3440-IL1/00
StockPower Inc., an independent online investor services company, discontinued its online services as of October 16, 2000. Therefore all references to StockPower Inc. in this Prospectus should be disregarded.
PROSPECTUS
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A Direct Purchase Program
For Kmart Common Stock
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Kmart Corporation is
pleased to offer you the opportunity to participate in Kmart Stock Direct, a
convenient and low cost stock purchase program available for new investors
to make an initial purchase, and for existing investors to increase their
holdings, of Kmart common stock.
Program highlights include:
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Invest in Kmart common
stock through a convenient, low-cost method
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Build your investment over
time, starting with as little as $250 for new investors — $50 for
existing investors
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Invest in shares either
directly through the Internet or by check, money order or bank
draft
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Authorize automatic
monthly investments from your checking account
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Invest up to $100,000 per
year
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Elect to have future
dividends, if any, automatically reinvested (no dividends have been paid
on the common stock since December 1995)
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This prospectus
relates to shares of Kmart common stock, par value $1.00 per share, to be
offered for purchase under Kmart Stock Direct.
Please read this
prospectus carefully and keep it and any future investment statements for
future reference. If you are already a registered Kmart stockholder and have
any questions about Kmart Stock Direct, please call EquiServe, L.P., the
Program Administrator, toll free at 1-800-336-6981. If you are not currently
a registered Kmart stockholder and would like to receive Program materials,
please call toll free at 1-800-947-8019. Calls may be placed to EquiServe 24
hours a day, seven days a week. Customer service representatives are
available between the hours of 9:00 A.M. and 6:00 P.M. Eastern time, Monday
through Friday.
The shares of Kmart
common stock being offered are not insured or protected by any governmental
agency, and involve investment risk, including the possible gain or loss of
principal.
Neither the
Securities and Exchange Commission nor any state securities commission has
approved or disapproved the securities to be issued under this prospectus or
determined if this prospectus is accurate or adequate. Any representation to
the contrary is a criminal offense.
This prospectus is
not an offer to sell securities and it is not soliciting an offer to buy
securities in any state or country where the offer or sale is not permitted.
To the extent required by applicable law in certain jurisdictions, shares
offered through Kmart Stock Direct are offered only through a registered
broker-dealer in those jurisdictions.
The date of this Prospectus is January 27, 2000.
The Company
With over 2,100 Kmart
stores and sales of $33.7 billion in 1998, Kmart Corporation is the nation
’s second largest discount retailer and one of the world’s largest
general merchandise retailer. Kmart’s retail stores are located in each
of the 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam and
in 311 of the 316 Metropolitan Statistical Areas in the United States.
Stores are generally one-floor, free-standing units ranging in size from
40,000 to 180,000 square feet.
In 1995, Kmart began
converting its traditional stores to feature a new, high-frequency format.
In April 1997, this design was renamed Big Kmart. Big Kmart offers customers
an increased mix of frequently-purchased, everyday basics, along with a
variety of consumables in a “Kmart Pantry” area located near the
front of each store. A total of 1,828 traditional Kmart stores had been
converted to the Big Kmart format as of October 27, 1999. Including new
stores built in the Big Kmart format, it is expected that approximately
1,860 stores will be in the Big Kmart format by the end of fiscal
1999.
Kmart’s
supercenter operations, Super Kmart Centers, combine a full grocery
assortment, including fresh and frozen food, bakery, meats and other items,
with a broad selection of the general merchandise found at Big Kmart and
traditional Kmart stores. Open 24 hours a day, seven days a week, the 105
Super Kmart Centers are the third largest supercenter operation in the
nation.
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Cautionary Statement
Regarding Forward-Looking Information
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Statements, other
than those based on historical facts, which address activities, events or
developments that Kmart expects or anticipates may occur in the future are
forward-looking statements which are based upon a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate.
Actual events and results may materially differ from anticipated results
described in such statements. Kmart’s ability to achieve such results
is subject to certain risks and uncertainties, including, but not limited
to, economic and weather conditions which affect buying patterns of Kmart
’s customers, changes in consumer spending and Kmart’s ability to
anticipate buying patterns and implement appropriate inventory strategies,
continued availability of capital and financing, competitive factors and
other factors affecting business beyond Kmart’s control. Consequently,
all of the forward-looking statements are qualified by these cautionary
statements and there can be no assurance that the results or developments
anticipated by Kmart will be realized or that they will have the expected
effects on Kmart or its business or operations.
