<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 May 4, 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.)
N54 W13600 Woodale Drive, Menomonee Falls, Wisconsin 53051
- - ------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 783-5800
--------------
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: June 6, 1996 Common Stock, Par
Value $.01 per Share, 73,797,223 Shares Outstanding.
<PAGE>
<TABLE>
<CAPTION>
KOHL'S CORPORATION
INDEX
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets at
May 4, 1996, February 3, 1996 and
April 29, 1995 3
Condensed Consolidated Statements of Income
for the Three Months Ended May 4, 1996 and
April 29, 1995 4
Consolidated Statement of Changes in
Shareholders' Equity for the Three Months
Ended May 4, 1996 5
Condensed Consolidated Statements of
Cash Flows for the Three Months Ended
May 4, 1996 and April 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 9-11
PART II. OTHER INFORMATION
Item 4 Submission of Matters to a Vote of
Security Holders 12
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>
May 4 February 3 April 29
1996 1996 1995
----------- ------------ -----------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
Assets
--------
Current assets:
Cash and cash equivalents $1,832 $2,819 $1,444
Merchandise inventories 397,190 320,325 310,709
Other 11,237 7,020 10,417
----------- ----------- -----------
Total current assets 410,259 330,164 322,570
Property and equipment, at cost 542,846 502,406 393,518
Less accumulated depreciation 101,223 93,238 73,145
----------- ----------- -----------
441,623 409,168 320,373
Other assets 5,488 4,564 4,903
Favorable lease rights 20,029 20,491 23,005
Goodwill 39,238 40,538 44,438
----------- ----------- -----------
Total assets $916,637 $804,925 $715,289
=========== =========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $135,109 $68,810 $110,001
Accrued liabilities 58,820 57,259 42,402
Income taxes payable 9,955 21,628 4,802
Deferred income taxes 7,139 5,674 8,509
Current portion of long-term debt 1,425 1,425 1,345
----------- ----------- -----------
Total current liabilities 212,448 154,796 167,059
Long-term debt 225,369 187,699 155,829
Deferred income taxes 31,678 30,731 23,562
Other long-term liabilities 21,891 21,061 22,727
Shareholders' equity
Common stock-$.01 par value, 200,000,000 shares
authorized, 73,789,772, 73,736,670 and 73,517,662
issued at May 4, 1996, February 3, 1996 and
April 29, 1995 respectively. 738 737 735
Paid-in capital 189,849 188,998 185,330
Retained earnings 234,664 220,903 160,047
----------- ----------- -----------
Total shareholders' equity 425,251 410,638 346,112
----------- ----------- -----------
Total liabilities and shareholders' equity $916,637 $804,925 $715,289
=========== =========== ===========
</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
(13 Weeks) (13 Weeks)
Ended Ended
May 4, 1996 April 29, 1995
----------- --------------
(In thousands except per share data)
<S> <C> <C>
Sales $468,638 $368,365
Cost of merchandise sold 311,836 243,987
----------- ----------
Gross margin 156,802 124,378
Operating expenses:
Selling, general, and administrative 115,890 92,551
Depreciation and amortization 8,665 6,656
Goodwill amortization 1,300 1,300
Preopening expenses 3,639 1,492
----------- ----------
Operating income 27,308 22,379
Interest expense, net 4,102 2,453
----------- ----------
Income before income taxes 23,206 19,926
Provision for income taxes 9,445 8,130
----------- ----------
Net income $13,761 $11,796
=========== ==========
Earnings per share:
Net income $0.19 $0.16
=========== ==========
Weighted average number of common shares 73,771 73,514
=========== ==========
</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 - - - 13,761 13,761
Exercise of stock options 53,102 1 851 - 852
Balance at May 4, 1996 73,789,772 $738 $189,849 $234,664 $425,251
=======================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
5
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
3 Months 3 Months
(13 Weeks) (13 Weeks)
Ended Ended
May 4, 1996 April 29, 1995
-------------- --------------
(In thousands)
<S> <C> <C>
Operating activities
Net income $13,761 $11,796
Adjustments to reconcile net income to net
cash (used in) provided by operating activities
Depreciation and amortization 10,010 7,976
Deferred income taxes 2,412 6,316
Other noncash charges 263 279
Changes in operating assets and liabilities (24,328) (72,893)
------------ ------------
Net cash (used in) provided by operating activities 2,118 (46,526)
Investing activities
Acquisition of property and equipment, net (40,440) (22,624)
Other (295) (626)
------------ ------------
Net cash used in investing activities (40,735) (23,250)
Financing activities
Net borrowings(repayments) under working capital loan (62,000) 41,000
Proceeds from public debt offering 100,000 -
Repayments of long-term debt (330) (253)
Payment of financing fees on debt (892) -
Net proceeds from issuance of common shares
(including stock options) 852 67
------------ -----------
Net cash provided by financing activities 37,630 40,814
------------ -----------
Net decrease in cash and cash equivalents (987) (28,962)
Cash and cash equivalents at beginning of period 2,819 30,406
----------- -----------
Cash and cash equivalents at end of period $1,832 $1,444
=========== ===========
</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.
LIFO Expense 3 Months Ended
------------ --------------
Quarter May 4, 1996 April 29, 1995
------- ----------- --------------
Total Total
----- -----
(In Thousands)
First $1,171 $1,104
Inventories would have been $832,000 higher at May 4, 1996, $339,000 lower
at February 3, 1996 and $2,163,000 at April 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 $28 million ($17
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.
NEW ACCOUNTING PRONOUNCEMENT
In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which requires impairment losses to be recorded on long-lived assets including
goodwill used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Statement 121 also addresses the accounting for
long-lived assets that are expected to be disposed. The Company adopted
Statement 121 in the first quarter of 1996 and no adjustment was necessary.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
----------------------------------------------
THREE MONTHS ENDED MAY 4, 1996
------------------------------
RESULTS OF OPERATIONS
- - ---------------------
At May 4, 1996, the Company operated 136 stores compared with 109 stores at
the same time last year. The Company successfully opened eight new stores
during the quarter. In March, the Company opened four new stores: Niles, Ohio;
Springfield, Missouri and two stores in Wichita, Kansas. In April, the Company
opened four new stores: Jackson, Michigan; Louisville, Kentucky; and the fifth
and sixth stores in the Cleveland, Ohio market.
Net sales increased $100.2 million or 27.2% to $468.6 million for the three
months ended May 4, 1996 from $368.4 million for the three months ended April
29, 1995. Of the increase, $65.9 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 eight new stores opened in 1996. The remaining $34.3 million is
attributable to comparable store sales growth of 9.6%.
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 May 4, 1996 with the thirteen weeks ended May
6, 1995, total sales increased 23.1%. Comparable store sales increased 6.0% on
this basis.
Gross margin for the three months ended May 4, 1996 was 33.5% compared to
33.8% in the three months ended April 29, 1995. This decrease is primarily
attributable to clearance markdowns taken 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 May 4, 1996 increased $4.9
million or 22.0% over the three months ended April 29, 1995. This increase
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 May 4, 1996 from 25.1% of net sales for the
three months ended April 29, 1995.
The Company incurred $3.6 million of preopening expenses associated with
the opening of eight stores in the three months ended May 4, 1996 compared to
$1.5 million for three stores opened in the three months ended April 29, 1995.
These expenses relate to the costs associated with new store openings, including
hiring and training costs for new employees, opening new charge accounts,
processing and transporting initial merchandise and advertising of the Kohl's
name and retailing concept.
-9-
<PAGE>
Net interest expense for the three months ended May 4, 1996 increased $1.6
million from the three months ended April 29, 1995. This increase was due to
interest associated with an initial $100 million of non-callable 6.7% unsecured
senior notes (Notes) the Company issued on February 6, 1996 under the Company's
$250 million shelf registration of January 25, 1996. Although the Company
expects interest expense to increase in fiscal 1996, the exact effect cannot be
quantified because it will depend on a number of factors, including the number
of stores opened, the Company's cash flow, interest rates and whether new stores
are leased or owned by the Company.
For the three months ended May 4, 1996, net income increased 16.7% to $13.8
million from $11.8 million in the three months ended April 29, 1995. Earnings
were $.19 per share for the three months ended May 4, 1996 compared to $.16 per
share for the three months ended April 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 shelf offering 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 May 4, 1996, the Company's merchandise inventories had increased $76.9
million over the February 3, 1996 balance and $86.5 million over the April 29,
1995 balance. These increases reflect the purchase of summer inventory as well
as inventory for new stores. The Company's working capital increased to $197.8
million at May 4, 1996 from $175.4 million at February 3, 1996 and $155.5
million at April 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.
-10-
<PAGE>
Cash provided from operating activities was $2.1 million for the three
months ended May 4, 1996 compared to cash used of $46.5 million for the three
months ended April 29, 1995. Excluding changes in operating assets and
liabilities, cash provided by operating activities was $26.5 million for the
three months ended May 4, 1996 compared to $26.4 million for the three months
ended April 29, 1995.
Capital expenditures for the three months ended May 4, 1996 were $40.4
million (no additional assets under capital lease) compared to $29.0 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 eight new stores for the three months ended May 4, 1996 compared to
three new stores for the three months ended April 29, 1996 and the relocation of
the Company's corporate headquarters within Menomonee Falls in the summer of
1996 to an owned facility.
The Company's long-term debt increased from $187.7 million at February 3,
1996 to $225.4 million at May 4, 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 of January 25, 1996. The proceeds were
used to repay borrowings under its $200 million unsecured revolving credit
facility and will support future Company growth. The notes mature on February
1, 2006.
Total capital expenditures for fiscal 1996 are currently expected to be
approximately $200.0 million (excluding assets under capital leases). On May
6, 1996 the Company announced plans to enter the Philadelphia market in the
spring of 1997. The Company will lease up to eleven former Clover stores. This
opportunity has increased the estimated 1996 capital spending from approximately
$160 million to $200 million. 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 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, 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.
-11-
<PAGE>
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Kohl's Corporation was held on May
29, 1996:
1. To elect two directors to serve for a three-year term.
2. To ratify the appointment of Ernst & Young LLP as independent auditors.
3. To amend the Company's Articles of Incorporation to increase the
number of shares of Common Stock authorized for issuance.
4. To amend the Company's 1994 Long-Term Compensation Plan to
increase the number of shares of Common Stock reserved for issuance.
Proxies for the meeting were solicited pursuant to Section 14(a) of the
Securities Exchange Act of 1934 and there was no solicitation in opposition to
management's solicitations. All of management's nominees for directors as
listed in the proxy statement were elected.
The results of the voting were as follows:
1. Election of directors
William S. Kellogg
For - 32,311,911 shares
Withheld - 553,142 shares
R. Elton White
For - 32,396,929 shares
Withheld - 468,124 shares
2. Ratification of Ernst & Young LLP as independent auditors
For - 32,849,646 shares
Against - 5,241 shares
Abstain - 10,166 shares
3. To amend the Company's Articles of Incorporation to increase the number of
shares of Common Stock authorized for issuance from 200,000,000 shares to
400,000,000 shares.
For - 30,555,661 shares
Against - 2,284,308 shares
Abstain - 25,084 shares
4. To amend the Company's 1994 Long-Term Compensation Plan to increase the
number of shares of Common Stock reserved for issuance from 3,000,000 shares to
6,000,000 shares.
For - 24,673,351 shares
Against - 6,915,556 shares
Abstain - 41,186 shares
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.10 Amendment No. 2 dated April 16, 1996 and Amendment No. 3
dated May 17, 1996 to the Receivables Purchase Agreement
dated as of September 1, 1995 by and among Kohl's
Department Stores, Inc., Preferred Receivables Funding
Corporation and The First National Bank of Chicago as
agent, incorporated herein by reference.
10.14 Bylaws
10.15 Kohl's Corporation 1994 Long-Term
Compensation Plan
12.1 Statement regarding calculation of
ratio of earnings to fixed charges.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for
three months ended May 4, 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: June 12, 1996 /s/ William Kellogg
---------------------------------
William Kellogg
Chairman, Chief Executive Officer
Date: June 12, 1996 /s/ Arlene Meier
------------------------------------
Arlene Meier
Senior Vice President - Finance
Chief Financial Officer
-14-
<PAGE>
EXHIBIT 10.10
AMENDMENT NO. 2 TO
RECEIVABLES PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 (this "AMENDMENT"), is entered into as of April
16, 1996, by and among KOHL'S DEPARTMENT STORES, INC., a Delaware corporation
(the "SELLER"), the INVESTORS, PREFERRED RECEIVABLES FUNDING CORPORATION
("PREFCO"), and THE FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity,
the "AGENT"), with respect to the RECEIVABLES PURCHASE AGREEMENT, dated as of
September 1, 1995, by and among the Seller, the Investors, PREFCO and the Agent
(the "RECEIVABLES PURCHASE AGREEMENT"). Unless defined elsewhere herein,
capitalized terms used in this Amendment shall have the meaning assigned to such
terms in the Receivables Purchase Agreement.
