<PAGE>
Filed Pursuant to Rule 424(b)(4)
Registration No. 333-73257
PROSPECTUS
4,264,000 Shares
[KOHL'S LOGO]
COMMON STOCK
---------------
Kohl's Corporation is offering 2,800,000 shares and the selling stockholders
are offering 1,464,000 shares. Initially, the U.S. underwriters are
offering 3,411,200 shares in the United States and Canada, and the
international underwriters are offering 852,800 shares outside the
United States and Canada.
---------------
Kohl's Corporation's common stock is listed on the New York Stock Exchange
under the symbol "KSS." On March 18, 1999, the reported last sale price
of the common stock on the New York Stock Exchange was $75 per share.
---------------
PRICE $73 1/2 A SHARE
---------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company Stockholders
-------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Per
Share.... $73.500 $2.205 $71.295 $71.295
Total..... $313,404,000 $9,402,120 $199,626,000 $104,375,880
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
Kohl's Corporation has granted the U.S. underwriters the right to purchase up
to an additional 639,600 shares of common stock to cover over-allotments.
Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers
on March 24, 1999.
---------------
MORGAN STANLEY DEAN WITTER
MERRILL LYNCH & CO.
ROBERT W. BAIRD & CO.
Incorporated
WILLIAM BLAIR & COMPANY
March 18, 1999
<PAGE>
ABOUT THIS PROSPECTUS
You should rely only on the information contained in or incorporated by
reference in this prospectus. We and the selling stockholders have not
authorized anyone else to provide you with different information. We and the
selling stockholders are not making an offer of the common stock in any state
where the offer or sale is not permitted. The information in this prospectus
is accurate only as of any date of this prospectus.
In this prospectus, the terms "Kohl's", "we" and "our" mean Kohl's
Corporation and its consolidated subsidiaries.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Kohl's................................................................... 3
Selected Consolidated Financial Data..................................... 4
Use of Proceeds.......................................................... 6
Price Range of Common Stock and Dividend Policy.......................... 6
Capitalization........................................................... 7
Description of Capital Stock............................................. 8
Selling Stockholders..................................................... 10
United States Federal Income Tax Considerations To Non-United States
Holders................................................................. 12
Underwriters............................................................. 14
Legal Matters............................................................ 17
Experts.................................................................. 17
Forward-Looking Statements............................................... 17
Where You Can Find More Information...................................... 18
</TABLE>
----------------
We have not taken any action to permit a public offering of the shares of
common stock outside the United States or to permit the possession or
distribution of this prospectus outside the United States. Persons outside the
United States who come into possession of this prospectus must inform
themselves about and observe any restrictions relating to the offering of the
shares of common stock and the distribution of this prospectus outside of the
United States.
----------------
"Kohl's" is one of our federally registered service marks. This prospectus
also includes or incorporates references to trademarks and brand names of
other companies.
2
<PAGE>
KOHL'S
We currently operate 213 family oriented, specialty department stores
primarily in the Midwest and Mid-Atlantic areas of the United States. Our
stores feature quality, national brand merchandise which provides exceptional
value to customers. We sell moderately priced apparel, shoes, accessories,
soft home products and housewares targeted to middle-income customers shopping
for their families and homes. Our stores have fewer departments than
traditional, full-line department stores, but offer customers dominant
assortments of merchandise displayed in complete selections of styles, colors
and sizes. Central to our pricing strategy and overall profitability is a
culture focused on maintaining a low cost structure. Critical elements of this
low cost structure are our unique store format, lean staffing levels,
sophisticated management information systems and operating efficiencies
resulting from centralized buying, advertising and distribution.
Since 1986, we have expanded from 40 stores to our current total of 213
stores both by acquiring and converting pre-existing stores to our retailing
format and by opening new stores. From fiscal 1993 to fiscal 1997, our net
sales increased from $1.3 billion to $3.1 billion and our operating income
increased from $102.4 million to $258.8 million. In fiscal 1998, our net sales
increased to $3.7 billion.
We believe that we have substantial opportunity for further growth. We plan
to open approximately 40 to 45 stores in 1999, including entering new markets
in Denver, St. Louis and Dallas/Ft. Worth. We plan to open 50 to 55 stores in
2000, including 33 locations previously operated by Caldor Corporation in New
York (12 stores), New Jersey (11 stores), Connecticut (9 stores) and Maryland
(1 store). Our expansion strategy is to open additional stores in existing
markets, where we can leverage advertising, purchasing, transportation and
other regional overhead expenses; in contiguous markets, where we can extend
regional operating efficiencies; and in new markets which offer a similar
opportunity to implement our retailing concept successfully.
Our retailing concept has proven to be readily transferable to new markets.
For example, we have successfully opened new stores in small markets, such as
Kalamazoo and Knoxville; intermediate markets, such as Kansas City and
Charlotte; and large markets, such as Chicago and Philadelphia. In addition,
our concept has been successful in various retailing formats such as strip
shopping centers, community and regional malls and free-standing stores. We
believe that the transferability of our retailing strategy, our experience in
acquiring and converting pre-existing stores and in opening new stores, and
our substantial investment in our management information systems, centralized
distribution and headquarters functions provide a solid foundation for further
expansion.
Our fiscal year ends on the Saturday closest to January 31. Our principal
executive offices are located at N56 W17000 Ridgewood Drive, Menomonee Falls,
Wisconsin 53051. Our telephone number at this location is (414) 703-7000.