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Information About Kmart
Stock Direct
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The following
questions and answers explain and set forth the terms of Kmart Stock
Direct.
1. What is Kmart Stock
Direct?
Kmart Stock Direct is
a convenient and low cost stock purchase program available to new investors
to make an initial purchase, and to existing stockholders to increase their
holdings, of Kmart common stock. Participants in the Program may elect to
make optional cash investments and/or to have future dividends, if any,
automatically reinvested in Kmart common stock. (No dividends have been paid
on the common stock since December 1995—see Question 9 for additional
information.)
Participation in
Kmart Stock Direct is entirely voluntary, and no advice is given regarding
your decision to join the Program. However, if you decide to participate, an
enrollment form and reply envelope are enclosed for your convenience.
Enrollment forms are also available, and may be completed online through
services provided by StockPower Inc., an independent online investor
services company. You can access these services through the About Kmart
section of www.bluelight.com, or through StockPower’s web site,
www.stockpower.com.
2. What options are available under the
Program?
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Kmart Stock Direct allows
participants to:
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Make initial investments
in Kmart common stock through the Program;
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Make additional cash
investments in Kmart common stock, including the option of making
automatic monthly purchases through authorized deductions from a
designated checking account or making online purchases through services
provided by StockPower; and
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Have future common stock
dividends, if any, automatically reinvested in additional shares of Kmart
common stock. (No dividends have been paid on the common stock since
December 1995—see Question 9 for additional information.)
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Please refer to
Question 8 for details on fees to be paid by participants and to Question 10
for further information regarding the methods of making additional cash
investments.
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3.
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Who is eligible
to participate in Kmart Stock Direct?
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All U.S. citizens are
eligible to participate in Kmart Stock Direct, whether or not they are
currently stockholders of Kmart.
4.
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Can non-U.S.
citizens participate in Kmart Stock Direct?
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Yes. If you are not a
U.S. citizen, you can participate in Kmart Stock Direct, provided there are
no laws or governmental regulations that would prohibit participation or
that would affect the terms of the Program. Kmart reserves the right to
prohibit or terminate participation of any stockholder if it deems it
advisable under any applicable laws or regulations. All Program funds must
be in U.S. funds and drawn on a U.S. bank. If you are outside the U.S.,
contact your bank to verify that it can provide you with a check that clears
through a U.S. bank and can print the dollar amount in U.S. funds. Due to
the longer clearance period, checks clearing through non-U.S. banks are not
accepted. Also, third party checks are not accepted. Please contact your
local bank for details on how to make the transaction.
5.
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How does a Kmart
stockholder enroll in Kmart Stock Direct?
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If you are already a
Kmart stockholder of record (that is, if you own shares that are registered
in your name, not your bank’s or broker’s) and have received this
Prospectus, you are immediately qualified to participate in the
Program.
6.
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I already own
shares, but they are held by my bank or broker and registered in
“street name.” How can I participate in the
Program?
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If your shares of
Kmart common stock are registered in the name of a bank, broker or other
nominee, you have two alternatives to participate. You may arrange for that
bank, broker or nominee to register at least one share directly in your name
in order to be eligible to participate. As an alternative, you may also
enroll in the Program in the same manner as someone who is not currently a
Kmart stockholder, as described under Question 7.
7.
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I am not
currently a Kmart stockholder. How do I enroll in the
Program?
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If you do not
currently own any Kmart common stock and you wish to become a stockholder
and a participant in Kmart Stock Direct, you may enroll in the Program by
completing an enrollment form and sending with it an initial investment
amount of at least $250 and no more than $100,000. Initial cash investments
can be made by check, money order or bank draft made payable to EquiServe
and sent to EquiServe, as the Program Administrator, at the address listed
on the enrollment form. All money must be in U.S. funds and drawn on a U.S.
bank. If you are outside the U.S., contact your bank to verify that it can
provide you with a check that clears through a U.S. bank and can print the
dollar amount in U.S. funds. Due to the longer clearance period, checks
clearing through non-U.S. banks are not accepted. Also, third party checks
are not accepted. A fee of $5 will be deducted from your initial investment,
as well as your proportionate share of brokerage commissions on the
transaction (historically, about $0.05 per share on purchase transactions).
