-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R4P1E0Gj0h1LdxoURAECSRRLOuJqKyX5lyBJdfMs2x7q3NZl3WMB8VYpImzPogMl h1Y38WRNniuAa4v47ZLnUA== 0000892712-99-000114.txt : 19990719 0000892712-99-000114.hdr.sgml : 19990719 ACCESSION NUMBER: 0000892712-99-000114 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19990716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOHLS CORPORATION CENTRAL INDEX KEY: 0000885639 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 391630919 STATE OF INCORPORATION: WI FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-83031 FILM NUMBER: 99665719 BUSINESS ADDRESS: STREET 1: N56 W17000 RIDGEWOOD DR CITY: MENOMONEE FALLS STATE: WI ZIP: 53051 BUSINESS PHONE: 4147835800 MAIL ADDRESS: STREET 1: N54 W13600 WOODALE DR CITY: MENOMONEE FALLS STATE: WI ZIP: 53051 S-4 1 FORM S-4 As filed with the Securities and Exchange Commission on July 16, 1999 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ____________________ KOHL'S CORPORATION (Exact name of Registrant as specified in its charter) Wisconsin 5311 39-1630919 (State or other jurisdiction (Primary SIC (I.R.S. Employer of incorporation or organization) Code Number) Identification No.) N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 (414) 703-7000 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) ____________________ William S. Kellogg R. Lawrence Montgomery Kohl's Corporation N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 (414) 703-7000 (Name, address, including zip code, and telephone number, including area code, of agents for service) COPY TO: Peter M. Sommerhauser Godfrey & Kahn, S.C. 780 North Water Street Milwaukee, Wisconsin 53202 (414) 273-3500 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement is declared effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box.[ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] CALCULATION OF REGISTRATION FEE PROPOSED PROPOSED TITLE OF EACH MAXIMUM MAXIMUM CLASS OF OFFERING AGGREGATE AMOUNT OF SECURITIES TO BE AMOUNT TO BE PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER UNIT (1) PRICE FEE 7 1/4% Debentures $200,000,000 100% $200,000,000 $55,600 due June 1, 2029 (1) Calculated based on the book value of the securities to be received by the registrant in the exchange in accordance with Rule 457(f)(2) under the Securities Act of 1933. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. Kohl's may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS SUBJECT TO COMPLETION, DATED ______________ _____, 1999 KOHL'S Offer to exchange up to $200,000,000 of its 7 1/4% Debentures due June 1, 2029 which have been registered under the Securities Act of 1933 for all of its outstanding 7 1/4% Debentures due June 1, 2029 ____________________ * The exchange offer of Kohl's Corporation expires at 5:00 p.m., New York City time, on ___________ ____ , 1999, unless extended. * The exchange offer is not subject to any conditions other than that: - the exchange offer, or the making of any exchange by a debenture holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, - no action or proceeding shall have been instituted or threatened with respect to the exchange offer which, in our judgment, would impair our ability to proceed with the exchange offer, and - no law, rule or regulation or applicable interpretations of the staff of the SEC has been issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer. * All outstanding debentures that are validly tendered and not validly withdrawn will be exchanged. * Tenders of outstanding debentures may be withdrawn at any time before 5:00 p.m. on the date of expiration of the exchange offer. * The exchange of debentures will not be a taxable exchange for U.S. federal income tax purposes. * We will not receive any proceeds from the exchange offer. * The terms of the new debentures to be issued are substantially identical to your old debentures, except that the new debentures will not have securities law transfer restrictions and you will not have registration rights. * There is no established trading market for the new debentures and we do not intend to apply for listing of the new debentures on any securities exchange. ____________________ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. ____________________ The date of this prospectus is , 1999. TABLE OF CONTENTS Page Forward-Looking Statements 4 Prospectus Summary 5 Selected Consolidated Financial Data 11 Use of Proceeds 13 The Exchange Offer 13 Description of Debentures 23 Certain Federal Income Tax Considerations 34 Plan of Distribution 35 Legal Matters 36 Experts 36 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. We are "incorporating by reference" specified documents that we file with the SEC, which contain important business and financial information about Kohl's not included in or delivered with the prospectus. "Incorporating by reference" means: * incorporated documents are considered part of this prospectus, * we are disclosing important information to you by referring you to those documents, and * information we file with the SEC will automatically update and supercede this prospectus. We incorporate by reference the documents listed below and any documents we file in the future with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that we file after the date of this prospectus but before the end of the offering of debentures: * our annual report on Form 10-K for the fiscal year ended January 30, 1999; * our quarterly report on Form 10-Q for the fiscal quarter ended May 1, 1999; and * our current report on Form 8-K dated March 9, 1999. 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, Wisconsin 53051 (414) 703-7000 To obtain timely delivery of any of this information you must make your request at least five business days prior to the expiration of the exchange offer. The date by which you must make your request is , 1999. ____________________ You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell the debentures in any jurisdiction except where an offer or sale is permitted. You should assume that the information appearing in this prospectus, as well as information we previously filed with the SEC and are incorporating by reference, is accurate only as of the dates on the front of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates. 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; * 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 a Year 2000 computer problem in our systems or in the systems of one of our major suppliers. PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information included elsewhere or incorporated by reference in this prospectus. This summary may not contain all of the information that is important to you. Kohl's We currently operate 231 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 231 stores both by acquiring and converting pre-existing stores to our retailing format and by opening new stores. From fiscal 1994 to fiscal 1998, our net sales increased from $1.6 billion to $3.7 billion and our operating income increased from $123.9 million to $337.9 million. We believe that we have substantial opportunity for further growth. We plan to open approximately 44 stores in 1999, including entering new markets in Denver, St. Louis and Dallas/Ft. Worth. We have already opened 18 stores this year and plan to open approximately 26 stores in the second half of the year. 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. The Exchange Offer We sold $200,000,000 of our 7 1/4% Debentures due June 1, 2029 to the initial purchasers on June 1, 1999. The initial purchasers resold those debentures (the "old debentures") in reliance on Rule 144A, Regulation S and other exemptions under the Securities Act of 1933, as amended (the "Securities Act"). Registration Rights Agreement We entered into a registration rights agreement with the initial purchasers on June 1, 1999 in which we agreed, among other things, to: * file a registration statement with the SEC on or before October 14, 1999 relating to the exchange offer; * use our reasonable best efforts to cause the registration statement, which includes this prospectus, to become effective on or before November 28, 1999; and * us our reasonable best efforts to complete the exchange offer during the 45-day period after the registration statement becomes effective. As a result of making this exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. If you do not tender your old debentures in the exchange offer, you will not have any further registration rights under the registration rights agreement or otherwise unless you were not eligible to participate in the exchange offer or do not receive freely transferable new debentures in the exchange offer. See "The Exchange Offer--Purpose and Effect; Registration Rights." If you are eligible to participate in the exchange offer and do not tender your old debentures, you will continue to hold the untendered old debentures, which will continue to be subject to restrictions on transfer under the Securities Act. New Debentures We are offering registered 7 1/4% Debentures due June 1, 2029 for your old debentures. The terms of the new debentures and your old debentures are substantially identical except: * the new debentures will be registered under the Securities Act; * the new debentures will not contain securities law restrictions on transfer; and * except in limited circumstances, your rights, including your right to receive additional interest under the registration rights agreement, will terminate. The Exchange Offer We are offering to exchange $1,000 in principal amount of the new debentures for each $1,000 in principal amount of your old debentures (subject to the $100,000 minimum denomination for the debentures). As of the date of this prospectus, $200 million aggregate principal amount of the old debentures are outstanding. Expiration Date You have until 5:00 p.m., New York City time, on , 1999, to validly tender your old debentures if you want to exchange your old debentures for new debentures. We may extend that date under certain conditions. Conditions of the Exchange Offer; Extensions; Amendments If you validly tender, and do not validly withdraw, your old debentures, your old debentures will be exchanged for new debentures if the following conditions are met: * the exchange offer, or the making of any exchange by a debenture holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, * no action or proceeding shall have been instituted or threatened with respect to the exchange offer which, in our judgment, would impair our ability to proceed with the exchange offer, and * no law, rule or regulation or applicable interpretations of the staff of the SEC has been issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer. We may delay or extend the exchange offer and if any of the above conditions are not met, we may terminate the exchange offer. You will be notified of any delay, extension or termination. We may also waive any condition or amend the terms of the exchange offer. If we materially amend the exchange offer, we will notify you. Interest You will receive interest on the new debentures from the date interest was last paid on your old debentures. If no interest was paid on your old debentures, you will receive interest from June 1, 1999. Procedures for Tendering Old Debentures; Special Procedures for Beneficial Owners. If you want to participate in the exchange offer, you must transmit a properly completed and signed letter of transmittal, and all other documents required by the letter of transmittal, to the exchange agent. Please send these materials to the exchange agent at the address set forth in the accompanying letter of transmittal prior to 5:00 p.m., New York City time, on , 1999. You must also send either: * certificates of your old debentures; * a timely confirmation of book-entry transfer of your old debentures into the exchange agent's account at The Depository Trust Company; or * the items required by the guaranteed delivery procedures described below. If you are a beneficial owner of old debentures and your old debentures are registered in the name of a nominee, such as a broker, dealer, commercial bank or trust company, and you wish to tender your old debentures in the exchange offer, you should instruct your nominee to promptly tender the old debentures on your behalf. By executing the letter of transmittal, you will represent to us that: * you are not an "affiliate" (as defined in Rule 405 of the Securities Act) of us; * if you are a broker-dealer that acquired your debentures as a result of market-making or other trading activities you will deliver a prospectus in connection with any resale of new debentures; * you will acquire the new debentures in the ordinary course of your business; * you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in the distribution of the old debentures or the new debentures; and * you are not acting on behalf of any person who could not truthfully make the foregoing representations. If your debentures are not accepted for exchange for any reason, they will be returned to you at our expense. Guaranteed Delivery Procedures If you wish to tender your old debentures and: * your old debentures are not immediately available; * you are unable to deliver your old debentures or any other documents that you are required to deliver to the exchange agent on time; or * you cannot complete the procedures for delivery by book-entry transfer on time; then you may tender your old debentures according to the guaranteed delivery procedures that are discussed in the letter of transmittal and in "The Exchange Offer-- Guaranteed Delivery Procedures." Withdrawal Rights Tenders of old debentures may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. The Exchange Agent The Bank of New York is the exchange agent. Its address and telephone number are set forth in "The Exchange Offer-The Exchange Agent; Assistance." Resales of New Debentures We believe that the new debentures may be offered for resale, resold and otherwise transferred by you without further compliance with the registration and prospectus delivery requirements of the Securities Act, if: * you acquire the new debentures in the ordinary course of your business; * you are not participating, and have no arrangement or understanding with any person to participate, in a distribution (within the meaning of the Securities Act) of the old debentures or the new debentures; * you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of us. You should read this prospectus under the heading "The Exchange Offer--Resales of the New Debentures," for a more complete description of why we believe you can freely transfer new debentures received in the exchange offer without registration or delivery of a prospectus. All broker-dealers who are issued new debentures for their own accounts in exchange for old debentures that were acquired as a result of market-making or other trading activities must acknowledge that they will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new debentures. If you are a broker-dealer and required to deliver a prospectus, you may use this prospectus for an offer to resell, a resale or other transfer of the new debentures. Federal Income Tax Consequences The issuance of the new debentures will not constitute an exchange for federal income tax purposes. You will not recognize any gain or loss upon receipt of the new debentures. See "Certain Federal Income Tax Considerations." Summary of Terms of the New Debentures The new debentures will evidence the same debt as the old debentures and will be governed by the same indenture under which the old debentures were issued. Aggregate Principal Amount Up to $200,000,000. Interest Rate 7 1/4% per year. Maturity Date June 1, 2029. Interest Payment Dates June 1 and December 1 of each year, beginning December 1, 1999. Interest Calculations Based on 360-day year of twelve 30-day months. Ranking The debentures will rank equally with all other unsecured and unsubordinated indebtedness of Kohl's Corporation. Optional Redemption The debentures are redeemable by us prior to their maturity. Sinking Fund None. Minimum Denomination $100,000. General Indenture Provisions Applicable to the Debentures Limit on Debt The indenture does not limit the amount of debt that we may issue or provide holders any protection should we be involved in a highly leveraged transaction. Certain Covenants The indenture governing the debentures contains covenants that, among other things, will limit the ability of Kohl's Corporation and our largest operating subsidiary, Kohl's Department Stores, Inc., to: * incur, issue, assume or guarantee certain additional secured indebtedness, and * engage in sale and leaseback transactions. These covenants are subject to important exceptions and qualifications, which are described under the heading "Description of Debentures" in this prospectus. Events of Default Each of the following is an event of default under the indenture: * our failure for 30 days to pay interest when due on the debentures, * our failure to pay principal of or premium, if any, on the debentures when due, * our failure to perform covenants with respect to the debentures for 60 days after receipt of notice of failure, * default in the payment of principal or default and acceleration of at least $25.0 million in aggregate principal amount of other debt of Kohl's Corporation, and * certain events of bankruptcy, insolvency or reorganization of Kohl's Corporation. Remedies If an event of default occurs, the trustee under the indenture or holders of at least 25% in aggregate principal amount of outstanding debentures may declare the principal immediately due and payable. 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 30, 1999 from our consolidated financial statements, which have been audited by Ernst & Young LLP, independent auditors. We derived the selected consolidated financial data for the three months ended May 2, 1998 and May 1, 1999 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 three months ended May 1, 1999 are not necessarily indicative of results to be expected for the full fiscal year. 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 offering memorandum. Our fiscal year ends on the Saturday closest to January 31. Fiscal 1995 contained 53 weeks.
Fiscal Year Ended Three Months Ended January 28, February 3, February 1, January 31, January 30, May 2, May 1, 1995 1996 1997 1998 1999 1998 1999 (Dollars in Thousands) (Unaudited) Statement of Operations Data: Net sales $1,554,100 $1,925,669 $2,388,221 $3,060,065 $3,681,763 $744,571 $910,256 $ $ $ $ Cost of merchandise sold. 1,037,740 1,294,653 1,608,688 2,046,468 2,447,301 491,102 597,128 Gross margin 516,360 631,016 779,533 1,013,597 1,234,462 253,469 313,128 Selling, general and 356,893 436,442 536,226 678,793 810,162 180,353 216,032 administrative expenses Depreciation and amortization 27,402 33,931 44,015 57,380 70,049 16,284 19,877 Preopening Expenses 8,190 10,712 10,302 18,589 16,388 7,542 7,945 Credit operations, non-recurring (a) - 14,052 - - - - - Operating income 123,875 135,879 188,990 258,835 337,863 49,290 69,274 Interest expense, net 6,424 13,150 17,622 23,772 21,114 5,059 5,132 Income before income taxes 117,451 122,729 171,368 235,063 316,749 44,231 64,142 Provision for income taxes 48,939 50,077 68,890 93,790 124,483 17,383 24,823 Net income $ 68,512 $ 72,652 $ 102,478 $ 141,273 $ 192,266 $ 26,848 $ 39,319 Operating Data: Comparable store sales growth(b) 6.1% 5.9% 11.3% 10.0% 7.9% 12.0% 10.8% Net sales per selling square foot (c) $ 258 $ 257 $ 261 $ 267 $ 265 $ 57 $ 58 Total square feet of selling space (in thousands; end of period) 6,824 8,378 10,064 12,533 15,111 13,681 16,130 Number of stores open (end of period) 108 128 150 182 213 197 226 Capital expenditure including capitalized leases and favorable lease rights $ 132,800 $ 138,797 $ 223,423 $ 202,735 $ 248,878 $ 45,846 $207,344 Balance Sheet Data (end of period): Working capital $ 114,637 $ 175,368 $ 229,339 $ 525,251 $ 559,207 $524,592 $670,344 Property and equipment, net 298,737 409,168 596,227 749,649 933,011 781,325 984,831 Total assets 658,717 805,385 1,122,483 1,619,712 1,936,095 1,679,409 2,195,489 Total long-term debt 108,777 187,699 312,031 310,366 310,912 311,142 308,878 Shareholders' equity 334,249 410,638 517,471 954,782 1,162,779 983,066 1,454,728 Other Data: Ratio of earnings to fixed charges(d) 6.91x 4.96x(e) 4.94x 5.06x 5.99x 3.90x 4.68x (footnotes on next 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) 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. (c) 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. (d) The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, "earnings" means pre-tax income plus fixed charges minus capitalized interest. "Fixed charges" includes interest (expensed or capitalized), the portion of rent expense representative of interest and the amortization of deferred financing costs. (e) Excluding the credit operations non-recurring expense of $14.1 million, the ratio of earnings to fixed charges would be 5.40x. USE OF PROCEEDS We will not receive any proceeds from the exchange offer. THE EXCHANGE OFFER Purpose and Effect; Registration Rights We sold the old debentures to Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc., as initial purchasers, on June 1, 1999. The initial purchasers then resold the old debentures under an offering memorandum dated May 26, 1999 in reliance on Rule 144A, Regulation S and other available exemptions under the Securities Act. On June 1, 1999, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed: * to file with the SEC a registration statement relating to the exchange offer under the Securities Act no later than October 14, 1999; * to use our reasonable best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act on or before November 28, 1999; and * to use our reasonable best efforts to cause the exchange offer to be consummated not later than 45 days following the date of effectiveness of the exchange offer registration statement. If you participate in the exchange offer, you will, with limited exceptions, receive debentures that are freely tradable and not subject to restrictions on transfer. You should read this prospectus under the heading "--Resales of New Debentures" for more information relating to your ability to transfer new debentures. The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of old debentures in any jurisdiction in which the exchange offer or the acceptance of the exchange offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction. If you are eligible to participate in the exchange offer and do not tender your old debentures, you will continue to hold the untendered old debentures, which will continue to be subject to restrictions on transfer under the Securities Act. In the registration rights agreement, we will be required to file a shelf registration statement only if: * after June 1, 1999, there is a change in law or applicable interpretations of the law by the staff of the SEC, and as a result we are not permitted to complete the exchange offer as contemplated by the registration rights agreement, or * any holder of the old debentures is not able to participate in the exchange offer, or * any holder of the old debentures does not receive fully transferable new debentures, or * the exchange offer registration statement is not declared effective by November 28, 1999 or the exchange offer is not consummated within 45 days after the exchange offer registration statement is declared effective, but we may terminate such shelf registration statement at any time, without penalty, if the exchange offer registration statement is declared effective or the exchange offer is consummated, or * upon the request of any of the initial purchasers made within 90 days after the consummation of the exchange offer with respect to old debentures not eligible to be exchanged in the exchange offer and held by it following the consummation of the exchange offer. The shelf registration statement will permit only certain holders to resell their debentures from time to time. In addition, such holders must: * provide certain information in connection with the registration statement, and * agree in writing to be bound by all provisions of the registration rights agreement (including the applicable indemnification obligations). A holder who sells old debentures pursuant to the shelf registration statement will be required to be named as a selling securityholder in the prospectus and to deliver a copy of the prospectus to purchasers. If we are required to file a shelf registration statement, we will provide to each holder of the old debentures copies of the prospectus that is a part of the shelf registration statement and notify each such holder when the shelf registration statement becomes effective. Such holder will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales, and will be bound by the provisions of the registration rights agreement which are applicable to such a holder (including the applicable indemnification obligations). If a shelf registration statement is required, we will use our reasonable best efforts to: * file the shelf registration statement with the SEC no later than (a) November 28, 1999 or (b) the 60th day after such filing obligation arises, whichever is later, and * cause the shelf registration statement to be declared effective by the SEC no later than December 28, 1999, and * keep the shelf registration statement effective until June 1, 2001, or if earlier until all of the debentures covered by the shelf registration statement are sold thereunder or are already freely tradable. Additional Interest If a registration default occurs (this term is defined below under this subheading), then we will be required to pay additional interest to each holder of the old debentures. During the first 90-day period that a registration default occurs, we will pay additional interest equal to 0.25% per year. At the beginning of the second and any subsequent 90-day period that a registration default is continuing, the amount of additional interest will increase by an additional 0.25% per year until all registration defaults have been cured. However, in no event will the rate of additional interest exceed 0.5% per year. Such additional interest will accrue only for those days that a registration default occurs and is continuing. All accrued additional interest will be paid to the holders of the debentures in the same manner as interest payments on the debentures, with payments being made on the interest payment dates for the debentures. Following the cure of all registration defaults, no more additional interest will accrue. You will not be entitled to receive any additional interest if you were, at any time while the exchange offer was pending, eligible to exchange, and did not validly tender, your old debentures for new debentures in the exchange offer. A "registration default" includes if: * we fail to file any of the registration statements required by the registration rights agreement on or before the date specified for such filing, or * any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness, or * we fail to complete the exchange offer on or prior to the date specified for such completion, or * the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of the debentures during the period specified in the registration rights agreement, subject to certain exceptions for limited periods of time with respect to the shelf registration statement. The exchange offer is intended to satisfy our exchange offer obligations under the registration rights agreement. The above summary of the registration rights agreement is not complete and is subject to, and qualified by reference to, all the provisions of the registration rights agreement. A copy of the registration rights agreement is filed as an exhibit to the registration statement that includes this prospectus. Expiration Date; Extensions The expiration date at the exchange offer is , 1999 at 5:00 p.m., New York City time. We, in our sole discretion, may extend the exchange offer. If we extend the exchange offer, the expiration date will be the latest date and time to which the exchange offer is extended. We will notify the exchange agent of any extension by oral or written notice and will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We expressly reserve the right, in our sole and absolute discretion: * to delay accepting any old debentures; * to extend the exchange offer; * if any of the conditions under "--Conditions of the Exchange Offer" have not been satisfied, to terminate the exchange offer; and * to waive any condition or otherwise amend the terms of the exchange offer in any manner. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the old debentures. Any delay in acceptance, extension, termination or amendment will be followed promptly by an oral or written notice of the event to the exchange agent. We will also make a public announcement of the event. If the announcement relates to an extension, the announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which we may choose to make any public announcement and subject to applicable law, we have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to a national news service. Terms of the Exchange Offer We are offering, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, to exchange $1,000 in principal amount of new debentures for each $1,000 in principal amount of outstanding old debentures. We will accept for exchange any and all old debentures that are validly tendered on or before 5:00 p.m., New York City time, on the expiration date. Tenders of the old debentures may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date. The exchange offer is not conditioned upon any minimum principal amount of old debentures being tendered for exchange. However, the exchange offer is subject to the registration rights agreement and the satisfaction of the conditions described under "-Conditions of the Exchange Offer." Old debentures may be tendered only in a minimum denomination of $100,000 and integral multiples of $1,000. Holders may tender less than the aggregate principal amount represented by their old debentures if they appropriately indicate this fact on the letter of transmittal accompanying the tendered old debentures or indicate this fact pursuant to the procedures for book-entry transfer described below. As of the date of this prospectus, $200 million in aggregate principal amount of the old debentures were outstanding. Solely for reasons of administration, we have fixed the close of business on , 1999, as the record date for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Only a holder of the old debentures (or such holder's legal representative or attorney-in-fact) whose ownership is reflected in the records of The Bank of New York, as registrar, or whose debentures are held of record by The Depository Trust Company ("DTC") may participate in the exchange offer. There will be no fixed record date for determining the eligible holders of the old debentures that are entitled to participate in the exchange offer. We will be deemed to have accepted validly tendered old debentures when, as and if we give oral or written notice of its acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of old debentures and for purposes of receiving the new debentures from us. If any tendered old debentures are not accepted for exchange because of an invalid tender or otherwise, certificates for the unaccepted old debentures will be returned, without expense, to the tendering holder as promptly as practicable after the expiration date. Holders of old debentures do not have any appraisal or dissenters' rights under applicable law or the indenture as a result of the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Exchange Act and the rules and regulations under the Exchange Act, including Rule 14e-1. Holders who tender their old debentures in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old debentures pursuant to the exchange offer. See "--Fees and Expenses." Neither we nor our board of directors make any recommendation to holders of old debentures as to whether to tender any of their old debentures pursuant to the exchange offer. In addition, no one has been authorized to make any such recommendation. Holders of old debentures must make their own decision whether to participate in the exchange offer and, if the holder chooses to participate in the exchange offer, the aggregate principal amount of old debentures to tender, after reading carefully this prospectus and the letter of transmittal and consulting with their advisors. Conditions of the Exchange Offer You must tender your old debentures in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the exchange offer. Notwithstanding any other provision of the exchange offer, or any extension of the exchange offer, we will not be required to accept for exchange any old debentures, and may terminate or amend the exchange offer if: * the exchange offer, or the making of any exchange by a debenture holder, violates applicable law or any applicable interpretation of the staff of the SEC, * any action or proceeding shall have been instituted or threatened with respect to the exchange offer which, in our judgment, would impair our ability to proceed with the exchange offer, or * any law, rule or regulation or applicable interpretations of the staff of the SEC has been issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer. If we determine in our sole discretion that any of the above events or conditions has occurred, we may, subject to applicable law, terminate the exchange offer and return all old debentures tendered for exchange or may waive any condition or amend the terms of the exchange offer. We expect that the above conditions will be satisfied. The above conditions are for our sole benefit and may be waived by us at any time in our sole discretion. Our failure at any time to exercise any of the above rights will not be a waiver of those rights and each right will be deemed an ongoing right that may be asserted at any time. Any determination by us concerning the events described above will be final and binding upon all parties. Interest Each new debenture will bear interest from the most recent date to which interest has been paid or duly provided for on the old debenture surrendered in exchange for such new debenture or, if no such interest has been paid or duly provided for on such old debenture, from June 1, 1999. Interest on the new debentures will be payable semi-annually on June 1 and December 1 of each year. Procedures for Tendering Old Debentures The tender of a holder's old debentures and our acceptance of old debentures will constitute a binding agreement between the tendering holder and us upon the terms and conditions of this prospectus and the letter of transmittal. Unless a holder tenders old debentures according to the guaranteed delivery procedures or the book-entry procedures described below, the holder must transmit the old debentures, together with a properly completed and executed letter of transmittal and all other documents required by the letter of transmittal, to the exchange agent at its address before 5:00 p.m., New York City time on the expiration date. The method of delivery of old debentures, letters of transmittal and all other required documents is at the election and risk of the tendering holder. If delivery is by mail, it is recommended that registered mail, properly insured, with return receipt requested, be used. Instead of delivery by mail, it is recommended that each holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. Any beneficial owner of the old debentures whose old debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender old debentures in the exchange offer should contact that registered holder promptly and instruct that registered holder to tender on its behalf. Any financial institution that is a participant in DTC's Book-Entry Transfer Facility system may make book- entry delivery of the old debentures by causing DTC to transfer the old debentures into the exchange agent's account in accordance with DTC's procedures for such transfer. To be timely, book-entry delivery of old debentures requires receipt of a confirmation of a book- entry transfer before the expiration date. Although delivery of the old debentures may be effected through book-entry transfer into the exchange agent's account at DTC, the letter of transmittal (or facsimile), properly completed and executed, with any required signature guarantees and any other required documents or an agent's message (as described below), must in any case, be delivered to and received by the exchange agent at its address on or before the expiration date, or the guaranteed delivery procedure set forth below must be complied with. DTC has confirmed that the exchange offer is eligible for DTC's Automated Tender Offer Program. Accordingly, participants in DTC's Automated Tender Offer Program may, instead of physically completing and signing the applicable letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange offer by causing DTC to transfer old debentures to the exchange agent in accordance with DTC's Automated Tender Offer Program procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from a participant in DTC's Automated Tender Offer Program that is tendering old debentures that are the subject of such book-entry confirmation, that the participant has received and agrees to be bound by the terms of the applicable letter of transmittal or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery, and that we may enforce such agreement against that participant. Each signature on a letter of transmittal or a notice of withdrawal must be guaranteed unless the old debentures are tendered: * by a registered holder who has not completed the box entitled "Special Delivery Instructions"; or * for the account of an eligible institution (as described below). If a signature on a letter of transmittal or a notice of withdrawal is required to be guaranteed, the signature must be guaranteed by a participant in a recognized Medallion Signature Program (a "Medallion Signature Guarantor"). If the letter of transmittal is signed by a person other than the registered holder of the old debentures, the old debentures surrendered for exchange must be endorsed by the registered holder, with the signature guaranteed by a Medallion Signature Guarantor. If any letter of transmittal, endorsement, bond power, power of attorney or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in- fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should sign in that capacity when signing. Such person must submit evidence satisfactory to us, in our sole discretion, of his authority to so act unless we waive such requirement. As used in this prospectus with respect to the old debentures, a "registered holder" is any person in whose name the old debentures are registered on the books of the registrar. An "eligible institution" is a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or any other "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Exchange Act. