-----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, BuIjF+Q7sxCyzHyAFIqpBHuPliC4zTpNezmXI3s/xdnbfjmnbF00N83BCqIUvtXP 38x9/L9SCiOP86YofF045w== 0000950131-99-001408.txt : 19990311 0000950131-99-001408.hdr.sgml : 19990311 ACCESSION NUMBER: 0000950131-99-001408 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990310 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/A SEC ACT: SEC FILE NUMBER: 333-73257 FILM NUMBER: 99561221 BUSINESS ADDRESS: STREET 1: N56 W17000 RIDGEWOOD DR CITY: MENOMONEE FALLS STATE: WI ZIP: 53051 BUSINESS PHONE: 4147835800 MAIL ADDRESS: STREET 1: N54 W13600 WOODALE DR CITY: MENOMONEE FALLS STATE: WI ZIP: 53051 S-3/A 1 AMENDMENT #1 TO FORM S-3 As filed with the Securities and Exchange Commission on March 10, 1999 Registration No. 333-73257 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- Amendment No. 1 to FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- KOHL'S CORPORATION (Exact name of Registrant as specified in its charter) N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 (414) 703-7000 (Name, address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) Wisconsin 39-1630919 (I.R.S. Employer (State or other jurisdiction Identification No.) of incorporation or organization) William S. Kellogg R. Lawrence Montgomery Kohl's Corporation N56 W17000 Ridgewood Drive Menomonee Falls, Wisconsin 53051 (414) 703-7000 (Name, address, including zip code, and telephone number, including area code, of agents for service) --------------- Copies to: Peter M. Sommerhauser Andrew R. Schleider Godfrey & Kahn, S.C. Shearman & Sterling 780 North Water Street 599 Lexington Avenue Milwaukee, Wisconsin 53202 New York, New York 10022 (414) 273-3500 --------------- (212) 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 or 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 - ---------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------
Proposed Proposed Maximum Title of each Class of Amount Maximum Aggregate Amount of Securities to be to be Offering Price Offering Registration Registered Registered(1) Per Unit(2) Price(2) Fee - ---------------------------------------------------------------------------------- Common Stock, $.01 par value................. 4,903,600 shares $66 29/32 $328,081,488 $91,207(3) - ---------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------
(1) Includes 639,600 shares that the underwriters have the option to purchase to cover over-allotments, if any. (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 stock on the New York Stock Exchange on February 25, 1999. (3) Paid on March 3, 1999. --------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXPLANATORY NOTE This registration statement contains two forms of prospectus: one to be used in connection with an offering in the United States and Canada and one to be used in a concurrent offering outside the United States and Canada. The prospectuses are identical in all material respects except for the front cover page. The U.S. prospectus is included in this registration statement and is followed by the alternate front cover page to be used in the international prospectus. The alternate page for the international prospectus included in this registration statement is labeled "Alternate Page for International Prospectus." Final forms of each prospectus will be filed with the Securities and Exchange Commission under Rule 424(b). ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +Information in this prospectus is not complete and may be changed. We may not + +sell these securities until the Registration Statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities and we are not soliciting offers to buy these + +securities in any state where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ PROSPECTUS (Subject to Completion) Issued March 10, 1999 4,264,000 Shares Common Stock ----------- Kohl's Corporation is offering 2,800,000 shares and the selling stockholders are offering 1,464,000 shares. Initially, the U.S. underwriters are offering 3,411,200 shares in the United States and Canada, and the international underwriters are offering 852,800 shares outside the United States and Canada. ----------- Kohl's Corporation's common stock is listed on the New York Stock Exchange under the symbol "KSS." On March 9, 1999, the reported last sale price of the common stock on the New York Stock Exchange was $73 3/8 per share. ----------- PRICE $ A SHARE -----------
Underwriting Proceeds to Price to Discounts and Proceeds to Selling Public Commissions Company Stockholders -------- ------------- ----------- ------------ Per Share.... $ $ $ $ Total..... $ $ $ $
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Kohl's Corporation has granted the U.S. underwriters the right to purchase up to an additional 639,600 shares of common stock to cover over-allotments. Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on , 1999. ----------- MORGAN STANLEY DEAN WITTER MERRILL LYNCH & CO. ROBERT W. BAIRD & CO. Incorporated WILLIAM BLAIR & COMPANY , 1999 ABOUT THIS PROSPECTUS You should rely only on the information contained in or incorporated by reference in this prospectus. We and the selling stockholders have not authorized anyone else to provide you with different information. We and the selling stockholders are not making an offer of the common stock in any state where the offer or sale is not permitted. The information in this prospectus is accurate only as of any date of this prospectus. In this prospectus, the terms "Kohl's", "we" and "our" mean Kohl's Corporation and its consolidated subsidiaries. TABLE OF CONTENTS
Page ---- Kohl's................................................................... 3 Selected Consolidated Financial Data..................................... 4 Use of Proceeds.......................................................... 6 Price Range of Common Stock and Dividend Policy.......................... 6 Capitalization........................................................... 7 Description of Capital Stock............................................. 8 Selling Stockholders..................................................... 10 United States Federal Income Tax Considerations To Non-United States Holders................................................................. 12 Underwriters............................................................. 14 Legal Matters............................................................ 17 Experts.................................................................. 17 Forward-Looking Statements............................................... 17 Where You Can Find More Information...................................... 18
---------------- "Kohl's" is one of our federally registered service marks. This prospectus also includes or incorporates references to trademarks and brand names of other companies. 2 KOHL'S We currently operate 213 family oriented, specialty department stores primarily in the Midwest and Mid-Atlantic areas of the United States. Our stores feature quality, national brand merchandise which provides exceptional value to customers. We sell moderately priced apparel, shoes, accessories, soft home products and housewares targeted to middle-income customers shopping for their families and homes. Our stores have fewer departments than traditional, full-line department stores, but offer customers dominant assortments of merchandise displayed in complete selections of styles, colors and sizes. Central to our pricing strategy and overall profitability is a culture focused on maintaining a low cost structure. Critical elements of this low cost structure are our unique store format, lean staffing levels, sophisticated management information systems and operating efficiencies resulting from centralized buying, advertising and distribution. Since 1986, we have expanded from 40 stores to our current total of 213 stores both by acquiring and converting pre-existing stores to our retailing format and by opening new stores. From fiscal 1993 to fiscal 1997, our net sales increased from $1.3 billion to $3.1 billion and our operating income increased from $102.4 million to $258.8 million. In fiscal 1998, our net sales increased to $3.7 billion. We believe that we have substantial opportunity for further growth. We plan to open approximately 40 to 45 stores in 1999, including entering new markets in Denver, St. Louis and Dallas/Ft. Worth. We plan to open 50 to 55 stores in 2000, including 33 locations previously operated by Caldor Corporation in New York (12 stores), New Jersey (11 stores), Connecticut (9 stores) and Maryland (1 store). Our expansion strategy is to open additional stores in existing markets, where we can leverage advertising, purchasing, transportation and other regional overhead expenses; in contiguous markets, where we can extend regional operating efficiencies; and in new markets which offer a similar opportunity to implement our retailing concept successfully. Our retailing concept has proven to be readily transferable to new markets. For example, we have successfully opened new stores in small markets, such as Kalamazoo and Knoxville; intermediate markets, such as Kansas City and Charlotte; and large markets, such as Chicago and Philadelphia. In addition, our concept has been successful in various retailing formats such as strip shopping centers, community and regional malls and free-standing stores. We believe that the transferability of our retailing strategy, our experience in acquiring and converting pre-existing stores and in opening new stores, and our substantial investment in our management information systems, centralized distribution and headquarters functions provide a solid foundation for further expansion. Our fiscal year ends on the Saturday closest to January 31. Our principal executive offices are located at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051. Our telephone number at this location is (414) 703-7000. Recent Developments Net sales and sales growth for the thirteen weeks and years ended January 31, 1998 and January 30, 1999 were as follows:
Percentage Increase at Period Ended January 30, 1999 --------------------------------- --------------------------- All Comparable January 31, 1998 January 30, 1999 Stores Stores ---------------- ---------------- ----------- ------------- (in millions) Thirteen weeks.. $1,077.8 $1,289.5 19.6% 6.4% Year............ 3,060.1 3,681.8 20.3 7.9
Comparable stores sales growth represents sales of those stores open throughout the full period and throughout the full prior period. At January 30, 1999, we operated 213 stores compared to 182 stores at January 31, 1998. On March 2, 1999, we purchased the right to occupy 32 store locations previously operated by Caldor Corporation. We expect to purchase Caldor's lease for a 33rd store location within thirty days. We plan to take possession of the stores after Caldor completes its "going out of business sale," and we expect that the stores will be open for business in spring 2000. We paid $142 million for the rights to occupy the stores and expect to invest approximately $165 million more to renovate and refixture the stores. 3 SELECTED CONSOLIDATED FINANCIAL DATA We derived the selected consolidated financial data in the following table for each of the five years in the period ended January 31, 1998 from our consolidated financial statements, which have been audited by Ernst & Young LLP, independent auditors. You should read this information in conjunction with our consolidated financial statements and related notes, management's discussion and analysis of financial condition and results of operations and other financial information incorporated into this prospectus. We derived the selected consolidated financial data for the nine months ended November 1, 1997 and October 31, 1998 from our unaudited consolidated financial statements, which, in the opinion of management, include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position and results of operations as of the dates and for the periods presented. The results for the nine months ended October 31, 1998 are not necessarily indicative of results to be expected for the full fiscal year. Our fiscal year ends on the Saturday closest to January 31. Fiscal 1995 contained 53 weeks. We adjusted all per share data to reflect the 2-for-1 stock splits effected in April 1996 and April 1998.