PRELIMINARY STATEMENT
The parties desire to amend the Receivables Purchase Agreement to
decrease the Purchase Limit thereunder to $175,000,000.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree to as follows:
SECTION 1. AMENDMENTS. Subject to the terms and conditions hereinafter set
forth, and in reliance on the representations and warranties set forth in
Section 2 hereof, each of the parties hereby agrees to amend the Receivables
Purchase Agreement as follows:
1.1. The cover page of the Receivables Purchase Agreement is hereby
amended to delete "$200,000,000" where it appears and to substitute in lieu
thereof "$175,000,000".
1.2. Each of (a) the Commitment of First Chicago and (b) the
Purchase Limit is hereby decreased to $175,000,000.
SECTION 2. REPRESENTATION AND WARRANTIES.
-----------------------------
2.1. Seller Representations. As of the date hereof, the Seller
represents and warrants to the Agent and the Purchasers that:
<PAGE>
(a) Corporate Existence and Power. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation, and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted, except
for such failures which will not, individually or in the aggregate, have a
Material Adverse Effect.
(b) No Conflict. The execution, delivery and performance by the
Seller of this Amendment, and the Seller's use of the proceeds of purchases
made under the Receivables Purchase Agreement, as amended hereby, are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate of
incorporation or by-laws, (ii) any law, rule or regulation applicable to
it, (iii) any restrictions under any agreement, contract or instrument to
which it is a party or by which it or any of its property is bound, or (iv)
any order, writ, judgment, award, injunction or decree binding on or
affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on assets of the Seller (except created
under the Receivables Purchase Agreement); and no transaction contemplated
by the Receivables Purchase Agreement, as amended hereby, requires
compliance with any bulk sales act or similar law. This Amendment, and
each of the Transaction Documents to which the Seller is a party, have been
duly executed and delivered by the Seller.
(c) Governmental Authorization. Other than the filing of the
financing statements required under the Receivables Purchase Agreement, all
of which filings have previously been made, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery
and performance by the Seller of the Receivables Purchase Agreement, as
amended hereby.
(d) Binding Effect. The Receivables Purchase Agreement, as amended
hereby, constitute the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors;
rights generally or general equitable principles.
(e) Absence of Certain Events. No Servicer Default, Potential
Servicer Default, Termination Event or Potential Termination Event exists
and is continuing as of the date hereof.
2.2. Investors Representation. As of the date hereof, each of the
Investors represents and warrants to the other parties hereto that:
2
<PAGE>
(a) Due Execution. This Amendment has been duly executed and
delivered by such Investor.
(b) Binding Effect. The Receivables Purchase Agreement, as amended
hereby, constitutes the legal, valid and binding obligation of such
Investor, enforceable against it in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date first above written when the Agent receives counterparts of this
Amendment duly executed by each of the parties hereto.
SECTION 4. MISCELLANEOUS.
-------------
4.1. Choice of Law. This Amendment shall be construed in accordance
with the internal laws (and not the law of conflicts) of the State of Illinois.
4.2. Counterparts; Severability. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
4.3. Ratification. Except as expressly amended hereby, each of the
Transaction Documents shall remain unaltered and in full force and effect and is
hereby ratified and confirmed.
[signature pages to follow]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date
hereof.
KOHL'S DEPARTMENT STORES, INC.
By: /s/ Arlene Meier
-----------------
Name: Arlene Meier
--------------
Title: CFO
----
PREFERRED RECEIVABLES FUNDING
CORPORATION
By: /s/ Mark R. Matthews
---------------------
Authorized Signatory
INVESTORS:
Commitment
----------
$175,000,000 THE FIRST NATIONAL BANK OF CHICAGO
as an Investor and as Agent
By: /s/ Mark R. Matthews
------------------------
Title: Authorized Agent
4
<PAGE>
EXHIBIT 10.10
AMENDMENT NO. 3 TO
RECEIVABLES PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 (this "AMENDMENT"), is entered into as of May 17,
1996, by and among KOHL'S DEPARTMENT STORES, INC., a Delaware corporation (the
"SELLER"), the INVESTORS, PREFERRED RECEIVABLES FUNDING CORPORATION ("PREFCO"),
and THE FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity, the
"AGENT"), with respect to the RECEIVABLES PURCHASE AGREEMENT, dated as of
September 1, 1995, by and among the Seller, the Investors, PREFCO and the Agent
(the "RECEIVABLES PURCHASE AGREEMENT"). Unless defined elsewhere herein,
capitalized terms used in this Amendment shall have the meaning assigned to such
terms in the Receivables Purchase Agreement.
PRELIMINARY STATEMENT
The parties desire to amend the Receivables Purchase Agreement to
extend the Liquidity Termination Date to May 31, 1997.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree to as follows:
SECTION 1. AMENDMENT. Subject to the terms and conditions hereinafter set
forth, and in reliance on the representations and warranties set forth in
Section 2 hereof, each of the parties hereby agrees to amend the Receivables
Purchase Agreement as follows:
1.1. The Definition of "LIQUIDITY TERMINATION DATE" is hereby amended
by deleting the date "August 27, 1996" where it appears therein and by inserting
the date "May 31, 1997" in lieu thereof.
SECTION 2. REPRESENTATION AND WARRANTIES.
-----------------------------
2.1. Seller Representations. As of the date hereof, the Seller
represents and warrants to the Agent and the Purchasers that:
<PAGE>
(a) Corporate Existence and Power. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation, and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted, except
for such failures which will not, individually or in the aggregate, have a
Material Adverse Effect.
(b) No Conflict. The execution, delivery and performance by the
Seller of this Amendment, and the Seller's use of the proceeds of purchases
made under the Receivables Purchase Agreement, as amended hereby, are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate of
incorporation or by-laws, (ii) any law, rule or regulation applicable to
it, (iii) any restrictions under any agreement, contract or instrument to
which it is a party or by which it or any of its property is bound, or (iv)
any order, writ, judgment, award, injunction or decree binding on or
affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on assets of the Seller (except created
under the Receivables Purchase Agreement); and no transaction contemplated
by the Receivables Purchase Agreement, as amended hereby, requires
compliance with any bulk sales act or similar law. This Amendment, and
each of the Transaction Documents to which the Seller is a party, have been
duly executed and delivered by the Seller.
(c) Governmental Authorization. Other than the filing of the
financing statements required under the Receivables Purchase Agreement, all
of which filings have previously been made, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery
and performance by the Seller of the Receivables Purchase Agreement, as
amended hereby.
(d) Binding Effect. The Receivables Purchase Agreement, as amended
hereby, constitute the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors;
rights generally or general equitable principles.
(e) Absence of Certain Events. No Servicer Default, Potential
Servicer Default, Termination Event or Potential Termination Event exists
and is continuing as of the date hereof.
2.2. Investors Representation. As of the date hereof, each of the
Investors represents and warrants to the other parties hereto that:
2
<PAGE>
(a) Due Execution. This Amendment has been duly executed and
delivered by such Investor.
(b) Binding Effect. The Receivables Purchase Agreement, as amended
hereby, constitutes the legal, valid and binding obligation of such
Investor, enforceable against it in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date first above written when the Agent receives counterparts of this
Amendment duly executed by each of the parties hereto.
SECTION 4. MISCELLANEOUS.
-------------
4.1. Choice of Law. This Amendment shall be construed in accordance
with the internal laws (and not the law of conflicts) of the State of Illinois.
4.2. Counterparts; Severability. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
4.3. Ratification. Except as expressly amended hereby, each of the
Transaction Documents shall remain unaltered and in full force and effect and is
hereby ratified and confirmed.
[signature pages to follow]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date
hereof.
KOHL'S DEPARTMENT STORES, INC.
By: /s/ Arlene Meier
-----------------
Name: Arlene Meier
--------------
Title: CFO
----
PREFERRED RECEIVABLES FUNDING
CORPORATION
By: /s/ Mark R. Matthews
------------------------
Authorized Signatory
INVESTORS:
Commitment
----------
$175,000,000 THE FIRST NATIONAL BANK OF CHICAGO
as an Investor and as Agent
By: /s/ Mark R. Matthews
------------------------
Title: Authorized Agent
4
<PAGE>
EXHIBIT 10.14
BYLAWS
OF
KOHL'S CORPORATION
TABLE OF CONTENTS
ARTICLE I.
OFFICES; RECORDS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1.01 Principal and Business Offices............................. 1
1.02 Registered Office.......................................... 1
1.03 Corporate Records.......................................... 1
ARTICLE II.
SHAREHOLDERS
2.01 Annual Meeting............................................. 1
2.02 Special Meetings........................................... 2
2.03 Place of Meeting........................................... 4
2.04 Notices to Shareholders.................................... 4
(a) Required Notice........................................ 4
(b) Adjourned Meeting...................................... 5
(c) Waiver of Notice....................................... 5
(d) Contents of Notice..................................... 5
(e) Fundamental Transactions............................... 5
2.05 Fixing of Record Date...................................... 5
(a) Meetings............................................... 5
(b) Distributions.......................................... 5
2.06 Shareholder List........................................... 6
2.07 Quorum..................................................... 6
2.08 Conduct of Meetings........................................ 6
2.09 Proxies.................................................... 6
2.10 Voting of Shares........................................... 6
2.11 No Nominee Procedures...................................... 6
ARTICLE III.
BOARD OF DIRECTORS
3.01 General Powers............................................. 7
3.02 Resignations and Qualifications............................ 7
3.03 Regular Meetings........................................... 7
3.04 Special Meetings........................................... 7
3.05 Meetings By Telephone or Other Communication
Technology................................................. 7
3.06 Notice of Meetings......................................... 7
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
3.07 Quorum..................................................... 7
3.08 Manner of Acting........................................... 8
3.09 Conduct of Meetings........................................ 8
3.10 Vacancies.................................................. 8
3.11 Compensation............................................... 8
3.12 Presumption of Assent...................................... 8
3.13 Committees................................................. 8
ARTICLE IV.
OFFICERS
4.01 Appointment................................................ 9
4.02 Resignation and Removal.................................... 9
4.03 Chairman of the Board...................................... 9
4.04 President.................................................. 9
4.05 Chief Operating Officer.................................... 9
4.06 Vice Chairman.............................................. 9
4.07 Shared Duties of Chairman of the Board,
President and Chief Operating Officer...................... 10
4.08 Vice Presidents............................................ 10
4.09 Secretary.................................................. 10
4.10 Treasurer.................................................. 10
4.11 Assistants and Acting Officers............................. 10
4.12 Salaries................................................... 10
ARTICLE V.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
5.01 Certificates for Shares.................................... 11
5.02 Signature by Former Officers, Transfer Agent
or Registrar............................................... 11
5.03 Transfer of Shares......................................... 11
5.04 Restrictions on Transfer................................... 11
5.05 Lost,Destroyed or Stolen Certificates...................... 11
5.06 Consideration for Shares................................... 11
5.07 Stock Regulations.......................................... 11
ARTICLE VI.
WAIVER OF NOTICE
6.01 Shareholder Written Waiver................................. 12
6.02 Shareholder Waiver by Attendance........................... 12
6.03 Director Written Waiver.................................... 12
6.04 Director Waiver by Attendance.............................. 12
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VII.
ACTION WITHOUT MEETINGS
7.01 Director Action Without Meeting............................ 12
ARTICLE VIII.
INDEMNIFICATION
8.01 Indemnification for Successful Defense..................... 13
8.02 Other Indemnification...................................... 13
8.03 Written Request............................................ 13
8.04 Nonduplication............................................. 13
8.05 Determination of Right to Indemnification.................. 13
8.06 Advance of Expenses........................................ 14
8.07 Nonexclusivity............................................. 14
8.08 Court-Ordered Indemnification.............................. 15
8.09 Indemnification and Allowance of Expenses
of Employees and Agents.................................... 15
8.10 Insurance.................................................. 15
8.11 Securities Law Claims...................................... 15
8.12 Liberal Construction....................................... 16
8.13 Definitions Applicable to this Article..................... 16
ARTICLE IX.
SEAL
9.01 Seal....................................................... 17
ARTICLE X.
AMENDMENTS
10.01 By Shareholders............................................ 17
10.02 By Directors............................................... 17
10.03 Implied Amendments......................................... 17
</TABLE>
iii
<PAGE>
BYLAWS
OF
KOHL'S CORPORATION
ARTICLE I.
