<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) - February 20, 1997
J. C. PENNEY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-777 13-5583779
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
6501 Legacy Drive
Plano, Texas 75024-3698
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (972) 431-1000
<PAGE> 2
Item 5. Other Events.
On February 20, 1997, J. C. Penney Company, Inc. (the "Company")
entered into an Underwriting Agreement with Credit Suisse First Boston
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., and Morgan Stanley & Co. Incorporated (collectively, the
"Underwriters") for the sale of $500,000,000 aggregate principal amount of its
7 5/8% Debentures Due 2097 (the "Debentures") at a price to the public of 100%
of the principal amount thereof. The closing of the sale was held on February
25, 1997. The Debentures are being issued pursuant to Registration Statement
No. 333-06883, which was filed with the Securities and Exchange Commission (the
"Commission") on June 26, 1996 and became effective on July 2, 1996, and the
Prospectus dated July 2, 1996, as supplemented by the Prospectus Supplement
dated February 20, 1997, which were filed with the Commission on February 21,
1997. Pursuant to the Registration Statement, debt securities were registered
for offering under the Securities Act of 1933, as amended, on a continuous or
delayed basis pursuant to the provisions of Rule 415.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1 Underwriting Agreement among J. C. Penney Company,
Inc. and the Underwriters (dated February 20, 1997).
4(a) Form of 7 5/8% Debenture.
5 Opinion of C. R. Lotter with respect to the validity
of the Debentures.
23(a) Consent of C. R. Lotter (included in Exhibit 5)
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
J. C. PENNEY COMPANY, INC.
/s/ R. B. Cavanaugh
----------------------------
R. B. Cavanaugh
Vice President and Treasurer
Date: February 25, 1997
<PAGE> 4
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
1 Underwriting Agreement among J. C. Penney Company, Inc. and
the Underwriters (dated February 20, 1997).
4(a) Form of 7 5/8% Debenture.
5 Opinion of C. R. Lotter with respect to the validity of the
Debentures.
23(a) Consent of C. R. Lotter (included in Exhibit 5)
</TABLE>
<PAGE> 1
EXHIBIT 1
[CONFORMED COPY]
J. C. PENNEY COMPANY, INC.
UNDERWRITING AGREEMENT
February 20, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, N.Y. 10010
Dear Sirs:
1. Introductory. J. C. PENNEY COMPANY, INC., a Delaware corporation
("Company"), proposes to issue and sell the debt securities described in
Schedule B hereto (the "Debt Securities"). The Debt Securities will be issued
under an 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 (the "Indenture"). The several
Underwriters set forth in Schedule A are hereinafter referred to as
"Underwriters".
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with the several Underwriters that:
(a) A registration statement (No. 333-06883), including a prospectus,
relating to the Debt Securities has been filed with the Securities and
Exchange Commission ("Commission") and has become effective. Such
registration statement, as amended to the date hereof (but excluding any
amendments relating to securities which are not covered by this Agreement),
is hereinafter referred to as the "Registration Statement", and the
prospectus contained in the Registration Statement, as amended and
supplemented by a Prospectus Supplement of even date herewith, including
all material incorporated by reference therein, as the "Prospectus".
(b) On the effective date of the Registration Statement, as referred
to in Section 2(a) hereof, the Registration Statement conformed in all
material respects to the requirements of the Securities Act of 1933
("Act"), the Trust Indenture Act of 1939 ("Trust Indenture Act"), and the
published rules and regulations ("Rules and Regulations") of the
Commission, 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 date hereof, the
Registration Statement and the Prospectus conform in all material respects
to the requirements of the Act, the Trust Indenture Act and the Rules and
Regulations and none of such documents includes any untrue statement of a
material fact or omits 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 (i) statements in or omissions from any of such
documents based upon written information furnished to the Company by an
Underwriter for use therein, or (ii) statements or omissions in that part
of the Registration Statement which constitutes the Statement of
Eligibility and Qualification under the Trust Indenture Act (Form T-1) of
the Trustee.
3. Purchase, Sale and Delivery of Debt Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at the purchase prices set forth in Schedule B hereto, plus
accrued interest, if any, from February 25, 1997 to the Closing Date as defined
below, the respective principal amounts of Debt Securities set forth in Schedule
A hereto.
