-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AUD5kfQ+x5ipL8fs3YPRsLq8LnWiZv47i9OL/glJbmRYjdV+08bts45IYifftkwu LMEIuQVi0bS+MLQa+8GkKg== 0000950134-94-000717.txt : 19940705 0000950134-94-000717.hdr.sgml : 19940705 ACCESSION NUMBER: 0000950134-94-000717 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940607 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19940622 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNEY J C CO INC CENTRAL INDEX KEY: 0000077182 STANDARD INDUSTRIAL CLASSIFICATION: 5311 IRS NUMBER: 135583779 STATE OF INCORPORATION: DE FISCAL YEAR END: 0126 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00777 FILM NUMBER: 94535148 BUSINESS ADDRESS: STREET 1: 6501 LEGACY DRIVE CITY: PLANO STATE: TX ZIP: 75024-3698 BUSINESS PHONE: 2144311000 8-K 1 FORM 8-K 1 CONFORMED COPY SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT - June 7, 1994 (Date of earliest event reported) J. C. PENNEY COMPANY, INC. (Exact name of registrant as specified in its charter) Commission File No. 1-777 Delaware 13-5583779 (State of incorporation) (IRS Employer Identification No.) 6501 Legacy Drive Plano, Texas 75301-1103 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (214) 431-1000 2 Item 5. Other Events. On June 7, 1994, J. C. Penney Company, Inc. (the "Company") entered into an Underwriting Agreement with CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P. Morgan Securities Inc., and Morgan Stanley & Co. Incorporated (collectively, the "Underwriters") for the sale of (a) $225,000,000 aggregate principal amount of its 6 7/8% Notes Due 1999 (the "6 7/8% Notes") at a price to the public of 99.646% of the principal amount thereof, and (b) $275,000,000 aggregate principal amount of its 7 3/8% Notes Due 2004 (the "7 3/8% Notes") at a price to the public of 99.480% of the principal amount thereof, (the 6 7/8% Notes, and the 7 3/8% Notes herein collectively called the "Notes"). The closing of the sale was held on June 15, 1994. The Notes are being issued pursuant to Registration Statement No. 33-53275, which was filed with the Securities and Exchange Commission (the "Commission") on April 26, 1994 and became effective on April 29, 1994, and the Prospectus dated April 29, 1994 and a Prospectus Supplement dated June 7, 1994, which were filed with the Commission on June 9, 1994. Pursuant to the Registration Statement, debt securities were registered for offering under the Securities Act of 1933 on a continuous or delayed basis pursuant to the provisions of Rule 415. Item 7. Financial Statements and Exhibits (c) Exhibits. 1. Underwriting Agreement among J. C. Penney Company, Inc. and the Underwriters (dated June 7, 1994). 4. Form of Notes. 5. Opinion of C. R. Lotter with respect to the validity of the Notes. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. J. C. PENNEY COMPANY, INC. /S/C. R. Lotter C. R. Lotter Executive Vice President, Secretary and General Counsel Date: June 17, 1994 EX-1 2 UNDERWRITING AGREEMENT 1 EXHIBIT 1 (CONFORMED COPY) J. C. PENNEY COMPANY, INC. UNDERWRITING AGREEMENT June 7, 1994 CS FIRST BOSTON CORPORATION MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED As Representatives of the Several Underwriters named in Schedule A hereto c/o CS First Boston Corporation Park Avenue Plaza New York, N.Y. 10055 Dear Sirs: 1. Introductory. J. C. PENNEY COMPANY, INC., a Delaware corporation ("Company"), proposes to issue and sell the debt securities described in Schedule B hereto (collectively, "Debt Securities"). The Debt Securities will be issued under an Indenture, dated as of April 1, 1994, between the Company and Bank of America National Trust and Savings Association, as Trustee (the "Indenture"). The several Underwriters set forth in Schedule A are hereinafter referred to as "Underwriters". 2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, you (the "Representatives") that: (a) A registration statement (No. 33-53275), including a prospectus, relating to the Debt Securities has been filed with the Securities and Exchange Commission ("Commission") and has become effective. Such registration statement, as amended to the date hereof (but excluding any amendments relating to securities which are not covered by this Agreement), is hereinafter referred to as the "Registration Statement", and the prospectus contained in the Registration Statement, as amended and supplemented by a Prospectus Supplement of even date herewith, including all material incorporated by reference therein, as the "Prospectus". (b) On the effective date of the Registration Statement, as referred to in Section 2(a) hereof, the Registration Statement conformed in all material respects to the requirements of the Securities Act of 1933 ("Act"), the Trust Indenture Act of 1939 ("Trust Indenture Act"), and the published rules and regulations ("Rules and Regulations") of the Commission, and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and on the date hereof, the Registration Statement and the Prospectus conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations and none of such documents includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the foregoing does not apply to (i) statements in or omissions from any of such documents based upon written information furnished to the Company by an Underwriter for use therein, or (ii) statements or omissions in that part of the Registration Statement which constitutes the Statement of Eligibility and Qualification under the Trust Indenture Act (Form T-1) of the Trustee. 