<PAGE> 1
Registration No. 33-64973
As filed with the Securities and Exchange Commission on January 22, 1996
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_________________________
FEDERATED DEPARTMENT STORES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 5311 13-3324058
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
151 West 34th Street
New York, New York 10001
(212) 695-4400
and
7 West Seventh Street
Cincinnati, Ohio 45202
Telephone (513) 579-7000
(Principal Executive Offices)
Dennis J. Broderick, Esq.
Senior Vice President, General Counsel and Secretary
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, Ohio 45202
(513) 579-7000
(Agent for Service)
_________________________
Copy to:
Robert A. Profusek, Esq.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
32nd Floor
New York, New York 10022
Telephone: (212) 326-3939
_________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of the Registration Statement, as
determined by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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 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. [X]
_________________________
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of securities to Amount to be Proposed Proposed maximum Amount of
be registered registered(1) maximum offering aggregate registration
price per offering fee
unit(1)(2) price(1)(2)(3)(4)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(5) } } } }
Common Stock, par value $.01 per share(6) } } } }
Preferred Stock, par value $.01 per share(5) } } } }
Warrants(5) } } } }
} } }
} }
Total $1,000,000,000 $1,000,000,000 $1,000,000,000 $344,827(7)
</TABLE>
(1) In United States dollars or the equivalent thereof in any other
currency, currency unit or units, or composite currency or currencies.
Such amount represents the aggregate initial offering price for the
securities registered hereunder and the exercise price for any
securities issuable upon exercise of Warrants.
(2) Not specified as to each class of securities to be registered,
pursuant to General Instruction II.D. of Form S-3.
(3) Estimated for the sole purpose of computing the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933. The
proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(4) The number of shares of Common Stock registered hereunder is limited
to that which is permissible under Rule 415(a)(4) of the Securities
Act of 1933.
(5) Also includes such indeterminate prinicpal amount of Debt Securities
or such indeterminate number of shares of Preferred Stock or Common
Stock (including rights to purchase Series A Junior Participating
Preferred Stock) as may be issued upon conversion, exchange or
exercise of any Debt Securities, Preferred Stock or Warrants that
provide for conversion, exchange or exercise into or for such other
securities.
(6) Includes rights to purchase Series A Junior Participating Preferred
Stock. Prior to the occurrence of certain events, purchase rights for
units of Series A Junior Participating Preferred Stock will not be
evidenced separately from the Common Stock.
(7) Previously paid in full.
_________________________
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
WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 3
PROSPECTUS
$1,000,000,000
FEDERATED DEPARTMENT STORES, INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
Federated Department Stores, Inc. (the "Company") may offer from time
to time, together or separately, (i) debt securities ("Debt Securities")
consisting of notes, debentures, or other evidences of indebtedness in one or
more series, (ii) shares of its Common Stock, par value $.01 per share (the
"Common Stock"), (iii) shares of its Preferred Stock, par value $.01 per share
(the "Preferred Stock"), and (iv) warrants to purchase Debt Securities, Common
Stock, or Preferred Stock, or any combination thereof, as may be designated by
the Company at the time of the offering (the "Warrants") in amounts, at prices,
and on terms to be determined at the time of the offering. The Debt
Securities, Common Stock, Preferred Stock, and Warrants are collectively called
the "Securities".
The Securities may be offered in separate series or issuances at an
aggregate initial public offering price not to exceed $1,000,000,000 or, if
applicable, the equivalent thereof in other currencies, at prices, and on terms
to be determined at the time or times of offering.
The specific terms of the Securities with respect to which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement and include, where applicable, (i) in the case of Debt Securities,
the specific designation, aggregate principal amount, purchase price, maturity,
rate (or method of calculation thereof) and time of payment of interest, if
any, any conversion or exchange provisions, any redemption provisions, any
subordination provisions, and any other specific terms of the Debt Securities
offered hereby not set forth herein under the caption "Description of Debt
Securities" in this Prospectus, and any listing thereof on a securities
exchange; (ii) in the case of Common Stock, the number of shares and any
initial public offering price; (iii) in the case of Preferred Stock, the number
of shares, the specific title, the aggregate amount, any dividend (including
the method of calculating payment of dividends), seniority, liquidation,
redemption, voting and other rights, any terms for any conversion or exchange
into other Securities, any listing on a securities exchange, the initial public
offering price, and any other terms; and (iv) in the case of Warrants, the
designation and number, the exercise price, any listing of the Warrants or the
underlying Securities on a securities exchange, and any other terms in
connection with the offering, sale and exercise of the Warrants.
The Company's Common Stock is listed on the New York Stock Exchange
(the "NYSE") under the trading symbol "FD." Any Common Stock sold pursuant to a
Prospectus Supplement will be listed on the NYSE, subject to official notice of
issuance.
Any statement contained in this Prospectus will be deemed to be
modified or superseded by any inconsistent statement contained in the
accompanying Prospectus Supplement.
SEE "RISK FACTORS" BEGINNING AT PAGE 3 HEREOF FOR A DESCRIPTION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN
THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 4
The Securities will be sold either through underwriters, dealers, or
agents or directly by the Company. The accompanying Prospectus Supplement sets
forth the names of any underwriters, dealers, or agents involved in the sale of
the Securities in respect of which this Prospectus is being delivered, the
proposed amounts, if any, to be purchased by underwriters, and the
compensation, if any, of such underwriters, dealers, or agents.
_____________________________
This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
_____________________________
THE DATE OF THIS PROSPECTUS IS JANUARY 22, 1996.
<PAGE> 5
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED HEREIN OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IF
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements, and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
Regional Offices located at 7 World Trade Center, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Common Stock and certain other securities of
the Company are listed on the NYSE. Reports and other information concerning
the Company may also be inspected and copied at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") filed under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement, which may
be inspected and copied at, or obtained from, the Commission or the NYSE in the
manner described above.
_____________________________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
January 28, 1995 (File No. 1-3536) (the "1994 Form 10-K"), the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended April 29, 1995
(the "First Quarter Form 10-Q"), July 29, 1995 (the "Second Quarter Form
10-Q"), and October 28, 1995 (the "Third Quarter Form 10-Q"), the Company's
Current Reports on Form 8-K dated September 21, 1995, September 22, 1995,
September 26, 1995, September 27, 1995, October 4, 1995, and October 11, 1995,
and all reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
pursuant hereto are incorporated herein by reference.
Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified will not be deemed to
constitute a part of this Prospectus, except as so modified, and any statement
so superseded will not be deemed to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Federated Department Stores, Inc., 7 West Seventh Street, Cincinnati, Ohio
45202, Attention: Investor Relations (telephone: (513) 579-7780).
-2-
<PAGE> 6
RISK FACTORS
The Securities are subject to a number of material risks, including
those enumerated below. Investors should carefully consider the risk factors
enumerated below together with all of the information set forth or incorporated
by reference in this Prospectus or the accompanying Prospectus Supplement in
determining whether to purchase any of the Securities.
BUSINESS FACTORS AND COMPETITIVE CONDITIONS
The retailing industry is and will continue to be intensely
competitive. The Company's stores will face increasing competition not only
with other department stores in the geographic areas in which they operate, but
also with numerous other types of retail outlets, including specialty stores,
general merchandise stores, off-price and discount stores, new and established
forms of home shopping (including mail order catalogs, television, and computer
services), and manufacturer outlets.
SEASONAL NATURE OF THE DEPARTMENT STORE BUSINESS
The department store business is seasonal in nature, with a high
proportion of sales and operating income generated in November and December.
Working capital requirements fluctuate during the year, increasing somewhat in
mid-Summer in anticipation of the Fall merchandising season and increasing
substantially prior to the Christmas season as significantly higher inventory
levels are necessary.
LEVERAGE; RESTRICTIVE COVENANTS
The Company's consolidated indebtedness is and will continue to be
greater than its shareholders' equity. As of October 28, 1995, the Company had
a total of $6,884.8 million of consolidated indebtedness. Certain of the debt
instruments to which the Company is a party contain a number of restrictive
covenants and events of default, including covenants limiting capital
expenditures, incurrence of debt, and sales of assets. In addition, under
certain of its debt instruments, the Company is required to achieve certain
financial ratios, some of which become more restrictive over time, and a
substantial portion of the Company's indebtedness is secured by the capital
stock or assets of various subsidiaries of the Company or has been incurred by
the Company's subsidiaries. Among other consequences, the leverage of the
Company and such restrictive covenants and other terms of the Company's debt
instruments could impair the Company's ability to obtain additional financing
in the future, to make acquisitions, and to take advantage of significant
business opportunities that may arise. In addition, the Company's leverage may
increase its vulnerability to adverse general economic and retailing industry
conditions and to increased competitive pressures.
DIVIDEND POLICIES; RESTRICTIONS ON PAYMENT OF DIVIDENDS
The Company does not anticipate that it will pay any dividends on the
Common Stock in the foreseeable future. The Company's bank credit agreement
includes covenants restricting the Company's ability to pay dividends or make
certain other distributions to stockholders. In connection with the offering
of any dividend-paying Preferred Stock hereby, the applicable Prospectus
Supplement will set forth the amount available for distribution as of the end
of the most recent fiscal period under the Company's bank credit agreement.