See Question 8 for a summary of the fees associated with the
Program.
You may also join
Kmart Stock Direct online through services provided by StockPower (visit the
About Kmart section of www.bluelight.com or
www.stockpower.com) and authorize the deduction of your initial
investment from your bank account online. As above, a fee of $5 will be
deducted from your initial investment, as well as your proportionate share
of brokerage commissions on the transaction (historically, about $0.05 per
share on purchase transactions). See Question 12 for information regarding
StockPower.
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Are there fees
associated with participation?
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The Program
Administrator will deduct a service charge for each transaction made by you,
whether the transaction is your initial investment, an additional investment
or a sale of shares held through Kmart Stock Direct. (See Question 7
regarding initial investment fees.) For an additional investment, the fee is
$5 per transaction or $2 if the purchase is made via an automatic monthly
withdrawal from your bank account. In addition, you will be charged your
proportionate share of brokerage commissions on each purchase transaction
(historically, about $0.05 per share).
If you request a sale
of some or all of your shares held in the Program, you will be charged a
service charge of $10 per transaction, plus your proportionate share of
brokerage commissions on the transaction (historically, about $0.12 per
share on sale transactions).
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The fees associated with
participation in the Program are summarized in the following
chart:
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Costs to the Participant
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One Time Fee |
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Transaction Fee |
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Brokerage
Commission |
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Initial
Investment Fee
for
First-time Investors |
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$5 deducted directly from
initial investment
See Question 7
for more information |
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None |
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Historically, about
$0.05 per share |
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| Additional Investments |
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None |
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$5 per transaction
($2 per transaction if
automatic monthly bank account
withdrawal) |
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Historically, about
$0.05 per share |
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| Sales |
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None |
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$10 per
transaction |
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Historically, about
$0.12 per share |
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| Insufficient Funds |
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$25 |
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None |
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None |
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See Question 16 for
more information |
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Ÿ Full Dividend
Reinvestment. If you select this option, the
Program Administrator would apply cash dividends on all of your Kmart
common stock toward the purchase of additional shares of Kmart common
stock.
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Ÿ Partial Dividend
Reinvestment. If you select this option, the
Program Administrator would apply the cash dividends on the specified
shares of Kmart common stock toward the purchase of additional shares.
You would continue to be paid cash dividends on the remaining shares of
Kmart common stock then owned by you.
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Ÿ No Dividend
Reinvestment. If you select this option,
cash dividends would not be reinvested. Instead, you would receive a
check for cash dividends on all of your Kmart common stock.
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You may change your
election at any time by either completing and submitting a new enrollment
form by mail or online, or by contacting EquiServe, the Program
Administrator, directly at 1-800-336-6981. See Question 25 for further
information about changing your dividend reinvestment option.
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How
do I make an additional investment in Kmart common
stock?
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You may make
additional investments in Kmart common stock by choosing among the
following three options:
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Ÿ Check.
You may send EquiServe, the Program Administrator, a
check, money order or bank draft made payable to EquiServe in U.S.
dollars and drawn on a U.S. bank. If you are outside the U.S., contact
your bank to verify that it can provide you with a check that clears
through a U.S. bank and can print the dollar amount in U.S. funds. Due
to the longer clearance period, checks clearing through non-U.S. banks
are not accepted. Third party checks are also not accepted. All checks,
money orders and bank drafts should be sent to EquiServe at the address
listed on the additional investment tear-off form attached to each
statement you receive, or, if making an initial investment, with the
enrollment form.
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Ÿ Automatic Withdrawal
from Bank Account. As an alternative to
sending checks, you may elect to have funds automatically withdrawn
every month from your checking account at a qualified financial
institution. You may elect this option by simply completing and signing
the automatic monthly investment form, providing the necessary
information, together with a voided blank check or checking account
deposit slip, and designating the amount, account number and U.S. bank
routing number from which the funds are to be withdrawn each month.
