<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 3, 1996
----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission file number 1-11084
--------
KOHL'S CORPORATION
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1630919
-------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051
- - -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 703-7000
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 Days.
Yes X No
----- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: September 10, 1996 Common
Stock, Par Value $.01 per Share, 73,887,746 Shares Outstanding.
<PAGE>
KOHL'S CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
<S> <C>
Condensed Consolidated Balance Sheets at
August 3, 1996, February 3, 1996 and
July 29, 1995 3
Condensed Consolidated Statements of Income
for the Three Months and Six Months Ended
August 3, 1996 and July 29, 1995 4
Consolidated Statement of Changes in
Shareholders' Equity for the Six Months
Ended August 3, 1996 5
Condensed Consolidated Statements of
Cash Flows for the Six Months Ended
August 3, 1996 and July 29, 1995 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
-2-
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
August 3, February 3, July 29,
1996 1996 1995
----------- ----------- -----------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
Assets
------
Current assets:
Cash and cash equivalents $ 4,650 $ 2,819 $ 1,528
Merchandise inventories 440,541 320,325 351,228
Other 12,360 7,020 11,575
-------- -------- --------
Total current assets 457,551 330,164 364,331
Property and equipment, at cost 586,496 502,406 423,446
Less accumulated depreciation 109,681 93,238 79,128
-------- -------- --------
476,815 409,168 344,318
Other assets 5,636 4,564 5,388
Favorable lease rights 19,567 20,491 22,431
Goodwill 37,938 40,538 43,138
-------- -------- --------
Total assets $997,507 $804,925 $779,606
======== ======== ========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $159,266 $ 68,810 $137,039
Accrued liabilities 57,311 57,259 41,740
Income taxes payable 6,362 21,628 5,374
Deferred income taxes 6,865 5,674 10,224
Current portion of long-term debt 1,425 1,425 1,345
-------- -------- --------
Total current liabilities 231,229 154,796 195,722
Long-term debt 269,532 187,699 177,844
Deferred income taxes 32,189 30,731 25,009
Other long-term liabilities 23,161 21,061 23,480
Shareholders' equity
Common stock-$.01 par value, 400,000,000 shares
authorized, 73,857,108, 73,736,670 and 73,552,136
issued at August 3, 1996, February 3, 1996 and
July 29, 1995 respectively. 738 737 736
Paid-in capital 191,166 188,998 185,625
Retained earnings 249,492 220,903 171,190
-------- -------- --------
Total shareholders' equity 441,396 410,638 357,551
-------- -------- --------
Total liabilities and shareholders' equity $997,507 $804,925 $779,606
======== ======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
3 Months 3 Months 6 Months 6 Months
(13 Weeks) (13 Weeks) (26 Weeks) (26 Weeks)
Ended Ended Ended Ended
August 3, 1996 July 29, 1995 August 3, 1996 July 29, 1995
-------------- ------------- -------------- -------------
(In thousands except per share data)
<S> <C> <C> <C> <C>
Sales $474,598 $363,536 $943,236 $731,901
Cost of merchandise sold 318,040 242,279 629,876 486,266
-------- -------- -------- --------
Gross margin 156,558 121,257 313,360 245,635
Operating expenses:
Selling, general, and administrative 117,439 91,389 233,329 183,940
Depreciation and amortization 9,064 6,507 17,729 13,163
Goodwill amortization 1,300 1,300 2,600 2,600
Preopening expenses 111 -- 3,750 1,492
-------- -------- -------- --------
Operating income 28,644 22,061 55,952 44,440
Interest expense, net 3,640 3,237 7,742 5,690
-------- -------- -------- --------
Income before income taxes 25,004 18,824 48,210 38,750
Provision for income taxes 10,176 7,681 19,621 15,811
-------- -------- -------- --------
Net income $ 14,828 $ 11,143 $ 28,589 $ 22,939
======== ======== ======== ========
Earnings per share:
Net income $ 0.20 $ 0.15 $ 0.39 $ 0.31
======== ======== ======== ========
Weighted average number of common shares 73,824 73,538 73,798 73,528
======== ======== ======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
KOHL'S CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
-------------------------- Paid-In Retained
Shares Amount Capital Earnings Total
----------------------------------------------------------------
(In thousands, except share data)
<S> <C> <C> <C> <C> <C>
Balance at February 3, 1996 73,736,670 $737 $188,998 $220,903 $410,638
Net income - - - 28,589 28,589
Exercise of stock options 120,438 1 2,168 - 2,169
----------------------------------------------------------------
Balance at August 3, 1996 73,857,108 $738 $191,166 $249,492 $441,396
================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
5
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
6 Months 6 Months
(26 Weeks) (26 Weeks)
Ended Ended
August 3, 1996 July 29, 1995
---------------------------------
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $28,589 $22,939
Adjustments to reconcile net income to net
cash provided by (used in) operating activities
Depreciation and amortization 20,418 15,802
Deferred income taxes 2,649 9,478
Other noncash charges 735 592
Changes in operating assets and liabilities (48,949) (87,162)
----------- -----------
Net cash provided by (used in) operating activities 3,442 (38,351)
INVESTING ACTIVITIES
Acquisition of property and equipment, net (84,090) (52,571)
Other (626) (1,081)
----------- -----------
Net cash used in investing activities (84,716) (53,652)
FINANCING ACTIVITIES
Net borrowings (repayments) under working capital loan (17,500) 63,300
Proceeds from public debt offering 100,000 -
Repayments of long-term debt (667) (538)
Payment of financing fees on debt (897) -
Net proceeds from issuance of common shares
(including stock options) 2,169 363
----------- -----------
Net cash provided by financing activities 83,105 63,125
----------- -----------
Net increase (decrease) in cash and cash equivalents 1,831 (28,878)
Cash and cash equivalents at beginning of period 2,819 30,406
----------- -----------
Cash and cash equivalents at end of period $4,650 $1,528
========== ==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
6
<PAGE>
KOHL'S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for fiscal year end financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Form 10-K (Commission File No.