SECURITY INTERESTS
The capital stock of the Company's principal subsidiaries and
substantially all of the receivables and certain real estate of the Company and
its subsidiaries are subject to various security interests and liens securing
certain indebtedness of the Company and its subsidiaries. As of October 28,
1995, the Company and its subsidiaries had $5,308.5 million of secured
indebtedness. If a holder of a security interest becomes entitled to exercise
its rights as a secured party, it would have the right to foreclose upon and
sell or otherwise transfer the collateral subject to its security interest, and
the collateral would be correspondingly unavailable to the Company or the
subsidiary owning such collateral and to other creditors of the Company or such
subsidiary, except to the extent, if any, that the value of the affected
collateral exceeds the amount of the indebtedness in respect of which such
foreclosure rights are exercised.
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<PAGE> 7
HOLDING COMPANY STRUCTURE
The Company is a holding company, substantially all of the operations
of which are conducted through subsidiaries. Consequently, the Company relies
principally on dividends or advances from its subsidiaries for the funds
necessary for, among other things, the payment of principal of and interest on
the Debt Securities and the other indebtedness of the Company. The ability of
such subsidiaries to pay dividends is subject to applicable state law and
certain other restrictions. Any right of the holders of the Debt Securities to
participate in the assets of any of the subsidiaries upon such subsidiary's
liquidation or recapitalization will be effectively subordinated to the claims
of such subsidiary's creditors and preferred stockholders (if any), except to
the extent that the Company is itself recognized as a creditor of such
subsidiary. In addition to their own indebtedness, certain of the Company's
subsidiaries have guaranteed the indebtedness of the Company under its bank
credit facility.
NONCOMPARABILITY OF HISTORICAL FINANCIAL INFORMATION; CONSOLIDATION OF
BUSINESSES
The Company acquired R.H. Macy & Co., Inc. ("Macy's") on December 19,
1994 and effected other acquisitions (and dispositions) during fiscal year
1994. Under the purchase method of accounting, the assets, liabilities, and
results of operations associated with such acquisitions have been included in
the Company's financial position and results of operations since the respective
dates thereof. Accordingly, the financial position and results of operations
of the Company as of the end of and for fiscal year 1994 and subsequent dates
and periods are not directly comparable to the financial position and results
of operations of the Company as of and for prior dates and periods. Similar
effects result from the Company's recent acquisition of Broadway Stores, Inc.
("Broadway"). For accounting purposes, the assets, liabilities, and results of
operations associated with the Broadway acquisition are included in the
Company's financial position and results of operations following July 29, 1995.
Accordingly, the financial position and results of operations for the Company
for dates and periods subsequent to July 29, 1995 are not directly comparable
to the financial position and results of operations of the Company on and prior
to that date.
For the 39 weeks ended Ocrober 28, 1995, the Company incurred $211.5
million of non-recurring charges in connection with the consolidation of the
Macy's and Broadway's businesses with the Company's other businesses and other
divisional consolidations. The Company anticipates that it will incur
additional non-recurring charges in connection with the consolidation of
Broadway's business with the Company's other businesses, as well as the ongoing
consolidations of the Macy's business and the Company's other businesses. In
addition, the Company anticipates that a number of Broadway's stores will be
sold or otherwise disposed of. The Company has entered into a definitive
agreement to sell nine stores, has identified ten additional stores to be sold,
and has yet to make a determination with respect to certain other stores.
CERTAIN CLAIMS AGAINST THE MACY'S DEBTORS
Certain claims or portions thereof (the "Cash Payment Claims") against
Macy's and certain of its subsidiaries (collectively, the "Macy's Debtors")
which, to the extent allowed by the bankruptcy court having continuing
jurisdiction over the Macy's Debtors, will be paid in cash pursuant to the plan
of reorganization of the Macy's Debtors were disputed by the Company as of the
date of this Prospectus. The aggregate amount of disputed Cash Payment Claims
ultimately allowed may be more or less than the Company's estimate of the
aggregate allowed amount thereof. As of December 5, 1995, the aggregate face
amount of disputed Cash Payment Claims was $362.5 million, while the estimated
allowed amount thereof was $242.5 million. Although there can be no assurance
with respect thereto, the Company believes that the actual allowed amount of
disputed Cash Payment Claims will not exceed the estimated allowed amount
thereof.
MARKET RISK; CERTAIN INVESTMENT LIMITATIONS
The Common Stock is listed for trading on the NYSE. However, the
prices at which shares of Common Stock trade may depend upon many factors,
including prevailing interest rates, markets for similar securities, industry
conditions, and the performance of, and investor expectations for, the Company.
No assurance can be given that a holder of shares of Common Stock will be able
to sell such shares at any particular price.
Certain institutional investors may invest only in dividend-paying
equity securities or may operate under other restrictions that may prohibit or
limit their ability to invest in Common Stock.
-4-
<PAGE> 8
ABSENCE OF PUBLIC MARKET FOR THE DEBT SECURITIES AND PREFERRED STOCK
All Debt Securities and Preferred Stock will be a new issue of
securities with no established trading market. Any underwriters to whom Debt
Securities or Preferred Stock are sold by the Company for public offering and
sale may make a market in such Debt Securities or Preferred Stock, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the
liquidity of the secondary market for any Debt Securities or Preferred Stock.
CERTAIN TAXATION MATTERS
The Company is subject to audits by taxing authorities with respect to
periods both before and after the Macy's acquisition. As of the date of this
Prospectus, the Company was a party to certain disputes with the Internal
Revenue Service (the "IRS") in which the IRS was seeking to disallow certain
deductions claimed by Federated and its predecessors. Although there can be no
assurance with respect thereto, the Company does not expect the ultimate
resolution of such disputes to have a material adverse effect on the Company's
financial position or results of operations.
CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION, BY-LAWS, AND
OTHER AGREEMENTS
The Company's certificate of incorporation and by-laws and certain
other agreements to which the Company is a party contain provisions that may
have the effect of delaying, deferring, or preventing a change in control of
the Company. In addition, the Company's certificate of incorporation
authorizes the issuance of up to 500.0 million shares of Common Stock and 125.0
million shares of Preferred Stock. The Company's Board of Directors will have
the power to determine the price and terms under which any additional capital
stock may be issued and to fix the terms of such Preferred Stock, and existing
stockholders of the Company will not have preemptive rights with respect
thereto.
THE COMPANY
The Company is one of the leading operators of full-line department
stores in the United States, with 414 department stores in 33 states as of the
date of this Prospectus. As of the date of this Prospectus, the Company also
operates 154 specialty stores and a mail order catalog business. The
Company's department stores sell a wide range of merchandise, including men's,
women's and children's apparel and accessories, cosmetics, home furnishings,
and other consumer goods, and are diversified by size of store, merchandising
character, and character of community served. The Company's department stores
are located at urban or suburban sites, principally in densely populated areas
across the United States. The Company has announced that it intends to
explore the possibility of selling the specialty store operations that were
acquired in the Company's acquisition of Macy's in December 1994. In addition,
the Company anticipates that a number of the stores acquired in its recent
acquisition of Broadway will be disposed of and that Broadway's retained
department stores will be converted into other nameplates of the Company
commencing in 1996. The Company has entered into a definitive agreement to
sell nine stores, has identified ten additional stores to be sold, and has yet
to make a determination with respect to certain other stores.
The Company believes that the department store business will continue
to consolidate. Accordingly, the Company intends from time to time to consider
actions to increase efficiency and provide greater value to customers and to
consider the possible acquisition of department store assets and companies.
The Company's principal executive offices are located at 151 West 34th
Street, New York, New York 10001 and 7 West Seventh Street, Cincinnati, Ohio
45202. The Company's telephone numbers at such offices are (212) 695-4400 and
(513) 579-7000, respectively.
-5-
<PAGE> 9
USE OF PROCEEDS
The principal reason for this offering is to make funds available for
general corporate purposes, which may include the repayment of indebtedness
outstanding from time to time, acquisitions, new store construction, store
expansions, and further investments in technology. Other reasons, if any, for
this offering are set forth in the accompanying Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods set
forth below has been computed on a consolidated basis and should be read in
conjunction with the Company's Consolidated Financial Statements (including the
notes thereto) set forth in the 1994 Form 10-K and the Third Quarter Form 10-Q.
As a result of the Company's emergence from reorganization proceedings and its
adoption of fresh-start reporting as of February 1, 1992, the Company's
financial information for periods ending after February 1, 1992 is generally
not comparable to financial information for periods ending on or before
February 1, 1992 and is separated by a black line. As a result of the
Company's acquisition of Macy's and other transactions, the Company's results
of operations for the fiscal year ended January 28, 1995 and subsequent
periods are not directly comparable to its results of operations for prior
fiscal years and its results of operations for the 39 weeks ended October 28,
1995 are neither directly comparable to its results of operations for prior
periods nor indicative of the results to be achieved for the full fiscal year.
See "Risk Factors -- Certain Effects of Acquisitions."
<TABLE>
<CAPTION>
39 Weeks Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended Ended Ended
October 28, January 28, January 29, January 30, February 1, February 2,
1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Consolidated
ratio of
earnings to
fixed charges
(unaudited) (a) --- 1.99x 2.33x 1.72x --- ---
Consolidated
deficiency of
earnings to
fixed charges
(in millions)
(unaudited)(a) $214.3 --- --- --- $1,850.1(b) $548.8(c)
</TABLE>
(a) For purposes of computing the ratio (or deficiency) of earnings to
fixed charges, earnings consist of income before income taxes and
extraordinary items plus fixed charges (excluding capitalized
interest). Fixed charges represent interest incurred, amortization of
debt expense, and that portion of rental expense on operating leases
deemed to be the equivalent of interest.