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of old debentures tendered for exchange will be determined by us in our sole discretion. Our determination will be final and binding. We reserve the absolute right to reject old debentures not properly tendered and to reject any old debentures if acceptance might, in our judgment or the judgment of our counsel, be unlawful. We also reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to particular old debentures at any time, including the right to waive the ineligibility of any holder who seeks to tender old debentures in the exchange offer. The interpretation by us of the terms and conditions of the exchange offer, including the letter of transmittal and its instructions, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old debentures for exchange must be cured within such period of time as we determine. Neither we nor the exchange agent is under any duty to give notification of defects in such tenders or will incur any liability for failure to give such notification. The exchange agent will use reasonable efforts to give notification of defects or irregularities with respect to tenders of old debentures for exchange but will not incur any liability for failure to give such notification. Tenders of old debentures will not be deemed to have been made until such irregularities have been cured or waived. By tendering, you will represent to us that, among other things: * the new debentures to be received in the exchange offer are being acquired in the ordinary course of your business; * you do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution (within the meaning of the Securities Act) of the old debentures or the new debentures; * if you are a broker-dealer that acquired old debentures as a result of market-making or other trading activities, you will deliver a prospectus in connection with any resale of new debentures acquired in the exchange offer; * you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of us; and * you are not acting on behalf of any person who could not truthfully make the foregoing representations. In connection with a book-entry transfer, each participant will confirm that it makes the representations and warranties contained in the letter of transmittal. Guaranteed Delivery Procedures Holders who wish to tender their old debentures and: * whose old debentures are not immediately available, or * who cannot deliver their old debentures or any other documents required by the letter of transmittal to the exchange agent on or before the expiration date (or complete the procedure for book-entry transfer on a timely basis), may tender their old debentures according to the guaranteed delivery procedures described in the letter of transmittal. Those procedures require that: * tenders be made by or through an eligible institution and a notice of guaranteed delivery must be signed by such holder; * on or before the expiration date, the exchange agent receive from the holder and the eligible institution a properly completed and executed notice of guaranteed delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder, the certificate number or numbers of the tendered old debentures, and the principal amount of tendered old debentures, which states that the tender is being made pursuant to the guaranteed delivery procedures and guaranteeing that, within four business days after the date of delivery of the notice of guaranteed delivery, the tendered old debentures in proper form for transfer or confirmation of a book- entry transfer of those old debentures into the exchange agent's account at DTC, a duly executed letter of transmittal and any other required documents will be deposited by the eligible institution with the exchange agent; and * properly completed and executed documents required by the letter of transmittal and the tendered old debentures in proper form for transfer or confirmation of a book-entry transfer of such old debentures into the exchange agent's account at DTC be received by the exchange agent within four business days after the expiration date. Any holder who wishes to tender old debentures pursuant to the guaranteed delivery procedures must ensure that the exchange agent receives the notice of guaranteed delivery and letter of transmittal relating to such old debentures before 5:00 p.m., New York City time, on the expiration date. Acceptance of Old Debentures for Exchange; Delivery of New Debentures Upon satisfaction or waiver of all the conditions to the exchange offer, we will accept old debentures that are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. The new debentures will be delivered promptly after acceptance of the old debentures. For purposes of the exchange offer, we will be deemed to have accepted validly tendered old debentures, when, as and if we have given notice to the exchange agent. Withdrawal Rights Tenders of the old debentures may be withdrawn by delivery of a written or facsimile transmission notice to the exchange agent, at its address set forth under "--The Exchange Agent; Assistance" at any time before 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must: * specify the name of the person having deposited the old debentures to be withdrawn; * identify the old debentures to be withdrawn (including the certificate number or numbers and principal amount of such old debentures), or, in the case of old debentures transferred by book-entry transfer, the name and number of the account at DTC to be credited; * be signed by the holder in the same manner as the original signature on the letter of transmittal by which old debentures were tendered, including any required signature guarantees, or be accompanied by a bond power in the name of the person withdrawing the tender, in satisfactory form as determined by us in our sole discretion, executed by the registered holder, with the signature guaranteed by a Medallion Signature Guarantor, together with the other documents required upon transfer by the indenture; and * specify the name in which the old debentures are to be re-registered, if different from the person who deposited the old debentures. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by us, in our sole discretion. The old debentures withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old debentures that have been tendered for exchange but are withdrawn will be returned to the holder without cost as soon as practicable after withdrawal. Properly withdrawn old debentures may be retendered pursuant to the procedures described under "--Procedures for Tendering Old Debentures" at any time on or before the expiration date. The Exchange Agent; Assistance The Bank of New York, a New York banking corporation, is the exchange agent. All tendered old debentures, executed letters of transmittal and other related documents should be directed to the exchange agent. Questions and requests for assistance and requests for additional copies of the prospectus, the letter of transmittal and other related documents should be addressed to the exchange agent as follows: By Registered or Certified Mail: The Bank of New York 101 Barclay Street, Floor 7-E New York, NY 10286 Attention: Reorganization Section By Hand or Overnight Courier: The Bank of New York 101 Barclay Street Corporate Trust Services Window Ground Level New York, NY 10286 Attention: Reorganization Section By Facsimile: (212) 815-6339 Attention: Reorganization Section Confirm by Telephone (eligible institutions only): (212) 815-5920 Fees and Expenses We will bear the expenses of soliciting old debentures for exchange. The principal solicitation is being made by mail by the exchange agent. Additional solicitation may be made by telephone, facsimile or in person by our officers and regular employees and our affiliates and by persons so engaged by the exchange agent. We will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with its services and pay other registration expenses, including fees and expenses of the trustee under the indenture, filing fees, blue sky fees and printing and distribution expenses. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptance of the exchange offer. We will pay all transfer taxes, if any, applicable to the exchange of old debentures pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of old debentures pursuant to the exchange offer, then the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. If satisfactory evidence of payment of those taxes or exemption is not submitted with the letter of transmittal, the amount of those transfer taxes will be billed directly to such tendering holder. Accounting Treatment The new debentures will be recorded at the same carrying value as the old debentures, as reflected in our accounting records on the date of the exchange. Accordingly, we will recognize no gain or loss for accounting purposes. The expenses of the exchange offer will be amortized over the term of the new debentures. Consequences of Not Exchanging Old Debentures As a result of this exchange offer, we will have fulfilled most of its obligations under the registration rights agreement, and holders who do not tender their old debentures, except for certain instances involving the initial purchasers or holders of old debentures who are not eligible to participate in the exchange offer or who do not receive freely transferrable new debentures pursuant to the exchange offer, will not have any further registration rights under the registration rights agreement or otherwise and will not have rights to receive additional interest. Accordingly, any holder that does not exchange its old debentures for new debentures will continue to hold the untendered old debentures and will be entitled to all the rights and subject to all the limitations applicable under the indenture, except to the extent that such rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the exchange offer. The old debentures that are not exchanged for new debentures pursuant to the exchange offer will remain restricted securities within the meaning of the Securities Act. In general, such old debentures may be resold only: * to us or any of our subsidiaries; * pursuant to an effective registration statement under the Securities Act; * to a "qualified institutional buyer" in compliance with Rule 144A under the Securities Act; * to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act), that, prior to such transfer, furnishes or has furnished on its behalf by a U.S. broker-dealer to the trustee under the indenture a signed letter containing certain representations and agreements relating to the restrictions on transfer of the old debentures, the form of which letter can be obtained from the trustee; * outside the United States in compliance with Regulation S under the Securities Act; or * pursuant to any other available exemption from registration under the Securities Act. We reserve the right prior to any offer, sale or other transfer pursuant to the last three bullet points above to require the delivery of an opinion of counsel, certificates and/or other information satisfactory to us to demonstrate that the transaction is permitted. Resales of the New Debentures We are making the exchange offer in reliance on the position of the staff of the SEC as set forth in interpretive letters addressed to third parties in other transactions. However, we have not sought our own interpretive letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the exchange offer as it has in the interpretive letters to third parties. Based on these interpretations by the staff, and except as provided below, we believe that new debentures may be offered for resale, resold and otherwise transferred by a holder that participates in the exchange offer and is not a broker-dealer without further compliance with the registration and prospectus delivery provisions of the Securities Act. In order to receive new debentures that are freely tradeable, a holder must acquire the new debentures in the ordinary course of its business and may not participate, or have any arrangement or understanding with any person to participate, in the distribution (within the meaning of the Securities Act) of the old debentures or the new debentures. Holders wishing to participate in the exchange offer must make the representations described in "--Procedures for Tendering Old Debentures" above. Any holder of old debentures: * who is our "affiliate" (as defined in Rule 405 under the Securities Act); * who did not acquire the new debentures in the ordinary course of its business; or * who intends to participate, or has an arrangement or understanding with any person to participate, in a distribution (within the meaning of the Securities Act) of the old debentures or the new debentures, will be subject to separate restrictions. Each holder in any of the above categories: * will not be able to rely on the interpretations of the staff of the SEC in the above-mentioned interpretive letters; * will not be permitted or entitled to tender old debentures in the exchange offer; and * must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of old debentures unless such sale is made pursuant to an exemption from such requirements. In addition, if you are a broker-dealer holding old debentures acquired for your own account, then you may be deemed a statutory "underwriter" within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of your new debentures. Each broker- dealer that receives new debentures for its own account pursuant to the exchange offer must acknowledge that it acquired the old debentures for its own account as a result of market- making activities or other trading activities and must agree that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those new debentures. The letter of transmittal states that by making the above acknowledgment and by delivering a prospectus, a broker- dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Based on the position taken by the SEC staff in the interpretive letters referred to above, we believe that broker-dealers who acquired old debentures for their own accounts, as a result of market-making or other trading activities ("Participating Broker-Dealers") may fulfill their prospectus delivery requirements with respect to the new debentures received upon exchange of old debentures (other than old debentures which represent an unsold allotment from the original sale of the old debentures) with a prospectus meeting the requirements of the Securities Act, which may be the prospectus prepared for an exchange offer so long as it contains a description of the plan of distribution with respect to the resale of such new debentures. Accordingly, this prospectus, as it may be amended or supplemented, may be used by a Participating Broker- Dealer during the period referred to below in connection with resales of new debentures received in exchange for old debentures where such old debentures were acquired by such Participating Broker-Dealer for its own account as a result of market-making or other trading activities. Subject to certain provisions set forth in the registration rights agreement, we have agreed that this prospectus may be used by a Participating Broker-Dealer in connection with resales of such new debentures. See "Plan of Distribution." However, a Participating Broker-Dealer who intends to use this prospectus in connection with the resale of new debentures received in exchange for old debentures pursuant to the exchange offer must notify us, or cause us to be notified, on or before the expiration date of the exchange offer, that it is a Participating Broker- Dealer. Such notice may be given in the space provided for that purpose in the letter of transmittal or may be delivered to the exchange agent at the address set forth under "--The Exchange Agent; Assistance." Any Participating Broker-Dealer who is an "affiliate" of us may not rely on such interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each Participating Broker-Dealer who tenders old debentures pursuant to the exchange offer will be deemed to have agreed, by execution of the letter of transmittal, that, upon receipt of notice from us of the occurrence of any event or the discovery of any fact which makes any statement contained in this prospectus untrue in any material respect or which causes this prospectus to omit to state a material fact necessary in order to make the statements contained herein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the registration rights agreement, such Participating Broker-Dealer will suspend the sale of new debentures pursuant to this prospectus until we have amended or supplemented this prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented prospectus to such Participating Broker-Dealer or we have given notice that the sale of the new debentures may be resumed, as the case may be. DESCRIPTION OF DEBENTURES The old debentures were, and the new debentures will be, issued under an indenture (the "Indenture") dated as of December 1, 1995, as supplemented and amended by a First Supplemental Indenture, dated as of June 1, 1999 between us and The Bank of New York, as Trustee (the "Trustee"). The form and term of the new debentures are substantially identical to the form and term of the old debentures, except that the new debentures: * will be registered under the Securities Act; * will not, except under limited circumstances, have registration rights or rights to additional interest; and * will not bear any securities laws legends restricting transfer. The new debentures will be issued solely in exchange for an equal principal amount of old debentures. As of the date of this prospectus, $200 million aggregate principal amount of old debentures is outstanding. See "The Exchange Offer." As used below, "debentures" refers to the old debentures and the new debentures. We have summarized selected provisions of the Indenture below. The summary is not complete. The Indenture has been filed as an exhibit to the registration statement to which this prospectus is a part and is incorporated herein by reference. You should read the Indenture for provisions that may be important to you. Section references below are to the sections in the Indenture. Capitalized terms have the meanings assigned to them in the Indenture. General The Indenture does not limit the amount of debt securities that we may issue and we may issue debt securities under the Indenture from time to time in one or more series. We have previously issued under the Indenture $200,000,000 aggregate principal amount of old debentures, $100,000,000 aggregate principal amount of our 6.70% notes due 2006 and $100,000,000 aggregate principal amount of our 7.375% notes due 2011. The new debentures will be unsecured and unsubordinated obligations of Kohl's Corporation and will rank equally and ratably with our other unsecured and unsubordinated obligations. The debentures will mature on June 1, 2029. The debentures are initially limited to $200,000,000 aggregate principal amount, but we may "reopen" the debentures series and issue additional debentures. Interest on the debentures will be computed on the basis of a 360-day year of twelve 30-day months and will be payable on each June 1 and December 1 (each an "Interest Payment Date"), commencing on December 1, 1999. We will pay interest to the person in whose name a debenture is registered at the close of business on the May 15 or November 15, as the case may be, before such Interest Payment Date. We expect that payments of principal and interest to owners of book-entry interests (as described below) will be made in accordance with the procedures of DTC and its participants in effect from time to time. DTC shall act as the Depository, as described in the Indenture. The provisions of the Indenture relating to defeasance and covenant defeasance are applicable to the debentures. The Indenture does not contain covenants or other provisions designed to afford holders of the debentures protection in the event of a highly leveraged transaction, change in credit rating or other similar occurrence. The debentures constitute an obligation of Kohl's Corporation, not of our subsidiaries. Our subsidiaries, however, own substantially all of our consolidated assets and conduct substantially all of our consolidated operations. As a result, the debentures are structurally subordinated to the prior claims of our subsidiaries' creditors (including trade creditors) and our subsidiaries' preferred stockholders, if any, except to the extent that Kohl's Corporation may itself be a creditor with recognized claims against a subsidiary. The debentures will be issued in fully registered book-entry form without coupons in denominations of not less than $100,000 and integral multiples of $1,000. We do not intend to apply for the listing of the debentures on a national securities exchange. No service charge will be made for any transfer or exchange of the debentures, but we may require payment of any tax or other governmental charge payable in connection with any transfer or exchange. (Sections 2.1, 2.3 and 2.8) Optional Redemption We will have the right to redeem the debentures at any time, in whole or in part, upon at least 30 days notice mailed to the registered address of each holder of the debentures. We will pay a redemption price equal to the greater of (1) 100% of the principal amount of the debentures to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments discounted on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the Treasury Rate plus twenty- five basis points. If we redeem any debentures, accrued interest on those debentures will be payable to the redemption date. "Treasury Rate" means, for any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. "Comparable Treasury Issue" means the United States Treasury security, selected by a Reference Treasury Dealer appointed by us, as having a maturity comparable to the remaining term of the debentures to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of those debentures. "Comparable Treasury Price" means, for any redemption date, (1) the average of the Reference Treasury Dealer Quotations for that redemption date after excluding the highest and lowest of those Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than five Reference Treasury Dealer Quotations, the average of all the quotations. "Reference Treasury Dealer" means any nationally recognized investment banking firm that is a primary U.S. Government securities dealer. "Reference Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that redemption date. "Remaining Scheduled Payments" means, for each debenture to be redeemed, the remaining scheduled payments of principal and interest on that debenture that would be due after the related redemption date but for that redemption. If that redemption date is not an interest payment date with respect to that debenture, the amount of the next succeeding scheduled interest payment on that debenture will be reduced by the amount of interest accrued on the debenture to the redemption date. On and after the redemption date, interest will cease to accrue on the debentures or any portion of the debentures called for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date, we will deposit with a paying agent (or the Trustee) money sufficient to pay the redemption price of and accrued interest on the debentures to be redeemed on that date. If less than all of the debentures are to be redeemed, the debentures to be redeemed shall be selected by the Trustee by any method as the Trustee shall deem fair and appropriate. The debentures will not be entitled to the benefit of any sinking fund or other mandatory redemption provisions. Merger and Consolidation The Indenture provides that we may, without the consent of the holders of the debentures, consolidate with or merge into any other corporation, or convey, transfer or lease our properties and assets substantially as an entirety to any person, as long as: * the successor corporation is a domestic corporation that assumes by a supplemental indenture our obligations under the Indenture and the debt securities; * immediately after the transaction, no Event of Default shall have happened and be continuing; and * if an Operating Property would become subject to a Mortgage which would not be permitted under the Indenture, the debt securities are secured, equally and ratably with (or prior to) all Indebtedness so secured. Upon compliance with these requirements by a successor corporation (except in the case of a lease), we would be relieved of our obligations under the Indenture and the debt securities. (Sections 5.1 and 5.2) Events of Default "Event of Default" under the Indenture means any of the following with respect to debt securities of any series (Section 6.1): * default in payment of any interest on any debt security of that series when due and payable, continued for 30 days; * default in payment of all or any part of principal of or premium, if any, on any debt security of that series at its maturity; * default in the deposit of any sinking fund payment, when and as due by the terms of a debt security of that series; * default in the performance or breach of any other covenant or warranty in the Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere applicable in the Indenture specifically dealt with or which has been included in the Indenture solely for the benefit of series of debt securities other than that series), continued for 60 days after written notice as provided in the Indenture; * acceleration of any indebtedness, having an aggregate minimum principal amount of $25 million, for money borrowed by Kohl's Corporation under the terms of the instrument under which such indebtedness is issued or secured, if such acceleration is not discharged within 10 days after written notice as provided in the Indenture; * certain events in bankruptcy, insolvency or reorganization pertaining to Kohl's Corporation as described in the Indenture; and * any other Event of Default provided with respect to debt securities of that series. No Event of Default with respect to a particular series of debt securities issued under the Indenture (except as to such events in bankruptcy, insolvency or reorganization) necessarily constitutes an Event of Default with respect to any other series of debt securities issued under the Indenture. (Section 6.1) If an Event of Default for any series of debt securities occurs and continues, the Trustee or the holders of at least 25% in principal amount of the debt securities of that series may, by a notice in writing to us (and to the Trustee if given by holders), declare the entire principal of all the debt securities of that series to be due and payable immediately (or, if the debt securities of that series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series). However, at any time after a declaration of acceleration with respect to debt securities of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of a majority in principal amount of outstanding debt securities of that series may, subject to conditions described in the Indenture, rescind and annul such acceleration if all Events of Default, other than the non-payment of accelerated principal, with respect to debt securities of that series have been cured or waived as provided in the Indenture. (Section 6.2) For information as to waiver of defaults, see "Modification and Waiver." The Indenture provides that the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or discretion of any of the holders, unless those holders shall have offered to the Trustee reasonable security and indemnity. (Section 7.1) Subject to such provisions for security and indemnification of the Trustee and certain other rights of the Trustee, the holders of a majority in principal amount of the outstanding debt securities of any series shall have the right to direct the time, method and place of conducting any proceedings for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the debt securities of that series. (Section 6.12) No holder of any debt security of any series will have any right to institute any proceeding with respect to the Indenture or for any remedy under the Indenture, unless: * the holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to debt securities of that series; * the holders of at least 25% in principal amount of the outstanding debt securities of that series shall have made written request, and offered reasonable security and indemnity, to the Trustee to institute such proceeding as trustee; and * the Trustee shall not have received from the holders of a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. (Section 6.7) Notwithstanding the foregoing, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of (and premium, if any) and any interest on the debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of that payment. (Section 6.8) We are required to furnish to the Trustee annually a statement regarding our compliance with the Indenture. (Section 4.8) The Indenture provides that the Trustee may withhold notice to the holders of debt securities of any series of any default (except in payment of principal, any premium, interest or any sinking fund payments) with respect to debt securities of that series if it considers it in the interest of the holders of debt securities of that series to do so. (Section 7.5) Modification and Waiver We and the Trustee may modify and amend the Indenture with the consent of the holders of 66 2/3% in principal amount of the outstanding debt securities of all affected series. However, without the consent of each affected holder, no modification may: * change the stated maturity date of the principal of, or any installment of principal of or interest on, any debt security; * reduce the principal, premium (if any) or any interest on, any debt security or reduce the amount of principal of an original issue discount security that would be due and payable upon acceleration; * change the place or currency of payment of principal or interest on any debt security; * impair the right to institute suit to enforce any payment after the stated maturity date; or * reduce the percentage in principal amount of outstanding debt securities of any series, the consent of whose holders is required for modification or amendment of the Indenture, for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults. (Sections 9.2 and 9.3) The holders of a majority in principal amount of the outstanding debt securities of any series may, on behalf of the holders of all debt securities of that series, waive, insofar as that series is concerned, our compliance with specified restrictive provisions of the Indenture. (Section 9.2) The holders of a majority in principal amount of the outstanding debt securities of any series may, on behalf of the holders of all debt securities of that series, waive any past default under the Indenture with respect to that series. They may not waive a default in the payment of the principal of (or premium, if any) or any interest on any debt security of that series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding debt security of that series affected. (Section 6.13) Defeasance of Debt Securities or Certain Covenants in Certain Circumstances Defeasance and Discharge. The Indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations with respect to the debt securities of any series upon the deposit with the Trustee, in trust, of money and/or U.S. government obligations, which through the payment of interest and principal of those U.S. government obligations in accordance with their terms will provide money in an amount sufficient to pay any installment of principal (and premium, if any) and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of such payments in accordance with the terms of the Indenture and the debt securities. A discharge may only occur if we have received from, or there has been published by, the United States Internal Revenue Service a ruling, or there has been a change in the federal income tax law, in each case to the effect that holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred. A discharge will not be applicable to any debt securities of any series then listed on the New York Stock Exchange or any other securities exchange if such deposit would cause the debt securities to be delisted. In addition, the discharge will not apply to our obligations to register the transfer or exchange of debt securities of the series, to replace stolen, lost or mutilated debt securities of the series, to maintain paying agencies and to hold moneys for payment in trust. (Section 8.3) Defeasance of Certain Covenants. The Indenture provides that unless otherwise provided by the terms of the applicable series of debt securities: * we may omit to comply with certain restrictive covenants set forth in the Indenture, including the restrictive covenants described under the caption "Certain Covenants," and * a cross acceleration constituting an Event of Default under the Indenture shall be inapplicable to such series. In order to exercise such option, we will be required to deposit irrevocably with the Trustee money and/or U.S. government obligations which through the payment of interest and principal of those U.S. government obligations in accordance with their terms will provide money in an amount sufficient to pay principal (and premium, if any) and interest on and any mandatory sinking fund payments in respect of the debt securities of the series on the stated maturity of such payments in accordance with the terms of the Indenture and the debt securities. We will also be required to deliver to the Trustee an opinion of counsel to the effect that the deposit and related covenant defeasance will not cause the holders of the debt securities of that series to recognize income, gain or loss for federal income tax purposes as a result of our deposit and related covenant defeasance and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if the deposit and related covenant defeasance not occurred. (Section 8.4) Defeasance and Events of Default. In the event we exercise our option to omit compliance with certain covenants of the Indenture with respect to any series of debt securities and the debt securities of that series are declared due and payable because of the occurrence of any Event of Default, the amount of money and U.S. government obligations on deposit with the Trustee will be sufficient to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting from such Event of Default. However, we would remain liable for such payments. Concerning the Trustee The Bank of New York is the Trustee under the Indenture. The Bank of New York maintains normal banking relations with us, including participating in and acting as Administrative Agent under our revolving credit agreement. The Trustee is an affiliate of BNY Capital Markets, Inc., one of the initial purchasers. Certain Covenants Restrictions on Liens. The Indenture contains a covenant that we will not, and we will not permit any of our Restricted Subsidiaries to, issue, assume or guarantee any Indebtedness secured by any Mortgage upon any Operating Property or Operating Asset of Kohl's Corporation or any Restricted Subsidiary without securing the debt securities (and, if we so determine, any other Indebtedness ranking equally with the debt securities) equally and ratably with such Indebtedness. This covenant will not prevent us or any of our Restricted Subsidiaries from issuing, assuming or guaranteeing: * Any purchase money Mortgage on such property simultaneously with or within 180 days after the later of (1) the acquisition or completion of construction or completion of substantial reconstruction, renovation, remodeling, expansion or improvement (each, a "substantial improvement") of such property, or (2) the placing in operation of such property after the acquisition or completion of any such construction or substantial improvement; * An existing Mortgage on property not previously owned by Kohl's Corporation or a Restricted Subsidiary, including in each case Indebtedness incurred for reimbursement of funds previously expended for any substantial improvements to or acquisitions of property. However: - The Mortgage must be limited to any or all of (1) such acquired or constructed property or substantial improvement (including accretions thereto), (2) the real property on which any construction or substantial improvement occurs or (3) with respect to distribution centers, any equipment used directly in the operation of, or the business conducted on, the real property on which any construction or substantial improvement occurs; and - The total amount of the Indebtedness secured by the Mortgage, together with all other Indebtedness to persons other than Kohl's Corporation or a Restricted Subsidiary secured by Mortgages on such property, shall not exceed the lesser of (1) the total costs of such Mortgaged property, including any costs of construction or substantial improvement, or (2) the fair market value of the property immediately following the acquisition, construction or substantial improvement; * Any Mortgage on real property or, with respect to distribution centers, on equipment used directly in the operation of, or the business conducted on, such Mortgaged real property, which is the sole security for Indebtedness: - Incurred within three years after the latest of (1) the date of issuance of the first series of debt securities under