Recent Developments
Net sales and sales growth for the thirteen weeks and years ended January
31, 1998 and January 30, 1999 were as follows:
<TABLE>
<CAPTION>
Percentage Increase at
Period Ended January 30, 1999
--------------------------------- ---------------------------
All Comparable
January 31, 1998 January 30, 1999 Stores Stores
---------------- ---------------- ----------- -------------
(in millions)
<S> <C> <C> <C> <C>
Thirteen weeks.. $1,077.8 $1,289.5 19.6% 6.4%
Year............ 3,060.1 3,681.8 20.3 7.9
</TABLE>
Comparable stores sales growth represents sales of those stores open
throughout the full period and throughout the full prior period.
At January 30, 1999, we operated 213 stores compared to 182 stores at
January 31, 1998.
On March 2, 1999, we purchased the right to occupy 32 store locations
previously operated by Caldor Corporation. We expect to purchase Caldor's
lease for a 33rd store location within thirty days. We plan to take possession
of the stores after Caldor completes its "going out of business sale," and we
expect that the stores will be open for business in spring 2000. We paid $142
million for the rights to occupy the stores and expect to invest approximately
$165 million more to renovate and refixture the stores.
3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
We derived the selected consolidated financial data in the following table
for each of the five years in the period ended January 31, 1998 from our
consolidated financial statements, which have been audited by Ernst & Young
LLP, independent auditors. You should read this information in conjunction
with our consolidated financial statements and related notes, management's
discussion and analysis of financial condition and results of operations and
other financial information incorporated into this prospectus. We derived the
selected consolidated financial data for the nine months ended November 1,
1997 and October 31, 1998 from our unaudited consolidated financial
statements, which, in the opinion of management, include all adjustments,
consisting of normal recurring accruals, necessary for a fair presentation of
the financial position and results of operations as of the dates and for the
periods presented. The results for the nine months ended October 31, 1998 are
not necessarily indicative of results to be expected for the full fiscal year.
Our fiscal year ends on the Saturday closest to January 31. Fiscal 1995
contained 53 weeks. We adjusted all per share data to reflect the 2-for-1
stock splits effected in April 1996 and April 1998.
<TABLE>
<CAPTION>
Fiscal Year Ended Nine Months Ended
--------------------------------------------------------------- ------------------------
January 29, January 28, February 3, February 1, January 31, November 1, October 31,
1994 1995 1996 1997 1998 1997 1998
----------- ----------- ----------- ----------- ----------- ----------- -----------
(In Thousands, Except Per Share and Per Square Foot Data) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net sales............... $1,305,746 $1,554,100 $1,925,669 $2,388,221 $3,060,065 $1,982,257 $2,392,215
Cost of merchandise
sold................... 869,236 1,037,740 1,294,653 1,608,688 2,046,468 1,317,121 1,582,547
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross margin............ 436,510 516,360 631,016 779,533 1,013,597 665,136 809,668
Selling, general and
administrative
expenses............... 305,547 356,893 436,442 536,226 678,793 472,061 565,280
Depreciation and
amortization........... 23,201 27,402 33,931 44,015 57,380 41,813 51,383
Preopening expenses..... 5,360 8,190 10,712 10,302 18,589 18,589 15,591
Credit operations, non-
recurring(a)........... -- -- 14,052 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income........ 102,402 123,875 135,879 188,990 258,835 132,673 177,414
Interest expense, net... 5,711 6,424 13,150 17,622 23,772 18,405 15,627
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
taxes and extraordinary
item................... 96,691 117,451 122,729 171,368 235,063 114,268 161,787
Income taxes............ 41,029 48,939 50,077 68,890 93,790 45,593 63,583
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before
extraordinary item..... 55,662 68,512 72,652 102,478 141,273 68,675 98,204
Extraordinary item(b)... (1,769) -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.............. $ 53,893 $ 68,512 $ 72,652 $ 102,478 $ 141,273 $ 68,675 $ 98,204
========== ========== ========== ========== ========== ========== ==========
Per share:
Basic.................. $ .37 $ .47 $ .49 $ .69 $ .93 $ .46 $ .62
Diluted................ .36 .46 .49 .68 .91 .45 .60
Operating Data:
Comparable store sales
growth(c).............. 8.3% 6.1% 5.9% 11.3% 10.0% 10.2% 8.8%
Net sales per selling
square foot(d)......... $ 255 $ 258 $ 257 $ 261 $ 267 $ 178 $ 180
Total square feet of
selling space
(in thousands; end of
period)................ 5,523 6,824 8,378 10,064 12,533 12,486 15,129
Number of stores open
(end of period)........ 90 108 128 150 182 182 214(e)
Capital expenditures
including capitalized
leases................. $ 64,813 $ 132,800 $ 138,797 $ 223,423 $ 202,735 $ 163,921 $ 183,784
Balance Sheet Data (end
of period):
Working capital......... $ 86,856 $ 114,637 $ 175,368 $ 229,339 $ 525,251 $ 468,009 $ 566,557
Property and equipment,
net.................... 186,626 298,737 409,168 596,227 749,649 724,019 883,602
Total assets............ 469,289 658,717 805,385 1,122,483 1,619,721 1,607,536 1,930,086
Total long-term debt.... 51,852 108,777 187,699 312,031 310,366 310,932 379,076
Shareholders' equity.... 262,502 334,249 410,638 517,471 954,782 874,561 1,056,938
</TABLE>
(footnotes on next page)
4
<PAGE>
(footnotes from previous page)
(a) Effective September 1, 1995, we terminated our agreement with Citicorp
Retail Services under which we sold our private label credit card
receivables. At the same time, we established our own credit card
operation. In connection with this transaction, we incurred a one-time
charge of $14.1 million ($8.3 million after-tax).