(b) Excludes interest on unsecured prepetition indebtedness of $301.6
million and dividends on preferred stock of $47.4 million.
(c) Excludes interest on unsecured prepetition indebtedness of $291.0
million and dividends on preferred stock of $47.4 million.
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<PAGE> 10
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be issued under an Indenture, dated as of
December 15, 1994 (the "Indenture"), which is incorporated by reference as an
exhibit to the Registration Statement, between the Company and State Street
Bank and Trust Company, as Trustee (the "Trustee"). The statements under this
caption are brief summaries of the material provisions of the Indenture, do not
purport to be complete, and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indenture. Except as otherwise
defined herein, capitalized terms used herein have the meanings given to them
in the Indenture.
The Indenture does not limit the aggregate amount of Debt Securities
which may be issued thereunder. The Debt Securities may be issued from time to
time in one or more series. Reference is made to the accompanying Prospectus
Supplement for the following terms and other information with respect to the
Debt Securities being offered hereby: (i) the title of such Debt Securities;
(ii) any limit on the aggregate principal amount of such Debt Securities; (iii)
the persons to whom any interest on such Debt Securities will be payable, if
other than the registered holders thereof on the Regular Record Date therefor;
(iv) the date or dates (or manner of determining the same) on which the
principal of such Debt Securities will be payable; (v) the rate or rates (or
manner of determining the same) at which such Debt Securities will bear
interest, if any, and the date or dates from which such interest will accrue;
(vi) the dates (or manner of determining the same) on which such interest will
be payable and the Regular Record Dates for such Interest Payment Dates; (vii)
the place or places where the principal of and any premium and interest on such
Debt Securities will be payable; (viii) the period or periods, if any, within
which, and the price or prices at which, such Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (ix) any mandatory or
optional sinking fund or analogous provisions; (x) the denominations in which
any Debt Securities will be issuable if other than denominations of $1,000 and
any integral multiple thereof; (xi) the currency or currencies or currency
units, if other than currency of the United States of America, in which payment
of the principal of and any premium or interest on such Debt Securities will be
payable, and the terms and conditions of any elections that may be made
available with respect thereto; (xii) any index or formula used to determine
the amount of payments of principal of and any premium or interest on such Debt
Securities; (xiii) whether the Debt Securities are to be issued in whole or in
part in the form of one or more global securities ("Global Securities"), and,
if so, the identity of the depositary, if any, for such Global Security or
Securities; (xiv) the terms and conditions, if any, pursuant to which such Debt
Securities are convertible into or exchangeable for Common Stock or other
securities of the Company or other issuers (provided, however, that any such
securities issuable upon conversion or exchange of Debt Securities will be
subject to registration under the Securities Act or an applicable exemption
therefrom); (xv) the applicability of the provisions described in "--
Defeasance"; (xvi) any subordination provisions applicable to such Debt
Securities; and (xvii) any other terms of the Debt Securities.
Debt Securities may be issued at a discount from their stated
principal amount. Certain federal income tax considerations and other special
considerations applicable to any Debt Security issued with original issue
discount (an "Original Issue Discount Security") may be described in an
applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in
a foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms,
and other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in an applicable Prospectus Supplement.
Unless otherwise indicated in an applicable Prospectus Supplement, (i)
the Debt Securities will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof and (ii) payment of
principal, premium (if any), and interest on the Debt Securities will be
payable, and the exchange, conversion, and transfer of Debt Securities will be
registerable, at the office or agency of the Company maintained for such
purposes and at any other office or agency maintained for such purpose. No
service charge will be made for any registration of transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith.
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BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (a "Depositary") or its nominee identified in an
applicable Prospectus Supplement. In such a case, one or more Global
Securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal amount of Debt Securities of the series
to be represented by such Global Security or Securities. Unless and until it
is exchanged in whole or in part for Debt Securities in registered form, a
Global Security may not be registered for transfer or exchange except as a
whole by the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any nominee to a successor
Depositary or a nominee of such successor Depositary and except in any other
circumstances described in an applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in an applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement,
Debt Securities which are to be represented by a Global Security to be
deposited with or on behalf of a Depositary will be represented by a Global
Security registered in the name of such depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Depositary for such Global Security, the Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such depositary or its
nominee ("Participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Securities will be limited to Participants
or Persons that may hold interests through Participants. Ownership of
beneficial interests by Participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through Participants will be shown on, and the transfer of that ownership
interest within such Participant will be effected only through, records
maintained by such Participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the registered owner of such Global Security, such Depositary or such nominee,
as the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in an applicable Prospectus Supplement,
owners of beneficial interests in such Global Securities will not be entitled
to have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form, and will not
be considered the owners or Holders thereof for any purpose under the
Indenture. Accordingly, each Person owning a beneficial interest in such
Global Security must rely on the procedures of the Depositary and, if such
Person is not a Participant, on the procedures of the Participant through which
such Person owns its interest, to exercise any rights of a Holder under the
Indenture. The Company understands that, under existing industry practices, if
the Company requests any action of Holders or an owner of a beneficial interest
in such Global Security desires to give any notice or take any action a Holder
is entitled to give or take under Indenture, the Depositary would authorize the
Participants to give such notice or take such action, and Participants would
authorize beneficial owners owning through such Participants to give such
notice or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in an applicable Prospectus Supplement.
Payment of principal of, and any premium or interest on, Debt Securities
registered in the name of or held by a Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
or the holder of the Global Security representing such Debt Securities. None
of the Company, the Trustee, any Paying Agent, or the Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a
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Global Security for such Debt Securities or for maintaining, supervising, or
reviewing any records relating to such beneficial ownership interests.
CERTAIN COVENANTS
Maintenance of Office or Agency. The Company will be required to
maintain an office or agency in each place of payment for each series of Debt
Securities for notice and demand purposes and for the purposes of presenting or
surrendering Debt Securities for payment, registration of transfer, or
exchange.
Paying Agents, Etc. If the Company acts as its own paying agent with
respect to any series of Debt Securities , on or before each due date of the
principal of, or interest on any of the Debt Securities of that series, it will
be required to segregate and hold in trust for the benefit of the persons
entitled thereto a sum sufficient to pay such amount due and to notify the
Trustee promptly of its action or failure so to act. If the Company has one or
more paying agents for any series of Debt Securities, prior to each due date of
the principal of or interest on any Debt Securities of that series, it will
deposit with a paying agent a sum sufficient to pay such amount, and the
Company will promptly notify the Trustee of its action or failure so to act
(unless such paying agent is the Trustee). All moneys paid by the Company to a
paying agent for the payment of principal of and interest on any Debt
Securities that remain unclaimed for two years after such principal or interest
has become due and payable may be repaid to the Company, and thereafter the
holder of such Debt Securities may look only to the Company for payment
thereof.
Payment of Taxes and Other Claims. The Company will be required to
pay and discharge, before the same become delinquent, (i) all taxes,
assessments, and governmental charges levied or imposed upon the Company or any
Subsidiary of the Company or their properties and (ii) all claims that if
unpaid would result in a lien on their property and have a material adverse
effect on the business, assets, financial condition, or results of operations
of the Company and its Subsidiaries, taken as a whole (a "Material Adverse
Effect"), unless the same is being contested by proper proceedings.
Maintenance of Properties. The Company will be required to cause all
properties used in the business of the Company or any Subsidiary of the Company
to be maintained and kept in good condition, repair, and working order, except
to the extent that the failure to do so would not have a Material Adverse
Effect.
Existence. The Company will be required to, and also will be required
to cause its Subsidiaries to, preserve and keep in full force their existence,
charter rights, statutory rights, and franchises, except to the extent that
failure to do so would not have a Material Adverse Effect.
Compliance with Laws. The Company will be required to and to cause
its Subsidiaries to comply with all applicable laws to the extent the failure
to do so would have a Material Adverse Effect.
Restrictive Covenants. Any restrictive covenants applicable to any
series of Debt Securities will be described in an applicable Prospectus
Supplement.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect
to Debt Securities of any series: (i) default in the payment of the principal
of (or premium, if any, on) any Debt Security of that series when it becomes
due and payable; (ii) default in the payment of any interest on any Debt
Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 calendar days; (iii) default in the making of
any sinking fund payment as and when due by the terms of any Debt Security of
that series; (iv) default in the performance, or breach, of any other covenant
or warranty of the Company in the Indenture (other than a covenant included in
the Indenture solely for the benefit of a series of Debt Securities other than
that series) and continuance of such default for a period of 60 calendar days
after written notice thereof has been given to the Company as provided in the
Indenture; (v) any nonpayment at maturity or other default (beyond any
applicable grace period) under any agreement or instrument relating to any
other indebtedness of the Company the principal amount of which is not less
than $100 million, which default results in such indebtedness becoming due
prior to its stated maturity or occurs at the final maturity thereof; (vi)
certain events of bankruptcy, insolvency, or reorganization involving the
Company; and (vii) any other Event of Default provided with respect to Debt
Securities of that series. Pursuant to the Trust Indenture Act, the Trustee is
required, within 90 calendar days after the occurrence of a default in respect
of any series of Debt
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Securities, to give to the Holders of the Debt Securities of such series notice
of all such uncured defaults known to it (except that, in the case of a default
in the performance of any covenant of the character contemplated in clause (iv)
of the preceding sentence, no such notice to Holders of the Debt Securities of
such series will be given until at least 30 calendar days after the occurrence
thereof), except that, other than in the case of a default of the character
contemplated in clause (i), (ii), or (iii) of the preceding sentence, the
Trustee may withhold such notice if and so long as it in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Debt Securities of such series.