OFFICES; RECORDS
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation required
by the Wisconsin Business Corporation Law to be maintained in the State of
Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin. The address of the registered office may be changed from
time to time by any officer or by the registered agent. The office of the
registered agent of the corporation shall be identical to such registered
office.
1.03. Corporate Records. The following documents and records shall be kept
at the corporation's principal office or at such other reasonable location as
may be specified by the corporation:
(a) Minutes of shareholders' and Board of Directors' meetings and any
written notices thereof.
(b) Records of actions taken by the shareholders or directors without a
meeting.
(c) Records of actions taken by committees of the Board of Directors.
(d) Accounting records.
(e) Records of its shareholders.
(f) Current Bylaws.
(g) Written waivers of notice by shareholders or directors (if any).
(h) Written consents by shareholders or directors for actions without a
meeting (if any).
(i) Voting trust agreements (if any).
(j) Stock transfer agreements to which the corporation is a party or of
which it has notice (if any).
ARTICLE II.
SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders (an "Annual
Meeting") shall be held on such date and at such time as may be fixed by or
under the authority of the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the election of directors is not held on the day fixed as herein
provided for any annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a meeting
of the shareholders as soon thereafter as may be convenient.
At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors; (b) otherwise brought before the meeting by or at the
direction of the Board of Directors; or (c) brought before the meeting by a
shareholder pursuant to this Section 2.01.
Only persons who are nominated in accordance with the procedures set forth in
this Section 2.01 shall be eligible for election as directors, except as may
otherwise be provided by the terms of the corporation's Articles
1
<PAGE>
of Incorporation with respect to the rights of holders of any series of
Preferred Stock to elect directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of shareholders
by or at the direction of the Board of Directors or by any shareholder of the
corporation entitled to vote for the election of directors at the meeting who
complies with the procedures set forth in this bylaw.
For business to be properly brought before an annual meeting by a shareholder,
and for nominations by shareholders for the election of directors, the
shareholder must have given timely notice thereof in writing to the Secretary of
the corporation. All notices given pursuant to this Section shall be in writing
and must be received by the Secretary of the corporation not later than ninety
days prior to the anniversary date of the annual meeting of shareholders in the
immediately preceding year. All such notices shall include (i) a representation
that the person sending the notice is a shareholder of record and will remain
such through the Meeting Record Date (defined in Section 2.05); (ii) the name
and address, as they appear on the corporation's books, of such shareholder;
(iii) the class and number of the corporation's shares which are owned
beneficially and of record by such shareholder; and (iv) a representation that
such shareholder intends to appear in person or by proxy at such meeting to make
the nomination or move the consideration of other business set forth in the
notice. Notice as to proposals with respect to any business to be brought
before the meeting other than election of directors shall also set forth the
text of the proposal and may set forth any statement in support thereof that the
shareholder wishes to bring to the attention of the corporation, and shall
specify any material interest of such shareholder in such business. The person
providing the notice shall also be required to provide such further information
as may be requested by the corporation to comply with federal securities laws,
rules and regulations. Notice as to nominations shall set forth the name(s) of
the nominee(s), address and principal occupation or employment of each, a
description of all arrangements or understandings between the shareholder and
each nominee and any person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the shareholder, the
written consent of each nominee to serve as a director if so elected and such
other information as would be required to be included in a proxy statement
soliciting proxies for the election of the nominee(s) of such shareholder.
The chairman of the meeting shall refuse to acknowledge the nomination of any
person or the consideration of any business not made in compliance with the
foregoing procedures.
2.02. Special Meetings. (a) A special meeting of shareholders (a "Special
Meeting") may be called only by the Board of Directors pursuant to a resolution
adopted by three-quarters (3/4) of the entire Board of Directors and shall be
called by the Board of Directors upon the demand, in accordance with this
Section 2.02, of the holders of record of shares representing at least 10% of
all the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting.
(b) In order that the corporation may determine the shareholders entitled to
demand a Special Meeting, the Board of Directors may fix a record date to
determine the shareholders entitled to make such a demand (the "Demand Record
Date"). The Demand Record Date shall not precede the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors
and shall not be more than 10 days after the date upon which the resolution
fixing the Demand Record Date is adopted by the Board of Directors. Any
shareholder of record seeking to have shareholders demand a Special Meeting
shall, by sending written notice to the Secretary of the corporation by hand or
by certified or registered mail, return receipt requested, request the Board of
Directors to fix a Demand Record Date. The Board of Directors shall promptly,
but in all events within 30 days after the date on which a valid request to fix
a Demand Record Date is received, adopt a resolution fixing the Demand Record
Date and shall make a public announcement of such Demand Record Date. If no
Demand Record Date has been fixed by the Board of Directors within 30 days after
the date on which such request is received by the Secretary, the Demand Record
Date shall be the 30th day after the first day on which a valid written request
to set a Demand Record Date is received by the Secretary. To be valid, such
written request shall set forth the purpose or purposes for which the Special
Meeting is to be held, shall be signed by one or more shareholders of record (or
their duly authorized proxies or other representatives), shall bear the date of
signature of each such shareholder (or proxy or other representative) and shall
set forth all information about each such shareholder and about the beneficial
2
<PAGE>
owner or owners, if any, on whose behalf the request is made that would be
required to be set forth in a shareholder's notice described in Section 2.01.
Any business proposed to be brought before the meeting must be a subject for
which a special meeting must be called under Wisconsin law upon the demand of a
10% shareholder.
(c) In order for a shareholder or shareholders to demand a Special Meeting, a
written demand or demands for a Special Meeting by the holders of record as of
the Demand Record Date of shares representing at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the Special
Meeting must be delivered to the corporation. To be valid, each written demand
by a shareholder for a Special Meeting shall set forth the specific purpose or
purposes for which the Special Meeting is to be held (which purpose or purposes
shall be limited to the purpose or purposes set forth in the written request to
set a Demand Record Date received by the corporation pursuant to paragraph (b)
of this Section 2.02), shall be signed by one or more persons who as of the
Demand Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the name and
address, as they appear in the corporation's books, of each shareholder signing
such demand and the class or series and number of shares of the corporation
which are owned of record and beneficially by each such shareholder, shall be
sent to the Secretary by hand or by certified or registered mail, return receipt
requested, and shall be received by the Secretary not before and within 70 days
after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2.02, the Secretary receives a written agreement signed by
each Soliciting Shareholder (as defined herein), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as director at such meeting is elected, then
the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(i) "Affiliate" shall have the meaning assigned to such term in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(ii) "Participant in a Solicitation" shall have the meaning assigned to
such term in Item 4 of Schedule 14A promulgated under the Exchange Act.
(iii) "Person" shall mean any individual, firm, corporation, partnership,
joint venture, association, trust, unincorporated organization or other
entity.
(iv) "Proxy" shall have the meaning assigned to such term in Rule 14a-1
promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such term in Rule
14a-1 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to any Special
Meeting demanded by a shareholder or shareholders, any of the following
Persons:
(A) each shareholder signing any such demand;
(B) if the number of shareholders signing the demand or demands for a
meeting delivered to the corporation pursuant to paragraph (c) of this
Section 2.02 is more than 10, each Person who is or intends to be a
Participant in a Solicitation in connection with the Special Meeting (other
than a Solicitation of Proxies on behalf of the corporation); or
3
<PAGE>
(C) any Affiliate of a Soliciting Shareholder, if a majority of the
directors then in office determine, in good faith, that such Affiliate
should be required to sign the written notice described in paragraph (c) of
this Section 2.02 and/or the written agreement described in this paragraph
(d) in order to prevent the purposes of this Section 2.02 from being
evaded.
(e) Except as provided in the following sentence, any Special Meeting shall be
held at such hour and day as may be designated by the Board of Directors. In
the case of any Special Meeting called by the Board of Directors upon the demand
of shareholders (a "Demand Special Meeting"), the date of the Demand Special
Meeting shall be not more than 70 days after the Meeting Record Date (as defined
in Section 2.05 of these Bylaws); provided that in the event that the directors
then in office fail to designate an hour and date for a Demand Special Meeting
within 30 days after the date that valid written demands for such meeting by the
holders of record as of the Demand Record Date of shares representing at least
10% of all the votes entitled to be cast on any issue proposed to be considered
at the Special Meeting, as well as the agreement described in paragraph (d), are
delivered to the corporation (the "Delivery Date"), then such meeting shall be
held at 2:00 p.m. (local time) on the 100th day after the Delivery Date or, if
such 100th day is not a Business Day (as defined below), on the first preceding
Business Day. In fixing a meeting date for any Special Meeting, the Board of
Directors may consider such factors as it deems relevant within the good faith
exercise of its business judgment, including, without limitation, the nature of
the action proposed to be taken, the facts and circumstances surrounding any
demand for such meeting, and any plan of the Board of Directors to call an
Annual Meeting or a Special Meeting.
(f) The corporation may engage independent inspectors of elections to act as
an agent of the corporation for the purpose of promptly performing a ministerial
review of the validity of any purported written demand or demands for a Special
Meeting received by the Secretary. For the purpose of permitting the inspectors
to perform such review, no purported demand shall be deemed to have been
delivered to the corporation until the earlier of (i) 5 Business Days following
receipt by the Secretary of such purported demand and (ii) such date as the
independent inspectors certify to the corporation that the valid demands
received by the Secretary represent at least 10% of all the votes entitled to be
cast on each issue proposed to be considered at the Special Meeting. Nothing
contained in this paragraph shall in any way be construed to limit the ability
of the Board of Directors or any shareholder to contest the validity of any
demand, whether during or after such 5 Business Day period, or to take any other
action (including, without limitation, the commencement, prosecution or defense
of any litigation with respect thereto).
(g) Only business within the purpose described in the meeting notice given in
accordance with Section 2.04 of these Bylaws may be conducted at a Special
Meeting.
(h) For purposes of these Bylaws, "Business Day" shall mean any day other than
a Saturday, a Sunday or a day on which banking institutions in the State of
Wisconsin are authorized or obligated by law or executive order to close.
2.03. Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Wisconsin, as the place of meeting for any
annual meeting or any special meeting. If no designation is made, the place of
meeting shall be the principal office of the corporation. Any meeting may be
adjourned to reconvene at any place designated by vote of the Board of
Directors.
2.04. Notices to Shareholders.
(a) Required Notice. Written notice stating the place, day and hour of the
meeting and, in case of a Special Meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) days nor more
than seventy (70) days before the date of the meeting (unless a different time
is provided by law or the Articles of Incorporation), by or at the direction
of the Chairman of the Board, the President, the Chief Operating Officer, the
Vice Chairman or the Secretary, to each shareholder entitled to vote at such
meeting or, for the fundamental transactions described in subsections (e)(l)
to (4) below (for which the
4
<PAGE>
Wisconsin Business Corporation Law requires that notice be given to
shareholders not entitled to vote), to all shareholders. If mailed, such
notice is effective when deposited in the United States mail, and shall be
addressed to the shareholder's address shown in the current record of
shareholders of the corporation, with postage thereon prepaid. At least
twenty (20) days' notice shall be provided if the purpose, or one of the
purposes, of the meeting is to consider a plan of merger or share exchange for
which shareholder approval is required by law, or the sale, lease, exchange or
other disposition of all or substantially all of the corporation's property,
with or without good will, otherwise than in the usual and regular course of
business.
(b) Adjourned Meeting. Except as provided in the next sentence, if any
shareholder meeting is adjourned to a different date, time, or place, notice
need not be given of the new date, time, and place, if the new date, time, and
place is announced at the meeting before adjournment. If a new record date
for the adjourned meeting is or must be fixed, then notice must be given
pursuant to the requirements of paragraph (a) of this Section 2.04, to those
persons who are shareholders as of the new record date.
(c) Waiver of Notice. A shareholder may waive notice in accordance with
Article VI of these Bylaws.
(d) Contents of Notice. The notice of each Special Meeting shall include a
description of the purpose or purposes for which the meeting is called.
Except as otherwise provided in these Bylaws, in the Articles of
Incorporation, or in the Wisconsin Business Corporation Law, the notice of an
annual shareholder meeting need not include a description of the purpose or
purposes for which the meeting is called.