(b) The extraordinary item reflects an after-tax charge of $1.8 million to
write-off unamortized deferred financing costs in connection with our
termination of certain credit facilities in January 1994.
(c) Comparable store sales for each period are based on sales of stores
(including relocated or expanded stores) open throughout the current and
prior year. Comparable store sales growth for fiscal 1996 compares the 52
weeks of fiscal 1996 to the same 52 week calendar in fiscal 1995 and
excludes the electronics business that we discontinued in 1996. Comparable
store sales growth for fiscal 1995 has been adjusted to eliminate the 53rd
week in fiscal 1995.
(d) Net sales per selling square foot is calculated using net sales of stores
that have been open for the full period, divided by their square footage
of selling space.
(e) We subsequently closed one undersized store in the Milwaukee market upon
expiration of the lease.
5
<PAGE>
USE OF PROCEEDS
We estimate that we will receive net proceeds from the offering of
approximately $199.3 million. We intend to use approximately $165 million of
the proceeds to renovate and refixture 33 former Caldor stores. On March 2,
1999, we purchased the right to occupy 32 of the store locations and expect to
purchase the rights to occupy the 33rd store location within thirty days. We
intend to use the remaining proceeds for other general corporate purposes,
including financing our continued store growth. Until we use the proceeds for
these purposes, we will temporarily repay borrowings under our revolving
credit facility and reduce future sales of accounts receivable under our
accounts receivable financing program. At February 27, 1999, the interest rate
payable under our revolving credit facility was approximately 5 1/8% per
annum. The facility matures on June 12, 2003. We will not receive any proceeds
from the sale of common stock by the selling stockholders, but we will receive
the exercise price of their employee stock options.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The common stock has been traded on the New York Stock Exchange since May
19, 1992, under the symbol "KSS." The table below sets forth the high and low
prices of the common stock for the fiscal periods indicated, adjusted for our
2-for-1 stock splits effected in April 1996 and April 1998.
<TABLE>
<CAPTION>
Common Stock Price
-------------------
High Low
--------- ---------
<S> <C> <C>
Fiscal 1999
First Quarter (through March 18, 1999)...................... $78 $63 3/8
Fiscal 1998
First Quarter............................................... $43 15/32 $34 11/16
Second Quarter.............................................. 57 5/8 40 1/2
Third Quarter............................................... 58 11/16 34 1/16
Fourth Quarter.............................................. 67 3/4 45 1/8
Fiscal 1997
First Quarter............................................... $25 9/16 $19 7/16
Second Quarter.............................................. 31 19/32 24 7/8
Third Quarter............................................... 37 3/8 29
Fourth Quarter.............................................. 37 11/16 31 5/16
</TABLE>
See the cover page of this prospectus for a recent reported last sale
price.
At January 29, 1999, there were 5,495 holders of record of our common
stock.
We have never paid a cash dividend, have no current plans to pay dividends,
and intend to retain all our earnings for investment in and growth of our
business. In addition, financial covenants and other restrictions in our
financing agreements limit our ability to pay dividends. The payment of future
dividends, if any, will be determined by our board of directors in light of
existing conditions, including our earnings, financial condition and
requirements, restrictions in our financing agreements, business conditions
and other factors they deem relevant.
6
<PAGE>
CAPITALIZATION
The following table sets forth our consolidated capitalization as of
October 31, 1998, and as adjusted to give effect to the offering and the
exercise of employee stock options by the selling stockholders. We based the
adjustment on the offering price of $73 1/2 per share for the 2,800,000 shares
that we are selling in the offering. We also adjusted for the proceeds that we
will receive upon exercise of employee stock options for 1,309,000 shares of
common stock by the selling stockholders and the related income tax benefits
that we will receive. The adjustments from the stock option exercises
increased total shareholders' equity by $44.6 million. For purposes of the
table, we have assumed that the U.S. underwriters do not exercise their over-
allotment option and that $69.5 million of the net proceeds are applied to
repay borrowings under our revolving credit facility. At February 27, 1999, we
had no borrowings under our revolving credit facility.
<TABLE>
<CAPTION>
As of October 31, 1998
----------------------
Actual As Adjusted
---------- -----------
(In Thousands)
<S> <C> <C>
Long-term debt:
Revolving credit facility............................. $ 69,500 $ --
Capitalized lease obligations......................... 47,421 47,421
6.57% unsecured senior notes, due 2004................ 60,000 60,000
6.70% notes, due 2006................................. 100,000 100,000
7 3/8% notes, due 2011................................ 100,000 100,000
Other................................................. 2,155 2,155
---------- ----------
Total long-term debt................................ 379,076 309,576
Shareholders' equity:
Common stock; 158,202,170 shares outstanding
(162,311,170 shares after the offering).............. 1,582 1,623
Paid-in capital....................................... 492,498 736,330
Retained earnings..................................... 562,858 562,858
---------- ----------
Total shareholders' equity.......................... 1,056,938 1,300,811
---------- ----------
Total capitalization................................ $1,436,014 $1,610,387
========== ==========
</TABLE>
7
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 400,000,000 common shares, $0.01
par value per share, and 10,000,000 preferred shares, $0.01 par value per
share. As of January 30, 1999, 158,394,735 shares of common stock and no
shares of preferred stock were issued and outstanding.