Automatic investment forms are available from EquiServe and are
available online through services provided by StockPower. You may change
the amount of funds to be withdrawn or terminate an automatic monthly
investment of funds by either calling EquiServe directly at
1-800-336-6981 or by completing and submitting to EquiServe a new
automatic investment form. To be effective, the automatic investment
form must be received by EquiServe before the last business day of the
prior month. Also, you can cancel any purchase scheduled to be made by
automatic investment, provided the request is received by EquiServe at
least seven business days prior to the date of the scheduled withdrawal.
See Question 13 for information regarding investment dates.
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Ÿ Online.
You may make investments online through services
provided by StockPower, which may be accessed through the About Kmart
section of www.bluelight.com, as well as via the StockPower web
site, www.stockpower.com. In order to invest in shares online
through StockPower, you must authorize online the withdrawal of funds
from your bank account.
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11.
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What
are the minimum and maximum investment amounts?
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If you are a
registered Kmart stockholder, your investments in Kmart common stock must
be for a minimum of $50 and may not exceed $100,000 per calendar year.
Whether participating through use of a personal check, traveler’s
check, money order or bank draft, or through the automatic investment
feature, the $50 minimum and $100,000 annual investment maximum apply. If
you are not a registered stockholder and are a first-time investor in
Kmart Stock Direct, your initial investment must be for at least $250 and
cannot exceed the $100,000 annual investment maximum. All amounts must be
in U.S. dollars and drawn on a U.S. bank. If you are outside the U.S.,
contact your bank to verify that it can provide you with a check that
clears through a U.S. bank and can print the dollar amount in U.S. funds.
Due to the longer clearance period, checks clearing through non-U.S. banks
are not accepted. Third party checks are also not accepted.
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What
transactions can I conduct through StockPower’s online
services?
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StockPower Inc., an
independent company, offers investors a convenient way to invest in Kmart
common stock completely online, without having to send in any forms or
checks by mail. Through StockPower, you may:
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Eliminate the
time required to receive an enrollment form through the mail
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Elect to
purchase shares of Kmart common stock and authorize the withdrawal of
funds from a bank account for your initial and additional
investments
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Review and
manage your Kmart Stock Direct account at any time from your personal
computer, including making changes to Program elections and personal
data
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Arrange to
receive Kmart annual reports and other materials over the
Internet
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Receive
transaction confirmations via email
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Choose to
reinvest future Kmart dividends, if any (no dividends have been paid on
the common stock since December 1995—see Question 9 for additional
information)
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Arrange for
online sales of some or all of your shares held in the Program (except
for fractional shares —see Question 22)
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Participation in
Kmart Stock Direct through services provided by StockPower is voluntary.
You can access StockPower’s services through the About Kmart section
of www.bluelight.com, or through the StockPower web site,
www.stockpower.com.
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13.
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When
will shares be purchased under the Program?
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General.
EquiServe, the Program Administrator, will
attempt to buy Kmart common stock in the open market through a registered
broker-dealer on investment dates twice each week, typically each Tuesday
and Thursday.
If you are mailing
your investment, EquiServe must receive your investment request and the
applicable check by Noon Eastern Time, two business days prior to an
investment date in order to receive the funds in time for the investment
deadline.
If you are making
your first online investment, your investment request must be placed by
Noon Eastern Time, four business days prior to an investment date.
Subsequent online investment requests must be placed by Noon Eastern Time,
three business days prior to the investment date.
If any Tuesday or
Thursday is not a day on which the New York Stock Exchange is open, or
falls on a day which is not a business day in Massachusetts, then the
investment will occur on the next succeeding business day.
Additional
investments not received before the applicable investment date deadline
will not be invested until the next succeeding investment date. EquiServe
will commingle all funds received from participants. No interest will be
paid on any funds held by EquiServe between investment dates. Once you
have placed your order, you may not request a cash refund or otherwise
change your order.
Automatic
Monthly Investments. If you elect to make
monthly investments through automatic withdrawals from your bank account,
those investments will be made only on the last investment date of each
month. Your account will be debited one business day before the last
investment date of the month. For example, assuming that each day in this
example is a business day, if the last day of the month is Wednesday, the
30th, your account would be debited on Monday, the 28th, for an investment
on Tuesday, the 29th, which is the last investment date of the
month.
Dividend
Reinvestments. EquiServe will generally invest
any dividend funds authorized to be reinvested on the same investment date
that optional investments are made under the Program. (No dividends have
been paid on the common stock since December 1995—see Question 9 for
additional information.) All funds to be invested on an investment date
are commingled.