(e) Fundamental Transactions. If a purpose of any shareholder meeting is
to consider either: (1) a proposed amendment to the Articles of Incorporation
(including any restated articles); (2) a plan of merger or share exchange for
which shareholder approval is required by law; (3) the sale, lease, exchange
or other disposition of all or substantially all of the corporation's
property, with or without good will, otherwise than in the usual and regular
course of business; (4) the dissolution of the corporation; or (5) the removal
of a director, the notice must so state and in cases (1), (2) and (3) above
must be accompanied by, respectively, a copy or summary of the: (1) proposed
articles of amendment or a copy of the restated articles that identifies any
amendment or other change; (2) proposed plan of merger or share exchange; or
(3) proposed transaction for disposition of all or substantially all of the
corporation's property. If the proposed corporate action creates dissenters'
rights, the notice must state that shareholders and beneficial shareholders
are or may be entitled to assert dissenters' rights, and must be accompanied
by a copy of Sections 180.1301 to 180.1331 of the Wisconsin Business
Corporation Law.
2.05. Fixing of Record Date. (a) Meetings. The Board of Directors may
fix in advance a date as the record date for any determination of shareholders
entitled to notice of, and to vote at, a shareholders' meeting, such date in
any case to be not more than seventy (70) days prior to the meeting (the
"Meeting Record Date"). In the case of any Demand Special Meeting, (i) the
Meeting Record Date shall be not later than the 30th day after the Delivery
Date and (ii) if the Board of Directors fails to fix the Meeting Record Date
within 30 days after the Delivery Date, then the close of business on such
30th day shall be the Meeting Record Date. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in these Bylaws, such determination shall be applied to any
adjournment thereof unless the Board of Directors fixes a new record date and
except as otherwise required by law. A new record date must be set if a
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting.
(b) Distributions. The Board may also fix in advance a date as the record
date for determining shareholders entitled to receive a dividend or
distribution. If no record date is fixed for the determination of
shareholders entitled to receive a share dividend or distribution (other than
a distribution involving a purchase, redemption or other acquisition of the
corporation's shares), the close of business on the day on which the
resolution of the Board of Directors is adopted declaring the dividend or
distribution shall be the record date.
5
<PAGE>
2.06. Shareholder List. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each meeting of
shareholders, make a complete record of the shareholders entitled to notice of
such meeting, arranged by class or series of shares and showing the address of
and the number of shares held by each shareholder. The shareholder list shall
be available at the meeting and may be inspected by any shareholder or his or
her agent or attorney at any time during the meeting or any adjournment. Any
shareholder or his or her agent or attorney may inspect the shareholder list
beginning two (2) business days after the notice of the meeting is given and
continuing to the date of the meeting, at the corporation's principal office or
at a place identified in the meeting notice in the city where the meeting will
be held and, subject to Section 180.1602(2)(b) 3 to 5 of the Wisconsin Business
Corporation Law, may copy the list, during regular business hours and at his or
her expense, during the period that it is available for inspection hereunder.
The original stock transfer books and nominee certificates on file with the
corporation (if any) shall be prima facie evidence as to who are the
shareholders entitled to inspect the shareholder list or to vote at any meeting
of shareholders. Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the Articles of Incorporation
or in the Wisconsin Business Corporation Law, a majority of the votes entitled
to be cast by shares entitled to vote as a separate voting group on a matter,
represented in person or by proxy, shall constitute a quorum of that voting
group for action on that matter at a meeting of shareholders. Once a share is
represented for any purpose at a meeting, other than for the purpose of
objecting to holding the meeting or transacting business at the meeting, it is
considered present for purposes of determining whether a quorum exists for the
remainder of the meeting and for any adjournment of that meeting unless a new
record date is or must be set for that meeting.
2.08. Conduct of Meetings. The Chairman of the Board or, in his or her
absence, any Officer or Director chosen by the Board of Directors shall call the
meeting of the shareholders to order and shall act as Chairman of the meeting,
and the Secretary shall act as secretary of all meetings of the shareholders,
but, in the absence of the Secretary, the presiding officer may appoint any
other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder entitled to
vote may vote in person or by proxy appointed in writing by the shareholder or
by his or her duly authorized attorney-in-fact. All proxy appointment forms
shall be filed with the Secretary or other officer or agent of the corporation
authorized to tabulate votes before or at the time of the meeting. Unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest, a proxy appointment may be revoked at any time.
The presence of a shareholder who has filed a proxy appointment shall not of
itself constitute a revocation. No proxy appointment shall be valid after
eleven months from the date of its execution, unless otherwise expressly
provided in the appointment form. The Board of Directors shall have the power
and authority to make rules that are not inconsistent with the Wisconsin
Business Corporation Law as to the validity and sufficiency of proxy
appointments.
2.10. Voting of Shares. Each outstanding share shall be entitled to one (1)
vote on each matter submitted to a vote at a meeting of shareholders, except to
the extent that the voting rights of the shares are enlarged, limited or denied
by the Articles of Incorporation or the Wisconsin Business Corporation Law.
Shares of this corporation owned directly or indirectly by another corporation
are not entitled to vote if this corporation owns, directly or indirectly,
sufficient shares to elect a majority of the directors of such other
corporation. However, the prior sentence shall not limit the power of the
corporation to vote any shares, including its own shares, held by it in a
fiduciary capacity.
2.11. No Nominee Procedures. The corporation has not established, and
nothing in these Bylaws shall be deemed to establish, any procedure by which a
beneficial owner of the corporation's shares that are registered in the name of
a nominee is recognized by the corporation as the shareholder under Section
180.0723 of the Wisconsin Business Corporation Law.
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ARTICLE III.
BOARD OF DIRECTORS
3.01. General Powers. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its Board of Directors.
3.02. Resignations and Qualifications. A director may resign at any time by
delivering a written resignation to the Board of Directors, to the Chairman of
the Board, or to the corporation through the Secretary or otherwise. Directors
need not be residents of the State of Wisconsin or shareholders of the
corporation.
3.03. Regular Meetings. The Board of Directors may provide, by resolution,
the time and place, either within or without the State of Wisconsin, for the
holding of regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board or any two (2)
directors. Special meetings of any committee may be called by or at the request
of the foregoing persons or the Chairman of the committee. The persons calling
any special meeting of the Board of Directors or committee may fix any place,
either within or without the State of Wisconsin, as the place for holding any
special meeting called by them, and if no other place is fixed the place of
meeting shall be the principal office of the corporation in the State of
Wisconsin.
3.05. Meetings By Telephone or Other Communication Technology. (a) Any or
all directors may participate in a regular or special meeting or in a committee
meeting of the Board of Directors by, or conduct the meeting through the use of,
telephone or any other means of communication by which either: (i) all
participating directors may simultaneously hear each other during the meeting or
(ii) all communication during the meeting is immediately transmitted to each
participating director, and each participating director is able to immediately
send messages to all other participating directors.
(b) If a meeting will be conducted through the use of any means described in
paragraph (a), all participating directors shall be informed that a meeting is
taking place at which official business may be transacted. A director
participating in a meeting by any means described in paragraph (a) is deemed to
be present in person at the meeting.
3.06. Notice of Meetings. Except as otherwise provided in the Articles of
Incorporation or the Wisconsin Business Corporation Law, notice of the date,
time and place of any special meeting of the Board of Directors and of any
special meeting of a committee of the Board shall be given orally or in writing
to each director or committee member at least 48 hours prior to the meeting.
The notice need not describe the purpose of the meeting. Notice may be
communicated in person, by telephone, telegraph or facsimile, or by mail or
private carrier. Oral notice is effective when communicated to the director or
to any person answering the director's business or home telephone, or when left
on the director's answering machine or voice-mail system at home or place of
business. Written notice is effective at the earliest of the following: (a)
when received; (b) five days after its deposit in the U.S. Mail, if mailed
postpaid and correctly addressed; (c) on the date shown on the return receipt,
if sent by registered or certified mail, return receipt requested, and the
receipt is signed by or on behalf of the addressee; (d) at the time a facsimile
transmission is completed, if sent by facsimile to the director's home or place
of business.
3.07. Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law, a majority of the number of directors specified in accordance
with the Articles of Incorporation shall constitute a quorum of the Board of
Directors. Except as otherwise provided by the Wisconsin Business Corporation
Law, a majority of the number of directors appointed to serve on a committee
shall constitute a quorum of the committee.
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3.08. Manner of Acting. Except as otherwise provided by the Wisconsin
Business Corporation Law or the Articles of Incorporation, the affirmative vote
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors or any committee thereof.
3.09. Conduct of Meetings. The Chairman of the Board, or in his or her
absence, any director chosen by the directors present, shall call meetings of
the Board of Directors to order and shall chair the meeting. The Secretary of
the corporation shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding officer may
appoint any assistant secretary or any director or other person present to act
as secretary of the meeting.
3.10. Vacancies. Any vacancy occurring in the Board of Directors shall be
filled in the manner provided in the Articles of Incorporation.
3.11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may fix the compensation of directors.
3.12. Presumption of Assent. A director who is present and is announced as
present at a meeting of the Board of Directors or a committee thereof at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless (i) the director objects at the beginning of the meeting
or promptly upon his or her arrival to holding the meeting or transacting
business at the meeting; or (ii) the director's dissent or abstention from the
action taken is entered in the minutes of the meeting; or (iii) the director
delivers his or her written dissent or abstention to the presiding officer of
the meeting before the adjournment thereof or to the corporation immediately
after the adjournment of the meeting. Such right to dissent or abstain shall
not apply to a director who voted in favor of such action.
3.13. Committees. Unless the Articles of Incorporation otherwise provide,
the Board of Directors, by resolution adopted by the affirmative vote of a
majority of all the directors then in office, may create one (1) or more
committees, each committee to consist of two (2) or more directors as members,
which to the extent provided in the resolution as initially adopted, and as
thereafter supplemented or amended by further resolution adopted by a like vote,
may exercise the authority of the Board of Directors, except that no committee
may: (a) authorize distributions; (b) approve or propose to shareholders action
that the Wisconsin Business Corporation Law requires be approved by
shareholders; (c) fill vacancies on the Board of Directors or any of its
committees, except that the Board of Directors may provide by resolution that
any vacancies on a committee shall be filled by the affirmative vote of a
majority of the remaining committee members; (d) amend the Articles of
Incorporation; (e) adopt, amend or repeal Bylaws; (f) approve a plan of merger
not requiring shareholder approval; (g) authorize or approve reacquisition of
shares, except according to a formula or method prescribed by the Board of
Directors; or (h) authorize or approve the issuance or sale or contract for sale
of shares, or determine the designation and relative rights, preferences and
limitations of a class or series of shares, except within limits prescribed by
the Board of Directors. The Board of Directors may elect one or more of its
members as alternate members of any such committee who may take the place of any
absent member or members at any meeting of such committee, upon request by the
Chairman of the Board or the Chairman of such meeting. Each such committee
shall fix its own rules (consistent with the Wisconsin Business Corporation Law,
the Articles of Incorporation and these Bylaws) governing the conduct of its
activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request. Unless otherwise provided by
the Board of Directors in creating a committee, a committee may employ counsel,
accountants and other consultants to assist it in the exercise of authority.
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ARTICLE IV.
OFFICERS
4.01. Appointment. The principal officers may include a Chairman of the
Board, a President, a Chief Operating Officer, Vice Chairman, a Secretary, a
Treasurer and such other officers if any, as may be deemed necessary by the
Board of Directors, each of whom shall be appointed by the Board of Directors.
The officers may also include one or more Vice Presidents who may be appointed
and have such designations as are determined by or at the direction of the Board
of Directors or the Chairman of the Board, President, Chief Operating Officer or
Vice Chairman. Any two or more offices may be held by the same person.
4.02. Resignation and Removal. An officer shall hold office until he or she
resigns, dies, is removed hereunder, or a different person is appointed to the
office. An officer may resign at any time by delivering an appropriate written
notice to the corporation. The resignation is effective when the notice is
delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date. Any officer may be removed by the
Board of Directors with or without cause and notwithstanding the contract
rights, if any, of the person removed. The Chairman of the Board, President,
Chief Operating Officer or Vice Chairman may also remove any of the other
officers with or without cause and notwithstanding the contract rights, if any,
of the person removed. Except as provided in the preceding sentence, the
resignation or removal is subject to any remedies provided by any contract
between the officer and the corporation or otherwise provided by law.
Appointment shall not of itself create contract rights.
4.03. Chairman of the Board. The Chairman of the Board shall be the chief
executive officer of the corporation; he shall preside at all meetings of the
shareholders, Board of Directors and Executive Committee of the Board of
Directors, if any; he shall have general and active management of the business
of the corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect.