the Indenture (February 6, 1996), (2) the date of the acquisition of the real property or (3) the date of the completion of construction or substantial improvement on such real property; - Incurred for the purpose of reimbursing us or our Restricted Subsidiary for the cost of acquisition and/or the cost of improvement of such real property and equipment; - The amount of which does not exceed the lesser of the aggregate cost of the real property, improvements and equipment or the fair market value of that real property, improvements and equipment; and - The holder of which shall be entitled to enforce payment of such Indebtedness solely by resorting to the security for such Mortgage, without any liability on the part of Kohl's Corporation or a Restricted Subsidiary for any deficiency; * Mortgages existing on the date of the Indenture, Mortgages on assets of a Restricted Subsidiary existing on the date it became a subsidiary or Mortgages on the assets of a subsidiary that is newly designated as a Restricted Subsidiary if the Mortgage would have been permitted under the provisions of this paragraph if such Mortgage was created while the Subsidiary was a Restricted Subsidiary; * Mortgages in favor of Kohl's Corporation or a Restricted Subsidiary; * Mortgages securing only the Indebtedness issued under the Indenture; and * Mortgages to secure Indebtedness incurred to extend, renew, refinance or replace Indebtedness secured by any Mortgages referred to above, provided that the principal amount of the extended, renewed, refinanced or replaced Indebtedness does not exceed the principal amount of Indebtedness so extended, renewed, refinanced or replaced, plus transaction costs and fees, and that any such Mortgage applies only to the same property or assets subject to the prior permitted Mortgage (and, in the case of real property, improvements). (Section 4.5) As of May 1, 1999, we had less than $2.0 million of Indebtedness secured by a Mortgage on an Operating Property. Restrictions on Sale and Leaseback Transactions. The Indenture contains a covenant that we will not, and will not permit our Restricted Subsidiaries to, enter into any arrangement with any person providing for the leasing by Kohl's Corporation or any Restricted Subsidiary of any Operating Property or Operating Asset that has been or is to be sold or transferred by Kohl's Corporation or such Restricted Subsidiary to such person with the intention of taking back a lease of such property (a "Sale and Leaseback Transaction") without equally and ratably securing the debt securities (and, if we shall so determine, any other Indebtedness ranking equally with the debt securities), unless the terms of such sale or transfer have been determined by our Board of Directors to be fair and arms'-length and either: * Within 180 days after the receipt of the proceeds of the sale or transfer, Kohl's Corporation or any Restricted Subsidiary, applies an amount equal to the greater of the net proceeds of the sale or transfer or the fair value of such Operating Property or Operating Asset at the time of such sale or transfer to the prepayment or retirement (other than any mandatory prepayment or retirement) of our Senior Funded Debt; or * Kohl's or such Restricted Subsidiary would be entitled, at the effective date of the sale or transfer, to incur Indebtedness secured by a Mortgage on such Operating Property or Operating Assets, in an amount at least equal to the Attributable Debt in respect of the Sale and Leaseback Transaction, without equally and ratably securing the debt securities pursuant to the "Restrictions on Liens" described above. The foregoing restriction will not apply to: - Any Sale and Leaseback Transaction for a term of not more than three years including renewals; - Any Sale and Leaseback Transaction with respect to Operating Property (and, with respect to distribution centers, equipment used directly in the operation of, or the business conducted on, such Operating Property) if a binding commitment with respect thereto is entered into within three years after the latest of (1) the date of issuance of the first series of debt securities under the Indenture (February 6, 1996) or (2) the date such Operating Property was acquired; - Any Sale and Leaseback Transaction with respect to Operating Assets if a binding commitment with respect thereto is entered into within 180 days after the later of the date such property was acquired and, if applicable, the date such property was first placed in operation; or - Any Sale and Leaseback Transaction between Kohl's Corporation and a Restricted Subsidiary or between Restricted Subsidiaries provided that the lessor shall be Kohl's Corporation or a Wholly Owned Restricted Subsidiary. (Section 4.6). Exempted Debt. Notwithstanding the restrictions in the Indenture on Mortgages and Sale and Leaseback Transactions, Kohl's Corporation or its Restricted Subsidiaries may, in addition to amounts permitted under such restrictions, issue, assume or guarantee Indebtedness secured by Mortgages, or enter into Sale and Leaseback Transactions, provided that, after giving effect thereto, the aggregate outstanding amount of all such Indebtedness secured by Mortgages plus Attributable Debt resulting from such Sale and Leaseback Transactions does not exceed 15% of Consolidated Net Tangible Assets. (Sections 4.5 and 4.6) Certain Definitions For purposes of the Indenture: "Attributable Debt" in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value (discounted at the imputed rate of interest of such transaction determined in accordance with generally accepted accounting principles) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Capitalized Lease Obligations" means obligations created pursuant to leases which are required to be shown on the liability side of a balance sheet in accordance with generally accepted accounting principles. "Consolidated Net Tangible Assets" means the total amounts of assets (less depreciation and valuation reserves and other reserves and items deductible from gross book value of specific asset accounts under generally accepted accounting principles) which under generally accepted accounting principles would be included on a balance sheet of Kohl's Corporation and its Restricted Subsidiaries after deducting (1) all liability items except Funded Debt, Capitalized Lease Obligations, stockholders' equity and reserves for deferred income taxes, (2) all goodwill, trade names, trademarks, patents, favorable lease rights, unamortized debt discount and expense and other like intangibles (other than leasehold costs and investments in so-called safe harbor leases), which in each such case would be so included on such balance sheet, net of accumulated amortization, and (3) all amounts which would be so included on such balance sheet in respect of Investments (less applicable reserves) in Unrestricted Subsidiaries in excess of the amount of such Investments at November 25, 1995 (approximately $74.3 million). "Funded Debt" means Indebtedness which matures more than one year from the date of creation, or which is extendable or renewable at the sole option of the obligor so that it may become payable more than one year from such date. Funded Debt does not include (1) obligations created pursuant to leases, (2) any Indebtedness or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such Indebtedness shall be extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from such time, or (3) any Indebtedness for the payment or redemption of which money in the necessary amount shall have deposited in trust either at or before the maturity date thereof. "Indebtedness" means indebtedness for borrowed money and indebtedness under purchase money mortgages or other purchase money liens or conditional sales or similar title retention agreements, in each case where such indebtedness has been created, incurred, or assumed by such person to the extent such indebtedness would appear as a liability upon a balance sheet of such person prepared in accordance with generally accepted accounting principles, guarantees by such person of such indebtedness, and indebtedness for borrowed money secured by any mortgage, pledge or other lien or encumbrance upon property owned by such person, even though such person has not assumed or become liable for the payment of such indebtedness. "Investment" means and includes any investment in stock, evidences of indebtedness, loans or advances, however made or acquired, but shall not include accounts receivable of Kohl's Corporation or of any Restricted Subsidiary arising from transactions in the ordinary course of business, or any evidences of Indebtedness, loans or advances made in connection with the sale to any Subsidiary of accounts receivable of Kohl's Corporation or any Restricted Subsidiary arising from transactions in the ordinary course of business of Kohl's Corporation or any Restricted Subsidiary. "Mortgage" means any mortgage, security interest, pledge, lien or other encumbrance. "Operating Assets" means all merchandise inventories, furniture and equipment (including all transportation and warehousing equipment, store racks and showcases but excluding office equipment and data processing equipment) owned by Kohl's Corporation or a Restricted Subsidiary. "Operating Property" means all real property and improvements thereon owned by Kohl's Corporation or a Restricted Subsidiary and constituting, without limitation, any store, warehouse, service center or distribution center wherever located. This term does not include any store, warehouse, service center or distribution center that our Board of Directors declares by resolution not to be of material importance to the business of Kohl's Corporation and its Restricted Subsidiaries. "Restricted Subsidiary" means Kohl's Department Stores, Inc. and any other Subsidiary so designated by the Board of Directors or duly authorized officers of Kohl's Corporation in accordance with the Indenture provided that (a) the Board of Directors or duly authorized officers of Kohl's Corporation may, subject to certain limitations, designate any Unrestricted Subsidiary as a Restricted Subsidiary and any Restricted Subsidiary (other than Kohl's Department Stores, Inc.) as an Unrestricted Subsidiary and (b) any Subsidiary of which the majority of the voting stock is owned directly or indirectly by one or more Unrestricted Subsidiaries shall be an Unrestricted Subsidiary. As of the date of this offering memorandum, Kohl's Department Stores, Inc. is the only Restricted Subsidiary. "Senior Funded Debt" means all Funded Debt of Kohl's Corporation or any person (except Funded Debt, the payment of which is subordinated to the payment of the debt securities). "Subsidiary" means any corporation of which at least a majority of the outstanding stock having voting power under ordinary circumstances to elect a majority of the board of directors of said corporation or business entity is at the time owned or controlled by Kohl's Corporation, or by Kohl's Corporation and one or more Subsidiaries, or by any one or more Subsidiaries. "Unrestricted Subsidiary" means any Subsidiary other than a Restricted Subsidiary. Global Notes and Book-Entry System Except as described below, the new debentures will be represented by one or more Global Notes if the old debentures are so represented. We will deposit the Global Notes representing these new debentures with DTC, and the Global Notes will be registered in the name of DTC or its nominee. DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act. DTC holds securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, which eliminates the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a direct or indirect custodial relationship with a participant ("indirect participants"). The rules applicable to DTC and its participants are on file with the SEC. Upon the issuance of the Global Notes, DTC or its custodian will credit, on its internal system, the respective principal amount of the individual beneficial interests represented by the Global Notes to the accounts of the persons who have accounts with DTC. Ownership of beneficial interests in the Global Notes will be limited to persons who have accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in the Global Notes will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). So long as DTC or its nominee is the registered owner or holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole record owner or holder of the debentures represented by such Global Note for all purposes under the Indenture and the debentures. Except as set forth herein, owners of beneficial interests in the Global Note will not be entitled to have debentures represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of debentures in definitive certificated form, and will not be considered holders of the debentures for any purposes under the Indenture. Accordingly, each person owning a beneficial interest in the Global Note must rely on the procedures of DTC and, if such person is not a participant, on the procedures of the participant through which such person directly or indirectly owns its interest, to exercise any rights of a holder under the Indenture. We understand that under existing industry practices, if we request any action of holders or any owner of a beneficial interest in the Global Notes desires to give any notice or take any action that a holder is entitled to give or take under the Indenture, DTC would authorize the participants holding the relevant beneficial interest to give such notice or take such action, and such participants would authorize beneficial owners owning through such participants to give such notice or take such action or would otherwise act upon the instructions of beneficial owners owning through them. Payments of the principal of, premium, if any, and interest on the Global Note will be made to DTC or its nominee, as the case may be, as the registered owner. Neither we, the Trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We expect that DTC or its nominee, upon receipt of any payment of principal of, premium, if any, or interest in respect of the Global Note will credit participants' accounts with payments in amounts proportionate to their respective beneficial ownership interests in the principal amount of the Global Note, as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. The participants will be responsible for such payments. If DTC is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Exchange Act and we do not appoint a successor depositary within ninety days, or if there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default with respect to the debentures, then we will issue in definitive registered form in exchange for the Global Note representing the debentures. In addition, we may at any time and in our sole discretion determine not to have the debentures represented by one or more Global Notes and, in such event, will issue debentures in definitive registered form in exchange for all the Global Notes. In any such instance, an owner of a beneficial interest in a Global Note will be entitled to physical delivery in definitive form of debentures equal in principal amount to its beneficial interest and to have the debentures registered in its name. We expect that instructions for registering the debentures in definitive form would be based upon directions received from the DTC with respect to ownership of the beneficial interests in the Global Note. Although DTC has agreed to the procedures described above in order to facilitate transfers of interests in the Global Note among participants of DTC, it is under no obligation to perform such procedures and such procedures may be discontinued at any time. Neither we nor the Trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. We have been informed by DTC that its management is aware that some computer applications, systems, and the like for processing data that are dependent upon calendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000 problems." We have also been informed by DTC that it has informed its participants and other members of the financial community that it has developed and is implementing a program so that its systems, as the same relate to the timely payment of distributions (including principal and income payments) to securityholders, book-entry deliveries, and settlement of trades within DTC continue to function appropriately. According to DTC, this program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC has informed us that its plan includes a testing phase, which is expected to be completed within appropriate time frames. However, we have been informed by DTC that its ability to perform properly its services is also dependent upon other parties, including but not limited to issuers and their agents, as well as third party vendors from whom DTC licenses software and hardware, and third party vendors on whom DTC relies for information or the provision of services, including telecommunications and electrical utility service providers, among others. DTC has informed us that it is contacting (and will continue to contact) third party vendors from whom DTC acquires services to: (1) impress upon them the importance of such services being Year 2000 compliant; and (2) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC has informed us that it is in the process of developing such contingency plans as it deems appropriate. According to DTC, the foregoing information with respect to DTC has been provided by it for informational purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following discussion summarizes the material federal income tax considerations of the issuance of the new debentures and the exchange offer. This summary does not discuss all aspects of federal income taxation that may be relevant to particular holders of new debentures, especially in light of a holder's personal investment circumstances, or to certain types of holders subject to special treatment under the federal income tax laws (for example, life insurance companies, tax-exempt organizations and foreign corporations and individuals who are not citizens or residents of the United States) and does not discuss any aspects of state, local or foreign taxation. This discussion is limited to those holders who will hold the new debentures as "capital assets" (generally, property held for investment) within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This summary is based upon laws, regulations, rulings and decisions now in effect and upon proposed regulations, all of which are subject to change (possibly with retroactive effect) by legislation, administrative action or judicial decision. Exchange Offer. The exchange of old debentures for new debentures pursuant to the exchange offer should not be treated as a taxable "exchange" because the new debentures should not be considered to differ materially in kind or extent from the old debentures. Rather, the new debentures received by a holder of the old debentures should be treated as a continuation of the old debentures. As a result, there should be no gain or loss to holders exchanging the old debentures for the new debentures pursuant to the exchange offer. Interest. A holder will be required to include in gross income the stated interest on the old debentures or the new debentures in accordance with the holder's method of tax accounting. In addition, a holder will be required to include in gross income amortization of the original issuance discount attributable to the old debentures (which is the difference between the face amount of the old debentures and their original purchase price). Because the tax basis of the old debentures carries over to the new debentures (discussed below), the amortization of the original issuance discount will apply to the new debentures. Tax Basis. Generally, a holder's tax basis in a debenture will initially be the holder's purchase price for the debenture, and will be increased by the amount of amortization of original issuance discount, and will be decreased by the amount of any principal payments received. If a holder exchanges an old debenture for a new debenture pursuant to the exchange offer, the tax basis of the new debenture immediately after such exchange should equal the holder's tax basis in the old debenture immediately prior to the exchange. Sale. The sale, exchange or other disposition of a debenture (other than pursuant to the exchange offer) generally will be a taxable event. A holder generally will recognize gain or loss equal to the difference between (a) the amount of cash plus the fair market value of any property received upon such sale, exchange or other taxable disposition of a debenture (other than in respect of accrued interest on the debenture) and (b) the holder's adjusted tax basis in such debenture. Such gain or loss will be capital gain or loss and would be long-term capital gain or loss if the notes were held by the holder for the applicable holding period (currently more than one year) at the time of such sale or other disposition. The holding period of each new debenture would include the holding period of the old debentures exchanged therefor. Purchasers of Debentures at Other than Original Issuance. The above summary does not discuss special rules which may affect the treatment of purchasers that acquire debentures other than at original issuance, including those provisions of the Code relating to the treatment of "market discount" and "acquisition premium." Any such purchaser should consult its tax advisor as to the consequences to him of the acquisition, ownership and disposition of debentures. Backup Withholding. Unless a holder or other payee provides his correct taxpayer identification number (employer identification number or social security number) to us (as payor) and certifies that such number is correct, under the federal income tax backup withholding rules, generally 31% of (a) the interest paid on the debentures, and (b) proceeds of sale or other disposition of the debentures must be withheld and remitted to the United States Department of Treasury. Therefore, each holder should complete and sign the Substitute Form W-9 so as to provide the information and certification necessary to avoid backup withholding. However, certain exchanging holders (including, among others, certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt foreign recipient, that exchanging holder must submit a statement, signed under penalties of perjury, attesting to that individual's exempt foreign status. Withholding is not an additional federal income tax. Rather, the federal income tax payable by a person subject to withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The foregoing summary is included for general information only. Each holder of debentures should consult its tax advisor as to the specific tax consequences to it of the exchange offer, including the application of and effect of state, local, foreign and other tax laws. PLAN OF DISTRIBUTION Each broker-dealer that receives new debentures for its own account as a result of market-making activities or other trading activities in connection with the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new debentures. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new debentures received in exchange for old debentures where such old debentures were acquired as a result of market-making activities or other trading activities. We will receive no proceeds in connection with the exchange offer or any sale of new debentures by broker- dealers. New debentures received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new debentures or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealers or the purchasers of any such new debentures. Any broker-dealer that resells new debentures that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new debentures may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new debentures and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver, and by delivering, a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. LEGAL MATTERS Certain legal matters or in connection with the new debentures will be passed upon for us by Godfrey & Kahn, S.C., Milwaukee, Wisconsin. Mr. Peter M. Sommerhauser is a director of Kohl's and a shareholder and a member of the Management Committee of Godfrey & Kahn, S.C. As of March 31, 1999, Mr. Sommerhauser had voting and investment control of 16,721,173 shares of common stock of Kohl's or 10.3% of the outstanding shares. EXPERTS Ernst & Young LLP, independent auditors, have audited our consolidated financial statements and schedule appearing in our Annual Report on Form 10-K for the year ended January 30, 1999, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our consolidated financial statements and schedule are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. $200,000,000 Exchange Offer Kohl's Corporation 7 1/4% Debentures due June 1, 2029 ____________________ PROSPECTUS ____________________ PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers Section 180.0851 of the Wisconsin Business Corporation Law (the "WBCL") requires the Company to indemnify a director or officer, to the extent such person is successful on the merits or otherwise in the defense of a proceeding for all reasonable expenses incurred in the proceeding, if such person was a party to such proceeding because he or she was a director or officer of the Company unless it is determined that he or she breached or failed to perform a duty owed to the Company and such breach or failure to perform constitutes: (i) a willful failure to deal fairly with the Company or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; (ii) a violation of criminal law, unless the director or officer had reasonable cause to believe his or her conduct was unlawful; (iii) a transaction from which the director or officer derived an improper personal profit; or (iv) willful misconduct. Section 180.0858 of the WBCL provides that subject to certain limitations, the mandatory indemnification provisions do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under the article of incorporation or bylaws of the Company, a written agreement between the director or officer and the Company, or a resolution of the Board of Directors or the shareholders. Unless otherwise provided in the Company's articles of incorporation or bylaws, or by written agreement between the director or officer and the Company, an officer or director seeking indemnification is entitled to indemnification if approved in any of the following manners as specified in Section 180.0855 of the WBCL: (i) by majority vote of a disinterested quorum of the board of directors; (ii) by independent legal counsel chosen by a quorum of disinterested directors or its committee; (iii) by a panel of three arbitrators (one of which is chosen by a quorum of disinterested directors); (iv) by the vote of the shareholders; (v) by a court; or (vi) by any other method permitted in Section 180.0858 of the WBCL. Reasonable expenses incurred by a director or officer who is a party to a proceeding may be reimbursed by the Company, pursuant to Section 180.0853 of the WBCL, at such time as the director or officer furnishes to the Company written affirmation of his or her good faith that he or she has not breached or failed to perform his or her duties and written confirmation to repay any amounts advanced if it is determined that indemnification by the Company is not required. Section 180.0859 of the WBCL provides that it is the public policy of the State of Wisconsin to require or permit indemnification, allowance of expenses or insurance to the extent required or permitted under Sections 180.0850 or 180.0858 of the WBCL for any liability incurred in connection with a proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities. As permitted by Section 180.0858, the Company has adopted indemnification provisions in its By-Laws which closely track the statutory indemnification provisions with certain exceptions. In particular, Article VIII of the Company's By-Laws, among other items, provides (i) that an individual shall be indemnified unless it is proven by a final judicial adjudication that indemnification is prohibited and (ii) payment or reimbursement of expenses, subject to certain limitations, will be mandatory rather than permissive. Through insurance, the officers and directors of the Company are also insured for acts or omissions related to the conduct of their duties. The insurance covers certain liabilities which may arise under the Securities Act of 1933, as amended. Under Section 180.0828 of the WBCL, a director of the Company is not personally liable for breach of any duty resulting solely from his or her status as a director, unless it shall be proved that the director's conduct constituted conduct described in the first paragraph of this item. ITEM 21. Exhibits and Financial Statement Schedules (a) Exhibits 1 Purchase Agreement, dated as of May 26, 1999, between Kohl's Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc. 4.1 Indenture, dated December 1, 1995, between Kohl's Corporation and The Bank of New York, as trustee, incorporated herein by reference to exhibit 4.3 of the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 1996. 4.2 First Supplemental Indenture, dated June 1, 1999, between Kohl's Corporation and The Bank of New York, as trustee. 4.3 Registration Rights Agreement, dated as of June 1, 1999, between Kohl's Corporation, Merill Lynch, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc. 5 Opinion of Godfrey & Kahn, S.C. as to the legality of the securities being registered. 12 Computation of Ratio of Earnings to Fixed Charges, incorporated herein by reference to exhibit 12.1 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 1999. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Godfrey & Kahn, S.C. (contained in Exhibit 5). 24 Powers of attorney (contained on the signature page to this Registration Statement). 25 Form T-1 Statement of eligibility under the Trust Indenture Act of 1939 of The Bank of New York. 99.1 Form of Letter of Transmittal. 99.2 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99.3 Form of Letter to Clients. 99.4 Form of Notice of Guaranteed Delivery. (b) Not Applicable. (c) Not Applicable. ITEM 22. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, pursuant to the provisions described in Item 20, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that the claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (6) To respond to requests for information that is incorporated by reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed after the effective date of this Registration Statement through the date of responding to the request. (7) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this Registration Statement when it became effective. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menomonee Falls, State of Wisconsin, on July 15, 1999. KOHL'S CORPORATION By: /s/ William S. Kellogg ------------------------ William S. Kellogg Chairman of the Board POWER OF ATTORNEY Each person whose signature appears below appoints William S. Kellogg, R. Lawrence Montgomery and Kevin Mansell, and each of them, as his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments), to this Registration Statement (or any other Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended) and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, and any other regulatory authority, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing, requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated: /s/William S. Kellogg /s/R. Lawrence Montgomery - --------------------------- ----------------------------- William S. Kellogg R. Lawrence Montgomery Chairman and Director Vice Chairman, Chief Executive Officer and Director /s/Kevin Mansell /s/Arlene Meier - -------------------------- ------------------------------------- Kevin Mansell Arlene Meier, Chief Financial Officer President and Director (Principal Financial and Accounting Officer) /s/Jay Baker /s/James Ericson - ------------------------- ----------------------------------- Jay Baker James Ericson Director Director - ------------------------- ----------------------------------- John F. Herma Frank V. Sica Director Director /s/Peter M. Sommerhauser - ------------------------ ----------------------------------- Herbert Simon Peter M. Sommerhauser Director Director - ------------------------- R. Elton White Director Dated: July 15, 1999 EX-1 2 PURCHASE AGREEMENT Exhibit 1 EXECUTION COPY KOHL'S CORPORATION (a Wisconsin corporation) 7 1/4% Debentures due 2029 PURCHASE AGREEMENT Dated: May 26, 1999 Table of Contents SECTION 1. Representations and Warranties by the Company 2 (a) Representations and Warranties 2 (i) Offering Memorandum 2 (ii) Incorporated Documents 3 (iii) Independent Accountants 3 (iv) Financial Statements 3 (v) No Material Adverse Change in Business 3 (vi) Good Standing of the Company 4 (vii) Good Standing of Designated Subsidiaries 4 (viii) Capitalization 4 (ix) Authorization of Agreement 4 (x) Authorization of the Indenture 4 (xi) Authorization of the Supplemental Indenture 4 (xii) Authorization of the Securities 5 (xiii) Authorization of the Registration Rights Agreement 5 (xiv) Absence of Defaults and Conflicts; Absence of Further Requirements 5 (xv) Absence of Proceedings 5 (xvi) Possession of Licenses and Permits 6 (xvii) Environmental Laws 6 (xviii)Investment Company Act 6 xix) Similar Offerings 6 (xx) Rule 144A Eligibility 6 (xxi) No General Solicitation 7 (xxii) No Registration Required 7 (xxiii)Reporting Company 7 (xxiv) No Directed Selling Efforts 7 (xxv) No Stabilization or Manipulation 7 (xxvi) Year 2000. 7 (b) Officer's Certificates 8 SECTION 2. Sale and Delivery to Initial Purchasers; Closing 8 (a) Securities 8 (b) Payment 8 (c) Denominations; Registration 8 SECTION 3. Covenants of the Company 9 (a) Offering Memorandum 9 (b) Notice and Effect of Material Events 9 (c) Amendment to Offering Memorandum and Supplements 9 (d) Qualification of Securities for Offer and Sale 9 (e) Rating of Securities 10 (f) DTC 10 (g) Use of Proceeds 10 (h) Restriction on Sale of Securities 10 SECTION 4. Payment of Expenses 10 (a) Expenses 10 (b) Termination of Agreement 11 SECTION 5. Conditions of Initial Purchasers' Obligations 11 (a) Opinion of Counsel for Company 11 (b) Opinion of General Counsel for Company 11 (c) Opinion of Counsel for Initial Purchasers 11 (d) Officers' Certificate 11 (e) Accountants' Comfort Letter 12 (f) Bring-down Comfort Letter 12 (g) Maintenance of Rating 12 (h) Additional Documents 12 (i) Termination of Agreement 12 SECTION 6. Subsequent Offers and Resales of the Securities 13 (a) Offer and Sale Procedures 13 (i) Offers and Sales only to Qualified Institutional Buyers and Institutional Accredited Investors 13 (ii) No General Solicitation 13 (iii) No Directed Selling Efforts 13 (iv) Purchases by Non-Bank Fiduciaries 13 (v) Subsequent Purchaser Notification 13 (vi) Minimum Denomination Amount 14 (vii) Restrictions on Transfer 14 (b) Covenants of the Company 14 (i) Integration 14 (ii) Rule 144A Information 14 (iii) Restriction on Resales 14 (c) Qualified Institutional Buyer 15 (d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A 15 SECTION 7. Indemnification and Contribution 15 SECTION 8. Representations, Warranties and Agreements to Survive Delivery 18 SECTION 9. Termination of Agreement 19 (a) Termination; General 19 (b) Liabilities 19 SECTION 10. Default by One or More of the Initial Purchasers 19 SECTION 11. Notices 20 SECTION 12. Parties 20 SECTION 13. GOVERNING LAW AND TIME 20 SECTION 14. Effect of Headings 20 SCHEDULES Schedule A - List of Initial Purchasers Sch A-1 Schedule B - Pricing Information Sch B-1 EXHIBITS Exhibit A - Form of Opinion of Company's Counsel A-1 Exhibit B - Form of Opinion of Company's General Counsel B-1 ANNEXES Annex A - Form of Accountants' Comfort Letter Annex A-1 KOHL'S CORPORATION (a Wisconsin corporation) $200,000,000 7 1/4% Debentures due 2029 PURCHASE AGREEMENT May 26, 1999 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated BNY Capital Markets, Inc. Banc One Capital Markets, Inc. as Representative(s) of the several Initial Purchasers c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281 Ladies and Gentlemen: Kohl's Corporation, a Wisconsin corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other Initial Purchasers named in Schedule A hereto (collectively, the "Initial Purchasers", which term shall also include any initial purchaser substituted as hereinafter provided in Section 11 hereof), for whom Merrill Lynch, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc., acting as representative(s) (in such capacity, the "Representative(s)"), with respect to the issue and sale by the Company and the purchase by the Initial Purchasers, acting severally and not jointly, of the respective principal amounts set forth in said Schedule A of $200,000,000 aggregate principal amount of the Company's 7 1/4% Debentures due 2029 (the "Securities"). The Securities are to be issued pursuant to an indenture dated as of December 1, 1995 (the "Indenture") , as amended by the First Supplemental Indenture dated as of June 1, 1999 (the "Supplemental Indenture") between the Company and The Bank of New York, as trustee (the "Trustee"). Securities issued in book-entry form will be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC. The Company understands that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and agrees that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers ("Subsequent Purchasers") at any time after this Agreement has been executed and delivered. The Securities are to be offered and sold through the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom. Pursuant to the terms of the Securities, the Indenture and the Supplemental Indenture, investors that acquire Securities may only resell or otherwise transfer such Securities if such Securities are hereafter registered under the 1933 Act or if an exemption from the registration requirements of the 1933 Act is available (including the exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S") of the rules and regulations promulgated under the 1933 Act by the Securities and Exchange Commission (the "Commission")). The Company has prepared and delivered to each Initial Purchaser copies of a preliminary offering memorandum dated May 20, 1999 (the "Preliminary Offering Memorandum") and has prepared and will deliver to each Initial Purchaser, on the date hereof or the next succeeding day, copies of a final offering memorandum dated May 26, 1999 (the "Final Offering Memorandum"), each for use by such Initial Purchaser in connection with its solicitation of purchases of, or offering of, the Securities. "Offering Memorandum" means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Preliminary Offering Memorandum or the Final Offering Memorandum, or any amendment or supplement to either such document), including exhibits thereto and any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Initial Purchasers in connection with their solicitation of purchases of, or offering of, the Securities. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the Offering Memorandum. SECTION 1. Representations and Warranties by the Company. (a) Representations and Warranties. The Company represents and warrants to each Initial Purchaser as of the date hereof and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Initial Purchaser, as follows: (i) Offering Memorandum. The Offering Memorandum does not, and at the Closing Time will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by any Initial Purchaser through Merrill Lynch expressly for use in the Offering Memorandum. (ii) Incorporated Documents. The Offering Memorandum as delivered from time to time shall incorporate by reference the most recent Annual Report of the Company on Form 10-K filed with the Commission and each Quarterly Report of the Company on Form 10-Q and each Current Report of the Company on Form 8-K filed with the Commission since the filing of the end of the fiscal year to which such Annual Report relates. The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Offering Memorandum, at the time the Offering Memorandum was issued and at the Closing Time, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (iii) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Offering Memorandum are independent public accountants with respect to the Company and its subsidiaries within the meaning of Regulation S-X under the 1933 Act. (iv) Financial Statements. The financial statements, together with the related schedules and notes, included in the Offering Memorandum present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, except as stated therein, and, with respect to interim financial statements, subject to year-end adjustments and the absence of complete footnotes. The supporting schedules, if any, included in the Offering Memorandum present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Offering Memorandum present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Offering Memorandum. (v) No Material Adverse Change in Business. There has not occurred any material adverse change, or any development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole ("Material Adverse Effect"), from that set forth in the Offering Memorandum (exclusive of any amendments or supplements thereto effected subsequent to the date of this Agreement). (vi) Good Standing of the Company. The Company is validly existing as a corporation in good standing under the laws of the State of Wisconsin, has the corporate power and authority to own its property and to conduct its business as described in the Offering Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. (vii) Good Standing of Designated Subsidiaries. Kohl's Department Stores, Inc., a Delaware corporation, Kohl's Receivables Corporation, a Wisconsin corporation, Kohl's Investment Corp., a Delaware corporation, Kohl's Pennsylvania, Inc., a Pennsylvania corporation and Kohl's Illinois, Inc., a Nevada corporation, are the only "significant subsidiaries" of the Company (as such term is defined under Regulation S-X) and each is validly existing as a corporation in good standing under the laws of the State of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Offering Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. (viii) Capitalization. All the outstanding shares of common stock have been duly authorized and are validly issued, fully paid and, subject to Wisconsin Business Corporation Law 180.0622(2)(b), nonassessable. (ix) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company. (x) Authorization of the Indenture. The Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms, as limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting the enforcement of creditors' rights and (ii) the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (xi) Authorization of the Supplemental Indenture. The Supplemental Indenture has been duly authorized by the Company, and, when executed and delivered by the Company and the Trustee, will constitute a valid and binding agreement of the Company, enforceable in accordance with its terms, as limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting the enforcement of creditors' rights and (ii) the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (xii) Authorization of the Securities. The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and the Supplemental Indenture delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will be entitled to the benefits of the Indenture and Supplemental Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, as limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting the enforcement of creditors' rights and (ii) the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (xiii) Authorization of the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Company, and, when executed and delivered by the Company, will constitute a valid and binding agreement of the Company, enforceable in accordance with its terms, as limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting the enforcement of creditors' rights and (ii) the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); provided that no representation is made with respect to Section 5 of the Registration Rights Agreement. (xiv) Absence of Defaults and Conflicts; Absence of Further Requirements. The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture, the Supplemental Indenture, the Securities and the Registration Rights Agreement will not contravene any provision of applicable federal or state law or the articles of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any federal or state governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of or qualification with any federal or state governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture, the Supplemental Indenture, the Securities and the Registration Rights Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Securities or by the 1933 Act and the Trust Indenture Act of 1939, as amended (the "1939 Act"), in connection with the exchange offer as contemplated by the Registration Rights Agreement. (xv) Absence of Proceedings. There are no legal or governmental proceedings pending, and the Company does not know of any proceedings that are threatened, to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the documents incorporated by reference in the Offering Memorandum and are not so described or any statutes, regulations, material contracts or other documents that are required to be described in the documents incorporated by reference in the Offering Memorandum or to be filed or incorporated by reference as exhibits to such incorporated documents that are not described, filed or incorporated as required. (xvi) Possession of Licenses and Permits. Each of the Company and its subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental, administrative or regulatory authorities, all self- regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Offering Memorandum, except to the extent that the failure to obtain or file would not have a Material Adverse Effect. (xvii) Environmental Laws. The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect. (xviii) Investment Company Act. The Company is not an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended. (xix) Similar Offerings. Neither the Company nor any of its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), has, directly or indirectly, solicited any offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the 1933 Act. (xx) Rule 144A Eligibility. The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Time, of the same class as securities listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation system. (xxi) No General Solicitation. None of the Company, its Affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the 1933 Act. (xxii) No Registration Required. Subject to compliance by the Initial Purchasers with the representations, warranties and agreements set forth in Sections 2 and 6 and the procedures and agreements set forth in Section 6 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the 1933 Act or to qualify the Indenture under the 1939 Act. (xxiii) Reporting Company. The Company is subject to the reporting requirements of Section 13 or Section 15(d) of the 1934 Act. (xxiv) No Directed Selling Efforts. With respect to those Securities sold in reliance on Regulation S, (A) none of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Company and its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has complied and will comply with the offering restrictions requirement of Regulation S. (xxv) No Stabilization or Manipulation. None of the Company, its subsidiaries, or any of their respective officers, directors or controlling persons has taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (xxvi) Year 2000. The Company has reviewed its operations and that of its subsidiaries to evaluate the extent to which the business or operations of the Company or any of its subsidiaries will be affected by the Year 2000 Problem (that is, any significant risk that computer hardware or software applications used by the Company and its subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000); as a result of such review, (i) the Company has no reason to believe, and does not believe, that (A) there are any issues related to the Company's preparedness to address the Year 2000 Problem that are of a character required to be described or referred to in the documents incorporated by reference in the Offering Memorandum which have not been accurately described in such documents or the Offering Memorandum and (B) the Year 2000 Problem will have a Material Adverse Effect or result in any material loss or interference with the business or operations of the Company and its subsidiaries, taken as a whole; and (ii) the Company reasonably believes, after due inquiry, that the suppliers, vendors, customers or other material third parties used or served by the Company and such subsidiaries are addressing or will address the Year 2000 Problem in a timely manner, except to the extent that a failure to address the Year 2000 Problem by any supplier, vendor, customer or material third party would not have a Material Adverse Effect. (b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representative(s) or to counsel for the Initial Purchasers shall be deemed a representation and warranty by the Company to each Initial Purchaser as to the matters covered thereby. SECTION 2. Sale and Delivery to Initial Purchasers; Closing. (a) Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Initial Purchaser, severally and not jointly, and each Initial Purchaser, severally and not jointly, agrees to purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of Securities set forth in Schedule A opposite the name of such Initial Purchaser, plus any additional principal amount of Securities which such Initial Purchaser may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Payment. Payment of the purchase price for, and delivery of certificates for, the Securities shall be made at the office of Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such other place as shall be agreed upon by the Representative(s) and the Company, at 9:00 A.M. (eastern time) on the third business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representative(s) and the Company (such time and date of payment and delivery being herein called the "Closing Time"). Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representative(s) for the respective accounts of the Initial Purchasers of certificates for the Securities to be purchased by them. It is understood that each Initial Purchaser has authorized the Representative(s), for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Initial Purchasers, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by any Initial Purchaser whose funds have not been received by the Closing Time, but such payment shall not relieve such Initial Purchaser from its obligations hereunder. (c) Denominations; Registration. Certificates for the Securities shall be in such denominations ($100,000 or integral multiples of $1,000 in excess thereof) and registered in such names as the Representative(s) may request in writing at least one full business day before the Closing Time. The certificates representing the Securities shall be made available for examination and packaging by the Initial Purchasers in The City of New York not later than 10:00 A.M. on the last business day prior to the Closing Time. SECTION 3. Covenants of the Company. The Company covenants with each Initial Purchaser as follows: (a) Offering Memorandum. The Company, as promptly as possible, will furnish to each Initial Purchaser, without charge, such number of copies of the Preliminary Offering Memorandum, the Final Offering Memorandum and any amendments and supplements thereto and documents incorporated by reference therein as such Initial Purchaser may reasonably request. (b) Notice and Effect of Material Events. The Company will immediately notify each Initial Purchaser, and confirm such notice in writing, of (x) any filing made by the Company of information relating to the offering of the Securities with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) prior to the completion of the placement of the Securities by the Initial Purchasers as evidenced by a notice in writing from the Initial Purchasers to the Company, any changes, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, that is material and adverse and which (i) make any statement in the Offering Memorandum false or misleading or (ii) are not disclosed in the Offering Memorandum. In such event or if during such time any event shall occur as a result of which it is necessary, in the reasonable opinion of any of the Company, its counsel, the Initial Purchasers or counsel for the Initial Purchasers, to amend or supplement the Final Offering Memorandum in order that the Final Offering Memorandum not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances then existing, the Company will forthwith amend or supplement the Final Offering Memorandum by preparing and furnishing to each Initial Purchaser an amendment or amendments of, or a supplement or supplements to, the Final Offering Memorandum (in form and substance satisfactory in the reasonable opinion of counsel for the Initial Purchasers) so that, as so amended or supplemented, the Final Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a Subsequent Purchaser, not misleading. (c) Amendment to Offering Memorandum and Supplements. The Company will advise each Initial Purchaser promptly of any proposal to amend or supplement the Offering Memorandum and will not effect such amendment or supplement without the consent of the Initial Purchasers. Neither the consent of the Initial Purchasers, nor the Initial Purchaser's delivery of any such amendment or supplement, shall constitute a waiver of any of the conditions set forth in Section 5 hereof. (d) Qualification of Securities for Offer and Sale. The Company will use its best efforts, in cooperation with the Initial Purchasers, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Representative(s) may reasonably designate and will maintain such qualifications in effect as long as required for the sale of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. (e) Rating of Securities. The Company shall take all reasonable action necessary to enable Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. ("S&P"), and Moody's Investors Service Inc. ("Moody's") to provide their respective credit ratings of the Securities. (f) DTC. The Company will cooperate with the Representative(s) and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of DTC. (g) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Offering Memorandum under "Use of Proceeds". (h) Restriction on Sale of Securities. During a period of 60 days from the date of the Offering Memorandum, the Company will not, without the prior written consent of Merrill Lynch, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any other debt securities of the Company or securities of the Company that are convertible into, or exchangeable for, the Securities or such other debt securities. SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing, delivery to the Initial Purchasers and any filing of the Offering Memorandum (including financial statements and any schedules or exhibits and any document incorporated therein by reference) and of each amendment or supplement thereto, (ii) the preparation, printing and delivery to the Initial Purchasers of this Agreement, any Agreement among Initial Purchasers, the Indenture and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Initial Purchasers, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Securities to the Initial Purchasers and any charges of DTC in connection therewith, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Initial Purchasers in connection therewith and in connection with the preparation of the Blue Sky Survey, any supplement thereto, (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, and (vii) any fees payable in connection with the rating of the Securities. (b) Termination of Agreement. If this Agreement is terminated by the Representative(s) in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Initial Purchasers. SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations of the several Initial Purchasers hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) Opinion of Counsel for Company. At the Closing Time, the Representative(s) shall have received the favorable opinion, dated as of the Closing Time, of Godfrey & Kahn, S.C., counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Initial Purchasers may reasonably request. (b) Opinion of General Counsel for Company. At the Closing Time, the Representative(s) shall have received the favorable opinion, dated as of the Closing Date, of Sigrid E. Dynek, Esq., General Counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers to the effect set forth in Exhibit B hereto and to such further effect as counsel to the Initial Purchasers may reasonably request. (c) Opinion of Counsel for Initial Purchasers. At the Closing Time, the Representative(s) shall have received the favorable opinion, dated as of the Closing Time, of Shearman & Sterling, counsel for the Initial Purchasers, together with signed or reproduced copies of such letter for each of the other Initial Purchasers with respect to the matters set forth in (iii) through (vii), inclusive, (xii) and (xiv) of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Representative(s). Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (d) Officers' Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Offering Memorandum, any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, that is material and adverse, and the Representative(s) shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, and (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time. (e) Accountants' Comfort Letter. At the time of the execution of this Agreement, the Representative(s) shall have received from Ernst & Young LLP a letter dated such date, in form and substance satisfactory to the Representative(s), together with signed or reproduced copies of such letter for each of the other Initial Purchasers containing statements and information of the type ordinarily included in accountants' "comfort letters" to Initial Purchasers with respect to the financial statements and certain financial information contained in the Offering Memorandum. (f) Bring-down Comfort Letter. At the Closing Time, the Representative(s) shall have received from Ernst & Young LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. (g) Maintenance of Rating. At the Closing Time, the Securities shall be rated at least A3 by Moody's and BBB+ by S&P, and since the date of this Agreement, there shall not have occurred a downgrading in the rating assigned to the Securities or any of the Company's other securities by any "nationally recognized statistical rating agency", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Securities or any of the Company's other securities. (h) Additional Documents. At the Closing Time, counsel for the Initial Purchasers shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representative(s) and counsel for the Initial Purchasers. (i) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative(s) by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. Subsequent Offers and Resales of the Securities. (a) Offer and Sale Procedures. Each of the Initial Purchasers and the Company hereby establish and agree to observe the following procedures in connection with the offer and sale of the Securities: (i) Offers and Sales only to Qualified Institutional Buyers and Institutional Accredited Investors. Offers and sales of the Securities have been and shall only be made (A) to persons whom the offeror or seller reasonably believes to be qualified institutional buyers, as defined in Rule 144A under the 1933 Act ("Qualified Institutional Buyers"), (B) to a limited number of persons who are institutional accredited investors, as such term is defined in Rule 501(a)(1), (2), (3) and (7) under the 1933 Act, that the offeror reasonable believes to be and, with respect to sales and deliveries, that are such institutional accredited investors ("Institutional Accredited Investors"), or (C) non- U.S. persons outside the United States, as defined in Regulation S under the 1933 Act, to whom the offeror or seller reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S under the 1933 Act. Each Initial Purchaser severally agrees that it will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States except under circumstances that will result in compliance with the applicable laws thereof, and that it will take at its own expense whatever action is required to permit its purchase and resale of the Securities in such jurisdictions. (ii) No General Solicitation. No general solicitation or general advertising (within the meaning of Rule 502(c) under the 1933 Act) has been or will be used in the United States in connection with the offering or sale of the Securities. (iii) No Directed Selling Efforts. With respect to those Securities sold in reliance on Regulation S, (A) none of the Initial Purchasers or any person acting on its behalf has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Initial Purchasers and any person acting on its behalf has complied and will comply with the offering restrictions requirement of Regulation S. (iv) Purchases by Non-Bank Fiduciaries. In the case of a non-bank Subsequent Purchaser of a Security acting as a fiduciary for one or more third parties, each third party shall, in the judgment of the applicable Initial Purchaser, be a Qualified Institutional Buyer or an Institutional Accredited Investor or a non-U.S. person outside the United States. (v) Subsequent Purchaser Notification. Each Initial Purchaser will take reasonable steps to inform, and cause each of its U.S. Affiliates to take reasonable steps to inform, persons acquiring Securities from such Initial Purchaser or affiliate, as the case may be, in the United States that the Securities (A) have not been and will not be registered under the 1933 Act, (B) are being sold to them without registration under the 1933 Act in reliance on Rule 144A or in accordance with another exemption from registration under the 1933 Act, as the case may be, and (C) may not be offered, sold or otherwise transferred except (1) to the Company, (2) outside the United States in accordance with Regulation S, or (3) inside the United States in accordance with (x) Rule 144A to a person whom the seller reasonably believes is a Qualified Institutional Buyer that is purchasing such Securities for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A or (y) pursuant to another available exemption from registration under the 1933 Act. (vi) Minimum Denomination Amount. No sale of the Securities to any one Subsequent Purchaser will be in denominations less than U.S. $100,000 and integral multiples of $1,000. If the Subsequent Purchaser is a non-bank fiduciary acting on behalf of others, each person for whom it is acting must purchase the Securities in denominations not less than U.S. $100,000 and integral multiples of $1,000. (vii) Restrictions on Transfer. The transfer restrictions and the other provisions set forth in the Offering Memorandum under the heading "Notice to Investors", including the legend required thereby, shall apply to the Securities except as otherwise agreed by the Company and the Initial Purchasers. (b) Covenants of the Company. The Company covenants with each Initial Purchaser as follows: (i) Integration. The Company agrees that it will not and will cause its Affiliates not to, directly or indirectly, solicit any offer to buy, sell or make any offer or sale of, or otherwise negotiate in respect of, securities of the Company of any class if, as a result of the doctrine of "integration" referred to in Rule 502 under the 1933 Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Company to the Initial Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the 1933 Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise. (ii) Rule 144A Information. The Company agrees that, in order to render the Securities eligible for resale pursuant to Rule 144A under the 1933 Act, while any of the Securities remain outstanding, it will make available, upon request, to any holder of Securities or prospective purchasers of Securities the information specified in Rule 144A(d)(4), unless the Company furnishes information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act. (iii) Restriction on Resales. Until the expiration of two years after the original issuance of the Securities, the Company will not, and will cause its Affiliates not to, resell any Securities which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise (except as agent acting as a securities broker on behalf of and for the account of customers in the ordinary course of business in unsolicited broker's transactions). (c) Qualified Institutional Buyer. Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Company that it is a Qualified Institutional Buyer and an "accredited investor" within the meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor"). (d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each Initial Purchaser understands that the Securities have not been and will not be registered under the 1933 Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the 1933 Act or pursuant to an exemption from the registration requirements of the 1933 Act. Each Initial Purchaser severally represents and agrees, that, except as permitted by Section 6(a) above, it has offered and sold Securities and will offer and sell Securities (i) as part of their distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commences and the Closing Time, only in accordance with Rule 903 of Regulation S, Rule 144A under the 1933 Act or another applicable exemption from the registration requirements of the 1933 Act. Accordingly, neither the Initial Purchasers, their affiliates nor any persons acting on their behalf have engaged or will engage in any directed selling efforts with respect to Securities sold hereunder pursuant to Regulation S, and the Initial Purchasers, their affiliates and any person acting on their behalf have complied and will comply with the offering restriction requirements of Regulation S. Each Initial Purchaser severally agrees that, at or prior to confirmation of a sale of Securities pursuant to Regulation S it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it or through it during the restricted period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons (i) as part of their distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commenced and the date of closing, except in either case in accordance with Regulation S or Rule 144A under the Securities Act. Terms used above have the meaning given to them by Regulation S." SECTION 7. Indemnification and Contribution. The Company agrees to indemnify and hold harmless each Initial Purchaser and each person, if any, who controls any Initial Purchaser within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Final Offering Memorandum (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any Preliminary Offering Memorandum shall not inure to the benefit of any Initial Purchaser from whom the person asserting any such losses, claims, damages or liabilities purchased Securities, or any person controlling such Initial Purchaser, if (i) a copy of the Final Offering Memorandum (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Initial Purchaser to such person, at or prior to the written confirmation of the sale of the Securities to such person, (ii) such person maintains a customer account with an address in the United States, and (iii) the Final Offering Memorandum (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, the directors of the Company, and each person, if any, who controls the Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Final Offering Memorandum (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use in any Preliminary Offering Memorandum or the Final Offering Memorandum or any amendments or supplements thereto. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to any of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing (but the failure to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 7) and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (a) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Initial Purchasers and all persons, if any, who control any Initial Purchaser within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, and each person, if any, who controls the Company within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Initial Purchasers and such control persons of Initial Purchasers, such firm shall be designated in writing by Merrill Lynch, Pierce, Fenner & Smith Incorporated. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party. If the indemnification provided for in the first or second paragraph of this Section 7 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Initial Purchasers on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Initial Purchasers, in each case as set forth in the table on the cover of the Final Offering Memorandum, bear to the aggregate initial offering price of the Securities. The relative fault of the Company on the one hand and the Initial Purchasers on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Initial Purchasers' respective obligations to contribute pursuant to this Section 7 are several in proportion to the respective principal amount of Securities they have purchased hereunder, and not joint. The Company and the Initial Purchasers agree that it would not be just or equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 7 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser or any person controlling any Initial Purchaser, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Initial Purchasers. SECTION 9. Termination of Agreement. (a) Termination; General. The Representative(s) may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Offering Memorandum, any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business affairs or operations of the Company and its subsidiaries, taken as a whole, that is material and adverse, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the reasonable judgment of the Representative(s), impracticable to market the Securities or to enforce contracts for the sale of the Securities on the terms and in the manner contemplated in the Offering Memorandum, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the NASDAQ System has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 7 and 8 shall survive such termination and remain in full force and effect. SECTION 10. Default by One or More of the Initial Purchasers. If one or more of the Initial Purchasers shall fail at the Closing Time to purchase the Securities which it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative(s) shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Initial Purchasers, or any other initial purchasers, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative(s) shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities to be purchased hereunder, each of the non-defaulting Initial Purchasers shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Initial Purchasers, or (b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Initial Purchaser. No action taken pursuant to this Section shall relieve any defaulting Initial Purchaser from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Representative(s) or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Offering Memorandum or in any other documents or arrangements. As used herein, the term "Initial Purchaser" includes any person substituted for an Initial Purchaser under this Section. SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Initial Purchasers shall be directed to the Representative(s) at North Tower, World Financial Center, New York, New York 10281, attention of Amy Lane; notices to the Company shall be directed to it at Kohl's Corporation, N56 W 17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, attention of Arlene Meier, with a copy to Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin 53202-3590, attention of Peter M. Sommerhauser. SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Initial Purchasers and the Company and their respective successors and the controlling persons and officers and directors referred to in Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Initial Purchasers and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 14. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Initial Purchasers and the Company in accordance with its terms. Very truly yours, KOHL'S CORPORATION By: /s/R. Lawrence Montgomery Name: R.Lawrence Montgomery Title: Vice Chairman and Chief Executive Officer CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED MORGAN STANLEY & CO. INCORPORATED BNY CAPITAL MARKETS, INC. BANC ONE CAPITAL MARKETS, INC. By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ A. Scott Lemone Authorized Signatory For itself and as Representative of the other Initial Purchasers named in Schedule A hereto. SCHEDULE A Principal Amount of Name of Initial Purchaser Securities Merrill Lynch, Pierce, Fenner & Smith Incorporated $124,000,000 Morgan Stanley & Co. Incorporated 64,000,000 BNY Capital Markets, Inc. 6,000,000 Banc One Capital Markets, Inc. 6,000,000 Total $200,000,000 SCHEDULE B KOHL'S CORPORATION $200,000,000 7 1/4% Debentures due 2029 1. The initial public offering price of the Securities shall be 98.629% of the principal amount thereof, plus accrued interest, if any, from the date of issuance. 2. The purchase price to be paid by the Initial Purchasers for the Securities shall be 97.754% of the principal amount thereof. 3. The interest rate on the Securities shall be 7 1/4% per annum. 4. The Securities are redeemable prior to maturity as set forth in the Offering Memorandum. Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(a) (i) the Company is validly existing as a corporation in good standing under the laws of the State of Wisconsin and has the corporate power and authority to own its property and to conduct its business as described in the Offering Memorandum; (ii) this Agreement has been duly authorized, executed and delivered by the Company; (iii) the Indenture has been duly authorized, executed and delivered by the Company and (assuming due authorization, execution and delivery thereof by the Trustee), constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms; (iv) the Supplemental Indenture has been duly authorized, executed and delivered by the Company and (assuming due authorization, execution and delivery thereof by the Trustee), constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms; (v) the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and the Supplemental Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will be entitled to the benefits of the Indenture and the Supplemental Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms; (vi) the Registration Rights Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms; (vii) the Securities, the Indenture and the Supplemental Indenture conform in all material respects to the descriptions thereof contained in the Offering Memorandum; (viii) the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture, the Supplemental Indenture and the Registration Rights Agreement will not contravene any provision of the law of the State of Wisconsin or the federal laws of the United States applicable to the Company or the articles of incorporation or by-laws of the Company or, to the best of such counsel's knowledge, any agreement or other instrument binding upon the Company or any of its subsidiaries which has been identified to such counsel by the Company as one of such agreements or instruments that is material to the Company and its subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, without independent investigation other than inquiries of responsible officers of the Company, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of or qualification with any federal or State of Wisconsin governmental body or agency is required for the performance by the Company of its obligations under this Agreement or the Indenture or the Supplemental Indenture or the Registration Rights Agreement, except such as have been obtained or may be required by securities or Blue Sky laws of the various states in connection with the offer and sale of the Securities or by the 1933 Act and the Trust Indenture Act of 1939, as amended (the "1939 Act"), in connection with the exchange offer as contemplated by the Registration Rights Agreement; (ix) the statements (1) in the Offering Memorandum under the caption "Description of Debentures" (2) to such counsel's knowledge, after due inquiry of responsible officers of the Company, under the caption "Executive Compensation-Employment Agreements" and "-Other Agreements" in the Company's Proxy Statement for the Annual Meeting of Shareholders held on May 25, 1999, in each case insofar as such statements constitute summaries of the legal matters or documents referred to therein, fairly present the information called for with respect to such legal matters and documents and fairly summarize the matters referred to therein; (x) the Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; (xi) the statements in the Offering Memorandum under the caption "Certain United States Tax Consequences to Non-United States Holders" insofar as such statements constitute a summary of the United States federal tax laws referred to therein, are accurate and fairly summarize the United States federal tax laws referred to therein; (xii) based upon the representations, warranties and agreements of the Company and the Initial Purchasers in the Purchase Agreement, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers under the Purchase Agreement or in connection with the initial resale of such Securities by the Initial Purchasers in accordance with the Purchase Agreement to register the Securities under the 1933 Act or to qualify the Indenture or the Supplemental Indenture under the 1939 Act, it being understood that such counsel need express no opinion as to any subsequent resales of any Security; (xiii) each document filed pursuant to the 1934 Act and incorporated by reference in the Offering Memorandum complied when so filed as to form in all material respects with the 1934 Act and the applicable rules and regulations of the Commission thereunder and such counsel need not express any opinion as to the financial statements, schedules and other financial data included in or excluded from such documents filed pursuant to the 1934 Act and such counsel need not assume any responsibility for the accuracy, completeness or fairness of the statements contained in such documents filed pursuant to the 1934 Act (other than as specified in subparagraph (ix) above insofar as the statements referred to therein relate to provisions of documents and other legal matters); and (xiv) in addition, such opinion shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company, and with your representatives and your counsel at which the contents of the Offering Memorandum and related matters were discussed and, although such counsel need not pass upon or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Memorandum and need not make any independent check or verification thereof (other than as specified in subparagraphs (vii), (ix) and (xi) above insofar as the captions referred to therein relate to provisions of documents), on the basis of the foregoing, no facts have come to the attention of such counsel which have led such counsel to believe that the Offering Memorandum, as of its date and as of the Closing Date, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial data included in or excluded from the Offering Memorandum. Such counsel may also state in such opinion that (i) such opinion is limited to the laws of the United States, the State of Wisconsin and the General Corporation Law of the State of Delaware, and (ii) each of subparagraphs (iii), (iv), (v) and (vi) is limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws affecting the enforcement of creditors' rights and (ii) the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law), including without limitation concepts of materiality, reasonableness, good faith and fair dealing. In applying such principles, a court, among other things, might not allow the Trustee to take action based upon the occurrence of a default deemed immaterial, and such counsel may assume that the Trustee will at all times act in good faith, in a commercially reasonable manner and in compliance with all laws and regulations. Such counsel need not express an opinion in subparagraph (vi) as to the enforceability of Section 5 of the Registration Rights Agreement. Such counsel may assume that the laws of the State of New York are identical to the laws of the State of Wisconsin. (xiv) Exhibit B FORM OF OPINION FROM GENERAL COUNSEL OF COMPANY TO BE DELIVERED PURSUANT TO SECTION 5(b) (i) the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; (ii) each of Kohl's Department Stores, Inc., Kohl's Receivables Corporation, Kohl's Investment Corp., Kohl's Pennsylvania, Inc. and Kohl's Illinois, Inc. is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; (iii) each of Kohl's Department Stores, Inc., Kohl's Receivables Corporation, Kohl's Investment Corp., Kohl's Pennsylvania, Inc. and Kohl's Illinois, Inc. is validly existing as a corporation in good standing under the laws of its state of incorporation, and has the corporate power and authority to own its property and to conduct its business as described in the Offering Memorandum; (iv) the statements, to such counsel's knowledge, after due inquiry, in "Item 3 - Legal Proceedings" of the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 1999, insofar as such statements constitute summaries of the legal matters or proceedings referred to therein, fairly present the information called for with respect to such legal matters and proceedings and fairly summarize the matters referred to therein; and (v) after due inquiry, such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that is required to be described in the documents incorporated by reference in the Offering Memorandum and is not so described or of any statutes, regulations, material contracts or other documents that are required to be described in the documents incorporated by reference in the Offering Memorandum or to be filed or incorporated by reference as exhibits to such incorporated documents that are not described, filed or incorporated as required. Annex A FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e) EX-4.2 3 FIRST SUPPLEMENTAL INDENTURE Exhibit 4.2 EXECUTION COPY KOHL'S CORPORATION AND THE BANK OF NEW YORK, Trustee ________________________________________ First Supplemental Indenture Dated as of June 1, 1999 To Indenture Dated as of December 1, 1995 _______________________________________ FIRST SUPPLEMENTAL INDENTURE, dated as of June 1, 1999 (this "First Supplemental Indenture"), between Kohl's Corporation, a corporation duly organized and existing under the laws of the State of Wisconsin (herein called the "Company"), having its principal office at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, and The Bank of New York, a New York banking corporation, as Trustee (herein called the "Trustee") under the Indenture dated as of December 1, 1995 between the Company and the Trustee (the "Original Indenture"). Recitals of the Company The Company has executed and delivered the Original Indenture to the Trustee to provide for the issuance from time to time of its unsecured debentures, notes or other debt instruments (the "Securities"), to be issued in one or more series as provided in the Indenture. Pursuant to the terms of the Original Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 7 1/4% Debentures due June 1, 2029 (herein called the "Debentures"), in this First Supplemental Indenture. All things necessary to make this First Supplemental Indenture a valid agreement of the Company have been done. Now, Therefore, This First Supplemental Indenture Witnesseth: For consideration, the adequacy and sufficiency of which are hereby acknowledged by the parties hereto, each party agrees as follows, for the benefit of the other parties and for the equal and proportionate benefit of all Holders of the Debentures, as follows: ARTICLE ONE DEFINED TERMS Section 101. Defined Terms. Except as otherwise expressly provided in this First Supplemental Indenture or in the form of or otherwise clearly required by the context hereof or thereof, all capitalized terms used and not defined herein or in said form of that are defined in the Original Indenture shall have the meanings assigned to them in the Original Indenture. The Original Indenture, as supplemented from time to time, including by this First Supplemental Indenture, is hereafter referred to as the "Indenture". For all purposes of this First Supplemental Indenture: "Closing Date" means June 1, 1999. "Commission" means the Securities and Exchange Commission. "Debentures" means any of the securities, as defined in the second paragraph of the recitals hereof, that are authenticated and delivered under the Indenture. For all purposes of the Indenture, the term "Debentures" shall include the Debentures initially issued on the Closing Date, any Exchange Debentures to be issued and exchanged for any Debentures pursuant to the Registration Rights Agreement and the Indenture and any other Debentures issued after the Closing Date under the Indenture. For purposes of the Indenture, all Debentures shall vote together as one series of Debentures under the Indenture. "Exchange Debentures" means any securities of the Company containing terms identical to the Debentures (except that such Exchange Debentures shall be registered under the Securities Act and shall not include the restrictions on transfer) that are issued and exchanged for the Debentures pursuant to the Registration Rights Agreement and the Indenture. "Exchange Offer Registration Statement" means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement. "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Non-U.S. Person" means a person who is not a U.S. Person (as defined in Regulation S). "Registration Rights Agreement" means the Registration Rights Agreement, dated June 1, 1999, between the Company and Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc. and certain permitted assigns specified therein. "Registration Statement" means the Registration Statement as defined and described in the Registration Rights Agreement. "Regulation S" means Regulation S under the Securities Act. "Restricted Security" means any Debenture that has not been (i) exchanged for an Exchange Debenture or (ii) sold in connection with an effective Registration Statement pursuant to the Registration Rights Agreement. "Rule 144A" means Rule 144A under the Securities Act. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. ARTICLE TWO TERMS OF THE DEBENTURES Section 201. Establishment of the Debentures. There is hereby authorized a series of Securities designated the 7 1/4% Debentures due June 1, 2029, initially limited in aggregate principal amount to $200,000,000 (except as provided in Section 2.3.2 of the Original Indenture, and except that the Company may issue additional Debentures of this Series). The Debentures shall be substantially in the form set forth in Exhibit A hereto and shall include substantially the legends set forth on the face of the form of so long as the Debentures are Restricted Securities. Section 202. Terms of the Debentures. The Stated Maturity of the Debentures shall be June 1, 2029, and they shall bear interest at the rate of 7 1/4% per annum, from June 1, 1999 or from the most recent interest payment date to which interest has been paid or duly provided for, as the case may be, payable semiannually (to holders of record of the Debentures at the close of business on the May 15 and November 15 immediately preceding the interest payment date) on June 1 and December 1, commencing December 1, 1999 until payment of the principal amount shall have been made or duly provided for. The principal of and interest on the Debentures shall be payable at the office or agency of the Trustee in New York, New York maintained for such purpose and at any other office or agency maintained by the Company for such purpose; provided, however, that at the option of the Company payment of interest may be made by wire transfer or by check mailed to the address of the Person entitled thereto as such address shall appear in the list of Securityholders. The Debentures are redeemable prior to maturity and shall not have the benefit of a sinking fund. The Debentures shall not be superior in right of payment to, and shall rank equal with, all other unsecured and unsubordinated debt of the Company. The Debentures shall be subject to defeasance at the option of the Company as provided in Sections 8.3 and 8.4 of the Original Indenture. Section 203. Denominations. The Debentures shall be issued in denominations of $100,000 and integral multiples of $1,000. Section 204. Form. Debentures offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Debentures in registered form, substantially in the form set forth in Exhibit A (the "U.S. Global Debentures"), registered in the name of the nominee of The Depository Trust Company (the "Depositary" or "DTC"), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as provided in Section 2.4 of the Original Indenture. The aggregate principal amount of the U.S. Global Debentures may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, in accordance with the instructions given by the Holder thereof, as hereinafter provided. Debentures offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more permanent global Debentures in registered form substantially in the form set forth in Exhibit A (the "Offshore Global Debentures"), registered in the name of the nominee of the Depositary, deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as provided in Section 2.4 of the Original Indenture. The aggregate principal amount of the Offshore Global Debentures may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. Debentures offered and sold to Institutional Accredited Investors that are not QIBs (excluding non- U.S. Persons) shall be issued in the form of permanent certificated Debentures in registered form substantially in the form set forth in Exhibit A (the "Physical Debentures"). The U.S. Global Debentures and the Offshore Global Debentures are sometimes referred to herein as the "Global Debentures". The definitive Debentures shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Debentures may be listed, all as determined by the Officers executing such Debentures, as evidenced by their execution of such Debentures. ARTICLE THREE AMENDMENTS Section 301. Article Four of the Original Indenture shall be amended by adding the following paragraph immediately following the two paragraphs contained in Section 4.9: "The Company will take all actions necessary to permit resales of any Securities sold pursuant to Rule 144A of the Securities Act of 1933, as amended (the "Securities Act") including, without limitation, furnishing upon request of a Holder of such Security to such Holder and a prospective purchaser designated by such Holder financial and other information of the Company required to be delivered under Rule 144A(d)(4) of the Securities Act, if at the time of such request the Company is not a reporting company under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended." ARTICLE FOUR REDEMPTION Subject to the terms of Article Three of the Original Indenture, the Company shall have the right to redeem the Debentures, in whole but not in part, from time to time and at any time (such redemption, an "Optional Redemption", and the date thereof, the "Optional Redemption Date") upon at least 30 days' notice mailed to the registered address of each holder of the Debentures, at a redemption price equal to the sum of (A) the greater of (1) 100% of the principal amount of the Debentures to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments thereon discounted to the Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the Treasury Rate plus twenty-five basis points, less the Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest Amount. "Applicable Accrued Interest Amount" means, at the Optional Redemption Date, the amount of interest accrued and unpaid from the prior interest payment date to the Optional Redemption Date on the Debentures subject to the Optional Redemption determined at the rate per annum shown in the title thereof, computed on the basis of a 360-day year of twelve 30-day months. "Comparable Treasury Issue" means the United States Treasury security, selected by a Reference Treasury Dealer appointed by the Company, as having a maturity comparable to the remaining term of the Debentures to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Debentures to be redeemed pursuant to the Optional Redemption. "Comparable Treasury Price" means, with respect to the Optional Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for such Optional Redemption Date after excluding the highest and lowest of those Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than five Reference Treasury Dealer Quotations, the average of all quotations. "Reference Treasury Dealer" means any nationally recognized investment banking firm that is a primary U.S. Government securities dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Optional Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding such Optional Redemption Date. "Remaining Scheduled Payments" means, for each Debenture to be redeemed, the remaining scheduled payments of principal and interest on that Debenture that would be due after the related Optional Redemption Date but for that Optional Redemption. If the Optional Redemption Date is not an interest payment date with respect to that Debenture, the amount of the next succeeding scheduled interest payment on that Debenture will be reduced by the amount of interest accrued on the Debenture to the Optional Redemption Date. "Treasury Rate" means, with respect to the Optional Redemption Date (if any), the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Optional Redemption Date. ARTICLE FIVE ORIGINAL ISSUE OF DEBENTURES Section 501. Debentures in the aggregate principal amount of $200,000,000, or in such additional principal amount as the Company may issue pursuant to Section 201 of this First Supplemental Indenture, may, upon execution of this First Supplemental Indenture, or from time to time thereafter, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures upon a Company Order without any further action by the Company. Section 502. Exchange Debentures. Exchange Debentures may from time to time be executed by the Company and delivered to the Trustee for authentication and the Trustee shall thereupon authenticate and deliver said Exchange Debentures, upon cancellation of an equal amount of Restricted Securities tendered in exchange, upon a Company Order without further action by the Company. ARTICLE SIX SPECIAL TRANSFER PROVISIONS Section 601. Legend on Restricted Securities. Unless and until a Debenture is exchanged for an Exchange Debenture or sold in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, (i) the U.S. Global Debentures and Physical Debentures shall bear the legend set forth on the face of the Debenture and (ii) the Offshore Global Debentures shall bear the legend set forth on the face of the Debenture until (A) at least the 41st day after the Closing Date and (B) receipt by the Company and the Trustee of a certificate substantially in the form of Appendix B hereto. Except as provided in Section 603 hereof, the Trustee shall not issue any unlegended Debentures until it has received an Officers' Certificate from the Company directing it to do so. Section 602. Book-Entry Provisions for Global Debentures. (a) The U.S. Global Debentures and Offshore Global Debentures initially shall (i) be registered in the name of the Depositary for such Global Debentures or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear legends as set forth on the face of the form of the Debenture. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Debenture held on their behalf by the Depositary, or the Trustee as its custodian, or under such Global Debenture, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Debenture for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Debenture. (b) Transfers of a Global Debenture shall be limited as specified in Section 2.15.2 of the Original Indenture and the provisions of Section 603(b)(ii). Interests of beneficial owners in Global Debentures may be transferred in accordance with the rules and procedures of the Depositary and the provisions of Section 603. In addition, Physical Debentures shall be transferred to all beneficial owners in exchange for their beneficial interests in the U.S. Global Debentures or Offshore Global Debentures, as the case may be, as specified in Section 2.15.2 of the Original Indenture. (c) Any beneficial interest in one of the Global Debentures that is transferred to a person who takes delivery in the form of an interest in another Global Debenture will, upon transfer, cease to be an interest in such Global Debenture and become an interest in such other Global Debenture and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Debenture for as long as it remains such an interest. (d) In connection with any transfer of a portion of the beneficial interests in a Global Debenture to beneficial owners pursuant to paragraph (b) of this Section 602, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such Global Debenture in an amount equal to the principal amount of the beneficial interest in such Global Debenture to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Debentures of like tenor and amount. (e) In connection with the transfer of the U.S. Global Debentures or the Offshore Global Debentures, in whole, to beneficial owners pursuant to paragraph (b) of this Section 602, the U.S. Global Debentures or Offshore Global Debentures, as the case may be, shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the U.S. Global Debentures or Offshore Global Debentures, as the case may be, an equal aggregate principal amount of Physical Debentures of authorized denominations. (f) Any Physical Debenture delivered in exchange for an interest in the U.S. Global Debentures pursuant to paragraph (b), (d) or (e) of this Section 602 shall, except as otherwise provided by Section 601, bear the legend regarding transfer restrictions applicable to the Physical Debenture. (g) The registered holder of a Global Debenture may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Debentures. Section 603. (a) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Debenture constituting a Restricted Security to a qualified institutional buyer as defined in Rule 144A (a "QIB"): (i) if the Debenture to be transferred consists of (x) Physical Debentures, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Debenture stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Debenture stating, or has otherwise advised the Company and the Registrar in writing, that it is purchasing the Debenture for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A or (y) an interest in the U.S. Global Debentures, the transfer of such interest may be effected through the book entry system maintained by the Depositary; and (ii) (a) If the proposed transferee is an Agent Member and the Debentures to be transferred consist of Physical Debentures which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Registrar of instructions given in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security in an amount equal to the principal amount of the Physical Debentures to be transferred, and the Trustee shall cancel the Physical Debentures so transferred and (b)(1) if the proposed transferor is an Agent Member holding a beneficial interest in the Offshore Global Debentures, upon receipt by the Registrar of instructions in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Offshore Global Debentures in an amount equal to the principal amount of the beneficial interest in the Offshore Global Debentures to be transferred, and (b)(2) if the proposed transferee is an Agent Member, upon receipt by the Registrar of instructions given in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the U.S. Global Debentures in an amount equal to the principal amount of the Offshore Global Debentures to be transferred and the Trustee shall decrease the amount of the Offshore Global Debentures. (b) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer of a Debenture constituting a Restricted Security to any Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons): (i) The Registrar shall register the transfer of any Debenture, if the proposed transferee has delivered to the Registrar (A) a certificate substantially in the form of Appendix A hereto and (B) an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act. (ii) If the proposed transferor is an Agent Member holding a beneficial interest in the Global Security, upon receipt by the Registrar of (x) the documents, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Debentures of like tenor and amount. (c) Transfers of Interests in the Offshore Global Debentures. The following provisions shall apply with respect to any transfer of interests in Offshore Global Debentures: (i) until the expiration of the 40-day distribution compliance period within the meaning of Rule 903 of Regulation S, any offer or sale of interests in the Offshore Global Debenture shall be made (a) outside the United States (1) in compliance with Rule 903 or 904 under the Securities Act or (2) to a QIB in compliance with Rule 144A and (b) in accordance with all applicable securities laws of the states of the United States or any other applicable jurisdiction; (ii) prior to the removal of the legend from the Offshore Global Debentures pursuant to Section 601, the Registrar shall refuse to register such transfer unless such transfer complies with this Section 603, and (iii) after such removal, the Registrar shall register the transfer of any such Debenture without requiring any additional certification. (d) Transfers to Non-U.S. Persons at Any Time. The following provisions shall apply with respect to any transfer of a Restricted Security to a Non-U.S. Person: (i) The Registrar shall register any proposed transfer to any Non-U.S. Person if (A) the Debenture to be transferred is a Physical Debenture or an interest in U.S. Global Debentures, (B) the proposed transferor has delivered to the Registrar a certificate substantially in the form of Appendix B hereto and (C) the proposed transferee has delivered to the Registrar an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act.. (ii) (a) If the proposed transferor is an Agent Member holding a beneficial interest in the U.S. Global Debentures, upon receipt by the Registrar of (x) the documents, if any, required by paragraph (i) and (y) instructions in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the U.S. Global Debentures in an amount equal to the principal amount of the beneficial interest in the U.S. Global Debentures to be transferred, and (b) if the proposed transferee is an Agent Member, upon receipt by the Registrar of instructions given in accordance with the Depositary's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Offshore Global Debentures in an amount equal to the principal amount of the Physical Debentures or the U.S. Global Debentures, as the case may be, to be transferred, and the Trustee shall cancel the Physical Debenture, if any, so transferred or decrease the amount of the U.S. Global Debentures. Section 604. General. By its acceptance of any Debenture bearing the legends set forth on the face of the form of Debenture, each Holder of such a Debenture acknowledges the restrictions on transfer of such Debenture set forth in the Indenture and in such legends and agrees that it will transfer such Debenture only as provided in the Indenture. The Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 604. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. ARTICLE SEVEN SUNDRY PROVISIONS Section 701. No exchange of Debentures for Exchange Debentures pursuant to Section 2.8 of the Original Indenture shall occur until a Registration Statement shall have been declared effective by the Commission and that any Debentures that are exchanged for Exchange Debentures shall be canceled by the Trustee. Section 702. The Original Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. _____________________________________________ This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. In Witness Whereof, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the day and year first above written. KOHL'S CORPORATION By: /s/R. Lawrence Montgomery --------------------------- Name: R. Lawrence Montgomery Title: Vice Chairman of the Board and Chief Executive Officer THE BANK OF NEW YORK as Trustee By: /s/Mary La Gumina -------------------- Mary La Gumina Assistant Vice President EXHIBIT A [Form of Debenture] [Each Global Security, whether or not an Exchange Debenture, shall bear the following legend: Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Kohl's Corporation or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or to such other entity or in such other name as is requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] [Any Global Security issued hereunder shall bear a legend in substantially the following form: This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depositary or a nominee of the Depositary. This Security is exchangeable for Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depositary to a nominee of the Depositary by a nominee of the Depositary, by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.] [Unless and until a Debenture is exchanged for an Exchange Debenture or sold in connection with an effective Registration Statement pursuant to the Registration Rights Agreement,(i) the U.S. Global Debentures and Physical Debentures shall bear the legend set forth below on the face thereof and (ii) the Offshore Physical Debentures and Offshore Global Debentures shall bear the legend set forth below on the face thereof until at least the 41st day after the Closing Date and receipt by the Company and the Trustee of a certificate substantially in the form of Appendix B hereto: THE DEBENTURES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS DEBENTURE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE DEBENTURES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS DEBENTURE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH DEBENTURE PRIOR TO THE DATE WHICH IS THE LATER OF (X) TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS DEBENTURE) AND THE LAST DATE ON WHICH KOHL'S CORPORATION OR ANY AFFILIATE OF KOHL'S CORPORATION WAS THE OWNER OF THIS DEBENTURE (OR ANY PREDECESSOR OF THIS DEBENTURE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A) TO KOHL'S CORPORATION OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE DEBENTURES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE TRANSACTION WITHIN THE MEANING AND CONSISTENT WITH THE TERMS AND CONDITIONS OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE DEBENTURES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT KOHL'S CORPORATION, THE TRUSTEE, THE TRANSFER AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS DEBENTURE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO KOHL'S CORPORATION AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "UNITED STATES", "OFFSHORE TRANSACTION" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.] [Each Offshore Global Debenture shall bear the following legend: PRIOR TO EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S, THIS DEBENTURE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON.] KOHL'S CORPORATION 7 1/4% DebentureS Due June 1, 2029 CUSIP No. _________ No. _____ $_____________ Principal Amount Kohl's Corporation, a corporation duly organized and existing under the laws of the State of Wisconsin (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to [________] [Cede & Co.] or registered assigns, the principal sum of ($ ) on June 1, 2029, and to pay interest thereon semiannually (to holders of record of the Debentures at the close of business on the May 15 and November 15 immediately preceding the interest payment date) on June 1 and December 1 in each year, commencing December 1, 1999, at the rate of 7 1/4% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any interest payment date, as provided in the Indenture, shall be paid to the Person in whose name this Debenture (or one or more predecessor Debentures) is registered at the close of business on the May 15 or November 15 (whether or not a business day), as the case may be, next preceding such interest payment date. If the Company defaults in a payment of interest, it will pay the defaulted interest plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders on a subsequent special record date, determined in accordance with the Indenture. The Company may pay the defaulted interest in any other lawful manner. The statements set forth in the restrictive legend above are an integral part of the terms of this Debenture and by acceptance hereof each holder of this Debenture agrees to be subject to and bound by the terms and provisions set forth in such legend. Payments of principal and interest on this Debenture will be made at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by wire transfer or by check mailed on or prior to an interest payment date to the address of the Person entitled thereto as such address shall appear in the list of Securityholders. Any payment of this Debenture due on any day which is not a business day in New York, New York need not be made on such day, but may be made on the next succeeding business day with the same force and effect as if made on the due date and no interest shall accrue for the period from and after such date, unless such payment is a payment at maturity or upon redemption, in which case interest shall accrue thereon at the stated rate for such additional days. This Debenture is one of a duly authorized issue of securities of the Company, designated 7 1/4% Debentures due June 1, 2029 (the "Debentures"), issued and to be issued in one or more series under an Indenture, dated as of December 1, 1995, as supplemented by the First Supplemental Indenture, dated as of June 1, 1999 (the "Indenture"), between the Company and The Bank of New York, as Trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debentures and of the terms upon which the Debentures are, and are to be, authenticated and delivered. This Debenture is one of a series designated on the face hereof, issued initially in the aggregate principal amount of $200,000,000. [INCLUDE IF SECURITY IS A GLOBAL DEBENTURE - This Debenture is a "book-entry" Debenture and is being registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), a clearing agency. Subject to the terms of the Indenture, this Debenture will be held by a clearing agency or its nominee, and beneficial interests will be held by beneficial owners through the book-entry facilities of such clearing agency or its nominee in minimum denominations of $100,000 and integral multiples of $1,000. As long as this Debenture is registered in the name of DTC or its nominee, the Trustee will make payments of principal of and interest on this Debenture by wire transfer of immediately available funds to DTC or its nominee. Notwithstanding the above, the final payment on this Debenture will be made after due notice by the Trustee of the pendency of such payment and only upon presentation and surrender of this Debenture at its principal corporate trust office or such other offices or agencies appointed by the Trustee for that purpose and such other locations provided in the Indenture.] The Holder of this Debenture is entitled to the benefits of the Registration Rights Agreement, dated as of June 1, 1999. In the event that (i) the Company fails to file an Exchange Offer Registration Statement with respect to the Debentures with the Commission on or prior to the 135th calendar day following the Closing Date, (ii) the Commission does not declare such Exchange Offer Registration Statement effective on or prior to the 180th calendar day following the Closing Date, (iii) the Exchange Offer is not consummated on or prior to the 45th calendar day following the effective date of the Exchange Offer Registration Statement or (iv) if required, a Shelf Registration Statement with respect to the Debentures is not declared effective by the Commission on or prior to the 210th calendar day following the Closing Date (each, a "Registration Default"), the per annum interest rate borne by the Debentures shall be increased by one-quarter of one percent (0.25%) per annum from the end of the applicable period giving rise to such Registration Default. The interest rate borne by the Debentures will be increased by an additional one-quarter of one percent (0.25%) per annum for each subsequent 90-day period (or portion thereof) during which any such Registration Default continues up to a maximum aggregate increase in the annual interest rate of one- half of one percent (0.50%) per annum. Following the cure of all Registration Defaults, the interest rate borne by the Debentures shall be reduced to the original interest rate borne by the Debentures. No increase in the rate shall be payable for any period during which a Shelf Registration is effective. All accrued additional interest shall be paid to Holders by the Company in the same manner as interest is paid pursuant to the Indenture. All terms used in this Debenture that are defined in the Registration Rights Agreement shall have the meanings assigned to them in the Registration Rights Agreement. The Debentures do not have the benefit of any sinking fund obligations. Subject to the terms of Article Three of the Indenture, the Company shall have the right to redeem the Debentures, in whole but not in part, from time to time and at any time (such redemption, an "Optional Redemption", and the date thereof, the "Optional Redemption Date") upon at least 30 days' notice mailed to the registered address of each holder of the Debentures, at a redemption price equal to the sum of (A) the greater of (1) 100% of the principal amount of the Debentures to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments thereon discounted to the Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the Treasury Rate plus twenty-five basis points, less the Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest Amount. "Applicable Accrued Interest Amount" means, at the Optional Redemption Date, the amount of interest accrued and unpaid from the prior interest payment date to the Optional Redemption Date on the Debentures subject to the Optional Redemption determined at the rate per annum shown in the title thereof, computed on the basis of a 360-day year of twelve 30-day months. "Comparable Treasury Issue" means the United States Treasury security, selected by a Reference Treasury Dealer appointed by the Company, as having a maturity comparable to the remaining term of the Debentures to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Debentures to be redeemed pursuant to the Optional Redemption. "Comparable Treasury Price" means, with respect to the Optional Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for such Optional Redemption Date after excluding the highest and lowest of those Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than five Reference Treasury Dealer Quotations, the average of all quotations. "Reference Treasury Dealer" means any nationally recognized investment banking firm that is a primary U.S. Government securities dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Optional Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding such Optional Redemption Date. "Remaining Scheduled Payments" means, for each Debenture to be redeemed, the remaining scheduled payments of principal and interest on that Debenture that would be due after the related Optional Redemption Date but for that Optional Redemption. If the Optional Redemption Date is not an interest payment date with respect to that Debenture, the amount of the next succeeding scheduled interest payment on that Debenture will be reduced by the amount of interest accrued on the Debenture to the Optional Redemption Date. "Treasury Rate" means, with respect to the Optional Redemption Date (if any), the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Optional Redemption Date. If an Event of Default with respect to Debentures of this series shall occur and be continuing, the principal of all the Debentures of this series may be declared due and payable in the manner and with the effect provided in the Indenture. [INCLUDE IF SECURITY IS A GLOBAL SECURITY - In the event of a deposit or withdrawal of an interest in this Debenture, including an exchange, transfer, repurchase or conversion of this Debenture in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.] [INCLUDE IF SECURITY IS A RESTRICTED SECURITY - Subject to certain limitations in the Indenture, at any time when the Company is not subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted Security, the Company will promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such Holder of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder, to the extent required to permit compliance by any such Holder with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).] The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company under this Debenture and (b) certain restrictive covenants and the related defaults and Events of Default applicable to the Company, in each case, upon compliance by the Company with certain conditions set forth in the Indenture, which provisions apply to this Debenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of at least 66_% in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of each series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued upon the registration of transfer thereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture. No reference herein to the Indenture and provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, and interest on this Debenture at the times, place and rate, and in the coin or currency, herein prescribed. As provided in and subject to the provisions of the Indenture, the Holder of this Debenture shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Debentures of this series, the Holders of not less than 25% in principal amount of the Debentures of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a majority in principal amount of Debentures of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Debenture for the enforcement of any payment of principal hereof or any interest hereon on or after the respective due dates expressed herein. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debenture is registrable upon surrender of this Debenture to the Registrar, for registration of transfer duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar attached hereto duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures, and of like tenor, of authorized denominations and for the same aggregate principal amount, shall be issued to the designated transferee or transferees. The Debentures of this Series are issuable only in fully registered form without coupons in denominations of $100,000 and any integral multiples of $1,000. As provided in the Indenture and subject to certain limitations therein set forth, the Debentures of this Series are exchangeable for a like aggregate principal amount of Debentures of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange of Debentures, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Debenture for registration of transfer, the Company, the Trustee and any agent of the Company, or the Trustee may treat the Person in whose name this Debenture is registered as the owner hereof for all purposes, whether or not this Debenture be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary. Interest on this Debenture shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall furnish to any Holder of record of Debentures, upon written request and without charge, a copy of the Indenture. The Indenture and this Debenture each shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Debenture shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. All terms used in this Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties IT TEN - as joint tenants with right of survivorship and not as tenants in common. UNIF GIFT MIN ACT - ______________ Custodian _____________ (Cust) (Minor) under the Uniform Gifts to Minors Act ------------------------------------------ (State) Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s), and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------ - ------------------------------------ - ---------------------------------------------------------------------------- Please print or typewrite name and address including postal zip code of assignee - ----------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - ----------------------------------------------------------------------------- attorney to transfer said Security on the books of the Company, with full power of substitution in the premises. Date:_______________ -------------------------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the within instrument in ever particular, without alteration or enlargement, or any change whatsoever. In Witness Whereof, the Company has caused this instrument to be duly executed Dated: June 1, 1999 KOHL'S CORPORATION By: ____________________________ Attest: ____________________________________ TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the Series originated therein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By:________________________ Authorized Officer APPENDIX A Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors _______________ The Bank of New York 101 Barclay Street 21W New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Kohl's Corporation (the "Company") 7 1/4% Debentures due June 1, 2029, (the Debentures) Ladies and Gentlemen: In connection with our proposed purchase of $_________ aggregate principal amount of the 7 1/4% Debentures due June 1, 2029 (the "Debentures") of Kohl's Corporation, a Wisconsin corporation ("Kohl's"), we confirm that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor," and we are acquiring the Debentures for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act or other applicable securities law and we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Debentures, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 2. We understand and acknowledge that the Debentures have not been registered under the Securities Act or any other applicable securities law and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities law, or pursuant to an exemption therefrom, or in a transaction not subject thereto, and in each case in compliance with the conditions for transfer set forth below. We agree on our own behalf and on behalf of any investor account for which we are purchasing Debentures to offer, sell or otherwise transfer such Debentures prior to (x) the date which is two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act) after the later of the date of original issue and the last date on which Kohl's or any affiliate of Kohl's was the owner of such Debentures (or any predecessor thereto) and (y) such later date, if any, as may be required by applicable law (the "Resale Restriction Termination Date") only (a) to Kohl's or any of Kohl's subsidiaries, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) for so long as the Debentures are eligible for resale pursuant to Rule 144A under the Securities Act, to a person we reasonably believe is a "Qualified Institutional Buyer" within the meaning of Rule 144A (a "QIB") that purchases for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales to non-U.S. persons in an offshore transaction within the meaning and consistent with the terms and conditions of Regulation S under the Securities Act, (e) to an institutional "accredited investor" within the meaning of subparagraph (a)(1), (2),(3) or (7) of Rule 501 under the Securities Act that is acquiring the Debentures for its own account or for the account of such an institutional "accredited investor" for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and to compliance with any applicable state or other securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Debentures is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver to the trustee (the "Trustee") a letter from the transferee substantially in the form of this letter, which shall provide, among other things, that the transferee is a person or entity as defined in paragraph 1 of this letter and that it is acquiring such Debentures for investment purposes and not for distribution in violation of the Securities Act. We acknowledge that the Company and the Trustee reserve the right prior to any offer, sale or other transfer of the Debentures pursuant to clauses (d), (e) or (f) above prior to the Resale Restriction Termination Date to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to Kohl's and the Trustee. 3. We are acquiring the Debentures purchased by us for our own account or for one or more accounts as to each of which we exercise sole investment discretion. 4. You are entitled to rely upon this letter and you are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, By: (Name of Purchaser) Date: Upon transfer the Debentures would be registered in the name of the new beneficial owner as follows: Taxpayer ID Name Address Number ----- ------- ------------- APPENDIX B Form of Certificate to Be Delivered in Connection with Transfers Pursuant to Regulation S ________________ Kohl's Corporation c/o The Bank of New York 101 Barclay Street 21W New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Kohl's Corporation (the "Company") 71/4% Debentures due June 1, 2029 (the "Debentures") Dear Sirs: In connection with our proposed sale of U.S.$ aggregate principal amount of the Debentures, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the Securities Act of 1933 and, accordingly, we represent that: (1) the offer of the Debentures was not made to a person in the United States; (2) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States; (3) no directed selling efforts have been made by us in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and (4) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act of 1933. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By:______________________ Authorized Signature EX-4.3 4 REGISTRATION RIGHTS AGREEMENT Exhibit 4.3 EXECUTION COPY REGISTRATION RIGHTS AGREEMENT Dated as of June 1, 1999 among KOHL'S CORPORATION and MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated MORGAN STANLEY & CO. INCORPORATED BNY CAPITAL MARKETS, INC., BANC ONE CAPITAL MARKETS, INC. as the Initial Purchasers REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of June 1, 1999, by and among KOHL'S CORPORATION, a Wisconsin corporation (the "Company"), and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MORGAN STANLEY & CO. INCORPORATED, BNY CAPITAL MARKETS, INC. and BANC ONE CAPITAL MARKETS, INC. (collectively, the "Initial Purchasers"). This Agreement is made pursuant to the Purchase Agreement dated May 26, 1999 by and among the Company and the Initial Purchasers (the "Purchase Agreement"), which provides for the sale by the Company to the Initial Purchasers of $200,000,000 aggregate principal amount of the Company's 7 1/4% Debentures due 2029 (the "Debentures"). In order to induce the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the Initial Purchasers' obligations thereunder, the Company has agreed to provide to the Initial Purchasers and their respective direct and indirect transferees and assigns the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 Act" shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder. "1934 Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder. "Closing Time" shall mean the Closing Time as defined in the Purchase Agreement. "Company" shall have the meaning set forth in the preamble and also includes the Company's successors. "Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Company, including any agent thereof; provided, however, that any such depositary must at all times have an address in the Borough of Manhattan, in The City of New York. "Exchange Debentures" shall mean the 7 1/4% Debentures due 2029 issued by the Company under the Indenture, containing terms identical to the Debentures (except that (i) interest thereon shall accrue from the last date on which interest was paid on the Debentures or, if no such interest has been paid, from the Closing Time, (ii) the transfer restrictions thereon shall be eliminated and (iii) certain provisions relating to an increase in the stated rate of interest thereon shall be eliminated) to be offered to Holders of Registrable Debentures in exchange for Registrable Debentures pursuant to the Exchange Offer. "Exchange Offer" shall mean the exchange offer by the Company of Exchange Debentures for Registrable Debentures pursuant to Section 2(a) hereof. "Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2(a) hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S- 4 covering the Registrable Debentures (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Holders" shall mean the Initial Purchasers, for so long as they own any Registrable Debentures, and each of their respective successors, assigns and direct and indirect transferees who become registered owners of Registrable Debentures under the Indenture. "Indenture" shall mean the Indenture dated as of December 1, 1995 by and between the Company and The Bank of New York, as Trustee, as supplemented by the First Supplemental Indenture dated as of June 1, 1999, between the Company and the Trustee, in each case relating to the Debentures and the Exchange Debentures and as the same may be amended and supplemented from time to time in accordance with the terms thereof. "Initial Purchasers" shall have the meaning set forth in the preamble of this Agreement. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Registrable Debentures outstanding; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Debentures is required hereunder, Registrable Debentures held by the Company or any of its affiliates (as such term is defined in Rule 405 under the 1933 Act) (other than the Initial Purchasers or subsequent holders of Registrable Debentures) if such subsequent holders are deemed to be such affiliates solely by reason of their holding of such Registrable Debentures shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage or amount. "NASD" shall mean the National Association of Securities Dealers, Inc. "Participating Broker-Dealer" shall have the meaning set forth in Section 3(f). "Person" shall mean an individual, partnership, joint venture, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Debentures covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. "Purchase Agreement" shall have the meaning set forth in the preamble of this Agreement. "Registrable Debentures" shall mean the Debentures; provided, however, that the Debentures shall cease to be Registrable Debentures when (i) a Registration Statement with respect to such Debentures shall have been declared effective under the 1933 Act and such Debentures shall have been disposed of pursuant to such Registration Statement, (ii) such Debentures shall have been sold to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Debentures shall have ceased to be outstanding or (iv) such Debentures have been exchanged for Exchange Debentures upon consummation of the Exchange Offer. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock exchange or NASD registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state or other securities or blue sky laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with state or other securities or blue sky qualification of any of the Exchange Debentures or Registrable Debentures), (iii) all expenses of any Persons in preparing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements, certificates representing the Exchange Debentures and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and expenses incurred in connection with the listing, if any, of any of the Exchange Debentures or such Registrable Debentures, covered by a Shelf Registration Statement, as applicable, on any securities exchange or exchanges, (vi) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vii) the fees and disbursements of counsel for the Company and the fees and expenses of the independent public accountants of the Company, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, (viii) the fees and expenses of a "qualified independent underwriter" as defined by Conduct Rule 2720 of the NASD (if required by the NASD rules) in connection with the offering of the Registrable Debentures, (ix) the reasonable fees and expenses of the Trustee, any registrar, any depositary and paying agent, including their respective counsel, and any escrow agent or custodian and (x) in the case of an underwritten offering, any fees and disbursements of the underwriter customarily required to be paid by issuers or sellers of such securities and the fees and expenses of any special experts retained by the Company in connection with any Registration Statement but excluding (except as otherwise provided herein) fees of counsel to the underwriters or the Holders and underwriting discounts and commissions and any transfer taxes, if any, relating to the sale or disposition of Registrable Debentures by a Holder. "Registration Statement" shall mean any registration statement of the Company relating to any offering of the Exchange Debentures or Registrable Debentures pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission. "Shelf Registration" shall mean a registration effected pursuant to Section 2(b) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 2(b) of this Agreement which covers all of the Registrable Debentures on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Trustee" shall mean the trustee under the Indenture. 2. Registration Under the 1933 Act. (a) Exchange Offer Registration. To the extent not prohibited by any applicable law or applicable interpretation of the staff of the SEC, the Company shall (A) file with the SEC within 135 calendar days after the Closing Time an Exchange Offer Registration Statement covering the offer by the Company to the Holders to exchange all of the Registrable Debentures for Exchange Debentures, (B) use its reasonable best efforts to cause such Exchange Offer Registration Statement to be declared effective by the SEC within 180 calendar days after the Closing Time, (C) use its reasonable best efforts to cause such Registration Statement to remain effective until the closing of the Exchange Offer and (D) use its reasonable best efforts to consummate the Exchange Offer within 45 calendar days after the effective date of the Exchange Offer Registration Statement. The Exchange Debentures will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder (other than Participating Broker-Dealers (as defined in Section 3(f)) eligible and electing to exchange Registrable Debentures for Exchange Debentures (assuming that such Holder is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act, acquires the Exchange Debentures in the ordinary course of such Holder's business and has no arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing the Exchange Debentures) to trade such Exchange Debentures from and after their receipt without any limitations or restrictions under the 1933 Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. In connection with the Exchange Offer, the Company shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) keep the Exchange Offer open for not less than 20 business days (or longer if required by applicable federal and state securities laws) after the date notice thereof is mailed to the Holders; (iii) use the services of the Depositary for the Exchange Offer with respect to Debentures evidenced by global certificates; (iv) permit Holders to withdraw tendered Registrable Debentures at any time prior to the close of business, New York City time, on the last business day on which the Exchange Offer shall remain open, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Debentures delivered for exchange, and a statement that such Holder is withdrawing its election to have such Debentures exchanged; and (v) otherwise comply in all material respects with all applicable federal and state securities laws relating to the Exchange Offer. As soon as practicable after the close of the Exchange Offer, the Company shall: (i) accept for exchange Registrable Debentures duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which is an exhibit thereto; (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Debentures so accepted for exchange by the Company; and (iii) cause the Trustee promptly to authenticate and deliver Exchange Debentures to each Holder of Registrable Debentures equal in principal amount to the principal amount of the Registrable Debentures of such Holder so accepted for exchange. Interest on each Exchange Note will accrue from the last date on which interest was paid on the Registrable Debentures surrendered in exchange therefor or, if no interest has been paid on the Registrable Debentures, from the Closing Time. The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer, or the making of any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (ii) that no action or proceeding shall have been instituted or threatened in any court or before any governmental agency with respect to the Exchange Offer which, in the Company's judgment, would impair the ability of the Company to proceed with the Exchange Offer, (iii) that no law, rule or regulation or applicable interpretations of the staff of the SEC has been issued or promulgated which, in the good faith determination of the Company, does not permit the Company to effect the Exchange Offer and (iv) that the Holders tender the Registrable Debentures to the Company in accordance with the Exchange Offer. Each Holder of Registrable Debentures (other than Participating Broker-Dealers) who wishes to exchange such Registrable Debentures for Exchange Debentures in the Exchange Offer shall have represented that (i) it is not an affiliate (as defined in Rule 405 under the 1933 Act) of the Company or, if it is an affiliate, it will comply with the registration and prospectus delivery requirements of the 1933 Act, to the extent applicable, (ii) any Exchange Debentures to be received by it will be acquired in the ordinary course of business, (iii) at the time of the commencement of the Exchange Offer, it has no arrangement with any Person to participate in the distribution (within the meaning of the 1933 Act) of the Debentures or the Exchange Debentures, (iv) it is not acting on behalf of any person who could not truthfully make the foregoing representations and (v) it shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or another appropriate form under the 1933 Act available or for the Exchange Offer Registration Statement to be declared effective. To the extent permitted by law, the Company shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Debentures in the Exchange Offer. (b) Shelf Registration. (i) If, because of any change in law or applicable interpretations thereof by the Staff of the SEC, the Company is not permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof, or (ii) if for any other reason the Exchange Offer Registration Statement is not declared effective within 180 calendar days following the Closing Time or the Exchange Offer is not consummated within 45 days after effectiveness of the Exchange Offer Registration Statement (provided that if the Exchange Offer Registration Statement shall be declared effective after such 180-day period or if the Exchange Offer shall be consummated after such 45-day period, then the Company's obligations under this clause (ii) arising from the failure of the Exchange Offer Registration Statement to be declared effective within such 180-day period or the failure of the Exchange Offer to be consummated within such 45-day period, respectively, shall terminate), or (iii) if any Holder (other than an Initial Purchaser) is not eligible to participate in the Exchange Offer or elects to participate in the Exchange Offer but does not receive fully tradeable Exchange Debentures pursuant to the Exchange Offer or (iv) upon the written request of any of the Initial Purchasers within 90 days following the consummation of the Exchange Offer; provided that such Initial Purchaser shall hold Registrable Debentures that it acquired directly from the Company and if such Initial Purchaser is not permitted, in the opinion of counsel to such Initial Purchaser, pursuant to applicable law or applicable interpretation of the staff of the SEC, to participate in the Exchange Offer, the Company shall, at its cost: (A) as promptly as practicable, but no later than (a) the 180th day after the Closing Time or (b) the 60th day after such filing obligations arises, whichever is later, file with the SEC a Shelf Registration Statement relating to the offer and sale of the Registrable Debentures by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders of such Registrable Debentures and set forth in such Shelf Registration Statement; (B) use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the SEC as promptly as practicable, but in no event later than the 210th day after the Closing Time (or within 30 days of a request of any Initial Purchaser); provided that, with respect to Exchange Debentures received by a broker-dealer in exchange for any securities that were acquired by such broker-dealer as a result of market-making or other trading activities, the Company may, if permitted by current interpretations by the staff of the SEC, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its obligations under paragraph (A) solely with respect to broker- dealers who acquired their Securities as a result of market-making or other trading activities, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement. In the event that the Company is required to file a Shelf Registration Statement upon the request of any Holder (other than an Initial Purchaser) not eligible to participate in the Exchange Offer pursuant to clause (iii) above or upon the request of any Initial Purchaser pursuant to clause (iv) above, the Company shall file and use its reasonable best efforts to have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Debentures and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Debentures held by such Holder or such Initial Purchaser, as applicable, after completion of the Exchange Offer; (C) use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years after its effective date or such shorter period which will terminate when all of the Registrable Debentures covered by the Shelf Registration Statement (i) have been sold pursuant to the Shelf Registration Statement, (ii) cease to be outstanding or (iii) become eligible for resale pursuant to Rule 144 under the 1934 Act without volume restrictions; and (D) notwithstanding any other provisions hereof, use its best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading; provided, however, clauses (ii) and (iii) shall not apply to any information relating to any Initial Purchaser or any Holder furnished to the Company in writing by such Initial Purchaser or Holder expressly for use in the Shelf Registration Statement. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement if reasonably requested by the Majority Holders with respect to information relating to the Holders and otherwise as required by Section 3(b) below, to use its reasonable best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as practicable thereafter and to furnish to the Holders of Registrable Debentures copies of any such supplement or amendment promptly after its being used or filed with the SEC. (c) Expenses. The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) and 2(b) and, in the case of any Shelf Registration Statement, will reimburse the Holders or the Initial Purchasers for the reasonable fees and disbursements of one counsel (in addition to any local counsel) designated in writing by the Majority Holders to act as counsel for the Holders of the Registrable Debentures in connection therewith. Each Holder shall pay all expenses of its counsel other than as set forth in the preceding sentence, underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Debentures pursuant to a Shelf Registration Statement. (d) Effective Registration Statement. (i) The Company shall be deemed not to have used its reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite periods set forth herein if the Company voluntarily takes any action that could reasonably be expected to result in any such Registration Statement not being declared effective or remaining effective or in the Holders of Registrable Debentures covered thereby not being able to exchange or offer and sell such Registrable Debentures during that period unless (A) such action is required by applicable law or (B) such action is taken by the Company in good faith and for valid business reasons (but not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets or a material corporate transaction or event so long as the Company promptly complies with the requirements of Section 3(k) hereof, if applicable. (ii) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof shall not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Debentures pursuant to a Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement shall be deemed not to have been effective during the period of such interference, until the offering of Registrable Debentures pursuant to such Registration Statement may legally resume. (iii) During any 365-day period, the Company may suspend the availability of a Shelf Registration Statement and the use of the related Prospectus, as provided in Section 3(e)(vi) and the last paragraph of Section 3 hereof, for up to four periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to maturity of the Debentures), but no more than an aggregate 90 days during any 365-day period, if any event shall occur (A) as set forth in Section 2(d)(i) or (B) as a result of which it shall be necessary, in the good faith determination of the board of directors of the Company, to amend the Shelf Registration Statement or amend or supplement any prospectus or prospectus supplement thereunder in order that each such document not include any untrue statement of fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. (e) Increase in Interest Rate. In the event that (i) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 135th calendar day following the date hereof, (ii) the Exchange Offer Registration Statement is not declared effective on or prior to the 180th calendar day following the date hereof, (iii) the Exchange Offer is not consummated on or prior to the 45th calendar day following the effective date of the Exchange Offer Registration Statement, or (iv) if required, a Shelf Registration Statement with respect to the Registrable Debentures is not declared effective on or prior to the 210th calendar day following the date hereof, the per annum interest rate borne by the Registrable Debentures shall be increased by one-quarter of one percent (0.25%) per annum following such 135- day period in the case of clause (i) above, following such 180-day period in the case of clause (ii) above, following such 45-day period in the case of clause (iii) above, or following such 210-day period in the case of (iv) above, which rate will be increased by an additional quarter of one percent (0.25%) per annum for each 90-day period that any additional interest continues to accrue; provided that the aggregate increase in such annual interest rate may in no event exceed one-half of one percent (0.50%) per annum. Upon (w) the filing of the Exchange Offer Registration Statement after the 135-day period described in clause (i) above, (x) the effectiveness of the Exchange Offer Registration Statement after the 180-day period described in clause (ii) above, (y) the consummation of the Exchange Offer after the 45-day period described in clause (iii) above, or (z) the effectiveness of a Shelf Registration Statement, after the 210-day period described in clause (iv) above, the interest rate borne by the Debentures from the date of such filing, effectiveness or consummation, as the case may be, shall be reduced to the original interest rate if the Company is otherwise in compliance with this paragraph; provided, however, that, if after any such reduction in interest rate, a different event specified in clause (i), (ii), (iii) or (iv) above occurs, the interest rate shall again be increased pursuant to the foregoing provisions. No increase in the rate under (i), (ii) or (iii) above shall be payable for any period during which a Shelf Registration is effective. (f) Specific Enforcement. Without limiting the remedies available to the Initial Purchasers and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Sections 2(a) and 2(b) hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company's obligations under Sections 2(a) and 2(b). 