Fiscal Year Ended Nine Months Ended --------------------------------------------------------------- ------------------------ January 29, January 28, February 3, February 1, January 31, November 1, October 31, 1994 1995 1996 1997 1998 1997 1998 ----------- ----------- ----------- ----------- ----------- ----------- ----------- (In Thousands, Except Per Share and Per Square Foot Data) (Unaudited) Statement of Operations Data: Net sales............... $1,305,746 $1,554,100 $1,925,669 $2,388,221 $3,060,065 $1,982,257 $2,392,215 Cost of merchandise sold................... 869,236 1,037,740 1,294,653 1,608,688 2,046,468 1,317,121 1,582,547 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Gross margin............ 436,510 516,360 631,016 779,533 1,013,597 665,136 809,668 Selling, general and administrative expenses............... 305,547 356,893 436,442 536,226 678,793 472,061 565,280 Depreciation and amortization........... 23,201 27,402 33,931 44,015 57,380 41,813 51,383 Preopening expenses..... 5,360 8,190 10,712 10,302 18,589 18,589 15,591 Credit operations, non- recurring(a)........... -- -- 14,052 -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Operating income........ 102,402 123,875 135,879 188,990 258,835 132,673 177,414 Interest expense, net... 5,711 6,424 13,150 17,622 23,772 18,405 15,627 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income before income taxes and extraordinary item................... 96,691 117,451 122,729 171,368 235,063 114,268 161,787 Income taxes............ 41,029 48,939 50,077 68,890 93,790 45,593 63,583 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income before extraordinary item..... 55,662 68,512 72,652 102,478 141,273 68,675 98,204 Extraordinary item(b)... (1,769) -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income.............. $ 53,893 $ 68,512 $ 72,652 $ 102,478 $ 141,273 $ 68,675 $ 98,204 ========== ========== ========== ========== ========== ========== ========== Per share: Basic.................. $ .37 $ .47 $ .49 $ .69 $ .93 $ .46 $ .62 Diluted................ .36 .46 .49 .68 .91 .45 .60 Operating Data: Comparable store sales growth(c).............. 8.3% 6.1% 5.9% 11.3% 10.0% 10.2% 8.8% Net sales per selling square foot(d)......... $ 255 $ 258 $ 257 $ 261 $ 267 $ 178 $ 180 Total square feet of selling space (in thousands; end of period)................ 5,523 6,824 8,378 10,064 12,533 12,486 15,129 Number of stores open (end of period)........ 90 108 128 150 182 182 214(e) Capital expenditures including capitalized leases................. $ 64,813 $ 132,800 $ 138,797 $ 223,423 $ 202,735 $ 163,921 $ 183,784 Balance Sheet Data (end of period): Working capital......... $ 86,856 $ 114,637 $ 175,368 $ 229,339 $ 525,251 $ 468,009 $ 566,557 Property and equipment, net.................... 186,626 298,737 409,168 596,227 749,649 724,019 883,602 Total assets............ 469,289 658,717 805,385 1,122,483 1,619,721 1,607,536 1,930,086 Total long-term debt.... 51,852 108,777 187,699 312,031 310,366 310,932 379,076 Shareholders' equity.... 262,502 334,249 410,638 517,471 954,782 874,561 1,056,938
(footnotes on next page) 4 (footnotes from previous page) (a) Effective September 1, 1995, we terminated our agreement with Citicorp Retail Services under which we sold our private label credit card receivables. At the same time, we established our own credit card operation. In connection with this transaction, we incurred a one-time charge of $14.1 million ($8.3 million after-tax). (b) The extraordinary item reflects an after-tax charge of $1.8 million to write-off unamortized deferred financing costs in connection with our termination of certain credit facilities in January 1994. (c) Comparable store sales for each period are based on sales of stores (including relocated or expanded stores) open throughout the current and prior year. Comparable store sales growth for fiscal 1996 compares the 52 weeks of fiscal 1996 to the same 52 week calendar in fiscal 1995 and excludes the electronics business that we discontinued in 1996. Comparable store sales growth for fiscal 1995 has been adjusted to eliminate the 53rd week in fiscal 1995. (d) Net sales per selling square foot is calculated using net sales of stores that have been open for the full period, divided by their square footage of selling space. (e) We subsequently closed one undersized store in the Milwaukee market upon expiration of the lease. 5 USE OF PROCEEDS We estimate that we will receive net proceeds from the offering of approximately $198.9 million, based on an assumed offering price of $73 3/8 per share. We intend to use approximately $165 million of the proceeds to renovate and refixture 33 former Caldor stores. On March 2, 1999, we purchased the right to occupy 32 of the store locations and expect to purchase the rights to occupy the 33rd store location within thirty days. We intend to use the remaining proceeds for other general corporate purposes, including financing our continued store growth. Until we use the proceeds for these purposes, we will temporarily repay borrowings under our revolving credit facility and reduce future sales of accounts receivable under our accounts receivable financing program. At February 27, 1999, the interest rate payable under our revolving credit facility was approximately 5 1/8% per annum. The facility matures on June 12, 2003. We will not receive any proceeds from the sale of common stock by the selling stockholders, but we will receive the exercise price of their employee stock options. PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY The common stock has been traded on the New York Stock Exchange since May 19, 1992, under the symbol "KSS." The table below sets forth the high and low prices of the common stock for the fiscal periods indicated, adjusted for our 2-for-1 stock splits effected in April 1996 and April 1998.
Common Stock Price ------------------- High Low --------- --------- Fiscal 1999 First Quarter (through March 9, 1999)....................... $73 3/8 $63 3/8 Fiscal 1998 First Quarter............................................... $43 15/32 $34 11/16 Second Quarter.............................................. 57 5/8 40 1/2 Third Quarter............................................... 58 11/16 34 1/16 Fourth Quarter.............................................. 67 3/4 45 1/8 Fiscal 1997 First Quarter............................................... $25 9/16 $19 7/16 Second Quarter.............................................. 31 19/32 24 7/8 Third Quarter............................................... 37 3/8 29 Fourth Quarter.............................................. 37 11/16 31 5/16
See the cover page of this prospectus for a recent reported last sale price. At January 29, 1999, there were 5,495 holders of record of our common stock. We have never paid a cash dividend, have no current plans to pay dividends, and intend to retain all our earnings for investment in and growth of our business. In addition, financial covenants and other restrictions in our financing agreements limit our ability to pay dividends. The payment of future dividends, if any, will be determined by our board of directors in light of existing conditions, including our earnings, financial condition and requirements, restrictions in our financing agreements, business conditions and other factors they deem relevant. 6 CAPITALIZATION The following table sets forth our consolidated capitalization as of October 31, 1998, and as adjusted to give effect to the offering and the exercise of employee stock options by the selling stockholders. We based the adjustment on an assumed offering price of $73 3/8 per share for the 2,800,000 shares that we are selling in the offering. We also adjusted for the proceeds that we will receive upon exercise of employee stock options for 1,309,000 shares of common stock by the selling stockholders and the related income tax benefits that we will receive. The adjustments from the stock option exercises increased total shareholders' equity by $44.5 million. For purposes of the table, we have assumed that the U.S. underwriters do not exercise their over- allotment option and that $69.5 million of the net proceeds are applied to repay borrowings under our revolving credit facility. At February 27, 1999, we had no borrowings under our revolving credit facility.