1-11084) filed with the Securities and Exchange Commission.
Shareholders' equity, share and per share amounts for all periods
presented have been adjusted for the 2 for 1 stock split declared by the
Company's Board of Directors on March 11, 1996 effected in the form of a stock
dividend. The dilutive effect of stock options on earnings per share is
immaterial.
2. INVENTORIES
The Company uses the last-in, first out (LIFO) method of accounting for
merchandise inventory because it results in a better matching of cost and
revenues. The following information is provided to show the effects of the LIFO
provision on the quarter, as well as to provide users with the information to
compare to other companies not on LIFO.
<TABLE>
<CAPTION>
6 Months Ended
LIFO Expense ------------------------------
Quarter August 3, 1996 July 29, 1995
------------ -------------- -------------
(In Thousands)
<S> <C> <C>
First $1,171 $1,104
Second 1,184 1,090
------ ------
Total $2,355 $2,194
</TABLE>
Inventories would have been $2,016,000 higher at August 3, 1996, $339,000
lower at February 3, 1996 and $3,253,000 higher at July 29, 1995 if they had
been valued using the first-in, first-out (FIFO) method.
-7-
<PAGE>
3. CONTINGENCIES
The Company is involved in various legal matters arising in the normal
course of business. In the opinion of management, the outcome of such
proceedings and litigation will not have a material adverse impact on the
Company's financial position or results of operations.
The Internal Revenue Service (the "IRS") is currently auditing the
Company's federal income tax returns for fiscal years ended August 1986, 1987
and 1988. In January 1994, the IRS proposed approximately $20 million of tax
consisting primarily of an adjustment to the LIFO inventory method used by the
Company. The impact of the proposed adjustments before interest had previously
been substantially reflected in the Company's deferred income tax accounts. If
the Company were unsuccessful on all issues asserted by the IRS, the estimated
interest to date on the adjustments would be approximately $30 million ($18
million after tax). The Company is contesting the proposed adjustments
vigorously within the administrative appeals process of the IRS and intends to
litigate if necessary. The Company's management and tax advisors strongly
believe that the Company's positions are correct and consistent with governing
tax law and regulations, and expect the Company will prevail. Management does
not believe the ultimate resolution of these issues will have a material adverse
impact on the Company's results of operations or liquidity.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED AUGUST 3, 1996
RESULTS OF OPERATIONS
At August 3, 1996, the Company operated 138 stores compared with 109
stores at the same time last year. The Company successfully opened two new
stores during the last week of the quarter: Toledo, Ohio and the fourth store
in the Kansas City market.
Net sales increased $111.1 million or 30.6% to $474.6 million for the
three months ended August 3, 1996 from $363.5 million for the three months ended
July 29, 1995. Of the increase, $73.5 million is attributable to the inclusion
of 19 new stores opened in 1995 and ten new stores opened in 1996. The
remaining $37.6 million is attributable to comparable store sales growth of
10.4%. The Company completed its discontinuance of the electronics business
during the second quarter. Excluding electronics, comparable store sales
increased 11.9%.
Net sales increased $211.3 million or 28.9% to $943.2 million for the
six months ended August 3, 1996 from $731.9 million for the six months ended
July 29, 1995. Of the increase, $140.8 million is attributable to the inclusion
of 22 new stores opened in 1995 (net of the sales of two underperforming stores
closed in 1995) and ten new stores opened in 1996. The remaining $70.5 million
is attributable to comparable store sales growth of 9.9%. Excluding
electronics, comparable store sales increased 11.4%.
Due to a shift in the fiscal accounting calendar, the fiscal quarter
ending dates are one week later this year than a year ago. On a calendar basis,
matching the thirteen weeks ended August 3, 1996 with the thirteen weeks ended
August 5, 1995, total sales increased 29.1%. Comparable store sales increased
9.9% on this basis. Excluding electronics, comparable store sales increased
11.4% on this basis. Matching the twenty-six weeks ended August 3, 1996 with
the twenty-six weeks ended August 5, 1995, total sales increased 26.0% and
comparable sales increased 7.9% on this basis. Excluding electronics, comparable
stores sales increased 9.3% on this basis.
Gross margin for the three months ended August 3, 1996 was 33.0%
compared to 33.4% in the three months ended July 29, 1995. Gross margin for the
six months ended August 3, 1996 was 33.2% compared to 33.6% in the six months
ended July 29, 1995. These decreases are primarily attributable to clearance
markdowns taken
-9-
<PAGE>
to eliminate the Company's electronics business. A low-cost operating
environment and continued focus on expense control allows the Company to
profitably offer value to its customers.
Operating income for the three months ended August 3, 1996 increased
$6.6 million or 29.8% over the three months ended July 29, 1995. Operating
income for the six months ended August 3, 1996, increased $11.5 million or 25.9%
over the six months ended July 29, 1995. These increases resulted primarily
from the increased sales and the Company's ability to leverage its selling,
general and administrative expenses as net sales increased. Selling, general and
administrative expenses declined to 24.7% of net sales for the three months
ended August 3, 1996 from 25.1% of net sales for the three months ended July 29,
1995. Selling, general and administrative expenses declined to 24.7% of net
sales for the six months ended August 3, 1996 from 25.1% of net sales for the
six months ended July 29, 1995.
Costs associated with the opening of new stores are accumulated for
the 6-8 weeks prior to opening and expensed over the two week grand opening
period. The Company expensed $0.1 million of preopening expenses associated
with the opening of the two stores in the last week of the three months ended
August 3, 1996. The balance of the preopening expense related to these two
stores will be expensed in the three months ended November 2, 1996. The Company
expensed no preopening expense for the three months ended July 29, 1995. In the
six months ended August 3, 1996, the Company expensed $3.8 million of preopening
expenses associated with the opening of ten stores, with the balance of the
preopening expense of two stores to be expensed in the three months ended
November 2, 1996. The Company expensed $1.5 million of preopening expenses for
three stores opened in the six months ended July 29, 1995. These expenses
relate to the costs associated with new store openings, including hiring and
training costs for new employees, Kohl's charge account solicitation, and
processing and transporting initial merchandise.
