otherwise than pursuant to
Section 3 or Section 11 of this Agreement. The Securities will be issued under
an indenture, dated as of April 1, 1994 (said Indenture, and all indentures
supplemental thereto, being hereinafter called the "Indenture"), between the
Issuer and First Trust of California, National Association, Successor Trustee
to Bank of America National Trust and Savings Association, as trustee
("Trustee").
The Securities shall have the terms described in the Prospectus
referred to in Section 2(a) as it may be amended or supplemented from time to
time, including any supplement to the Prospectus that sets forth only the terms
of a particular issue of the Securities ("Pricing Supplement"). Securities will
be issued, and the terms thereof established, from time to time by the Issuer
in accordance with the Indenture and the Procedures (as defined in Section 3(d)
hereof).
2. Representations and Warranties of the Issuer. The Issuer
represents and warrants to, and agrees with, each Agent as follows:
(a) A Registration Statement (No. 333-_____), including a
prospectus, relating to debt securities of the Issuer, including the
Securities ("Registered Securities"), has been filed with the
Securities and Exchange Commission ("Commission") and has become
effective under the Securities Act of 1933, as amended ("Act"). Such
Registration Statement, as amended as of the Closing Date (as defined
in Section 3(e) hereof), is hereinafter referred to as the
"Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as of the Closing Date,
including all material incorporated by reference therein, is
hereinafter referred to as the "Prospectus". Any reference in this
Agreement to amending or supplementing the Prospectus shall be deemed
to include the filing of materials incorporated by reference in the
Prospectus after the Closing Date and any reference in this Agreement
to any amendment or supplement to the Prospectus shall be deemed to
include any such materials incorporated by reference in the Prospectus
after the Closing Date.
(b) On the effective date of the Registration Statement
relating to the Registered Securities, such Registration Statement
conformed in all respects to the requirements of the Act, the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act"), and the
rules and regulations of the
2
<PAGE> 3
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and on the Closing Date, the Registration
Statement and the Prospectus, and at each of the times of acceptance
and of delivery referred to in Section 6(a) hereof and at each of the
times of amendment or supplementing referred to in Section 6(b) hereof
(the Closing Date and each such time being herein sometimes referred to
as a "Representation Date"), the Registration Statement and the
Prospectus as then amended or supplemented will conform in all respects
to the requirements of the Act, the Trust Indenture Act and the Rules
and Regulations, and neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply to statements in
or omissions from any of such documents based upon (i) written
information furnished to the Issuer by any Agent specifically for use
therein or (ii) that part of the Registration Statement constituting
the Statement of Eligibility and Qualification under the Trust
Indenture Act (Form T-1) of the Trustee.
3. Appointment as Agents; Agreement of Agents; Solicitations
as Agents.
(a) Subject to the terms and conditions stated herein, and
subject to the right of the Issuer to sell Securities on its own
behalf directly or through affiliates or through other agents, the
Issuer hereby appoints each of the Agents as a non-exclusive agent of
the Issuer for the purpose of soliciting or receiving offers to
purchase the Securities from the Issuer by others.
(b) On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Issuer, to use reasonable
best efforts when requested by the Issuer to solicit offers to
purchase the Securities upon the terms and conditions set forth in the
Prospectus, as from time to time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by Section 4(b)
hereof, each Agent shall promptly suspend its solicitation of offers to
purchase Securities until such time as the Issuer shall have furnished it with
an amendment or supplement to the Registration Statement or the Prospectus, as
the case may be, contemplated by Section 4(b) and shall have advised such Agent
3
<PAGE> 4
that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any time for
any period of time or permanently. Upon receipt of at least one Business Day's
prior notice from the Issuer, the Agents will immediately suspend solicitation
of offers to purchase Securities from the Issuer until such time as the Issuer
has advised the Agents that such solicitation may be resumed. For the purpose
of the foregoing sentence, "Business Day" shall mean any day that is not a
Saturday or Sunday, and that in The City of New York is not a day on which
banking institutions generally are authorized or obligated by law or executive
order to close.
The Agents are authorized to solicit offers to purchase Securities as
described in the Prospectus, as amended or supplemented, and only in a minimum
aggregate amount of $1,000 or integral multiples thereof (or the equivalent
thereof in one or more currencies or currency units other than U.S. dollars).
Each Agent shall communicate to the Issuer, orally or in writing, each
reasonable offer to purchase Securities received by it as agent. The Issuer
shall have the sole right to accept offers to purchase the Securities and may
reject any such offer, in whole or in part. Each Agent shall have the right, in
its discretion reasonably exercised, without notice to the Issuer, to reject
any offer to purchase Securities received by it, in whole or in part, and any
such rejection shall not be deemed a breach of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Issuer, until such Security shall have been delivered to the purchaser thereof
against payment by such purchaser.
(c) At the time of delivery of, and payment for, any
Securities sold by the Issuer as a result of a solicitation made by,
or offer to purchase received by, an Agent, the Issuer agrees to pay
such Agent a commission in accordance with the schedule set forth in
Exhibit A hereto.
(d) Administrative procedures respecting the sale of
Securities ("Procedures") shall be agreed upon from time to time by
the Agents and the Issuer. The initial Procedures, which are set forth
in Exhibit B hereto, shall remain in effect until changed by agreement
among the Issuer and the Agents. Each Agent and the Issuer agree to
perform the respective duties and obligations specifically provided to
be performed by each of them herein and in the Procedures. The
4
<PAGE> 5
Issuer will furnish to the Trustee a copy of the Procedures as from
time to time in effect.
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of the Issuer, 6501 Legacy Drive,
Plano, Texas, not later than 10:00 a.m., New York City time, on the
date of this Agreement or at such later time as may be mutually agreed
by the Issuer and the Agents, which in no event shall be later than
the time at which the Agents commence solicitation of purchases of
Securities hereunder, such time and date being herein called the
"Closing Date".
4. Certain Agreements of the Issuer. The Issuer agrees with
the Agents that it will furnish to Sullivan & Cromwell, counsel for the Agents,
one signed copy of the Registration Statement, including all exhibits, in the
form it became effective and of all amendments thereto and that, in connection
with each offering of Securities:
(a) The Issuer will advise each Agent promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement or of any part thereof and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act and no suspension
of solicitation of offers to purchase Securities pursuant to Section
3(b) or this Section 4(b) shall be in effect (any such time and any
time when either any Agent shall own any Securities with the intention
of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred being referred
to herein as a "Marketing Time"), any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or if it is necessary at any such time to
amend the Prospectus to comply with the Act, the Issuer will promptly
notify each Agent to suspend solicitation of offers to purchase the
Securities; and if the Issuer shall decide to amend or supplement the
Registration Statement or the Prospectus, it will promptly advise each
Agent by telephone (with confirmation in writing) and, subject to the
provisions of subsection (a) of this Section, will promptly prepare
and file with the Commission an
5
<PAGE> 6
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Notwithstanding the
foregoing, if, at the time any such event occurs or it becomes
necessary to amend the Prospectus to comply with the Act, any Agent
shall own any of the Securities with the intention of reselling them,
or the Issuer has accepted an offer to purchase Securities but the
related settlement has not occurred, the Issuer, subject to the
provisions of subsection (a) of this Section, will promptly prepare
and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance. Neither the Agents' consent to, nor their delivery
of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 5.
(c) The Issuer will file promptly all documents required to be
filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"). In addition, on or prior to the date on which the Issuer makes
any announcement to the general public concerning earnings or
concerning any other event which is required to be described, or which
the Issuer proposes to describe, in a document filed pursuant to the
Exchange Act, the Issuer will furnish the information contained or to
be contained in such announcement to each Agent, confirmed in writing
and, subject to the provisions of subsections (a) and (b) of this
Section, will cause the Prospectus to be amended or supplemented to
reflect the information contained in such announcement. The Issuer
also will furnish each Agent with copies of all material press
releases or announcements to the general public. The Issuer will
immediately notify each Agent of any downgrading in the rating of any
debt securities of the Issuer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), with which the Company has an ongoing
relationship, or any public announcement that any such organization
has placed its rating of the Issuer's debt securities under
surveillance or review (other than an announcement with positive
implications of a possible upgrading) as soon as the Issuer learns of
such downgrading or public announcement.
(d) As soon as practicable, but not later than 16 months after
the date of each acceptance by the Issuer of an offer to purchase
Securities hereunder, the Issuer will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
6
<PAGE> 7
Registration Statement to become effective prior to the date of such
acceptance and (iii) the date of the Issuer's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such acceptance, which will satisfy the provisions of Section 11(a) of
the Act.
(e) The Issuer will furnish to each Agent copies of the
Registration Statement, including all exhibits, the Prospectus and all
amendments and supplements to such documents (including any Pricing
Supplement), in each case as soon as available and in such quantities
as are reasonably requested.
(f) The Issuer will use its reasonable best efforts to arrange
for the qualification of the Securities for sale, and the
determination of their eligibility for investment, under the laws of
such jurisdictions as the Agents reasonably designate and will
diligently endeavor to continue such qualifications in effect so long
as required for the distribution of the Securities.
(g) So long as any Securities are outstanding, the Issuer will
furnish to the Agents, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as practicable, a copy of each report or definitive
proxy statement of the Issuer filed with the Commission under the
Exchange Act or mailed to stockholders, and (iii) from time to time,
such other information concerning the Issuer as the Agents may
reasonably request.
(h) The Issuer will pay all reasonable expenses incident to
the performance of its obligations under this Agreement or any
agreement contemplated by Section 11 hereof and will reimburse each
Agent for any reasonable expenses (including reasonable fees and
disbursements of counsel) incurred by it in connection with
qualification of the Securities for sale, and determination of their
eligibility for investment, under the laws of such jurisdictions as
such Agent may reasonably designate and the printing of memoranda
relating thereto, for any fees charged by investment rating agencies
for the rating of the Securities, for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Securities,
for reasonable expenses incurred by each Agent in distributing the
Prospectus and all supplements thereto (including any Pricing
Supplement), any preliminary prospectuses and any preliminary
prospectus supplements to such Agent and for each Agent's reasonable
expenses (including the reasonable fees and disbursements of counsel
to the Agents) incurred in connection with the establishment or
maintenance of the program contemplated by this Agreement or
7
<PAGE> 8
otherwise in connection with the activities of the Agents under this
Agreement (including any purchases of Notes by any Agent for resale as
contemplated by Section 11).
5. Conditions of Obligations of the Agents. The obligation of
each Agent under this Agreement at any time to solicit offers to purchase the
Securities is subject to the accuracy, on the date hereof, on each
Representation Date and on the date of each such solicitation, of the
representations and warranties of the Issuer herein, to the accuracy, on each
such date, of the statements of the Issuer's officers made pursuant to the
provisions hereof, to the performance, on or prior to each such date, by the
Issuer of its obligations hereunder, and to each of the following additional
conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be,
shall have been filed with the Commission in accordance with the Rules
and Regulations and no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Issuer or any Agent, shall be contemplated by the
Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement
of fact or omit to state a fact which is required to be stated therein
or is necessary to make the statements therein not misleading, which,
in the opinion of Sullivan & Cromwell or counsel of the Issuer, is
material.
