-----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, DoDvhyKTNaxXJ8vFDexKKzLGdLTakMstqxcs2JjZwNVfELzrMJyUeDsg9va3oMIB 1mz7JTUhum+LcfqpM9W1qw== 0000950131-97-004765.txt : 19970806 0000950131-97-004765.hdr.sgml : 19970806 ACCESSION NUMBER: 0000950131-97-004765 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970805 SROS: NYSE 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-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-32905 FILM NUMBER: 97651860 BUSINESS ADDRESS: STREET 1: N54 W13600 WOODALE 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-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 5, 1997 REGISTRATION NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- KOHL'S CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) --------------- 39-1630919 WISCONSIN (I.R.S. EMPLOYER (STATE OR OTHER JURISDICTION IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) 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 N56 W17000 RIDGEWOOD DRIVE MENOMONEE FALLS, WISCONSIN 53051 (414) 703-7000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES OF ALL COMMUNICATIONS TO: PETER M. SOMMERHAUSER JERRY ELLIOTT GODFREY & KAHN, S.C. SHEARMAN & STERLING 780 NORTH WATER STREET 599 LEXINGTON AVENUE MILWAUKEE, WISCONSIN 53202 NEW YORK, NEW YORK 10022 (414) 273-3500 (414) 848-4000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement is declared effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend of interest reinvestment plans, 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(c) 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. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER UNIT(2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------------ 4,600,000 Common Shares, $.01 par value shares $61 5/8 $283,475,000 $85,901.52
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) Includes 600,000 shares issuable upon exercise of the Underwriters' over- allotment option. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) on the basis of the average of the high and low prices of the Common Shares on the New York Stock Exchange on August 4, 1997. --------------- 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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ PROSPECTUS (Subject to Completion) Issued August 5, 1997 4,000,000 Shares LOGO COMMON STOCK ----------- OF THE 4,000,000 SHARES OF COMMON STOCK OFFERED HEREBY, 3,300,000 SHARES ARE BEING OFFERED BY KOHL'S CORPORATION AND 700,000 SHARES ARE BEING OFFERED BY THE SELLING STOCKHOLDERS. SEE "SELLING STOCKHOLDERS." THE COMPANY WILL NOT RECEIVE ANY PROCEEDS FROM THE SALE OF SHARES BY THE SELLING STOCKHOLDERS. THE COMMON STOCK IS TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL "KSS." ON AUGUST 4, 1997, THE LAST SALE PRICE OF THE COMMON STOCK AS REPORTED ON THE NEW YORK STOCK EXCHANGE WAS $61 5/16 PER SHARE. ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------- PRICE $ A SHARE -----------
PRICE UNDERWRITING PROCEEDS TO TO DISCOUNTS AND PROCEEDS TO SELLING PUBLIC COMMISSIONS (1) COMPANY (2) STOCKHOLDERS ------- --------------- ----------- ------------ Per Share...................... $ $ $ $ Total (3)...................... $ $ $ $
- ----- (1) The Company and the Selling Stockholders have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriters." (2)Before deducting expenses payable by the Company estimated at $350,000. (3) The Company has granted the Underwriters an option, exercisable within 30 days of the date hereof, to purchase up to an aggregate of 600,000 additional Shares at the price to public less underwriting discounts and commissions for the purpose of covering over-allotments, if any. If the Underwriters exercise such option in full, the total price to public, underwriting discounts and commissions, proceeds to Company and proceeds to Selling Stockholders will be $ , $ , $ and $ , respectively. See "Underwriters." ----------- The Shares are offered, subject to prior sale, when, as and if accepted by the Underwriters and subject to approval of certain legal matters by Shearman & Sterling, counsel for the Underwriters. It is expected that the delivery of the Shares will be made on or about , 1997 at the office of Morgan Stanley & Co. Incorporated, New York, New York, against payment therefor in immediately available funds. ----------- MORGAN STANLEY DEAN WITTER MERRILL LYNCH & CO. MONTGOMERY SECURITIES WILLIAM BLAIR & COMPANY ROBERT W. BAIRD & CO. Incorporated , 1997 ADDITIONAL INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement (which term shall include all amendments thereto) on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act") with respect to the shares of Common Stock offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, to which reference is hereby made. The Company is subject to the informational requirements of the Exchange Act (as defined below) and in accordance therewith files reports, proxy statements and other information with the Commission. The Registration Statement, the exhibits and schedules forming a part thereof and the reports, proxy statements and other information filed by the Company with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, 7th Floor, New York, New York 10048, and copies of such materials may be obtained from the Public Reference Section of the Commission at prescribed rates. Copies of such materials may be obtained from the web site that the Commission maintains at http://www.sec.gov. In addition, such material and other information concerning the Company can be inspected and copied at the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on which exchange the Company's Common Stock is traded. ---------------- NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, BY ANY SELLING STOCKHOLDER OR BY ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ---------------- "Kohl's" is a federally registered service mark of the Company. This Prospectus also includes or incorporates references to trademarks and brand names of other companies. ---------------- No action has been or will be taken in any jurisdiction by the Company, any Selling Stockholder or any Underwriter that would permit a public offering of the Common Stock or possession or distribution of this Prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons into whose possession this Prospectus comes are required by the Company, the Selling Stockholders and the Underwriters to inform themselves about and to observe any restrictions as to the offering of the Common Stock and the distribution of this Prospectus. ---------------- CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS." 2 CAUTIONARY NOTE: This Prospectus, certain of the documents incorporated herein by reference, and other written materials, future filings, releases and oral statements issued by or on behalf of the Company contain certain forward- looking statements, including, but not limited to, statements about the future performance of the Company and the Company's plans, objectives, expectations or intentions, such as debt service requirements, planned capital expenditures, future store openings and adequacy of capital resources. Forward-looking statements can also be identified by forward-looking terminology such as "believes", "expects", "intends", "plans", "may", "will", "should", or "anticipates" or the negative thereof or other variations thereof. These forward-looking statements are based on management's assumptions and beliefs in light of information currently available to it and are subject to risks and uncertainties. The Company's actual results may differ significantly and materially from those projected or suggested in the forward-looking statement. Factors that might cause such differences to occur include, but are not limited to: (i) heightened competition, (ii) adverse weather conditions in the Company's retail markets, (iii) increases in interest rates, (iv) increases in real estate, construction and development costs, (v) inventory imbalances caused by unanticipated fluctuations in consumer demand, (vi) trends in the economy which affect consumer confidence and consumer demand for the Company's goods, particularly trends affecting the Company's markets, including inflationary pressures, (vii) the availability of suitable retail real estate which can be acquired on terms which are acceptable to the Company and (viii) the ability of the Company to be able to continue to hire and train sufficient numbers of capable and talented associates. ---------------- TABLE OF CONTENTS
PAGE ---- Additional Information............. 2 Incorporation of Certain Documents by Reference...................... 3 The Company........................ 4 Selected Consolidated Financial Data.............................. Use of Proceeds.................... 7 Price Range of Common Stock and Dividend Policy................... 7