<PAGE> 2
The Company will deliver the Debt Securities to the Underwriters, at the
office of The Chase Manhattan Bank, 450 West 33rd Street, Fifteenth Floor, New
York, New York 10001, Attention: Guy Marzella, against payment of the purchase
price by wire transfer to an account previously designated to Credit Suisse
First Boston Corporation ("Credit Suisse First Boston") by the Company at a bank
acceptable to Credit Suisse First Boston or by official bank check or checks in
federal reserve (same day) funds drawn to the order of the Company, at the
office of the Company, 6501 Legacy Drive, Plano, Texas 75024-3698, at 9:00 A.M.,
Dallas, Texas Time, on February 25, 1997 or at such other time not later than
seven full business days thereafter as you and the Company determine, such time
being herein referred to as the "Closing Date". The Debt Securities so to be
delivered will be, unless otherwise mutually agreed by the Underwriters and the
Company, in fully registered form, in such denominations and registered in such
names as the Underwriters request, and will be made available for checking and
packaging at the above office of The Chase Manhattan Bank, at least 24 hours
prior to the Closing Date.
4. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will advise the Underwriters promptly of any amendment
or supplementation of the Registration Statement or the Prospectus with
respect to the Debt Securities, and of the institution by the Commission of
any stop order proceedings in respect of the Registration Statement, 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 Debt Securities
is required to be delivered under the Act any event occurs as a result of
which the Prospectus as then amended or supplemented with respect to such
Debt Securities would include an 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, in light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend
or supplement the Registration Statement or the Prospectus to comply with
the Act, the Company promptly will prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or
effect such compliance.
(c) Not later than 90 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during which the
Closing Date occurs, the Company will make generally available to its
securityholders an earnings statement covering such 12-month period which
will satisfy the provisions of Section 11(a) of the Act.
(d) The Company will furnish to the Underwriters copies of the
Registration Statement (one of which, to be delivered to counsel for the
Underwriters, will be signed and include all exhibits), the Prospectus and
supplements relating to the Debt Securities, in each case as soon as
available and in such quantities as the Underwriters reasonably request.
(e) The Company will use its best efforts to arrange for the
qualification of the Debt Securities for sale, and the determination of
their eligibility for investment, under the laws of such jurisdictions as
the Underwriters reasonably designate and will diligently endeavor to
continue such qualifications in effect so long as required for the
distribution of the Debt Securities; provided, however, that the Company
shall not be required to register or qualify, or to maintain qualification,
as a foreign corporation nor, except as to matters and transactions
relating to the offer or sale of the Debt Securities, consent to service of
process generally in any state.
(f) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with qualification of the Debt Securities
for sale, and determination of their eligibility for investment, under the
laws of such jurisdictions as the Underwriters reasonably designate and the
printing of memoranda relating thereto, for any fees charged by investment
rating agencies for the rating of the Debt Securities and for reasonable
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
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<PAGE> 3
(g) So long as any of the Debt Securities are outstanding, the Company
will furnish to the Underwriters (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 available, a copy of each report or definitive proxy
statement of the Company filed with the Commission under the Securities
Exchange Act of 1934 or mailed to stockholders, and (iii) from time to
time, such other information concerning the Company as the Underwriters may
reasonably request.
5. Conditions of Obligations of the Underwriters. The obligations of the
Underwriters to purchase and pay for the Debt Securities will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) The Underwriters shall have received letters of KPMG Peat Marwick
LLP, Dallas, Texas, and KPMG Peat Marwick LLP, Tampa, Florida, each dated
the Closing Date, in form and substance satisfactory to them, with respect
to the financial statements and certain financial information contained in
or incorporated by reference into the Registration Statement and the
Prospectus. Such letters shall be in substantially the form, and contain
substantially the information, as those letters heretofore furnished by
KPMG Peat Marwick LLP in connection with other underwritten offerings by
the Company.
(b) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted, or to the
knowledge of the Company or the Underwriters, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company and its subsidiaries, taken as a whole, which, in the
judgment of a majority in interest of the Underwriters, materially impairs
the investment quality of the Debt Securities.