As of October 31, 1998 ---------------------- Actual As Adjusted ---------- ----------- (In Thousands) Long-term debt: Revolving credit facility............................. $ 69,500 $ -- Capitalized lease obligations......................... 47,421 47,421 6.57% unsecured senior notes, due 2004................ 60,000 60,000 6.70% notes, due 2006................................. 100,000 100,000 7 3/8% notes, due 2011................................ 100,000 100,000 Other................................................. 2,155 2,155 ---------- ---------- Total long-term debt................................ 379,076 309,576 Shareholders' equity: Common stock; 158,202,170 shares outstanding (162,311,170 shares after the offering).............. 1,582 1,623 Paid-in capital....................................... 492,498 735,927 Retained earnings..................................... 562,858 562,858 ---------- ---------- Total shareholders' equity.......................... 1,056,938 1,300,408 ---------- ---------- Total capitalization................................ $1,436,014 $1,609,984 ========== ==========
7 DESCRIPTION OF CAPITAL STOCK Our authorized capital stock consists of 400,000,000 common shares, $0.01 par value per share, and 10,000,000 preferred shares, $0.01 par value per share. As of January 30, 1999, 158,394,735 shares of common stock and no shares of preferred stock were issued and outstanding. Common Stock Voting. For all matters submitted to a vote of stockholders, each holder of common stock is entitled to one vote for each share registered in his or her name on the books of Kohl's. Our common stock does not have cumulative voting rights. As a result, subject to the voting rights of any outstanding preferred stock and any voting limitations imposed by the Wisconsin Business Corporation Law, persons who hold more than 50% of the outstanding common stock can elect all of the directors who are up for election in a particular year. Election of Board of Directors. Our articles of incorporation divide the board of directors into three classes serving staggered three-year terms. As a result, at least two annual meetings will generally be required for stockholders to effect a change of a majority of the board of directors. Any director, or the entire board of directors, may be removed from office only for cause. These provisions in the articles of incorporation require an 80% vote of stockholders to amend or repeal. Dividends. If our board declares a dividend, holders of common stock will receive payments from the funds of Kohl's that are legally available to pay dividends. However, this dividend right is subject to any preferential dividend rights we may grant to the persons who hold preferred stock, if any is outstanding. Liquidation. If Kohl's is dissolved, the holders of common stock will be entitled to share ratably in all the assets that remain after we pay our liabilities and any amounts we may owe to the persons who hold preferred stock, if any is outstanding. Other Rights and Restrictions. Holders of common stock do not have preemptive rights, and they have no right to convert their common stock into any other securities. Our common stock is not redeemable. Listing. Our common stock is listed on the New York Stock Exchange. Transfer Agent and Registrar. The transfer agent and registrar for our common stock is The Bank of New York. Wisconsin Business Corporation Law Provisions of the Wisconsin Business Corporation Law ("WBCL") could have the effect of delaying, deterring or preventing a change in control of Kohl's. Restrictions on Business Combinations. Sections 180.1130 to 180.1134 of the WBCL provide generally that for a "resident domestic corporation," such as Kohl's, business combinations not meeting fair price standards specified in the statute must be approved by the affirmative vote of at least (1) 80% of the votes entitled to be cast by the outstanding voting shares of the corporation, and (2) two-thirds of the votes entitled to be cast by the holders of voting shares that are not beneficially owned by a "significant shareholder" or an affiliate or associate of a significant shareholder who is a party to the transaction. This requirement is in addition to any vote that may be required by law or our articles of incorporation. The term "business combination" means, subject to certain exceptions, a merger or share exchange of the issuing public corporation (or any subsidiary of that corporation) with, or the sale or other disposition of substantially all of the property and assets of the issuing public corporation to, any significant shareholder or affiliate of a significant shareholder. "Significant shareholder" means a person that is the beneficial owner of 10% or more of the voting power of the outstanding voting shares of the issuing public corporation. These statutory sections also restrict the repurchase of shares and the sale of corporate assets by an issuing public corporation in response to a takeover offer. 8 Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business combinations" between a "resident domestic corporation" and an interested shareholder within three years after the date such person became an interested shareholder, unless the business combination or the acquisition of the interested shareholder's stock has been approved before the stock acquisition date by the corporation's board of directors. An "interested shareholder" is a person beneficially owning 10% or more of the voting power of the outstanding voting stock of such corporation. After the three-year period, a business combination with the interested shareholder may be consummated only with the approval of the holders of a majority of the voting stock not beneficially owned by the interested shareholder at a meeting called for that purpose, unless the business combination satisfies specified adequacy-of-price standards intended to provide a fair price for shares held by disinterested stockholders. Control Share Voting Restrictions. Under Section 180.1150(2) of the WBCL, the voting power of shares of a "resident domestic corporation" that are held by any person in excess of 20% of the voting power are limited (in voting on any matter) to 10% of the full voting power of those excess shares, unless otherwise provided in the articles of incorporation or unless full voting rights have been restored at a special meeting of the stockholders called for that purpose. This statute is designed to protect corporations against uninvited takeover bids by reducing to one-tenth of their normal voting power all shares in excess of 20% owned by an acquiring person. Section 180.1150(3) excludes shares held or acquired under certain circumstances from the application of Section 180.1150(2), including (among others) shares acquired directly from Kohl's and shares acquired in a merger or share exchange to which Kohl's is a party. Constituency Provision. Under Section 180.0827 of the WBCL, in discharging his or her duties, a director or officer of Kohl's may, in addition to considering the effects of any action on stockholders, consider the effects of any action on employees, suppliers, customers, the communities in which Kohl's operates and any other factors that the director or officer considers pertinent. Preferred Stock Our articles of incorporation authorize the board of directors to issue preferred stock in one or more series and to determine the voting rights, dividend rights, dividend rates, liquidation preferences, conversion or exchange rights, redemption rights, including sinking fund provisions and redemption prices, and other terms and rights of each series. Although our board of directors does not presently intend to authorize the issuance of preferred stock, it could issue a series of preferred stock that could impede the completion of a merger, tender offer or other takeover attempt. Our board will issue such a series of preferred stock only if it determines that the issuance is in the best interests of Kohl's and its stockholders. In addition, the terms of a series of preferred stock might discourage a potential acquiror from attempting to acquire Kohl's in a manner that changes the composition of our board of directors, even when a majority of our stockholders believe that such an acquisition would be in their best interests or would receive a premium for their stock over the then current market price. 9 SELLING STOCKHOLDERS The following table sets forth information about the beneficial ownership of the common stock as of December 31, 1998, and after the sale of the common stock offered hereby, by each selling stockholder. To calculate the percentage owned after the offering, we assume no exercise of the U.S. underwriters' over-allotment option. Each of the selling stockholders (other than Mr. Sommerhauser) is an executive officer of Kohl's. Messrs. Kellogg, Baker, Herma, Montgomery, Mansell and Sommerhauser is each a director. Except as otherwise noted below, the selling stockholders have sole voting and investment power with respect to their shares.