(c) There shall not have occurred any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Issuer and
subsidiaries, taken as a whole, which, in the judgment of such Agent,
materially impairs the investment quality of the Securities.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of C. R. Lotter, Executive Vice
President, Secretary and General Counsel of the Issuer, to the effect
that:
(i) The Issuer has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its
8
<PAGE> 9
business as described in the Prospectus; and the Issuer is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification;
(ii) The Indenture has been duly authorized, executed
and delivered by the Issuer and has been duly qualified under
the Trust Indenture Act and constitutes a valid and legally
binding obligation of the Issuer enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles;
(iii) The Securities have been duly authorized and
established in conformity with the Indenture, and, when the
terms of a particular Security and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, and such
Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture and delivered against
payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the
Issuer enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles, it being understood that such counsel may (a)
assume that at the time of the issuance, sale and delivery of
each Security the authorization of such series will not have
been modified or rescinded and there will not have occurred
any change in law affecting the validity, legally binding
character or enforceability of such Security, (b) assume that
neither the issuance, sale and delivery of any Security, nor
any of the terms of such Security, nor compliance by the
Issuer with such terms, will violate any applicable law, any
agreement or instrument then binding upon the Issuer or any
restriction imposed by any court or governmental body having
jurisdiction over the Issuer, and (c) state that as of the
date of such opinion a judgment for money in an action based
on Securities denominated in foreign currencies or currency
units in a Federal or State court in the United States
ordinarily would be enforced in the United States only in
United States dollars, and that the date used to determine the
rate of conversion of the foreign currency or currency unit in
which a particular
9
<PAGE> 10
Security is denominated into United States dollars will depend
upon various factors, including which court renders the
judgment;
(iv) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act
specified in such opinion on the date specified therein, and,
to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or
of any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement
relating to the Registered Securities, as of its effective
date, the Registration Statement and the Prospectus, as of the
Closing Date, and any amendment or supplement thereto, as of
its date, complied as to form in all material respects with
the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations; there has not been disclosed to such
counsel any information giving him reason to believe that such
Registration Statement, as of its effective date, the
Registration Statement or the Prospectus, as of the Closing
Date, or any such amendment or supplement, as of its date,
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and the Prospectus
of statutes, legal and governmental proceedings and contracts
and other documents are accurate in all material respects and
fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus which are not
described as required, nor of any contracts or documents of a
character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required; it being understood that such counsel need express
no opinion as to the financial statements or other financial
data contained in the Registration Statement or the
Prospectus;
(v) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
and sale of the Securities by the Issuer, except such as have
been obtained and made under
10
<PAGE> 11
the Act and the Trust Indenture Act and such as may be
required under state securities laws (it being understood that
such counsel may assume with respect to each particular
Security that the inclusion of any alternative or additional
terms in such Security that are not currently specified in the
forms of Securities examined by such counsel would not require
the Issuer to obtain any regulatory consent, authorization or
approval or make any regulatory filing in order for the Issuer
to issue, sell and deliver such Security);
(vi) The execution, delivery and performance of the
Indenture, this Agreement and the issuance and sale of the
Securities, and compliance with the terms and provisions
thereof, will not result in a material breach or material
violation of any of the terms and provisions of, or constitute
a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court having
jurisdiction over the Issuer or any of its property or any
agreement or instrument to which the Issuer is a party or by
which the Issuer is bound or to which any of the property of
the Issuer is subject, or the charter or bylaws of the Issuer,
and the Issuer has full power and authority to authorize,
issue and sell the Securities as contemplated by this
Agreement (it being understood that such counsel may assume
with respect to each particular Security that the inclusion of
any alternative or additional terms in such Security that are
not currently specified in the forms of Securities examined by
such counsel will not cause the issuance, sale or delivery of
such Security, the terms of such Security, or the compliance
by the Company with such terms, to violate any of the court
orders or laws specified in this paragraph or to result in a
default under or a breach of any of the agreements specified
in this paragraph); and
(vii) This Agreement has been duly authorized,
executed and delivered by the Issuer.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman of the Board, the
Vice Chairman of the Board, the President and Chief Operating Officer
or any Vice President and a principal financial or accounting officer
of the Issuer in which such officers, to the best of their knowledge
after reasonable investigation, shall state that (i) the
representations and warranties of the Issuer in this Agreement are
true and correct, (ii) the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or
11
<PAGE> 12
satisfied hereunder at or prior to the Closing Date, (iii) no stop
order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission, and (iv)
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Issuer and its subsidiaries,
taken as a whole, which materially impairs the investment quality of
the Securities, except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(f) At the Closing Date, the Agents shall have received a
letter, dated the Closing Date, of KPMG Peat Marwick LLP, in form and
substance satisfactory to the Agents, with respect to financial
statements and certain financial information contained in or
incorporated by reference in the Registration Statement and the
Prospectus. Such letter shall be in substantially the form, and
contain substantially the information, as those letters heretofore
furnished by KPMG Peat Marwick LLP in connection with underwritten
offerings of the Issuer.
(g) The Agents shall have received from Sullivan & Cromwell,
counsel for the Agents, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Issuer, the validity of
the Securities, the Registration Statement, the Prospectus and to such
of the matters stated in paragraph 5(d) above and other related
matters as they may require, and the Issuer shall have furnished to
such counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
The Issuer will furnish the Agents with such conformed copies
of such opinions, certificates, letters and documents as they reasonably
request.
6. Additional Covenants of the Issuer. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase
of Securities shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement are true
and correct at the time of such acceptance and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Securities as though made at and as
of each such time, it being understood that such representations and
warranties shall relate to the Registration Statement and the
Prospectus
12
<PAGE> 13
as amended or supplemented at each such time. Each such acceptance by
the Issuer of an offer to purchase Securities shall be deemed to
constitute an additional representation, warranty and agreement by the
Issuer that, as of the settlement date for the sale of such
Securities, after giving effect to the issuance of such Securities, of
any other Securities to be issued on or prior to such settlement date
and of any other Registered Securities to be issued and sold by the
Issuer on or prior to such settlement date, the aggregate amount of
Registered Securities (including any Securities) which have been
issued and sold by the Issuer will not exceed the amount of Registered
Securities registered pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), the Issuer shall, (A) concurrently with such amendment or
supplement, if such amendment or supplement shall occur at a Marketing
Time, or (B) immediately at the next Marketing Time if such amendment
or supplement shall not occur at a Marketing Time, furnish the Agents
with a certificate, dated the date of delivery thereof, of the
Chairman of the Board, Vice Chairman of the Board, the President and
Chief Operating Officer or any Vice President and a principal
financial or accounting officer of the Issuer, in form satisfactory to
the Agents, to the effect that the statements contained in the
certificate covering the matters set forth in Section 5(e) hereof
which was last furnished to the Agents are true and correct at the
time of such amendment or supplement, as though made at and as of such
time or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in Section 5(e); provided, however,
that any certificate furnished under this Section 6(b) shall relate to
the Registration Statement and the Prospectus as amended or
supplemented at the time of delivery of such certificate and, in the
case of the matters set forth in clause (ii) of Section 5(e), to the
time of delivery of such certificate.
(c) At each Representation Date referred to in Section 6(b),
the Issuer shall, (A) concurrently if such Representation Date shall
occur at a Marketing Time, or (B) immediately at the next Marketing
Time if such Representation Date shall not occur at a Marketing Time,
furnish the Agents with a written opinion or opinions, dated the date
of such Representation Date, of counsel for the Issuer, in form
satisfactory to the Agents, to the effect set forth in Section 5(d)
hereof; provided, however, that to the extent appropriate such opinion
or opinions may reconfirm matters set forth in a
13
<PAGE> 14
prior opinion delivered under Section 5(d) or this Section 6(c);
provided further, however, that any opinion or opinions furnished
under this Section 6(c) shall relate to the Registration Statement and
the Prospectus as amended or supplemented at such Representation Date
and shall state that the Securities sold in the relevant Applicable
Period (as defined below) have been duly executed, authenticated,
issued and delivered and constitute valid and legally binding
obligations of the Issuer enforceable in accordance with their terms,
subject only to the exceptions set forth in clause (iii) of Section
5(d) hereof as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, and conform in all material respects to the description
thereof contained in the Prospectus as amended or supplemented at the
relevant settlement date or dates for the sale of such Securities. For
the purpose of this Section 6(c), "Applicable Period" shall mean with
respect to any opinion delivered on a Representation Date the period
commencing on the date as of which the most recent prior opinion
delivered under Section 5(d) or this Section 6(c) speaks and ending on
such Representation Date.
(d) At each Representation Date referred to in Section 6(b) on
which the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, the Issuer
shall cause KPMG Peat Marwick, (A) concurrently if such Representation
Date shall occur at a Marketing Time, or (B) immediately at the next
Marketing Time if such Representation Date shall not occur at a
Marketing Time, to furnish the Agents with a letter, addressed jointly
to the Issuer and the Agents and dated the date of such Representation
Date, in form and substance satisfactory to the Agents, to the effect
set forth in Section 5(f) hereof; provided, however, that to the
extent appropriate such letter may reconfirm matters set forth in a
prior letter delivered pursuant to Section 5(f) or this Section 6(d);
provided further, however, that any letter furnished under this
Section 6(d) shall relate to the Registration Statement and the
Prospectus as amended or supplemented at such Representation Date,
with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Issuer.
(e) On each settlement date for the sale of Securities, the
Issuer shall, if reasonably requested by the Agent that solicited or
received the offer to purchase any Securities being delivered on such
settlement date, furnish such Agent with a written opinion or
opinions, dated the date of delivery
14
<PAGE> 15
thereof, of counsel for the Issuer, in form satisfactory to such
Agent, to the effect set forth in clauses (i), (ii) and (iii) of
Section 5(d) hereof; provided, however, that any opinion furnished
under this Section 6(e) shall relate to the Prospectus as amended or
supplemented at such settlement date and shall state that the
Securities being sold by the Issuer on such settlement date, when
delivered against payment therefor as contemplated by this Agreement,
will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Issuer
enforceable in accordance with their terms, subject only to the
exceptions set forth in clause (iii) of Section 5(d) hereof as to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and will
conform in all material respects to the description thereof contained
in the Prospectus as amended or supplemented at such settlement date.
(f) The Issuer agrees that any obligation of a person who has
agreed to purchase Securities to make payment for and take delivery of
such Securities shall be subject to (i) the accuracy, in all material
respects, on the related settlement date fixed pursuant to the
Procedures, of the Issuer's representation and warranty deemed to be
made to the Agents pursuant to the last sentence of subsection (a) of
this Section 6, and (ii) the satisfaction, on such settlement date, of
each of the conditions set forth in Sections 5(a), (b) and (c), it
being understood that under no circumstance shall any Agent have any
duty or obligation to exercise the judgment permitted under Section
5(b) or (c) on behalf of any such person.