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At
what price will shares be purchased?
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Your purchase price
will be the weighted average purchase price per share for all shares
purchased under the Program on a given investment date.
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15.
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Will
fractional shares be purchased?
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If any optional
investment or dividend reinvestment is not sufficient to purchase a whole
share of Kmart common stock, a fractional share equivalent will be
credited to your account.
16.
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How
are investments with “insufficient funds”
handled?
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In the event that
any check or other deposit is returned unpaid for any reason or your
predesignated bank account does not have sufficient funds for an automatic
withdrawal, there is a $25 insufficient funds charge and EquiServe will
consider the request for that purchase null and void and will immediately
remove from your Kmart Stock Direct account any shares already purchased
in anticipation of receiving those funds. If the net proceeds from the
sale of those shares are insufficient to satisfy the balance of the amount
due, EquiServe may sell the number of shares from your Kmart Stock Direct
account as necessary to satisfy the balance due and the insufficient funds
charge.
17.
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Will
interest be paid on Kmart Stock Direct accounts?
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No interest will be
paid on amounts held pending investments.
18.
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What
is the source of Kmart common stock purchased through the
Program?
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Shares are usually
purchased in the open market through a registered broker-dealer; however,
at Kmart’s option, newly issued or reacquired shares may be purchased
directly from Kmart (at the per share closing price on the New York Stock
Exchange on the investment date). Share purchases in the open market may
be made on any stock exchange where Kmart common stock is traded or by
negotiated transactions on such terms as EquiServe may reasonably
determine. Neither Kmart nor any participant will have any authority or
power to direct the date, time or price at which shares may be purchased
by EquiServe.
19.
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Who
will hold the shares purchased through Kmart Stock
Direct?
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Shares purchased
through Kmart Stock Direct are held in safekeeping in book-entry form on
EquiServe’s records. The number of shares (including fractional
interests) held for each participant will be shown on each account
statement.
20.
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How
may I obtain a stock certificate?
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You may obtain a certificate (at no cost) for some or all of your
whole shares at any time by simply requesting EquiServe to withdraw shares
from your Kmart Stock Direct account. You may make such a request
by:
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using the
tear-off form attached to your Kmart Stock Direct account
statement;
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calling
EquiServe at 1-800-336-6981; or
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Certificates are
normally issued to participants within three business days after receipt
of the request. Withdrawing shares from your Program account would not
affect your dividend reinvestment election—should dividends on the
common stock be reinstated at some time in the future. Dividends, if paid,
would continue to be reinvested unless a new election were made. No
certificates will be issued for fractional shares of common stock;
instead, the market value of any fractional share will be paid in
cash.
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May I
add my certificate shares of Kmart common stock to my Program account
for safekeeping?
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At the time of
enrollment in the Program or at any later time, you may use the Program
’s share certificate safekeeping service to deposit with EquiServe
any Kmart common stock certificates in your possession and registered in
your name. To combine shares held in certificate form with shares held in
your Kmart Stock Direct account, you must complete the tear-off form
attached to your account statement and submit it with your certificates to
the address on the tear-off form. There is no charge for this service. The
certificates do not need to be endorsed. You should send your stock
certificates by certified, registered or insured mail, or by some other
safe means, because you bear the risk of loss in transit.
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22.
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How
may I sell shares I hold through the Program?
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Shares held in your
Kmart Stock Direct account can be sold on your behalf by either calling
EquiServe directly at 1-800-336-6981 or by completing and submitting the
tear-off form attached to your account statement. For participants
enrolled in StockPower, sales can also be made online using StockPower
(unless your stock holding includes a fractional share—in which case,
you should sell your shares through EquiServe). Upon receipt of a request
to sell some or all of your shares, whether directly or through
StockPower, EquiServe will cause your shares to be sold on the open market
within three business days of receipt of your request and will send you
the proceeds less a service charge of $10 and applicable brokerage
commissions. The market value of any fractional share will be paid in
cash. Proceeds are normally paid by check, which are distributed within
three business days after the sale.