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...... 12,487,045(a) 7.8% 559,300(b) 11,827,745(a) 7.3% Jay H. Baker............ 5,368,718(c) 3.4 400,000(d) 4,968,718(c) 3.1 John F. Herma........... 6,847,273(e) 4.3 341,100 6,506,173(e) 4.0 R. Lawrence Montgomery.. 819,960(f) * 41,000 778,960(f) * Kevin Mansell........... 639,810(g) * 32,000 607,810(g) * Caryn Blanc............. 697,450(h) * 34,900 662,550(h) * Arlene Meier............ 390,100(i) * 19,500 370,600(i) * Jeffrey Rusinow......... 129,500(j) * 6,500 123,000(j) * Donald Sharpin.......... 83,500(j) * 4,200 79,300(j) * Gary Vasques............ 80,000(j) * 4,000 76,000(j) * Richard Leto............ 61,000(j) * 3,000 58,000(j) * Peter M. Sommerhauser... 16,837,673(k) 10.6 18,500(b) 16,719,173(k) 10.3
(footnotes on next page) 10 (footnotes from previous page) * Less than 1%. (a) Includes 9,337,245 shares held in trust for the benefit of Mr. Kellogg's family but as to which Mr. Sommerhauser has sole voting and investment power and 43,260 shares held by a charitable foundation for which Mr. Kellogg serves as a director and president. Includes 1,258,900 shares (1,158,900 shares after the offering) held in trust for the benefit of Mr. Baker's family and as to which Mr. Kellogg and Mr. Sommerhauser have shared voting and investment power but no pecuniary interest. Includes 950,000 shares (390,700 shares after the offering) represented by stock options. (b) Excludes 100,000 shares being offered by the Jay Baker Children's Trusts. (c) Includes 1,258,900 shares (1,158,900 shares after the offering) held in trust for the benefit of Mr. Baker's family as to which Mr. Kellogg and Mr. Sommerhauser have shared voting and investment power and 125,660 shares held by a charitable foundation for which Mr. Baker serves as a director and president. Also includes 475,000 shares (175,000 shares after the offering) represented by stock options. (d) Includes 100,000 shares being offered by the Jay Baker Children's Trusts. (e) Includes 5,351,703 shares held in trust for the benefit of Mr. Herma's family as to which Mr. Sommerhauser has sole voting and investment power and 25,150 shares held by a charitable foundation for which Mr. Herma serves as a director and president. Also includes 475,000 shares (133,900 shares after the offering) represented by stock options. (f) Includes 125,948 shares held in trust for the benefit of Mr. Montgomery's family as to which Mr. Sommerhauser has sole voting and investment power. Also includes 520,828 shares (500,328 shares after the offering) represented by stock options. (g) Includes 138,000 shares held in trust for the benefit of Mr. Mansell's family as to which Mr. Sommerhauser has sole voting and investment power. Also includes 327,078 shares (311,078 shares after the offering) represented by stock options. (h) Includes 545,454 shares (510,554 shares after the offering) represented by stock options. (i) Includes 383,100 shares (363,600 shares after the offering) represented by stock options. (j) All of the shares are represented by stock options. (k) Includes 16,461,866 shares (16,361,866 shares after the offering) held in trust for the benefit of the families of current and former executive officers of Kohl's or in charitable foundations established by executive officers of Kohl's, as to which Mr. Sommerhauser has sole or shared voting and investment power but no pecuniary interest. Includes 81,042 shares held in trust for the benefit of Mr. Sommerhauser's family as to which Mr. Sommerhauser has no voting or investment power and 5,500 shares held by a charitable foundation for which Mr. Sommerhauser serves as director and president. Includes 2,000 shares represented by stock options. 11 UNITED STATES FEDERAL TAX CONSIDERATIONS TO NON-UNITED STATES HOLDERS This section summarizes the United States federal income and estate tax issues that a nonresident alien individual foreign corporation, foreign partnership or other foreign shareholder (a "non-United States shareholder") may consider relevant in connection with its purchase, ownership and disposition of our common stock. This summary does not address all of the United States federal income and estate tax considerations that may be relevant to you in light of your particular circumstances or if you are subject to special treatment under United States federal income tax laws. Furthermore, this summary does not discuss any aspects of state, local or foreign taxation. We base this summary on current provisions of the federal income tax laws, Treasury regulations, judicial opinions, published positions of the United States Internal Revenue Service (the "IRS") and other applicable authorities, all of which are subject to change, possibly with retroactive effect. We urge you to consult your own adviser with respect to the tax consequences of acquiring, holding and disposing of our common stock. Dividends. Dividends that we pay to you generally will be subject to withholding of United States federal income tax at the rate or 30% (or such lower rate specified in an applicable income tax treaty) unless the dividend is effectively connected with your conduct of a trade or business within the United States (of if certain tax treaties apply, is attributable to a United States permanent establishment maintained by you) and you file the appropriate documentation with Kohl's or our transfer agent, in which case you will be subject to United States federal income tax at graduated rates in the same manner as United States persons are taxed. If you are a corporation, such effectively connected income also may be subject to the branch profits tax at a rate of 30% (or such lower rate specified in an applicable income tax treaty), which is generally imposed on a foreign corporation on the repatriation from the United States of effectively connected earnings and profits. You should consult any applicable income tax treaties that may provide for a lower rate of withholding or other rules different from those described above. You may be required to satisfy certain certification requirements in order to claim treaty benefits or otherwise claim a reduction of or exemption from withholding under the foregoing rules. Sale or Disposition of Common Stock. You generally will not incur United States federal income tax on gain recognized on a sale or other disposition of our common stock unless: (1) the gain is effectively connected with your conduct of a trade or business within the United States or if certain tax treaties apply, is attributable to a United States permanent establishment maintained by you; (2) you are a nonresident alien, hold our common stock as a capital asset and are present in the United States for 183 or more days in the taxable year of disposition and either you have a "tax home" in the United States or the gain is attributable to an office or other fixed place of business maintained by you in the United States; (3) Kohl's is or has been a "United States real property holding corporation" for United States federal income tax purposes (which we likely are not) and in the event that our common stock is considered regularly traded, you hold or have held, directly or indirectly, at any time during the five-year period ending on the date of disposition (or, if shorter, your holding period), more than 5% of our common stock, in which case your gain will be taxed as if it were gain described in clause (1) above; or (4) you are subject to tax pursuant to the federal income tax provisions applicable to certain United States expatriates. Gain that is or is treated as effectively connected with your conduct of a trade or business within the United States will be subject to United States federal income tax on the same basis that applies to United States persons generally (and, with respect to corporate holders, under certain circumstances, the branch profits tax) but will not be subject to withholding. You should consult any applicable treaties that may provide for different rules. A non-resident alien holding our common stock as a capital asset as described in clause (2) above, generally will incur a 30% (or such lower rate specified in an applicable income tax treaty) tax on the gain derived from the sale, which gain may be offset by certain United States source capital losses. 12 Federal Estate Taxes. If an individual who is not a citizen (as specifically defined for United States federal estate tax purposes) of the United States at the time of death owns or is treated as owning our common stock, then such common stock will be included in that individual's gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise. Information Reporting and Backup Withholding. We must report annually to the IRS and to you the amount of dividends paid to you and the amount of tax withheld with respect to such dividends, regardless of whether any tax is actually withheld. This information may also be made available to the authorities of a country in which you reside under the provisions of an applicable income tax treaty or other agreement. Under current federal income tax law, United States information reporting requirements and backup withholding tax at a rate of 31% will generally apply (1) to dividends that we pay on our common stock to you at an address within the United States and (2) to payments to you by a United States office of a broker of the proceeds of a sale of common stock unless you certify your non- United States shareholder status under penalties of perjury or otherwise establish an exemption. Information reporting requirements (but not backup withholding) will also apply to payments of the proceeds of sales of our common stock by foreign offices or United States brokers, or foreign brokers with certain types of relationships to the United States, unless the broker has documentary evidence in its records that you are a non-United States shareholder and certain other conditions are met, or you otherwise establish an exemption. The United States Treasury Department has issued regulations generally effective for payments made after December 31, 1999 that will affect the procedures that you must follow in establishing your status as a non-United States shareholder for purposes of the withholding, backup withholding and information reporting rules discussed in this prospectus. Among other things, (1) non-United States shareholders currently required to furnish certification of foreign status may be required to furnish new certification of foreign status, and (2) certain non-United States shareholders not currently required to furnish certification of foreign status may be required to furnish certification of foreign status in the future. We urge you to consult your tax adviser concerning the effect of such regulations on an investment in our common stock. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be refunded or credited against your United States federal income tax liability, provided that the required information is furnished to the IRS. 13 UNDERWRITERS Under the terms and subject to the conditions in the underwriting agreement dated the date of this prospectus, the U.S. underwriters named below, for whom Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce Fenner & Smith Incorporated, Robert W. Baird & Co. Incorporated and William Blair & Company, L.L.C. are acting as U.S. representatives, and the international underwriters named below, for whom Morgan Stanley & Co. International Limited, Merrill Lynch International, Robert W. Baird & Co. Incorporated and William Blair & Company, L.L.C. are acting as international representatives, have severally agreed to purchase, and we and the selling stockholders have agreed to sell to them, severally, the respective number of shares of common stock set forth opposite the names of such underwriters below:
Number of Name Shares ---- --------- U.S. Underwriters: Morgan Stanley & Co. Incorporated................................... Merrill Lynch, Pierce, Fenner & Smith Incorporated........................................................ Robert W. Baird & Co. Incorporated.................................. William Blair & Company, L.L.C...................................... --------- Subtotal.......................................................... 3,411,200 --------- International Underwriters: Morgan Stanley & Co. International Limited.......................... Merrill Lynch International......................................... Robert W. Baird & Co. Incorporated.................................. William Blair & Company, L.L.C...................................... --------- Subtotal.......................................................... 852,800 --------- Total........................................................... 4,264,000 =========
The U.S. underwriters and the international underwriters, and the U.S. representatives and the international representatives, are collectively referred to as the "underwriters" and the "representatives," respectively. The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and the selling stockholders and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered hereby are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered hereby (other than those covered by the U.S. underwriters' over-allotment option described below) if any such shares are taken. Pursuant to the Agreement between U.S. and International Underwriters, each U.S. underwriter has represented and agreed that, with certain exceptions: . it is not purchasing any shares (as defined herein) for the account of anyone other than a United States or Canadian person (as defined herein); and 14 . it has not offered or sold, and will not offer or sell, directly or indirectly, any shares or distribute any prospectus relating to the shares outside the United States or Canada or to anyone other than a United States or Canadian person. Pursuant to the Agreement between U.S. and International Underwriters, each international underwriter has represented and agreed that, with certain exceptions: . it is not purchasing any shares for the account of any United States or Canadian person; and . it has not offered or sold, and will not offer or sell, directly or indirectly, any shares or distribute any prospectus relating to the shares in the United States or Canada or to any United States or Canadian person. With respect to any underwriter that is a U.S. underwriter and an international underwriter, the foregoing representations and agreements (1) made by it in its capacity as a U.S. underwriter apply to it in its capacity as a U.S. underwriter and (2) made by it in its capacity as an international underwriter apply only to it in its capacity as an international underwriter. The foregoing limitations do not apply to stabilization transactions or to certain other transactions specified in the Agreement between U.S. and International Underwriters. As used herein, "United States" or "Canadian" person means any national or resident of the United States or Canada, or any corporation, pension, profit-sharing or other trust or other entity organized under the laws of the United States or Canada or of any political subdivision thereof (other than a branch located outside the United States and Canada of any United States or Canadian person), and includes any United States or Canadian branch of a person who is otherwise not a United States or Canadian person. All shares of common stock to be purchased by the underwriters under the Underwriting Agreement are referred to herein as the "shares." Pursuant to the Agreement between U.S. and International Underwriters, sales may be made between U.S. underwriters and international underwriters of any number of shares as may be mutually agreed. The per share price of any shares so sold shall be the public offering price set forth on the cover page hereof, in United States dollars, less an amount not greater than the per share amount of the concession to dealers set forth below. Pursuant to the Agreement between U.S. and International Underwriters, each U.S. underwriter has represented that it has not offered or sold, and has agreed not to offer or sell, any shares, directly or indirectly, in any province or territory of Canada or to, or for the benefit of, any resident of any province or territory of Canada in contravention of the securities laws thereof and has represented that any offer or sale of shares in Canada will be made only pursuant to an exemption from the requirement to file a prospectus in the province or territory of Canada in which such offer or sale is made. Each U.S. underwriter has further agreed to send to any dealer who purchases from it any of the shares a notice stating in substance that, by purchasing such shares, such dealer represents and agrees that it has not offered or sold, and will not offer or sell, directly or indirectly, any of such shares in any province or territory of Canada or to, or for the benefit of, any resident of any province or territory of Canada in contravention of the securities laws thereof and that any offer or sale of shares in Canada will be made only pursuant to an exemption from the requirement to file a prospectus in the province or territory of Canada in which such offer or sale is made, and that such dealer will deliver to any other dealer to whom it sells any of such shares a notice containing substantially the same statement as is contained in this sentence. Pursuant to the Agreement between U.S. and International Underwriters, each international underwriter has represented and agreed that: . it has not offered or sold and, prior to the date six months after the closing date for the sale of the shares to the international underwriters, will not offer or sell, any shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; . it has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom; and 15 . it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the offering of the shares to a person who is of a kind described in Article 11(3) of the Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom such document may otherwise lawfully be issued or passed on. Pursuant to the Agreement between U.S. and International Underwriters, each international underwriter has further represented that it has not offered or sold, and has agreed not to offer to sell, directly or indirectly, in Japan or to or for the account of any resident thereof, any of the shares acquired in connection with the distribution contemplated hereby, except for offers or sales to Japanese international underwriters or dealers and except pursuant to any exemption from the registrations requirements of the Securities and Exchange Law and otherwise in compliance with applicable provisions of Japanese law. Each international underwriter has further agreed to send to any dealer who purchases from it any of the shares a notice stating in substance that, by purchasing such shares, such dealer represents and agrees that it has not offered or sold, and will not offer or sell, any of such shares, directly or indirectly, in Japan or to or for the account of any resident thereof except for offers or sales to Japanese international underwriters or dealers and except pursuant to any exemption from the registration requirements of the Securities and Exchange Law and otherwise in compliance with applicable provisions of Japanese law, and that such dealer will send to any other dealer to whom it sells any of such shares a notice containing substantially the same statement as is contained in this sentence. The underwriters initially propose to offer part of the common stock directly to the public at the public offering price set forth on the cover page hereof and part to certain dealers at a price which represents a concession not in excess of $ a share under the public offering price. Any underwriter may allow, and such dealers may reallow, a concession not in excess of $ a share to other underwriters or to certain dealers. After the initial offering of the common stock, the offering price and other selling terms may from time to time be varied by the representatives. We have granted the U.S. underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of 639,600 additional shares of common stock at the public offering price set forth on the cover page hereof, less underwriting discounts and commissions. The U.S. underwriters may exercise such option to purchase solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered hereby. To the extent such option is exercised, each U.S. underwriter will become obligated, subject to certain conditions, to purchase approximately the same percentage of such additional shares of common stock as the number set forth next to such U.S. underwriter's name in the preceding table bears to the total number of shares of common stock set forth next to the names of all U.S. underwriters in the preceding table. If the U.S. underwriters' option is exercised in full, the total price to the public would be $ , the total underwriters' discounts and commissions would be $ and the total proceeds to Kohl's would be $ . In the underwriting