(d) The Underwriters shall have received an opinion of C. R. Lotter,
General Counsel of the Company, dated the Closing Date, to the effect that:
(i) The Company 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 business as described in the Prospectus; and the Company 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
and has been duly qualified under the Trust Indenture Act; the Debt
Securities have been duly authorized, executed, authenticated, issued
and delivered and conform in all material respects to the description
thereof contained in the Prospectus; and the Indenture and the Debt
Securities constitute valid and legally binding obligations of the
Company, enforceable in accordance with their 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) 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 or sale of the Debt Securities by the
Company, except such as have been obtained and made under the Act and
the Trust Indenture Act and such as may be required under state
securities laws;
(iv) The execution, delivery and performance of the Indenture and
this Agreement and the issuance and sale of the Debt Securities and
compliance with the terms and provisions thereof will not result in a
breach or 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
Company or any of its property or any agreement or instrument to which
the
3
<PAGE> 4
Company is a party or by which the Company is bound or to which any of
the property of the Company is subject, or the charter or bylaws of the
Company, and the Company has full power and authority to authorize,
issue and sell the Debt Securities as contemplated by this Agreement;
(v) The Registration Statement has become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending under the Act; the Registration Statement and the Prospectus, as
of the date of this Agreement, comply 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 either that the
Registration Statement, as of such 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 not
misleading or that the Prospectus contains any untrue statement of a
material fact or omits to state 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; 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; and
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Underwriters shall have received from Dewey Ballantine,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such of the matters stated in paragraph (d) hereof
and other related matters as the Underwriters may reasonably require, and
the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Underwriters shall have received a certificate of the Chairman
of the Board and Chief Executive Officer or any Vice President and a
principal financial or accounting officer of the Company, dated the Closing
Date, in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct, that the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission, and that, 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 Company and its subsidiaries, taken as a whole, except as
set forth or contemplated in the Prospectus or as described in such
certificate.
The Company will furnish the Underwriters with such conformed copies of
such opinions, certificates, letters and documents as the Underwriters
reasonably request.
6. Indemnification. (a) The Company will indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person 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
4
<PAGE> 5
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 Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable 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
Company by any Underwriter for use therein, or (ii) in that part of the
Registration Statement constituting the Statement of Eligibility and
Qualification under the Trust Indenture Act (Form T-1) of the Trustee. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company or any
such director, officer or controlling person 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, 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 Company by such Underwriter for use therein; and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 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 this
Section, 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 this
Section. 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 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 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 recovery is not available under the foregoing indemnification
provisions of this Section, 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 Debt 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
5
<PAGE> 6
considerations appropriate under the circumstances. The Company and the
Underwriters 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
Underwriters were treated as one entity for such purpose). No Underwriter or any
person controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the total public offering price of the
Debt Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages which such Underwriter and its controlling
persons have otherwise been required to pay in respect of the same claim or any
substantially similar claim. The Underwriters' obligations to contribute are
several in proportion to their respective underwriting obligations and not
joint.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Debt Securities hereunder and the aggregate
principal amount of the Debt Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of the Debt Securities, Credit Suisse First Boston may make
arrangements satisfactory to the Company for the purchase of such Debt
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Debt Securities which such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate principal amount of Debt Securities with respect to which such default
or defaults occur is more than 10% of the total principal amount of the Debt
Securities and arrangements satisfactory to Credit Suisse First Boston and the
Company for the purchase of such Debt Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 8 hereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company and of the Underwriters 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 Underwriter
or the Company or any of its officers or directors or any controlling person,
and will survive delivery of and payment for the Debt Securities. If this
Agreement is terminated pursuant to Section 7 hereof or if for any reason the
purchase of the Debt Securities by the Underwriters pursuant to this Agreement
is not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4 hereof and the respective
obligations of the Company and the Underwriters pursuant to Section 6 hereof
shall remain in effect. If for any reason, the purchase of the Debt Securities
by the Underwriters is not consummated other than because of the termination of
this Agreement pursuant to Section 7, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by them in connection with the offering of the Debt
Securities.
9. Notices. All communications hereunder will be in writing and if sent to
the Underwriters will be mailed, delivered or telegraphed and confirmed c/o
Credit Suisse First Boston, Attention: Investment Banking
Department -- Transactions Advisory Group to the address first above written and
if sent to the Company will be similarly sent, 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 of the Secretary.
10. Successors. This Underwriting Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 6 hereof,
and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Credit Suisse First Boston, as
representative, will act for the several Underwriters in connection with the
offering of the Debt Securities, and any action under this Agreement taken by
the Underwriters jointly or by Credit Suisse First Boston will be binding upon
all the Underwriters.
12. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
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<PAGE> 7
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
J. C. PENNEY COMPANY, INC.
By /s/ ROBERT B. CAVANAUGH
-----------------------------------
Vice President and Treasurer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
By CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ DAVID RUSSELL
-------------------------------------------------
Managing Director
Acting on behalf of itself and as representative of
the several Underwriters.
7
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SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
7 5/8% DEBENTURES
UNDERWRITER DUE 2097
----------- -------------------
<S> <C>
Credit Suisse First Boston Corporation...................... $125,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 125,000,000
J.P. Morgan Securities Inc. ................................ 125,000,000
Morgan Stanley & Co. Incorporated........................... 125,000,000
------------
Total............................................. $500,000,000
============
</TABLE>
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<PAGE> 9
SCHEDULE B
DESCRIPTION OF DEBT SECURITIES
<TABLE>
<S> <C>
Title of Securities: 7 5/8% Debentures Due 2097
Aggregate Principal Amount: $500,000,000
Interest rate: 7 5/8% per annum commencing February 25, 1997
Interest payment dates: March 1 and September 1 commencing September 1, 1997
Maturity date: March 1, 2097, subject to a conditional right to shorten
the maturity upon the occurrence of certain tax events
Purchase price: 98.875%
Initial public offering price: 100%
Dealers' concession: .675%
Reallowance: .25%
Redemption: Redeemable in whole or in part, at the option of the
Company at any time, at a redemption price equal to the
greater of (i) 100% of principal amount and (ii) the sum of
the present values of the Remaining Scheduled Payments
discounted to the redemption date on a semiannual basis at
the Treasury Rate plus 20 basis points, together in either
case with accrued interest to the date of redemption.
Redeemable in whole (but not in part) upon the occurrence
of certain tax events, and under certain circumstances, at
a redemption price equal to the greater of (i) 100% of
principal amount and (ii) the sum of the present values of
the Remaining Scheduled Payments discounted to the
redemption date on a semiannual basis at the Treasury Rate
plus 40 basis points, together in either case with accrued
interest to the date of redemption.
</TABLE>
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<PAGE> 1
EXHIBIT 4(a)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF
THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
$ No
---------- -----------------
CUSIP: 708160BL9
---------
J. C. PENNEY COMPANY, INC.
7 5/8% Debenture Due 2097
J. C. Penney Company, Inc., a Delaware Corporation (hereinafter called
the Company), for value received, promises to pay to or registered
assigns, the principal sum of ___________________ Dollars, on March 1, 2097,
and to pay interest on said principal sum, semiannually on March 1 and
September 1 of each year, at the rate of 7 5/8% per annum, from the March 1 or
the September 1, as the case may be, next preceding the date of this Debenture
to which interest has been paid or duly provided for, unless the date hereof is
a date to which interest has been paid or duly provided for, in which case from
the date of this Debenture, or unless no interest has been paid on the
Debentures, in which case from February 25, 1997, until the principal hereof
becomes due and payable, and at such rate on any overdue principal and (to the
extent that the payment of such interest shall be legally enforceable) on any
overdue instalment of interest. Notwithstanding the foregoing, when there is no
existing default in the payment of interest on the Debentures, if the date
hereof is after a Regular Record Date, which shall be the close of business on
February 15 or August 15 (whether or not a Business Day), as
<PAGE> 2
the case may be, next preceding an Interest Payment Date, and before the next
succeeding Interest Payment Date, this Debenture shall bear interest from such
Interest Payment Date; provided, however, that if the Company shall default in
the payment of interest due on such Interest Payment Date, then this Debenture
shall bear interest from the next preceding Interest Payment Date to which
interest has been paid or duly provided for, or if no interest has been paid on
the Debentures, from February 25, 1997. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Debenture
(or one or more Predecessor Debentures) is registered at the Regular Record
Date for such Interest Payment Date. The principal of (and premium, if any)
and interest on this Debenture are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts, at the agency or agencies maintained by the
Company for such purpose; 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 such address shall appear in the Security Register. Any
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. Notwithstanding anything else contained herein, if this
Debenture is a Global Security and held in book-entry form through the
facilities of the Depository, payments on this Debenture will be made to the
Depository or its nominee in accordance with the arrangements then in effect
between the Trustee and the Depository. If a Tax Event (as defined below)
occurs, the Company shall have the right to advance the Stated Maturity as
provided for below.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof, which shall have the same effect as though fully
set forth at this place.