4.04. President. The President shall have charge of the Kohl's Department
Stores, Inc. general merchandising and marketing functions. He shall, in the
absence of the Chairman of the Board, preside at all meetings of shareholders,
Board of Directors and the Executive Committee of the Board of Directors, if
any. During the absence of the Chairman of the Board, he shall exercise the
functions of the chief executive officer of the corporation. He shall have the
authority, subject to such rules, directions or orders as may be prescribed by
the Chairman of the Board or the Board of Directors, to appoint and terminate
the appointment of such agents and employees of the corporation as he shall deem
necessary, to prescribe their power, duties and compensation and to delegate
authority to them. He shall perform such other duties as may be prescribed from
time to time by the Chairman of the Board or the Board of Directors.
4.05. Chief Operating Officer. The Chief Operating Officer shall be the
chief operating officer of the corporation. He shall supervise the day to day
operations of the corporation's business, manage the administrative and
operating affairs of the corporation, and direct and assign duties to those
officers and agents of the corporation who are engaged in the administrative and
operating affairs of the corporation. He shall have the authority, subject to
such rules, directions or orders as may be prescribed by the Chairman of the
Board or the Board of Directors, to appoint and terminate the appointment of
such agents and employees of the corporation as he shall deem necessary, to
prescribe their power, duties and compensation and to delegate authority to
them. The Chief Operating Officer shall perform such other duties as may be
prescribed from time to time by the Chairman of the Board or the Board of
Directors.
4.6. Vice Chairman. The Vice Chairman shall have charge of the operations of
the Kohl's Department Stores, Inc. department stores and human resources
department. He shall have the authority, subject to such rules, directions or
orders as may be prescribed by the Chairman of the Board or the Board of
Directors, to appoint and terminate the appointment of such agents and employees
of the corporation as he shall deem necessary, to prescribe
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their power, duties and compensation and to delegate authority to them. He shall
perform such other duties as may be prescribed from time to time by the Chairman
of the Board or the Board of Directors.
4.07. Shared Duties of Chairman of the Board, President, Chief Operating
Officer and Vice Chairman. The Chairman of the Board, President, Chief
Operating Officer and Vice Chairman are each severally authorized to sign,
execute and acknowledge, on behalf of the corporation, all deeds, mortgages,
bonds, stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law or directed by
the Board of Directors, the Chairman of the Board, President, Chief Operating
Officer and Vice Chairman may authorize any Vice President or other officer or
agent of the corporation to sign, execute and acknowledge such documents or
instruments in his or her place and stead.
4.08. Vice Presidents. Any Vice President (including any Executive Vice
President, Senior Vice President or other Vice President, however designated)
may sign, with the Secretary, certificates for shares of the corporation; and
shall have charge of such divisions or departments of the corporation and
perform such other duties and have such authority as from time to time may be
delegated or assigned to him or her by the Chairman of the Board, President,
Chief Operating Officer, Vice Chairman or the Board of Directors. The execution
of any instrument of the corporation by any Vice President shall be conclusive
evidence, as to third parties, of the Vice President's authority to act in the
stead of the Chairman of the Board, President or Chief Operating Officer or Vice
Chairman.
4.09. Secretary. The Secretary shall: (a) keep (or cause to be kept) regular
minutes of all meetings of the shareholders, the Board of Directors and any
committees of the Board of Directors in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, if any, and see that the
seal of the corporation, if any, is affixed to all documents which are
authorized to be executed on behalf of the corporation under its seal; (d) keep
or arrange for the keeping of a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign certificates for shares of the corporation, the issuance of which shall
have been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be delegated or
assigned to him or her by the Chairman of the Board or the Board of Directors.
4.10. Treasurer. The Treasurer shall: (a) have charge and custody of and be
responsible for all funds and securities of the corporation; (b) receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected by the
corporation; and (c) in general perform all of the duties incident to the office
of Treasurer and have such other duties and exercise such other authority as
from time to time may be delegated or assigned to him or her by the Chairman of
the Board, President, Chief Operating Officer or by the Board of Directors.
4.11. Assistants and Acting Officers. The Board of Directors and the
Chairman of the Board, President, Chief Operating Officer and Vice Chairman
shall each have the power to appoint any person to act as assistant to any
officer, or as agent for the corporation in the officer's stead, or to perform
the duties of such officer whenever for any reason it is impracticable for such
officer to act personally, and such assistant or acting officer or other agent
so appointed shall have the power to perform all the duties of the office to
which that person is so appointed to be assistant, or as to which he or she is
so appointed to act, except as such power may be otherwise defined or restricted
by the Board of Directors, Chairman of the Board, President, Chief Operating
Officer or Vice Chairman.
4.12. Salaries. The salaries of the Chairman of the Board, President, Chief
Operating Officer and Vice Chairman shall be fixed from time to time by the
Board of Directors or by a duly authorized committee thereof,
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and no officer shall be prevented from receiving such salary by reason of the
fact that such officer is also a director of the corporation.
ARTICLE V.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
5.01. Certificates for Shares. All shares of this corporation shall be
represented by certificates. Certificates representing shares of the
corporation shall be in such form, consistent with law, as shall be determined
by the Board of Directors. Such certificates shall be signed, either manually
or in facsimile, by any one or more of the Chairman of the Board, the President,
the Chief Operating Officer, the Vice Chairman or a Vice President. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except as provided in Section 5.05.
5.02. Signature by Former Officer, Transfer Agent or Registrar. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon any certificate for shares has ceased to be such officer,
transfer agent or registrar before such certificate is issued, the certificate
may be issued by the corporation with the same effect as if that person were
still an officer, transfer agent or registrar at the date of its issue.
5.03. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer, and unless the corporation has established
a procedure by which a beneficial owner of shares held by a nominee is to be
recognized by the corporation as the shareholder, the corporation may treat the
registered owner of such shares as the person exclusively entitled to vote, to
receive notifications and otherwise to have and exercise all the rights and
power of an owner. The corporation may require reasonable assurance that all
transfer endorsements are genuine and effective and in compliance with all
regulations prescribed by or under the authority of the Board of Directors.
5.04. Restrictions on Transfer. The face or reverse side of each certificate
representing shares shall bear a conspicuous notation of any restriction upon
the transfer of such shares imposed by the corporation.
5.05. Lost, Destroyed or Stolen Certificates. Where the owner claims that
his or her certificate for shares has been lost, destroyed or wrongfully taken,
a new certificate shall be issued in place thereof if the owner (a) so requests
before the corporation has notice that such shares have been acquired by a bona
fide purchaser; and (b) if required by the corporation, files with the
corporation a sufficient indemnity bond; and (c) satisfies such other reasonable
requirements as may be prescribed by or under the authority of the Board of
Directors.
5.06. Consideration for Shares. The shares of the corporation may be issued
for such consideration as shall be fixed from time to time and determined to be
adequate by the Board of Directors, provided that any shares having a par value
shall not be issued for a consideration less than the par value thereof. The
consideration may consist of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, contracts
for services to be performed, or other securities of the corporation. When the
corporation receives the consideration for which the Board of Directors
authorized the issuance of shares, such shares shall be deemed to be fully paid
and nonassessable.
5.07. Stock Regulations. The Board of Directors shall have the power and
authority to make all such rules and regulations not inconsistent with the
statutes of the State of Wisconsin as it may deem expedient concerning the
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issue, transfer and registration of certificates representing shares of the
corporation, including the appointment or designation of one or more stock
transfer agents and one or more registrars.
ARTICLE VI.
WAIVER OF NOTICE
6.01. Shareholder Written Waiver. A shareholder may waive any notice
required by the Wisconsin Business Corporation Law, the Articles of
Incorporation or these Bylaws before or after the date and time stated in the
notice. The waiver shall be in writing and signed by the shareholder entitled
to the notice, shall contain the same information that would have been required
in the notice under the Wisconsin Business Corporation Law except that the time
and place of meeting need not be stated, and shall be delivered to the
corporation for inclusion in the corporate records.
6.02. Shareholder Waiver by Attendance. A shareholder's attendance at a
meeting, in person or by proxy, waives objection to both of the following:
(a) Lack of notice or defective notice of the meeting, unless the shareholder
at the beginning of the meeting or promptly upon arrival objects to holding
the meeting or transacting business at the meeting.
(b) Consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
6.03. Director Written Waiver. A director may waive any notice required by
the Wisconsin Business Corporation Law, the Articles of Incorporation or these
Bylaws before or after the date and time stated in the notice. The waiver shall
be in writing, signed by the director entitled to the notice and retained by the
corporation.
6.04. Director Waiver by Attendance. A director's attendance at or
participation in a meeting of the Board of Directors or any committee thereof
waives any required notice to him or her of the meeting unless the director at
the beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
ARTICLE VII.
ACTION WITHOUT MEETINGS
7.01. Director Action Without Meeting. Unless the Articles of Incorporation
provide otherwise, action required or permitted by the Wisconsin Business
Corporation Law to be taken at a Board of Directors meeting or committee meeting
may be taken without a meeting if the action is taken by all members of the
Board or committee. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director and retained by
the corporation. Action taken hereunder is effective when the last director
signs the consent, unless the consent specifies a different effective date. A
consent signed hereunder has the effect of a unanimous vote taken at a meeting
at which all directors or committee members were present, and may be described
as such in any document.
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ARTICLE VIII.
INDEMNIFICATION
8.01. Indemnification for Successful Defense. Within twenty (20) days after
receipt of a written request pursuant to Section 8.03, the corporation shall
indemnify a director or officer, to the extent he or she has been successful on
the merits or otherwise in the defense of a proceeding, for all reasonable
expenses incurred in the proceeding if the director or officer was a party
because he or she is a director or officer of the corporation.
8.02. Other Indemnification. (a) In cases not included under Section 8.01,
the corporation shall indemnify a director or officer against all liabilities
and expenses incurred by the director or officer in a proceeding to which the
director or officer was a party because he or she is a director or officer of
the corporation, unless liability was incurred because the director or officer
breached or failed to perform a duty he or she owes to the corporation and the
breach or failure to perform constitutes any of the following:
(1) A willful failure to deal fairly with the corporation or its
shareholders in connection with a matter in which the director or officer has
a material conflict of interest.
(2) A violation of criminal law, unless the director or officer had
reasonable cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was unlawful.
(3) A transaction from which the director or officer derived an improper
personal profit.
(4) Willful misconduct.
(b) Determination of whether indemnification is required under this Section
shall be made pursuant to Section 8.05.
(c) The termination of a proceeding by judgment, order, settlement or
conviction, or upon a plea of no contest or an equivalent plea, does not, by
itself, create a presumption that indemnification of the director or officer is
not required under this Section.
8.03. Written Request. A director or officer who seeks indemnification under
Sections 8.01 or 8.02 shall make a written request to the corporation.
8.04. Nonduplication. The corporation shall not indemnify a director or
officer under Sections 8.01 or 8.02 if the director or officer has previously
received indemnification or allowance of expenses from any person, including the
corporation, in connection with the same proceeding. However, the director or
officer has no duty to look to any other person for indemnification.
8.05. Determination of Right to Indemnification. (a) Unless otherwise
provided by the Articles of Incorporation or by written agreement between the
director or officer and the corporation, the director or officer seeking
indemnification under Section 8.02 shall select one of the following means for
determining his or her right to indemnification:
(1) By a majority vote of a quorum of the Board of Directors consisting of
directors not at the time parties to the same or related proceedings. If a
quorum of disinterested directors cannot be obtained, by majority vote of a
committee duly appointed by the Board of Directors and consisting solely of
two (2) or more directors who are not at the time parties to the same or
related proceedings. Directors who are parties to the same or related
proceedings may participate in the designation of members of the committee.
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(2) By independent legal counsel selected by a quorum of the Board of
Directors or its committee in the manner prescribed in sub. (1) or, if unable
to obtain such a quorum or committee, by a majority vote of the full Board of
Directors, including directors who are parties to the same or related
proceedings.
(3) By a panel of three (3) arbitrators consisting of one arbitrator
selected by those directors entitled under sub. (2) to select independent
legal counsel, one arbitrator selected by the director or officer seeking
indemnification and one arbitrator selected by the two (2) arbitrators
previously selected.
(4) By an affirmative vote of shares represented at a meeting of
shareholders at which a quorum of the voting group entitled to vote thereon is
present. Shares owned by, or voted under the control of, persons who are at
the time parties to the same or related proceedings, whether as plaintiffs or
defendants or in any other capacity, may not be voted in making the
determination.
(5) By a court under Section 8.08.
(6) By any other method provided for in any additional right to
indemnification permitted under Section 8.07.
(b) In any determination under (a), the burden of proof is on the corporation
to prove by clear and convincing evidence that indemnification under Section
8.02 should not be allowed.
(c) A written determination as to a director's or officer's indemnification
under Section 8.02 shall be submitted to both the corporation and the director
or officer within 60 days of the selection made under (a).