Net interest expense for the three months ended August 3, 1996
increased $0.4 million from the three months ended July 29, 1995. Net interest
expense for the six months ended August 3, 1996 increased $2.1 million from the
six months ended July 29, 1995. The increase was due to higher interest rates
associated with the $100 million non-callable 6.7% unsecured senior notes issued
in February 1996 and increased spending on capital and working capital
requirements of new stores. The Company expects interest expense to continue to
increase during the remainder of fiscal 1996 based on increased borrowings for
new store's capital and working capital requirements and higher interest rates.
-10-
<PAGE>
For the three months ended August 3, 1996, net income increased 33.1% to
$14.8 million from $11.1 million in the three months ended July 29, 1995.
Earnings were $.20 per share for the three months ended August 3, 1996 compared
to $.15 per share for the three months ended July 29, 1995. Net income for the
six months ended August 3, 1996 increased 24.6% to $28.6 million or $.39 per
share from $22.9 million or $.31 per share in the six months ended July 29,
1995.
SEASONALITY & INFLATION
- - -----------------------
The Company's business is seasonal, reflecting increased consumer
buying in the "back-to-school" and Christmas seasons. The Company's financial
position and operations are also affected by the timing of new store openings.
Inflation did not materially affect the Company's net income during the periods
presented.
FINANCIAL CONDITION AND LIQUIDITY
- - ---------------------------------
The Company's primary ongoing cash requirements are for inventory
purchases, capital expenditures in connection with the Company's expansion and
remodeling programs and preopening expenses. The Company's primary sources of
funds for its business activities are cash flow from operations, borrowings
under its revolving credit facility, the availability of the debt securities
under the Company's shelf registration statement and short-term trade credit.
Short-term trade credit, in the form of extended payment terms for inventory
purchases or third party factor financing, represents a significant source of
financing for merchandise inventories. The Company's working capital and
inventory levels typically build throughout the fall, peaking during the
Christmas selling season.
At August 3, 1996, the Company's merchandise inventories had increased
$120.2 million over the February 3, 1996 balance and $89.3 million over the July
29, 1995 balance. These increases reflect the purchase of fall inventory as
well as inventory for new stores. The Company's working capital increased to
$226.3 million at August 3, 1996 from $175.4 million at February 3, 1996 and
$168.6 million at July 29, 1995. The increase is due primarily to higher
inventory levels offset in part by increased accounts payable. The Company
expects working capital levels to continue to grow as new stores are opened.
Cash provided from operating activities was $3.4 million for the six
months ended August 3, 1996 compared to cash used of $38.4 million for the six
months ended July 29, 1995. Excluding changes in operating assets and
liabilities, cash provided by operating activities was $52.4 million for the six
months ended August 3, 1996 compared to $48.8 million for the six months ended
July 29, 1995.
-11-
<PAGE>
Capital expenditures for the six months ended August 3, 1996 were $84.1
million (no additional assets under capital lease) compared to $59.0 million
(including $6.4 million of assets under capital leases) for the same period a
year ago. The increase in expenditures in 1996 is primarily attributable to the
opening of ten new stores for the six months ended August 3, 1996 compared to
three new stores for the six months ended July 29, 1995 and the relocation of
the Company's corporate headquarters within Menomonee Falls in July 1996 to an
owned facility.
Total capital expenditures for fiscal 1996 are currently expected to
be approximately $200.0 million (excluding assets under capital leases). The
actual amount of the Company's future annual capital expenditures will depend
primarily on the number of new stores opened, whether such stores are owned or
leased by the Company and the number of existing stores remodeled or
refurbished.
The Company's long-term debt increased from $187.7 million at February
3, 1996 to $269.5 million at August 3, 1996. On February 6, 1996 the Company
issued $100 million non-callable 6.70% unsecured senior notes under the
Company's $250 million shelf registration statement. The proceeds were used to
paydown borrowings under its $200 million unsecured revolving credit facility
and will support future Company growth. The notes mature on February 1, 2006.
The Company anticipates that it will be able to satisfy its current
operating needs, planned capital expenditures and debt service requirements with
current working capital, cash flows from operations, seasonal borrowings under
its revolving credit facility, offerings of debt securities, short-term trade
credit and other lending facilities.
Information in this document contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as statements relating to debt service requirements and planned capital
expenditures. Forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "may", "will",
"should" or "anticipates" or the negative thereof or other variations thereon.
No assurance can be given that the future results covered by the forward-looking
statements will be achieved.
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
4.2 Amendment No. 4 to the Revolving Credit Agreement dated
July 19, 1996 among Kohl's Department Stores, Inc. various
commercial banking institutions and the Bank of New York,
an Administrative Agent, the Bank of Nova Scotia as Agent,
and the First National Bank of Chicago, as Agent.
10.16 Articles of Incorporation as Amended
12.1 Statement regarding calculation of ratio of earnings to
fixed charges.
27 Financial Data Schedule - Article 5 of Regulation S-X
b) Reports on Form 8-K
There were no reports on Form 8-K filed for three months ended
August 3, 1996
-13-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Kohl's Corporation
(Registrant)
Date: September 12, 1996 /s/ William Kellogg
---------------------------------
William Kellogg
Chairman, Chief Executive Officer
Date: September 12, 1996 /s/ Arlene Meier
---------------------------------
Arlene Meier
Senior Vice President - Finance
Chief Financial Officer
-14-
<PAGE>
EXHIBIT 4.2
AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT is made as of the 19th
day of July, 1996 by and among KOHL'S DEPARTMENT STORES, INC., a Delaware
corporation (the "Borrower"), and the Banks and other financial institutions
whose signatures appear on the signature pages hereof (the "Banks").