You should be aware
that the price of Kmart common stock may rise or fall during the period
between a request for sale, its receipt by EquiServe and the ultimate sale
on the open market. In addition, if a request to sell all of your Program
shares and close your Program account were received by EquiServe after the
third business day preceding a dividend record date (should dividends on
the common stock be reinstated at some time in the future), the sale would
be postponed and your account would not be closed until after you received
the shares resulting from the pending dividend reinvestment. Instructions
sent to EquiServe to sell shares are binding. You may not change or
rescind a sell order.
23.
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Can I
transfer shares that I hold in the Program to someone
else?
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You may transfer
ownership of some or all of your shares held through Kmart Stock Direct.
You may call EquiServe at 1-800-336-6981 for complete transfer
instructions. You will be asked to send to EquiServe written transfer
instructions. Your signature must be “Medallion Guaranteed” by a
financial institution. Most banks and brokers participate in the Medallion
Guarantee program. The Medallion Guarantee program ensures that the
individual signing is in fact the owner of the participant’s account.
A notary is not sufficient.
You may transfer
shares to new or existing Kmart stockholders. However, a new Kmart Stock
Direct account will not be opened for a transferee unless at least one
full share is transferred. If you open a new Kmart Stock Direct account
for a transferee, you must include an enrollment form with the
gift/transfer instructions.
24.
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I
’ve just moved. How can I request a change of address or update
other personal data?
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It is important
that our records contain your most up-to-date personal data. If you need
to request a change of address or update other personal data, please call
EquiServe, the Program Administrator, at 1-800-336-6981 or write to them
at the address listed under Question 26. You can also update your records
online through StockPower.
You can modify or
close your Kmart Stock Direct account at any time by either (i) calling
EquiServe, the Program Administrator, at 1-800-336-6981, (ii) providing
EquiServe with written instructions delivered to the address listed under
Question 26 or (iii) providing StockPower with online instructions at
www.stockpower.com, provided your notification is received by the
third business day preceding a dividend record date (should dividends on
the common stock be reinstated at some time in the future). If a request
to either sell all of your shares or to stop dividend reinvestment were
received after the third business day preceding the dividend record date,
the request would not be implemented until after the pending dividend
reinvestment.
Your elections under the Program can be changed or discontinued as
follows:
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Ÿ
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Completing and
submitting an authorization form by mail or online or calling EquiServe
at
1-800-336-6981 and changing your elections regarding investments by
automatic bank account withdrawal and/or dividend reinvestment while
still keeping your shares in your Kmart Stock Direct account;
or
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Ÿ
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Closing your
Kmart Stock Direct account by requesting (by mail or telephone) that all
shares be issued in the form of a stock certificate and a check be
issued for the value of any fractional share. If you made this election
and your request was received after the third business day preceding a
dividend record date (should dividends on the common stock be
reinstituted at some time in the future), the sale would be postponed
and your account would not be closed until after the pending dividend
reinvestment (see Question 20 for additional information on obtaining a
stock certificate); or
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Ÿ
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Alternatively,
you may close your Kmart Stock Direct account by requesting (by mail or
telephone) that all shares be sold on the open market and a check be
remitted to you for the proceeds for all full and fractional shares,
less a service charge of $10 and applicable broker commissions and fees.
If you made this election and your request was received after the third
business day preceding a dividend record date (should dividends on the
common stock be reinstituted at some time in the future), the sale would
be postponed and your account would not be closed until after the
pending dividend reinvestment (see Question 22 for additional
information on sales).
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26. Who administers Kmart Stock
Direct? How do I contact them?
EquiServe, L.P., as
Administrator of the Program, directs the purchase of and holds shares of
Kmart common stock acquired under Kmart Stock Direct, keeps records, sends
statements of account activity to participants and performs other related
duties.
You may contact the
Program Administrator by writing to:
Kmart Stock Direct
c/o EquiServe, L.P.
P.O. Box 8038
Boston, MA 02266-8038
You may also
telephone EquiServe toll free at 1-800-336-6981, 24 hours a day, seven
days a week. Customer service representatives are available between the
hours of 9:00 A.M. and 6:00 P.M. Eastern Time, Monday through
Friday.
27. What reports will I
receive?