Unless one of the certificates of authentication hereon has been
executed by or on behalf of the Trustee by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
<PAGE> 3
IN WITNESS WHEREOF, J. C. Penney Company, Inc. has caused the
execution hereof in its corporate name by its duly authorized officers.
J. C. PENNEY COMPANY, INC.
By
-------------------------
CHAIRMAN OF THE BOARD
By
---------------------------
SECRETARY
<PAGE> 4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the 7 5/8% Debentures Due 2097
referred to in the within-mentioned Indenture.
FIRST TRUST OF CALIFORNIA
NATIONAL ASSOCIATION, AS TRUSTEE
By
---------------------------------
Authorized Officer
<PAGE> 5
[FORM OF ALTERNATE CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the 7 5/8% Debentures Due 2097 referred to in the
within-mentioned Indenture.
FIRST TRUST OF CALIFORNIA
NATIONAL ASSOCIATION, AS TRUSTEE
THE CHASE MANHATTAN BANK
By
-------------------------------
Authenticating Agent
By
-------------------------------
Authorized Officer
[FORM OF REVERSE OF DEBENTURE]
J. C. PENNEY COMPANY, INC.
7 5/8% Debenture Due 2097
This Debenture is one of a duly authorized issue of unsecured
debentures, notes or other evidences of indebtedness of the Company (herein
called the "Securities") of the series hereinafter specified, all issued and to
be issued under an Indenture dated as of April 1, 1994 (herein called the
"Indenture"), between the Company and Bank of America National Trust and
Savings Association, Trustee (herein called the "Trustee", which term includes
any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for the statement of
the respective rights thereunder of the Company, the Trustee and the Holders of
the Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. The Securities, which are unlimited in aggregate
principal amount, may be issued in one or more series, which different series
may be issued in various aggregate principal amounts, may mature at different
times, may bear interest (if any) at different rates, may be subject to
different redemption provisions (if any), may be subject to different sinking,
purchase or analogous funds (if any), may be subject to different covenants and
Events of Default and may otherwise vary as in the Indenture provided. This
Debenture is one of a series of the Securities designated as the 7 5/8%
Debentures Due 2097 (herein called the "Debentures"), limited in aggregate
principal amount to $500,000,000.
<PAGE> 6
On and after February 25, 1997, the Debentures may be redeemed, at the
option of the Company, as a whole or from time to time in part, on any date
prior to Stated Maturity, upon not less than 30 nor more than 60 days' prior
notice given as provided in the Indenture, at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Debentures to be redeemed
and (ii) the sum of the present values of the Remaining Scheduled Payments
thereon discounted to the date of redemption on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20
basis points, together in either case with accrued interest on the principal
amount being redeemed to the Redemption Date.
In addition, if a Tax Event (as defined below) occurs and in the
opinion of nationally recognized independent tax counsel, there would,
notwithstanding any shortening of the maturity of the Debentures, be more than
an insubstantial risk that interest paid by the Company on the Debentures is
not, or will not be, deductible, in whole or in part, by the Company for United
States federal income tax purposes, the Company will have the right, within 90
days following the occurrence of such Tax Event, to redeem the Debentures in
whole (but not in part), on not less than 30 or more than 60 days' prior notice
mailed to the Holders thereof, at a Redemption Price equal to the greater of
(i) 100% of the principal amount of the Debentures and (ii) the sum of the
present values of the Remaining Scheduled Payments thereon discounted to the
Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 40 basis points, together, in
either case with accrued interest on the principal amount being redeemed to the
Redemption Date.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture may be registered on the
Security Register, upon surrender of this Debenture for registration of
transfer at one of the agencies maintained by the Company for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar (if other than the
Company) duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures, of authorized denominations
and for the same aggregate principal, will issued to the designated transferee
or transferees.
The Debentures are issuable only as registered Debentures without
coupons in the denominations of $1000 and any integral multiple thereof. As
provided in the Indenture, Debentures are exchangeable for a like aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the absolute
owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Debenture be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Upon the occurrence of a Tax Event, the Company shall have the right,
without the
<PAGE> 7
consent of the Holders of the Debentures, to advance the Stated Maturity of
all, but not less than all, of the Debentures to the extent required, in the
written opinion of a nationally recognized independent tax counsel experienced
in such matters, such that, after advancing the Stated Maturity, interest paid
on the Debentures will be deductible for United States federal income tax
purposes.