7. Indemnification and Contribution.
(a) The Issuer will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto (excluding any amendments or supplements relating to
securities which are not covered by this Agreement), or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, and will reimburse each Agent for any legal
or
15
<PAGE> 16
other expenses reasonably incurred by such Agent in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Issuer will not be liable to such Agent in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made (i) in any of such documents in reliance upon
and in conformity with written information furnished to the Issuer by
such Agent for use therein, or (ii) in that part of the Registration
Statement constituting its Statement of Eligibility and Qualification
under the Trust Indenture Act (Form T-1) of the Trustee.
(b) Each Agent will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer
may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto
(excluding any amendments or supplements relating to securities which
are not covered by this Agreement), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by such
Agent for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Issuer in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense
16
<PAGE> 17
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with
such consent or if there has been a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be
entitled to contribution for liabilities and expenses, except to the
extent that contribution is not permitted under Section 11(f) of the
Act. In determining the amount of contribution to which the respective
parties are entitled, there shall be considered the relative benefits
received by each party from the offering of the Securities (taking
into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission and
any other equitable considerations appropriate under the
circumstances. The Issuer and the Agents agree that it would not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Agents were treated as one
entity for such purpose). Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
which are the subject of the action and which were distributed to the
public through it pursuant to this Agreement or upon resale of
Securities purchased by it from the Issuer exceeds the amount of any
damages which such Agent has otherwise been required to pay in respect
of the same claim or any substantially similar claim. The obligations
of each Agent in this subsection (d) to contribute are several, in the
same proportion which the amount of the Securities which are the
subject of the action and which were distributed to the public through
such Agent pursuant to this Agreement bears to the total amount of
such Securities distributed to the public through all of the Agents
pursuant to this Agreement, and not joint.
17
<PAGE> 18
(e) The obligations of the Issuer under this Section 7 shall
be in addition to any liability which the Issuer may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls each Agent within the meaning of the Act; and the
obligations of each Agent under this Section 7 shall be in addition to
any liability which each Agent may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Issuer, to
each officer of the Issuer who has signed the Registration Statement
and to each person, if any, who controls the Issuer within the meaning
of the Act.
8. Status of Each Agent. In soliciting offers to purchase the
Securities from the Issuer pursuant to this Agreement and in assuming its other
obligations hereunder (other than offers to purchase pursuant to Section 11),
each Agent is acting individually and not jointly. Each Agent will make
reasonable best efforts to assist the Issuer in obtaining performance by each
purchaser whose offer to purchase Securities from the Issuer has been solicited
by such Agent and accepted by the Issuer. If the Issuer shall default on its
obligations to deliver Securities to a purchaser whose offer it has accepted,
the Issuer (i) shall hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Issuer, and (ii) in
particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Agent, the Issuer or any of their respective representatives, officers
or directors or any controlling person and will survive delivery of any payment
for the Securities. If this Agreement is terminated pursuant to Section 10 or
for any other reason, the Issuer shall remain responsible for the expenses to
be paid or reimbursed by it pursuant to Section 4(h) and the obligations of the
Issuer under Sections 4(d) and 4(g) and the respective obligations of the
Issuer and the Agents pursuant to Section 7 shall remain in effect. In
addition, if any such termination shall occur either (i) at a time when any
Agent shall own any of the Securities with the intention of reselling them or
(ii) after the Issuer has accepted an offer to purchase Securities and prior to
the related settlement, the obligations of the Issuer under the second sentence
of Section 4(b), under Section 4(a), 4(c), 4(e) and 4(f) and, in the case of a
termination occurring as described in (ii) above, under Sections 3(c), 6(a),
6(e) and 6(f) and under the last sentence of Section 8, shall also remain in
effect.
18
<PAGE> 19
10. Termination. This Agreement may be terminated for any
reason at any time by the Issuer as to any Agent or, in the case of an Agent by
such Agent insofar as this Agreement relates to such Agent, upon the giving of
one day's written notice of such termination to the other parties hereto. Any
settlement with respect to Securities placed by an Agent occurring after
termination of this Agreement shall be made in accordance with the Procedures
and each Agent agrees, if requested by the Issuer, to take the steps therein
provided to be taken by such Agent in connection with such settlement.
11. Purchases as Principal. From time to time, any Agent may
agree with the Issuer to purchase Securities from the Issuer as principal and
(unless the Issuer and such Agent may otherwise agree) such purchase shall be
made in accordance with the terms of a separate agreement ("Purchase
Agreement") in the form attached hereto as Exhibit C. A Purchase Agreement may
also specify certain provisions relating to the reoffering of such Notes by
such Agent. Whether or not the Issuer and an Agent execute and deliver an
agreement in connection with any such sale and purchase, such sale and purchase
shall, unless the Issuer and such Agent otherwise expressly agree in writing,
be made pursuant to a Purchase Agreement in the form attached hereto as Exhibit
C with such additional provisions relating to the terms of the Securities and
of the purchase and sale (and, if applicable, resale) thereof as shall be set
forth in the Purchase Information delivered pursuant to the Procedures, and
such Agent's compensation shall, unless otherwise agreed between the Issuer and
such Agent, be the amount thereof set forth in the Pricing Supplement.
12. Sales of Securities Denominated in a Currency other than
U.S. Dollars or of Indexed Securities. If at any time the Issuer with any of
the Agents shall determine to issue and sell Securities denominated in a
currency other than U.S. dollars, which other currency may include a currency
unit, or with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, the Issuer and any such
Agent may execute and deliver a supplement to this Agreement for the purpose of
making any appropriate additions to and modifications of the terms of this
Agreement (and the Procedures) applicable to such Securities and the offer and
sale thereof. The Agents are authorized to solicit offers to purchase
Securities with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, and the Issuer shall agree
to any sales of such Securities (whether offered on an agency or principal
basis), only in a minimum aggregate amount of $2,500,000.
13. Notices. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and
19
<PAGE> 20
shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to CS First Boston Corporation
shall be directed to it at Park Avenue Plaza, New York, New York 10055,
Attention: Short and Medium-Term Finance Department, phone number (212)
909-2575, fax number (212) 318-1498; to Merrill Lynch & Co. shall be directed
to it at Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, 10th
Floor, World Financial Center, New York, New York 10281-1310, Attention: MTN
Product Management, phone number (212) 449-7476, fax number (212) 449-2234; to
Morgan Stanley & Co. Incorporated shall be directed to it at 1585 Broadway, 2nd
Floor, New York, New York 10036, Attention: Manager - Continuously Offered
Products, phone number (212) 761-2000, fax number (212) 761-0780, with a copy
to 1585 Broadway, 34th Floor, New York, New York 10036 Attention: Peter Cooper,
Investment Banking Information Center, phone number (212) 761-8385, fax number
(212) 761-0260; and to J.P. Morgan Securities Inc. shall be directed to it at
60 Wall Street, New York, New York 10260, Attention: Medium Term Note
Department, phone number (212) 648-0591, fax number (212) 648-5907; and notices
to the Issuer shall be directed to it if by mail, to P.O. Box 10001, Dallas,
Texas 75301-0001, and if sent otherwise, to 6501 Legacy Drive, Plano, Texas
75024-3698, Attention: C.R. Lotter, Secretary; or in the case of any party
hereto, to such other address or person as such party shall specify to each
other party by a notice given in accordance with the provisions of this Section
13. Any such notice shall take effect at the time of receipt.
14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
officers and directors and controlling persons referred to in Section 7 and, to
the extent provided in Section 6(f), any person who has agreed to purchase
Securities from the Issuer, and no other person will have any right or
obligation hereunder.
15. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such executed counterparts shall
together constitute one and the same Agreement.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
20
<PAGE> 21
Very truly yours,
J.C. PENNEY COMPANY, INC.
By:
________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the
date first above written:
CS FIRST BOSTON CORPORATION
By:_________________________________
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:_________________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:_________________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:_________________________________
Name:
Title:
<PAGE> 22
EXHIBIT A
The Issuer agrees to pay each Agent a commission equal to the
following percentage of the principal amount of Securities sold to purchasers
solicited by such Agent:
<TABLE>
<CAPTION>
Commission Rate
(as a percentage of
Term principal amount)
------ -------------------
<S> <C>
9 months to less than 12 months .125%
12 months to less than 18 months .150
18 months to less than 24 months .200
24 months to less than 30 months .250
30 months to less than 3 years .300
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 7 years .500
7 years to less than 10 years .550
10 years to less than 20 years .600
20 years to 30 years .750
Greater than 30 years To be negotiated
at time of trade
</TABLE>
<PAGE> 23
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes - Series A due nine months or more from their
issue date ("Notes"), are to be offered on a continuing basis by J. C. Penney
Company, Inc. ("Issuer"). CS First Boston Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and J. P. Morgan
Securities Inc., as agents (individually, an "Agent" and collectively, the
"Agents"), have each agreed to use reasonable best efforts to solicit offers to
purchase the Notes, but the Issuer reserves the right to sell the Notes on its
own behalf directly or through affiliates and, upon notice to each Agent, to
enter into agreements substantially identical to the Agency Agreement with other
agents. The Agents will not be obligated to purchase Notes for their own
account. The Notes are being sold pursuant to an Agency Agreement, dated ______
__, 1996 ("Agency Agreement"), among the Issuer and the Agents and will be
issued pursuant to an Indenture, dated as of April 1, 1994 (said Indenture, and
all Indentures supplemental thereto, being hereinafter called the "Indenture"),
between the Issuer and First Trust of California, National Association,
Successor Trustee to Bank of America National Trust and Savings Association
("Trustee"). In connection with certain procedures to be followed with respect
to the settlement of sales of Notes as set forth in this Administrative
Procedures, the Issuer has appointed Chemical Bank as its Issuing Agent. With
respect to the Notes, Chemical Bank will also act as Paying Agent and
Authenticating Agent under the Indenture and, as may be required, Calculation
Agent and Exchange Rate Agent for the Issuer. All references herein to Chemical
Bank, regardless of the capacity in which it is acting, will be to the "Paying
Agent".
The Notes will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Issuer and will have been registered under
the Securities Act of 1933 ("Act"). For a description of the terms of the Notes
and the offering and sale thereof, see the sections entitled "Description of
Notes", "Special Provisions Relating to Foreign Currency Notes", "United States
Taxation", "Plan of Distribution of Notes" and "Glossary" in the Prospectus
Supplement relating to the Notes, dated ______ __, 1996, attached hereto and
hereinafter referred to as the "Prospectus Supplement", and the sections
entitled "Description of Securities" and "Plan of Distribution" in the
Prospectus relating to the Notes, dated ______ __, 1996, attached hereto and
hereinafter referred to as the "Prospectus". Defined terms used herein but not
defined herein shall have the meanings assigned to them in the Agency
Agreement, the Prospectus or the Prospectus Supplement.
The Notes will be represented either by Global Notes delivered to The
Depository Trust Company ("DTC") or its nominee and recorded in the book-entry
system maintained by DTC or such nominee ("Book-Entry Notes") (it being
understood that only each Global Note and
<PAGE> 24
not any such Book-Entry Note represented thereby constitutes a Security under
the Indenture) or by certificates delivered to the Holders thereof or Persons
designated by such Holders ("Certificated Notes"). Notes for which interest is
calculated on the basis of a fixed interest rate are referred to herein as
"Fixed Rate Notes". Notes for which interest is calculated at a rate or rates
determined by reference to an interest rate formula are referred to herein as
"Floating Rate Notes".