Common Stock
Voting. For all matters submitted to a vote of stockholders, each holder of
common stock is entitled to one vote for each share registered in his or her
name on the books of Kohl's. Our common stock does not have cumulative voting
rights. As a result, subject to the voting rights of any outstanding preferred
stock and any voting limitations imposed by the Wisconsin Business Corporation
Law, persons who hold more than 50% of the outstanding common stock can elect
all of the directors who are up for election in a particular year.
Election of Board of Directors. Our articles of incorporation divide the
board of directors into three classes serving staggered three-year terms. As a
result, at least two annual meetings will generally be required for
stockholders to effect a change of a majority of the board of directors. Any
director, or the entire board of directors, may be removed from office only
for cause. These provisions in the articles of incorporation require an 80%
vote of stockholders to amend or repeal.
Dividends. If our board declares a dividend, holders of common stock will
receive payments from the funds of Kohl's that are legally available to pay
dividends. However, this dividend right is subject to any preferential
dividend rights we may grant to the persons who hold preferred stock, if any
is outstanding.
Liquidation. If Kohl's is dissolved, the holders of common stock will be
entitled to share ratably in all the assets that remain after we pay our
liabilities and any amounts we may owe to the persons who hold preferred
stock, if any is outstanding.
Other Rights and Restrictions. Holders of common stock do not have
preemptive rights, and they have no right to convert their common stock into
any other securities. Our common stock is not redeemable.
Listing. Our common stock is listed on the New York Stock Exchange.
Transfer Agent and Registrar. The transfer agent and registrar for our
common stock is The Bank of New York.
Wisconsin Business Corporation Law
Provisions of the Wisconsin Business Corporation Law ("WBCL") could have
the effect of delaying, deterring or preventing a change in control of Kohl's.
Restrictions on Business Combinations. Sections 180.1130 to 180.1134 of the
WBCL provide generally that for a "resident domestic corporation," such as
Kohl's, business combinations not meeting fair price standards specified in
the statute must be approved by the affirmative vote of at least (1) 80% of
the votes entitled to be cast by the outstanding voting shares of the
corporation, and (2) two-thirds of the votes entitled to be cast by the
holders of voting shares that are not beneficially owned by a "significant
shareholder" or an affiliate or associate of a significant shareholder who is
a party to the transaction. This requirement is in addition to any vote that
may be required by law or our articles of incorporation. The term "business
combination" means, subject to certain exceptions, a merger or share exchange
of the issuing public corporation (or any subsidiary of that corporation)
with, or the sale or other disposition of substantially all of the property
and assets of the issuing public corporation to, any significant shareholder
or affiliate of a significant shareholder. "Significant shareholder" means a
person that is the beneficial owner of 10% or more of the voting power of the
outstanding voting shares of the issuing public corporation. These statutory
sections also restrict the repurchase of shares and the sale of corporate
assets by an issuing public corporation in response to a takeover offer.
8
<PAGE>
Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation" and an interested
shareholder within three years after the date such person became an interested
shareholder, unless the business combination or the acquisition of the
interested shareholder's stock has been approved before the stock acquisition
date by the corporation's board of directors. An "interested shareholder" is a
person beneficially owning 10% or more of the voting power of the outstanding
voting stock of such corporation. After the three-year period, a business
combination with the interested shareholder may be consummated only with the
approval of the holders of a majority of the voting stock not beneficially
owned by the interested shareholder at a meeting called for that purpose,
unless the business combination satisfies specified adequacy-of-price
standards intended to provide a fair price for shares held by disinterested
stockholders.
Control Share Voting Restrictions. Under Section 180.1150(2) of the WBCL,
the voting power of shares of a "resident domestic corporation" that are held
by any person in excess of 20% of the voting power are limited (in voting on
any matter) to 10% of the full voting power of those excess shares, unless
otherwise provided in the articles of incorporation or unless full voting
rights have been restored at a special meeting of the stockholders called for
that purpose. This statute is designed to protect corporations against
uninvited takeover bids by reducing to one-tenth of their normal voting power
all shares in excess of 20% owned by an acquiring person. Section 180.1150(3)
excludes shares held or acquired under certain circumstances from the
application of Section 180.1150(2), including (among others) shares acquired
directly from Kohl's and shares acquired in a merger or share exchange to
which Kohl's is a party.
Constituency Provision. Under Section 180.0827 of the WBCL, in discharging
his or her duties, a director or officer of Kohl's may, in addition to
considering the effects of any action on stockholders, consider the effects of
any action on employees, suppliers, customers, the communities in which Kohl's
operates and any other factors that the director or officer considers
pertinent.
Preferred Stock
Our articles of incorporation authorize the board of directors to issue
preferred stock in one or more series and to determine the voting rights,
dividend rights, dividend rates, liquidation preferences, conversion or
exchange rights, redemption rights, including sinking fund provisions and
redemption prices, and other terms and rights of each series.
Although our board of directors does not presently intend to authorize the
issuance of preferred stock, it could issue a series of preferred stock that
could impede the completion of a merger, tender offer or other takeover
attempt. Our board will issue such a series of preferred stock only if it
determines that the issuance is in the best interests of Kohl's and its
stockholders. In addition, the terms of a series of preferred stock might
discourage a potential acquiror from attempting to acquire Kohl's in a manner
that changes the composition of our board of directors, even when a majority
of our stockholders believe that such an acquisition would be in their best
interests or would receive a premium for their stock over the then current
market price.
9
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information about the beneficial ownership
of the common stock as of December 31, 1998, and after the sale of the common
stock offered hereby, by each selling stockholder. To calculate the percentage
owned after the offering, we assume no exercise of the U.S. underwriters'
over-allotment option. Each of the selling stockholders (other than Mr.