In the event that the Company elects to exercise its right to advance
the Stated Maturity of the Debentures on the occurrence of a Tax Event, the
Company shall mail a notice of the advanced Stated Maturity to each Holder
hereof in the manner provided in the Indenture by first-class mail not more
than 60 days after the occurrence of such Tax Event, stating the new Stated
Maturity of the Debentures. Such notice shall be effective immediately upon
mailing.
"Tax Event" means that the Company shall have received the written
opinion of a nationally recognized independent tax counsel to the effect that,
on or after the date of the Debentures' issuance, as a result of (a) any
amendment to, clarification of, or change in any law, or any regulation
thereunder, of the United States, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, including any
notice or announcement of intent to adopt or promulgate any ruling, regulatory
procedure or regulation (an "Administrative or Judicial Action"), or (c) any
amendment to, clarification of, or change in the official position with respect
to or any interpretation of such Administrative or Judicial Action that differs
from the theretofore generally accepted position, in each case, on or after,
the date of the issuance of the Debentures, such change in tax laws or
regulations creates a more than insubstantial risk that interest paid by the
Company on the Debentures is not, or will not be, deductible, in whole or in
part, by the Company for United States federal income tax purposes.
If an Event of Default with respect to the Debentures shall occur and
be continuing, the principal of all the Debentures may be declared due and
payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of any series under the
Indenture at any time by the Company with the consent of the Holders of 66 2/3%
(unless a different percentage is specified with respect to any series of
Securities, in which case, as to such series, the percentage so specified) in
aggregate principal amount of the Outstanding Securities of each series
affected by any such amendment or modification. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Debentures at the time Outstanding, on behalf of the
Holders of all the Debentures, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Debenture
shall be conclusive and binding upon such Holder and upon all future Holders of
this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest, on this Debenture at the
<PAGE> 8
times, places and rate, and in the coin or currency, herein prescribed.
No recourse shall be had for the payment of the principal of (or
premium, if any) or interest on this Debenture, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or any
successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE> 1
EXHIBIT 5
February 25, 1997
Board of Directors
J. C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
Ladies and Gentlemen:
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 taken in connection
with the sale of $500,000,000 aggregate principal amount of 7 5/8% Debentures
Due 2097 (the "Debentures") to be issued under an Indenture, dated as of April
1, 1994 ("Indenture"), between the Company and First Trust of California,
National Association, Successor Trustee to Bank of America National Trust and
Savings Association ("Successor Trustee"), which Indenture relates to the
issuance and sale from time to time of debt securities, each series of which is
to be offered on terms to be determined at the time of sale. I have examined
the Registration Statement on Form S-3 (Commission File No. 333-06883) filed by
the Company with the Securities and Exchange Commission ("Commission") on June
26, 1996 ("Registration Statement"), which became effective on July 2, 1996,
for the registration under the Securities Act of 1933, as amended ("Act"), of
$1,500,000,000 aggregate principal amount of debt securities (all of which debt
securities may be offered with warrants to purchase debt securities) to be made
on a continuous or delayed basis pursuant to the provisions of Rule 415. I
have also examined a Prospectus Supplement dated February 20, 1997 (to the
Prospectus dated July 2, 1996 which was included in the Registration Statement)
relating to the Debentures in the form filed with the Commission pursuant to
Rule 424(b)(5) and such other documents and records as I have deemed
appropriate for purposes of this opinion.
Based upon the foregoing, I am of the opinion as follows:
(i) The execution and delivery of the Indenture and the issuance
and sale of the Debentures have been validly authorized by the Company
and the Indenture constitutes a valid and binding obligation of the
Company 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.
(ii) The Debentures, when duly executed on behalf of the Company,
authenticated by or on behalf of the Successor Trustee, and sold by
the Company will be validly issued and will constitute valid and
binding obligations of the Company in accordance with their terms and
the terms of the Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability affecting creditors' rights and to general
equity principles.
<PAGE> 2
I hereby consent to the reference to me under the heading "Validity of
Securities" in the Prospectus included in said Registration Statement and in
the heading "Validity of Debentures" in the Prospectus Supplement.
Very truly yours,
/s/ C. R. Lotter
C. R. Lotter
General Counsel