PAGE ---- Capitalization........................................................ 8 Selling Stockholders.................................................. 9 Description of Capital Stock.......................................... 10 Underwriters.......................................................... 11 Legal Matters......................................................... 12 Experts............................................................... 12
3 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission (File No. 1-11084) pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated in this Prospectus by reference: (1) the Company's Annual Report on Form 10-K for the year ended February 1, 1997; (2) the Company's Quarterly Report on Form 10-Q for the quarter ended May 3, 1997; and (3) the description of the Common Stock contained in the Company's Registration Statement on Form 8-B dated June 25, 1993, including such amendments or reports filed for the purpose of updating such description. All reports and other documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the termination of the offering of the Common Stock offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof. Such documents, and the documents listed above, are hereinafter referred to as "Incorporated Documents." Any statement contained herein or in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE INFORMATION RELATING TO THE COMPANY CONTAINED IN THIS PROSPECTUS SUMMARIZES, IS BASED UPON, OR REFERS TO, INFORMATION AND FINANCIAL STATEMENTS CONTAINED IN ONE OR MORE INCORPORATED DOCUMENTS; ACCORDINGLY, SUCH INFORMATION CONTAINED HEREIN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO INCORPORATED DOCUMENTS AND SHOULD BE READ IN CONJUNCTION THEREWITH. The Company will provide without charge to each person (including any beneficial owner) to whom a copy of this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any or all of the Incorporated Documents, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests for such copies should be directed to Corporate Secretary, Kohl's Corporation, N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, telephone (414) 703-7000. 4 THE COMPANY The Company operates as of August 4, 1997, 172 family oriented, specialty department stores primarily in the Midwest and Mid-Atlantic areas of the United States that feature quality, national brand merchandise which provides exceptional value to customers. The Company's stores sell moderately priced apparel, shoes, accessories, soft home products and housewares targeted to middle-income customers shopping for their families and homes. Kohl's 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 the Company's pricing strategy and overall profitability is a culture focused on maintaining a low cost structure. Critical elements of this low cost structure are the Company's unique store format, lean staffing levels, sophisticated management information systems and operating efficiencies resulting from centralized buying, advertising and distribution. Since 1986, the Company has expanded from 40 stores to the current total of 172 stores both by acquiring and converting pre-existing stores and by opening new stores. From fiscal 1992 to fiscal 1996, the Company's net sales increased from $1.1 billion to over $2.3 billion, and operating income increased from $64.5 million to $189.0 million. Management believes there is substantial opportunity for further growth. In October 1997, Kohl's will open four additional stores in the Philadelphia trade area (three in New Jersey and one in Pennsylvania), an additional store in the Washington, D.C. market, its second store in Omaha, Nebraska, a store in Binghamton, New York and will enter the Pittsburgh market with three stores. At the end of 1997, Kohl's will be operating 182 stores. Kohl's expansion strategy is to open additional stores in existing markets, where it can leverage advertising, purchasing, transportation and other regional overhead expenses; in contiguous markets where it can extend regional operating efficiencies; and in new markets which offer a similar opportunity to implement successfully the Kohl's retailing concept. Kohl's retailing concept has proven to be readily transferable to new markets. For example, Kohl's has successfully opened new stores in small markets, such as Kalamazoo, Michigan; intermediate markets, such as Kansas City; and large markets, such as Chicago and Philadelphia. In addition, the Kohl's concept has been successful in various retailing formats such as strip shopping centers, community and regional malls and free-standing stores. Management believes the transferability of the Kohl's retailing strategy, the Company's experience in acquiring and converting pre-existing stores and opening new stores, and the Company's substantial investment in management information systems, centralized distribution and headquarters functions provide a solid foundation for further expansion. As used in this Prospectus, unless the context otherwise requires, the "Company" and "Kohl's" refer to Kohl's Corporation, its consolidated subsidiaries and predecessors. Unless otherwise noted, all references in this Prospectus to shares of Common Stock and per share amounts have been adjusted for a 2-for-1 stock split effected by the Company in April 1996. The Company's fiscal year ends on the Saturday closest to January 31. Fiscal 1996 ended on February 1, 1997 and was a 52-week year. RECENT DEVELOPMENTS Net sales and sales growth for the 4 weeks and 26 weeks ended August 3, 1996 and August 2, 1997 were as follows:
PERIOD ENDED PERCENTAGE INCREASE ------------------- ------------------------------ COMPARABLE STORES(A) AUGUST 3, AUGUST 2, ALL ----------------------- 1996 1997 STORES CURRENT YEAR PRIOR YEAR --------- --------- ------ ------------ ---------- (IN MILLIONS) 4 weeks...................... $139.2 $ 182.8 31.4% 12.1% 20.6% 26 weeks..................... 943.2 1,224.5 29.8 10.1 11.4
- -------- (a) Comparable store sales represent sales of those stores open throughout the full period and throughout the full prior period and exclude the discontinued electronics business. At August 2, 1997, the Company operated 172 stores compared with 138 at August 3, 1996. 5 SELECTED CONSOLIDATED FINANCIAL DATA The selected consolidated financial data in the following table for each of the five years in the period ended February 1, 1997 are derived from consolidated financial statements of the Company, which have been audited by Ernst & Young LLP, independent auditors. This information should be read in conjunction with the consolidated financial statements of the Company and related notes incorporated into this Prospectus. The selected consolidated financial data for the three months ended May 4, 1996 and May 3, 1997 are derived from unaudited consolidated financial statements of the Company 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.
FISCAL YEAR ENDED THREE MONTHS ENDED --------------------------------------------------------------- ------------------- JANUARY 30, JANUARY 29, JANUARY 28, FEBRUARY 3, FEBRUARY 1, MAY 4, MAY 3, 1993 1994 1995 1996(A) 1997 1996 1997 ----------- ----------- ----------- ----------- ----------- -------- --------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER SQUARE FOOT DATA) STATEMENT OF OPERATIONS DATA: Net sales............... $1,096,856 $1,305,746 $1,554,100 $1,925,669 $2,388,221 $468,638 $ 600,547 Cost of merchandise sold................... 722,610 869,236 1,037,740 1,294,653 1,608,688 311,836 397,377 ---------- ---------- ---------- ---------- ---------- -------- --------- Gross margin............ 374,246 436,510 516,360 631,016 779,533 156,802 203,170 Selling, general and administrative expenses............... 269,158 305,547 356,893 436,442 536,226 115,890 146,751 Incentive compensation charge(b).............. 17,735 -- -- -- -- -- -- Depreciation and amortization........... 19,834 23,201 27,402 33,931 44,015 9,965 13,000 Preopening expenses..... 2,992 5,360 8,190 10,712 10,302 3,639 12,112 Credit operations, non- recurring(c)........... -- -- -- 14,052 -- -- -- ---------- ---------- ---------- ---------- ---------- -------- --------- Operating income........ 64,527 102,402 123,875 135,879 188,990 27,308 31,307 Interest expense, net(d)................. 14,393 5,711 6,424 13,150 17,622 4,102 5,836 ---------- ---------- ---------- ---------- ---------- -------- --------- Income before income taxes and extraordinary items.................. 50,134 96,691 117,451 122,729 171,368 23,206 25,471 Income taxes............ 21,442 41,029 48,939 50,077 68,890 9,445 10,163 ---------- ---------- ---------- ---------- ---------- -------- --------- Income before extraordinary items.... 28,692 55,662 68,512 72,652 102,478 13,761 15,308 Extraordinary items(e).. (2,121) (1,769) -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- -------- --------- Net income.............. $ 26,571 $ 53,893 $ 68,512 $ 72,652 $ 102,478 $ 13,761 $ 15,308 ========== ========== ========== ========== ========== ======== ========= Per common share(f): Income before extraordinary items... $ .44 $ .76 $ .93 $ .99 $ 1.39 $ 0.19 $ 0.21 Extraordinary items.... (.03) (.02) -- -- -- -- -- Net income............. .41 .74 .93 .99 1.39 0.19 0.21 OPERATING DATA: Comparable store sales growth(g).............. 10.5% 8.3% 6.1% 5.9% 11.3% 11.0% 9.3% Net sales per selling square foot(h)......... $ 239 $ 255 $ 258 $ 257 $ 261 $ 54 $ 55 Total square feet of selling space (in thousands; end of period)................ 4,771 5,523 6,824 8,378 10,064 8,966 11,556 Number of stores open (end of period)........ 79 90 108 128 150 136 170 Capital expenditures including capitalized leases................. $ 46,337 $ 64,813 $ 132,800 $ 138,797 $ 223,423 $ 40,440 $ 63,071 BALANCE SHEET DATA (END OF PERIOD): Working capital......... $ 105,564 $ 86,856 $ 114,637 $ 175,368 $ 229,339 $197,811 $ 277,038 Property and equipment, net.................... 141,196 186,626 298,737 409,168 596,227 441,623 648,057 Total assets............ 444,797 469,289 658,717 805,385 1,122,414 917,212 1,267,318 Total long-term debt.... 95,096 51,852 108,777 187,699 312,031 225,369 390,173 Shareholders' equity.... 207,400 262,502 334,249 410,638 517,471 425,251 534,890