Notes which are issued at a price lower than the principal amount
thereof and which provide that upon redemption or acceleration of the maturity
thereof an amount less than the principal thereof shall become due and payable
are referred to herein as "Original Issue Discount Notes". For special
provisions relating to Original Issue Discount Notes and other Notes issued at
a discount for tax purposes, see the section entitled "United States Taxation -
- - Original Issue Discount" in the Prospectus Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars and payments of principal of and any
premium and interest on the Notes will be made in U.S. dollars in the manner
indicated in the Prospectus and the Prospectus Supplement. Notes denominated in
one or more currencies or currency units other than U.S. dollars are referred
to herein as "Foreign Currency Notes". For special provisions relating to
Foreign Currency Notes, see the sections entitled "Special Provisions Relating
to Foreign Currency Notes" in the Prospectus Supplement. Specific information
concerning the foreign currency or currency unit in which a particular Foreign
Currency Note is denominated, including historical exchange rates and a
description of the currency and any exchange controls, shall be contained in a
Pricing Supplement to the Prospectus Supplement reflecting the terms of such
Note.
Notes which provide that amounts payable by the Issuer in respect of
principal of or any premium or interest on the Notes shall be determined by
reference to the value, rate or price of one or more specified indices, are
referred to herein as "Indexed Notes". Specific information pertaining to the
method for determining the principal amounts payable, a historical comparison
of the value, rate or price of the specified index, indices and the face amount
of the Indexed Note and certain additional tax considerations will be described
in the applicable Pricing Supplement.
Administrative procedures and specific terms of the offering are
explained below. Part I indicates procedures applicable to all Notes; Part II
indicates specific procedures for Certificated
<PAGE> 25
Notes; and Part III indicates specific procedures for Book-Entry Notes.
Administrative and record-keeping responsibilities will be handled by the
Issuer. The Issuer will advise the Agents in writing of those persons handling
administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery.
Except as otherwise specified, all time references herein shall be to
New York City time on the date of the event, act or notice referred to in the
particular provision.
PART I: PROCEDURES APPLICABLE TO ALL NOTES
Issue Date
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date ("Issue Date") which, with respect to any such
Note (or portion thereof), shall mean the date of its original issuance and
shall be specified therein. The Issue Date will remain the same for all Notes
subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
Price to Public
Except as otherwise specified in a Pricing Supplement, each Note will
be issued at 100% of principal amount.
Maturities; Minimum Purchase
Each Note will mature on a date, selected by the purchaser and agreed
to by the Issuer, which will be at least nine months or more after its Issue
Date. The minimum aggregate amount of Notes which may be offered to any
purchaser will be $1,000 or any integral multiple thereof.
Interest Payments
Interest on each interest-bearing Note will be calculated and paid in
the manner described in such Note, in the Prospectus Supplement and in the
applicable Pricing Supplement. Unless otherwise set forth therein, interest on
Fixed Rate Notes (including interest for partial periods) will be calculated on
the basis of a 360-day year of twelve 30-day months and will not accrue on the
31st day of any month. Interest on Floating Rate Notes, except as otherwise set
forth therein, will be calculated on the
3
<PAGE> 26
basis of actual days elapsed and a year of 360 days, except that in the case of
a Floating Rate Note for which the Base Rate is the Treasury Rate, interest
will be calculated on the basis of the actual number of days in the year.
On the fifth Business Day immediately preceding each Interest Payment
Date, the Paying Agent will furnish the Issuer with the total amount of
interest payments (whether in U.S. dollars or other currencies or currency
units) to be made on such Interest Payment Date. The Paying Agent will provide
monthly, to the Issuer, a list of the principal and any premium and interest to
be paid on Notes maturing in the next succeeding month. Except with respect to
Book-Entry Notes, the Paying Agent will assume responsibility for withholding
taxes on interest paid as required by law.
Redemption/Repayment
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to redemption in whole or in part (subject to
applicable minimum denominations), at the option of the Issuer on and after an
initial redemption date as set forth in the applicable Pricing Supplement and
in the applicable Note. The redemption price will be set forth in the
applicable Pricing Supplement and in the applicable Note.
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to repayment at the option of the Holders
thereof in accordance with the terms of the Notes on a repayment date as set
forth in the applicable Pricing Supplement and in the applicable Note. The
repayment date or dates and repayment price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
Procedures for Establishing the Terms of the Notes
The Issuer and the Agents will discuss from time to time the rates to
be borne by the Notes that may be sold as a result of the solicitation of
offers by the Agents. Once any Agent has recorded any reasonable indication of
interest in Notes upon certain terms, and communicated with the Issuer, if the
Issuer plans to accept an offer to purchase Notes upon such terms, it will
prepare a Pricing Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes and will arrange to have
copies of the Pricing Supplement filed with, or transmitted by a means
reasonably calculated to result in filing with, the Securities and Exchange
Commission ("Commission") pursuant to Rule 424 under the Act. The Issuer will
supply at least 10 copies of the Prospectus, as then amended or supplemented,
and bearing such Pricing
4
<PAGE> 27
Supplement, to the Agent who presented the offer ("Presenting Agent"). No
settlements with respect to Notes upon such terms may occur prior to such
transmitting or filing and the Agents will not, prior to such transmitting or
filing, mail confirmations to customers who have offered to purchase Notes upon
such terms. After such transmitting or filing, sales, mailing of confirmations
and settlements may occur with respect to Notes upon such terms, subject to the
provisions of "Delivery of Prospectus" below.
If the Issuer decides to post rates and a decision has been reached to
change interest rates, the Issuer will promptly notify each Agent. Each Agent
will immediately suspend solicitation of purchases. At that time, the Agents
will recommend and the Issuer may establish rates to be so "posted". Following
establishment of posted rates and prior to the transmitting or filing described
in the preceding paragraph, the Agents may only record indications of interest
in purchasing Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and communicated with the
Issuer, if the Issuer plans to accept an offer at the posted rate, it will
prepare a Pricing Supplement reflecting such posted rates and will arrange to
have copies of the Pricing Supplement, filed with, or transmitted by means
reasonably calculated to result in filing with, the Commission pursuant to Rule
424 and will supply at least 10 copies of the Prospectus, as then amended or
supplemented, and bearing such Pricing Supplement, to the Presenting Agent. No
settlements at the posted rates may occur prior to such transmitting or filing
and the Agents will not, prior to such transmitting or filing, mail
confirmations to customers who have offered to purchase Notes at the posted
rates. After such transmitting or filing, sales, mailing of confirmations and
settlements may resume, subject to the provisions of "Delivery of Prospectus"
below.
Outdated Pricing Supplements, and copies of the Prospectus to which
they are attached (other than those retained for files), will be destroyed.
Suspension of Solicitation: Amendment or Supplement
As provided in the Agency Agreement, the Issuer may instruct the
Agents to suspend solicitation of offers to purchase at any time, and upon
receipt of such instruction from the Issuer, the Agents will each immediately
suspend solicitation until such time as the Issuer has advised them that
solicitation of offers to purchase may be resumed.
If the Agents receive the notice from the Issuer contemplated by
Section 3(b) or 4(b) of the Agency Agreement, they will
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immediately suspend solicitation and will only resume solicitation as provided
in the Agency Agreement. If the Issuer is required, pursuant to Section 4(b) of
the Agency Agreement, to prepare an amendment or supplement, it will promptly
furnish each Agent with the proposed amendment or supplement; if the Issuer
decides to amend or supplement the Registration Statement or the Prospectus
relating to the Notes, it will promptly advise each Agent and will furnish each
Agent with the proposed amendment or supplement in accordance with the terms of
the Agency Agreement. The Issuer will file such amendment or supplement with
the Commission, provide the Agents with copies of any such amendment or
supplement, confirm to the Agents that such amendment or supplement has been
filed with the Commission and advise the Agents that solicitation may be
resumed.
Any such suspension shall not affect the Issuer's obligations under
the Agency Agreement; and in the event that at the time the Issuer suspends
solicitation of offers to purchase there shall be any offers already accepted
by the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Presenting Agent and the Paying Agent if such offers are
not to be settled and if copies of the Prospectus as in effect at the time of
the suspension may not be delivered in connection with the settlement of such
offers.
Acceptance of Offers
Each Agent will promptly advise the Issuer, orally or in writing, of
each reasonable offer to purchase Notes received by it. Each Agent may, in its
discretion reasonably exercised, without notice to the Issuer, reject any offer
received by it, in whole or in part. The Issuer will have the sole right to
accept offers to purchase Notes and may in its discretion reject any such
offer, in whole or in part. If the Issuer accepts or rejects an offer, in whole
or in part, the Issuer will promptly so notify the Presenting Agent.
Confirmation
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a separate confirmation to the Issuer,
setting forth the Purchase Information (as defined under II below with respect
to Certificated Notes and III below with respect to Book-Entry Notes) and
delivery and payment instructions; provided, however, that, in the case of the
confirmation issued to the purchaser, no confirmation shall be delivered to the
purchaser prior to the delivery of the Prospectus referred to below.
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Determination of Settlement Date
The receipt of immediately available funds by the Issuer in payment
for a Note and (i) in the case of Certificated Notes, the authentication and
issuance of such Note and (ii) in the case of Book-Entry Notes, entry by the
Presenting Agent of a DTC Same-Day Funds Settlement System ("SDFS") deliver
order through DTC's Participant Terminal System to credit such Note to the
account of a Participant purchasing, or acting for the purchase of, such Note,
shall, with respect to such Note, constitute "settlement". All offers accepted
by the Issuer will be settled on the fifth Business Day next succeeding the
date of acceptance unless otherwise agreed by the purchaser and the Issuer. The
settlement date shall be specified upon receipt of an offer to purchase. No
later than 11:00 a.m., on the settlement date, the Issuer will instruct the
Paying Agent to authenticate and deliver the Notes no later than 2:15 p.m. on
the settlement date.
Delivery of Prospectus
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered by
the Presenting Agent to a purchaser prior to or together with the earlier of
the delivery of (i) the written confirmation provided for above, and (ii) any
Note purchased by such purchaser. (For this purpose, entry of an SDFS deliver
order through DTC's Participant Terminal System to credit a Note to the account
of a Participant purchasing, or acting for the purchaser of, a Note shall be
deemed to constitute delivery of such Note.) Subject to the foregoing, it is
anticipated that delivery of the Prospectus, confirmation and Notes to the
purchaser will be made simultaneously at settlement. The Issuer shall ensure
that the Presenting Agent receives copies of the Prospectus and each amendment
or supplement thereto (including appropriate Pricing Supplements) in such
quantities and within such time limits as will enable the Presenting Agent to
deliver such confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the first sentence of this paragraph. If,
since the date of acceptance of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of Notes on terms different from
those agreed to between the Issuer and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
Authenticity of Signatures
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The Issuer will cause the Paying Agent to furnish the Agents from
time to time with the specimen signatures of each of the Paying Agent's
officers, employees or agents who have been authorized by the Paying Agent to
authenticate Notes, but no Agent will have any obligation or liability to the
Issuer or the Paying Agent in respect of the authenticity of the signature of
any officer, employee or agent of the Issuer or the Paying Agent on any
Certificated Note or Global Note (as defined in Part III), unless the Agent
knows or has reason to believe that such signature may not be authentic.
