<PAGE>
REGISTRATION NO. 333-
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FEDERATED DEPARTMENT STORES, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 5311 13-3324058
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
</TABLE>
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)
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COPY TO:
ROBERT A. PROFUSEK, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
32ND FLOOR
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 326-3939
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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/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM
MAXIMUM OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO AMOUNT TO BE PRICE PER OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) UNIT(1)(2) PRICE(1)(2)(3)(4) FEE
<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 $ 303,031
</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 of 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 principal 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.
------------------------------
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.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION DATED AUGUST 25, 1997
PROSPECTUS
$1,000,000,000
FEDERATED DEPARTMENT STORES, INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
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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.
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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.
------------------------
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
<PAGE>
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.
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THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
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.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), ARE
CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES,
MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. FORWARD-LOOKING STATEMENTS ARE
TYPICALLY IDENTIFIED BY THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND,"
"ESTIMATE," AND SIMILAR EXPRESSIONS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE CONTEMPLATED BY THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS
FACTORS, INCLUDING GENERAL ECONOMIC CONDITIONS AND CONDITIONS IN THE RETAIL
INDUSTRY, COMPETIVE CONSIDERATIONS AND OTHER FACTORS. ACCORDINGLY, THERE CAN BE
NO ASSURANCE THAT THE RESULTS AND EVENTS CONTEMPLATED BY SUCH FORWARD-LOOKING
INFORMATION WILL IN FACT OCCUR, AND READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. THE COMPANY DOES NOT UNDERTAKE ANY
OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of 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") under 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.
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2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended February
1, 1997 (File No. 1-13536) (the "1996 Form 10-K"), the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 3, 1997 (the "First Quarter
Form 10-Q"), the Company's Current Report on Form 8-K dated July 15, 1997, 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 will 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).
3
<PAGE>
THE COMPANY
The Company is one of the leading operators of full-line department stores
in the United States with over 400 department stores in 36 states. 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. As of the date of this Prospectus, the Company also operates
approximately 150 specialty stores under the names "Aeropostale" and "Charter
Club," and a mail order catalog business under the name "Bloomingdale's By
Mail."
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.
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 1996 Form 10-K and the First Quarter Form 10-Q.
As a result of substantial acquisition transactions, the Company's results of
operations for its fiscal year ended January 28, 1995 and subsequent periods are
not directly comparable to its results of operations for prior periods.
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
13 WEEKS ENDED ENDED ENDED ENDED
ENDED FEBRUARY 1, FEBRUARY 3, JANUARY 28, JANUARY 29,
MAY 3, 1997 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed
charges (unaudited)(1).................... 1.30x 1.71x 1.31x 1.99x 2.33x
<CAPTION>
FISCAL YEAR
ENDED
JANUARY 30,
1993
-------------
<S> <C>
Consolidated ratio of earnings to fixed
charges (unaudited)(1).................... 1.72x
</TABLE>
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(1) For purposes of computing the ratio 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.
4
<PAGE>
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.
5
<PAGE>
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.
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
6
<PAGE>
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 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.
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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 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
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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 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
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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.
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
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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 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.
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DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Company's Certificate of Incorporation provides that the authorized
capital stock of the Company consists of 500.0 million shares of Common Stock
and 125.0 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 (or such later date as may be specified by
the Board of Directors of the Company) following the commencement of a tender
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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
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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.
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
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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.
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
15
<PAGE>
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 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
16
<PAGE>
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.
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.
17
<PAGE>
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.
EXPERTS
The consolidated financial statements of the Company as of February 1, 1997
and February 3, 1996, and for the 52 week period ended February 1, 1997, the 53
week period ended February 3, 1996, and the 52 week period ended January
28,1995, 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 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.
18
<PAGE>
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............... $ 303,031
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....................................................... $ 598,031
---------
---------
</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.
II-1
<PAGE>
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
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's By-Laws provide for, among other things, (i) the
indemnification by the Company of its directors and officers 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.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
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 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>
- ------------------------
* To be filed by amendment.
II-2
<PAGE>
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.
II-3
<PAGE>
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
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>
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 August 25, 1997.
FEDERATED DEPARTMENT STORES, INC.
/s/ DENNIS J. BRODERICK
------------------------------------------
By: 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 August 25, 1997.
SIGNATURE TITLE
- ------------------------------ ------------------------------
* Chairman of the Board and
- ------------------------------ Chief Executive
James M. Zimmerman Officer (principal executive
officer)
and Director
Vice Chairman and Chief
* Financial Officer
- ------------------------------ (principal financial
Ronald W. Tysoe officer) and Director
* Vice President and Controller
- ------------------------------ (principal accounting
Joel A. Belsky officer)
*
- ------------------------------ Director
Meyer Feldberg
*
- ------------------------------ Director
Earl G. Graves, Sr.
*
- ------------------------------ Director
George V. Grune
*
- ------------------------------ Director
Sara Levinson
*
- ------------------------------ Director
Terry J. Lundgren
*
- ------------------------------ Director
Joseph Neubauer
*
- ------------------------------ Director
Karl M. von der Heyden
*
- ------------------------------ Director
Craig E. Weatherup
*
- ------------------------------ Director
Marna C. Whittington
* 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>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------------------------------
<C> <S>
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
23.4 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>
- ------------------------
* To be filed by amendment.