R E C I T A L S
- - - - - - - -
I. The Borrower has requested that the Credit Agreement (as defined below)
be amended as set forth herein, and The Bank of New York, as Administrative
Agent under the Credit Agreement, and the Banks are willing to amend the Credit
Agreement upon the terms and conditions herein contained.
II. Among other things, from and after the Amendment Effective Date (as
defined below), the Borrower will be permitted to guaranty Indebtedness of the
Guarantor.
IN CONSIDERATION of the mutual covenants, conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:
ARTICLE 1.
----------
Definitions
-----------
1.1. When used herein, the following terms shall have the meanings
specified:
"Amendment" shall mean this Amendment No. 4 to Revolving Credit Agreement.
"Amendment Effective Date" shall have the meaning set forth in Section 3.1
hereof.
"Credit Agreement" shall mean the Revolving Credit Agreement among the
Borrower and the Banks, dated as of February 28, 1994, as amended by Amendment
No. 1 thereto, dated as of July 19, 1995, Amendment No. 2 thereto, dated as of
September 29, 1995 and Amendment No. 3 thereto, dated as of December 21, 1995.
<PAGE>
1.2. The other capitalized terms used in this Amendment shall have the
definitions assigned in the Credit Agreement, unless otherwise defined herein.
ARTICLE 2.
----------
Amendments
----------
2.1. Section 9.6 of the Credit Agreement is amended by adding the phrase
"and other than Guaranties of Indebtedness of the Guarantor by any Subsidiary"
after the word "Borrower" on the second line therein.
2.2. Section 9.10 of the Credit Agreement is amended in its entirety to
read as follows:
9.10 Guaranties.
Permit the Guarantor or any Subsidiary (other than a Subsidiary
formed primarily for the sold purpose of owning and administering the
retail Receivables of retail Subsidiaries) to become or be liable in
respect of any Guaranty except for (i) the Parent Guaranty, (ii) Guaranties
by the Borrower of the obligations of any Restricted Subsidiaries that are
limited in amount to a stated maximum dollar exposure, (iii) Guaranties by
any Subsidiary of Indebtedness of the Guarantor, provided that immediately
before and after giving effect thereto, no Default or Event of Default
shall or would exist, (iv) Guaranties by the Guarantor of the obligations
of any Subsidiary, and (v) recourse obligations of Guarantor's retail
Subsidiaries in connection with Securitized Receivables Transactions; and
in each case incurred in compliance with the provisions of this Agreement.
2.3. Section 9.13 of the Credit Agreement is amended by adding the phrase
"or Section 9.10" after the reference to "Section .16" on the second line
therein.
ARTICLE 3.
----------
Conditions for Effectiveness
----------------------------
3.1 This Amendment shall not be effective until such
-2-
<PAGE>
time (the "Amendment Effective Date") as each of the following conditions have
been fulfilled:
(a) The Administrative Agent shall have received copies, certified by the
Secretary or an Assistant Secretary of the Borrower to be correct, of
all corporate action taken by the Borrower to authorize this
Amendment.
(b) The Borrower shall pay all of the out-of-pocket costs and expenses of
the Administrative Agent (including reasonable legal fees and
disbursements) incurred in connection with the preparation,
negotiation and closing of this Amendment.
(c) On and as of the Amendment Effective Date, no Default or Event of
Default shall have occurred or be continuing.
ARTICLE 4.
----------
Other Provisions
----------------
4.1. The Borrower hereby reaffirms and admits the validity and
enforceability of the Loan Documents and all of its obligations thereunder,
agrees and admits that it has no defenses to or offsets against any of its
obligations to the Banks or the Administrative Agent under the Loan Documents,
and represents and warrants that there exists no Default or Event of Default,
and that the representations and warranties contained in the Credit Agreement
are true and correct on and as of the date hereof, except such thereof as relate
solely to an earlier date.
4.2. In all other respects the Loan Documents shall remain in full force
and effect, and no amendment of any term or condition of the Credit Agreement
herein contained shall be deemed to be an amendment of any other term or
condition contained in the Credit Agreement or any other Loan Document or
constitute a waiver of any Default or Event of Default.
4.3. This Amendment may be executed in any number of counterparts all of
which, taken together, shall constitute one Amendment. In making proof of this
Amendment, it shall
-3-
<PAGE>
only be necessary to produce the counterpart executed and delivered by the
party to be charged.
4.4. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED TO
BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE IN
ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 4 to Revolving Credit Agreement as of the day, month and year first written
above.
KOHL'S DEPARTMENT STORES,
INC.
By: /s/ William S. Kellogg
-----------------------
Name: William S. Kellogg
---------------------
Title: C.E.O.
--------------------
THE BANK OF NEW YORK, in its individual
capacity and as Administrative Agent
By: /s/ Michael Flannery
-----------------------
Name: Michael Flannery
---------------------
Title: Vice President
--------------------
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Lynn M. Hickey
-----------------------
Name: Lynn M. Hickey
---------------------
Title: Corporate Banking Officer
-------------------------
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
-----------------------
Name: F.C.H. Ashby
---------------------
Title: Senior Manager Loan Operations
------------------------------
BANK ONE, MILWAUKEE, N.A.
By: /s/ Cindy L. Wavrunek
-----------------------
Name: Cindy L. Wavrunek
---------------------
Title: Vice President
--------------------
-5-
<PAGE>
THE FUJI BANK, LIMITED
By: /s/Hidehiko Ide
-----------------------------
Name: Hidehiko Ide
---------------------------
Title: General Manager
--------------------------
FIRST BANK NATIONAL
ASSOCIATION
By: /s/Mark R. Olmin
-----------------------------
Name: Mark R. Olmin
---------------------------
Title: Vice President
--------------------------
BANK OF AMERICA ILLINOIS
f/k/a CONTINENTAL BANK N.A.