See footnotes on next page 6 (footnotes from previous page) (a) Fiscal 1995 contained 53 weeks. (b) In connection with the Company's initial public offering, the Company amended two incentive plans to set the value of the phantom stock units previously granted thereunder at the initial public offering price of $7.00 per share. The related non-recurring incentive compensation charge reduced net income by $10.6 million, or $.16 per share for fiscal 1992. Distributions, including interest accrued at 6% on the vested portion, are paid out annually with the final payment in 2002. (c) Effective September 1, 1995, the Company terminated its agreement with Citicorp Retail Services (CRS) under which it sold its private label credit card receivables to CRS and established its own credit operation. In connection with this transaction, the Company incurred a one-time charge of $14.1 million ($8.3 million after-tax). (d) On June 1, 1992, the Company used the net proceeds of the initial public offering and $14.6 million of borrowings under its revolving credit facility to redeem all $105.0 million of its Senior Subordinated Notes and the remaining $13.2 million of its Junior Subordinated Notes and to pay related accrued interest. If the initial public offering and the related reduction of indebtedness had occurred on February 2, 1992, interest expense for fiscal 1992 would have been reduced by $3.1 million and income before extraordinary items would have been $30.7 million, or $.44 per share. (e) The extraordinary items reflect an after-tax charge of $1.8 million to write-off unamortized deferred financing costs in connection with the termination of certain credit facilities in January 1994, and an after-tax charge of $2.1 million to write-off unamortized deferred financing fees and the obligations under an interest rate cap agreement associated with the redemption of the Company's Senior Subordinated Notes in June 1992. (f) All per share data has been adjusted to reflect the 2 for 1 stock split declared by the Company's Board of Directors on March 11, 1996 and distributed on April 29, 1996. (g) 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 versus the same 52 week calendar in fiscal 1995 and excludes the discontinued electronics business. Comparable store sales growth for fiscal 1995 has been adjusted to reflect the elimination of the 53rd week in fiscal 1995. Comparable store sales growth for the periods ended May 4, 1996 and May 3, 1997 have been adjusted to exclude the discontinued electronics business. (h) 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. 7 USE OF PROCEEDS The net proceeds to the Company from the Offering are estimated to be approximately $195.9 million, based on an assumed offering price of $61 5/16 per share of Common Stock. The Company intends to use the net proceeds for general corporate purposes, including financing the Company's continued store growth. Pending such use, a portion of the proceeds will be used to repay borrowings under the Company's revolving credit facility and to reduce future sales of accounts receivable pursuant to the Company's accounts receivable sales program. At May 3, 1997, the interest rate payable under the Company's revolving credit facility was approximately 6.0% per annum. The facility matures on June 12, 2002. The Company will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY The Common Stock has been traded on the New York Stock Exchange since May 19, 1992, under the symbol "KSS." On March 11, 1996, the Company's Board of Directors declared a 2-for-1 stock split in the form of a stock dividend on the Common Stock. The prices in the table set forth below indicate the high and low prices of the Common Stock for each quarter in fiscal 1997, 1996 and 1995, as reported on the New York Stock Exchange Composite Tape, adjusted by the Company to give effect retroactively to the stock split.
COMMON STOCK PRICE ------------------ HIGH LOW --------- -------- FISCAL 1997 First Quarter.......................................... $51 1/8 $38 7/8 Second Quarter......................................... 63 3/16 49 5/8 Third Quarter (through August 4, 1997)................. 61 15/16 61 5/16 FISCAL 1996 First Quarter.......................................... $35 1/2 $28 3/8 Second Quarter......................................... 37 1/8 26 3/4 Third Quarter.......................................... 41 32 3/8 Fourth Quarter......................................... 42 36 1/8 FISCAL 1995 First Quarter.......................................... $23 5/8 $20 Second Quarter......................................... 26 20 Third Quarter.......................................... 27 3/8 21 1/2 Fourth Quarter......................................... 29 1/8 22 5/8
See the cover page of this Prospectus for a recent reported last sale price of the Common Stock. At July 31, 1997, there were 4,515 holders of record of the Common Stock. The Company has never paid a cash dividend, has no current plans to pay dividends on its Common Stock and intends to retain all earnings for investment in and growth of the Company's business. In addition, financial covenants and other restrictions in the Company's financing agreements limit the payment of dividends on the Common Stock. The payment of future dividends, if any, will be determined by the Board of Directors in light of existing conditions, including the Company's earnings, financial condition and requirements, restrictions in financing agreements, business conditions and other factors deemed relevant by the Board of Directors. 8 CAPITALIZATION The following table sets forth the consolidated capitalization of the Company as of May 3, 1997, and as adjusted to give effect to the Offering (based on an assumed offering price of $61 5/16 per share and assuming that the Underwriters' over-allotment option is not exercised) and the application of the estimated net proceeds of $195.9 million. For purposes of the table, it is assumed that $78.5 million of the net proceeds are applied to repay borrowings under the Company's revolving credit facility, although the actual amount of borrowings to be repaid is expected to be in excess of that amount. See "Use of Proceeds." This table should be read in conjunction with the consolidated financial statements and related notes and the other financial information incorporated in this Prospectus.
AS OF MAY 3, 1997 ------------------- AS ACTUAL ADJUSTED -------- ---------- (IN THOUSANDS) Long-term Debt: Revolving credit facility.......................... $ 78,500 $ -- Capitalized lease obligations...................... 50,503 50,503 6.57% unsecured senior notes, due 2004............. 60,000 60,000 6.70% notes, due 2006.............................. 100,000 100,000 7 3/8% notes, due 2011............................. 100,000 100,000 Other.............................................. 1,170 1,170 -------- ---------- Total long-term debt............................. 390,173 311,673 -------- ---------- Shareholders' equity: Common stock; 74,055,365 shares outstanding (77,355,365 shares after the Offering)............ 740 774 Paid-in capital.................................... 195,461 391,338 Retained earnings.................................. 338,689 338,689 -------- ---------- Total shareholders' equity....................... 534,890 730,801 -------- ---------- Total capitalization............................. $925,063 $1,042,474 ======== ==========
9 SELLING STOCKHOLDERS The following table sets forth certain information regarding the beneficial ownership of the Common Stock as of July 31, 1997, and after the sale of the Common Stock offered hereby (assuming no exercise of the Underwriters' over- allotment option), by each Selling Stockholder. Each of the Selling Stockholders (other than Mr. Sommerhauser) is an executive officer of the Company. Messrs. Kellogg, Baker, Herma, Montgomery and Sommerhauser is each a director of the Company. Except as otherwise noted, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned below.