Business Day
"Business Day" means any day which is not a Saturday or Sunday and is
not a day on which banking institutions are generally authorized or obligated
by law or executive order to close in the City of New York and, with respect to
LIBOR notes, a London Banking Day. "London Market Day" means any day on which
dealings in deposits in U.S. Dollars are transacted in the London interbank
market.
Paying Agent Not to Risk Funds
Nothing herein shall be deemed to require the Paying Agent to risk or
expend its own funds in connection with any payment made to the Issuer, the
Agents, DTC or any Noteholder, it being understood by all parties that payments
made by the Paying Agent to the Issuer, the Agents, DTC or any Holder of a Note
shall be made only to the extent that funds are provided to the Paying Agent
for such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Form and Denominations
The Certificated Notes shall be issued only in fully registered form in
denominations of $1,000 or any integral multiple thereof, or, in the case of
Foreign Currency Notes, in such minimum denomination, not less than the
equivalent of $1,000 or any integral multiple thereof, and such greater
denomination or denominations in excess thereof, as shall be set forth in the
applicable Pricing Supplement. However, Notes with respect to which an index is
used to determine the amounts of payments of principal and any premium and
interest shall be issued only in a minimum aggregate amount of $2,500,000.
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Transfers and Exchanges
A Certificated Note may be presented for transfer or exchange at the
office of Chemical Bank, Room 234 North Building, Corporate Trust Security
Window, 55 Water Street, New York, New York 10041, or by mail to Chemical Bank
Debt Operations Department, JAF Building, P.O. Box 2862, GPO Station, New York,
New York 10016-2862 or such other place or transfer agent as the Issuer may
designate ("Transfer Agent"). Certificated Notes will be exchangeable for other
Certificated Notes of any authorized denominations and of like tenor and in a
like aggregate principal amount, upon surrender of the Certificated Notes to be
exchanged at the corporate trust office of the Transfer Agent. Certificated
Notes will not be exchangeable for Book-Entry Notes.
Payment at Maturity
Upon presentation of each Certificated Note at Maturity, the Paying
Agent will pay the principal amount thereof, together with any premium and
accrued interest due at Maturity. Such payment will be made in immediately
available funds, provided that the Certificated Note is presented in time for
the Paying Agent to make payment in such funds in accordance with its normal
procedures. The Issuer will provide the Paying Agent with funds available for
immediate use for such purpose. Certificated Notes presented at Maturity will
be canceled by the Paying Agent as provided in the Indenture. For special
provisions relating to Foreign Currency Notes, see the section entitled
"Special Provisions Relating to Foreign Currency Notes" in the Prospectus
Supplement.
Details for Settlement
For each offer for Certificated Notes accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer no later than 11:00 a.m. on
the first Business Day after the sale date (or on the sale date if such sale is
to be settled within one Business Day) by telephone, telex, facsimile
transmission or other acceptable means, the following information ("Purchase
Information"):
1. Exact name in which the Note or Notes are to be registered
("Registered Owner").
2. Exact address of Registered Owner and, if different, the
address for delivery, notices and payment of principal and any
premium and interest.
3. Taxpayer identification number of Registered Owner.
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4. Principal amount of each Note in authorized denominations to
be delivered to registered owner.
5. In the case of Fixed Rate Notes, the interest rate of each
Note; in the case of Floating Rate Notes, the interest rate
formula, the Spread or Spread Multiplier (if any), the maximum
or minimum interest rate limitation (if any), the Calculation
Agent, the Calculation Dates, the Initial Interest Rate, the
Interest Payment Dates, the Regular Record Dates, the Index
Maturity, the Interest Determination Dates and the Interest
Reset Dates, in each case, to the extent applicable with
respect to each Note.
6. Stated Maturity of each Note.
7. Redemption and/or repayment provisions, if any, of each Note.
8. Trade date of each Note.
9. Settlement date (Issue Date) of each Note.
10. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Issuer upon
settlement).
11. Price.
12. Net Proceeds to Issuer.
13. Currency or currency unit in which each Note is to be
denominated and exchange rate applicable to purchase Foreign
Currency Notes to be paid for in U.S. dollars.
14. Any additional applicable terms of each Note.
The Issue Date of, and the settlement date for, Certificated Notes
will be the same. Before accepting any offer to purchase Certificated Notes to
be settled in less than three Business Days, the Issuer shall verify that the
Paying Agent will have adequate time to prepare and authenticate the Notes.
If the initial interest rate for a Floating Rate Certificated Note has
not been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as soon
as such rate has been determined but no later than 12:00 noon, on the Business
Day before the settlement date.
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Immediately after receiving the details for each offer for Certificated
Notes from the Presenting Agent and in any event no later than 12:00 noon on the
first Business Day after the sale date (or on the sale date if such sale is to
be settled within one Business Day), the Issuer will, if accepting the offer,
after recording the details and any necessary calculations, communicate the
Purchase Information by telephone, telex, facsimile transmission or other
acceptable means, to the Paying Agent. Each such instruction given by the Issuer
to the Paying Agent shall constitute a continuing representation and warranty by
the Issuer to the Paying Agent and the Agents that (i) the issuance and delivery
of such Notes have been duly and validly authorized by the Issuer and (ii) such
Notes, when completed, authenticated and delivered, shall constitute the valid
and legally binding obligation of the Issuer. The Paying Agent will assign to
and enter on each Note a transaction number.
At such time as the Issuer may determine, but in any event
sufficiently in advance of an issuance to allow the Paying Agent time to
process the Notes, the Issuer will deliver to the Paying Agent a pre-printed
four-ply packet (or such other packet as may be agreed upon between the
parties) for such Certificated Notes, which packet will contain the following
documents in forms that have been approved by the Issuer, the Agents and the
Paying Agent:
1. Certificated Note with customer confirmation.
2. Stub One - For the Paying Agent.
3. Stub Two - For the Presenting Agent.
4. Stub Three - For the Issuer.
The Paying Agent will complete such Certificated Note and will
authenticate such Certificated Note and deliver it (with the confirmation) and
the Stubs One and Two to such Presenting Agent, and such Agent will acknowledge
receipt of the Note by stamping or otherwise marking Stub One and returning it
to the Paying Agent. The Paying Agent will send Stub Three to the Issuer by
first-class mail or such other means as may be agreed upon by these parties.
Settlement; Note Deliveries and Cash Payment
At such time as the Issuer may determine, but in any event
sufficiently in advance of an issuance to allow the Paying Agent time to
process the Notes, the Issuer will deliver to the Paying Agent a supply of duly
executed Certificated Notes with pre-printed control numbers adequate to
implement the program. Upon the receipt of appropriate documentation and
instructions from the Issuer in accordance with the applicable Officers'
Certificate and
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verification thereof, the Paying Agent will cause the Certificated Notes to be
completed and authenticated and hold the Certificated Notes for delivery against
payment.
The Paying Agent will deliver the Certificated Notes, in accordance
with instructions from the Issuer, to the Presenting Agent for the benefit of
the purchaser only against receipt. The Presenting Agent will acknowledge
receipt of the Notes through a broker's receipt. Delivery of the Certificated
Notes by the Paying Agent will be made only against such acknowledgement of
receipt from the Presenting Agent. Upon the Presenting Agent's determination
that such Notes have been authenticated, delivered and completed as aforesaid,
the Presenting Agent will make, or cause to be made, payment to the Issuer at
such account of the Issuer as the Issuer may specify in writing, in immediately
available funds, of an amount equal to the principal amount of such Notes, less
the applicable commission. If the Presenting Agent in any instance advances its
own funds, the Issuer shall not use any of the proceeds of such sale to acquire
securities.
The Presenting Agent will deliver the Notes (with the written
confirmation provided for above) to the purchaser thereof against payment
therefor by such purchaser in immediately available funds. Delivery of any
confirmation or Note will be made in compliance with "Delivery of Prospectus"
in Part I above.
Fails
In the event that a purchaser shall fail to accept delivery of and
make payment for a Certificated Note on the settlement date, the Presenting
Agent will notify the Paying Agent and the Issuer, by telephone, confirmed in
writing. If such Certificated Note has been delivered to the Presenting Agent,
the Presenting Agent shall return such Note to the Paying Agent. If funds have
been advanced for the purchase of such Note, the Paying Agent will, immediately
upon receipt of such Note, debit the account of the Issuer for the amount so
advanced and the Paying Agent shall refund to the Presenting Agent the payment
previously made by the Presenting Agent in immediately available funds. Such
payments will be made on the settlement date, if possible, and in any event not
later than the Business Day following the settlement date. If the fail shall
have occurred for any reason other than the Presenting Agent's gross negligence
or willful misconduct, including but not limited to the failure of the
Presenting Agent to provide the Purchase Information to the Issuer or to
provide a confirmation to the purchaser, the Issuer will reimburse the
Presenting Agent on an equitable basis for its loss of the use of funds during
the period when the funds were credited to the account of the Issuer, or for
any other cost or expense; and in no event shall the Issuer be
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obligated to pay any commission, as contemplated by the Agency Agreement, with
respect to any fail.
Immediately upon receipt of the Certificated Note in respect of which
the fail occurred, the Paying Agent will make appropriate entries in its
records to reflect the fact that the Note was never issued and the Note will be
canceled and disposed of as provided in the Indenture.
PART III: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Paying Agent will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations
("Letter") from the Issuer and the Paying Agent to DTC dated as of ______ __,
1996, and a Medium-Term Note Certificate Agreement between the Paying Agent and
DTC dated as of December 2, 1988, and its obligations as a participant in DTC,
including "SDFS".
Form, Denominations and Registration
All Book-Entry Notes of the same tenor and having the same Issue Date,
will be represented initially by a single note (a "Global Note") in fully
registered form without coupons. Book-Entry Notes will represent Notes
denominated in U.S. dollars. Global Notes will be issued in denominations of
$1,000 or any integral multiple thereof. However, Notes with respect to which an
index is used to determine the amounts of payments of principal and any premium
and interest shall be issued only in a minimum aggregate amount of $2,500,000.
Each Global Note will be registered in the name of Cede & Co., as nominee for
DTC, on the Security Register maintained under the Indenture. The beneficial
owner of a Book-Entry Note (or one or more indirect participants in DTC
designated by such owner) will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as agent or agents for such
owner in connection with the book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Book-Entry Note in the
account of such Participants. The ownership interest of such beneficial owner in
such Book-Entry Note will be recorded through the records of such Participants
or through the separate records of such Participants and one or more indirect
participants in DTC.