(d) If it is determined that indemnification is required under Section 8.02,
the corporation shall pay all liabilities and expenses not prohibited by Section
8.04 within ten (10) days after receipt of the written determination under (c).
The corporation shall also pay all expenses incurred by the director or officer
in the determination process under (a).
8.06. Advance of Expenses. Within ten (10) days after receipt of a written
request by a director or officer who is a party to a proceeding, the corporation
shall pay or reimburse his or her reasonable expenses as incurred if the
director or officer provides the corporation with all of the following:
(1) A written affirmation of his or her good faith belief that he or she
has not breached or failed to perform his or her duties to the corporation.
(2) A written undertaking, executed personally or on his or her behalf, to
repay the allowance to the extent that it is ultimately determined under
Section 8.05 that indemnification under Section 8.02 is not required and that
indemnification is not ordered by a court. The undertaking under this
subsection shall be an unlimited general obligation of the director or officer
and may be accepted without reference to his or her ability to repay the
allowance. The undertaking may be unsecured.
8.07. Nonexclusivity. (a) Except as provided in (b), Sections 8.01, 8.02 and
8.06 do not preclude any additional right to indemnification or allowance of
expenses that a director or officer may have under any of the following:
(1) The Articles of Incorporation.
(2) A written agreement between the director or officer and the
corporation.
(3) A resolution of the Board of Directors.
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(4) A resolution, after notice, adopted by a majority vote of all of the
corporation's voting shares then issued and outstanding.
(b) Regardless of the existence of an additional right under (a), the
corporation shall not indemnify a director or officer, or permit a director or
officer to retain any allowance of expenses unless it is determined by or on
behalf of the corporation that the director or officer did not breach or fail to
perform a duty he or she owes to the corporation which constitutes conduct under
Section 8.02(a)(1), (2), (3) or (4). A director or officer who is a party to
the same or related proceedings for which indemnification or an allowance of
expenses is sought may not participate in a determination under this subsection.
(c) Sections 8.01 to 8.14 do not affect the corporation's power to pay or
reimburse expenses incurred by a director or officer in any of the following
circumstances.
(1) As a witness in a proceeding to which he or she is not a party.
(2) As a plaintiff or petitioner in a proceeding because he or she is or
was an employee, agent, director or officer of the corporation.
8.08. Court-Ordered Indemnification. (a) Except as provided otherwise by
written agreement between the director or officer and the corporation, a
director or officer who is a party to a proceeding may apply for indemnification
to the court conducting the proceeding or to another court of competent
jurisdiction. Application shall be made for an initial determination by the
court under Section 8.05(a)(5) or for review by the court of an adverse
determination under Section 8.05(a)(l), (2), (3), (4) or (6).
(b) If the court determines that the director or officer is entitled to
indemnification, the corporation shall pay the director's or officer's expenses
incurred to obtain the court-ordered indemnification.
8.09. Indemnification and Allowance of Expenses of Employees and Agents. The
corporation shall indemnify an employee of the corporation who is not a director
or officer of the corporation, to the extent that he or she has been successful
on the merits or otherwise in defense of a proceeding, for all reasonable
expenses incurred in the proceeding if the employee was a party because he or
she was an employee of the corporation. In addition, the corporation may
indemnify and allow reasonable expenses of an employee or agent who is not a
director or officer of the corporation to the extent provided by the Articles of
Incorporation or these Bylaws, by general or specific action of the Board of
Directors or by contract.
8.10. Insurance. The corporation may purchase and maintain insurance on
behalf of an individual who is an employee, agent, director or officer of the
corporation against liability asserted against or incurred by the individual in
his or her capacity as an employee, agent, director or officer, regardless of
whether the corporation is required or authorized to indemnify or allow expenses
to the individual against the same liability under Sections 8.01, 8.02, 8.06,
8.07 and 8.09.
8.11. Securities Law Claims.
(a) Pursuant to the public policy of the State of Wisconsin, the
corporation shall provide indemnification and allowance of expenses and may
insure for any liability incurred in connection with a proceeding involving
securities regulation described under (b) to the extent required or permitted
under Sections 8.01 to 8.10.
(b) Sections 8.01 to 8.10 apply, to the extent applicable to any other
proceeding, to any proceeding involving a federal or state statute, rule or
regulation regulating the offer, sale or purchase of securities, securities
brokers or dealers, or investment companies or investment advisers.
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8.12. Liberal Construction. In order for the corporation to obtain and
retain qualified directors, officers and employees, the foregoing provisions
shall be liberally administered in order to afford maximum indemnification of
directors, officers and, where Section 8.09 of these Bylaws applies, employees.
The indemnification above provided for shall be granted in all applicable cases
unless to do so would clearly contravene law, controlling precedent or public
policy.
8.13. Definitions Applicable to this Article. For purposes of this Article:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the corporation.
(b) "Corporation" means this corporation and any domestic or foreign
predecessor of this corporation where the predecessor corporation's existence
ceased upon the consummation of a merger or other transaction.
(c) "Director or officer" means any of the following:
(1) An individual who is or was a director or officer of this
corporation.
(2) An individual who, while a director or officer of this corporation,
is or was serving at the corporation's request as a director, officer,
partner, trustee, member of any governing or decision-making committee,
employee or agent of another corporation or foreign corporation,
partnership, joint venture, trust or other enterprise.
(3) An individual who, while a director or officer of this corporation,
is or was serving an employee benefit plan because his or her duties to the
corporation also impose duties on, or otherwise involve services by, the
person to the plan or to participants in or beneficiaries of the plan.
(4) Unless the context requires otherwise, the estate or personal
representative of a director or officer.
For purposes of this Article, it shall be conclusively presumed that any
director or officer serving as a director, officer, partner, trustee, member
of any governing or decision-making committee, employee or agent of an
affiliate shall be so serving at the request of the corporation.
(d) "Expenses" include fees, costs, charges, disbursements, attorney fees
and other expenses incurred in connection with a proceeding.
(e) "Liability" includes the obligation to pay a judgment, settlement,
penalty, assessment, forfeiture or fine, including an excise tax assessed with
respect to an employee benefit plan, and reasonable expenses.
(f) "Party" includes an individual who was or is, or who is threatened to
be made, a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending or completed civil,
criminal, administrative or investigative action, suit, arbitration or other
proceeding, whether formal or informal, which involves foreign, federal, state
or local law and which is brought by or in the right of the corporation or by
any other person.
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ARTICLE IX.
SEAL
9.01. Seal. The Board of Directors may provide a corporate seal which may be
circular in form and have inscribed thereon the name of the corporation and the
state of incorporation and the words "Corporate Seal."
ARTICLE X.
AMENDMENTS
10.01. By Shareholders. These Bylaws may be amended or repealed and new
Bylaws may be adopted by the shareholders.
10.02. By Directors. Except as the Articles of Incorporation may otherwise
provide, these Bylaws may also be amended or repealed and new Bylaws may be
adopted by the Board of Directors by the vote provided in Section 3.08, but (a)
no Bylaw adopted by the shareholders shall be amended, repealed or readopted by
the Board of Directors if the Bylaw so adopted so provides and (b) a Bylaw
adopted or amended by the shareholders that fixes a greater or lower quorum
requirement or a greater voting requirement for the Board of Directors than
otherwise is provided in the Wisconsin Business Corporation Law may not be
amended or repealed by the Board of Directors unless the Bylaw expressly
provides that it may be amended or repealed by a specified vote of the Board of
Directors. Action by the Board of Directors to adopt or amend a Bylaw that
changes the quorum or voting requirement for the Board of Directors must meet
the same quorum requirement and be adopted by the same vote required to take
action under the quorum and voting requirement then in effect, unless a
different voting requirement is specified as provided by the preceding sentence.
A Bylaw that fixes a greater or lower quorum requirement or a greater voting
requirement for shareholders or voting groups of shareholders than otherwise is
provided in the Wisconsin Business Corporation Law may not be adopted, amended
or repealed by the Board of Directors.
10.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
Bylaws then in effect but is taken or authorized by a vote that would be
sufficient to amend the Bylaws so that the Bylaws would be consistent with such
action, shall be given the same effect as though the Bylaws had been temporarily
amended or suspended so far, but only so far, as is necessary to permit the
specific action so taken or authorized.
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EXHIBIT 10.15
KOHL'S CORPORATION
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1994 LONG-TERM COMPENSATION PLAN
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1. PURPOSE
The purpose of the Plan is to provide motivation to Key Employees of
the Company and its Subsidiaries to put forth maximum efforts toward the
continued growth, profitability, and success of the Company and its Subsidiaries
by providing incentives to such Key Employees through the ownership and
performance of the Common Stock of the Company. Toward this objective, the
Committee may grant stock options, stock appreciation rights, Stock Awards,
performance units, performance shares, and/or other incentive awards to Key
Employees on the terms and subject to the conditions set forth in the Plan.
2. DEFINITIONS
2.1. "Award" means any form of stock option, stock appreciation
right, Stock Award, performance unit, performance shares or other incentive
award granted under the Plan, whether singly, in combination, or in tandem, to a
Participant by the Committee pursuant to such terms, conditions, restrictions,
and/or limitations, if any, as the Committee may establish by the Award Notice
or otherwise.
2.2. "Award Notice" means a written notice from the Company to a
Participant that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established by this Plan
and by the Committee's exercise of its administrative powers.
2.3. "Board" means the Board of Directors of the Company.
2.4. "Cause" means (a) the failure by a Key Employee to perform his
duties for his employer, or (b) the engaging by a Key Employee in illegal
conduct which is injurious to the Company or a Subsidiary.
2.5. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.6. "Committee" means the Compensation Committee of the Board, or
such other committee of directors designated by the Board, authorized to
administer the Plan under Paragraph 3 hereof. The Committee shall consist of
not less than two (2) directors and shall be constituted so as to permit the
Plan to comply with both Rule 16b-3 and Code Section 162(m).
<PAGE>
2.7. "Common Stock" means $.01 par value common shares of the
Company.
2.8. "Company" means Kohl's Corporation, a Wisconsin corporation.
2.9. "Disability" means the inability of a Participant to perform his
normal duties as a full-time employee of the Company or a Subsidiary for a
continuous period of ninety (90) days by reason of physical or mental illness or
incapacity. If there is any dispute as to whether the termination of the
Participant's employment was due to his physical or mental illness or
incapacity, such question shall be submitted to a licensed physician for the
purpose of making such determination. An examination of the Participant shall
be made within thirty (30) days after written notice by the Committee or the
Participant by a licensed physician selected by the Committee. The Participant
shall submit to such examination and provide such information as such physician
may request and the determination of such physician as to the question of the
Participant's physical or mental condition shall be binding and conclusive on
all parties concerned for purposes of this Plan. The disability shall be deemed
to be continuing unless the Participant performs his regular duties for his
employer for a continuous period of ninety (90) days.
2.10. "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
2.11. "Key Employee" means an employee of the Company or a Subsidiary
chosen by the Committee to receive an Award hereunder.
2.12. "Market Value" of Common Stock shall mean the closing sale
price of Common Stock on the New York Stock Exchange - Composite Transactions,
the American Stock Exchange - Composite Transactions, or other national or
regional exchange, or the mean of the closing bid and asked prices in the over-
the-counter market, as reported by the National Association of Securities
Dealers Automatic Quotation System ("NASDAQ").
2.13. "Participant" means any individual to whom an Award has been
granted by the Committee under this Plan.
2.14. "Plan" means the Kohl's Corporation 1994 Long-Term Compensation
Plan.
2.15. "Retirement" means termination of employment of a Participant
other than for Cause after the later to occur of (a) attainment of age sixty
(60); or (b) employment with the Company and/or a Subsidiary for a continuous
period of ten (10) years.
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2.16. "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as it may be amended
from time to time, and any successor rule.
2.17. "Stock Award" means an award granted pursuant to Paragraph 10
hereof in the form of shares of Common Stock, restricted shares of Common Stock,
and/or Units of Common Stock.
2.18. "Subsidiary" means a corporation or other business entity in
which the Company directly or indirectly has an ownership interest of 80% or
more.
2.19. "Unit" means a bookkeeping entry used by the Company to record
and account for the grant of the following Awards until such time as the Award
is paid, cancelled, forfeited or terminated, as the case may be: Units of
Common Stock, performance units, and performance shares which are expressed in
terms of Units of Common Stock.
3. ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the terms
of the Plan, the Committee shall have the authority to: (a) interpret the Plan;
(b) establish such rules and regulations as it deems necessary for the proper
operations and administration of the Plan; (c) select Key Employees to receive
Awards under the Plan; (d) determine the form of an Award, whether a stock
option, stock appreciation right, Stock Award, performance unit, performance
share, or other incentive award established by the Committee in accordance with
the Plan, the number of shares or Units subject to the Award, all the terms,
conditions, restrictions and/or limitations, if any, of an Award, including the
time and conditions of exercise or vesting, and the terms of any Award Notice;
(e) determine whether Awards will be granted singly, in combination or in
tandem; (f) determine the performance goals, if any, which will be applicable to
the Award; (g) grant waivers of Plan terms, conditions, restrictions, and
limitations; (h) accelerate the vesting, exercise, or payment of an Award or the
performance period of an Award when such action or actions would be in the best
interest of the Company; and (i) take any and all other action it deems
necessary or advisable for the proper operation or administration of the Plan.
In addition, in order to enable Key Employees who are foreign nationals or are
employed outside the United States or both to receive Awards under the Plan, the
Committee may adopt such amendments, procedures, regulations, subplans and the
like as are necessary or advisable, in the opinion of the Committee, to
effectuate the purposes of the Plan. The Committee shall also have the
authority to grant Awards in replacement of Awards previously granted under this
Plan or any other executive compensation plan of the Company or a Subsidiary.
All determinations of the Committee shall be made by a majority of its members,
and its determinations shall be final, binding and conclusive. The Committee,
in its discretion, may delegate its authority and duties under the Plan to the
Chief Executive Officer and/or to other senior officers of the Company under
such
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conditions and/or limitations as the Committee may establish; provided, however,
that only the Committee may select and grant Awards to Participants who are
subject to Section 16 of the Exchange Act.
4. ELIGIBILITY
Any Key Employee is eligible to become a Participant of the Plan.
5. SHARES AVAILABLE
The maximum number of shares of Common Stock of the Company which
shall be available for grant of Awards under the Plan (including incentive stock
options) during its term shall not exceed 6,000,000 (such amount shall be
subject to adjustment as provided in Paragraph 20). No Participant shall
receive a grant or grants of Awards aggregating more than 300,000 shares of
Common Stock in any twelve-month period; and no Participant, in any twelve-month
period, shall receive a grant or grants of Awards which are not based on, or
paid in, Common Stock, with an aggregate fair market value at the time of grant,
equal to more than 300% of such Participant's base salary. Any shares of Common
Stock related to Awards which (a) terminate by expiration, forfeiture,
cancellation or otherwise without the issuance of such shares, (b) are settled
in cash in lieu of Common Stock, or (c) are exchanged with the Committee's
permission for Awards not involving Common Stock, shall be available again for
grant under the Plan, provided the Participant received no other benefits of
ownership of such Award other than voting rights, if any. Notwithstanding the
foregoing, no shares of Common Stock which are used by a Participant for the
full or partial payment to the Company of the purchase price of shares of Common
Stock upon exercise of a stock option, or for any withholding taxes due as a
result of such exercise, may become available for Awards under the Plan. Shares
of Common Stock with respect to which a stock appreciation right has been
exercised and paid in cash shall again be available for grant under the Plan.
The shares of Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares.
6. TERM
The Plan shall become effective as of the date of its approval by the
Company's shareholders. Awards shall not be granted pursuant to the Plan after
May 24, 2004.
7. PARTICIPATION
The Committee shall select, from time to time, Participants from those
Key Employees who, in the opinion of the Committee, can further the Plan's
purposes. Once a Participant is so selected, the Committee shall determine the
type or types of Awards to be
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made to the Participant and shall establish in the related Award Notices the
terms, conditions, restrictions and/or limitations, if any, applicable to the
Awards in addition to those set forth in this Plan and the administrative rules
and regulations issued by the Committee.
8. STOCK OPTIONS
(a) Grants. Awards may be granted in the form of stock options.
These stock options may be incentive stock options within the meaning of
Section 422 of the Code or nonqualified stock options (i.e., stock options
which are not incentive stock options), or a combination of both.
(b) Terms and Conditions of Options. An option shall be
exercisable in whole or in such installments and at such times as may be
determined by the Committee. The price at which a share of Common Stock
may be purchased upon exercise of a stock option shall be established by
the Committee, but shall be no less than 50% of the fair market value of a
share of Common Stock, as determined by the Committee, on the date of
grant.
(c) Restrictions Relating to Incentive Stock Options. Stock
options issued in the form of incentive stock options shall, in addition to
being subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with Section 422 of the
Code. Further, the per share option price of an incentive stock option
shall not be less than 100% (or 110% in the case of a 10% or more
shareholder) of the fair market value of a share of Common Stock, as
determined by the Committee, on the date of the grant. Also, each option
shall expire not later than ten years (or five years in the case of a 10%
or more shareholder) from its date of grant; and if an incentive stock
option granted under the Plan is first exercisable in any calendar year to
obtain Common Stock having a fair market value (determined at the time of
grant) in excess of $100,000, the option shall be treated as an incentive
stock option for Common Stock having a fair market value (determined at the
time of grant) equal to $100,000, and as a nonqualified stock option for
the remaining Common Stock. The number of shares of Common Stock that
shall be available for incentive stock options granted under the Plan is
1,500,000.
(d) Additional Terms and Conditions. The Committee may, by way
of the Award Notice or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, of any stock option Award,
provided they are not inconsistent with the Plan.
(e) Exercise Payment. At the option of the Committee, upon
exercise, the option price of a stock option may be paid in cash, shares of
Common Stock, a combination of the foregoing, or such other consideration
as the Committee may deem
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appropriate. The Committee shall establish appropriate methods for
accepting Common Stock and may impose such conditions as it deems
appropriate on the use of such Common Stock to exercise a stock option.
9. STOCK APPRECIATION RIGHTS
(a) Grants. Awards may be granted in the form of stock
appreciation rights ("SARs"). An SAR may be granted in tandem with all or a
portion of a related stock option under the Plan (a "Tandem SAR"), or may
be granted separately (a "Freestanding SAR"). A Tandem SAR may be granted
either at the time of the grant of the related stock option or any time
thereafter during the term of the stock option. SARs shall entitle the
recipient to receive a payment equal to the appreciation in Market Value of
a stated number of shares of Common Stock from the exercise price to the
Market Value on the date of exercise. In the case of SARs granted in tandem
with stock options granted prior to the grant of such SARs, the
appreciation in value is from the option price of such related stock option
to the Market Value on the date of exercise.
(b) Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related stock
option is exercisable, and the "exercise price" of such an SAR (the base
from which the value of the SAR is measured at its exercise) shall be the
option price under the related stock option. If a related stock option is
exercised as to some or all of the shares covered by the Award, the related
Tandem SAR, if any, shall be cancelled automatically to the extent of the
number of shares covered by the stock option exercise. Upon exercise of a
Tandem SAR as to some or all of the shares covered by the Award, the
related stock option shall be cancelled automatically to the extent of the
number of shares covered by such exercise, and such shares shall again be
eligible for grant in accordance with Paragraph 5 hereof, except to the
extent any shares of Common Stock are issued to settle the SAR.
(c) Terms and Conditions of Freestanding SARs. A Freestanding
SAR shall be exercisable in whole or in such installments and at such times
as may be determined by the Committee.
(d) Deemed Exercise. The Committee may provide that an SAR
shall be deemed to be exercised at the close of business on the scheduled
expiration date of such SAR, if at such time the SAR by its terms remains
exercisable and, if so exercised, would result in a payment to the holder
of such SAR.
(e) Additional Terms and Conditions. The Committee may, by way
of the Award Notice or otherwise, determine such other terms, conditions,
restrictions
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and/or limitations, if any, of any SAR Award, provided they are not
inconsistent with the Plan.
10. STOCK AWARDS
(a) Grants. Awards may be granted in the form of Stock Awards.
Stock Awards shall be awarded in such numbers and at such times during the
term of the Plan as the Committee shall determine.
(b) Award Restrictions. Stock Awards shall be subject to such
terms, conditions, restrictions, and/or limitations, if any, as the
Committee deems appropriate including, but not by way of limitation,
performance goal requirements and restrictions on transferability and
continued employment. The Committee may modify or accelerate the delivery
of a Stock Award under such circumstances as it deems appropriate.
(c) Rights as Shareholders. During the period in which any
restricted shares of Common Stock are subject to the restrictions imposed
under Paragraph 10(b), the Committee may, in its discretion, grant to the
Participant to whom such restricted shares have been awarded all or any of
the rights of a shareholder with respect to such shares, including, but not
by way of limitation, the right to vote such shares and to receive
dividends.
(d) Evidence of Award. Any Stock Award granted under the Plan
may be evidenced in such manner as the Committee deems appropriate,
including, without limitation, book-entry registration or issuance of a
stock certificate or certificates.
11. PERFORMANCE UNITS
(a) Grants. Awards may be granted in the form of performance
units. Performance units, as that term is used in this Plan, shall refer
to Units valued by reference to designated criteria established by the
Committee, other than Common Stock.
(b) Performance Criteria. Performance units shall be contingent
on the attainment during a performance period of certain performance goals.
The length of the performance period, the performance goals to be achieved
during the performance period, and the measure of whether and to what
degree such goals have been attained shall be conclusively determined by
the Committee in the exercise of its absolute discretion. Performance
goals may be revised by the Committee, at such times as it deems
appropriate during the performance period, in order to take into
consideration any unforeseen events or changes in circumstances.
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(c) Additional Terms and Conditions. The Committee may, by way
of the Award Notice or otherwise, determine such other terms, conditions,
restrictions, and/or limitations, if any, of any Award of performance
units, provided they are not inconsistent with the Plan.
12. PERFORMANCE SHARES
(a) Grants. Awards may be granted in the form of performance
shares. Performance shares, as that term is used in this Plan, shall refer
to shares of Common Stock or Units which are expressed in terms of Common
Stock.
(b) Performance Criteria. Performance shares shall be
contingent upon the attainment during a performance period of certain
performance goals. The length of the performance period, the performance
goals to be achieved during the performance period, and the measure of
whether and to what degree such goals have been attained shall be
conclusively determined by the Committee in the exercise of its absolute
discretion. Performance goals may be revised by the Committee, at such
times as it deems appropriate during the performance period, in order to
take into consideration any unforeseen events or changes in circumstances.
(c) Additional Terms and Conditions. The Committee may, by way
of the Award Notice or otherwise, determine such other terms, conditions,
restrictions and/or limitations, if any, of any Award of performance
shares, provided they are not inconsistent with the Plan.
13. PERFORMANCE GOALS
Notwithstanding any other provision hereof, the Committee may
establish performance goals in connection with the grant of any Award hereunder.
Performance goals established by the Committee shall be based upon the
performance of the Market Value of the Common Stock in relation to its
historical performance and the performance of applicable market indices and
market peer groups, Company sales figures, cash flow, return on equity, and/or
either pre-tax or after-tax profit levels of the Company; and the Committee may,
in its discretion, determine whether an Award will be paid under any one or more
of the performance goals. Such performance goals shall be set by the Committee
so as to comply with the performance-based compensation provisions under Code
(S)162(m), and may be (but need not be) different for each performance period.
The Committee may set different goals for different Participants and for
different Awards, and performance goals may include standards for minimum
attainment, target attainment, and maximum attainment. In all cases, however,
performance goals shall include a minimum performance standard below which no
part of the relevant Award will be earned. If necessary, after the end of a
performance
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period, the Committee shall certify in writing prior to payment of the Award
that the relevant performance goals and any other material terms of the Award
were in fact satisfied.
14. PAYMENT OF AWARDS
At the discretion of the Committee, payment of Awards may be made in
cash, Common stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine, other than stock options and Stock
Awards, which shall be made in Common Stock. In addition, payment of Awards may
include such terms, conditions, restrictions and/or limitations, if any, as the
Committee deems appropriate, including, in the case of Awards paid in the form
of Common Stock, restrictions on transfer and forfeiture provisions. Further,
payment of Awards may be made in the form of a lump sum or installments, as
determined by the Committee.
15. DIVIDENDS AND DIVIDEND EQUIVALENTS
If an Award is granted in the form of a Stock Award, stock option, or
performance share, or in the form of any other stock-based grant, the Committee
may choose, at the time of the grant of the award or any time thereafter up to
the time of the Award's payment, to include as part of such Award an entitlement
to receive dividends or dividend equivalents, subject to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may establish.
Dividends and dividend equivalents shall be paid in such form and manner (i.e.,
lump sum or installments), and at such time as the Committee shall determine.
All dividends or dividend equivalents which are not paid currently may, at the
Committee's discretion, accrue interest, be reinvested into additional shares of
Common Stock or, in the case of dividends or dividend equivalents credited in
connection with performance shares, be credited as additional performance shares
and paid to the Participant if and when, and to the extent that, payment is made
pursuant to such Award.