SHARES BENEFICIALLY SHARES BENEFICIALLY OWNED PRIOR TO OFFERING SHARES OWNED AFTER OFFERING ------------------------------- BEING -------------------------- NAME OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT - ------------------------ --------------- -------------------- -------------- ---------- William S. Kellogg...... 6,137,873 (a) 8.2% 305,000 (b) 5,832,873(a) 7.5% Jay H. Baker............ 2,964,998 (c) 4.0 150,000 2,814,998(c) 3.6 John F. Herma........... 3,757,931 (d) 5.1 187,000 (e) 3,570,931(d) 4.6 R. Lawrence Montgomery.. 340,680 (f) * 17,000 323,680 (f) * Caryn Blanc............. 342,725 (g) * 17,000 325,725 (g) * Kevin Mansell........... 289,555 (h) * 14,000 275,555 (h) * Peter M. Sommerhauser... 209,112 (i) * 10,000 199,112 (i) *
- -------- * Less than 1%. (a) Includes 5,322,173 shares (5,017,173 shares after the Offering) held in trust for the benefit of Mr. Kellogg's family but as to which Mr. Sommerhauser has sole voting and investment power and 26,430 shares held by a charitable foundation for which Mr. Kellogg serves as a director and president. Excludes 634,446 shares (634,446 shares after the Offering) held in trust for the benefit of Mr. Baker's family and as to which Mr. Kellogg and Mr. Sommerhauser have shared voting and investment power. Includes 337,500 shares represented by stock options exercisable within 60 days of July 31, 1997. (b) All of the shares are being offered by the William S. Kellogg Irrevocable Trust and William S. Kellogg Children's Trusts. (c) Includes 634,446 shares (634,446 shares after the Offering) held in trust for the benefit of Mr. Baker's family as to which Mr. Kellogg and Mr. Sommerhauser have shared voting and investment power and 78,330 shares held by a charitable foundation for which Mr. Baker serves as a director and president. Also includes 168,750 shares represented by stock options exercisable within 60 days of July 31, 1997. (d) Includes 3,075,821 shares (2,888,821 shares after the Offering) held in trust for the benefit of Mr. Herma's family as to which Mr. Sommerhauser has sole voting and investment power and 13,400 shares held by a charitable foundation for which Mr. Herma serves as a director and president. Also includes 168,750 shares represented by stock options exercisable within 60 days of July 31, 1997. (e) All of the shares are being offered by the John F. Herma 1987 Trust. (f) Includes 62,974 shares (62,974 shares after the Offering) held in trust for the benefit of Mr. Montgomery's family as to which Mr. Sommerhauser has sole voting and investment power. Also includes 155,414 shares represented by stock options exercisable within 60 days of July 31, 1997. (g) Includes 249,727 shares represented by stock options exercisable within 60 days of July 31, 1997. (h) Includes 69,000 shares (69,000 shares after the Offering) held in trust for the benefit of Mr. Mansell's family as to which Mr. Sommerhauser has sole voting and investment power. Also, includes 104,289 shares represented by stock options exercisable within 60 days of July 31,1997. (i) Excludes 9,192,414 shares (8,700,414 shares after the Offering) held in trust for the benefit of the families of current and former executive officers of the Company, as to which Mr. Sommerhauser has sole or shared voting and investment power. Includes 40,521 shares (40,521 shares after the Offering) held in trust for the benefit of Mr. Sommerhauser's family as to which Mr. Sommerhauser has no voting or investment power and 3,000 shares held by a charitable foundation for which Mr. Sommerhauser serves as director and president. 10 DESCRIPTION OF CAPITAL STOCK Pursuant to the Company's Articles of Incorporation ("Articles"), the authorized capital stock of the Company consists of 400,000,000 common shares, par value $.01 per share ("Common Stock"), and 10,000,000 preferred shares, par value $.01 per share ("Preferred Stock"). As of May 3, 1997, 74,055,365 shares of Common Stock and no shares of Preferred Stock were outstanding. Holders of the Common Stock are entitled to one vote per share on all matters to be voted on by stockholders. Voting rights are not cumulative, and, therefore, holders of a majority of the shares of Common Stock are able to elect all of the Company's directors. Holders of Common Stock are entitled to receive dividends when, as and if declared by the Board of Directors in its discretion out of funds legally available therefor. See "Price Range of Common Stock and Dividend Policy." Subject to the rights of any holders of Preferred Stock outstanding, upon liquidation or dissolution of the Company, the holders of Common Stock will be entitled to receive on a pro rata basis all assets remaining for distribution to stockholders. The Common Stock does not have preemptive or other subscription rights, any conversion rights or any sinking fund provisions. The Company's Board of Directors is authorized, without further stockholder action, to issue Preferred Stock in one or more series and to fix and determine the relative rights and preferences thereof, including voting rights, dividend rights, liquidation rights, redemption provisions, sinking fund provisions or conversion rights. As a result, the Board of Directors of the Company could, without stockholder approval, issue shares of Preferred Stock with voting, conversion, dividend, liquidation or other rights that could adversely affect the holders of Common Stock and that could have the effect of delaying, deferring or preventing a change in control of the Company. In addition, the Board of Directors has the ability to adopt, without stockholder approval, a so-called "rights plan" which would entitle stockholders (other than a hostile bidder) to acquire stock of the Company at a discount. The Company's Articles divide the Board of Directors into three classes serving staggered three-year terms. As a result, at least two annual meetings will generally be required for stockholders to effect a change of a majority of the Board of Directors. Any director, or the entire Board of Directors, may be removed from office only for a cause. These provisions in the Articles require an 80% vote of stockholders for amendment or repeal, which makes it more difficult for even holders of a majority of the Common Stock to effect a change in control of the Company. The Company's Bylaws establish procedures, including advance notice procedures, for considering at any annual stockholders meeting the nomination, other than by the Board of Directors, of candidates for election as directors, and for other stockholder proposals. In general, notice must be received by the Company at least 90 days prior to the anniversary date of the annual meeting of stockholders in the immediately preceding year and must contain certain specified information concerning, among other things, any person nominated for director, the stockholder submitting the proposal or nomination, and the stockholder's interest in any proposal. The Company's Bylaws also permit the holders of record of 10% of the Common Stock to call a special meeting, provided certain procedures are followed. These provisions in the Bylaws may be amended by the Board of Directors or by an 80% vote of stockholders. Certain provisions of the Wisconsin Business Corporation Law could have the effect of delaying, deferring or preventing a change in control of the Company. 11 UNDERWRITERS Under the terms and subject to the conditions in the Underwriting Agreement dated the date hereof (the "Underwriting Agreement"), the Underwriters named below have severally agreed to purchase, and the Company and the Selling Stockholders have severally agreed to sell to them, the respective number of shares of Common Stock set forth opposite the names of such Underwriters below:
NUMBER OF NAME SHARES ---- --------- Morgan Stanley & Co. Incorporated.............................. Merrill Lynch, Pierce, Fenner & Smith Incorporated.......................................... Montgomery Securities.......................................... William Blair & Company, L.L.C................................. Robert W. Baird & Co. Incorporated............................. --------- Total...................................................... 4,000,000 =========
The Underwriting Agreement provides that the obligations of the several Underwriters to pay for and accept delivery of the shares of Common Stock offered hereby are subject to the approval of certain legal matters by their counsel and to certain other conditions. The Underwriters are obligated to take and pay for all of the shares of Common Stock offered (other than those covered by the Underwriters' over-allotment option described below) if any such shares are taken. The Underwriters initially propose to offer part of the Common Stock directly to the public at the public offering price set forth on the cover page hereof and part to certain dealers at a price which represents a concession not in excess of $ per share under the public offering price. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share to other Underwriters or to certain dealers. After the initial offering of the Common Stock, the offering price and other selling terms may from time to time be varied by the Underwriters. Pursuant to the Underwriting Agreement, the Company has granted the Underwriters an option, exercisable for 30 days from the date of this Prospectus, to purchase up to 600,000 additional shares of Common Stock at the public offering price set forth on the cover page hereof, less underwriting discounts and commissions. The Underwriters may exercise such option to purchase solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of Common Stock hereby. To the extent such option is exercised, each Underwriter will become obligated, subject to certain conditions, to purchase approximately the same percentage of such additional shares as the number set forth next to such Underwriter's name in the preceding table bears to the total number of shares of Common Stock offered by the Underwriters hereby. The Company and all the Selling Stockholders have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, they will not during the period ending 90 days after the date of this Prospectus (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase lend or otherwise transfer, or dispose 12 LOGO PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Securities and Exchange Commission Registration Fee............ $ 85,902 NASD filing fees............................................... 30,000 Legal Fees and Expenses........................................ 100,000 Blue Sky Fees and Expenses (including legal fees).............. 3,000 Accounting Fees and Expenses................................... 18,000 Printing....................................................... 85,000 NYSE listing fees.............................................. 14,000 Miscellaneous.................................................. 14,098 --------- Total...................................................... $ 350,000 =========
All of the above expenses except the registration fees are estimated. All of such expenses will be borne by the Company. ITEM 15. 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 lawful or no reasonable cause to believe that 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 articles 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 provided for in any additional right of indemnification permitted under 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 good faith belief that he has not breached or failed to perform his duties to the Company; and a written undertaking to repay any amounts advanced and interest thereon if it is determined that indemnification by the Company is not required and that indemnification is not ordered by a court. 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 and insurance to the extent required or permitted under Sections II-1 180.0850 to 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 16. EXHIBITS. 1.1 Form of Underwriting Agreement. 5 Opinion of Godfrey and Kahn, S.C. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Godfrey & Kahn, S.C. (included in Exhibit 5). 24 Powers of Attorney (included on the signature page hereof).