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CUSIP Numbers
The Issuer has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation ("CUSIP Service Bureau") for the reservation of a series of
CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Global Notes representing
Book-Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers and has delivered it to DTC and the
Paying Agent. The Paying Agent will assign CUSIP numbers serially to Global
Notes as described below under "Details for Settlement". DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Paying Agent
has assigned to Global Notes. The Paying Agent will notify the Issuer at the
time when fewer than 100 of the reserved CUSIP numbers remain unassigned to the
Global Notes; and the Issuer will reserve an additional 900 CUSIP numbers for
assignment to Global Notes representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall deliver a list of such additional
CUSIP numbers to DTC.
Transfers and Exchanges for the Purpose of Consolidation
Transfers of a Book-Entry Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
The Paying Agent may upon notice to the Issuer deliver to DTC and the
CUSIP Service Bureau at any time a written notice (a copy of which shall be
attached to the Global Note resulting from such exchange) specifying (i) the
CUSIP numbers of two or more outstanding Global Notes that represent Book-Entry
Notes of the same tenor and having the same Issue Date, and for which interest
(if any) has been paid to the same date, (ii) a date occurring at least thirty
days after such written notice is delivered and at least thirty days before the
next Interest Payment Date (if any) for such Notes, on which such Global Notes
shall be exchanged for a single replacement Global Note and (iii) a new CUSIP
number to be assigned to such replacement Global Note. Upon receipt of such a
notice, DTC will send to its Participants (including the Paying Agent) a
written notice to the effect that such exchange will occur on such date. Prior
to the specified exchange date, the Paying Agent will deliver to the CUSIP
Service Bureau a written notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Global Notes to be exchanged will no longer be valid. On the specified
exchange date, the Paying Agent will exchange such Global Notes for a single
Global Note bearing the new CUSIP number and the CUSIP numbers of the exchanged
Global Notes will, in accordance
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with CUSIP Service Bureau procedures, be canceled and not immediately
reassigned.
Notice of Interest Payment Dates and Regular Record Dates
To the extent then known, on the first Business Day of March, June,
September and December of each year, the Paying Agent will deliver to the
Issuer and DTC a written list of Record Dates and Interest Payment Dates that
will occur with respect to Floating Rate Book-Entry Notes during the six-month
period beginning on such first Business Day.
Payments of Principal and Interest
(a) Payments of Interest Only. Promptly after each Regular Record Date
(as defined in the Note), the Paying Agent will deliver to the Issuer and DTC a
written notice specifying by CUSIP number the amount of interest to be paid on
each Global Note on the following Interest Payment Date (other than an interest
Payment Date coinciding with Maturity) and the total of such amounts. The
Issuer will confirm with the Paying Agent the amount payable on each Global
Note on such Interest Payment Date. DTC will confirm the amount payable on each
Global Note on such Interest Payment Date by reference to the daily or weekly
bond reports published by Standard & Poor's Corporation. The Issuer will pay to
the Paying Agent the total amount of interest due on such Interest Payment Date
(other than at Maturity), and the Paying Agent will pay such amount to DTC at
the times and in the manner set forth below under "Manner of Payment".
(b) Payments at Stated Maturity. On or about the first Business Day of
each month, the Paying Agent will deliver to the Issuer and DTC a written list
of principal and interest to be paid on each Global Note maturing in the
following month. The Issuer, the Paying Agent and DTC will confirm the amounts
of such principal and interest payments with respect to each such Global Note
on or about the fifth Business Day preceding the Stated Maturity of such Global
Note. The Issuer will pay to the Paying Agent, as the paying agent, the
principal amount of such Global Note, together with interest due at such Stated
Maturity. Upon surrender of a Global Note, the Paying Agent will pay such
amounts to DTC at the times and in the manner set forth below under "Manner of
Payment". If any Stated Maturity of a Global Note representing Book-Entry Notes
is not a Business Day, the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on such payment for the
period from and after such Stated Maturity. Promptly after payment to DTC of
the principal and any interest due at the Stated Maturity of such Global Note,
the Paying Agent will
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cancel such Global Note and return such Global Note to the Issuer in accordance
with the terms of the Indenture.
(c) Payment upon Redemption. The Paying Agent will comply with the
terms of the Letter with regard to redemptions or repayments of the Book-Entry
Notes. In the case of Book-Entry Notes stated by their terms to be redeemable
prior to Stated Maturity, at least 60 calendar days before the date fixed for
redemption ("Redemption Date"), the Issuer shall notify the Paying Agent of the
Issuer's election to redeem such Book-Entry Notes in whole or in part and the
principal amount of such Book-Entry Notes to be so redeemed. At least 30
calendar days but not more than 60 calendar days prior to the Redemption Date,
the Paying Agent shall notify DTC of the Issuer's election to redeem such
Book-Entry Notes. The Paying Agent shall notify the Issuer and DTC of the CUSIP
numbers of the particular Global Notes representing such Book-Entry Notes to be
redeemed either in whole or in part. The Issuer, the Paying Agent and DTC will
confirm the amounts of such principal and any premium and interest payable with
respect to each such Book-Entry Notes on or about the fifth Business Day
preceding the Redemption Date of such Book-Entry Notes. The Issuer will pay the
Paying Agent, in accordance with the terms of the Indenture, the amount
necessary to redeem each such Book-Entry Note or the applicable portion of each
such Book-Entry Note. The Paying Agent will pay such amount to DTC at the times
and in the manner set forth herein. Promptly after payment to DTC of the amount
due on the Redemption Date for such Book-Entry Note, the Paying Agent shall
cancel any such Book-Entry Note redeemed in whole and shall deliver it to the
Issuer with an appropriate debit advice. If a Global Note is to be redeemed in
part, the Paying Agent will cancel such Global Note and issue a Global Note
which shall represent the remaining portion of such Global Note and shall bear
the CUSIP number of the canceled Global Note.
(d) Manner of Payment. The total amount of any principal and interest
due on Global Notes on any Interest Payment Date or at Maturity shall be paid
by the Issuer to the Paying Agent in immediately available funds on such date.
The Issuer will make such payment on such Notes by wire transfer to the Paying
Agent. The Issuer will confirm instructions regarding payment in writing to the
Paying Agent. Prior to 10:00 a.m. on each date of maturity of a Book-Entry
Note or as soon as possible thereafter, the Paying Agent will pay by separate
wire transfer (using Fedwire message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve Bank of New York
previously specified by DTC in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due at maturity on
Book-Entry Notes. On each Interest Payment Date, interest payment shall be made
to DTC in same day funds in accordance with existing arrangements between the
Paying Agent and
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DTC. Thereafter, on each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds available for
immediate use to the respective Participants in whose names the Book-Entry
Notes represented by such Global Notes are recorded in the book-entry system
maintained by DTC. NEITHER THE ISSUER NOR THE PAYING AGENT SHALL HAVE ANY
DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS
OF THE PRINCIPAL OF AND ANY PREMIUM OR INTEREST ON THE BOOK-ENTRY NOTES.
(e) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
Details for Settlement
For each offer for Book-Entry Notes accepted by the Issuer, and which
are to be represented by one Global Note, the Presenting Agent shall
communicate to the Issuer no later than 11:00 a.m. on the first Business Day
after the sale date (or on the sale date if such sale is to be settled within
one Business Day), by telephone, telex, facsimile transmission or other
acceptable means, the following information ("Purchase Information"):
1. Statement that these Book-Entry Notes will be represented by a
Global Note registered in the name of Cede & Co.
2. Exact address of Participant with respect to each Book-Entry
Note and, if different, the address for delivery, notices and
payment of principal and any premium and interest.
3. Principal amount of each Book-Entry Note.
4. Principal amount of Global Note representing all Book-Entry
Notes.
5. Stated Maturity of the Notes.
6. In the case of Fixed Rate Notes, the interest rate of the
Notes; in the case of Floating Rate Notes, the interest rate
formula, the Spread or Spread Multiplier (if any), the maximum
or minimum interest rate limitation (if any), the Calculation
Agent, the Calculation Dates, the Initial Interest Rate, the
Interest Payment Dates, the Regular
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Record Dates, the Index Maturity, the Interest Determination
Dates and the Interest Reset Dates, in each case, to the
extent applicable with respect to the Notes.
7. Redemption and/or repayment provisions, if any, of the Notes.
8. Trade date of the Notes.
9. Settlement date (Issue Date) of the Notes.
10. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Issuer upon
settlement).
11. Price.
12. Net Proceeds to Company.
13. Currency or currency unit in which the Notes are to be
denominated and exchange rate applicable to purchase Foreign
Currency Notes payable in U.S. dollars.
14. Any additional applicable terms of the Notes.
The Issue Date of, and the settlement date for, Book-Entry Notes will
be the same. Before accepting any offer to purchase Book-Entry Notes to be
settled in less than three Business Days, the Issuer shall verify that the
Paying Agent will have adequate time to prepare and authenticate the Global
Note(s) which shall represent such Book-Entry Notes.
If the initial interest rate for a Floating Rate Book-Entry Note has
not been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as soon
as such rate has been determined but no later than 12:00 noon (with respect to
the next following paragraph) and 2:00 p.m. (with respect to the second
following paragraph), as the case may be, on the Business Day before the
settlement date.
Immediately after receiving the details for each offer for Book-Entry
Notes from the Presenting Agent and in any event no later than 12:00 noon on
the first Business Day after the sale date (or on the sale date if such sale is
to be settled within one Business Day), the Issuer will, if accepting the
offer, after recording the details and any necessary calculations, communicate
the Purchase Information by telephone, telex, facsimile transmission or other
acceptable means, to the Paying Agent. Each such instruction given by the
Issuer to the Paying Agent shall
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constitute a continuing representation and warranty by the Issuer to the Paying
Agent and the Agents that (i) the issuance and delivery of such Global Note
representing such Book-Entry Notes has been duly and validly authorized by the
Issuer and (ii) such Global Note, when completed, authenticated and delivered,
shall constitute the valid and legally binding obligation of the Issuer.
Immediately after receiving the Purchase Information from the Issuer
and in any event no later than 2:00 p.m. on the first Business Day after the
sale date (or on the sale date if such sale is to be settled within one
Business Day), the Paying Agent will assign a CUSIP number to the Global Note
representing such Book-Entry Notes and will telephone the Issuer and advise the
Issuer of such CUSIP number and, as soon thereafter as practicable, the Issuer
shall notify the Agent of such CUSIP number. The Paying Agent will enter a
pending deposit message through DTC's Participant Terminal System, providing
the following settlement information to DTC (which shall route such information
to Standard & Poor's Corporation) and the Presenting Agent:
1. The applicable Purchase information.
2. Initial Interest Payment Date for the Book-Entry Notes
represented by such Global Note, number of days by which such
date succeeds the Regular Record Date which shall be the
Regular Record Date (as defined in the Note), and, if known,
the amount of interest payable on such Interest Payment Date
per $1,000 principal amount of Book-Entry Notes.
3. Identification as either a Fixed Rate Note or a Floating Rate
Note.
4. CUSIP number of the Global Note representing such Book-Entry
Note(s).