By:/s/M.H. Claggett
-----------------------------
Name: M.H. Claggett
---------------------------
Title: Vice President
--------------------------
COMERICA BANK
By: /s/Harve C. Light
-----------------------------
Name: Harve C. Light
---------------------------
Title: Assistant Vice President
--------------------------
-6-
<PAGE>
ACKNOWLEDGMENT
--------------
On behalf of Kohl's Corporation, the undersigned hereby acknowledges
and consents to this Amendment No. 4 to Revolving Credit Agreement and, without
in any way establishing a course of dealing by the Borrower or the Banks,
reaffirms the terms and conditions of the Guaranty of Kohl's Corporation and
agrees that the Credit Agreement, as amended, remains in full force and effect
and is hereby ratified and confirmed.
KOHL'S CORPORATION
By: /s/ William S. Kellogg
------------------------
Name: William S. Kellogg
----------------------
Title: C.E.O.
---------------------
-7-
<PAGE>
ARTICLES OF INCORPORATION EXHIBIT 10.16
OF
KOHL'S WISCONSIN CORPORATION
The undersigned incorporator, acting as incorporator of a corporation under
the Wisconsin Business Corporation Law Chapter 180 of the Wisconsin Statutes
(the "WBCL"), adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
Name
----
The name of the corporation is Kohl's Wisconsin Corporation.
ARTICLE II
Purposes
--------
The purposes for which the corporation is organized are to engage in any
lawful activity within the purposes for which a corporation may be organized
under the WBCL.
ARTICLE III
Capital Stock
-------------
The aggregate number of shares which the corporation shall have the
authority to issue, the designation of each class of shares, the authorized
number of shares of each class and the par value thereof per share shall be as
follows:
<TABLE>
<CAPTION>
Designation Par Value Authorized
Class Per Share Number of Shares
----------- --------- ----------------
<S> <C> <C>
Common Shares $.01 200,000,000
Preferred Shares $.01 10,000,000
</TABLE>
The preferences, limitations and relative rights of shares of each class of
stock shall be as follows:
A. Common Shares.
(1) Voting. Except as otherwise provided by law and subject to the
rights of holders of any series of Preferred Shares, only the holders of Common
Shares shall be entitled to vote for the election of directors of the
corporation and for all other corporate purposes. Except as otherwise provided
by law, upon any such vote, each holder of Common Shares shall be entitled to
one vote for each Common Share held of record by such shareholder.
<PAGE>
(2) Dividends. Subject to the rights of holders of any series of Preferred
Shares, the holders of Common Shares shall be entitled to receive such dividends
as may be declared thereon from time to time by the Board Of Directors, in its
discretion, out of any funds of the corporation at the time legally available
for payment of dividends on Common Shares.
(3) Liquidation. In the event of the voluntary or involuntary
dissolution, liquidation or winding up of the corporation, after there have been
paid to or set aside for the holders of any series of Preferred Shares the full
preferential amounts, if any, to which they are entitled, the holders of
outstanding Common Shares shall be entitled to share ratably, according to the
number of shares held by each, in the remaining assets of the corporation
available for distribution.
B. Preferred Shares.
The Preferred Shares may be issued from time to time in one or more series
in any manner permitted by law and the provisions of the Articles of
Incorporation of the corporation, as determined from time to time by the Board
of Directors and stated in the resolution or resolutions providing for the
issuances thereof, prior to the issuances of any shares thereof. Unless
otherwise provided in the resolution establishing a series of Preferred Shares,
prior to the issue of any shares of a series so established or to be
established, the Board of Directors may, by resolution, amend the relative
rights and preferences of the shares of such series.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of each series of Preferred
Shares shall be governed by the following provisions:
(i) The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of Preferred Shares in one
or more series, with such voting powers, full or limited, or without voting
powers and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of
Directors, including (but not limiting the generality thereof) the
following:
(A) The number of shares to constitute each such series, and
the designation of each such series.
(B) The dividend rate of each such series, the conditions and
dates upon which such dividends shall be payable, the relation which
such dividends shall bear
2
<PAGE>
to the dividends payable on any other class or classes or on any other
series of any class or classes of stock, and whether such dividends
shall be cumulative, noncumulative or partially cumulative,
(C) Whether the shares of each such series shall be subject to
redemption by the corporation and if made subject to such redemption,
the times, prices and other terms and conditions of such redemption.
(D) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of each such series.
(E) Whether or not the shares of each such series shall be
convertible into or exchangeable for any other securities of the
corporation, including shares of any other class, classes or series of
any other class or classes of stock of the corporation, or any debt
securities of the corporation, and, if provision be made for
conversion or exchange, the times, prices, rates of exchange,
adjustments, and other terms and conditions of such conversion or
exchange.
(F) The extent, if any, to which the holders of the shares of
each such series shall be entitled to vote with respect to the
election of directors or otherwise.
(G) The restrictions, if any, on the issue or reissue of any
additional Preferred Shares.
(H) The rights of the holders of the shares of each such series
upon the dissolution of, or upon the distribution of the assets of,
the corporation.
(ii) Except as otherwise required by law and except for such voting
powers with respect to the election of directors or other matters as may be
stated in the resolutions of the Board of Directors creating any series of
Preferred Shares, the holders of any such series shall have no voting
powers whatsoever.
ARTICLE IV
Preemptive Rights
-----------------
No holder of any capital stock of the corporation shall have any preemptive
right to purchase, subscribe for, or otherwise acquire any shares of the
corporation of any class now or hereafter authorized, or any securities
exchangeable for or convertible into such shares.
3
<PAGE>
ARTICLE V
Board of Directors
------------------
(a) Number of Directors, Tenure and Qualifications. Except as provided
pursuant to subparagraph (d) of this Article V, the number of directors
constituting the Board of Directors of the corporation shall be such number, not
less than 5 nor more than 15, as from time to time shall be determined by the
then authorized number of directors; provided, however, that no decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director. The Board of Directors shall be and is divided into three
classes, designated Class I, Class II and Class III. The initial Class I
directors shall be William S. Kellogg and Lawrence B. Sorrel; the initial Class
II directors shall be Jay H. Baker, Herbert Simon and Peter M. Sommerhauser; and
the initial Class III directors shall be John F. Herma, Jules Allen and Frank V.