Sommerhauser) is an executive officer of Kohl's. Messrs. Kellogg, Baker,
Herma, Montgomery, Mansell and Sommerhauser is each a director. Except as
otherwise noted below, the selling stockholders have sole voting and
investment power with respect to their shares.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Offering Shares Owned After Offering
------------------------------ Being ---------------------------
Name of Beneficial Owner Number Percent Offered Number Percent
- ------------------------ -------------- ------------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
William S. Kellogg...... 12,487,045(a) 7.8% 559,300(b) 11,827,745(a) 7.3%
Jay H. Baker............ 5,368,718(c) 3.4 400,000(d) 4,968,718(c) 3.1
John F. Herma........... 6,847,273(e) 4.3 341,100 6,506,173(e) 4.0
R. Lawrence Montgomery.. 819,960(f) * 41,000 778,960(f) *
Kevin Mansell........... 639,810(g) * 32,000 607,810(g) *
Caryn Blanc............. 697,450(h) * 34,900 662,550(h) *
Arlene Meier............ 390,100(i) * 19,500 370,600(i) *
Jeffrey Rusinow......... 129,500(j) * 6,500 123,000(j) *
Donald Sharpin.......... 83,500(j) * 4,200 79,300(j) *
Gary Vasques............ 80,000(j) * 4,000 76,000(j) *
Richard Leto............ 61,000(j) * 3,000 58,000(j) *
Peter M. Sommerhauser... 16,837,673(k) 10.6 18,500(b) 16,719,173(k) 10.3
</TABLE>
(footnotes on next page)
10
<PAGE>
(footnotes from previous page)
* Less than 1%.
(a) Includes 9,337,245 shares held in trust for the benefit of Mr. Kellogg's
family but as to which Mr. Sommerhauser has sole voting and investment
power and 43,260 shares held by a charitable foundation for which Mr.
Kellogg serves as a director and president. Includes 1,258,900 shares
(1,158,900 shares after the offering) held in trust for the benefit of Mr.
Baker's family and as to which Mr. Kellogg and Mr. Sommerhauser have
shared voting and investment power but no pecuniary interest. Includes
950,000 shares (390,700 shares after the offering) represented by stock
options.
(b) Excludes 100,000 shares being offered by the Jay Baker Children's Trusts.
(c) Includes 1,258,900 shares (1,158,900 shares after the offering) held in
trust for the benefit of Mr. Baker's family as to which Mr. Kellogg and
Mr. Sommerhauser have shared voting and investment power and 125,660
shares held by a charitable foundation for which Mr. Baker serves as a
director and president. Also includes 475,000 shares (175,000 shares after
the offering) represented by stock options.
(d) Includes 100,000 shares being offered by the Jay Baker Children's Trusts.
(e) Includes 5,351,703 shares held in trust for the benefit of Mr. Herma's
family as to which Mr. Sommerhauser has sole voting and investment power
and 25,150 shares held by a charitable foundation for which Mr. Herma
serves as a director and president. Also includes 475,000 shares (133,900
shares after the offering) represented by stock options.
(f) Includes 125,948 shares held in trust for the benefit of Mr. Montgomery's
family as to which Mr. Sommerhauser has sole voting and investment power.
Also includes 520,828 shares (500,328 shares after the offering)
represented by stock options.
(g) Includes 138,000 shares held in trust for the benefit of Mr. Mansell's
family as to which Mr. Sommerhauser has sole voting and investment power.
Also includes 327,078 shares (311,078 shares after the offering)
represented by stock options.
(h) Includes 545,454 shares (510,554 shares after the offering) represented by
stock options.
(i) Includes 383,100 shares (363,600 shares after the offering) represented by
stock options.
(j) All of the shares are represented by stock options.
(k) Includes 16,461,866 shares (16,361,866 shares after the offering) held in
trust for the benefit of the families of current and former executive
officers of Kohl's or in charitable foundations established by executive
officers of Kohl's, as to which Mr. Sommerhauser has sole or shared voting
and investment power but no pecuniary interest. Includes 81,042 shares
held in trust for the benefit of Mr. Sommerhauser's family as to which Mr.
Sommerhauser has no voting or investment power and 5,500 shares held by a
charitable foundation for which Mr. Sommerhauser serves as director and
president. Includes 2,000 shares represented by stock options.
11
<PAGE>
UNITED STATES FEDERAL TAX CONSIDERATIONS
TO NON-UNITED STATES HOLDERS
This section summarizes the United States federal income and estate tax
issues that a nonresident alien individual foreign corporation, foreign
partnership or other foreign shareholder (a "non-United States shareholder")
may consider relevant in connection with its purchase, ownership and
disposition of our common stock. This summary does not address all of the
United States federal income and estate tax considerations that may be
relevant to you in light of your particular circumstances or if you are
subject to special treatment under United States federal income tax laws.
Furthermore, this summary does not discuss any aspects of state, local or
foreign taxation. We base this summary on current provisions of the federal
income tax laws, Treasury regulations, judicial opinions, published positions
of the United States Internal Revenue Service (the "IRS") and other applicable
authorities, all of which are subject to change, possibly with retroactive
effect. We urge you to consult your own adviser with respect to the tax
consequences of acquiring, holding and disposing of our common stock.