5. Whether such Global Note will represent any other Book-Entry
Note(s) (to the extent known at such time).
6. Interest payment periods.
7. Numbers of the participant accounts maintained by DTC on
behalf of the Paying Agent and the Agents.
Standard & Poor's Corporation will use the information received in the
pending deposit message to include the amount of any interest payable and
certain other information regarding the related Global Note in the appropriate
daily or weekly bond report published by Standard & Poor's Corporation.
19
<PAGE> 42
Settlement; Global Note Delivery and Cash Payment
The Issuer will deliver to the Paying Agent at the commencement of the
program and from time to time thereafter a supply of duly executed Global Notes
with pre-printed control numbers adequate to implement the program. Upon the
receipt of appropriate documentation and instructions from the Issuer in
accordance with the applicable Officers' Certificate and verification thereof,
the Paying Agent will cause a Global Note to be completed and authenticated no
later than 9:00 a.m. on the Settlement Date, and hold such Global Note for
delivery against payment.
Prior to 10:00 a.m. on the Settlement Date, DTC will credit such Note
to the Paying Agent's participant account at DTC. At or prior to 2:00 p.m. on
the Settlement Date, the Paying Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i) debit such Global Note
to the Paying Agent's participant account and credit such Global Note to the
Presenting Agent's participant account and (ii) debit the Presenting Agent's
settlement account and credit the Paying Agent's settlement account for an
amount equal to the price of such Global Note less such Agent's commission (in
accordance with SDFS operating procedures in effect on the Settlement Date).
The entry of such a deliver order shall constitute a representation and
warranty by the Paying Agent to DTC that (i) the Global Note representing such
Book-Entry Note(s) has been executed, delivered and authenticated and (ii) the
Paying Agent is holding such Global Note pursuant to the Medium-Term Note
Certificate Agreement between the Paying Agent and DTC.
Simultaneously with the giving of such instructions by the Paying
Agent, the Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Global Note to
the Presenting Agent's participant account and credit the underlying Book-Entry
Notes to the Participant accounts of the Participants with respect to such
Global Note and (ii) to debit the settlement accounts of such Participants with
respect to the underlying Book-Entry Notes and credit the settlement account of
such Presenting Agent for an amount equal to the price of such Global Note (in
accordance with SDFS operating procedures in effect on the Settlement Date).
Transfers of funds will take place on or prior to 4:45 p.m. on the
Settlement Date, subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the
20
<PAGE> 43
Settlement Date.
The Paying Agent, upon confirming receipt of such funds, will wire
transfer the amount transferred to the Paying Agent, in funds available for
immediate use, for the designated account of J.C. Penney Company, Inc., at
Chemical Bank, New York, New York (ABA No. 0210 00128).
Fails
If settlement of a Book-Entry Note is rescheduled or canceled, the
Issuer shall notify the Paying Agent, and upon receipt of such notice, the
Paying Agent will deliver to DTC, through DTC's Participant Terminal System, a
cancelation message to such effect by no later than 2:00 p.m., on the Business
Day immediately preceding the scheduled Settlement Date.
If the Paying Agent has not entered an SDFS deliver order with respect
to a Book-Entry Note, then upon written request (which may be evidenced by
telecopy transmission) of the Issuer, the Paying Agent shall deliver to DTC,
through DTC's Participant Terminal System, as soon as practicable, but no later
than 2:00 p.m. on any Business Day, a withdrawal message instructing DTC to
debit such Book-Entry Note to the Paying Agent's participant account. DTC will
process the withdrawal message, provided that the Paying Agent's participant
account contains a principal amount of the Global Note representing such
Book-Entry Note that is at least equal to the principal amount to be debited.
If withdrawal messages are processed with respect to all the Book-Entry Notes
represented by a Global Note, the Paying Agent will mark such Global Note
"canceled", make appropriate entries in the Paying Agent's records and send
such canceled Global Note to the Issuer. The CUSIP number assigned to such
Global Note shall, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If withdrawal messages are processed
with respect to one or more, but not all, of the Book-Entry Notes represented
by a Global Note, the Paying Agent will exchange such Global Note for two
Global Notes, one of which shall represent such Book-Entry Notes and shall be
canceled immediately after issuance and the other of which shall represent the
remaining Book-Entry Notes previously represented by the surrendered Global
Note and shall bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in DTC, acting on behalf of
such purchaser), such
21
<PAGE> 44
Participants and, in turn, the Presenting Agent may enter an SDFS deliver order
through DTC's Participant Terminal System debiting such Book-Entry Note to such
Agent's participant account and crediting such Book-Entry Note to the
participant account of the Paying Agent and shall notify the Paying Agent and
the Issuer thereof. Thereafter, the Paying Agent, (i) will immediately notify
the Issuer, once the Paying Agent has confirmed that such Book-Entry Note has
been credited to its participant account, and the Issuer shall immediately
transfer by Fedwire (in immediately available funds) to the Presenting Agent an
amount equal to the price of such Book-Entry Note which was previously sent by
wire transfer to the account of the Issuer maintained at Chemical Bank, and
(ii) the Paying Agent will deliver the withdrawal message and take the related
actions described in the preceding paragraph. Such debits and credits will be
made on the Settlement Date, if possible, and in any event not later than 5:00
p.m. on the following Business Day. If the fail shall have occurred for any
reason other than the Presenting Agent's gross negligence or willful
misconduct, including but not limited to failure of the Presenting Agent to
provide the Purchase Information to the Issuer or to provide a confirmation to
the purchaser, the Issuer will reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during the period when the funds were
credited to the account of the Issuer, or for any other cost or expense; and in
no event shall the Issuer be obligated to pay any commission, as contemplated
by the Agency Agreement, with respect to any fail.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Paying Agent will provide for the
authentication and issuance of a Global Note representing the other Book-Entry
Notes to have been represented by such Global Note and will make appropriate
entries in its records.
22
<PAGE> 45
EXHIBIT C
PURCHASE AGREEMENT
, 1996
J.C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of
the Securities described in the Agency Agreement dated , 1996 (the
"Agency Agreement"):
<TABLE>
<S> <C>
Principal Amount $______________________
Interest Rate ________%
Maturity Date _________________, 19__
Discount ________% of Principal Amount
Price to be paid to
Issuer [(in immediately
available funds)] $______________________
[(in New York Clearing
House (next day) funds)]
Commission to Agent $______________________
Settlement Date _______________________
</TABLE>
Except as otherwise expressly provided herein, all terms used herein
which are defined in the Agency Agreement shall have the same meanings as in
the Agency Agreement. The terms Agent and Agents, as used in the Agency
Agreement, shall be deemed to refer only to the undersigned for purposes of
this Agreement.
This Agreement incorporates by reference all of the provisions of the
Agency Agreement (including any Amendment entered into pursuant thereto by the
Issuer and the undersigned Agent, to the extent applicable), except provisions
of the Agency Agreement relating specifically to solicitation by the Agents, as
agents, and except that (i) the phrase "jointly with any other indemnifying
party similarly notified" in Section 7(c) and the last sentence of Section 7(d)
shall not be applicable; and (ii) the term "this Agreement", as used in Section
7(d) of the Agency Agreement, shall be deemed to refer to this Agreement (and
not the Agency Agreement) except that in the fifth sentence such term shall be
deemed to refer to the Agency Agreement. You and we agree to perform, to the
extent applicable, our respective duties and obligations specifically provided
to be performed by each of us in the Procedures.
<PAGE> 46
Our obligation to purchase Securities hereunder is subject to the
accuracy on the above Settlement Date of your representations and warranties
contained in Section 2 of the Agency Agreement (it being understood that such
representations and warranties shall be deemed to be made as of the date of
this Purchase Agreement and references to the Registration Statement and
Prospectus shall be deemed to relate to the Registration Statement and the
Prospectus as amended as of the date hereof and as of such Settlement Date) and
to your performance and observance of all covenants and agreements contained in
Sections 4 and 6 thereof. Our obligation hereunder is also subject to the
following conditions:
(a) the satisfaction, at such Settlement Date, of each of the
conditions set forth in subsections (a) and (b) and (d) through (g) of Section
5 of the Agency Agreement (it being understood that each document so required
to be delivered shall be dated such Settlement Date and that each such
condition and the statements contained in each such document that relate to the
Registration Statement or the Prospectus shall be deemed to relate to the
Registration Statement or the Prospectus, as the case may be, as amended or
supplemented as of the date hereof and at the time of settlement on such
Settlement Date and except that the opinion described in Section 5(d) shall be
modified so as to state that the Securities being sold on such Settlement Date,
when delivered against payment therefor as provided in this Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, subject only to the exceptions set forth in clause
(iii) of Section 5(d) of the Agency Agreement, and will conform in all material
respects to the description thereof contained in the Prospectus as amended or
supplemented at such Settlement Date;
(b) there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Issuer and its subsidiaries, taken as a whole, which, in our
judgment, materially impairs the investment quality of the Securities; and
(c) [such other conditions as may be agreed upon among the parties.]
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not offer or
sell, or enter into any agreement to sell, any debt securities of the Issuer in
the United States, other than sales of Securities, borrowings under your
revolving credit agreements and lines of credit, the private placement of
securities and issuances of your commercial paper.
If for any reason our purchase of the above Securities is not
<PAGE> 47
consummated, you shall remain responsible for the reasonable expenses to be
paid or reimbursed by you pursuant to Section 4 of the Agency Agreement and the
respective obligations of you and the undersigned pursuant to Section 7 shall
remain in effect. If for any reason the purchase by the undersigned of the
above Securities is not consummated other than because of a default by the
undersigned or a failure to satisfy a condition set forth in clause (iii), (iv)
or (v) of paragraph (b) above, you shall reimburse us, severally, for all
out-of-pocket expenses reasonably incurred by us in connection with the
offering of the above Securities and not otherwise required to be reimbursed
pursuant to Section 4 of the Agency Agreement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
executed counterparts shall together constitute one and the same Agreement.
[INSERT NAME OF PURCHASER]
By:__________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
J. C. Penney Company, Inc.
By:____________________________________
Name:
Title:
<PAGE> 1
[JC PENNEY LETTERHEAD]
Exhibit 5
June 26, 1996
Board of Directors
J. C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
Dear Sirs:
As General Counsel of J. C. Penney Company, Inc., a Delaware corporation
("Company"), I am familiar with the Restated Certificate of Incorporation of
the Company, and its Bylaws, as amended.
I am also familiar with the corporate proceedings heretofore taken and the
additional proceedings proposed to be taken in connection with the issuance and
sale from time to time of up to $1,500,000,000 aggregate principal amount of
debt securities ("Debt Securities") issuable under an Indenture dated as of
April 1, 1994 ("Indenture") between the Company and First Trust of California,
National Association, as Successor Trustee ("Trustee") to Bank of America
National Trust and Savings Association, each series of which will be offered on
terms to be determined at the time of sale. The Debt Securities may be offered
with warrants ("Warrants") to purchase Debt Securities, any such Warrants to be
issued pursuant to a warrant agreement ("Warrant Agreement") to be entered
between the Company and a warrant agent ("Warrant Agent") (Debt Securities and
Warrants being collectively called "Securities"). I have examined the
Registration Statement on Form S-3 in the form being filed by the Company with
the Securities and Exchange Commission on this date, for the registration under
the Securities Act of 1933, as amended, of the Securities for an offering to be
made on a continuous or delayed basis pursuant to the provisions of Rule 415.