Easy to read
statements of your calendar year-to-date account activity will be sent to
you after the settlement of each Program transaction, which will simplify
your record keeping. Each statement will show the amount invested, the
purchase or sale price, the number of shares purchased or sold and the
applicable service charges, as well as any activity associated with share
deposits or withdrawals. Please notify EquiServe promptly at either the
address or telephone number listed under Question 26 if your address
changes.
In addition, you
will receive copies of the same communications sent to all other holders
of Kmart common stock, such as annual reports and proxy statements. You
will also receive Internal Revenue Service information returns, if
required. You can elect to receive stockholder communications from Kmart,
such as annual reports and proxy statements, online. This election can be
made either through StockPower at www.stockpower.com or, if you are
not a StockPower participant, by contacting EquiServe at 1-800-336-6981.
In addition, you can review your current account status, Program options
and transaction history at any time online through StockPower. If you
elect to receive stockholder communications online, please contact
www.stockpower.com, as well as EquiServe, if your email address
changes.
Please retain all
transaction statements for your records. The statements contain important
tax and other information.
Any stock dividends
or split shares distributed by Kmart to holders of common stock held in
Kmart Stock Direct accounts will be added to your account balance. You
will receive a statement indicating the number of shares distributed or
dividends earned as a result of the transaction. In the event of a rights
offering, you will receive rights based upon the total number of whole
shares you own, whether the shares are held in the form of a physical
certificate or held in a Kmart Stock Direct account.
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29. How do I vote my Kmart Stock
Direct shares at stockholders’ meetings?
In connection with
any meeting of Kmart stockholders, you will receive proxy materials,
including a proxy card representing both the shares for which you hold
physical certificates and the shares held in your Kmart Stock Direct
account. Those shares will be voted as you indicate on your proxy card,
whether mailed or voted by telephone or the Internet. Fractional shares
will be voted. If you sign and return the proxy card and no voting
instructions are given with respect to any item on the proxy card, all of
your shares will be voted in accordance with the recommendations of Kmart
’s Board of Directors. This is the same procedure that is followed
for all other stockholders who return signed proxy cards or vote by
telephone or online and do not provide voting instructions. If you do not
return the proxy card or vote by telephone or online, or if you do not
sign or electronically acknowledge it, none of your shares will be
voted.
30. Can the Program be changed or
terminated?
Kmart and EquiServe
may suspend, modify or terminate the Program at any time. All participants
will receive notice of any suspension, modification or termination. If
Kmart Stock Direct is terminated, certificates for whole shares held in
your Kmart Stock Direct account will be issued, and a cash payment will be
made for any fractional share.
EquiServe also may
terminate your Kmart Stock Direct account if you do not own at least one
full share of Kmart common stock. In the event your Kmart Stock Direct
account is terminated for this reason, a check for the cash value of the
fractional share will be sent to you and your account will be
closed.
31. What are the responsibilities
of Kmart, Equiserve and StockPower under Kmart Stock
Direct?
EquiServe, L.P. and
StockPower, Inc. are independent companies. EquiServe L.P. acts as the
Program Administrator of Kmart Stock Direct. StockPower transfers
information between online investors and EquiServe.
Neither Kmart,
EquiServe nor StockPower will be liable for any act or omission to act,
which was done in good faith, including any claim of liability arising out
of the failure to terminate a participant’s account upon the
participant’s death prior to receipt of notice in writing of the
death along with a request to terminate participation from a qualified
representative of the deceased.
Neither Kmart,
EquiServe nor StockPower can assure you of a profit or protect you against
a loss with respect to shares purchased through Kmart Stock
Direct.
Participants in
the Program are advised to consult their own tax advisors with respect to
the tax consequences of participation in Kmart Stock Direct (including
federal, state, local and other tax laws and U.S. tax withholding laws)
applicable to their particular situations.
Cash dividends, if
any, reinvested under the Program will be taxable for U.S. federal income
tax purposes as having been received by you even though you have not
actually received them in cash. The total amount of dividends, if any,
paid to you during a calendar year, whether or not they are reinvested,
will be reported to you and the U.S. Internal Revenue Service shortly
after the close of each year.
You will not
realize gain or loss for U.S. federal income tax purposes upon a transfer
of shares to your Kmart Stock Direct account or the withdrawal of whole
shares from your account. You will, however, generally realize gain or
loss upon the receipt of cash for fractional shares held in the Program.