agreement: . we have agreed to pay the printing, legal, accounting and other expenses related to the offering, which we estimate will be $350,000; and . Kohl's, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Kohl's and each of the selling stockholders has agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, it will not during the period ending 90 days after the date of this prospectus: . offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock or . enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock; 16 whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise, except under certain limited circumstances. In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common stock. Specifically, the underwriters may over-allot in connection with the offering, creating a short position in the common stock for their own account. In addition, to cover over-allotments or to stabilize the price of the common stock, the underwriters may bid for, and purchase, shares of common stock in the open market. Finally, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing shares of common stock in the offering, if the syndicate repurchases previously distributed common stock in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the common stock above independent market levels. The underwriters are not required to engage in these activities, and may end any of these activities at any time. Certain underwriters from time to time perform various investment banking services for us, for which such underwriters receive compensation. LEGAL MATTERS Certain legal matters will be passed upon for Kohl's by Godfrey & Kahn, S.C., Milwaukee, Wisconsin, and for the underwriters by Shearman & Sterling, New York, New York. Mr. Peter M. Sommerhauser is a director of Kohl's and a shareholder and member of the management committee of Godfrey & Kahn, S.C. As of December 31, 1998, Mr. Sommerhauser beneficially owned 16,837,673 shares of common stock. EXPERTS The consolidated financial statements of Kohl's appearing in Kohl's Corporation Annual Report (Form 10-K) for the year ended January 31, 1998, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. FORWARD-LOOKING STATEMENTS Statements in this prospectus or incorporated by reference in this prospectus that are not statements of historical fact may be deemed to be "forward-looking statements," subject to protections under federal law. We intend words such as "believes," "anticipates," "plans," "expects" and similar expressions to identify forward-looking statements. In addition, statements covering our future performances and our plans, objectives, expectations or intentions are forward-looking statements, such as statements regarding our debt service requirements, planned capital expenditures, future store openings and adequacy of capital resources. There are a number of important factors that could cause our results to differ materially from those indicated by the forward-looking statements, including among others those discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual and quarterly reports and as follows: . heightened competition; . adverse weather conditions in our retail markets; . increases in interest rates; . increases in real estate, construction and development costs; . inventory imbalances caused by unanticipated fluctuations in consumer demand; . trends in the economy which affect consumer confidence and demand for our merchandise; . our ability to find suitable store sites that we can acquire on acceptable terms; 17 . our ability to continue to hire, train and retain sufficient numbers of capable and talented associates; and . interruptions in our business as a result of the Year 2000 computer problem in our systems or in the systems of one of our major suppliers. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the regional offices of the SEC located at 7 World Trade Center, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. Our common stock is listed on the New York Stock Exchange. You may also inspect the information we file with the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The SEC allows us to "incorporate by reference" into this prospectus the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, including any we make after the date we filed our registration statement and before the registration statement becomes effective: (1) our annual report on Form 10-K for the fiscal year ended January 31, 1998; (2) our quarterly reports on Form 10-Q for the quarterly periods ended May 2, 1998, August 1, 1998 and October 31, 1998; and (3) the description of our common stock contained in our registration statement on Form 8-B dated June 25, 1993, as updated from time to time by our subsequent filings with the SEC. You may also request a copy of these filings (excluding exhibits), at no cost, by writing or telephoning our chief financial officer at the following address: Arlene Meier Kohl's Corporation N56 W17000 Ridgewood Drive Menomonee Falls, WI 53051 (414) 703-7000 18 ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +Information in this prospectus is not complete and may be changed. We may not + +sell these securities until the Registration Statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities and we are not soliciting offers to buy these + +securities in any state where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ [Alternate Page for International Prospectus] PROSPECTUS (Subject to Completion) Issued March 10, 1999 4,264,000 Shares [KOHL'S LOGO] Common Stock ------------ Kohl's Corporation is offering 2,800,000 shares and the selling stockholders are offering 1,464,000 shares. Initially, the international underwriters are offering 852,800 shares outside the United States and Canada, and the U.S. underwriters are offering 3,411,200 shares in the United States and Canada. ------------ Kohl's Corporation's common stock is listed on the New York Stock Exchange under the symbol "KSS." On March 9, 1999, the reported last sale price of the common stock on the New York Stock Exchange was $73 3/8 per share. ------------ PRICE $ A SHARE ------------
Underwriting Proceeds to Price to Discounts and Proceeds to Selling Public Commissions Company Stockholders -------- ------------- ----------- ------------ Per Share.... $ $ $ $ Total..... $ $ $ $
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Kohl's Corporation has granted the U.S. underwriters the right to purchase up to an additional 639,600 shares of common stock to cover over-allotments. Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on , 1999. ------------ MORGAN STANLEY DEAN WITTER MERRILL LYNCH INTERNATIONAL ROBERT W. BAIRD & CO. Incorporated WILLIAM BLAIR & COMPANY , 1999 PART II ITEM 14. Other Expenses of Issuance and Distribution. The following table sets forth those expenses to be incurred by the Company in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions. All of the amounts shown are estimates, except the applicable Securities and Exchange Commission registration fee. SEC registration fee............................................... $ 91,207 Printing expenses.................................................. 85,000 Legal fees......................................................... 100,000 Accounting fees.................................................... 40,000 NYSE listing fees.................................................. 14,000 Blue sky fees and expenses......................................... 5,000 Miscellaneous expenses............................................. 14,793 -------- Total............................................................ $350,000 ========
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 unlawful; (iii) a transaction from which the director or officer derived an improper personal profit; or (iv) willful misconduct. Section 180.0858 of the WBCL provides that subject to certain limitations, the mandatory indemnification provisions do not preclude any additional right to indemnification or allowance of expenses that a director or officer may have under the article of incorporation or bylaws of the Company, a written agreement between the director or officer and the Company, or a resolution of the Board of Directors or the shareholders. Unless otherwise provided in the Company's articles of incorporation or bylaws, or by written agreement between the director or officer and the Company, an officer or director seeking indemnification is entitled to indemnification if approved in any of the following manners as specified in Section 180.0855 of the WBCL: (i) by majority vote of a disinterested quorum of the board of directors; (ii) by independent legal counsel chosen by a quorum of disinterested directors or its committee; (iii) by a panel of three arbitrators (one of which is chosen by a quorum of disinterested directors); (iv) by the vote of the shareholders; (v) by a court; or (vi) by any other method permitted in Section 180.0858 of the WBCL. Reasonable expenses incurred by a director or officer who is a party to a proceeding may be reimbursed by the Company, pursuant to Section 180.0853 of the WBCL, at such time as the director or officer furnishes to the Company written affirmation of his or her good faith that he or she has not breached or failed to perform his or her duties and written confirmation to repay any amounts advanced if it is determined that indemnification by the Company is not required. Section 180.0859 of the WBCL provides that it is the public policy of the State of Wisconsin to require or permit indemnification, allowance of expenses or insurance to the extent required or permitted under Sections 180.0850 or 180.0858 of the WBCL for any liability incurred in connection with a proceeding involving a federal or state statute, rule or regulation regulating the offer, sale or purchase of securities. II-1 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. 3.1 Articles of Incorporation of the Company, as amended, incorporated by reference to Exhibit 10.16 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 1996. 3.2 Bylaws of the Company, as amended, incorporated by reference to Exhibit 10.14 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 4, 1996. 4.1 Amendment to Revolving Credit Agreement dated as of June 5, 1998. 5.1* Opinion of Godfrey & Kahn, S.C. 10.1 1994 Long-Term Compensation Plan, incorporated herein by reference to Exhibit 10.15 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 4, 1996. 23.1 Consent of Ernst & Young LLP. 23.2* Consent of Godfrey & Kahn, S.C. 24.1* Powers of Attorney.