16. DEFERRAL OF AWARDS
At the discretion of the Committee, payment of a Stock Award,
performance share, performance unit, dividend, dividend equivalent, or any
portion thereof may be deferred by a Participant until such time as the
Committee may establish. All such deferrals shall be accomplished by the
delivery of a written, irrevocable election by the Participant prior to such
time payment would otherwise be made, on a form provided by the Company.
Further, all deferrals shall be made in accordance with administrative
guidelines established by the Committee to ensure that such deferrals comply
with all applicable requirements of the Code and its regulations. Deferred
payments shall be paid in a lump sum or installments, as determined by the
Committee. The Committee may also credit interest, at such rates to be
determined by the Committee, on cash payments that are deferred and credit
dividends or dividend equivalents on deferred payments denominated in the form
of Common Stock.
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17. TERMINATION OF EMPLOYMENT
If a Participant's employment with the Company or a Subsidiary
terminates for a reason other than death, Disability, Retirement, or any
approved reason, all unexercised, unearned, and/or unpaid Awards, including, but
not by way of limitation, Awards earned, but not yet paid, all unpaid dividends
and dividend equivalents, and all interest accrued on the foregoing shall be
cancelled or forfeited, as the case may be, unless the Participant's Award
Notice provides, or the Committee determines, otherwise. The Committee shall
have the authority to promulgate rules and regulations to (a) determine what
events constitute Disability, Retirement, or termination for an approved reason
for purposes of the Plan, and (b) determine the treatment of a Participant under
the Plan in the event of his death, Disability, Retirement, or termination for
an approved reason.
18. CHANGE OF CONTROL
(a) Impact. In the event of a Change of Control (as defined below),
the following acceleration and valuation provisions shall apply:
(i) All Awards outstanding on the date such Change of Control is
determined to have occurred shall become immediately vested and fully
exercisable as if all applicable performance goals, if any, had been
attained at the level of 100% or the equivalent thereof;
(ii) All Awards which are not paid in Common Stock will be
cashed out at the "Change of Control Price" (as defined below) reduced by
the exercise price, if any, applicable to such Awards; and
(iii) The Committee may, in its discretion, make such other
provision relating to any Award, any unpaid dividend or dividend equivalent
and all interest accrued thereon, any performance goal, or any Award
deferred under Paragraph 16 hereof which the Committee may deem equitable,
including, but not limited to, adjusting the terms of an Award to reflect
the Change of Control or causing the Award to be assumed, or new rights to
be substituted therefor, by another entity.
(b) Definitions.
-----------
(i) "Change of Control" means the occurrence of (1) the
acquisition (other than from the Company) by any person, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
other than the Company, a subsidiary of the Company, or any employee
benefit plan or plans sponsored by the Company or any subsidiary of the
Company, directly or indirectly, of beneficial ownership (within the
meaning of Exchange
10
<PAGE>
Act Rule 13d-3) of 20% or more of the then outstanding shares of common
stock of the Company or voting securities representing 20% or more of the
combined voting power of the Company's then outstanding voting securities
ordinarily entitled to vote in the election of directors unless the
Incumbent Board (as defined below), before such acquisition or within 30
days thereafter, deems such acquisition not to be a Change of Control; or
(2) individuals who, as of the date this Plan is adopted by the Board,
constitute the Board (as of such date, the "Incumbent Board") ceasing for
any reason to constitute at least a majority of such Board; provided,
however, that any person becoming a director subsequent to the date this
Plan is adopted by the Board whose election, or nomination for election by
the shareholders of the Company, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be for
purposes of the Plan, considered as though such person were a member of the
Incumbent Board but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest which was (or, if threatened, would have been) subject to
Exchange Act Rule 14a-11.
(ii) "Change of Control Price" means, as determined by the
Committee, (1) the highest Market Value at any time within the 60-day
period immediately preceding the date of determination of the Change of
Control Price by the Committee, (2) the highest price paid or offered per
share of Common Stock, as determined by the Committee, in any bona fide
transaction or bona fide offer related to the Change of Control of the
Company at any time within such 60-day period, or (3) some lower price as
the Committee, in its discretion, determines to be a reasonable estimate of
the fair market value of a share of Common Stock.
19. NONASSIGNABILITY
No Awards or any other payment under the Plan shall be subject in any
manner to alienation, anticipation, sale, transfer (except by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined in the Code), assignment, pledge, or encumbrance, and during the
lifetime of the Participant, only the Participant may exercise rights under the
Plan. Following the death of the Participant, such individual, trust or estate
who or which by designation of the Participant or operation of law succeeds to
the rights of the Participant under the Plan upon the Participant's death, may
exercise the Participant's rights to the extent they are exercisable under the
Plan following the death of the Participant. All beneficiary designations shall
be made in such form and subject to such limitations as may from time to time be
acceptable to the Committee and delivered to and accepted by the Committee.
11
<PAGE>
20. ADJUSTMENT PROVISIONS
If there is any change in the number of outstanding shares of Common
Stock through the declaration of stock dividends, stock splits or the like, the
number of shares available for Awards, the shares subject to any Award and the
option prices or exercise prices of Awards shall be automatically adjusted. If
there is any change in the number of outstanding shares of Common Stock through
any change in the capital of the Company, or through any other transaction
referred to in Section 424(a) of the Code, the Committee shall make appropriate
adjustments in the maximum number of shares of Common Stock which may be issued
under the Plan and any adjustments and/or modifications to outstanding Awards as
it deems appropriate. In the event of any other change in the capital structure
or in the Common Stock of the Company, or in the event of a merger,
consolidation, combination or exchange of shares, or the like, as a result of
which Common Stock is changed into another class, or securities of another
person, cash or other property, the exercise price, consideration to be
received, and other terms of an Award shall be adjusted as deemed equitable by
the Committee, in its sole discretion. The Committee shall have authority to
provide for, in appropriate cases upon the effectiveness of the transaction, (a)
waiver, in whole or in part, of remaining restrictions for vesting or earning,
and (b) the conversion of outstanding Awards into cash or other property to be
received in the transactions immediately or over the periods the Award would
have vested or been earned. Any adjustment, waiver, conversion or the like
carried out by the Committee under this Paragraph shall be conclusive and
binding for all purposes of the Plan. Notwithstanding the foregoing, any
increase in the number of shares of Common Stock subject to the Plan shall, if
required under Rule 16b-3 or Code Section 162(m), be subject to approval of the
Company's shareholders.
21. WITHHOLDING TAXES
The Company shall be entitled to deduct from any payment under the
Plan, regardless of the form of such payment, the amount of all applicable
income and employment taxes required by law to be withheld with respect to such
payment or may require the Participant to pay to it such tax prior to and as a
condition of the making of such payment. In accordance with any applicable
administrative guidelines it establishes, the Committee may allow a Participant
to pay the amount of taxes required by law to be withheld from an Award by
withholding from any payment of Common Stock due as a result of such Award, or
by permitting the Participant to deliver to the Company, shares of Common Stock
having a fair market value, as determined by the Committee, equal to the amount
of such required withholding taxes.
22. NONCOMPETITION PROVISION
Unless the Award Notice specifies otherwise, a Participant shall
forfeit all unexercised, unearned, and/or unpaid Awards, including, but not by
way of limitation, Awards
12
<PAGE>
earned but not yet paid, all unpaid dividends and dividend equivalents, and all
interest, if any, accrued on the foregoing if, (a) in the opinion of the
Committee, the Participant, at any time during the period of Participant's
employment and for one (1) year thereafter, without the written consent of the
Company, engages directly or indirectly in any manner or capacity as principal,
agent, partner, officer, director, employee, or otherwise, in any business or
activity competitive with the business conducted by the Company or any
Subsidiary, in the geographic area in which the Company does business; or (b)
the Participant performs any act or engages in any activity which in the opinion
of the Chief Executive Officer of the Company is inimical to the best interests
of the Company. In addition, the Committee may, in its discretion, condition
the deferral of any Award, dividend, or dividend equivalent under Paragraph 16
hereof on a Participant's compliance with the terms of this Paragraph 22, and
cause such a Participant to forfeit any payment which is so deferred if the
Participant fails to comply with the terms hereof.
23. AMENDMENTS TO AWARDS
The Committee may at any time unilaterally amend or terminate and cash
out any unexercised or unpaid Award, whether earned or unearned, including, but
not by way of limitation, Awards earned but not yet paid, and/or substitute
another Award of the same or different type, to the extent it deems appropriate;
provided, however, that any amendment to (but not termination of) an outstanding
Award which, in the opinion of the Committee, is materially adverse to the
Participant, or any amendment or termination which, in the opinion of the
Committee, may subject the Participant to liability under Section 16 of the
Exchange Act, shall require the Participant's consent.
24. REGULATORY APPROVALS AND LISTINGS
Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing Stock Awards or any other Award resulting in the payment of
Common Stock prior to (a) the obtaining of any approval from any governmental
agency which the Company shall, in its sole discretion, determine to be
necessary or advisable, (b) the admission of such shares to listing on the stock
exchange on which the Common Stock may be listed, and (c) the completion of any
registration or other qualification of said shares under any state or federal
law or ruling of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
13
<PAGE>
25. NO RIGHTS TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Key Employee any right to
remain in the employ of the Company or any Subsidiary. The Company or, in the
case of employment with a Subsidiary, the Subsidiary, reserves the right to
terminate any Key Employee at any time. Further, the adoption of this Plan
shall not be deemed to give any Key Employee or any other individual any right
to be selected as a Participant or to be granted an Award.
26. AMENDMENT
The Board may suspend or terminate the Plan at any time, but the
termination or suspension shall not, without the consent of a Participant,
adversely affect the rights of such Participant under an outstanding Award then
held by the Participant, except to the extent permitted by Paragraph 23. In
addition, the Board may, from time to time, amend the Plan in any manner, but
may not without shareholder approval adopt any amendment that requires
shareholder approval under Rule 16b-3, Code Section 162(m), or any other
applicable provision of securities and/or tax law.
27. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the
laws of the State of Wisconsin.
28. NO RIGHT, TITLE, OR INTEREST IN COMPANY ASSETS
No Participant shall have any right in any fund or in any specific
asset of the Company by reason of being a Participant under this Plan, nor any
rights as a shareholder as a result of participation in the Plan until the date
of issuance of a stock certificate in his name, and, in the case of restricted
shares of Common Stock, such rights are granted to the Participant under
Paragraph 10(c) hereof. To the extent any person acquires a right to receive
payments from the Company under this Plan, such rights shall be no greater than
the rights of an unsecured creditor of the Company.
29. GENDER
Throughout this Plan, the masculine gender shall include the feminine.
14
<PAGE>
Exhibit 12.1
Kohl's Corporation
Ratio of Earnings to Fixed Charges
($000s)
<TABLE>
<CAPTION>
Fiscal Quarter Ended
-------------------- Fiscal Year (1)
May 4, April 29, -----------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ -------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
- - --------
Income before income taxes and
extraordinary items $23,206 $19,926 $122,729 $117,451 $ 96,691 $50,134 $33,413
Fixed charges 9,377 6,335 30,770 19,758 16,144 21,503 30,922
Less interest capitalized
during period (176) (327) (1,287) (603) (376) 0 0
-------- --------- -------- -------- -------- -------- --------
$32,407 $25,934 $152,212 $136,606 $112,459 $71,637 $64,335
======== ========= ======== ======== ======== ======== ========
Fixed Charges
- - -------------
Interest (expensed or capitalized) $4,443 $2,845 $14,895 $7,911 $6,253 $13,648 $24,797
Portion of rent expense
representative of interest 4,889 3,470 15,798 11,777 9,113 6,794 4,531
Amortization of deferred
financing fees 45 20 77 70 778 1,061 1,594
-------- --------- -------- -------- -------- -------- --------
$9,377 $6,335 $30,770 $19,758 $16,144 $21,503 $30,922
======== ========= ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 3.46 4.09 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> 3-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> MAY-04-1996
<CASH> 1,832
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 397,190
<CURRENT-ASSETS> 410,259
<PP&E> 542,846
<DEPRECIATION> 101,223
<TOTAL-ASSETS> 916,637
<CURRENT-LIABILITIES> 212,448
<BONDS> 225,369
<COMMON> 738
0
0
<OTHER-SE> 424,513
<TOTAL-LIABILITY-AND-EQUITY> 916,637
<SALES> 468,638
<TOTAL-REVENUES> 468,638
<CGS> 311,836
<TOTAL-COSTS> 441,330
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,102
<INCOME-PRETAX> 23,206
<INCOME-TAX> 9,445
<INCOME-CONTINUING> 13,761
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,761
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