ITEM 17. UNDERTAKINGS. 1. The undersigned registrant hereby undertakes 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 the 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. 2. 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 foregoing provisions, 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 a 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 financial adjudication of such issue. 3. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. II-2 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND 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 AUGUST 5, 1997. Kohl's Corporation /s/ William S. Kellogg By: _________________________________ William S. Kellogg Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY EACH PERSON WHOSE SIGNATURE APPEARS BELOW APPOINTS WILLIAM S. KELLOGG, JAY H. BAKER, JOHN F. HERMA AND R. LAWRENCE MONTGOMERY 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, 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 DATE INDICATED: /s/ William S. Kellogg /s/ Jay H. Baker ___________________________________________ _________________________________________ William S. Kellogg Jay H. Baker Chairman, Chief Executive Officer and President and Director Director /s/ John F. Herma /s/ R. Lawrence Montgomery ___________________________________________ _________________________________________ John F. Herma R. Lawrence Montgomery Chief Operating Officer and Director Vice Chairman and Director /s/ Arlene Meier /s/ James D. Ericson ___________________________________________ _________________________________________ Arlene Meier James D. Ericson Executive Vice President and Chief Director Financial Officer (Principal Financial and Accounting Officer) /s/ Frank V. Sica /s/ Herbert Simon ___________________________________________ _________________________________________ Frank V. Sica Herbert Simon Director Director /s/ Peter M. Sommerhauser /s/ R. Elton White ___________________________________________ _________________________________________ Peter M. Sommerhauser R. Elton White Director Director
Dated: August 5, 1997 EX-1.1 2 UNDERWRITING AGREEMENT 4,000,000 Shares KOHL'S CORPORATION Common Stock (par value $.01 per share) FORM OF UNDERWRITING AGREEMENT August [ ], 1997 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Montgomery Securities William Blair & Company, L.L.C. Robert W. Baird & Co. Incorporated c/o Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs: Kohl's Corporation, a Wisconsin corporation (the "Company"), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the "Underwriters"), and certain shareholders of the Company (the "Selling Shareholders") named in Schedule II hereto severally propose to sell to the several Underwriters, an aggregate of 4 million shares of the Common Shares (par value per share $.01), of the Company (the "Firm Shares") of which 3.3 million shares are to be issued and sold by the Company (the "Company Firm Shares") and 700,000 shares are to be sold by the Selling Shareholders, each Selling Shareholder selling the amount set forth opposite such Selling Shareholder's name in Schedule II hereto. The Company and the Selling Shareholders are hereinafter collectively referred to as the "Sellers". Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Montgomery Securities, William Blair & Company, L.L.C. and Robert W. Baird & Co. Incorporated, shall act as representatives (the "Representatives") of the several Underwriters. The Company also proposes to issue and sell to the several Underwriters not more than an additional 600,000 shares of Common Shares (par value $.01 per share) of the Company (the "Additional Shares"; and, together with the Company Firm Shares, the "Company Shares"), if and to the extent that the Representatives shall have determined to exercise, on behalf of the Underwriters, the right to purchase such shares of Common Stock granted to the Underwriters in Article III hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the "Shares". The Common Shares (par value $.01 per share) of the Company are hereinafter referred to as the "Common Stock". 2 The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement relating to the Shares. The registration statement as amended at the time it becomes effective, and including all documents incorporated by reference therein, the exhibits thereto and the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter referred to as the "Registration Statement"; the prospectus in the form first used to confirm sales of Shares, including all documents incorporated by reference therein, is hereinafter collectively referred to as the "Prospectus". The terms "supplement", "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Prospectus by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). I. The Company represents and warrants to each of the Selling Shareholders and each of the Underwriters that: (a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before, and the Company does not know of any such proceedings that are threatened by, the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not contain any 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) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph (b) do not apply to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein. 3 (c) 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 Prospectus 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 on the Company and its subsidiaries, taken as a whole. (d) Kohl's Department Stores, Inc. and Kohl's Investment Corp. 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 Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus 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 on the Company and its subsidiaries, taken as a whole. (e) The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus. (f) All the outstanding shares of Common Stock (including the Shares to be sold by the Selling Shareholders) have been duly authorized and are validly issued, fully paid and, subject to Wisconsin Business Corporation Law (S) 180.0622(2)(b), nonassessable. (g) The Company Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and, subject to Wisconsin Business Corporation Law (S) 180.0622(2)(b), nonassessable. (h) This Agreement and each of the Power of Attorney and Custody Agreement (each, a "Power of Attorney and Custody Agreement" and collectively, the "Power of Attorney and Custody Agreements"), dated as of the date hereof, between each Selling Shareholder and the Company, as Custodian (the "Custodian"), relating to the deposit of the Shares to be sold by such Selling Shareholder and appointing certain individuals as such Selling Shareholder's attorneys-in-fact to the extent set forth therein, relating to the transactions contemplated hereby and by the Registration Statement, have been duly authorized, executed and delivered by the Company. (i) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Power of Attorney and 4 Custody Agreements and the issuance and delivery of the Company Shares 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, 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 Shares. (j) 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, from that set forth in the Prospectus. (k) 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 Registration Statement or the Prospectus and are not so described or any statutes, regulations, material contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed as required or incorporated. (l) 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 Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (m) Each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the rules and regulations of the Commission thereunder. (n) 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. (o) The Shares are listed on the New York Stock Exchange. (p) 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 on the Company and its subsidiaries, taken as a whole. (q) The Company has complied with all provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida). (r) The Company has not taken and will not take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock (provided that the Company does not make any representation as to any actions that may be taken by any Underwriter); and the Company has not distributed and will not distribute any prospectus or other offering material in connection with the offering and sale of the Shares other than any preliminary prospectus filed with the Commission or the Prospectus or other material permitted by the Securities Act. II. Each of the Selling Shareholders represents and warrants to each of the Underwriters and the Company that: (a) This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Shareholder. (b) The execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Power of Attorney and Custody Agreement, will not contravene any provision of applicable federal or state law or any agreement or other instrument binding upon such Selling Shareholder or any judgment, order or decree of any federal or state governmental body, agency or court having jurisdiction over such Selling Shareholder, and no consent, approval, authorization or order of or qualification with any federal or 6 state governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement or the Power of Attorney and Custody Agreement of such Selling Shareholder, 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 Shares. (c) Such Selling Shareholder has, and on the Closing Date (as defined below) will have, valid and marketable title to the Shares to be sold by such Selling Shareholder and the legal right and power and all authorization and approval to enter into this Agreement and the Power of Attorney and Custody Agreement, and to sell, transfer and deliver the Shares to be sold by such Selling Shareholder. (d) The Power of Attorney and Custody Agreement has been duly authorized, executed and delivered by such Selling Shareholder and is a valid and binding agreement of such Selling Shareholder. (e) Delivery of the Shares to be sold by such Selling Shareholder pursuant to this Agreement will pass marketable title to such Shares free and clear of any security interests, claims, liens, equities and other encumbrances. (f) All information furnished by or on behalf of such Selling Shareholder expressly for use in the Registration Statement and Prospectus does not, and on the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make such information not misleading. (g) Such Selling Shareholder has not taken and will not take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock (provided that such Selling Shareholder does not make any representation as to any actions that may be taken by any Underwriter); and such Selling Shareholder has not distributed and will not distribute any prospectus or other offering material in connection with the offering and sale of the Shares