If an Event of Default with respect to Debt Securities occurs and is
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Debt Securities of that series by notice as provided in the
Indenture may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Debt Securities
of that series to be due and payable immediately. However, at any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on such acceleration has been
obtained, the Holders of a majority in principal amount of the Debt Securities
of that series may, under certain circumstances, rescind and annul such
acceleration. See "-- Modification and Waiver" below. If an Event of Default
under clause (vi) of the immediately preceding paragraph occurs, then the
principal of, premium on, if any, and accrued interest on the Debt Securities
of that series will become immediately due and payable without any declaration
or other act on the part of the Trustee of any holder of the Debt Securities of
that series.
The Indenture provides that, subject to the duty of the Trustee
thereunder during an Event of Default to act with the required standard of
care, the Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity. Subject to certain provisions, including those requiring security
or indemnification of the Trustee, the Holders of a majority in principal
amount of the Debt Securities of any series will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series.
No Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default and unless the Holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
the same series have also made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee has received from the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of the same series a direction
inconsistent with such request and has failed to institute such proceeding
within 60 calendar days. However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for enforcement of payment of the
principal of and interest on such Debt Security on or after the respective due
dates expressed in such Debt Security.
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the Indenture and
as to any default in such performance.
Any additional Events of Default with respect to any series of Debt
Securities, and any variations from the foregoing Events of Default applicable
to any series of Debt Securities, will be described in an applicable Prospectus
Supplement.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debt Securities of each series
affected thereby, except that no such modification or amendment may, without
the consent of the Holder of each Debt Security affected thereby, (i) change
the Stated Maturity of, or any installment of principal of, or interest on, any
Debt Security; (ii) reduce the principal amount of, the rate of interest on, or
the premium, if any, payable upon the redemption of, any Debt Security; (iii)
reduce the amount of principal of an Original Issue Discount Security payable
upon acceleration of the Maturity thereof; (iv) change the place or currency of
payment of principal of, or premium, if any, or interest on any Debt Security;
(v) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security on or after the Stated Maturity or Prepayment
Date thereof; or (vi) reduce the percentage in
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<PAGE> 14
principal amount of Debt Securities of any series, the consent of the Holders
of which is required for modification or amendment of the applicable Indenture
or for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults.
The Holders of at least a majority in aggregate principal amount of
the Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the Indenture. The Holders
of not less than a majority in principal amount of the Debt Securities of any
series may, on behalf of the Holders of all Debt Securities of that series,
waive any past default under the Indenture with respect to that series, except
a default in the payment of the principal of, or premium, if any, or interest
on, any Debt Security of that series or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the Holder
of each Debt Security of that series affected thereby.
DEFEASANCE
Unless otherwise specified in a Prospectus Supplement applicable to a
particular series of Debt Securities, the Company, at its option, (i) will be
deemed to have been discharged from its obligations with respect to the Debt
Securities of such series (except for certain obligations, including
obligations to register the transfer or exchange of Debt Securities of such
series, to replace destroyed, stolen, lost, or mutilated Debt Securities of
such series, and to maintain an office or agency in respect of the Debt
Securities and hold moneys for payment in trust) or (ii) will be released from
its obligations to comply with the covenants that are under "Certain Covenants"
above with respect to the Debt Securities of such series, and the occurrence of
an event described in clause (iv) under "Events of Default" above with respect
to any defeased covenant and clauses (iii), (v), and (vii) of the "Events of
Default" above will no longer be an Event of Default if, in either case, the
Company irrevocably deposits with the Trustee, in trust, money or direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or obligations of
an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable at the
issuer's option ("U.S. Government Obligations") or certain depositary receipts
therefor that through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
all the principal of (and premium, if any) and any interest on the Debt
Securities of such series on the dates such payments are due in accordance with
the terms of such Debt Securities. Such defeasance may be effected only if,
among other things, (a) no Event of Default or event which with the giving of
notice or lapse or time, or both, would become an Event of Default under the
Indenture shall have occurred and be continuing on the date of such deposit,
(b) no Event of Default described under clause (vi) under "-- Events of
Default" above or event that with the giving of notice or lapse of time, or
both, would become an Event of Default described under such clause (vi) shall
have occurred and be continuing at any time on or prior to the 90th calendar
day following such date of deposit, (c) in the event of defeasance under clause
(i) above, the Company has delivered an Opinion of Counsel, stating that (1)
the Company has received from, or there has been published by, the IRS a ruling
or (2) since the date of the Indenture there has been a change in applicable
federal law, in either case to the effect that, among other things, the holders
of the Debt Securities of such series will not recognize gain or loss for
United States federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States federal income tax in the same
manner as if such defeasance had not occurred, and (d) in the event of
defeasance under clause (ii) above, the Company has delivered an Opinion of
Counsel to the effect that, among other things, the Holders of the Debt
Securities of such series will not recognize gain or loss for United States
federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States federal income tax in the same manner as if such
defeasance had not occurred. In the event the Company fails to comply with its
remaining obligations under the applicable Indenture after a defeasance of such
Indenture with respect to the Debt Securities of any series as described under
clause (ii) above and the Debt Securities of such series are declared due and
payable because of the occurrence of any undefeased Event of Default, the
amount of money and U.S. Government Obligations on deposit with the Trustee may
be insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments.
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SATISFACTION AND DISCHARGE
The Company, at its option, may satisfy and discharge the Indenture
(except for certain obligations of the Company and the Trustee, including,
among others, the obligations to apply money held in trust) when (i) either (a)
all Debt Securities previously authenticated and delivered (other than (1) Debt
Securities that were destroyed, lost, or stolen and that have been replaced or
paid and (2) Debt Securities for the payment of which money has been deposited
in trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all such Debt Securities not theretofore
delivered to the Trustee for cancellation (1) have become due and payable, (2)
will become due and payable at their Stated Maturity within one year, or (3)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name and at the expense of the Company, and the Company has deposited or caused
to be deposited with the Trustee as trust funds in trust for such purpose an
amount sufficient to pay and discharge the entire indebtedness on such Debt
Securities not previously delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Debt Securities which have become due and payable) or to the stated maturity
or redemption date, as the case may be, (ii) the Company has paid or caused to
be paid all other sums payable under the Indenture by the Company, and (iii)
the Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each to the effect that all conditions precedent relating
to the satisfaction and discharge of the Indenture have been satisfied.
LIMITATIONS ON MERGER AND CERTAIN OTHER TRANSACTIONS
Prior to the satisfaction and discharge of the Indenture, the Company
may not consolidate with or merge with or into any other person, or transfer
all or substantially all of its properties and assets to another person unless
(i) either (a) the Company is the continuing or surviving person in such a
consolidation or merger or (b) the person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which all or
substantially all of the properties and assets of the Company are transferred
(the Company or such other person being referred to as the "Surviving Person")
is a corporation organized and validly existing under the laws of the United
States, any state thereof, or the District of Columbia, and expressly assumes,
by an indenture supplement, all the obligations of the Company under the Debt
Securities and the Indenture, (ii) immediately after the transaction and the
incurrence or anticipated incurrence of any indebtedness to be incurred in
connection therewith, no Event of Default exists, and (iii) an officer's
certificate is delivered to the Trustee to the effect that the conditions set
forth in the preceding clauses (i) and (ii) have been satisfied and an opinion
of counsel has been delivered to the Trustee to the effect that the conditions
set forth in the preceding clause (i) have been satisfied. The Surviving
Person will succeed to and be substituted for the Company with the same effect
as if it has been named in the Indenture as a party thereto, and thereafter the
predecessor corporation will be relieved of all obligations and covenants under
the Indenture and the Debt Securities.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the
Trustee, should it become a creditor of the Company within three months of, or
subsequent to, a default by the Company to make payment in full of principal of
or interest on any series of Debt Securities when and as the same becomes due
and payable, to obtain payment of claims, or to realize for its own account on
property received in respect of any such claim as security or otherwise, unless
and until such default is cured. However, the Trustee's rights as a creditor
of the Company will not be limited if the creditor relationship arises from,
among other things, the ownership or acquisition of securities issued under any
indenture or having a maturity of one year or more at the time of acquisition
by the Trustee; certain advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by the Indenture; disbursements made in the
ordinary course of business in its capacity as indenture trustee, transfer
agent, registrar, custodian, or paying agent or in any other similar capacity;
indebtedness created as a result of goods or securities sold in a cash
transaction or services rendered or premises rented; or the acquisition,
ownership, acceptance, or negotiation of certain drafts, bills of exchange,
acceptances, or other obligations. The Indenture does not prohibit the Trustee
from serving as trustee under
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<PAGE> 16
any other indenture to which the Company may be a party from time to time or
from engaging in other transactions with the Company. If the Trustee acquires
any conflicting interest and there is an Event of Default with respect to any
series of Debt Securities, it must eliminate such conflict or resign.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Company's Certificate of Incorporation provides that the
authorized capital stock of the Company consists of 500 million shares of
Common Stock and 125 million shares of Preferred Stock.