Dividends. Dividends that we pay to you generally will be subject to
withholding of United States federal income tax at the rate or 30% (or such
lower rate specified in an applicable income tax treaty) unless the dividend
is effectively connected with your conduct of a trade or business within the
United States (of if certain tax treaties apply, is attributable to a United
States permanent establishment maintained by you) and you file the appropriate
documentation with Kohl's or our transfer agent, in which case you will be
subject to United States federal income tax at graduated rates in the same
manner as United States persons are taxed. If you are a corporation, such
effectively connected income also may be subject to the branch profits tax at
a rate of 30% (or such lower rate specified in an applicable income tax
treaty), which is generally imposed on a foreign corporation on the
repatriation from the United States of effectively connected earnings and
profits. You should consult any applicable income tax treaties that may
provide for a lower rate of withholding or other rules different from those
described above. You may be required to satisfy certain certification
requirements in order to claim treaty benefits or otherwise claim a reduction
of or exemption from withholding under the foregoing rules.
Sale or Disposition of Common Stock. You generally will not incur United
States federal income tax on gain recognized on a sale or other disposition of
our common stock unless:
(1) the gain is effectively connected with your conduct of a trade or
business within the United States or if certain tax treaties apply, is
attributable to a United States permanent establishment maintained by you;
(2) you are a nonresident alien, hold our common stock as a capital
asset and are present in the United States for 183 or more days in the
taxable year of disposition and either you have a "tax home" in the United
States or the gain is attributable to an office or other fixed place of
business maintained by you in the United States;
(3) Kohl's is or has been a "United States real property holding
corporation" for United States federal income tax purposes (which we likely
are not) and in the event that our common stock is considered regularly
traded, you hold or have held, directly or indirectly, at any time during
the five-year period ending on the date of disposition (or, if shorter,
your holding period), more than 5% of our common stock, in which case your
gain will be taxed as if it were gain described in clause (1) above; or
(4) you are subject to tax pursuant to the federal income tax provisions
applicable to certain United States expatriates.
Gain that is or is treated as effectively connected with your conduct of a
trade or business within the United States will be subject to United States
federal income tax on the same basis that applies to United States persons
generally (and, with respect to corporate holders, under certain
circumstances, the branch profits tax) but will not be subject to withholding.
You should consult any applicable treaties that may provide for different
rules. A non-resident alien holding our common stock as a capital asset as
described in clause (2) above, generally will incur a 30% (or such lower rate
specified in an applicable income tax treaty) tax on the gain derived from the
sale, which gain may be offset by certain United States source capital losses.
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Federal Estate Taxes. If an individual who is not a citizen (as
specifically defined for United States federal estate tax purposes) of the
United States at the time of death owns or is treated as owning our common
stock, then such common stock will be included in that individual's gross
estate for United States federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
Information Reporting and Backup Withholding. We must report annually to
the IRS and to you the amount of dividends paid to you and the amount of tax
withheld with respect to such dividends, regardless of whether any tax is
actually withheld. This information may also be made available to the
authorities of a country in which you reside under the provisions of an
applicable income tax treaty or other agreement.
Under current federal income tax law, United States information reporting
requirements and backup withholding tax at a rate of 31% will generally apply
(1) to dividends that we pay on our common stock to you at an address within
the United States and (2) to payments to you by a United States office of a
broker of the proceeds of a sale of common stock unless you certify your non-
United States shareholder status under penalties of perjury or otherwise
establish an exemption. Information reporting requirements (but not backup
withholding) will also apply to payments of the proceeds of sales of our
common stock by foreign offices or United States brokers, or foreign brokers
with certain types of relationships to the United States, unless the broker
has documentary evidence in its records that you are a non-United States
shareholder and certain other conditions are met, or you otherwise establish
an exemption.
The United States Treasury Department has issued regulations generally
effective for payments made after December 31, 1999 that will affect the
procedures that you must follow in establishing your status as a non-United
States shareholder for purposes of the withholding, backup withholding and
information reporting rules discussed in this prospectus. Among other things,
(1) non-United States shareholders currently required to furnish certification
of foreign status may be required to furnish new certification of foreign
status, and (2) certain non-United States shareholders not currently required
to furnish certification of foreign status may be required to furnish
certification of foreign status in the future. We urge you to consult your tax
adviser concerning the effect of such regulations on an investment in our
common stock.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules generally will be refunded or credited against your
United States federal income tax liability, provided that the required
information is furnished to the IRS.
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UNDERWRITERS
Under the terms and subject to the conditions in the underwriting agreement
dated the date of this prospectus, the U.S. underwriters named below, for whom
Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce Fenner & Smith
Incorporated, Robert W. Baird & Co. Incorporated and William Blair & Company,
L.L.C. are acting as U.S. representatives, and the international underwriters
named below, for whom Morgan Stanley & Co. International Limited, Merrill
Lynch International, Robert W. Baird & Co. Incorporated and William Blair &
Company, L.L.C. are acting as international representatives, have severally
agreed to purchase, and we and the selling stockholders have agreed to sell to
them, severally, the respective number of shares of common stock set forth
opposite the names of such underwriters below:
<TABLE>
<CAPTION>
Number of
Name Shares
---- ---------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated................................... 1,382,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................ 1,382,000
Robert W. Baird & Co. Incorporated.................................. 153,600
William Blair & Company, L.L.C...................................... 153,600
Cleary Gull & Reiland Inc........................................... 68,000
Goldman, Sachs & Co................................................. 68,000
NationsBanc Montgomery Securities L.L.C............................. 68,000
Salomon Smith Barney Inc............................................ 68,000
Sutro & Co. Incorporated............................................ 68,000
---------
Subtotal.......................................................... 3,411,200
---------
International Underwriters:
Morgan Stanley & Co. International Limited.......................... 383,760
Merrill Lynch International......................................... 383,760
Robert W. Baird & Co. Incorporated.................................. 42,640
William Blair & Company, L.L.C...................................... 42,640
---------
Subtotal.......................................................... 852,800
---------
Total........................................................... 4,264,000
=========
</TABLE>
The U.S. underwriters and the international underwriters, and the U.S.