other than any preliminary prospectus filed with the Commission or the Prospectus or other material permitted by the Securities Act. III. The Company and each Selling Shareholder, severally and not jointly, hereby agree to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties of the Company, with respect to Firm Shares sold by it, and of the Selling Shareholders, with respect to Firm Shares sold by them, herein contained, but subject to the conditions hereinafter stated, agrees severally and not jointly, to purchase from 7 the Sellers at $[ ] a share -- the purchase price -- the number of Firm Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) (x) in the case of the Company, that bears the same proportion to the number of Firm Shares to be sold by the Company as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares and (y) in the case of the Selling Shareholders, that bears the same proportion to the number of Firm Shares to be sold by such Selling Shareholders as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees, to sell to the Underwriters the Additional Shares, and the Underwriters shall have a one-time right to purchase, severally and not jointly, up to 600,000 Additional Shares at the purchase price. Additional Shares may be purchased as provided in Article V hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. If any Additional Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Additional Shares to be purchased as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares. Each Seller hereby agrees that without the prior written consent of Morgan Stanley & Co. Incorporated ("Morgan Stanley"), it will not, for a period of 90 days after the date of the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, other than any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock and issued pursuant to employee benefit or employee stock option or ownership plans of the Company which are in existence on the date of this Agreement, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such shares of Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, other than (a) the sale of the Shares to the Underwriters pursuant to this Agreement or (b) transactions relating to shares of Common Stock or other securities acquired in open market transactions after completion of the public offering. 8 In addition, each Selling Shareholder agrees that, without the prior written consent of Morgan Stanley on behalf of the Underwriters, it will not, for a period of 90 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. IV. The Company and the Selling Shareholders are advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Company and the Selling Shareholders are further advised by you that the Shares are to be offered to the public initially at $[ ] a Share (the public offering price) and to certain dealers selected by you at a price that represents a concession not in excess of $[ ] a share under the public offering price, and that any Underwriter may allow, and such dealers may reallow, a concession, not in excess of $[ ] a share, to any Underwriter or to certain other dealers. V. Payment for the Firm Shares to be sold by the Company and each Selling Shareholder shall be made by wire transfers payable to the order of the Company and the Custodian (or to the Company's registrar at the Custodian's direction), as the case may be, in federal funds or other funds immediately available in New York City at the office of Shearman & Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M., local time, on September 25, 1997, or at such other time on the same or such other date, not later than October 2, 1997, as shall be agreed to by you, the Company and the Selling Shareholders. The time and date of each such payment are hereinafter referred to as the "Closing Date". Payment for any Additional Shares shall be made by wire transfers payable to the order of the Company and the Custodian (or to the Company's registrar at the Custodian's direction), as the case may be, in federal funds or other funds immediately available in New York City at the office of Shearman & Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M., local time, on such date (which may be the same as the Closing Date but shall in no event be earlier than the Closing Date nor later than five business days after the giving of the notice hereinafter referred to) as shall be designated in a written notice from the Representatives to the Company of your determination, on behalf of the Underwriters, to purchase a number, specified in said notice, of Additional Shares, or on such other date, in any event not later than [ ], 1997, as shall be agreed to by the 9 Representatives and the Company. The time and date of such payment are hereinafter referred to as the "Option Closing Date". The notice of the determination to exercise the option to purchase Additional Shares and of the Option Closing Date may be given at any time within 30 days after the date of this Agreement. The Underwriters represent that the Additional Shares will be used only to cover over-allotments made in connection with the offering of the Firm Shares. Certificates for the Firm Shares and Additional Shares shall be in definitive form and registered in such names and in such denominations as you shall request in writing not later than two full business days prior to the Closing Date or the Option Closing Date, as the case may be. The certificates evidencing the Firm Shares and Additional Shares shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against payment of the purchase price therefor. VI. The obligations of the Company and each Selling Shareholder and the several obligations of the Underwriters hereunder are subject to the condition that the Registration Statement shall have become effective not later than the date hereof. The several obligations of the Underwriters hereunder are subject to the following further conditions: (a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date: (i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Securities Act, and (ii) there shall not have occurred 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, from that set forth in the Registration Statement, that, in your judgment, is material and adverse and makes it, in your judgment, 10 impracticable to market the Shares on the terms and in the manner contemplated in this Prospectus. (b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in clause (a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. (c) You shall have received on the Closing Date an opinion of Godfrey & Kahn, S.C., counsel for the Company, dated the Closing Date, to the effect that: (i) 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 Prospectus and, to such counsel's knowledge, 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. and Kohl's Investment Corp. is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, to such counsel's knowledge, 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 on the Company and its subsidiaries taken as a whole; (iii) the authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus; 11 (iv) all the outstanding shares of Common Stock (including the Shares to be sold by the Selling Shareholders) have been duly authorized and are validly issued, fully paid and, subject to Wisconsin Business Corporation Law (S) 180.0622(2)(b), nonassessable. (v) the Company Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and, subject to Wisconsin Business Corporation Law (S) 180.0622(2)(b), nonassessable. (vi) this Agreement and each of the Power of Attorney and Custody Agreements and the issuance and delivery of the Company Shares have been duly authorized, executed and delivered by the Company; (vii) the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Power of Attorney and Custody Agreements and the issuance and delivery of the Company Shares will not contravene any provision of applicable law or the certificate 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 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, except such as may be required by the securities or Blue Sky laws in connection with the offer and sale of the Shares by the Underwriters; (viii) the statements (1) in the Prospectus under the caption "Description of Capital Stock" and (2) in the Registration Statement under Item 15 thereof, (3) to such counsel's knowledge, after due inquiry of responsible officers of the Company, in "Item 3 -- Legal Proceedings" of the Company's most recent annual report on Form 10-K incorporated by reference in the Prospectus, (4) 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 its Annual Meeting of Stockholders 12 immediately succeeding the filing of the Company's last annual report, and (5) to such counsel's knowledge, after due inquiry of responsible officers of the Company, in "Item 1 -- Legal Proceedings" of Part II of the Company's quarterly reports on Form 10-Q, if any, filed since such annual report, in each case insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (ix) after due inquiry, without independent investigation other than inquiries of responsible officers of the Company, such counsel does not know of any legal or governmental proceeding 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 are required to be described in the Registration Statement or the Prospectus and are not so described or of any statutes, regulations, material contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required; (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) (1) each document filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied when so filed as to form in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder and (2) the Registration Statement, as of its effective date, and the Prospectus, as of its date and as of the Closing Date, appeared on their face to be appropriately responsive in all material respects to the requirements of the Securities Act and the rules and regulations of the Commission thereunder, except that, in each case, 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 Exchange Act or the Registration Statement 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 Exchange Act or in the Registration Statement and the Prospectus (other than as specified in subparagraph (viii) above insofar as the captions referred to therein relate to provisions of documents and other legal matters); and 13 (xii) 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 Registration Statement, the Prospectus 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 Registration Statement or the Prospectus and need not make any independent check or verification thereof (other than as specified in subparagraph (viii) 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 Registration Statement, at the time it became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, 