COMMON STOCK
The holders of the Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of stockholders.
Subject to preferential rights that may be applicable to any Preferred Stock,
holders of Common Stock are entitled to receive ratably such dividends as may
be declared by the Board of Directors of the Company out of funds legally
available therefor. In the event of a liquidation, dissolution, or winding up
of the Company, holders of Common Stock will be entitled to share ratably in
all assets remaining after payment of liabilities and the liquidation
preference of any Preferred Stock. Holders of Common Stock have no preemptive
rights and have no rights to convert their Common Stock into any other
securities, and there are no redemption provisions with respect to such shares.
The Common Stock is listed on the NYSE. The transfer agent and registrar for
the Common Stock is The Bank of New York.
PREFERRED STOCK
The Board of Directors of the Company has the authority to issue 125
million shares of Preferred Stock in one or more series and to fix the
designations, relative powers, preferences, limitations, and restrictions of
all shares of each such series, including without limitation dividend rates,
conversion rights, voting rights, redemption and sinking fund provisions,
liquidation preferences, and the number of shares constituting each such
series, without any further vote or action by the stockholders. The issuance
of the Preferred Stock could decrease the amount of earnings and assets
available for distribution to holders of Common Stock or adversely affect the
rights and powers, including voting rights, of the holders of Common Stock.
The issuance of the Preferred Stock could have the effect of delaying,
deferring, or preventing a change in control of the Company without further
action by the stockholders.
The Board of Directors of the Company has not taken any action to
designate or issue any series of Preferred Stock, other than the Series A
Junior Participating Preferred Stock described below. The terms of any
Preferred Stock offered and the applicable Certificate of Designation, as well
as the transfer agent and registrar therefor, will be set forth in the
applicable Prospectus Supplement.
PREFERRED SHARE PURCHASE RIGHTS
Each outstanding share of Common Stock issued is accompanied by one
right (a "Right") issued pursuant to a share purchase rights agreement between
the Company and The Bank of New York, as rights agent (the "Share Purchase
Rights Agreement"). Each Right entitles the registered holder thereof to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Series A
Preferred Shares"), of the Company at a price (the "Purchase Price") of $62.50
per one one-hundredth of a Series A Preferred Share, subject to adjustment.
Until the earliest to occur of the following dates (the earliest of
such dates being hereinafter called the "Rights Distribution Date"), the Rights
will be evidenced by the certificates evidencing shares of Common Stock: (i)
the close of business on the tenth business day (or such later date as may be
specified by the Board of Directors of the Company) following the first date of
public announcement by the Company that a person (other than the Company or a
subsidiary or employee benefit or stock ownership plan of the Company),
together with its affiliates and associates, has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the outstanding Common
Stock (any such person being hereinafter called an "Acquiring Person"), (ii)
the close of business on the tenth business day
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(or such later date as may be specified by the Board of Directors of the
Company) following the commencement of a tender offer or exchange offer by a
person (other than the Company or a subsidiary or employee benefit or stock
ownership plan of the Company), the consummation of which would result in
beneficial ownership by such person of 20% or more of the outstanding Common
Stock, and (iii) the close of business on the tenth business day following the
first date of public announcement by the Company that a Flip-in Event or a
Flip-over Event (as such terms are hereinafter defined) has occurred.
The Share Purchase Rights Agreement provides that, until the Rights
Distribution Date, the Rights may be transferred with and only with the Common
Stock. Until the Rights Distribution Date (or earlier redemption or expiration
of the Rights), any certificate evidencing shares of Common Stock issued upon
transfer or new issuance of Common Stock will contain a notation incorporating
the Share Purchase Rights Agreement by reference. Until the Rights
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates evidencing Common Stock will also
constitute the transfer of the Rights associated with such certificates. As
soon as practicable following the Rights Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of Common Stock as of the close of business on the Rights
Distribution Date and such separate Rights Certificates alone will evidence the
Rights. No Right is exercisable at any time prior to the Rights Distribution
Date. The Rights will expire on December 19, 2004 (the "Final Expiration
Date") unless earlier redeemed or exchanged by the Company as described below.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including without limitation the right to vote or
to receive dividends.
The Purchase Price payable, and the number of Series A Preferred
Shares or other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination, or reclassification of, the Series
A Preferred Shares, (ii) upon the grant to holders of the Series A Preferred
Shares of certain rights or warrants to subscribe for or purchase Series A
Preferred Shares at a price, or securities convertible into Series A Preferred
Shares with a conversion price, less than the then-current market price of the
Series A Preferred Shares, or (iii) upon the distribution to holders of the
Series A Preferred Shares of evidences of indebtedness or cash (excluding
regular periodic cash dividends), assets, or stock (excluding dividends payable
in Series A Preferred Shares) or of subscription rights or warrants (other than
those referred to above). The number of outstanding Rights and the number of
one one-hundredths of a Series A Preferred Share issuable upon exercise of each
Right also is subject to adjustment in the event of a stock dividend on the
Common Stock payable in shares of Common Stock or a subdivision, combination,
or reclassification of the Common Stock occurring, in any such case, prior to
the Rights Distribution Date.
The Series A Preferred Shares issuable upon exercise of the Rights
will not be redeemable. Each Series A Preferred Share will be entitled to a
minimum preferential quarterly dividend payment equal to the greater of (i)
$1.00 per share and (ii) an amount equal to 100 times the aggregate dividends
declared per share of Common Stock during the related quarter. In the event of
liquidation, the holders of the Series A Preferred Shares will be entitled to a
preferential liquidation payment equal to the greater of (a) $100 per share and
(b) an amount equal to 100 times the liquidation payment made per share of
Common Stock. Each Series A Preferred Share will have 100 votes, voting
together with the Common Stock. In the event of any merger, consolidation, or
other transaction in which shares of Common Stock are exchanged, each Series A
Preferred Share will be entitled to receive 100 times the amount received per
share of Common Stock. These rights will be protected by customary
antidilution provisions. Because of the nature of the Series A Preferred
Shares' dividend, voting and liquidation rights, the value of the one
one-hundredth interest in a Series A Preferred Share purchasable upon exercise
of each Right should approximate the value of one share of Common Stock.
Rights may be exercised to purchase Series A Preferred Shares only
after the Rights Distribution Date occurs and prior to the occurrence of a
Flip-in Event or Flip-over Event. A Rights Distribution Date resulting from
the commencement of a tender offer or exchange offer described in clause (ii)
of the definition of "Rights Distribution Date" could precede the occurrence of
a Flip-in Event or Flip-over Event and thus result in the Rights being
exercisable to purchase Series A Preferred Shares. A Rights Distribution Date
resulting from any occurrence described in clause (i) or clause (iii) of the
definition of "Rights Distribution Date" would necessarily follow the
occurrence of a Flip-in Event or Flip-over Event and thus result in the Rights
being exercisable to purchase shares of Common Stock or other securities as
described below.
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<PAGE> 18
In the event (a "Flip-in Event") that (i) any person, together with
its affiliates and associates, becomes the beneficial owner of 20% or more of
the outstanding Common Stock, (ii) any Acquiring Person merges into or combines
with the Company and the Company is the surviving corporation or any Acquiring
Person effects certain other transactions with the Company, as described in the
Share Purchase Rights Agreement, or (iii) during such time as there is an
Acquiring Person, there is any reclassification of securities or
recapitalization or reorganization of the Company which has the effect of
increasing by more than 1% the proportionate share of the outstanding shares of
any class of equity securities of the Company or any of its subsidiaries
beneficially owned by the Acquiring Person, proper provision will be made so
that each holder of a Right, other than Rights that are or were owned
beneficially by the Acquiring Person (which, from and after the later of the
Rights Distribution Date and the date of the earliest of any such events, will
be void), will thereafter have the right to receive upon exercise thereof at
the then-current exercise price of the Right, that number of shares of Common
Stock (or, under certain circumstances, an economically equivalent security or
securities of the Company) that have a market value of two times the exercise
price of the Right.
In the event (a "Flip-over Event") that, following the first date of
public announcement by the Company that a person has become an Acquiring
Person, (i) the Company merges with or into any person and the Company is not
the surviving corporation, (ii) any person merges with or into the Company and
the Company is the surviving corporation, but all or part of the Common Stock
is changed or exchanged, or (iii) 50% or more of the company's assets or
earning power, including without limitation securities creating obligations of
the Company, are sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then-current exercise price of the Right, that number of shares of common
stock (or, under certain circumstances, an economically equivalent security or
securities) of such other person which at the time of such transaction would
have a market value of two times the exercise price of the Right.
Following the occurrence of any Flip-in Event or Flip-over Event,
Rights (other than any Rights which have become void) may be exercised as
described above, upon payment of the exercise price or, at the option of the
holder thereof, without the payment of the exercise price that would otherwise
be payable. If a holder of Rights elects to exercise Rights without the
payment of the exercise price that would otherwise be payable, such holder will
be entitled to receive upon the exercise of such Rights securities having a
market value equal to the exercise price of the Rights. In addition, at any
time after the later of the Rights Distribution Date and the first occurrence
of a Flip-in Event or a Flip-over Event and prior to the acquisition by any
person or group of affiliated or associated persons of 50% or more of the
outstanding Common Stock, the Company may exchange the Rights (other than any
Rights which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock per Right (subject to adjustment).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company is not required to issue fractional Series A
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Series A Preferred Share, which may, at the option of the
Company, be evidenced by depositary receipts) or fractional shares of Common
Stock or other securities issuable upon the exercise of Rights. In lieu of
issuing such securities, the Company may make a cash payment, as provided in
the Share Purchase Rights Agreement.