representatives and the international representatives, are collectively
referred to as the "underwriters" and the "representatives," respectively. The
underwriters are offering the shares of common stock subject to their
acceptance of the shares from us and the selling stockholders and subject to
prior sale. The underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the shares of common
stock offered hereby are subject to the approval of certain legal matters by
their counsel and to certain other conditions. The underwriters are obligated
to take and pay for all of the shares of common stock offered hereby (other
than those covered by the U.S. underwriters' over-allotment option described
below) if any such shares are taken.
Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. underwriter has represented and agreed that, with certain exceptions:
. it is not purchasing any shares (as defined herein) for the account of
anyone other than a United States or Canadian person (as defined
herein); and
. it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares or distribute any prospectus relating to the
shares outside the United States or Canada or to anyone other than a
United States or Canadian person.
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Pursuant to the Agreement between U.S. and International Underwriters, each
international underwriter has represented and agreed that, with certain
exceptions:
. it is not purchasing any shares for the account of any United States or
Canadian person; and
. it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares or distribute any prospectus relating to the
shares in the United States or Canada or to any United States or
Canadian person.
With respect to any underwriter that is a U.S. underwriter and an
international underwriter, the foregoing representations and agreements (1)
made by it in its capacity as a U.S. underwriter apply to it in its capacity
as a U.S. underwriter and (2) made by it in its capacity as an international
underwriter apply only to it in its capacity as an international underwriter.
The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement between U.S. and
International Underwriters. As used herein, "United States" or "Canadian"
person means any national or resident of the United States or Canada, or any
corporation, pension, profit-sharing or other trust or other entity organized
under the laws of the United States or Canada or of any political subdivision
thereof (other than a branch located outside the United States and Canada of
any United States or Canadian person), and includes any United States or
Canadian branch of a person who is otherwise not a United States or Canadian
person. All shares of common stock to be purchased by the underwriters under
the Underwriting Agreement are referred to herein as the "shares."
Pursuant to the Agreement between U.S. and International Underwriters,
sales may be made between U.S. underwriters and international underwriters of
any number of shares as may be mutually agreed. The per share price of any
shares so sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per
share amount of the concession to dealers set forth below.
Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. underwriter has represented that it has not offered or sold, and has
agreed not to offer or sell, any shares, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of, any resident of
any province or territory of Canada in contravention of the securities laws
thereof and has represented that any offer or sale of shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made.
Each U.S. underwriter has further agreed to send to any dealer who purchases
from it any of the shares a notice stating in substance that, by purchasing
such shares, such dealer represents and agrees that it has not offered or
sold, and will not offer or sell, directly or indirectly, any of such shares
in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of the
securities laws thereof and that any offer or sale of shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made,
and that such dealer will deliver to any other dealer to whom it sells any of
such shares a notice containing substantially the same statement as is
contained in this sentence.
Pursuant to the Agreement between U.S. and International Underwriters, each
international underwriter has represented and agreed that:
. it has not offered or sold and, prior to the date six months after the
closing date for the sale of the shares to the international
underwriters, will not offer or sell, any shares to persons in the
United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers
of Securities Regulations 1995;
. it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the shares in, from or otherwise involving the United
Kingdom; and
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. it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
offering of the shares to a person who is of a kind described in Article
11(3) of the Financial Services Act of 1986 (Investment Advertisements)
(Exemptions) Order 1996 (as amended) or is a person to whom such
document may otherwise lawfully be issued or passed on.
Pursuant to the Agreement between U.S. and International Underwriters, each
international underwriter has further represented that it has not offered or
sold, and has agreed not to offer to sell, directly or indirectly, in Japan or
to or for the account of any resident thereof, any of the shares acquired in
connection with the distribution contemplated hereby, except for offers or
sales to Japanese international underwriters or dealers and except pursuant to
any exemption from the registrations requirements of the Securities and
Exchange Law and otherwise in compliance with applicable provisions of
Japanese law. Each international underwriter has further agreed to send to any
dealer who purchases from it any of the shares a notice stating in substance
that, by purchasing such shares, such dealer represents and agrees that it has
not offered or sold, and will not offer or sell, any of such shares, directly
or indirectly, in Japan or to or for the account of any resident thereof
except for offers or sales to Japanese international underwriters or dealers
and except pursuant to any exemption from the registration requirements of the
Securities and Exchange Law and otherwise in compliance with applicable
provisions of Japanese law, and that such dealer will send to any other dealer
to whom it sells any of such shares a notice containing substantially the same
statement as is contained in this sentence.
The underwriters initially propose to offer part of the common stock
directly to the public at the public offering price set forth on the cover
page hereof and part to certain dealers at a price which represents a
concession not in excess of $1.33 a share under the public offering price. Any
underwriter may allow, and such dealers may reallow, a concession not in
excess of $.10 a share to other underwriters or to certain dealers. After the
initial offering of the common stock, the offering price and other selling
terms may from time to time be varied by the representatives.