Sica. Each class shall consist, as nearly as may be possible, of one-third of
the total number of directors constituting the entire Board of Directors, with
the term of office of the directors of one class expiring each year. Each
director shall serve for a term ending on the date of the third annual meeting
following the annual meeting at which such director was elected; provided,
however, the initial Class I directors shall serve for a term ending on the date
of the annual meeting of shareholders held in 1993, the initial Class II
directors shall serve for a term ending on the date of the annual meeting of
shareholders held in 1994, and the initial Class III directors shall serve for a
term ending on the date of the annual meeting of shareholders held in 1995.
Each director shall hold office until the annual meeting for the year in which
his term expires and until such director's successor shall be elected and
qualified, subject, however, to such director's earlier death, resignation,
disqualification or removal from office.
(b) Vacancies. Any vacancy on the Board of Directors, whether resulting
from an increase in the number of directors or resulting from death,
resignation, disqualification, removal or otherwise, other than a vacancy with
respect to a director elected as provided pursuant to subparagraph (d) of this
Article V, shall be filled by the vote of the majority of the directors then in
office (excluding directors, if any, elected as provided pursuant to
subparagraph (d) of this Article V), even if less than a quorum, or by a sole
remaining director. If no director remains in office, any vacancy may be filled
by the shareholders. Any director so elected to fill any vacancy on the Board of
Directors, including a vacancy created by an increase in the number of
directors, shall hold office for the remaining term of directors of the class to
which he has been elected and until his successor shall be elected and shall
qualify.
4
<PAGE>
(c) Removal of Directors. Exclusive of directors, if any, elected as
provided pursuant to subparagraph (d) of this Article V, a director of the
corporation may be removed from office prior to the expiration of his term of
office at any time, but only for cause and only by the affirmative vote of a
majority of the outstanding shares of capital stock of the corporation entitled
to vote with respect to the election of such director at a meeting of the
shareholders duly called for such purpose.
(d) Directors Elected by Preferred Shares. Notwithstanding the foregoing,
whenever the holders of any one or more series of Preferred Shares issued by the
corporation shall have the right, voting pursuant to the term of such Preferred
Shares, to elect directors at an annual or special meeting of shareholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of such Preferred Shares. Unless
expressly provided by such terms, directors so elected shall not be divided into
classes and, during the prescribed terms of office of such directors, the Board
of Directors shall consist of such number of directors determined as provided in
subparagraph (a) of this Article V plus the number of directors determined as
provided in this subparagraph (d) of this Article V.
(e) Shareholder Nominations. Advance notice of shareholder nominations for
the election of directors shall be given in the manner provided in the Bylaws of
the corporation.
(f) Amendment or Repeal. Notwithstanding any other provisions of these
Articles of Incorporation or the Bylaws of the corporation (and notwithstanding
the fact that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws of the corporation), the affirmative vote of the
holders of 80% or more of the combined voting power of the then outstanding
shares of stock entitled to vote on the matter, voting together as a single
class, shall be required to alter, amend, adopt any provision inconsistent with,
or repeal this Article V.
ARTICLE VI
Shareholder Action
------------------
The shareholders shall not be entitled to take action without a meeting by
less than unanimous consent. Except as otherwise required by law and subject to
the express rights of the holders of any class or series of stock having a
preference over the Common Shares as to dividends or upon liquidation, annual
and special meetings of the shareholders shall be called, the record date or
dates shall be determined and notice shall be sent as set forth in the Bylaws of
the corporation. Notwithstanding any other provisions of these Articles of
5
<PAGE>
Incorporation or the Bylaws of the corporation (and notwithstanding the fact
that a lesser affirmative vote may be specified by law, these Articles of
Incorporation or the Bylaws of the corporation), the affirmative vote of the
holders of 80% or more of the combined voting power of the then outstanding
shares of stock entitled to vote on the matter, voting together as a single
class, shall be required to alter, amend, adopt any provision inconsistent with,
or repeal Articles II or VIII of the Bylaws, or this Article VI or any provision
thereof or hereof; provided, however, that the Board of Directors may alter,
amend, or adopt any provision inconsistent with, or repeal Articles II or VIII
of the Bylaws, or any provision thereof, without a vote of shareholders.
ARTICLE VII
Registered Office and Agent
---------------------------
The address of the initial registered office of the corporation is 44 East
Mifflin Street, Madison, Dane County, Wisconsin 53703 and the name of its
initial registered agent at such address is C T Corporation System.
ARTICLE VIII
Incorporator
------------
The name and address of the incorporator is Peter M. Sommerhauser, 780
North Water Street, Milwaukee, Wisconsin 53202.
Executed this 19th day of March, 1993.
----
/s/ Peter M. Sommerhauser
- - ------------------------------
Peter M. Sommerhauser
This instrument was drafted by Larry D. Lieberman, Godfrey & Kahn, S.C.,
780 N. Water Street, Milwaukee, Wisconsin 53202.
AI-Kohts.LDL
3/17/93 ica
6
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION
--------------------------------------
OF
--
KOHL'S CORPORATION
------------------
Pursuant to the consent of the Board of Directors of Kohl's
Corporation on April 18, 1996 and the vote of shareholders of Kohl's Corporation
on May 29, 1996, and in accordance with Section 180.1003 of the Wisconsin
Statutes, the following resolution was duly adopted:
BE IT RESOLVED, that Article III of the Articles of Incorporation
of Kohl's Corporation be amended by changing the number of authorized
shares of stock to read as follows:
<TABLE>
<CAPTION>
Designation Par Value Authorized
Class Per Share Number of Shares
---------------- --------- ----------------
<S> <C> <C>
Common Shares $.0l 400,000,000
Preferred Shares $.01 10,000,000
</TABLE>
and except as set forth above, Article III shall remain in full force
and effect without further amendment or modification.