The Company may redeem the Rights in whole, but not in part, at a
price of $0.03 per Right, subject to adjustment and, in the event that the
payment of such amount would be prohibited by loan agreements or indentures to
which the Company is a party, deferral (the "Redemption Price"), at any time
prior to the close of business on the later of (i) the Rights Distribution Date
and (ii) the first date of public announcement that a person has become an
Acquiring Person. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the holders will have only the right to
receive the Redemption Price.
The Share Purchase Rights Agreement may be amended by the Company
without the approval of any holders of Rights, including amendments which add
other events requiring adjustment to the Purchase Price payable and the number
of Series A Preferred Shares or other securities issuable upon the exercise of
the Rights which modify procedures relating to the redemption of the Rights,
provided that no amendment may be made which decreases the stated Redemption
Price to an amount less than $0.01 per Right, decreases the period of time
remaining until the Final Expiration Date, or modifies a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable.
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<PAGE> 19
CERTAIN CORPORATE GOVERNANCE MATTERS
The Company's Certificate of Incorporation and By-Laws provide that
the directors of the Company are to be classified into three classes, with the
directors in each class serving for three-year terms and until their successors
are elected. Any additional person elected to the Board of Directors of the
Company will be added to a particular class of directors to be determined at
the time of such election, although in accordance with the Company's
Certificate of Incorporation and By-Laws, the number of directors in each class
will be identical or as nearly as practicable thereto based on the total number
of directors then serving as such.
The Company's By-Laws provide that nominations for election of
directors by the stockholders will be made by the Board of Directors of the
Company or by any stockholder entitled to vote in the election of directors
generally. The Company's By-Laws require that stockholders intending to
nominate candidates for election as directors deliver written notice thereof to
the Secretary of the Company not later than 60 calendar days in advance of the
meeting of stockholders; provided, however, that in the event that the date of
the meeting is not publicly announced by the Company by inclusion in a report
filed with the Commission or furnished to stockholders, or by mail, press
release, or otherwise more than 75 calendar days prior to the meeting, notice
by the stockholder to be timely must be delivered to the Secretary of the
Company not later than the close of business on the tenth day following the
date on which such announcement of the date of the meeting was so communicated.
The Company's By-Laws further require that the notice by the stockholder set
forth certain information concerning such stockholder and the stockholder's
nominees, including their names and addresses, a representation that the
stockholder is entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice, a description of all arrangements or understandings between the
stockholders and each nominee, such other information as would be required to
be included in a proxy statement soliciting proxies for the election of the
nominees of such stockholder, and the consent of each nominee to serve as a
director of the Company if so elected. The chairman of the meeting may refuse
to acknowledge the nomination of any person not made in compliance with these
requirements.
In addition to the provisions relating to the classification of the
Board of Directors and the director nomination procedures described above, the
Company's Certificate of Incorporation and By-Laws provide, in general, that
(i) the number of directors of the Company will be fixed, within a specified
range, by a majority of the total number of the Company's directors (assuming
no vacancies) or by the holders of at least 80% of the Company's voting stock,
(ii) the directors of the Company in office from time to time will fill any
vacancy or newly created directorship on the Board of Directors of the Company
with any new director to serve in the class of directors to which he or she is
so elected, (iii) directors of the Company may be removed only for cause by the
holders of at least 80% of the Company's voting stock, (iv) stockholder action
can be taken only at an annual or special meeting of stockholders and not by
written consent in lieu of a meeting, (v) except as described below, special
meetings of stockholders may be called only by the Company's Chief Executive
Officer or by a majority of the total number of directors of the Company
(assuming no vacancies) and the business permitted to be conducted at any such
meeting is limited to that brought before the meeting by the Company's Chief
Executive Officer or by a majority of the total number of directors of the
Company (assuming no vacancies), and (vi) subject to certain exceptions, the
Board of Directors of the Company may postpone and reschedule any previously
scheduled annual or special meeting of stockholders. The Company's By-Laws
also require that stockholders desiring to bring any business before an annual
meeting of stockholders deliver written notice thereof to the Secretary of the
Company not later than 60 calendar days in advance of the meeting of
stockholders; provided, however, that in the event that the date of the meeting
is not publicly announced by the Company by press release or inclusion in a
report filed with the Commission or furnished to stockholders more than 75
calendar days prior to the meeting, notice by the stockholders to be timely
must be delivered to the Secretary of the Company not later than the close of
business on the tenth calendar day following the day on which such announcement
of the date of the meeting was so communicated. The Company's By-Laws further
require that the notice by the stockholder set forth a description of the
business to be brought before the meeting and the reasons for conducting such
business at the meeting and certain information concerning the stockholder
proposing such business and the beneficial owner, if any, on whose behalf the
proposal is made including their names and addresses, the class and number of
shares of the Company, that are owned beneficially and of record by each of
them, and any material interest of either of them in the business proposed to
be brought before the meeting. Upon the written request of the holders of not
less than 15% of the Company's voting stock, the Board of Directors of the
Company will be required to call a meeting of stockholders for the purpose
specified in such written request and fix a record date for the determination
of stockholders entitled to notice of and to vote at such meeting (which record
date may not be later than 60 calendar days after the date of receipt of notice
of such meeting), provided that in the event that the Board of Directors of
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<PAGE> 20
the Company calls an annual or special meeting of stockholders to be held not
later than 90 calendar days after receipt of any such written request, no
separate special meeting of stockholders as so requested will be required to be
convened provided that the purposes of such annual or special meeting called by
the Board of Directors of the Company include (among others) the purposes
specified in such written request of the stockholders.
Under applicable provisions of Delaware law, the approval of a
Delaware company's board of directors, in addition to stockholder approval, is
required to adopt any amendment to the company's certificate of incorporation,
but a company's by-laws may be amended either by action of its stockholders or,
if the company's certificate of incorporation so provides, its board of
directors. The Company's Certificate of Incorporation and By-Laws provide that
(i) except as described below, the provisions summarized above and the
provisions relating to the classification of the Company's Board of Directors
and nominating procedures may not be amended by the stockholders, nor may any
provision inconsistent therewith be adopted by the stockholders, without the
affirmative vote of the holders of at least 80% of the Company's voting stock,
voting together as single class, except that if any such action (other than any
direct or indirect amendments to the provision requiring that stockholder
action be taken at a meeting of stockholders rather than by written consent in
lieu of a meeting) is approved by the holders of a majority, but less than 80%,
of the then- outstanding voting stock (in addition to any other approvals
require by law, including approval by the Board of Directors of the Company
with respect to any amendment to the Company's Certificate of Incorporation),
such action will be effective as of one year from the date of adoption, or (ii)
the Company's By-Law provisions relating to the right of stockholders to cause
special meetings of stockholders to be called and to the composition of certain
directorate committees may not be amended by the Company's Board of Directors
without stockholder approval.
The Company is subject to Section 203 of the General Corporation Law
of the State of Delaware (the "DGCL"), which restricts the consummation of
certain business combination transactions in certain circumstances. In
addition, the Company's certificate of incorporation contains provisions that
are substantially similar to those contained in Section 203 of the DGCL that
restrict business combination transactions with (i) any person or group that
became or is deemed to have become the beneficial owner of 15% or more of the
voting stock of the Company as a result of its receipt of Common Stock or
warrants pursuant to Macy's plan of reorganization that thereafter becomes the
beneficial owner of an additional 1% or more of the voting stock of the Company
and (ii) any other person or group that becomes the beneficial owner of 15%
more of the voting stock of the Company.
The foregoing provisions of the Company's Certificate of
Incorporation, the provisions of its By-Laws relating to advance notice of
stockholder nominations, and the provisions of the Share Purchase Rights
Agreement (see "--Preferred Share Purchase Rights") may discourage or make more
difficult the acquisition of control of the Company by means of a tender offer,
open market purchase, proxy contest, or otherwise. These provisions are
intended to discourage or may have the effect of discouraging certain types of
coercive takeover practices and inadequate takeover bids and to encourage
persons seeking to acquire control of the Company first to negotiate with the
Company. The Company's management believes that the foregoing measures, many
of which are substantially similar to the takeover-related measures in effect
for many other publicly held companies, provide benefits by enhancing the
Company's potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to take over or restructure the Company that outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Common Stock, Preferred Stock, Depositary Shares, or any combination thereof.
Warrants may be issued independently, together with any other Securities
offered by a Prospectus Supplement, and may be attached to or separate from
such Securities. Warrants may be issued under warrant agreements (each, a
"Warrant Agreement") to be entered into between the Company and a warrant agent
specified in the applicable Prospectus Supplement (the "Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with the
Warrants of a particular series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Warrants. The following sets forth certain general terms and provisions of the
Warrants offered hereby. Further terms of the Warrants and the applicable
Warrant Agreement will be set forth in the applicable Prospectus Supplement.