<PAGE>
EXHIBIT 5.1
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
August 25, 1997
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
(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
<PAGE>
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.
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
<PAGE>
EXHIBIT 12.1
FEDERATED DEPARTMENT STORES, INC.
COMPUTATION OF HISTORICAL RATIOS OF EARNINGS TO FIXED CHARGES(A)
(IN THOUSANDS, EXCEPT RATIO DATA)
<TABLE>
<CAPTION>
PERIOD FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/3/97 2/1/97 2/3/96 1/28/95 1/29/94 1/30/93
---------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes.......... $ 43,683 $ 441,435 $ 201,859 $ 331,284 $ 367,780 $ 232,007
Add: Portion of rents representative
of the interest factor........ 29,332 117,328 133,501 71,109 63,530 63,843
Interest Expense................ 114,725 498,616 508,132 262,115 213,544 258,211
---------- ------------ ------------ ----------- ----------- -----------
Adjusted Income..................... $ 187,740 $ 1,057,379 $ 843,492 $ 664,508 $ 644,854 $ 554,061
---------- ------------ ------------ ----------- ----------- -----------
---------- ------------ ------------ ----------- ----------- -----------
Fixed charges:
Interest Expense................ $ 114,725 $ 498,616 $ 508,132 $ 262,115 $ 213,544 $ 258,211
Capitalized interest............ 248 897 933 447 191 126
Portion of rents representative
of the interest factor........ 29,332 117,328 133,501 71,109 63,530 63,843
---------- ------------ ------------ ----------- ----------- -----------
Total fixed charges................. $ 144,305 $ 616,841 $ 642,566 $ 333,671 $ 277,265 $ 322,180
---------- ------------ ------------ ----------- ----------- -----------
---------- ------------ ------------ ----------- ----------- -----------
Ratio of earnings to fixed
charges............................ 1.30x 1.71x 1.31x 1.99x 2.33x 1.72x
</TABLE>
- --------------
(a) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income before income taxes and extraordinary items plus fixed
charges (excluding interest capitalized). Fixed charges represent interest
incurred, amortization of debt expenses and that portion of rental expense
on operating leases deemed to be the equivalent of interest.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Federated Department Stores, Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Federated Department Stores, Inc. of our report dated March 4,
1997 relating to the consolidated balance sheets of Federated Department Stores,
Inc. and subsidiaries as of February 1, 1997 and February 3, 1996 and the
related consolidated statements of income and cash flows for the fifty-two week
period ended February 1, 1997, the fifty-three week period ended February 3,
1996 and the fifty-two week period ended January 28, 1995, which report appears
in the February 1, 1997 annual report on Form 10-K of Federated Department
Stores, Inc. and to the reference to our firm under the heading "Experts" in the
registration statement.
<TABLE>
<S> <C> <C>
/s/ KPMG PEAT MARWICK LLP
</TABLE>
Cincinnati, Ohio
August 22, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
By signing below, I hereby constitute and appoint Ronald W. Tysoe, Dennis J.
Broderick, John R. Sims, and Padma Tatta Cariappa, or any of them, my true and
lawful attorneys and agents to do any and all acts and things and to execute any
and all instruments in my name and behalf in my capacities as director and/or
officer of Federated Department Stores, Inc., a Delaware corporation (the
"Company"), which said attorneys and agents, or any of them, may deem necessary
or advisable or which may be required to enable the Company to comply with the
Securities Act of 1933, as amended (the "Securities Act"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with a Registration Statement on Form S-3 (or any other
appropriate form) and any abbreviated registration statement relating thereto
permitted pursuant to Rule 462(b) under the Securities Act for the purposes of
registering pursuant to the Securities Act debt and equity securities of the
Company having an aggregate offering price not to exceed $1.0 billion, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for me, in my name and behalf in my capacities as director
and/or officer of the Company (individually or on behalf of the Company), such
Registration Statement and any such abbreviated registration statement, and any
and all amendments and supplements thereto, and to file the same, with all
exhibits thereto and other instruments or documents in connection therewith,
with the Securities and Exchange Commission, and hereby ratify and confirm all
that said attorneys and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of August 22,
1997.
<TABLE>
<S> <C> <C>
/s/ Joel Belsky /s/ Meyer Feldberg /s/ Earl G. Graves, Sr.
- ---------------------------- ---------------------------- ----------------------------
Joel Belsky Meyer Feldberg Earl G. Graves, Sr.
/s/ George V. Grune /s/ Sara Levinson /s/ Terry J. Lundgren
- ---------------------------- ---------------------------- ----------------------------
George V. Grune Sara Levinson Terry J. Lundgren
/s/ Joseph Neubauer /s/ Ronald W. Tysoe /s/ Karl M. von der Heyden
- ---------------------------- ---------------------------- ----------------------------
Joseph Neubauer Ronald W. Tysoe Karl M. von der Heyden
/s/ Craig E. Weatherup /s/ Marna C. Whittington /s/ James M. Zimmerman
- ---------------------------- ---------------------------- ----------------------------
Craig E. Weatherup Marna C. Whittington James M. Zimmerman
</TABLE>