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 Registration Statement. Such counsel may also state in such opinion that (i) whenever such counsel indicates that the opinion is with respect to matters within the "knowledge of" or "known by" such counsel, such knowledge means the representations and warranties of the Company contained in this Agreement and in the documents delivered on the Closing Date by the Company pursuant to this Agreement, and the current conscious awareness of facts of the attorneys currently practicing law with such firm who had involvement in the transaction or such other attorneys presently in the firm whom such counsel has determined are likely, in the course of representing the Company, to have knowledge of the matters covered by the opinion, and that (ii) 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. As to matters involving the application of laws of any jurisdiction other than the State of Wisconsin, the General Corporation Law of the State of Delaware, and the United States, such counsel may assume that the laws of such jurisdiction are identical to the laws of the State of Wisconsin. (d) You shall have received on the Closing Date an opinion of Godfrey & Kahn, S.C., counsel for the Selling Shareholders, to the effect that: (i) this Agreement has been duly authorized, executed and delivered by or on behalf of each of the Selling Shareholders; 14 (ii) the execution and delivery by each Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Power of Attorney and Custody Agreement of such Selling Shareholder will not contravene any provision of the laws of the State of Wisconsin or the federal laws of the United States applicable to each Selling Shareholder or, to the best of such counsel's knowledge, without independent investigation other than inquiry of such Selling Shareholder, any agreement or other instrument binding upon such Selling Shareholder or, to the best of such counsel's knowledge, without independent investigation other than inquiry of such Selling Shareholder, any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder, 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 such Selling Shareholder of its obligations under this Agreement or the Power of Attorney and Custody Agreement of such Selling Shareholder, except such as have been obtained or such as may be required by securities or Blue Sky laws in connection with the offer and sale of the Shares; (iii) each of the Selling Shareholders has the legal right and power, and all authorization and approval required by federal or State of Wisconsin law, to enter into this Agreement and the Power of Attorney and Custody Agreement of such Selling Shareholder and to sell, transfer and deliver the Shares to be sold by such Selling Shareholder; (iv) the Power of Attorney and Custody Agreement of each Selling Shareholder has been authorized, executed and delivered by such Selling Shareholder and is a valid and binding agreement of such Selling Shareholder; and (v) delivery of the Shares to be sold by each Selling Shareholder pursuant to this Agreement will pass marketable title to such Shares free and clear of any security interests, claims, liens, equities and other encumbrances to each of the several Underwriters who have purchased Shares in good faith and without notice of any such security interest, claim, lien, equity, encumbrance or any other adverse claim within the meaning of the Uniform Commercial Code. (e) You shall have received on the Closing Date an opinion of Shearman & Sterling, special counsel for the Underwriters, dated the Closing Date. With respect to subparagraphs (xi) and (xii) of paragraph (c) above, Godfrey & Kahn, S.C. and, with respect to paragraph (e) above, Shearman & Sterling may state that their opinion and belief are based upon their participation in the preparation of the 15 Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification, except as specified. With respect to paragraph (d) above, Godfrey & Kahn, S.C. may rely upon the representations of each Selling Shareholder contained herein and in the Power of Attorney and Custody Agreement of such Selling Shareholder and in other documents and instruments; provided that copies of such Power of Attorney and Custody Agreement and of any such other documents and instruments shall be delivered to you and shall be in form and substance satisfactory to your counsel. The opinions of Godfrey & Kahn, S.C. described in paragraphs (c) and (d) above shall be rendered to you at the request of the Company and the Selling Shareholders, respectively, and shall so state therein. (f) You shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Ernst & Young LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (g) You shall have received on the Closing Date certificates dated the Closing Date and signed by the Selling Shareholders or by an attorney-in- fact of the Selling Shareholders, to the effect that the representations and warranties of each Selling Shareholder contained in this Agreement are true and correct as of the Closing Date and that each Selling Shareholder has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date. The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to the Representatives on the Option Closing Date of such documents as they may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares and other matters related to the issuance of the Additional Shares. VII. In further consideration of the agreements of the Underwriters herein contained, the Company covenants as follows: 16 (a) To furnish to you, without charge, five signed copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and, during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as you may reasonably request. In the case of the Prospectus, to furnish copies of the Prospectus in New York City prior to 5:00 p.m. on the business day following the date of this Agreement, in such quantities as you reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and to file no such proposed amendment or supplement to which you reasonably object unless, in the reasonable judgment of the Company and its counsel, such amendment or supplement is necessary to comply with law or to make the statements therein not misleading. (c) If, during such period after the first date of the public offering of the Shares as in the opinion of your counsel the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of your counsel, it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (d) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request and to maintain such qualification for as long as you shall reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel) in connection with such qualification and in connection with any required review of the offering of the Shares by the National Association of Securities Dealers, Inc. (e) To make generally available to the Company's security holders and to you, as soon as practicable, an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. 17 (f) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the preparation and filing of the Registration Statement and the Prospectus and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Shares, including any transfer or other taxes payable on the Company Shares, (iii) the fees and disbursements of the Company's counsel and accountants and of the counsel and accountants for the Selling Shareholders, (iv) the qualification of the Shares under securities or Blue Sky laws in accordance with paragraph (d) above, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to the Underwriters in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto and of the Prospectus and any amendments or supplements thereto, (vi) the costs and charges of any transfer agent, registrar or depositary, (vii) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the Offering, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expense of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show and (viii) all other costs and expenses incident to the performance of the obligations of the Company and the Selling Shareholders hereunder for which provision is not otherwise made in this Section. VIII. Each Selling Shareholder, severally and not jointly, agrees to pay or cause to be paid all taxes, if any, on the transfer and sale of the Shares being sold by such Selling Shareholder. IX. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange 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 the Registration Statement or any amendment thereof, any preliminary prospectus or the 18 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 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 Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased Shares, or any person controlling such Underwriter, if a copy of the Prospectus (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 Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Shares to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. The Company will indemnify and hold harmless each of the Selling Shareholders to the same extent that the Company indemnifies and holds harmless each Underwriter pursuant to the preceding paragraph; provided, however, the Company shall not be liable under this paragraph to the extent any losses, claims, damages or liabilities described in the preceding paragraph arise out of or are based upon an untrue statement or omission or alleged untrue statement or omission based upon information relating to such Selling Shareholder furnished in writing by or on behalf of such Selling Shareholder expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. Each Selling Shareholder agrees, severally and not jointly, to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and 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, 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 the Registration Statement or any amendment thereof, any preliminary prospectus or the 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 required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Selling Shareholder furnished in writing by or on behalf of such Selling Shareholder 19 expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the Selling Shareholders, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company or any Selling Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange 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 the Registration Statement or any amendment thereof, any preliminary prospectus or the 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 required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus 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 four 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 Article IX) 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 Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, (b) the fees and expenses of more than one separate firm (in addition to 20 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, (c) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Selling Shareholders and all persons, if any, who control any Selling Shareholder within the meaning of either such Section and all persons, if any, who control any of such Selling Shareholders 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 Underwriters and such control persons of Underwriters, such firm shall be designated in writing by Morgan Stanley & Co. 