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<PAGE> 21
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (i) the title of such Warrants; (ii) the
aggregate number of such Warrants; (iii) the price or prices at which such
Warrants will be issued; (iv) the designation, number and terms of the Debt
Securities, Common Stock, Preferred Stock, Depositary Shares, or combination
thereof, purchasable upon exercise of such Warrants; (v) the designation and
terms of the other Securities, if any, with which such Warrants are issued and
the number of such Warrants issued with each such Security; (vi) the date, if
any, on and after which such Warrants and the related underlying Securities
will be separately transferable; (vii) the price at which each underlying
Security purchasable upon exercise of such Warrants may be purchased; (viii)
the date on which the right to exercise such Warrants shall commence and the
date on which such right shall expire; (ix) the minimum amount of such Warrants
which may be exercised at any one time; (x) information with respect to
book-entry procedures, if any; (xi) a discussion of any applicable federal
income tax considerations; and (xii) any other terms of such Warrants,
including terms, procedures and limitations relating to the transferability,
exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any one or more of the
following ways: (i) through one or more underwriters, (ii) through one or more
dealers or agents (which may include one or more underwriters), or (iii)
directly to one or more purchasers.
The distribution of the Securities may be effected from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. In
connection with the sale of the Securities, underwriters, dealers, and agents
may receive compensation from the Company or from purchasers of the Securities
in the form of discounts, concessions, or commissions. Underwriters, dealers,
and agents who participate in the distribution of the Securities may be deemed
to be underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter, dealer, or agent will be identified and any such compensation
received from the Company will be described in an applicable Prospectus
Supplement. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Under agreements which may be entered into by the Company,
underwriters, dealers, and agents who participate in the distribution of the
Securities may be entitled to indemnification by the Company against certain
liabilities, including under the Securities Act, or contribution from the
Company to payments which the underwriters, dealers, or agents may be required
to make in respect thereof. The underwriters, dealers, and agents may engage
in transactions with, or perform services for, the Company in the ordinary
course of business.
All Securities will be a new issue of securities with no established
trading market, other than the Common Stock, which is listed on the NYSE. Any
Common Stock sold pursuant to a Prospectus Supplement will be listed on the
NYSE, subject to official notice of issuance. Any underwriters to whom
Securities are sold by the Company for public offering and sale may make a
market in such Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the secondary market for any Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in an applicable Prospectus Supplement
relating to the Securities, the validity of the Securities offered hereby will
be passed upon for the Company by Jones, Day, Reavis & Pogue, New York, New
York.
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<PAGE> 22
EXPERTS
The consolidated financial statements of the Company as of
January 28, 1995 and January 29, 1994, and for each of the fifty-two week
periods ended January 28, 1995, January 29, 1994, and January 30, 1993, have
been incorporated by reference in this Prospectus in reliance upon the report,
incorporated by reference herein, of KPMG Peat Marwick LLP, independent
certified public accountants and upon the authority of that firm as experts in
accounting and auditing.
The consolidated financial statements of Macy's as of July 30, 1994
and July 31, 1993 and for each of the fiscal years in the three-year period
ended July 30, 1994 incorporated by reference in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of Broadway as of January 28,
1995 and January 29, 1994 and for each of the fiscal years ended January 28,
1995 and January 29, 1994, the 17 weeks ended January 30, 1993, and the 35
weeks ended October 3, 1992 incorporated by reference in this Prospectus have
been so incorporated in reliance on the reports of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements incorporated herein by reference to reports
and documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold, or which deregisters all securities then remaining unsold, are
or will be so incorporated in reliance upon the reports of KPMG Peat Marwick
LLP, or any other independent public accountants, relating to such financial
statements and upon the authority of such independent public accountants as
experts in accounting and auditing in giving such reports to the extent that
the particular firm has audited such financial statements and consented to the
use of their reports thereon.
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<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions
(which will be described in an applicable Prospectus Supplement), are estimated
as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . . . . . . . . . . $344,827
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Printing and engraving expenses . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Trustee's fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Miscellaneous expenses(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $639,827
========
</TABLE>
- -----------------------------
(1) Includes estimate of stock exchange listing fees, blue sky fees and
expenses, NASD filing fees, and rating agency fees.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation (the "Certificate")
provides, as do the charters of many other publicly held companies, that the
personal liability of directors of the Company to the Company is eliminated to
the maximum extent permitted by Delaware law. The Certificate and the
Company's By-Laws provide for the indemnification of the directors, officers,
employees, and agents of the Company and its subsidiaries to the full extent
that may be permitted by Delaware law from time to time and, in the case of the
By-Laws, for various procedures relating thereto. Certain provisions of the
Certificate protect the Company's directors against personal liability for
monetary damages resulting from breaches of their fiduciary duty of care,
except as set forth below. Under Delaware law, absent these provisions,
directors could be held liable for gross negligence in the performance of their
duty of care, but not for simple negligence. The Certificate absolves
directors of liability for negligence in the performance of their duties,
including gross negligence. However, the Company's directors remain liable for
breaches of their duty of loyalty to the Company and its stockholders, as well
as for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law and transactions from which a director
derives improper personal benefit. The Certificate also does not absolve
directors of liability under Section 174 of the DGCL, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement in connection with specified
actions, suits, or proceedings, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the corporation -- a
"derivative action") if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of a derivative action, except that
indemnification only extends to expenses (including attorneys' fees) incurred
in connection with defense or settlement of such an action and Delaware law
requires court approval before there can be any indemnification of expenses
where the person seeking indemnification has been found liable to the Company.
The Certificate provides, among other things, that each person who was
or is made a party to, or is threatened to be made a party to, or is involved
in, any action, suit, or proceeding by reason of the fact that he or she is or
was a director or officer of the Company (or was serving at the request of the
Company as a director, officer, employee, or agent for another entity), will be
indemnified and held harmless by the Company to the full extent authorized by
Delaware law against all expense, liability, or loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties, and amounts to be paid
in settlement) reasonably incurred by such person in connection therewith. The
II-1
<PAGE> 24
rights conferred thereby will be deemed to be contract rights and will include
the right to be paid by the Company for the expenses incurred in defending the
proceedings specified above in advance of their final disposition.
The Company is a party to indemnification agreements with each of its
directors and officers. These indemnification agreements provide for, among
other things, (i) the indemnification by the Company of the indemnitees
thereunder to the extent described above, (ii) the advancement of attorneys'
fees and other expenses, and (iii) the establishment, upon approval by the
Board of Directors, of trusts or other funding mechanisms to fund the Company's
indemnification obligations thereunder.
ITEM 16. EXHIBITS
<TABLE>
<S> <C> <C> <C>
1.1 -- Underwriting Agreement (to be filed, as applicable to a particular offering of Securities, as an exhibit to a
Current Report on Form 8-K and incorporated herein by reference thereto)
4.1 -- Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form
10-K (File No. 1-13536) for the fiscal year ended January 28, 1995 ("1994 Form 10- K"))
4.2 -- By-Laws (incorporated by reference to Exhibit 3.2 of the 1994 Form 10-K)
4.3 -- Rights Agreement, dated December 19, 1994, between the Company and the Bank of New York, as rights agent
(incorporated by reference to Exhibit 4.3 of the 1994 Form 10-K)
4.4 -- Indenture, dated December 15, 1994, between the Company and State Street Bank and Trust Company (successor to
The First National Bank of Boston), as Trustee (incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-3 (Registration Number 33-88328) filed with the Commission on January 9, 1995)
4.5 -- Supplemental Indenture (to be filed, as applicable to a particular offering of Debt Securities, as an exhibit
to a Current Report on Form 8-K and incorporated herein by reference thereto)
4.6 -- The form or forms of Securities with respect to each particular series of Securities registered hereunder will
be filed as an exhibit to a Current Report on Form 8-K and incorporated herein by reference thereto
5.1 -- Opinion of Jones, Day, Reavis & Pogue
12.1 -- Statement re: Computation of Ratios*
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Price Waterhouse LLP
23.3 -- Consent of Deloitte & Touche LLP
23.4 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
24.1 -- Powers of Attorney*
25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of State Street
Bank and Trust Company to act as Trustee under the Indenture*
</TABLE>
- ---------------------------
* Filed Previously.
II-2
<PAGE> 25
ITEM 17. UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby, a post-effective
amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this 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 this
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; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above shall not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Company pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment will be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time will
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.
(4) That, for purposes of determining any liability under
the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement will be
deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time will
be deemed to be the initial bona fide offering thereof.
(5) That, (i) for purposes of determining any liability
under the Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective and (ii) for the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus 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.
The undersigned Registrant hereby undertakes to file
an application for the purpose of determining the eligibility of the
trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939 in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised
II-3
<PAGE> 26
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer,
or controlling person of the Company 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 Company will,
unless in the opinion of counsel for the Company 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 Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE> 27
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 Cincinnati, State of Ohio on January 22, 1996.
FEDERATED DEPARTMENT STORES, INC.
By /s/ Dennis J. Broderick
-------------------------------------
Dennis J. Broderick,
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on January 22, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman of the Board and Chief Executive
------------------------------------------ Officer (principal executive officer)
Allen I. Questrom and Director
* Vice Chairman and Chief Financial Officer
------------------------------------------ (principal financial officer) and Director
Ronald W. Tysoe
* Senior Vice President and Controller
------------------------------------------ (principal accounting officer)
John E. Brown
* Director
------------------------------------------
Robert A. Charpie
* Director
------------------------------------------
Lyle Everingham
* Director
------------------------------------------
Meyer Feldberg
* Director
------------------------------------------
Earl G. Graves, Sr.