3. Registration Procedures. In connection with the obligations of the Company with respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall: (a) prepare and file with the SEC a Registration Statement, within the time periods specified in Section 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf Registration Statement, be available for the sale of the Registrable Debentures by the selling Holders thereof and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith, and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act; and comply with the provisions of the 1933 Act with respect to the disposition of all Debentures covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof; (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Debentures, at least ten business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Debentures is being filed and advising such Holders that the distribution of Registrable Debentures will be made in accordance with the method elected by the Majority Holders; (ii) furnish to each Holder of Registrable Debentures, to counsel for the Initial Purchasers, to counsel for the Holders and to each underwriter of an underwritten offering of Registrable Debentures, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits (including those incorporated by reference) in order to facilitate the public sale or other disposition of the Registrable Debentures; and (iii) subject to the last paragraph of this Section 3, hereby consent to the use of the Prospectus, including each preliminary Prospectus, or any amendment or supplement thereto by each of the selling Holders of Registrable Debentures in connection with the offering and sale of the Registrable Debentures covered by the Prospectus or any amendment or supplement thereto; (d) use its reasonable best efforts to register or qualify the Registrable Debentures under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Debentures covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Debentures shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, to cooperate with the Holders in connection with any filings required to be made with the NASD, keep each such registration or qualification effective during the period such Registration Statement is required to be effective and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Debentures owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d) or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction if it is not then so subject; (e) in the case of a Shelf Registration, notify each Holder of Registrable Debentures and counsel for such Holders promptly and, if requested by such Holder or counsel, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Debentures covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to such offering cease to be true and correct in all material respects, (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Debentures for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (vi) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective (including as contemplated in Section 2(d)(iii) hereof) which (A) is contemplated in Section 2(d)(i) or (B) makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Shelf Registration Statement or Prospectus in order to make the statements therein not misleading and (vii) of any determination by the Company that a post-effective amendment to a Registration Statement would be appropriate; (f) (A) in the case of an Exchange Offer, (i) include in the Exchange Offer Registration Statement a "Plan of Distribution" section covering the use of the Prospectus included in the Exchange Offer Registration Statement by broker-dealers who have exchanged their Registrable Debentures for Exchange Debentures for the resale of such Exchange Debentures, (ii) furnish to each broker-dealer who desires to participate in the Exchange Offer, without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such broker-dealer may reasonably request, (iii) include in the Exchange Offer Registration Statement a statement that any broker-dealer who holds Registrable Debentures acquired for its own account as a result of market-making activities or other trading activities (a "Participating Broker-Dealer"), and who receives Exchange Debentures for Registrable Debentures pursuant to the Exchange Offer, may be a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Debentures, (iv) subject to the last paragraph of this Section 3, hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any broker-dealer in connection with the sale or transfer of the Exchange Debentures covered by the Prospectus or any amendment or supplement thereto, and (v) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer the following provision: "If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Debentures. If the undersigned is a broker- dealer that will receive Exchange Debentures for its own account in exchange for Registrable Debentures, it represents that the Registrable Debentures to be exchanged for Exchange Debentures were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Debentures pursuant to the Exchange Offer; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the 1933 Act;" (B) to the extent any Participating Broker-Dealer participates in the Exchange Offer, the Company shall use its best efforts to cause to be delivered at the request of an entity representing the Participating Broker-Dealers (which entity shall be Merrill Lynch, Pierce, Fenner & Smith Incorporated, unless it elects not to act as such representative) any "cold comfort" letters with respect to the Prospectus in the form existing on the last date for which exchanges are accepted pursuant to the Exchange Offer and with respect to each subsequent amendment or supplement, if any, effected during the period specified in clause (C) below; (C) to the extent any Participating Broker-Dealer participates in the Exchange Offer, the Company shall use its reasonable best efforts to maintain the effectiveness of the Exchange Offer Registration Statement for a period of 180 days following the closing of the Exchange Offer or such shorter period which will terminate when the Participating Broker-Dealers have completed all resales subject to applicable prospectus delivery requirements; and (D) the Company shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement as would otherwise be contemplated by Section 3(b) hereof, or take any other action as a result of this Section 3(f), for a period exceeding 180 days after the last date for which exchanges are accepted pursuant to the Exchange Offer (as such period may be extended by the Company) and Participating Broker-Dealers shall not be authorized by the Company to, and shall not, deliver such Prospectus after such period in connection with resales contemplated by this Section 3; (g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Debentures copies of any request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information; (h) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement as soon as practicable and provide immediate notice to each Holder of the withdrawal of any such order; (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Debentures, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Debentures to facilitate the timely preparation and delivery of certificates representing Registrable Debentures to be sold and not bearing any restrictive legends; and cause such Registrable Debentures to be in such denominations (consistent with the provisions of the Indenture) in a form eligible for deposit with the Depositary and registered in such names as the selling Holders or the underwriters, if any, may reasonably request in writing at least one business day prior to the closing of any sale of Registrable Debentures; (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Section 3(e)(vi) hereof, use its best efforts to prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Debentures, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company agrees to notify each Holder to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and each Holder hereby agrees to suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission. At such time as such public disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company agrees promptly to notify each Holder of such determination and to furnish each Holder such numbers of copies of the Prospectus, as amended or supplemented, as such Holder may reasonably request; (l) obtain CUSIP numbers for all Exchange Debentures, or Registrable Debentures, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with printed certificates for the Exchange Debentures or Registrable Debentures, as the case may be, in a form eligible for deposit with the Depositary; (m) (i) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Debentures, or Registrable Debentures, as the case may be, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use its reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (n) in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions (including those reasonably requested by the holders of a majority in principal amount of the Registrable Debentures being sold) in order to expedite or facilitate the disposition of such Registrable Debentures and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, in a manner that is reasonable and customary: (i) make such representations and warranties to the Holders of such Registrable Debentures and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by such Holders and underwriters; (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the Holders of a majority in principal amount of the Registrable Debentures being sold) addressed to each selling Holder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters; (iii) obtain "cold comfort" letters and updates thereof from the Company's independent certified public accountants addressed to the underwriters, if any, and will use best efforts to have such letters addressed to the selling Holders of Registrable Debentures, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with similar underwritten offerings; (iv) enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Debentures, which agreement shall be in form, substance and scope customary for similar offerings; (v) if an underwriting agreement is entered into in the case of an underwritten offering, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 5 hereof with respect to the underwriters and all other parties to be indemnified pursuant to Section 5 hereof; and (vi) deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings. The above shall be done at (i) the effectiveness of such Registration Statement (and, if appropriate, each post-effective amendment thereto) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder. In the case of any underwritten offering, the Company shall provide written notice to the Holders of all Registrable Debentures of such underwritten offering at least thirty days prior to the filing of a prospectus supplement for such underwritten offering. Such notice shall (x) offer each such Holder the right to participate in such underwritten offering, (y) specify a date, which shall be no earlier than ten days following the date of such notice, by which such Holder must inform the Company of its intent to participate in such underwritten offering and (z) include the instructions such Holder must follow in order to participate in such underwritten offering; (o) in the case of a Shelf Registration, make available for inspection by representatives of the Holders of the Registrable Debentures and any underwriters participating in any disposition pursuant to a Shelf Registration Statement and any U.S. counsel or accountant retained by such Holders or underwriters, all financial and other records, pertinent corporate documents and properties of the Company reasonably requested by any such Persons, and cause the respective officers, directors, employees, and any other agents of the Company to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement; provided, that any such records, documents, properties and such information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such records, documents, properties or information shall be kept confidential by any such representative, underwriter, counsel or accountant and shall be used only in connection with such Shelf Registration Statement, unless such information has become available (not in violation of this Agreement) to the public generally or through a third party without an accompanying obligation of confidentiality, and except that such representative, underwriter, counsel or accountant shall have no liability, and shall not be in breach of this provision, if disclosure of such confidential information is made in connection with a court proceeding or required by law, and the Company shall be entitled to request that such representative, underwriter, counsel or accountant sign a confidentiality agreement to the foregoing effect. Each such person will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public through no fault or action of such person. Each selling Holder of such Registrable Debentures will be required to further agree that it will, upon learning that disclosure of confidential information is necessary, give notice to the Company to allow the Company at its expense to undertake appropriate action to prevent disclosure of the confidential information; (p) (i) in the case of an Exchange Offer, a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to a Prospectus, provide copies of such document to the Initial Purchasers, and make such changes in any such document prior to the filing thereof as the Initial Purchasers or their counsel may reasonably request; (ii) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Debentures, to the Initial Purchasers, to counsel on behalf of the Holders and to the underwriter or underwriters of an underwritten offering of Registrable Debentures, if any, and make such changes in any such document prior to the filing thereof as counsel to the Initial Purchasers or any underwriter may reasonably request; and (iii) cause the representatives of the Company to be available for discussion of such document as shall be reasonably requested by the Holders of Registrable Debentures, the Initial Purchasers on behalf of such Holders or any underwriter, and shall not at any time make any filing of any such document of which such Holders, the Initial Purchasers on behalf of such Holders, their counsel or any underwriter shall not have previously been advised and furnished a copy or to which such Holders, the Initial Purchasers on behalf of such Holders, their counsel or any underwriter shall reasonably object within a reasonable time period; (q) in the case of a Shelf Registration, use its reasonable best efforts to cause all Registrable Debentures to be listed on any securities exchange on which similar debt securities issued by the Company are then listed if requested by the Majority Holders or by the underwriter or underwriters of an underwritten offering of Registrable Debentures, if any; (r) in the case of a Shelf Registration, use its reasonable best efforts to cause the Registrable Debentures to be rated with the appropriate rating agencies, if so requested by the holders of a majority in principal amount of Registrable Debentures or by the underwriter or underwriters of an underwritten offering, unless the Registrable Debentures are already so rated; (s) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least twelve months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; and (t) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter and its counsel. In the case of a Shelf Registration Statement, the Company may (as a documents required undcondition to such Holder's participation in the Shelf Registration) require each Holder of Registrable Debentures to furnish to the Company such information regarding such Holder and the proposed distribution by such Holder of such Registrable Debentures as the Company may from time to time reasonably request and agree in writing to be bound by the Agreement, including the indemnification provisions. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company of the happening of any event or the discovery of any facts, each of the kind described in Sections 2(d)(i) and 3(e)(ii)-(vii) hereof, such Holder will forthwith discontinue disposition of Registrable Debentures pursuant to a Registration Statement until such Holder's receipt of (i) the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof or (ii) written notice from the Company that the Shelf Registration Statement is once again effective and that no supplement or amendment is required. If so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Debentures current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Registrable Debentures pursuant to a Shelf Registration Statement as a result of the happening of any event or the discovery of any facts, each of the kind described in Sections 2(d)(i) and 3(e)(vi) hereof, the Company shall be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective during such period of suspension; provided that (i) such period of suspension shall not exceed the time periods provided in Section 2(d)(iii) hereof and (ii) the Company shall, if necessary, use its reasonable best efforts to file and have declared effective (if an amendment) as soon as practicable an amendment or supplement to the Shelf Registration Statement and shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions. 4. Underwritten Registrations. If any of the Registrable Debentures covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Majority Holders of such Registrable Debentures included in such offering and shall be reasonably acceptable to the Company. No Holder of Registrable Debentures may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Debentures on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other er the terms of such underwriting arrangements. 5. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser, each Holder, including Participating Broker-Dealers, each underwriter who participates in an offering of Registrable Debentures, their respective affiliates, and their respective directors, officers, employees, agents, and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred by the Initial Purchaser, any Holder or any such controlling or affiliated Person in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any amendment thereof, pursuant to which Exchange Debentures or Registrable Debentures were registered under the 1933 Act, including all documents incorporated therein by reference, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or caused by any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Initial Purchaser or any Holder furnished to the Company in writing by such Initial Purchaser through you or by or relating to any Holder or underwriter who participates in an offering of Registrable Debentures, in each case expressly for use therein. (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, each Initial Purchaser, each underwriter who participates in an offering of Registrable Debentures, and the other selling Holders, and each of their respective directors and officers (including each director and officer of the Company who signed the Registration Statement) and each person, if any, who controls the Company, any Initial Purchaser, any underwriter or any other selling Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses described in the indemnity contained in Section 5(a), as incurred, but only with reference to information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement or any amendment thereof or any Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing (but the failure to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 5) and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (a) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Initial Purchasers and all Persons, if any, who control any Initial Purchaser within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each Person, if any, who controls the Company within the meaning of either such Section and (c) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Holders and all Persons, if any, who control any Holders within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Initial Purchasers and such control Persons of Initial Purchasers, such firm shall be designated in writing by Merrill Lynch. In the case of any such separate firm for the Holders and such Persons who control Holders, such firm shall be designated in writing by the Majority Holders. In all other cases, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in paragraph (a) or paragraph (b) of this Section 5 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of such indemnifying party or parties on the one hand and the indemnified party or parties on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or parties or such indemnified party or parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, Initial Purchasers, and the Holders of Registrable Debentures respective obligations to contribute pursuant to this Section 5 are several in proportion to the respective number of Debentures they have purchased hereunder, and not joint. (e) The Company, the Initial Purchasers, and each Holder of Registrable Debentures agree that it would not be just or equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5, no Holder shall be required to indemnify or contribute any amount in excess of the amount by which the total price at which Registrable Debentures were sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 5, each Person, if any, who controls an Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Initial Purchaser or Holder, and each director of the Company, each officer of the Company who signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser or any Holder, or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company, its officers or directors or any Person controlling the Company, (iii) acceptance of any of the Exchange Debentures and (iv) any sale of Registrable Debentures pursuant to a Shelf Registration Statement. 6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company covenants that it will file the reports required to be filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder, that if it ceases to be so required to file such reports, it will upon the request of any Holder of Registrable Debentures (i) make publicly available or cause to be made publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to be delivered such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will take such further action as any Holder of Registrable Debentures may reasonably request, and (iii) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Debentures without registration under the 1933 Act within the limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (z) any similar rules or regulations hereafter adopted by the SEC. Upon the written request of any Holder of Registrable Debentures, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. (b) No Inconsistent Agreements. The Company has not entered into nor will the Company on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Debentures in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements. (c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Debentures affected by such amendment, modification, supplement, waiver or departure. (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder (other than an Initial Purchaser), at the most current address set forth on the records of the Registrar under the Indenture, (ii) if to an Initial Purchaser, at the most current address given by such Initial Purchaser to the Company by means of a notice given in accordance with the provisions of this Section 6(d), which address initially is the address set forth in the Purchase Agreement; and (iii) if to the Company, initially at the address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(d). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture. (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Debentures in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Debentures, in any manner, whether by operation of law or otherwise, such Registrable Debentures shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Debentures, such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof. (f) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. KOHL'S CORPORATION By: /s/ R. Lawrence Montgomery ------------------------------ Name: R.Lawrence Montgomery Title: Vice Chairman of the Board and Chief Executive Officer Confirmed and Accepted, as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated MORGAN STANLEY & CO. INCORPORATED BNY CAPITAL MARKETS, INC. BANC ONE CAPITAL MARKETS, INC. By: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated By: /s/ Cynthia Bates -------------------- Name: Cynthia Bates Title: Vice President EX-5 5 OPINION OF GODFREY & KAHN, S.C. GODFREY & KAHN, S.C. 780 North Water Street Milwaukee, Wisconsin 53202-3590 TEL (414) 273-3500 July 16, 1999 Kohl's Corporation N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 RE: Registration Statement on Form S-4 $200 million aggregate principal amount 7 1/4% Debentures due June 1, 2029 Ladies and Gentlemen: We have acted as special counsel to Kohl's Corporation, a Wisconsin corporation (the "Company"), in connection with the Company's registration of $200,000,000 aggregate principal amount of its 7 1/4% Debentures due June 1, 2029 (the "New Debentures") on a Registration Statement on Form S-4 (the "Registration Statement") to be filed on or about July 16, 1999 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"). The New Debentures will be offered in exchange (the "Exchange Offer") for any and all of the Company's outstanding 7 1/4% Debentures due June 1, 2029 (the "Old Debentures"). The Old Debentures were issued, and the New Debentures will be issued, pursuant to the Indenture between the Company and The Bank of New York, as Trustee, dated as of December 1, 1995 as supplemented by a First Supplemental Indenture, dated as of June 1, 1999 (the "Indenture"). In our role as special counsel, we have examined such corporate and other records, instruments, certificates and documents as we considered necessary to enable us to express this opinion. Based on the foregoing, it is our opinion that, upon completion of the Exchange Offer, the New Debentures will have been duly authorized for issuance and, when the New Debentures are duly executed, authenticated, issued and delivered in accordance with the Indenture, the New Debentures will constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles (whether considered in proceeding at law or in equity), including without limitation, concepts of materiality, reasonableness, good faith and fair dealing. In applying such principles, a court, among other things, might not allow the Trustee to take action based upon the occurrence of a default deemed immaterial, and we assume that the Trustee will at all time act in good faith, in a commercially reasonable manner and in compliance with all laws and regulations. The foregoing opinions are limited to the laws of the State of Wisconsin, and we express no opinion with respect to any other laws. The Indenture and the New Debentures state that they are governed by New York law. For purposes of our opinion above, we have assumed that the laws of the State of New York are identical to the laws of the State of Wisconsin. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to being named in the related prospectus under the caption "Legal Matters" with respect to the matters stated therein. In giving such consent, we do not admit that we are in the category of persons whom consent is required under Section 7 of the Act. Mr. Peter M. Sommerhauser is an affiliate of the Company and a shareholder and member of the Management Committee of Godfrey & Kahn, S.C. Very truly yours, /s/Godfrey & Kahn, S.C. GODFREY & KAHN, S.C. LDL:ica EX-23.1 6 CONSENT OF ERNST & YOUNG LLP Exhibit 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the captions "Selected Consolidated Financial Data" and "Experts" in the Registration Statement (Form S-4) and related Prospectus of Kohl's Corporation for the registration of $200,000,000 of 7.25% Debentures and to the incorporation by reference therein of our report dated March 5, 1999, except for Note 12 for which the date is March 18, 1999, with respect to the consolidated financial statements and schedule of Kohl's Corporation included in its Annual Report (Form 10-K) for the year ended January 30, 1999, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP Milwaukee, Wisconsin July 14, 1999 EX-25 7 FORM T-1 Exhibit 25 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ___________________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive (Zip code) offices) ___________________________ KOHL'S CORPORATION (Exact name of obligor as specified in its charter) Wisconsin 39-1630919 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 (Address of principal executive (Zip code) offices) ___________________________ 7 1/4% Debentures due June 1, 2029 (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Name Address Superintendent of Banks of the 2 Rector Street, New York, N.Y. State of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Washington, D.C. 20429 Corporation New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 6th day of July, 1999. THE BANK OF NEW YORK By: /s/MICHELE L. RUSSO ------------------------ Name: MICHELE L. RUSSO Title: ASSISTANT TREASURER Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1999, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. ASSETS Dollar Amounts In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency $4,508,742 and coin Interest-bearing balances 4,425,071 Securities: Held-to-maturity securities 836,304 Available-for-sale securities 4,047,851 Federal funds sold and Securities purchased under agreements to resell 1,743,269 Loans and lease financing receivables: Loans and leases, net of unearned income.........39,349,679 LESS: Allowance for loan and lease losses......603,025 LESS: Allocated transfer risk reserve............15,906 Loans and leases, net of unearned income, allowance, and reserve 38,730,748 Trading Assets 1,571,372 Premises and fixed assets (including capitalized leases) 685,674 Other real estate owned 10,331 Investments in unconsolidated subsidiaries and associated companies 182,449 Customers' liability to this bank on acceptances outstanding 1,184,882 Intangible assets 1,129,636 Other assets 2,632,309 Total assets $61,688,578 LIABILITIES Deposits: In domestic offices $25,731,036 Noninterest-bearing 10,252,589 Interest-bearing 15,478,447 In foreign offices, Edge and Agreement subsidiaries, and IBFs 18,756,302 Noninterest-bearing 111,386 Interest-bearing 18,644,916 Federal funds purchased and Securities sold under agreements to repurchase 3,276,362 Demand notes issued to the U.S. Treasury 230,671 Trading liabilities 1,554,493 Other borrowed money: With remaining maturity of one year or less 1,154,502 With remaining maturity of more than one year through three years 465 With remaining maturity of more than three years 31,080 Bank's liability on acceptances executed and outstanding 1,185,364 Subordinated notes and debentures 1,308,000 Other liabilities 2,743,590 Total liabilities 55,971,865 EQUITY CAPITAL Common stock 1,135,284 Surplus 764,443 Undivided profits and capital reserves 3,807,697 Net unrealized holding gains (losses) on available-for-sale securities 44,106 Cumulative foreign currency translation adjustments (34,817) Total equity capital 5,716,713 Total liabilities and equity capital $61,688,578 I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Reyni Directors Alan R. Griffith Gerald L. Hassell EX-99.1 8 LETTER OF TRANSMITTAL Exhibit 99.1 LETTER OF TRANSMITTAL FOR TENDERS OF $200,000,000 Aggregate Principal Amount of 7 1/4% Debentures due June 1, 2029 KOHL'S CORPORATION Pursuant to the Prospectus dated , 1999 of Kohl's Corporation THE EXCHANGE OFFER WILL EXPIRE 5:00 P.M., NEW YORK CITY TIME, ON JULY , 1999, UNLESS EXTENDED (THE "EXPIRATION DATE''). TENDERED OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.P., NEW YORK CITY TIME, ON THE EXPIRATION DATE. Deliver to: The Bank of New York, Exchange Agent: By Registered or Certified Mail: By Overnight Courier or Hand: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7-E Corporate Trust Services Window New York, NY 10286 Ground Level Attention: Reorganization Section New York, NY 10286 Attention: Reorganization Section By Facsimile: (212) 815-6339 Confirm by Telephone for Eligible Institutions: (212) 815-5920 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. The undersigned acknowledges that he or she has received the prospectus, dated , 1999 (the "Prospectus"), of Kohl's Corporation, a Wisconsin corporation (the "Company"), and this Letter of Transmittal, which may be amended from time to time (this "Letter"), which together constitute the Company's offer (the "Exchange Offer") to exchange up to $200 million aggregate principal amount of 7 1/4% Debentures due June 1, 2029 which have been registered under the Securities Act of 1933, as amended (the "New Debentures"), of the Company for a like principal amount of the Company's issued and outstanding 7 1/4% Debentures due June 1, 2029 (the "Old Debentures" and sometimes collectively with the New Debentures, the "Debentures"), with the Holders thereof. As used herein, ``Holder" shall mean the owner of any Old Debentures as reflected in the records of The Bank of New York as registrar for the Old Debentures (in such capacity, the "Registrar''), or any person whose Old Debentures are held of record by DTC (as defined below). For each Old Debenture accepted for exchange, the Holder of such Old Debenture will receive a New Debenture having a principal amount equal to that of the surrendered Old Debenture. Each New Debenture will bear interest from the most recent date to which interest has been paid or duly provided for on the Old Debenture surrendered in exchange for such New Debenture or, if no such interest has been paid or duly provided for on such Old Debenture, from June 1, 1999. Holders of the Old Debentures whose Old Debentures are accepted for exchange will not receive accrued interest on such Old Debentures for any period from and after the last interest payment date to which interest has been paid or duly provided for on such Old Debentures or, if no such interest has been paid or duly provided for, from and after June 1, 1999. This Letter is to be used: (a) by all Holders who are not members of the Automated Tender Offering Program ("ATOP") at the Depository Trust Company ("DTC"); (b) by Holders who are ATOP members but choose not to use ATOP; or (c) if the Old Debentures are to be tendered in accordance with the guaranteed delivery procedures set forth in "The Exchange Offer-Guaranteed Delivery Procedures" section of the Prospectus. See Instruction 2. Delivery of this Letter to DTC does not constitute delivery to the Exchange Agent. Subject to the terms of the Exchange Offer, the Company will accept for exchange any and all Old Debentures validly tendered on or prior to 5:00 p.m., New York City time, on , 1999, unless the Exchange Offer is extended by the Company (the "Expiration Date"). Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. IMPORTANT: HOLDERS WHO WISH TO TENDER OLD DEBENTURES IN THE EXCHANGE OFFER MUST COMPLETE THIS LETTER OF TRANSMITTAL AND TENDER THE OLD DEBENTURES TO THE EXCHANGE AGENT AND NOT TO THE COMPANY. The Exchange Offer is not conditioned upon any minimum principal amount of Old Debentures being tendered for exchange. However, the Exchange Offer is subject to certain conditions. Please see the Prospectus under "The Exchange Offer-Conditions of the Exchange Offer." The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, Holders of Old Debentures in any jurisdiction in which the making or acceptance of the Exchange Offer would not be in compliance with the laws of such jurisdiction. The instructions included with this Letter of Transmittal must be followed in their entirety. Questions and requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address listed on the front page hereof. APPROPRIATE SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. LADIES AND GENTLEMEN: The undersigned hereby tenders to the Company the principal amount of Old Debentures indicated below under "Description of Old Debentures," in accordance with and upon the terms and subject to the conditions set forth in the Prospectus, receipt of which is hereby acknowledged, and in this Letter of Transmittal, for the purpose of exchanging each $1,000 principal amount of Old Debentures designated herein held by the undersigned and tendered hereby for $1,000 principal amount of the New Debentures. New Debentures will be issued only in a minimum denomination of $100,000 and integral multiples of $1,000 to each tendering Holder of Old Debentures whose Old Debentures are accepted in the Exchange Offer. Subject to the foregoing, Holders may tender all or a portion of their Old Debentures pursuant to the Exchange Offer. Subject to, and effective upon, the acceptance for exchange of the Old Debentures tendered herewith in accordance with the terms of the Exchange Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all such Old Debentures that are being tendered hereby and that are being accepted for exchange pursuant to the Exchange Offer. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Company), with respect to the Old Debentures tendered hereby and accepted for exchange pursuant to the Exchange Offer with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to deliver the Old Debentures tendered hereby to the Company (together with all accompanying evidences of transfer and authenticity) for transfer or cancellation by the Company. All authority conferred or agreed to be conferred in this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, legal representatives, successors and assigns of the undersigned. Any tender of Old Debentures hereunder may be withdrawn only in accordance with the procedures set forth in the instructions contained in this Letter of Transmittal. See Instruction 4 hereto. The undersigned hereby represents and warrants that he or she has full power and authority to tender, exchange, assign and transfer the Old Debentures tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the assignment and transfer of the Old Debentures tendered. The undersigned has read and agrees to all of the terms of the Exchange Offer. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Debentures tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer-Withdrawal Rights" section of the Prospectus. The name(s) and address(es) of the registered Holder(s) should be printed herein under "Description of Old Debentures" (unless a label setting forth such information appears thereunder), exactly as they appear on the Old Debentures tendered hereby. The certificate number(s) and the principal amount of Old Debentures to which this Letter of Transmittal relates, together with the principal amount of such Old Debentures that the undersigned wishes to tender, should be indicated in the appropriate boxes herein under "Description of Old Debentures." The undersigned understands that the tender of Old Debentures pursuant to one of the procedures described in the Prospectus under "The Exchange Offer-Procedures for Tendering Old Debentures" and the Instructions hereto will constitute the tendering Holder's acceptance of the terms and the conditions of the Exchange Offer. The Company's acceptance for exchange of Old Debentures tendered pursuant to the Exchange Offer will constitute a binding agreement between the tendering Holder and the Company upon the terms and subject to the conditions herein and in the Prospectus. The undersigned acknowledges that the Company is making the Exchange Offer in reliance on the position of the staff of the Securities and Exchange Commission (the "SEC") as set forth in certain interpretive letters addressed to third parties in other transactions. However, the Company has not sought its own interpretive letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as it has in the interpretive letters to third parties. Based on these interpretations by the staff of the SEC, and except as provided below, the Company believes that New Debentures issued pursuant to the Exchange Offer to a Holder in exchange for Old Debentures may be offered for resale, resold and otherwise transferred by a Holder that participates in the Exchange Offer and is not a broker-dealer, without further compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, as amended (the "Securities Act"). In order to receive New Debentures that are freely tradable, a Holder must acquire the New Debentures in the ordinary course of its business and may not participate, or have any arrangement or understanding with any person to participate, in the distribution (within the meaning of the Securities Act) of the Old Debentures or the New Debentures. Holders wishing to participate in the Exchange Offer must make the representations described below. Any Holder of Old Debentures (a) who is the Company's "affiliate" (as defined in Rule 405 under the Securities Act); (b) who did not acquire the New Debentures in the ordinary course of its business; or (c) who intends to participate in the distribution (within the meaning, of the Securities Act) of the Old Debentures or the New Debentures, will be subject to separate restrictions. Each Holder in any of the above categories (x) will not be able to rely on the interpretations of the SEC staff in the above-mentioned interpretive letters; (y) will not be permitted or entitled to tender Old Debentures in the Exchange Offer; and (z) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of Old Debentures unless such sale is made pursuant to an exemption from such requirements. If the undersigned is a broker-dealer that receives New Debentures for its own account pursuant to the Exchange Offer, it acknowledges that it acquired the Old Debentures for its own account as a result of market-making activities or other trading activities and agrees that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Debentures. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Based on the position taken by the staff of the SEC in the interpretive letters referred to above, the Company believes that broker-dealers who acquired Old Debentures for their own accounts, as a result of market-making or other trading activities ("Participating Broker-Dealers") may fulfill their prospectus delivery requirements with respect to the New Debentures received upon exchange of Old Debentures (other than Old Debentures which represent an unsold allotment from the original sale of the Old Debentures) with a prospectus meeting the requirements of the Securities Act, which may be the prospectus prepared for the Exchange Offer so long as it contains a description of the plan of distribution with respect to the resale of such New Debentures. Accordingly, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer during the period referred to below in connection with resales of New Debentures received in exchange for Old Debentures where such Old Debentures were acquired by such Participating Broker-Dealer for its own account as a result of market-making or other trading activities. The Company has agreed that the Prospectus may be used by a Participating Broker-Dealer in connection with resales of such New Debentures. See the Prospectus under "Plan of Distribution." However, a Participating Broker-Dealer who intends to use the Prospectus in connection with the resale of New Debentures received in exchange for Old Debentures pursuant to the Exchange Offer must notify the Company, or cause the Company to be notified, on or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such notice may be given in the space provided for that purpose below or may be delivered to the Exchange Agent at the address set forth on the first page hereof. Any Participating Broker-Dealer who is an "affiliate" of the Company may not rely on such interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. If the undersigned is a Participating Broker-Dealer who tenders Old Debentures pursuant to the Exchange Offer, it agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained in the Prospectus, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement dated June 1, 1999 among the Company and the initial purchasers of the Old Debentures, such Participating Broker-Dealer will suspend the sale of New Debentures pursuant to the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such Participating Broker-Dealer or the Company has given notice that the sale of the New Debentures may be resumed, as the case may be. The undersigned hereby represents and warrants to the Company that (a) the New Debentures to be acquired in connection with the Exchange Offer by it and each beneficial owner of the Old Debentures that it represents (a ``Beneficial Owner") are being acquired by the Holder and such Beneficial Owner in the ordinary course of business of the Holder and such Beneficial Owner, (b) it and such Beneficial Owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution (within the meaning of the Securities Act) of the Old Debentures or the New Debentures, (c) that if it is a Participating Broker-Dealer, it will deliver a prospectus in connection with any resale of New Debentures acquired in the Exchange Offer, and (d) neither it nor any such Beneficial Owner is an "affiliate," as defined under Rule 405 under the Securities Act, of the Company. The undersigned understands that the New Debentures issued in consideration of Old Debentures accepted for exchange, and/or any principal amount of Old Debentures not tendered or not accepted for exchange, will only be issued in the name of the Holder(s) appearing herein under "Description of Old Debentures." Unless otherwise indicated under "Special Delivery Instructions," please mail the New Debentures issued in consideration of Old Debentures accepted for exchange, and/or any principal amount of Old Debentures not tendered or not accepted for exchange (and accompanying documents, as appropriate), to the Holder(s) at the address(es) appearing herein under "Description of Old Debentures." In the event that the Special Delivery Instructions are completed, please mail the New Debentures issued in consideration of Old Debentures accepted for exchange, and/or any Old Debentures for any principal amount not tendered or not accepted for exchange, in the name of the Holder(s) appearing herein under "Description of Old Debentures," and send such New Debentures and/or Old Debentures to the address(es) so indicated. Any transfer of Old Debentures to a different holder must be completed according to the provisions on transfer of Old Debentures contained in the Indenture, dated as of December 1, 1995 as amended by a First Supplemental Indenture dated as of June 1, 1999, between the Company and The Bank of New York, as trustee (the "Indenture"), or on the Old Debenture. THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD DEBENTURES" BELOW AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD DEBENTURES AS SET FORTH IN SUCH BOX BELOW. INSTRUCTIONS Forming Part of the Terms and Conditions of the Exchange Offer 1. Guarantee of Signatures. Each signature on this Letter of Transmittal or a notice of withdrawal (as described in Instruction 4), as the case may be, must be guaranteed unless the Old Debentures surrendered for exchange are tendered (a) by a Holder of the Old Debentures who has not completed the box entitled "Special Delivery Instructions," or (b) for the account of an Eligible Institution (as defined below). If a signature on a Letter of Transmittal or a notice of withdrawal, as the case may be, is required to be guaranteed, such signature must be guaranteed by a participant in a recognized Medallion Signature Program (a "Medallion Signature Guarantor"). If the Letter of Transmittal is signed by a person other than the Holder of the Old Debentures, the Old Debentures surrendered for exchange must be endorsed by the Holder, with the signature thereon guaranteed by a Medallion Signature Guarantor. The term "Eligible Institution" means a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or any other "eligible guarantor institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended. 2. Delivery of this Letter of Transmittal and Old Debentures; Guaranteed Delivery Procedures. This Letter of Transmittal is to be used: (a) by all Holders who are not ATOP members, (b) by Holders who are ATOP members but choose not to use ATOP or (c) if the Old Debentures are to be tendered in accordance with the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer-Guaranteed Delivery Procedures." Except as set forth below, a Holder who wishes to tender Old Debentures for exchange pursuant to the Exchange Offer must transmit such Old Debentures, together with a properly completed and duly executed Letter of Transmittal, including all other documents required by this Letter of Transmittal, to the Exchange Agent at the address set forth on the front page of this Letter of Transmittal prior to 5:00 p.m., New York City time on the Expiration Date. THE METHOD OF DELIVERY OF OLD DEBENTURES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT EACH HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. The "Expiration Date" shall be , 1999 at 5:00 p.m., New York City time, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the Expiration Date shall be the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral or written notice and will make a public announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. LETTERS OF TRANSMITTAL SHOULD NOT BE SENT TO THE COMPANY OR TO DTC. Any financial institution that is a participant in DTC's Book-Entry Transfer Facility system may make book entry delivery of the Old Debentures by causing DTC to transfer the Old Debentures into the Exchange Agent's account in accordance with DTC's procedures for such transfer. To be timely, book-entry delivery of Old Debentures requires receipt of a confirmation of a book-entry transfer before the expiration date. Although delivery of the Old Debentures may be effected through book-entry transfer into the Exchange Agent's account at DTC, this Letter of Transmittal (or facsimile), properly completed and executed, with any required signature guarantees and any other required documents or an agent's message (as described below), must in any case, be delivered to and received by the Exchange Agent at its address on or before the Expiration Date, or the guaranteed delivery procedure set forth below must be complied with. DTC has confirmed that the Exchange Offer is eligible for ATOP. Accordingly, participants in ATOP may, instead of physically completing and signing the Letter of Transmittal and delivering it to the Exchange Agent, electronically transmit their acceptance of the Exchange Offer by causing DTC to transfer Old Debentures to the Exchange Agent in accordance with DTC's ATOP procedures for transfer. DTC will then send an agent's message to the Exchange Agent. The term "agent's message" means a message transmitted by DTC, received by the Exchange Agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from a participant in ATOP that is tendering Old Debentures that are the subject of such book-entry confirmation, that the participant has received and agrees to be bound by the terms of the Letter of Transmittal or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the Notice of Guaranteed Delivery, and that the Company may enforce such agreement against that participant. Holders who wish to tender their Old Debentures and (a) whose Old Debentures are not immediately available or (b) who cannot deliver their Old Debentures or any other documents required by this Letter of Transmittal to the Exchange Agent prior to the Expiration Date (or complete the procedure for book-entry transfer on a timely basis), may tender their Old Debentures according to the following guaranteed delivery procedures: (1) such tender must be made by or through an Eligible Institution and a Notice of Guaranteed Delivery must be signed by such Holder, (2) on or prior to the Expiration Date, the Exchange Agent must have received from the Holder and the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number or numbers of the tendered Old Debentures, and the principal amount of tendered Old Debentures, stating that the tender is being made thereby and guaranteeing that, within four business days after the date of delivery of the Notice of Guaranteed Delivery, the tendered Old Debentures, a duly executed Letter of Transmittal and any other required documents will be deposited by the Eligible Institution with the Exchange Agent, and (3) such properly completed and executed documents required hereby and the tendered Old Debentures in proper form for transfer (or confirmation of a book-entry transfer of such Old Debentures into the Exchange Agent's account at DTC) must be received by the Exchange Agent within four business days after the Expiration Date. Any Holder who tenders Old Debentures pursuant to the guaranteed delivery procedures described above must deliver the Notice of Guaranteed Delivery and Letter of Transmittal relating to such Old Debentures to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. Any Beneficial Owner of the Old Debentures whose Old Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender Old Debentures in the Exchange Offer should contact such registered holder promptly and instruct such registered holder to tender on such Beneficial Owner's behalf. If such Beneficial Owner wishes to tender directly, such Beneficial Owner must, prior to completing and executing this Letter of Transmittal and tendering Old Debentures, make appropriate arrangements to register ownership of the Old Debentures in such Beneficial Owner's name. Beneficial Owners should be aware that the transfer of registered ownership may take considerable time. No alternative, conditional or contingent tenders will be accepted. All tendering Holders, by execution of this Letter of Transmittal (or facsimile hereof), waive any right to receive notice of acceptance of their Old Debentures for exchange. 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and principal amount of the Old Debentures to which this Letter of Transmittal relates should be listed on a separate signed schedule attached hereto. 4. Withdrawal of Tender. Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m. New York City time, on the Expiration Date. Tenders of the Old Debentures may be withdrawn by delivery of a written or facsimile transmission notice to the Exchange Agent, at its address set forth on the first page hereof, at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (a) specify the name of the person having deposited the Old Debentures to be withdrawn (the "Depositor"), (b) identify the Old Debentures to be withdrawn (including the certificate number or numbers and principal amount of such Old Debentures) or, in the case of Old Debentures transferred by book-entry transfer, the name and number of the account at DTC to be credited, (c) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Debentures were tendered (including any required signature guarantees) or be accompanied by a bond power in the name of the person withdrawing the tender, in satisfactory form as determined by the Company in its sole discretion, duly executed by the Holder, with the signature thereon guaranteed by a Medallion Signature Guarantor together with the other documents required upon transfer by the Indenture or the Old Debentures, and (4) specify the name in which such Old Debentures are to be re-registered, if different from the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, in its sole discretion. The Old Debentures so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Debentures which have been tendered for exchange but which are withdrawn will be returned to the applicable Holder without cost to such Holder as soon as practicable after withdrawal. Properly withdrawn Old Debentures may be retendered by following one of the procedures described in the Prospectus under "The Exchange Offer-Procedures for Tendering Old Debentures" at any time on or prior to the Expiration Date. 5. Partial Tenders; Pro Rata Effect. Tenders of the Old Debentures will be accepted only in a minimum denomination of $100,000 and integral multiples of $1,000. If less than the entire principal amount evidenced by any Old Debentures is to be tendered, fill in the principal amount that is to be tendered in the box entitled "Principal Amount Tendered" below. The entire principal amount of all Old Debentures delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 6. Signatures on this Letter of Transmittal; Bond Powers and Endorsements. If this Letter of Transmittal is signed by the registered Holders of the Old Debentures tendered hereby, the signature must correspond with the name as written on the face of the certificate representing such Old Debentures without alteration, enlargement or any change whatsoever. If any of the Old Debentures tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the Old Debentures tendered hereby are registered in different names, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal and any necessary accompanying documents as there are different registrations. When this Letter of Transmittal is signed by the Holder(s) of Old Debentures listed and tendered hereby, no endorsements or separate bond powers are required. If this Letter of Transmittal, or any endorsement, bond power, power of attorney or any other document required by the Letter of Transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company, in the sole discretion of the Company, of such person's authority to so act must be submitted. 7. Special Delivery Instructions. Tendering Holders should indicate in the applicable box the name and address to which New Debentures issued in consideration of Old Debentures accepted for exchange, or Old Debentures for principal amounts not exchanged or not tendered, are to be sent, if different from the name and address of the person signing this Letter of Transmittal. 8. Waiver of Conditions. The Company reserves the absolute right to waive any of the specified conditions in the Exchange Offer, in whole at any time or in part from time to time, in the case of any Old Debentures tendered hereby. See "The Exchange Offer Conditions to the Exchange Offer," in the Prospectus. 9. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Debentures pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the exchange of Old Debentures pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. 10. Irregularities. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of Old Debentures tendered for exchange will be determined by the Company in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all Old Debentures not properly tendered and to reject any Old Debentures the acceptance of which might, in the judgment of the Company or its counsel, be unlawful. The Company also reserves the absolute right to waive any defects or irregularities or conditions of the Exchange Offer as to particular Old Debentures either before or after the Expiration Date (including the right to waive the ineligibility of any Holder who seeks to tender Old Debentures in the Exchange Offer). The interpretation of the terms and conditions of the Exchange Offer (including the Letter of Transmittal and its instructions) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Debentures for exchange must be cured within such period of time as the Company shall determine. Neither the Company nor the Exchange Agent shall be under any duty to give notification of defects in such tenders or shall incur any liability for failure to give such notification. The Exchange Agent will use reasonable efforts to give notification of defects or irregularities with respect to tenders of Old Debentures for exchange but shall not incur any liability for failure to give such notification. Tenders of Old Debentures will not be deemed to have been made until such irregularities have been cured or waived. 11. Requests for Assistance or Additional Copies. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth above. 12. Mutilated, Lost, Stolen or Destroyed Certificates. Holders whose certificates for Old Debentures have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 13. Tax Identification Number. A tendering Holder whose Old Debentures are accepted for exchange should provide the Exchange Agent with such Holder's correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 below, which, in the case of a tendering Holder who is an individual, is his or her social security number. If the Company is not provided with the current TIN or an adequate basis for an exemption, such tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, all reportable payments made on New Debentures after the exchange may be subject to backup withholding in an amount equal to 31%. If withholding results in an overpayment of taxes, a refund may be obtained. Exempt Holders of Old Debentures (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. To prevent backup withholding on reportable payments made on New Debentures after the exchange, each tendering Holder of Old Debentures should provide its correct TIN by completing the "Substitute Form W-9" below, certifying that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (a) the Holder is exempt from backup withholding, (b) the Holder has not been notified by the Internal Revenue Service that such Holder is subject to backup withholding as a result of a failure to report all interest or dividends or (c) the Internal Revenue Service has notified the Holder that such Holder is no longer subject to backup withholding. If the tendering Holder of Old Debentures is a nonresident alien or foreign entity not subject to backup withholding, such Holder should give the Company a completed Form W-8, Certificate of Foreign Status. These forms may be obtained from the Exchange Agent. If the Old Debentures are in more than one name or are not in the name of the actual owner, such Holder should consult the W-9 Guidelines for information on which TIN to report. If such Holder does not have a TIN, such Holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 3 of the Substitute Form W-9 and write "applied for" in lieu of its TIN. Note: checking this box and writing "applied for" on the form means that such Holder has already applied for a TIN or that such Holder intends to apply for one in the near future. If such Holder does not provide its TIN to the Company within 60 days, backup withholding will begin and continue until such Holder furnishes its TIN to the Company. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), TOGETHER WITH ALL REQUIRED DOCUMENTS, OR A NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. TO BE COMPLETED BY ALL TENDERING HOLDERS (see Instruction 13) PAYOR'S NAME: KOHL'S CORPORATION SUBSTITUTE Part 1--PLEASE Social Security Number FORM W-9 PROVIDE YOUR TIN IN OR THE BOX AT RIGHT AND Employer ID Number CERTIFY BY SIGNING ____________________ AND DATING BELOW. Department of the Part 2--Certification-Under penalties of Treasury perjury, I certify that: Internal Revenue (1) The number shown on this form is my Service correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and Payor's Request for (2) I am not subject to backup withholding Taxpayer's either because: (a) I am exempt from backup Identification Number withholding, or (b) I have not been (TIN) notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to withholding. CERTIFICATION Part 3 INSTRUCTIONS-You must cross out item (2) above if you Awaiting TIN [] have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). SIGNATURE _______________________ DATE_____________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU ON THE DEBENTURES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. Signature ___________________________ Date ______________________ PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1 and 7) To be completed ONLY if the New Debentures issued in consideration of Old Debentures exchanged, or certificates for Old Debentures in a principal amount not surrendered for exchange are to be mailed to someone other than the undersigned or to the undersigned at an address other than that below. Mail to: ______________________________________ Name: _________________________________________ (Please Print) Address: ______________________________________ (Zip Code) DESCRIPTION OF OLD DEBENTURES (See Instructions 2 and 7) Name(s) and Address(es) Certificate(s) of Registered Holders(s) (Attach additional signed list, if necessary) (Please fill in, if blank) Principal Amount Aggregate of Old Debentures Principal Tendered (must be Amount of Old a minimum of Debentures $100,000 and Certificate Evidenced by integral multiples Number(s) Certificate(s) of $1,000) ----------- -------------- --------------- ----------- -------------- --------------- Total (Boxes below to be checked by Eligible Institutions only) [] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution ________________________________________ DTC Account Number ___________________________________________________ Transaction Code Number ______________________________________________ [] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s) ______________________________________ Window Ticket Number (if any) ________________________________________ Date of Execution of Notice of Guaranteed Delivery ___________________ Name of Institution which Guaranteed Delivery _______________________ If Guaranteed Delivery is to be made by Book-Entry Transfer: Name of Tendering Institution _________________________________________ DTC Account Number ____________________________________________________ Transaction Code Number _______________________________________________ [] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD DEBENTURES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE. [] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD DEBENTURES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ______________________________________________________________ Address: ___________________________________________________________ ____________________________________________________________________ PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY PLEASE SIGN HERE WHETHER OR NOT OLD DEBENTURES ARE BEING PHYSICALLY TENDERED HEREBY X ____________________________________ _____________________ X ____________________________________ _____________________ Signature(s) of Owner(s) Dated of Authorized Signatory Area Code and Telephone Number: __________________________________ This box must be signed by registered holder(s) of Old Debentures as their name(s) appear(s) on certificate(s) for Old Debentures hereby tendered or on a security position listing, or by any person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Letter of Transmittal (including such opinions of counsel, certifications and other information as may be required by the Company or the Trustee for the Old Debentures to comply with the restrictions on transfer applicable to the Old Debentures). If signature is by an attorney-in-fact, trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. Name(s) _________________________________________________________________ _________________________________________________________________________ (Please Print) Capacity (full title) ___________________________________________________ Address _________________________________________________________________ (Include Zip Code) Tax Identification or Social Security Number(s) _________________________ _________________________________________________________________________ Guarantee of Signature(s) (See Instructions 1 and 6 to determine if required) Authorized Signature ____________________________________________________ Name ____________________________________________________________________ Name of Firm ____________________________________________________________ Title ___________________________________________________________________ Address _________________________________________________________________ Area Code and Telephone Number __________________________________________ EX-99.2 9 LETTER TO BROKERS Exhibit 99.2 KOHL'S CORPORATION Offer for all Outstanding 7 1/4% Debentures due June 1, 2029 Which Have Been Registered Under the Securities Act of 1933 in Exchange for 7 1/4% Debentures due June 1, 2029 THE EXCHANGE OFFER WILL EXPIRE 5:00 P.M., NEW YORK CITY TIME, ON JULY , 1999, UNLESS EXTENDED (THE "EXPIRATION DATE''). TENDERED OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Kohl's Corporation (the "Company") is offering, upon and subject to the terms and conditions set forth in the Prospectus dated , 1999 (as the same may be amended or supplemented from time to time, the "Prospectus") and the enclosed Letter of Transmittal (the "Letter of Transmittal"), to exchange (the "Exchange Offer") its 7 1/4% Debentures due June 1, 2029 which have been registered under the Securities Act of 1933 (the "New Debentures") for its outstanding 7 1/4% Debentures due June 1, 2029 (the "Old Debentures"). The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement dated June 1, 1999 by and between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc. We are requesting that you contact your clients for whom you hold Old Debentures registered in your name or in the name of your nominee regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Old Debentures registered in your name or in the name of your nominee, or who hold Old Debentures registered in their own names, we are enclosing the following documents: 1. Prospectus dated , 1999; 2. The Letter of Transmittal for your use and for the information of your clients; 3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if time will not permit all required documents to reach the Exchange Agent (as defined below) prior to the Expiration Date (as defined below) or if the procedures for book-entry transfer cannot be completed on a timely basis; 4. A form of letter which may be sent to your clients for whose account you hold Old Debentures registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; 5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 6. Return envelopes addressed to The Bank of New York, the Exchange Agent (the "Exchange Agent") for the Old Debentures. Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1999, unless extended by the Company (the "Expiration Date"). Old Debentures tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to 5:00 p.m. New York City time, on the Expiration Date. To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus. If holders of Old Debentures wish to tender but time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under "The Exchange Offer-Guaranteed Delivery Procedures." The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Old Debentures held by them as nominee or in a fiduciary capacity. The Company will pay or cause to be paid all transfer taxes applicable to the exchange of Old Debentures pursuant to the Exchange Offer, except as set forth in Instruction 9 of the Letter of Transmittal. Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to the Exchange Agent, at its address and telephone number set forth on the front of the Letter of Transmittal. Very truly yours, KOHL'S CORPORATION NOTHING HEREIN OR IN TO ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL. Enclosures EX-99.3 10 LETTER TO CLIENTS Exhibit 99.3 KOHL'S CORPORATION Offer for all Outstanding 7 1/4% Debentures due June 1, 2029 in Exchange for 7 1/4% Debentures due June 1, 2029 Which Have Been Registered Under the Securities Act of 1933 THE EXCHANGE OFFER WILL EXPIRE 5:00 P.M., NEW YORK CITY TIME, ON JULY , 1999, UNLESS EXTENDED (THE "EXPIRATION DATE''). TENDERED OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK TIME, ON THE EXPIRATION DATE. To Our Clients: Enclosed for your consideration is a Prospectus, dated , 1999 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (the "Letter of Transmittal"), relating to the offer (the "Exchange Offer") of Kohl's Corporation (the "Company"), to exchange its 7 1/4% Debentures due June 1, 2029 which have been registered under the Securities Act of 1933 (the "New Debentures") for its outstanding 7 1/4% Debentures due June 1, 2029 (the "Old Debentures"), upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement dated June 1, 1999, by and between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, BNY Capital Markets, Inc. and Banc One Capital Markets, Inc. Holders of Old Debentures who cannot deliver all required documents to the Exchange Agent on or prior to the Expiration Date (as defined below), or who cannot complete the procedures for book-entry transfer on a timely basis, must follow the guaranteed delivery procedures described in the Prospectus under "The Exchange Offer- Guaranteed Delivery Procedures." This material is being forwarded to you as the beneficial owner of the Old Debentures carried by us in your account but not registered in your name. A tender of such Old Debentures may only be made by us as the holder of record and pursuant to your instructions. Accordingly, we request instructions as to whether you wish us to tender on your behalf the Old Debentures held by us for your account pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Debentures on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1999, unless extended by the Company. Any Old Debentures tendered pursuant to the Exchange Offer may be withdrawn at any time before 5:00 p.m., New York City time, on the Expiration Date. Your attention is directed to the following: 1. The Exchange Offer is for any and all Old Debentures. 2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned "The Exchange Offer-Conditions to the Exchange Offer.'' 3. Any transfer taxes incident to the transfer of Old Debentures from the holder to the Company will be paid by the Company, except as otherwise provided in Instruction 9 of the Letter of Transmittal. 4. The Exchange Offer expires at 5:00 p.m., New York City time, on , 1999, unless extended by the Company. If you wish to have us tender your Old Debentures, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. The Letter of Transmittal is furnished to you for informational purposes only and may not be used directly by you to tender Old Debentures held by us and registered in our name for your account or benefit. INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER The undersigned acknowledges receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Kohl's Corporation with respect to its Old Debentures. This will instruct you to tender the Old Debentures held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal. Please tender the Old Debentures held by you for my account as indicated below: Aggregate Principal Amount of Old Debentures __________________________________ 7 1/4% Debentures due June 1, 2029 [] Please do not tender any Old Debentures held by you for my account. Dated: __________________________, 1999 _____________________________________ Signature(s) _____________________________________ _____________________________________ _____________________________________ _____________________________________ Please print name(s) here _____________________________________ _____________________________________ _____________________________________ Address(es) ____________________________________ Area Code and Telephone Number ___________________________________________ Tax Identification or Social Security No(s). None of the Old Debentures held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Old Debentures held by us for your account. EX-99.4 11 NOTICE OF GUARANTEED DELIVERY Exhibit 99.4 NOTICE OF GUARANTEED DELIVERY for KOHL'S CORPORATION This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) of Kohl's Corporation (the "Company") made pursuant to the Prospectus, dated , 1999 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (the "Letter of Transmittal") If the Letter of Transmittal and all other required documents cannot be delivered or transmitted by facsimile transmission, mail or hand delivery to The Bank of New York (the "Exchange Agent'') on or prior to 5:00 p.m. New York City time, on the Expiration Date (as defined in the Prospectus) or the procedures for delivery by book-entry transfer cannot be completed on a timely basis. See "The Exchange Offer-Guaranteed Delivery Procedures" section in the Prospectus. The term "Old Debentures" means the Company's outstanding 7 1/4% Debentures due June 1, 2029. THE EXCHANGE OFFER WILL EXPIRE 5:00 P.M., NEW YORK CITY TIME, ON JULY , 1999, UNLESS EXTENDED (THE "EXPIRATION DATE''). TENDERED OLD NOTES MAY BE DRAWN AT ANY TIME Deliver to: The Bank of New York, Exchange Agent: By Registered or Certified Mail: By Overnight Courier or Hand: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7-E Corporate Trust Services Window New York, NY 10286 Ground Level Attention: Reorganization Department New York, NY 10286 Attention: Reorganization Department Facsimile: (212) 815-6339 Confirm Telephone for Eligible Institutions: (212) 815-5920 DELIVERY OF IS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by a "Medallion Signature Guarantor" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to the Company, upon the terms and conditions set forth in the Prospectus and the Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which are hereby acknowledged, the aggregate principal amount of Old Debentures set forth below pursuant to the guaranteed delivery procedure described in ``The Exchange Offer-Guaranteed Delivery Procedures" section in the Prospectus and the Letter of Transmittal. Principal Amount of Old Debentures Signature(s)________________________ Tendered $_____________________ ____________________________________ Certificate Nos. Please Print the Following Information (if available)________________ Name(s) of Registered Holders________ Total Aggregate Principal Amount _____________________________________ Represented by Old Debentures _____________________________________ Certificate(s)________________ Address______________________________ If Old Debentures will be tendered by _____________________________________ book-entry transfer, provide the _____________________________________ following information: Area Code and Telephone Number(s) DTC Account Number______________ _____________________________________ Dated:________________ , 1999 GUARANTEE (Not to be Used for Signature Guarantee) The undersigned, a firm or entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," hereby guarantees to deliver to the Exchange Agent, at its address set forth above, either the Old Debentures tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Debentures pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within four business days after the date of execution of this Notice of Guaranteed Delivery. Name of Firm____________________________ ______________________________ (Authorized Signature) Address_________________________________ Name__________________________ ________________________________________ Date__________________________ Zip Code Area Code and Telephone number____________________ -----END PRIVACY-ENHANCED MESSAGE-----