- -------- * Filed on March 3, 1999. 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 the 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. II-2 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 a 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-3 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 Amendment to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menomonee Falls, State of Wisconsin, on March 9, 1999. Kohl's Corporation /s/ William S. Kellogg By: _________________________________ William S. Kellogg Chairman of the Board Pursuant to the requirements of the Securities Act of 1933, this Amendment to Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature Title Date --------- ----- ---- /s/ William S. Kellogg Chairman and Director ______________________________________ William S. Kellogg * Vice Chairman, Chief ______________________________________ Executive Officer and R. Lawrence Montgomery Director * Chief Operating Officer and ______________________________________ Director John F. Herma * President and Director ______________________________________ Kevin Mansell /s/ Arlene Meier Chief Financial Officer ______________________________________ (Principal Financial and Arlene Meier Accounting Officer) * Director ______________________________________ Jay H. Baker Director ______________________________________ James Ericson * Director ______________________________________ Frank V. Sica
II-4
Signature Title Date --------- ----- ---- Director ______________________________________ Herbert Simon * Director ______________________________________ Peter M. Sommerhauser * Director ______________________________________ R. Elton White
*Executed on March 9, 1999 by William S. Kellogg pursuant to a power of attorney previously filed. /s/ William S. Kellogg - --------------------------------- William S. Kellogg II-5 EX-1.1 2 UNDERWRITING AGREEMENT Exhibit 1.1 4,264,000 Shares KOHL'S CORPORATION Common Stock (par value $.01 per share) UNDERWRITING AGREEMENT March ___, 1999 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Robert W. Baird & Co. Incorporated William Blair & Company, L.L.C. c/o Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Morgan Stanley & Co. International Limited Merrill Lynch International Robert W. Baird & Co. Incorporated William Blair & Company, L.L.C. c/o Morgan Stanley & Co. International Limited 25 Cabot Square Canary Wharf London E14 4QA England Dear Sirs: Kohl's Corporation, a Wisconsin corporation (the "Company"), proposes to issue and sell to the several Underwriters named in Schedule I and II hereto (the "Underwriters"), and certain shareholders of the Company (the "Selling Shareholders") named in Schedule III hereto severally propose to sell to the several Underwriters, an aggregate of 4,264,000 million shares of the Common Shares (par value per share $.01), of the Company (the "Firm Shares") of which 2,800,000 million shares are to be issued and sold by the Company (the "Company Firm Shares") and 1,464,000 million 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 III 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, Robert W. Baird & Co. Incorporated and William Blair & Company, L.L.C. shall act as representatives (the "Representatives") of the several Underwriters. It is understood that, subject to the conditions hereinafter stated, 3,411,200 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S. Underwriters named in Schedule 2 I hereto (the "U.S. Underwriters") in connection with the offering and sale of such U.S. Firm Shares in the United States and Canada to United States and Canadian Persons (as such terms are defined in the Agreement Between U.S. and International Underwriters of even date herewith), and 852,800 Firm Shares (the "International Shares") will be sold to the several International Underwriters named in Schedule II hereto (the "International Underwriters") in connection with the offering and sale of such International Shares outside the United States and Canada to persons other than United States and Canadian Persons. Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Robert W. Baird & Co. Incorporated and William Blair & Company, L.L.C. shall act as representatives (the "U.S. Representatives") of the several U.S. Underwriters, and Morgan Stanley & Co. International Limited, Merrill Lynch International, Robert W. Baird & Co. Incorporated and William Blair & Company, L.L.C. shall act as representatives (the "International Representatives") of the several International Underwriters. The Company also proposes to issue and sell to the several U.S. Underwriters not more than an additional 639,600 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 U.S. Representatives shall have determined to exercise, on behalf of the U.S. Underwriters, the right to purchase such shares of Common Stock granted to the U.S. 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". The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement relating to the Shares. The registration statement contains two prospectuses to be used in connection with the offering and sale of the Shares: the U.S. prospectus, to be used in connection with the offering and sale of Shares in the United States and Canada to United States and Canadian Persons, and the international prospectus, to be used in connection with the offering and sale of Shares outside the United States and Canada to persons other than United States and Canadian Persons. The international prospectus is identical to the U.S. prospectus except for the outside front cover page. 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 U.S. prospectus and the international prospectus in the respective forms first used to confirm sales of Shares, including all documents incorporated by reference therein, are 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"). If the Company files a registration statement to register additional shares of Common Stock and relies on Rule 462(b) for such registration statement to become effective upon 3 filing with the Commission (the "Rule 462(b) Registration Statement"), then any reference to the "Registration Statement" shall be deemed to refer to both the registration statement referred to above and the Rule 462(b) Registration Statement, in each case as amended from time to time. 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. (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., a Delaware corporation, Kohl's Receivables Corporation, a Wisconsin corporation, Kohl's Investment Company, a Delaware 4 Corporation, Kohl's Pennsylvania, Inc., a Pennsylvania corporation and Kohl's Illinois, Inc., a Nevada corporation, are the only "significant subsidiaries" of the Company (as such term is defined under Regulation S-X) and each is validly existing as a corporation in good standing under the laws of the State of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the 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, and/or the irrevocable exercise of options with respect to, 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 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 or the Power of Attorney and Custody Agreements, 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. 5 (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 (exclusive of any amendments or supplements thereto effected subsequent to the date of this Agreement). (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 or incorporated as required. (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 6 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. (s) The Company has reviewed its operations and that of its subsidiaries to evaluate the extent to which the business or operations of the Company or any of its subsidiaries will be affected by the Year 2000 Problem (that is, any significant risk that computer hardware or software applications used by the Company and its subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively as in the case of dates or time periods occurring prior to January 1, 2000); as a result of such review, (i) the Company has no reason to believe, and does not believe, that (A) there are any issues related to the Company's preparedness to address the Year 2000 Problem that are of a character required to be described or referred to in the Registration Statement or Prospectus which have not been accurately described in the Registration Statement or Prospectus and (B) the Year 2000 Problem will have a material adverse effect on the condition, financial or otherwise, or on the earnings, business or operations of the Company and its subsidiaries, taken as a whole, or result in any material loss or interference with the business or operations of the Company and its subsidiaries, taken as a whole; and (ii) the Company reasonably believes, after due inquiry, that the suppliers, vendors, customers or other material third parties used or served by the Company and such subsidiaries are addressing or will address the Year 2000 Problem in a timely manner, except to the extent that a failure to address the Year 2000 Problem by any supplier, vendor, customer or material third party would not have a material adverse effect on the condition, financial or otherwise, or on the earnings, business or operations of the Company and its subsidiaries, taken as a whole. 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. 7 (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 of such Selling Shareholder, 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 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 valid and marketable title to the Shares deposited by it pursuant to the Power of Attorney and Custody Agreement, 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. 8 III. The Company and each Selling Shareholder, severally and not jointly, hereby agrees 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 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 Schedules I and II 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 U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall have a one-time right to purchase, severally and not jointly, up to 639,600 Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf of the U.S. Underwriters, elect to exercise such option, the U.S. Representatives shall so notify the Company in writing not later than 30 days after the date of this Agreement, which notice shall specify the number of Additional Shares to be purchased by the U.S. Underwriters and the date on which such shares are to be purchased. Such date may be the same as the Closing Date (as defined below) but not earlier than the Closing Date nor later than ten business days after the date of such notice. 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 U.S. Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional shares as the U.S. Representatives may determine) that bears the same proportion to the total number of Additional Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I hereto opposite the name of such U.S. 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 9 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, (b) transactions relating to shares of Common Stock or other securities acquired in open market transactions after completion of the public offering or (c) in connection with the adoption of a stockholder rights plan, the distribution to stockholders of the Company of a dividend consisting of a right to purchase, in whole or in part, a share of preferred stock of the Company for each share of Common Stock held by such stockholder. 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 against delivery of such Firm Shares for the respective accounts of the several Underwriters at a closing to be held at the office of Shearman & Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M., local time, on ________, 1999, or at such other time on the same or such other date, not later than __________, 1999, 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 in federal funds or other funds immediately available in New York City 10 against delivery of such Additional Shares for the respective accounts of the several U.S. Underwriters at a closing to be held 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 U.S. Representatives to the Company of your determination, on behalf of the U.S. Underwriters, to purchase a number, specified in said notice, of Additional Shares, or on such other date, in any event not later than ________, 1999, as shall be agreed to by the 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 U.S. 