I have also examined such other documents and records as I have deemed
appropriate for the purpose of this opinion.
Based upon the foregoing, I am of the opinion as follows:
(i) The execution and delivery of the Indenture has been validly
authorized, and the Indenture constitutes a valid and binding obligation of the
Company in accordance with its terms except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
<PAGE> 2
(ii) Subject to the proposed additional proceedings being taken as
now contemplated by the Company prior to the issuance of the Debt Securities,
when the Debt Securities, including the Debt Securities issuable upon due
exercise of the Warrants in accordance with the terms of the Warrant Agreement,
have been duly executed on behalf of the Company, authenticated by or on behalf
of the Trustee, issued and sold as described in the Registration Statement,
including the Prospectus and Prospectus Supplement relating thereto, and
delivered by the Company in accordance with the Indenture, such Debt Securities
will constitute valid and binding obligations of the Company in accordance with
their respective terms and the terms of the Indenture except as limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(iii) Subject to the proposed additional proceedings being taken as
now contemplated by the Company prior to the issuance of the Warrants, and to
the due execution and delivery of the Warrant Agreement relating to the
Warrants to be issued, when the warrant certificates evidencing such Warrants
("Warrant Certificates") shall have been duly executed on behalf of the Company
and countersigned by the Warrant Agent, issued and sold as described in the
Registration Statement, including the Prospectus and Prospectus Supplement
relating thereto, and such Warrant Certificates shall have been delivered by
the Company in accordance with the Warrant Agreement, the Warrant Certificates
will constitute valid and binding obligations of the Company in accordance with
their respective terms and the terms of the Warrant Agreement except as limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general equity principles.
I hereby consent to the reference to me under the heading "Validity of
Securities" in the Prospectus included in said Registration Statement and to
the filing of this opinion as an exhibit to said Registration Statement.
Very truly yours,
/s/ C. R. Lotter
C. R. Lotter
General Counsel
<PAGE> 1
Exhibit 23a
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of
J. C. Penney Company, Inc.
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
Our reports refer to the adoption of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, in 1993, Statement of Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities, in 1994, and Statement
of Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in 1995.
/S/ KPMG Peat Marwick LLP
Dallas, Texas
June 26, 1996
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT each of the undersigned directors
and officers of J. C. PENNEY COMPANY, INC., a Delaware corporation ("Company"),
which will file with the Securities and Exchange Commission, Washington, D. C.
("Commission"), under the provisions of the Securities Act of 1933, as amended,
a Registration Statement on Form S-3 (or any appropriate form then in effect)
for the registration of the Company's debt securities (which may include debt
securities, together with warrants or other rights to purchase or otherwise
acquire debt securities), hereby constitutes and appoints C. R. Lotter, D. A.
McKay, W. J. Alcorn, and R. B. Cavanaugh, and each of them, his or her true and
lawful attorneys-in-fact and agents, with full power to each of them to act
without the others, for him or her and in his or her name, place, and stead, in
any and all capacities, to sign said Registration Statement and Prospectus and
Prospectus Supplements, which are about to be filed, and any and all subsequent
amendments thereto (including, without limitation, any and all post-effective
amendments thereto ("Registration Statement")), and to file said Registration
Statement so signed, with all exhibits thereto, and any and all documents in
connection therewith, and to appear before the Commission in connection with
any matter relating to said Registration Statement, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully and to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney as of the 14th day of February, 1996.
<TABLE>
<S> <C>
/s/ W. R. Howell /s/ J. E. Oesterreicher
- --------------------------------------- --------------------------------------------
W. R. Howell J. E. Oesterreicher
Chairman of the Board; Vice Chairman of the Board
Director and Chief Executive Officer
(principal executive officer);
Director
/s/ W. B. Tygart /s/ D. A. McKay
- --------------------------------------- ---------------------------------------------
W. B. Tygart D. A. McKay
President and Chief Operating Officer; Senior Vice President and
Director Chief Financial Officer
(principal financial officer)
/s/ W. J. Alcorn
- ---------------------------------------
W. J. Alcorn
Vice President and Controller
(principal accounting officer)
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
/s/ M. A. Burns /s/ C. H. Chandler
- --------------------------------------- ---------------------------------------------
M. A. Burns C. H. Chandler
Director Director
/s/ V. E. Jordan, Jr. /s/ George Nigh
- --------------------------------------- ---------------------------------------------
V. E. Jordan, Jr. George Nigh
Director Director
/s/ J. C. Pfeiffer /s/ A. W. Richards
- --------------------------------------- ---------------------------------------------
J. C. Pfeiffer A. W. Richards
Director Director
/s/ C. S. Sanford, Jr. /s/ R. G. Turner
- --------------------------------------- ---------------------------------------------
C. S. Sanford, Jr. R. G. Turner
Director Director
/s/ J. D. Williams
- ---------------------------------------
J. D. Williams
Director
</TABLE>
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
__________________________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
__________________________________
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
NOT APPLICABLE 94-3160100
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification No.)
1 CALIFORNIA STREET, SUITE 400
SAN FRANCISCO, CALIFORNIA 94111
(Address of principal executive offices) (Zip code)
_________________________________
J. C. PENNEY COMPANY, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-5583779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6501 LEGACY DRIVE
PLANO, TEXAS 75024-3698
(Address of principal executive offices) (Zip code)
__________________________________
DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
1. GENERAL INFORMATION Furnish the following information as to
the Trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of
the Trustee, describe each such affiliation.
None
Items 3-15 are not applicable because to the best of the
Trustee's knowledge the obligor is not in default under
any Indenture for which the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part
of this statement of eligibility.
Each of the exhibits listed below, other than Exhibit 6 and 7,
are filed with Securities and Exchange Commission as exhibits to
Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, in connection with the Registration Statement of
Potlatch Corporation, File No. 33-50826, under the same exhibit
number and are incorporated herein by reference.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust
powers (included in Exhibits 1 and 2; no separate
instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321 (b) of
the Act.
7. Copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust of California, National Association, an Association
organized and existing under the laws of the United States, has duly caused
this statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested,
on the 26th day of June, 1996.
<TABLE>
<S> <C>
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
[SEAL]
/s/ Gretchen L. Middents
------------------------
Gretchen L. Middents
Assistant Vice President
</TABLE>
/s/ William W. MacMillan
- ------------------------
William W. MacMillan
Assistant Secretary
<PAGE> 4
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION hereby
consents that reports of examination of the undersigned by Federal, State,
Territorial or District authorities may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Dated: June 26, 1996
<TABLE>
<S> <C>
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
/s/ Gretchen L. Middents
------------------------
Gretchen L. Middents
Assistant Vice President
</TABLE>
<PAGE> 5
FIRST TRUST OF CALIFORNIA, N.A. Call Date: 03/31/96 ST-BK:61431 FFIEC 033
101 CALIFORNIA STREET, SUITE 1150 VENDOR ID: D CERT: 33626 PAGE RC-1
SAN FRANCISCO, CA 94111
Transit Number: 91000020
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1996
All schedules are to reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<CAPTION>
C200<-
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C><<C> <C>
1. Cash and balances due from depository institutions (from schedule RC-A): RCON
----
a. Noninterest-bearing balances and currency and coin (1)____________________ 0081. . 46,512 1.a
b. Interest-bearing balances (2)_____________________________________________ 0071. . 0 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)________________ 1754. . 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)______________ 1773. . 3,916 2.b
3. Federal funds sold and securities purchased under agreements to resell:
a. Federal funds sold_________________________________________________________ 0276. . 0 3.a
b. Securities purchased under agreements to resell____________________________ 0277. . 0 3.b
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCON
----
(from Schedule RC-C)______________________ 2122 . . 0 . . . . . . 4.a
b. LESS: Allowance for loan and lease losses_____ 3123 . . 0 . . . . . . 4.b
c. LESS: Allocated transfer risk reserve__________ 3128 . . 0 . . . . . . 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)_______________________ 2125. . 0 4.d
5. Trading assets________________________________________________________________ 3545. . 0 5.
6. Premises and fixed assets (including capitalized leases)_____________________ 2145. . 430 6.
7. Other real estate owned (from Schedule RC-M)_________________________________ 2150. . 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M)_______________________________________________________________ 2130. . 0 8.
9. Customers' liability to this bank on acceptances outstanding_________________ 2155. . 0 9.
10. Intangible assets (from Schedule RC-M)_______________________________________ 2143. . 85,164 10.
11. Other assets (from Schedule RC-F)____________________________________________ 2160. . 8,501 11.
12 Total assets (sum of items 1 through 11)______________________________________ 2170. . 144,523 12.
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Schedule RC - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of RCON
----
columns A and C from Schedule RC-E)_________________________________ 2200. . 0 13.a
RCON
----
(1) Noninterest-bearing (1)_______________________ 6631. . 0 . . . 13.a.1
(2) Interest-bearing______________________________ 6636. . 0 . . . 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBF's______ . . .
(1) Noninterest-bearing_____________________________________________ . . .
(2) Interest-bearing________________________________________________ . . .
14. Federal funds purchased and securities sold under agreements to repurchase:
a. Federal funds purchased______________________________________________ 0278. . 0 14.a
b. Securities sold under agreements to repurchase_______________________ 0279. . 0 14.b
15. a. Demand Notes issued to the U.S. Treasury_____________________________ 2840. . 0 15.a
b. Trading liabilities__________________________________________________ 3548. . 0 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less________________________ 2332. . 345 16.a
b. With a remaining maturity of more than one year______________________ 2333. . 0 16.b
17. Mortgage indebtedness and obligations under capitalized leases__________ 2910. . 0 17.
18. Bank's liability on acceptances executed and outstanding________________ 2920. . 0 18.
19. Subordinated notes and debentures_______________________________________ 3200. . 0 19.
20. Other liabilities (from Schedule RC-G)__________________________________ 2930. . 21,441 20.
21. Total liabilities (sum of items 13 through 20) _________________________ 2948. . 21,786 21.
22. Limited-life preferred stock and related surplus________________________ 3282. . 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus___________________________ 3838. . 0 23.
24. Common stock____________________________________________________________ 3230. . 1,000 24.
25. Surplus(exclude all surplus related to preferred stock)_________________ 3839. . 126,260 25.
26. a. Undivided profits and capital reserve________________________________ 3632. . (4,523) 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434. . 0 26.b
27. Cumulative foreign currency translation adjustments . . . 27.
28. Total equity capital (sum of items 23 through 27)_______________________ 3210 122,737 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum
of items 21, 22, and 28)________________________________________________ 3300. . 144,523 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external auditors as of any date during
1995____________________________________________________________________ 6724. . 2 M.1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state charter-
ing authority)
</TABLE>
#
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