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. In the case of any such separate firm for the Selling Shareholders and such controlling persons of Selling Shareholders, 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, 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 includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first, second, third or fourth paragraph of this Article IX 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 Shares 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 21 in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Shareholders on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and each Selling Shareholder and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Shares. The relative fault of the Company and the Selling Shareholders on the one hand and the Underwriters 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, the Selling Shareholders or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Article IX are several in proportion to the respective number of Shares they have purchased hereunder, and not joint. The Company, the Selling Shareholders and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Article IX were determined by pro rata allocation (even if the Underwriters 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 Article IX, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Article IX 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 Article IX and the representations and warranties of the Company and the Selling Shareholders 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 Underwriter or any person controlling any Underwriter, any Selling Shareholder or any 22 person controlling any Selling Shareholder, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares. The liability of the Company or each Selling Shareholder under this Article IX shall not exceed an amount equal to the initial public offering price of the Shares sold by the Company or such Selling Shareholder, less the applicable underwriting discounts and commissions. X. This Agreement shall be subject to termination by notice given by you to the Sellers, if (a) after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event singly or together with any other such event makes it, in your reasonable judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Prospectus. XI. This Agreement shall become effective upon the later of (x) execution and delivery hereof by the parties hereto and (y) release of notification of the effectiveness of the Registration Statement by the Commission. If, on the Closing Date or the Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of all such non- defaulting Underwriters, or in such other proportions as you may specify, to purchase the Shares which such defaulting Underwriter or 23 Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Article XI by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter. If, on the Closing Date or the Option Closing Date, as the case may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to you, the Company and the Selling Shareholders for the purchase of such Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter, the Selling Shareholders or the Company. In any such case you, the Selling Shareholders or the Company shall have the right to postpone the Closing Date or the Option Closing Date, as the case may be, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company or any Selling Shareholder to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company or the Selling Shareholder shall be unable to perform its obligations under this Agreement, the Company and the Selling Shareholders will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder; provided that neither the Company nor any Selling Shareholder shall have any further liability to any Underwriter (including any liability for damages, including loss of anticipated profits) for any termination of this Agreement, except as provided in Article IX hereof. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 24 This Agreement shall be governed by the laws of the State of New York. Very truly yours, KOHL'S CORPORATION By_________________ Name: Title: The Selling Shareholders named in Schedule II hereto, acting severally By_________________ Attorney-in-Fact Name: Title: 25 Accepted, August [ ], 1997 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Montgomery Securities William Blair & Company, L.L.C. Robert W. Baird & Co. Incorporated Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto. By Morgan Stanley & Co. Incorporated By__________________________ 26 SCHEDULE I Underwriters ------------
Number of Firm Shares Underwriters To Be Purchased - ---------------------------------------------------- --------------- Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Montgomery Securities William Blair & Company, L.L.C. Robert W. Baird & Co. Incorporated --------------- Total Firm Shares................................... 4,000,000 ===============
27 SCHEDULE II Selling Shareholders --------------------
Number of Firm Shares Selling Shareholders To Be Sold - -------------------------------------- ----------- William S. Kellogg Irrevocable Trust 152,500 William S. Kellogg Children's Trusts 152,500 Jay H. Baker 150,000 John F. Herma 1987 Trust 187,000 R. Lawrence Montgomery 17,000 Caryn Blanc 17,000 Kevin Mansell 14,000 Peter M. Sommerhauser 10,000 _______ Total Shares.......................... 700,000
EX-5 3 OPINION OF GODFREY AND KAHN, S.C. Exhibit 5 Godfrey & Kahn, S.C. Attorneys At Law 780 North Water Street Milwaukee, WI 53202-3590 Tel: (414) 273-3500 Fax: (414) 273-5198 August 5, 1997 Kohl's Corporation N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 Ladies and Gentlemen: In connection with the registration of 4,600,000 shares of common stock, par value $0.01 per share (the "Shares"), of Kohl's Corporation, a Wisconsin corporation (the "Company"), under the Securities Act of 1933, as amended (the "Securities Act") on Form S-3 to be filed with the Securities and Exchange Commission (the "Commission") on or about August 5, 1997 (the "Registration Statement"), you have requested our opinion with respect to the following matters. Of the Shares being registered, (i) 3,300,000 Shares are being sold by the Company (the "Primary Shares"), (ii) 700,000 Shares are presently issued and outstanding (the "Outstanding Shares") and are being sold by certain shareholders named in the Registration Statement (the "Selling Shareholders") and (iii) 600,000 Shares will be subject to an option to be granted by the Company to the underwriters named in the Registration Statement to cover over-allotments (the "Option Shares") pursuant to the underwriting agreement in the form to be attached as an exhibit to the Registration Statement (the "Underwriting Agreement"). In our capacity as your counsel in connection with such registration, we are familiar with the proceedings taken and proposed to be taken by the Company in connection with the authorization, issuance and sale of the Shares, and, for purposes of this opinion, have assumed such proceedings will be timely completed in the manner presently proposed. In addition, we have made such legal and factual examinations and inquiries, including an examination of originals or copies certified or otherwise identified to our satisfaction of such documents, records and papers as we have deemed necessary or appropriate for purposes of this opinion. We have, with your consent, relied as to factual matters on certificates or other documents furnished by the Company and upon such other documents and data that we have deemed appropriate and, for purposes of this opinion, have assumed that the certificates and other documents to be furnished in connection with the closing of the sale of the Shares will be delivered in the manner presently proposed. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. With your consent, we are opining herein only on the laws of the State of Wisconsin. We express no opinion with respect to the applicability thereto, or the effect thereon, of any other laws or the laws of any other jurisdiction. Based on such examination and review, and subject to the foregoing, we are of the opinion that: 1. The Primary Shares have been duly authorized, and, upon issuance, delivery and payment therefor in the manner contemplated by the Underwriting Agreement, will be validly issued, fully paid and non- assessable, subject to Section 180.0622(2)(b) of the Wisconsin Business Corporation Law (the "WBCL") 2. The Outstanding Shares have been duly authorized and validly issued and are fully paid and non-assessable, subject to Section 180.0622(2)(b) of the WBCL. 3. The Option Shares have been duly authorized, and, upon issuance, delivery and payment therefor in the manner contemplated by the Underwriting Agreement, will be validly issued, fully paid and non- assessable, subject to 180.0622(2)(b) of the WBCL. Section 180.0622(2)(b) of the WBCL provides that shareholders of a corporation may be assessed up to the par value of their shares to satisfy the obligations of such corporation to its employees for services rendered, but not exceeding six months service in the case of any individual employee. Certain Wisconsin courts have interpreted "par value" to mean the full amount paid by the purchaser of shares upon issuance thereof. We hereby consent to the use of this opinion as an Exhibit to the Registration Statement and to the reference to our firm under the caption "Legal Matters" in the prospectus that is a part of the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ Godfrey & Kahn, S.C. GODFREY & KAHN, S.C. DFC:cr 2 EX-23.1 4 CONSENT OF ERNST & YOUNG LLP Exhibit 23.1 Consent of Ernst & Young LLP We consent to the reference to our firm under the captions "Selected Consolidated Financial Data" and "Experts" in the Registration Statement (Form S-3) and related Prospectus of Kohl's Corporation for the registration of 4,600,000 shares of common stock and to the incorporation by reference therein of our report dated March 7, 1997, with respect to the consolidated financial statements of Kohl's Corporation included in its Annual Report (Form 10-K) for the year ended February 1, 1997 filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Milwaukee, Wisconsin ERNST & YOUNG LLP August 4, 1997 -----END PRIVACY-ENHANCED MESSAGE-----