3. Purchase, Sale and Delivery of Debt Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Company, 2 at the purchase prices set forth in Schedule B hereto, plus accrued interest, if any, from June 15, 1994 to the Closing Date as defined below, the respective principal amounts of Debt Securities set forth in Schedule A hereto. The Company will deliver the Debt Securities to the Representatives, for the accounts of the Underwriters, at the office of Chemical Bank, 450 West 33rd Street, Tenth Floor, New York, New York 10001, attention: Ed White, against payment of the purchase price by certified or official bank check or checks in New York Clearing House (next day) funds drawn to the order of the Company, at the office of the Company, 6501 Legacy Drive, Plano, Texas 75024-3698, at 9:00 A.M., Dallas Time, on June 15, 1994 or at such other time not later than seven full business days thereafter as you and the Company determine, such time being herein referred to as the "Closing Date". The Debt Securities so to be delivered will be, unless otherwise mutually agreed by the Representatives and the Company, in fully registered form, in such denominations and registered in such names as the Representatives request, and will be made available for checking and packaging at the above office of Chemical Bank, at least 24 hours prior to the Closing Date. 4. Covenants of the Company. The Company covenants and agrees with the several Underwriters that: (a) The Company will advise the Representatives promptly of any amendment or supplementation of the Registration Statement or the Prospectus with respect to the Debt Securities, and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Debt Securities is required to be delivered under the Act any event occurs as a result of which the Prospectus as then amended or supplemented with respect to such Debt Securities would include an untrue statement of a material fact, or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Registration Statement or the Prospectus to comply with the Act, the Company promptly will prepare and file with the Commission an amendment or supplement which will correct such statement or omission or effect such compliance. (c) Not later than 90 days after the end of the 12-month period beginning at the end of the fiscal quarter of the Company during which the Closing Date occurs, the Company will make generally available to its securityholders an earnings statement covering such 12-month period which will satisfy the provisions of Section 11(a) of the Act. (d) The Company will furnish to the Representatives copies of the Registration Statement (one of which, to be delivered to counsel for the Underwriters, will be signed and include all exhibits), the Prospectus and supplements relating to the Debt Securities, in each case as soon as available and in such quantities as the Representatives reasonably request. (e) The Company will use its best efforts to arrange for the qualification of the Debt Securities for sale, and the determination of their eligibility for investment, under the laws of such jurisdictions as the Representatives reasonably designate and will diligently endeavor to continue such qualifications in effect so long as required for the distribution of the Debt Securities; provided, however, that the Company shall not be required to register or qualify, or to maintain qualification, as a foreign corporation nor, except as to matters and transactions relating to the offer or sale of the Debt Securities, consent to service of process generally in any state. (f) The Company will pay all expenses incident to the performance of its obligations under this Agreement, and will reimburse the Representatives for any expenses (including fees and disbursements of counsel) incurred by the Representatives in connection with qualification of the Debt Securities for sale, and determination of their eligibility for investment, under the laws of such jurisdictions as the Representatives reasonably designate and the printing of memoranda relating thereto, for any fees charged by investment rating agencies for the rating of the Debt Securities and for reasonable expenses 2 3 incurred in distributing preliminary prospectuses and the Prospectus (including any amendments and supplements thereto) to the Underwriters. (g) So long as any of the Debt Securities are outstanding, the Company will furnish to the Representatives (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year, (ii) as soon as available, a copy of each report or definitive proxy statement of the Company filed with the Commission under the Securities Exchange Act of 1934 or mailed to stockholders, and (iii) from time to time, such other information concerning the Company as the Representatives may reasonably request. Upon request, the Company will furnish to each of the other Underwriters copies of each annual report referred to in clause (i) above. 5. Conditions of Obligations of the Underwriters. The obligations of the Underwriters to purchase and pay for the Debt Securities will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent: (a) The Representatives shall have received a letter of KPMG Peat Marwick, dated the Closing Date, in form and substance satisfactory to them, with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement and the Prospectus. Such letter shall be in substantially the form, and contain substantially the information, as those letters heretofore furnished by KPMG Peat Marwick in connection with other underwritten offerings by the Company. (b) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted, or to the knowledge of the Company or the Representatives, shall be contemplated by the Commission. (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred any change, or any development involving a prospective change, in or affecting particularly the business or properties of the Company and its subsidiaries, taken as a whole, which, in the