Executed in duplicate this 20th day of June, 1996.
------
KOHL'S CORPORATION
By: /s/ John F. Herma
---------------------------------
John F. Herma, Chief
Operating Officer and
Secretary
This instrument was drafted by:
Larry D. Lieberman
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
10211ED8
<PAGE>
ARTICLES OF MERGER OF
KOHL'S CORPORATION
WITH AND INTO
KOHL'S WISCONSIN CORPORATION
Kohl's Wisconsin corporation, a corporation organized under the laws of the
State of Wisconsin, hereby certifies pursuant to Section 180.1107 of the
Wisconsin Statutes, as follows:
1. The Agreement and Plan of Merger by and between Kohl's Wisconsin
Corporation and Kohl's Corporation, a Delaware corporation, is attached hereto
as Appendix A and made a part hereof.
2. Said Plan of Merger was adopted and approved by the Board of Directors
and sole shareholder of Kohl's Wisconsin Corporation on March 23, 1993, in
accordance with Sections 180.1101 and 180.1103 of the Wisconsin Statutes.
3. All provisions of the laws of the States of Wisconsin and Delaware
applicable to the proposed merger have been complied with.
IN WITNESS WHEREOF, Kohl's Wisconsin Corporation has caused these Articles
of Merger to be executed on this 3rd day of June, 1993.
KOHL'S WISCONSIN CORPORATION
By: /s/ William S. Kellogg
---------------------------------
William S. Kellogg,
Chairman of the Board and
Chief Executive Officer
This instrument was drafted by:
Larry D. Lieberman
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, made and entered into as of this 23rd day of
March, 1993, by and between Kohl's Wisconsin Corporation, a Wisconsin
corporation (the "Surviving Corporation"), and Kohl's Corporation, a Delaware
corporation (the "Merging Corporation"). The Merging Corporation and the
Surviving Corporation are sometimes collectively referred to herein as the
"Constituent Corporations."
RECITALS
The Merging Corporation is a Delaware corporation having authorized capital
consisting of 60,000,000 shares of Common Stock, $.01 par value, of which
36,608,148 shares are issued and outstanding as of the date hereof, and
3,000,000 shares of Preferred Stock, $.01 par value, of which no shares are
issued and outstanding as of the date hereof.
The Surviving Corporation is a Wisconsin corporation having authorized
capital consisting of 200,000,000 Common Shares, $0.01 par value, of which 100
shares are issued and outstanding as of the date hereof, and 10,000,000
Preferred Shares, $.01 par value, of which no shares are issued and outstanding
as of the date hereof. All of the outstanding Common Shares of the Surviving
Corporation are owned by the Merging Corporation.
The Merging Corporation and the Surviving Corporation have determined it to
be advisable for the Merging Corporation to merge with and into the Surviving
Corporation (the "Merger") pursuant to the applicable provisions of the
Wisconsin Business Corporation Law and the Delaware General Corporation Law on
the terms hereinafter set forth, and the Boards of Directors of the Merging
Corporation and Surviving Corporation have each approved and adopted this
Agreement and Plan of Merger and authorized the execution hereof.
PLAN OF MERGER
In consideration of the premises, the parties hereto adopt arid make this
Agreement and Plan of Merger and prescribe the terms and conditions of such
Merger and the manner of carrying the same into effect, which shall be as
follows:
1. Effective 9:00 a.m., Milwaukee time, on June 4, 1993, (such time and
date being referred to herein as the "Effective Date"), the Merging Corporation
shall be merged with and into the Surviving Corporation.
2. The manner and basis of converting the issued and outstanding shares of
the Merging Corporation's stock and the outstanding stock options granted under
the Merging Corporation's 1992 Long Term Compensation Plan (the "Incentive
Plan") into shares of stock and stock options of the Surviving Corporation shall
be as follows:
(a) At the Effective Date each share, of Common Stock of the Merging
Corporation issued and outstanding shall, without any action on
the part of either of the Constituent Corporations or any holder
of such share, be converted into one fully paid and nonassessable
Common Share of the Surviving Corporation (subject to the
liability under Section 180.0622(2)(b) of the Wisconsin
Statutes).
(b) Each stock certificate which, prior to the Effective Date,
represented issued and outstanding shares of the Common Stock of
the Merging Corporation shall be and become on the Effective Date
a certificate representing an identical number of Common Shares
of the Surviving Corporation, automatically by virtue of the
Merger and without any action on the part of the holder thereof.
A-1
<PAGE>
(c) At the Effective Date, each share of Common Stock of the Merging
Corporation held as treasury stock shall be cancelled and
returned to the status of authorized but unissued shares.
(d) Each stock option granted by the Merging Corporation (under or
subject to the Incentive Plan of the Merging Corporation) and
outstanding immediately prior to the Effective Date shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become a stock option to
purchase, upon the same terms and conditions, an identical number
of the Surviving Corporation's Common Shares (subject to future
adjustments as may be provided in the Incentive Plan). The price
per share payable upon exercise under each of said options shall
(subject to future adjustments as may be provided in the
Incentive Plan) be equal to the exercise price per share
thereunder immediately prior to the Effective Date. A number of
the Surviving Corporation's Common Shares shall be reserved for
issuance upon the exercise of options equal to the number of
shares of the Merging Corporation's Common Stock so reserved
immediately prior to the Effective Date.
3. At the Effective Date all of the Common Shares of the Surviving
Corporation issued and outstanding immediately prior to the Effective Date of
the Merger shall be cancelled and returned to the status of authorized but
unissued shares.
4. On the Effective Date, each employee benefit plan and incentive
compensation plan to which the Merging Corporation is then a party shall be
assumed by, and continue to be the plan of, the Surviving Corporation. To the
extent any employee benefit plan or incentive compensation plan of the Merging
Corporation or any of its subsidiaries provides for the issuance or purchase of,
or otherwise relates to, the Merging Corporation's Common Stock, after the
Effective Date such plan shall be deemed to provide for the issuance or purchase
of, or otherwise relate to, the Surviving Corporation's Common Shares upon the
same terms and conditions.