* Director
------------------------------------------
George V. Grune
* Director
------------------------------------------
Gertrude G. Michelson
* Director
------------------------------------------
Joseph Neubauer
* Director
------------------------------------------
Laurence A. Tisch
* Director
------------------------------------------
Paul W. Van Orden
* Director
------------------------------------------
Karl M. von der Heyden
* Director
------------------------------------------
Marna C. Whittington
* Director
------------------------------------------
James M. Zimmerman
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute
this Registration Statement pursuant to the Powers of Attorney
executed by the above-named persons.
/s/ Dennis J. Broderick
---------------------------------------------
Dennis J. Broderick,
Attorney-in-Fact
II-5
<PAGE> 28
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1.1 -- Underwriting Agreement (to be filed, as applicable to a particular offering of Securities, as an
exhibit to a Current Report on Form 8-K and incorporated herein by reference thereto)
4.1 -- Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company's Annual
Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 1995 ("1994 Form 10-K"))
4.2 -- By-Laws (incorporated by reference to Exhibit 3.2 of the 1994 Form 10-K)
4.3 -- Rights Agreement, dated December 19, 1994, between the Company and the Bank of New York, as rights
agent (incorporated by reference to Exhibit 4.3 of the 1994 Form 10-K)
4.4 -- Indenture, dated December 15, 1994, between the Company and State Street Bank and Trust Company
(successor to The First National Bank of Boston), as Trustee (incorporated by reference to Exhibit
4.1 of the Company's Registration Statement on Form S-3 (Registration Number 33-88328) filed with
the Commission on January 9, 1995)
4.5 -- Supplemental Indenture (to be filed, as applicable to a particular offering of Debt Securities, as
an exhibit to a Current Report on Form 8-K and incorporated herein by reference thereto)
4.6 -- The form or forms of Securities with respect to each particular series of Securities registered
hereunder will be filed as an exhibit to a Current Report on Form 8-K and incorporated herein by
reference thereto
5.1 -- Opinion of Jones, Day, Reavis & Pogue
12.1 -- Statement re: Computation of Ratios*
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Price Waterhouse LLP
23.3 -- Consent of Deloitte & Touche LLP
23.4 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)*
24.1 -- Powers of Attorney*
25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of
State Street Bank and Trust Company to act as Trustee under the Indenture*
</TABLE>
____________________
* Filed previously.
<PAGE> 1
EXHIBIT 5.1
JONES, DAY, REAVIS & POGUE
599 Lexington Avenue
New York, New York 10022
January 22, 1996
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, Ohio 45202
Re: Registration on Form S-3 of up to $1,000,000,000
of Securities of Federated Department Stores, Inc.
Ladies and Gentlemen:
We are acting as counsel to Federated Department Stores, Inc.,
a Delaware corporation (the "Company"), in connection with the authorization of
the possible issuance and sale from time to time by the Company of (i) certain
debt securities of the Company (the "Debt Securities"), (ii) shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), (iii)
shares of one or more series of the Company's preferred stock, par value $.01
per share (the "Preferred Stock"), and (iv) certain warrants to purchase Debt
Securities, Common Stock, Preferred Stock, or a combination thereof (the
"Warrants"), in each case as contemplated by the Company's Registration
Statement on Form S-3 (File No. 33-64973) (the "Registration Statement"). The
Debt Securities, Common Stock, Preferred Stock, and Warrants are collectively
referred to herein as the "Securities." Except as otherwise defined herein,
capitalized terms that are defined in the Registration Statement are used
herein as so defined.
We have examined such documents, records, and matters of law
as we have deemed necessary for purposes of this opinion. Based on such
examination and on the assumptions set forth below, we are of the opinion that:
1. The Debt Securities, when (a) duly executed by the Company
and authenticated by the Trustee in accordance with the
provisions of the Indenture and issued and sold in
accordance with the Registration Statement and (b)
delivered to the purchaser or purchasers thereof upon
receipt by the Company of such lawful consideration
therefor as the Company's Board of Directors (or a duly
authorized committee thereof or a duly authorized officer
of the Company) may determine, will be valid and binding
obligations of the Company.
2. The Common Stock, when (a) issued and sold in accordance
with the Registration Statement and (b) delivered to the
purchaser or purchasers thereof upon receipt by the
Company of such lawful consideration therefor as the
Company's Board of Directors (or a duly authorized
committee thereof or a duly authorized officer of the
Company) may determine, assuming that the Company at such
time has authorized but unissued shares of Common Stock
remaining under its Certificate of Incorporation, will be
validly issued, fully paid and nonassessable.
3. The Preferred Stock, when (a) issued and sold in
accordance with the Registration Statement and the
provisions of an applicable Certificate of Designation
that has been duly adopted by the Board of Directors of
the Company and duly filed in accordance with Delaware law
and (b) delivered to the purchaser or purchasers thereof
upon receipt by the Company of such lawful consideration
therefor as the Company's Board of Directors (or a duly
authorized committee thereof or a duly authorized officer
of the Company) may determine, will be validly issued,
fully paid and nonassessable.
4. The Warrants, when (a) issued and sold in accordance with
the Registration Statement and the provisions of an
applicable Warrant Agreement and (b) delivered to the
purchaser or purchasers thereof upon receipt by the
Company of such lawful consideration therefor as the
Company's Board of Directors (or a duly authorized
committee thereof or a duly
<PAGE> 2
Federated Department Stores, Inc.
January 22, 1996
Page 2
authorized officer of the Company) may determine, will be
valid and binding obligations of the Company.
In rendering the foregoing opinions, we have assumed that (i)
the definitive terms of each class and series of the Securities not presently
provided for in the Indenture or the Company's Certificate of Incorporation
will have been established in accordance with all applicable provisions of law,
the Indenture, the Company's Certificate of Incorporation and By-Laws, and the
authorizing resolutions of the Company's Board of Directors, and reflected in
appropriate documentation approved by us and, if applicable, duly executed and
delivered by the Company and any other appropriate party, (ii) the interest
rate on the Debt Securities will not be higher than the maximum lawful rate
permitted from time to time under applicable law, (iii) any Securities
consisting of Common Stock or Preferred Stock, and any Common Stock or
Preferred Stock for or into which any other Securities are exercisable,
exchangeable or convertible, will have been duly authorized and reserved for
issuance, (iv) each Warrant Agreement will have been duly authorized, executed
and delivered by, and will constitute a valid and binding obligation of, each
party thereto, (v) the Registration Statement, and any amendments thereto, will
have become effective, (vi) a Prospectus Supplement describing each class or
series of Securities offered pursuant to the Registration Statement will have
been filed with the Commission, (vii) the resolutions authorizing the Company
to register, offer, sell, and issue the Securities will remain in effect and
unchanged at all times during which the Securities are offered, sold, or issued
by the Company, and (viii) all Securities will be issued in compliance with
applicable federal and state securities laws.
In rendering the foregoing opinion, we have relied as to
certain factual matters upon certificates of officers of the Company, and we
have not independently checked or verified the accuracy of the statements
contained therein. In rendering the foregoing opinion, our examination of
matters of law has been limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware, and the federal laws of the
United States of America, as in effect on the date hereof.
We understand that prior to offering for sale any Securities
you will advise us in writing of the terms of such offering and of such
Securities, will afford us an opportunity to review the operative documents
(including the applicable Prospectus Supplement) pursuant to which the
Securities are to be offered, sold, and issued, and will file as an exhibit to
the Registration Statement such supplement or amendment to this opinion (if
any) as we may reasonably consider necessary or appropriate by reason of the
terms of such Securities or any changes in the Company's capital structure or
other pertinent circumstances.
We hereby consent to the filing of this opinion as Exhibit
5.1 to the Registration Statement and to the reference to us in the Prospectus
under the caption "Validity of Securities."
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Federated Department Stores, Inc.:
We consent to the use of our audit report dated February 28, 1995 on
the consolidated financial statements of Federated Department Stores, Inc. and
subsidiaries as of January 28, 1995 and January 29, 1994, and for each of the
fifty-two week periods ended January 28, 1995, January 29, 1994 and January 30,
1993, incorporated herein by reference and to the reference to our firm under
the heading "Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Cincinnati, Ohio
January 17, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Federated
Department Stores, Inc. of our reports dated March 13, 1995 and March 12, 1993
relating to the consolidated financial statements of Broadway Stores, Inc. and
its subsidiaries as of January 28, 1995 and January 29, 1994 and the fiscal
years ended January 28, 1995 and January 29, 1994, the seventeen weeks ended
January 30, 1993, and the thirty-five weeks ended October 3, 1992, which appear
in the Current Report on Form 8-K of Federated Department Stores, Inc. dated
September 21, 1995. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Los Angeles, California
January 17, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Federated Department Stores, Inc. on Form S-3 of our report dated September 19,
1994 (September 28, 29 and 30, 1994 as to Notes 18, 2 and 20 respectively) on
the consolidated financial statements of R.H. Macy & Co., Inc. for the three
years in the period ended July 30, 1994, which expresses an unqualified opinion
and includes explanatory paragraphs relating to the Company's reorganization
proceedings, its ability to continue as a going concern and its method of
accounting for income taxes and postretirement benefits other than pension,
appearing in the Annual Report on Form 10-K of R.H. Macy & Co., Inc. for the
year ended July 30, 1994, which consolidated financial statements are attached
as an Exhibit to the Current Report on Form 8-K of Federated Department Stores,
Inc. dated September 21, 1995, and to the reference to us under the heading
"Experts" in the Prospectus which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
New York, New York
January 17, 1996