judgment of a majority in interest of the Underwriters including the Representatives, materially impairs the investment quality of the Debt Securities. (d) The Representatives shall have received an opinion of C. R. Lotter, General Counsel of the Company, dated the Closing Date, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which it owns or leases substantial properties or in which the conduct of its business requires such qualification; (ii) The Indenture has been duly authorized, executed and delivered and has been duly qualified under the Trust Indenture Act; the Debt Securities have been duly authorized, executed, authenticated, issued and delivered and conform in all material respects to the description thereof contained in the Prospectus; and the Indenture and the Debt Securities constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (iii) No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement in connection with the issuance or sale of the Debt Securities by the Company, except such as have been obtained and made under the Act and the Trust Indenture Act and such as may be required under state securities laws; 3 4 (iv) The execution, delivery and performance of the Indenture and this Agreement and the issuance and sale of the Debt Securities and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute, any rule, regulation or order of any governmental agency or body or any court having jurisdiction over the Company or any of its property or any agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property of the Company is subject, or the charter or by-laws of the Company, and the Company has full power and authority to authorize, issue and sell the Debt Securities as contemplated by this Agreement; (v) The Registration Statement has become effective under the Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending under the Act; the Registration Statement and the Prospectus, as of the date of this Agreement, comply as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the Rules and Regulations; there has not been disclosed to such counsel any information giving him reason to believe either that the Registration Statement, as of such date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; the descriptions in the Registration Statement and the Prospectus of statutes, legal and governmental proceedings and contracts and other documents are accurate in all material respects and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Registration Statement or the Prospectus; and (vi) This agreement has been duly authorized, executed and delivered by the Company. (e) The Representatives shall have received from Sullivan & Cromwell, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to such of the matters stated in paragraph (d) hereof and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (f) The Representatives shall have received a certificate of the Chairman of the Board or any Vice President and a principal financial or accounting officer of the Company, dated the Closing Date, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission, and that, subsequent to the date of the most recent financial statements in the Prospectus, there has been no material adverse change in the financial position or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Prospectus or as described in such certificate. The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. 6. Indemnification. (a) The Company will indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of the Act against any losses, claims, 4 5 damages or liabilities, joint or several, to which such Underwriter or such controlling person may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus or any amendment or supplement thereto (excluding any amendments or supplements relating to securities which are not covered by this Agreement), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and will reimburse each Underwriter and each such controlling person for any legal or other expenses reasonably incurred by such Underwriter or such controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made (i) in any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter for use therein, or (ii) in that part of the Registration Statement constituting the Statement of Eligibility and Qualification under the Trust Indenture Act (Form T-1) of the Trustee. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus or any amendment or supplement thereto (excluding any amendments or supplements relating to securities which are not covered by this Agreement), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter for use therein; and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. 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 has been 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. (d) If recovery is not available under the foregoing indemnification provisions of this Section, for any reason other than as specified therein, the parties entitled to indemnification by the terms thereof shall be entitled to contribution for liabilities and expenses, except to the extent that contribution is not permitted 5 6 under Section 11(f) of the Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Debt Securities (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission and any other equitable considerations appropriate under the circumstances. The Company and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose). No Underwriter or any person controlling such Underwriter shall be obligated to make contribution hereunder which in the aggregate exceeds the total public offering price of the Debt Securities purchased by such Underwriter under this Agreement, less the aggregate amount of any damages which such Underwriter and its controlling persons have otherwise been required to pay in respect of the same claim or any substantially similar claim. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 7. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Debt Securities hereunder and the aggregate principal amount of the Debt Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of the Debt Securities, the Representatives may make arrangements satisfactory to the Company for the purchase of such Debt Securities by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Debt Securities which such defaulting Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of Debt Securities with respect to which such default or defaults occur is more than 10% of the total principal amount of the Debt Securities and arrangements satisfactory to the Representatives and the Company for the purchase of such Debt Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 8 hereof. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default. 8. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties, and other statements of the Company and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Company or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Debt Securities. If this Agreement is terminated pursuant to Section 7 hereof or if for any reason the purchase of the Debt Securities by the Underwriters pursuant to this Agreement is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 4 hereof and the respective obligations of the Company and the Underwriters pursuant to Section 6 hereof shall remain in effect. If for any reason, the purchase of the Debt Securities by the Underwriters is not consummated other than because of the termination of this Agreement pursuant to Section 7, the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) incurred by them in connection with the offering of the Debt Securities. 9. Notices. All communications hereunder will be in writing and if sent to the Underwriters will be mailed, delivered or telegraphed and confirmed to the address first above written and if sent to the Company will be similarly sent, if by mail, to P.O. Box 10001, Dallas, Texas 75301-0001 and if sent otherwise, to 6501 Legacy Drive, Plano, Texas 75024-3698, Attention of the Secretary. 10. Successors. This Underwriting Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 6 hereof, and no other person will have any right or obligation hereunder. 6 7 11. Representation of Underwriters. The Representatives will act for the several Underwriters in connection with the offering of the Debt Securities, and any action under this Agreement taken by you will be binding upon all the Underwriters. 12. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms. Very truly yours, J. C. PENNEY COMPANY, INC. By /s/ D. A. McKAY Vice President and Treasurer The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. CS FIRST BOSTON CORPORATION MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED By CS FIRST BOSTON CORPORATION By /s/ CAROLINE VAN SCHELTINGA Vice President Acting on behalf of itself and as Representative of the several Underwriters. 7 8 SCHEDULE A
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF 6 7/8% NOTES 7 3/8% NOTES UNDERWRITER DUE 1999 DUE 2004 - - - - --------------------------------------------------------- ------------------- ------------------- CS First Boston Corporation.............................. $ 56,250,000 $ 68,750,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated................................ 56,250,000 68,750,000 J.P. Morgan Securities Inc. ............................. 56,250,000 68,750,000 Morgan Stanley & Co. Incorporated........................ 56,250,000 68,750,000 -------------- -------------- Total.......................................... $225,000,000 $275,000,000 ============== ==============
8 9 SCHEDULE B DESCRIPTION OF DEBT SECURITIES Title of Securities: 6 7/8% Notes Due 7 3/8% Notes Due 1999 2004 Aggregate Principal Amount: $225,000,000 $275,000,000 Interest rate: 6.875% per annum 7.375% per annum commencing commencing June 15, 1994 June 15, 1994 Interest payment dates: December 15 and December 15 and June 15 commencing June 15 commencing December 15, 1994 December 15, 1994 Maturity date: June 15, 1999 June 15, 2004 Purchase price: 99.021% 98.830% Initial public offering price: 99.646% 99.480% Dealers' concession: 0.375% 0.400% Reallowance: 0.250% 0.250% Redemption: Not redeemable Not redeemable prior to maturity prior to maturity
9 EX-4 3 FORM OF NOTES 1 EXHIBIT 4 Certificate Number Principal Amount $ Date Index Number REGISTERED J. C. Penney Company, Inc. REGISTERED 6 7/8% NOTE 6 7/8% NOTE DUE 1999 DUE 1999 J. C. PENNEY COMPANY, INC., a CUSIP 708160 BF 2 Delaware Corporation (hereinafter SEE REVERSE FOR CERTAIN DEFINITIONS called the Company), for value received, promises to pay to 6 7/8% DUE 1999 or registered assigns, the principal sum of DOLLARS, on June 15, 1999, and to pay interest on said principal sum, semiannually on June 15 and December 15 of each year, at the rate of 6 7/8% per annum, from the June 15 or the December 15, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or unless no interest has been paid on the Notes, in which case from June 15, 1994, until the principal hereof becomes due and payable, and at such rate on any overdue principal and (to the extent that the payment of such interest shall be legally enforceable) on any overdue instalment of interest. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Notes, if the date hereof is after a Regular Record Date, which shall be the close of business on June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding an Interest Payment Date, and before the next succeeding Interest Payment Date, this Note shall bear interest from such Interest Payment Date; provided, however, that if the Company shall default in the payment of interest due on _________ _______ such Interest Payment Date, then this Note shall bear interest from the next preceding Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid on the Notes, from June 15, 1994. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the Regular Record Date for such Interest Payment Date. The principal of and interest on this Note are payable 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, at the agency or agencies maintained by the Company for such purpose; provided, however, that at the _________ _______ option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Any interest not punctually paid or duly provided for shall be payable as provided in the Indenture.
2 CERTIFICATE OF AUTHENTICATION ALTERNATE CERTIFICATE OF AUTHENTICATION This is one of the 6 7/8% Notes Due This is one of the 6 7/8% Notes Due 1999 referred to in the within- 1999 referred to in the within- mentioned Indenture. mentioned Indenture. BANK OF AMERICA NATIONAL OR BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, TRUST AND SAVINGS ASSOCIATION, as Trustee as Trustee By By CHEMICAL BANK Authenticating Agent By Authorized Officer Authorized Officer Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth at this place. Unless one of the certificates of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, J. C. PENNEY COMPANY, INC. has caused the execution hereof in its corporate name by its duly authorized officers. J. C. PENNEY COMPANY, INC. By /s/ C.R. Lotter By /s/ W.R. Howell _____________________ __________________________ Secretary Chairman of the Board THIS NOTE IS TRANSFERABLE AT THE OFFICE OR AGENCY OF THE COMPANY SHOWN ON THE REVERSE HEREOF.
3 PAGE 1 J. C. PENNEY COMPANY, INC. 6 7/8% NOTE DUE 1999 This Note is one of a duly authorized issue of unsecured debentures, notes or other evidences of indebtedness of the Company (herein called the "Securities") of the series hereinafter specified, all issued and to be issued under an Indenture dated as of April 1, 1994 (herein called the "Indenture"), between the Company and Bank of America National Trust and Savings Association, Trustee (herein called 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 thereunder of the Company, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities, which are unlimited in aggregate principal amount, may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. This Note is one of a series of the Securities designated as the 6 7/8% Notes Due 1999 (herein called the "Notes"), limited in aggregate principal amount to $225,000,000. The Notes may not be redeemed prior to maturity. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register, upon surrender of this Note for registration of transfer at one of the agencies maintained by the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar (if other than the Company) duly executed by the Holder hereof or his attorney duly authorized in writing and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only as registered Notes without coupons in the denominations of $1,000 and any integral multiple thereof. As provided in the Indenture, Notes are exchangeable for a like aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, 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 for registration of transfer of this Note, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Company, at any time or from time to time, may satisfy and fully discharge its obligations with respect to any payment of principal or interest due on 4 the Notes by depositing in trust with the Trustee money or U.S. Government Obligations (as defined in the Indenture) or a combination thereof in such amounts as will provide, after giving effect in the case of U.S. Government Obligations so deposited to the principal thereof and interest thereon when due, no less than the dollar amount which the Company would have been required, in respect of such payment, to segregate and hold in trust or deposit with the Trustee; provided, however, that any such deposit shall not affect the rights of the Holder of any Note to receive payments due on such Notes at the times provided therein and in the Indenture. If such deposit is sufficient to make all payments of (1) interest on the Notes prior to their redemption or maturity, as the case may be, and (2) principal of and interest on the Notes when due upon redemption or at maturity, as the case may be, all the obligations of the Company under the Notes and the Indenture as it relates to the Notes shall be discharged and terminated except as otherwise provided in the Indenture. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. 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 any series under the Indenture at any time by the Company with the consent of the Holders of 66 2/3% (unless a different percentage is specified with respect to any series of Securities, in which case, as to such series, the percentage so specified) in aggregate principal amount of the Outstanding Securities of each series affected by any such amendment or modification. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Notes at the time Outstanding, on behalf of the Holders of all the Notes, 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 Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed. No recourse shall be had for the payment of the principal of or interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 5 - - - - ------------------------------------------------------------------------------ ADM -- Administrator(s), administratrix (ices) COMM -- Committee(s) CONS -- Conservator(s) CUST -- Custodian EST -- Estate EX -- Executor(s) executrix(ices) FBO -- For the benefit of GDN -- Guardian(s) JT TEN -- As joint tenants with right of survivorship and not as tenants in common TEN COM -- As tenants in common TEN ENT -- As tenants by the entireties TR -- Trustee(s) UA -- Under agreement UNIF GIFT -- Uniform Gifts to MIN ACT -- Minors Act UW -- Under last will and testament - - - - ------------------------------------------------------------------------------ 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 Note and all rights thereunder, hereby irrevocably constituting and appointing ______________ attorney to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: Signed: 6 THIS NOTE IS TRANSFERABLE AT: Chemical Bank 55 Water Street 2nd Floor New York, New York 10041 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. 7 PAGE 1 LOT 2 Certificate Number Principal Amount $ Date Index Number REGISTERED J. C. Penney Company, Inc. REGISTERED 7 3/8% NOTE 7 3/8% NOTE DUE 2004 DUE 2004 J. C. PENNEY COMPANY, INC., a CUSIP 708160 BG 0 Delaware Corporation (hereinafter SEE REVERSE FOR CERTAIN DEFINITIONS called the Company), for value received, promises to pay to 7 3/8% DUE 2004 or registered assigns, the principal sum of DOLLARS, on June 15, 2004, and to pay interest on said principal sum, semiannually on June 15 and December 15 of each year, at the rate of 7 3/8% per annum, from the June 15 or the December 15, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or unless no interest has been paid on the Notes, in which case from June 15, 1994, until the principal hereof becomes due and payable, and at such rate on any overdue principal and (to the extent that the payment of such interest shall be legally enforceable) on any overdue instalment of interest. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Notes, if the date hereof is after a Regular Record Date, which shall be the close of business on June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding an Interest Payment Date, and before the next succeeding Interest Payment Date, this Note shall bear interest from such Interest Payment Date; provided, however, that if the Company shall default in the payment of _________ _______ interest due on such Interest Payment Date, then this Note shall bear interest from the next preceding Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid on the Notes, from June 15, 1994. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the Regular Record Date for such Interest Payment Date. The principal of and interest on this Note are payable 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, at the agency or agencies maintained by the Company for such purpose; provided, however, that at the option of the _________ _______ Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Any interest not punctually paid or duly provided for shall be payable as provided in the Indenture. 8 CERTIFICATE OF AUTHENTICATION ALTERNATE CERTIFICATE OF AUTHENTICATION This is one of the 7 3/8% Notes This is one of the 7 3/8% Notes Due 2004 Due 2004 referred to in the referred to in the within-mentioned within-mentioned Indenture. Indenture. BANK OF AMERICA NATIONAL OR BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, TRUST AND SAVINGS ASSOCIATION, as Trustee as Trustee By By CHEMICAL BANK Authenticating Agent By Authorized Officer Authorized Officer Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth at this place. Unless one of the certificates of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, J. C. PENNEY COMPANY, INC. has caused the execution hereof in its corporate name by its duly authorized officers. J. C. PENNEY COMPANY, INC. By /s/ C.R. Lotter By /s/ W.R. Howell ____________________ ________________________ Secretary Chairman of the Board THIS NOTE IS TRANSFERABLE AT THE OFFICE OR AGENCY OF THE COMPANY SHOWN ON THE REVERSE HEREOF. 9 PAGE 1 LOT 2 J. C. PENNEY COMPANY, INC. 7 3/8% NOTE DUE 2004 This Note is one of a duly authorized issue of unsecured debentures, notes or other evidences of indebtedness of the Company (herein called the "Securities") of the series hereinafter specified, all issued and to be issued under an Indenture dated as of April 1, 1994 (herein called the "Indenture"), between the Company and Bank of America National Trust and Savings Association, Trustee (herein called 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 thereunder of the Company, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities, which are unlimited in aggregate principal amount, may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. This Note is one of a series of the Securities designated as the 7 3/8% Notes Due 2004 (herein called the "Notes"), limited in aggregate principal amount to $275,000,000. The Notes may not be redeemed prior to maturity. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register, upon surrender of this Note for registration of transfer at one of the agencies maintained by the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar (if other than the Company) duly executed by the Holder hereof or his attorney duly authorized in writing and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only as registered Notes without coupons in the denominations of $1,000 and any integral multiple thereof. As provided in the Indenture, Notes are exchangeable for a like aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, 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 for registration of transfer of this Note, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Company, at any time or from time to time, may satisfy and fully discharge its obligations with respect to any