We have granted the U.S. underwriters an option, exercisable for 30 days
from the date of this prospectus, to purchase up to an aggregate of 639,600
additional shares of common stock at the public offering price set forth on
the cover page hereof, less underwriting discounts and commissions. The U.S.
underwriters may exercise such option to purchase solely for the purpose of
covering over-allotments, if any, made in connection with the offering of the
shares of common stock offered hereby. To the extent such option is exercised,
each U.S. underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of common
stock as the number set forth next to such U.S. underwriter's name in the
preceding table bears to the total number of shares of common stock set forth
next to the names of all U.S. underwriters in the preceding table. If the U.S.
underwriters' option is exercised in full, the total price to the public would
be $360,414,600, the total underwriters' discounts and commissions would be
$10,812,438 and the total proceeds to Kohl's would be $245,226,282.
In the underwriting agreement:
. we have agreed to pay the printing, legal, accounting and other expenses
related to the offering, which we estimate will be $350,000; and
. Kohl's, the selling stockholders and the underwriters have agreed to
indemnify each other against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
Kohl's and each of the selling stockholders has agreed that, without the
prior written consent of Morgan Stanley & Co. Incorporated on behalf of the
underwriters, it will not during the period ending 90 days after the date of
this prospectus:
. offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock or
. enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the
common stock;
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whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise, except under
certain limited circumstances.
In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position in the common stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the common stock, the underwriters may bid for, and purchase, shares
of common stock in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or a dealer for
distributing shares of common stock in the offering, if the syndicate
repurchases previously distributed common stock in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the common stock
above independent market levels. The underwriters are not required to engage in
these activities, and may end any of these activities at any time.
Certain underwriters from time to time perform various investment banking
services for us, for which such underwriters receive compensation.
LEGAL MATTERS
Certain legal matters will be passed upon for Kohl's by Godfrey & Kahn,
S.C., Milwaukee, Wisconsin, and for the underwriters by Shearman & Sterling,
New York, New York. Mr. Peter M. Sommerhauser is a director of Kohl's and a
shareholder and member of the management committee of Godfrey & Kahn, S.C. As
of December 31, 1998, Mr. Sommerhauser beneficially owned 16,837,673 shares of
common stock.
EXPERTS
The consolidated financial statements of Kohl's appearing in Kohl's
Corporation Annual Report (Form 10-K) for the year ended January 31, 1998, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus or incorporated by reference in this
prospectus that are not statements of historical fact may be deemed to be
"forward-looking statements," subject to protections under federal law. We
intend words such as "believes," "anticipates," "plans," "expects" and similar
expressions to identify forward-looking statements. In addition, statements
covering our future performances and our plans, objectives, expectations or
intentions are forward-looking statements, such as statements regarding our
debt service requirements, planned capital expenditures, future store openings
and adequacy of capital resources. There are a number of important factors that
could cause our results to differ materially from those indicated by the
forward-looking statements, including among others those discussed under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" sections of our annual and quarterly reports and as follows:
. heightened competition;
. adverse weather conditions in our retail markets;
. increases in interest rates;
. increases in real estate, construction and development costs;
. inventory imbalances caused by unanticipated fluctuations in consumer
demand;
. trends in the economy which affect consumer confidence and demand for
our merchandise;
. our ability to find suitable store sites that we can acquire on
acceptable terms;
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<PAGE>
. our ability to continue to hire, train and retain sufficient numbers of
capable and talented associates; and
. interruptions in our business as a result of the Year 2000 computer
problem in our systems or in the systems of one of our major suppliers.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference room located at 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the regional offices
of the SEC located at 7 World Trade Center, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference
rooms and their copy charges.
Our common stock is listed on the New York Stock Exchange. You may also
inspect the information we file with the SEC at the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to termination
of the offering:
(1) our annual report on Form 10-K for fiscal year ended January 31,
1998;
(2) our quarterly reports on Form 10-Q for the quarterly periods ended
May 2, 1998, August 1, 1998 and October 31, 1998;
(3) our current report on Form 8-K dated March 9, 1999; and
(4) the description of our common stock contained in our registration
statement on Form 8-B dated June 25, 1993, as updated from time to time by
our subsequent filings with the SEC.
You may also request a copy of these filings (excluding exhibits), at no
cost, by writing or telephoning our chief financial officer at the following
address:
Arlene Meier
Kohl's Corporation
N56 W17000 Ridgewood Drive
Menomonee Falls, WI 53051
(414) 703-7000
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[KOHL'S LOGO]
<PAGE>
PROSPECTUS
4,264,000 Shares
[KOHL'S LOGO]
COMMON STOCK
----------------
Kohl's Corporation is offering 2,800,000 shares and the selling stockholders
are offering 1,464,000 shares. Initially, the international underwriters
are offering 852,800 shares outside the United States and Canada, and
the U.S. underwriters are offering 3,411,200 shares in the United
States and Canada.
----------------
Kohl's Corporation's common stock is listed on the New York Stock Exchange
under the symbol "KSS." On March 18, 1999, the reported last sale price
of the common stock on the New York Stock Exchange was $75 per
share.
----------------
PRICE $73 1/2 A SHARE
----------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Proceeds to Selling
Public Commissions Company Stockholders
-------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Per
Share.... $73.500 $2.205 $71.295 $71.295
Total..... $313,404,000 $9,402,120 $199,626,000 $104,375,880
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
Kohl's Corporation has granted the U.S. underwriters the right to purchase up
to an additional 639,600 shares of common stock to cover over-allotments.
Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers
on March 24, 1999.
----------------
MORGAN STANLEY DEAN WITTER
MERRILL LYNCH INTERNATIONAL
ROBERT W. BAIRD & CO.
Incorporated
WILLIAM BLAIR & COMPANY
March 18, 1999