5. The officers and directors of the Surviving Corporation on the
Effective Date shall be and continue to be the officers and directors of the
Surviving Corporation thereafter, until their successors are duly appointed or
elected.
6. Upon the Effective Date, the Articles of Incorporation of the Surviving
Corporation shall be amended as. follows:
Article I of the Surviving Corporation's Articles of Incorporation
shall be amended to change the name of the Surviving Corporation to
"Kohl's Corporation."
The Articles of Incorporation of the Surviving Corporation, as so amended, shall
remain in effect as the Articles of Incorporation of the Surviving Corporation
after the Merger.
7. The Bylaws of the Surviving Corporation, as they exist immediately
prior to the Effective Date, shall remain in effect as the Bylaws of the
Surviving Corporation thereafter, unaffected by the Merger.
8. On the Effective Date, the Merging Corporation shall be merged with and
into the Surviving Corporation, which shall continue its corporate existence
under the laws of the State of Wisconsin. The separate existence and corporate
organization of the Merging Corporation shall cease upon the Effective Date, and
the Surviving Corporation shall possess all of the rights, privileges, powers
and franchises, as well of a public as of a private nature, of each of the
Constituent Corporations; and all property, real, personal and mixed, and all
debts due on whatever account, including subscriptions to shares, and all other
things in action, and all and every other interest, of or belonging to or due to
each of the Constituent Corporations, shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without further act or
deed; and the title to any real estate,
A-2
<PAGE>
or any interest therein, vested in either of the Constituent Corporations shall
not revert or be in any way impaired by reason of such Merger. The Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of each of the Constituent Corporations, and any claims existing
or action or proceeding pending by or against the Constituent Corporations may
be prosecuted to judgment as if such Merger had not taken place. Neither the
rights of creditors nor any liens upon the property of either Constituent
Corporation shall be impaired by the Merger.
9. This Agreement and Plan of Merger shall be submitted to the
shareholders of each of the Constituent Corporations hereto in accordance with
the applicable provisions of law, and the consummation of the Merger herein
provided for is conditioned upon the approval and adoption hereof by the
shareholders of the respective parties as provided by law.
10. This Agreement and Plan of Merger and the Merger herein contemplated
may be abandoned by the Board of Directors of either of the Constituent
Corporations at any time prior to the Effective Date. This Agreement may be
amended, modified or supplemented at any time (before or after shareholder
approval) prior to the Effective Date with the mutual consent of the Boards of
Directors of the Merging Corporation and the Surviving Corporation; provided,
however, that this Agreement may not be amended, modified or supplemented after
it has been approved by the Merging Corporation's shareholders in any manner
which. in the judgment of the Board of Directors of the Merging Corporation,
would have a material adverse effect on the rights of the Merging Corporation's
shareholders or in any manner not permitted under applicable law.
IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be executed by their duly authorized officers, all as of the day and
year first above written.
KOHL'S CORPORATION,
a Delaware corporation
By: /s/ William S. Kellogg
---------------------------------
Chairman of the Board and
Chief Executive Officer
KOHL'S WISCONSIN CORPORATION,
a Wisconsin corporation
By: /s/ William S. Kellogg
---------------------------------
Chairman of the Board and
Chief Executive Officer
A-3
<PAGE>
Exhibit 12.1
KOHL'S CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
($000s)
<TABLE>
<CAPTION>
26 Weeks Ended
--------------------- Fiscal Year (1)
August 3, July 29, ----------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- ---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
- - --------
Income before income taxes and
extraordinary items $48,210 $38,750 $122,729 $117,451 $96,691 $50,134 $33,413
Fixed charges 19,547 13,682 30,770 19,758 16,144 21,503 30,922
Less interest capitalized
during period (1,264) (742) (1,287) (603) (376) 0 0
--------- --------- ---------- ----------- ----------- ----------- ---------
$66,493 $51,690 $152,212 $136,606 $112,459 $71,637 $64,335
========= ========= ========== =========== =========== =========== =========
Fixed Charges
- - -------------
Interest (expensed or capitalized) $9,076 $6,564 $14,895 $7,911 $6,253 $13,648 $24,797
Portion of rent expense
representative of interest 10,381 7,079 15,798 11,777 9,113 6,794 4,531
Amortization of deferred
financing fees 90 39 77 70 778 1,061 1,594
--------- --------- ---------- ----------- ----------- ----------- ---------
$19,547 $13,682 $30,770 $19,758 $16,144 $21,503 $30,922
========= ========= ========== =========== =========== =========== =========
Ratio of earnings to fixed charges 3.40 3.78 4.95(2) 6.91 6.97 3.33 2.08
========= ========= =========== =========== =========== =========== =========
</TABLE>
(1) Fiscal 1994, 1993 and 1992 are 52 week years and fiscal 1995 and 1991 are 53
week years.
(2) Excluding the credit operations non-recurring expense of $14,052, the ratio
of earnings to fixed charges would be 5.40.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> AUG-03-1996
<CASH> 4,650
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 440,541
<CURRENT-ASSETS> 457,551
<PP&E> 586,496
<DEPRECIATION> 109,681
<TOTAL-ASSETS> 997,507
<CURRENT-LIABILITIES> 231,229
<BONDS> 269,532
<COMMON> 738
0
0
<OTHER-SE> 440,658
<TOTAL-LIABILITY-AND-EQUITY> 997,507
<SALES> 943,236
<TOTAL-REVENUES> 943,236
<CGS> 629,876
<TOTAL-COSTS> 887,284
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,742
<INCOME-PRETAX> 48,210
<INCOME-TAX> 19,621
<INCOME-CONTINUING> 28,589
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,589
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.38
</TABLE>