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 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 or contemplated by the Registration Statement, that is material and adverse and that makes it, in your reasonable judgment, impracticable to market the Shares on the terms and in the manner contemplated in the 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, on behalf of the Company, 11 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; (ii) the authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus; (iii) 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. (iv) 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. (v) 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; (vi) 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 the law of the State of Wisconsin or the federal laws of the United States applicable to the Company 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 agreements or instruments that is material to the Company and its subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, without independent investigation other than inquiries of responsible officers of the 12 Company, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of or qualification with any federal or State of Wisconsin governmental body or agency is required for the performance by the Company of its obligations under this Agreement or the Power of Attorney or Custody Agreements, except such as may be required by securities or Blue Sky laws in connection with the offer and sale of the Shares by the Underwriters; (vii) the statements (1) in the Prospectus under the caption "Description of Capital Stock" (2) in the Registration Statement under Item 15 thereof and (3) 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 immediately succeeding the filing of the Company's last 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; (viii) 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; (ix) 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; (x) the statements in the Prospectus under the caption "United States Federal Income Tax Considerations to Non-United States Holders" insofar as such statements constitute a summary of the United States federal tax laws referred to therein, are accurate and fairly summarize the United States federal tax laws referred to therein; and (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 13 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 subparagraphs (viii) and (xi) above insofar as the captions referred to therein relate to provisions of documents and other legal matters); and (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 subparagraphs (viii) and (xi) above insofar as the captions referred to therein relate to provisions of documents), on the basis of the foregoing, no facts have come to the attention of such counsel which have led such counsel to believe that the 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. 14 (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; (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 Sigrid Dynek, Vice President and General Counsel of the Company, to the effect that: 15 (i) the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; (ii) each of Kohl's Department Stores, Inc., Kohl's Receivables Corporation, Kohl's Investment Company, Kohl's Pennsylvania, Inc. and Kohl's Illinois, Inc., is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; (iii) each of Kohl's Department Stores, Inc., Kohl's Receivables Corporation, Kohl's Investment Company, Kohl's Pennsylvania, Inc., and Kohl's Illinois, Inc., is validly existing as a corporation in good standing under the laws of its state of incorporation, 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 (iv) the statements (1) 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 and (2) 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. (f) 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 (f) above, Shearman & Sterling may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof and the documents incorporated by reference therein, 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 16 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. (g) 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 or incorporated by reference into the Prospectus. (h) 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 U.S. Underwriters to purchase Additional Shares hereunder are subject to the delivery to the U.S. 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: (a) To furnish to you, without charge, three 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. 17 (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, provided that the Company shall not be obligated to so qualify the Shares if such qualification requires it to file any general consent to service of process or to register or qualify as a foreign corporation in any jurisdiction in which it is not so registered or qualified. (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. (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 18 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 public offering of the Shares, 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 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. 19 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 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 20 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 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 21 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 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 22 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 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 each Selling Shareholder under this Article IX shall not exceed an amount equal to the initial Public Offering Price of the Shares sold by 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 has or they have agreed to purchase 23 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 or Schedule II 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 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. 24 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. 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 III hereto, acting severally By ----------------------- Attorney-in-Fact Name: Accepted, March ___, 1999 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Robert W. Baird & Co. Incorporated William Blair & Company, L.L.C. Acting severally on behalf of themselves and the several U.S. Underwriters named in Schedule I hereto. By Morgan Stanley & Co. Incorporated By ---------------------- MORGAN STANLEY & CO. INTERNATIONAL LIMITED 25 MERRILL LYNCH INTERNATIONAL ROBERT W. BAIRD & CO. INCORPORATED WILLIAM BLAIR & COMPANY, L.L.C. Acting severally on behalf of themselves and the several International Underwriters named in Schedule II hereto. By: Morgan Stanley & Co. International Limited By: --------------------------- Name: Title: 26 SCHEDULE I U.S. Underwriters -----------------
- --------------------------------------------------------------------- Underwriters Number of - ------------ Firm Shares To Be Purchased --------------- - --------------------------------------------------------------------- Morgan Stanley & Co. Incorporated - --------------------------------------------------------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated - --------------------------------------------------------------------- Robert W. Baird & Co. Incorporated - --------------------------------------------------------------------- William Blair & Company, L.L.C. - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- --------------- - --------------------------------------------------------------------- Total U.S. Firm Shares 3,411,200 =============== =====================================================================
SCHEDULE II International Underwriters ---------------------------
- --------------------------------------------------------------------- Underwriters Number of - ------------ Firm Shares To Be Purchased --------------- - --------------------------------------------------------------------- Morgan Stanley International Limited - --------------------------------------------------------------------- Merrill Lynch International - --------------------------------------------------------------------- Robert W. Baird & Co. Incorporated - --------------------------------------------------------------------- William Blair & Company, L.L.C. - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- --------------- - --------------------------------------------------------------------- Total International Firm Shares 852,800 =============== - ---------------------------------------------------------------------
SCHEDULE III Selling Shareholders --------------------
- --------------------------------------------------------------------- Selling Shareholder Number of - ------------------- Firm Shares To Be Sold ------------ - --------------------------------------------------------------------- William S. Kellogg 559,300 - --------------------------------------------------------------------- Jay H. Baker 300,000 - --------------------------------------------------------------------- Jay H. Baker Children's Trust FBO Stephanie E. Baker 50,000 - --------------------------------------------------------------------- Jay H. Baker Children's Trust FBO Stephen M. Baker 50,000 - --------------------------------------------------------------------- John F. Herma 341,100 - --------------------------------------------------------------------- R. Lawrence Montgomery 41,000 - --------------------------------------------------------------------- Kevin Mansell 32,000 - --------------------------------------------------------------------- Caryn Blanc 34,900 - --------------------------------------------------------------------- Jeffrey Rusinow 6,500 - --------------------------------------------------------------------- Arlene Meier 19,500 - --------------------------------------------------------------------- Gary Vasques 4,000 - --------------------------------------------------------------------- Donald Sharpin 4,200 - --------------------------------------------------------------------- Richard Leto 3,000 - --------------------------------------------------------------------- Peter M. Sommerhauser 18,500 - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- ------------ Total Firm Shares 1,464,000 ============ - ---------------------------------------------------------------------
EX-4.1 3 AMENDMENT TO REVOLVING CREDIT AGREEMENT Exhibit 4.1 KOHL'S CORPORATE OFFICES - N56 W17000 RIDGEWOOD DRIVE - MENOMONEE FALLS, WISCONSIN 53051 - (414) 703-7000 May 12, 1998 Mr. Michael V. Flannery, Jr. Vice President Bank of New York One Wall Street New York, NY 10286 Dear Mike: In accordance with Section 2.14 of the Credit Agreement dated June 13, 1997, Kohl's requests that the Lenders agree to extend the Revolving Credit Commitment Period by one year to June 13, 2003. Please call me or Gary Stoltmann at (414) 703-1638 if you have any questions. Sincerely, /s/ Arlene Meier Arlene Meier Executive Vice President-Finance Chief Financial Officer jmt BNY CAPITAL MARKETS, INC. A SUBSIDIARY OF THE BANK OF NEW YORK COMPANY ONE WALL STREET, NEW YORK, NY 10286 Date: June 5, 1998 To: Lenders to Kohl's Department Stores, Inc. From: The Bank of New York and BNY Capital Markets, Inc. Re: Extension of the Final Maturity for the $300 Million Senior Revolving Credit Facility This memorandum serves to inform you that the Scheduled Revolving Credit Termination Date for $285 million of the $300 million Facility has been extended to June 13, 2003. The extension is effective June 5, 1998. Kohl's Department Stores, Inc., BNY Capital Markets and The Bank of New York appreciate your prompt response to this request. The new allocations are as follows:
Lender Commitment ------ ---------- The Bank of New York $ 46,000,000 First Chicago NBD $ 40,000,000 First Union (Corestates) $ 40,000,000 Bank of America NT & SA $ 35,000,000 U.S. Bank National Association $ 35,000,000 Bank One $ 33,000,000 Firstar Bank Milwaukee, N.A. $ 31,000,000 Comerica Bank $ 25,000,000 The Fuji Bank, Ltd. $ 15,000,000 ------------ Total $300,000,000
cc: Gary Stoltmann, Kohl's Department Stores, Inc. EX-23.1 4 CONSENT OF ERNST & YOUNG 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 Amendment No. 1 to the Registration Statement (Form S-3-Registration No. 333-73257) and related Prospectus of Kohl's Corporation for the registration of 4,903,600 shares of its common stock and to the incorporation by reference therein of our report dated March 9, 1998, with respect to the consolidated financial statements of Kohl's Corporation included in its Annual Report (Form 10-K) for the year ended January 31, 1998, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP Milwaukee, Wisconsin March 8, 1999 -----END PRIVACY-ENHANCED MESSAGE-----