payment of principal or interest due on 10 the Notes by depositing in trust with the Trustee money or U.S. Government Obligations (as defined in the Indenture) or a combination thereof in such amounts as will provide, after giving effect in the case of U.S. Government Obligations so deposited to the principal thereof and interest thereon when due, no less than the dollar amount which the Company would have been required, in respect of such payment, to segregate and hold in trust or deposit with the Trustee; provided, however, that any such deposit shall not affect the rights of the Holder of any Note to receive payments due on such Notes at the times provided therein and in the Indenture. If such deposit is sufficient to make all payments of (1) interest on the Notes prior to their redemption or maturity, as the case may be, and (2) principal of and interest on the Notes when due upon redemption or at maturity, as the case may be, all the obligations of the Company under the Notes and the Indenture as it relates to the Notes shall be discharged and terminated except as otherwise provided in the Indenture. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. 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 any series under the Indenture at any time by the Company with the consent of the Holders of 66 2/3% (unless a different percentage is specified with respect to any series of Securities, in which case, as to such series, the percentage so specified) in aggregate principal amount of the Outstanding Securities of each series affected by any such amendment or modification. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Notes at the time Outstanding, on behalf of the Holders of all the Notes, 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 Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed. No recourse shall be had for the payment of the principal of or interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 11 ADM -- Administrator(s), administratrix (ices) COMM -- Committee(s) CONS -- Conservator(s) CUST -- Custodian EST -- Estate EX -- Executor(s) executrix(ices) FBO -- For the benefit of GDN -- Guardian(s) JT TEN -- As joint tenants with right of survivorship and not as tenants in common TEN COM -- As tenants in common TEN ENT -- As tenants by the entireties TR -- Trustee(s) UA -- Under agreement UNIF GIFT -- Uniform Gifts to MIN ACT -- Minors Act UW -- Under last will and testament 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 Note and all rights thereunder, hereby irrevocably constituting and appointing ____________________ attorney to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: Signed: 12 THIS NOTE IS TRANSFERABLE AT: Chemical Bank 55 Water Street 2nd Floor New York, New York 10041 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. EX-5 4 OPINION OF C. R. LOTTER 1 EXHIBIT 5 June 15, 1994 Board of Directors J. C. Penney Company, Inc. 6501 Legacy Drive Plano, Texas 75024-3698 Dear Sirs: As General Counsel of J. C. Penney Company, Inc., a Delaware corporation ("Company"), I am familiar with the Restated Certificate of Incorporation of the Company, as amended, and its by-laws, as amended. I am also familiar with the corporate proceedings taken in connection with the sale of $225,000,000 aggregate principal amount of 6 7/8% Notes Due 1999, and $275,000,000 aggregate principal amount of 7 3/8% Notes Due 2004 (collectively, "Debt Securities") to be issued under an Indenture dated as of April 1, 1994 ("Indenture"), between the Company and Bank of America National Trust and Savings Association, Trustee, which Indenture relates to the issuance and sale from time to time of debt securities, each series of which is to be offered on terms to be determined at the time of sale. I have examined Registration Statement No. 33-53275 ("Registration Statement") filed by the Company on Registration Form S-3 with the Securities and Exchange Commission ("Commission") on April 26, 1994, which became effective on April 29, 1994 for the registration under the Securities Act of 1933, as amended ("Act"), of $1,500,000,000 aggregate principal amount of debt securities (all of which debt securities may be offered with warrants to purchase debt securities ) to be made on a continuous or delayed basis pursuant to the provisions of Rule 415. I have also examined a Prospectus Supplement dated June 7, 1994 (to the Prospectus dated April 29, 1994 which was included in the Registration Statement) relating to the Debt Securities in the form filed with the Commission pursuant Rule 424(b)(5) and such other documents and records as I have deemed appropriate for the purpose of this opinion. Based upon the foregoing, I am of opinion as follows: (i) The execution and delivery of the Indenture and the issuance and sale of the Debt Securities have been validly authorized by the Company and the Indenture constitutes a valid and binding obligation of the Company in accordance with its terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 2 (ii) The Debt Securities, when duly executed on behalf of the Company, authenticated by or on behalf of the Trustee, and sold by the Company will be validly issued and will constitute valid and binding obligations of the Company in accordance with their terms and the terms of the Indenture, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability affecting creditors' rights and to general equity principles. I hereby consent to the reference to me under the heading "Validity of Securities" in the Prospectus included in said Registration Statement and in the heading "Validity of Notes" in the Prospectus Supplement. Very truly yours, /s/ C. R. LOTTER C. R. Lotter General Counsel -----END PRIVACY-ENHANCED MESSAGE-----