You will also realize gain or loss when shares are sold. The amount of
gain or loss will be the difference between the amount that you receive
for the shares sold and your tax basis in the shares (generally, the
amount you paid for the shares). In order to determine the tax basis for
shares in your account, you should retain all account transaction
statements.
Program
participants who are non-resident aliens or non-U.S. corporations,
partnerships or other entities generally are subject to a withholding tax
on dividends, if any, paid on shares held in the Program. Where
applicable, this withholding tax generally is imposed at the rate of 30%;
but this rate may be reduced by treaty between the U.S. and the country in
which the participant resides.
Dividends, if any,
paid on shares in Kmart Stock Direct accounts (see Question 9 for
additional information) may be subject to the “backup withholding
” provisions of the Internal Revenue Code. If you fail to furnish a
properly completed Form W-9 or its equivalent, unless you are exempt from
the withholding requirements described in Section 3406 of the Internal
Revenue Code, then the Program Administrator must withhold 31% from the
amount of dividends, the proceeds of the sale of a fractional share and
the proceeds of any sale of full shares.
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WHERE YOU CAN FIND MORE INFORMATION
Kmart files annual,
quarterly reports, proxy statements and other information with the
Securities and Exchange Commission. 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
with the SEC at the SEC’s following public reference
facilities:
| Public Reference Room |
|
New York Regional
Office |
|
Chicago Regional Office |
| 450 Fifth Street, N.W. |
|
7 World Trade
Center |
|
500 West Madison Street |
| Room 1024 |
|
Suite 1300 |
|
Suite 1400 |
| Washington, D.C. 20549 |
|
New York, NY
10048 |
|
Chicago, IL 60661-2511 |
You may also obtain
copies of the documents at prescribed rates by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information
on the operations of the public reference facilities. Our SEC filings are
also available at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
This prospectus
constitutes part of a registration statement on Form S-3 filed by Kmart
under the Securities Act of 1933. As allowed by SEC rules, this prospectus
does not contain all the information you can find in the registration
statement or the exhibits to the registration statement.
The SEC allows us
to “incorporate by reference” in this prospectus the information
we file with the SEC, which means:
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incorporated
documents are considered part of this prospectus;
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we can disclose
important information to you by referring you to those documents;
and
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information
that we file with the SEC will automatically update and supersede the
information in this prospectus and any information that was previously
incorporated.
|
We incorporate by
reference the documents listed below which were filed with the SEC under
the Securities Exchange Act of 1934:
(1) our Annual
Report on Form 10-K for the year ended on January 27, 1999;
(2) our Quarterly
Reports on Form 10-Q for the quarters ended on April 29, 1999, July 28,
1999 and October 27, 1999; and
(3) the section
entitled “Description of Common Stock” in our Prospectus dated
June 6, 1996.
We also incorporate
by reference each of the following documents that we will file with the
SEC after the date of the initial filing of the registration statement and
prior to the time we sell all of the shares of common stock offered by
this prospectus:
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reports filed
under Section 13(a) and (c) of the Exchange Act;
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definitive
proxy statement filed under Section 14 of the Exchange Act in connection
with any subsequent stockholders’ meeting; and
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any reports
filed under Section 15(d) of the Exchange Act.
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You can obtain any
of the filings incorporated by reference in this document through us, or
from the SEC through the SEC’s web site or at the addresses listed
above. Documents incorporated by reference are available from us without
charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this prospectus.
You can obtain documents incorporated by reference in this prospectus by
requesting them in writing or by telephone from us at the following
address:
|
3100 West Big
Beaver Road
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Attention:
Investor Relations
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Telephone:
(248) 643-1040
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TOP
USE OF PROCEEDS
Kmart will receive
proceeds from the purchase of common stock through Kmart Stock Direct only
to the extent that such purchases are made directly from Kmart, and not
from open market purchases by EquiServe, as Program Administrator. Any
proceeds received by us (which cannot be estimated) will be used for
general corporate purposes.
LEGAL OPINIONS
The legality of the
common stock covered by this prospectus has been passed upon for Kmart by
Dickinson Wright PLLC.
EXPERTS
The financial
statements incorporated in this Prospectus by reference to the Annual
Report on Form 10-K for the year ended January 27, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
[LOGO OF KMART CORPORATION]
3440-PROS-1/00
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