<PAGE>
Rule 424(b)(5)
Registration No. 33-59008
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 6, 1993
$150,000,000
DAYTON HUDSON CORPORATION
7 1/2% NOTES DUE 1999
----------------
Interest on the Notes is payable semi-annually on March 1 and September 1 of
each year, commencing September 1, 1995. The Notes are not redeemable prior to
maturity and will not be entitled to any sinking fund. The Notes will be
represented by one or more global Notes registered in the name of the nominee
of The Depository Trust Company, which will act as Depositary. Interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and its participants. Except as described
under "Description of Notes", owners of beneficial interests in the global
Notes will not be considered the Holders thereof and will not be entitled to
receive any delivery of Notes in definitive form. Settlement for the Notes will
be made in immediately available funds. The Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity and secondary
market trading activity in the Notes will therefore settle in immediately
available funds. See "Description of Notes".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Note .......................... 99.828% 0.550% 99.278%
Total.............................. $149,742,000 $825,000 $148,917,000
</TABLE>
- --------
(1) Plus accrued interest from March 1, 1995 to the date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $100,000 payable by the Company.
----------------
The Notes are offered severally by the Underwriters, as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that delivery of the Notes will
be made through the facilities of The Depository Trust Company on or about
March 6, 1995 against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
----------------
The date of this Prospectus Supplement is February 27, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS IN THE NOTES WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the ratios of earnings to fixed charges for each of the
fiscal years in the five-year period ended January 29, 1994 and the nine months
ended October 30, 1993 and October 29, 1994.
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED ENDED
---------------------------------------------------- ------------------
FEBRUARY FEBRUARY FEBRUARY JANUARY JANUARY OCTOBER OCTOBER
3, 2, 1, 30, 29, 30, 29,
1990 1991 1992 1993 1994 1993 1994
-------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
3.02 2.47 1.85 2.06 2.04 1.32 1.56
</TABLE>
Earnings, as used to calculate the ratio of earnings to fixed charges,
consist of consolidated earnings before income taxes and fixed charges. Fixed
charges consist of interest on all indebtedness (including capital lease
obligations), amortization of debt expense, dividends on preferred stock, if
any, and the percentage of rental expense on operating leases which is deemed
representative of the interest factor.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Offered Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
The Notes will be issued under an Indenture, dated as of February 1, 1986, as
amended or supplemented from time to time (the "Indenture"), between the
Company and First Trust National Association, as Trustee, which is more fully
described in the Prospectus.
The Notes are unsecured and unsubordinated obligations of the Company and
will be limited to $150,000,000 aggregate principal amount. The Notes will
mature on March 1, 1999, and will bear interest at the rate per annum shown on
the front cover of this Prospectus Supplement from March 1, 1995 or from the
most recent Interest Payment Date to which interest has been paid or provided
for, payable semi-annually on March 1 and September 1 of each year, commencing
September 1, 1995, to the Person in whose name the Note (or any predecessor
Note) is registered at the close of business on the preceding February 15 or
August 15, as the case may be.
The Notes are not redeemable by the Company prior to their Stated Maturity
and will not be entitled to a sinking fund.
The Notes will be issued in the form of one or more fully registered global
Notes which will be deposited with, or on behalf of, The Depository Trust
Company, as Depositary (the "Depositary"), located in the Borough of Manhattan,
The City of New York, and will be registered in the name of the Depositary or a
nominee of the Depositary.
Ownership of beneficial interests in a global Note will be limited to
participants and to persons that may hold interests through institutions that
have accounts with the Depositary ("participants"). Ownership of beneficial
interests by participants in a global Note will be shown on, and the transfer
of that ownership interest will be effected only through, records maintained by
the Depositary for such global Note. Ownership of beneficial interests in such
global Note by persons that hold through participants will be shown on, and the
transfer of that ownership interest within each participant will be effected
only through, records maintained by such participants.
S-2
<PAGE>
Payment of principal of and interest on the Notes represented by any such
global Note will be made to the Depositary or its nominee, as the case may be,
as the sole registered owner and the sole Holder of the Notes represented
thereby for all purposes under the Indenture. None of the Company, the Trustee
or any agent of the Company or the Trustee will have any responsibility or
liability for any aspect of the Depositary's records relating to or payments
made on account of beneficial ownership interests in a global Note representing
any Notes or any other aspect of the relationship between the Depositary and
its participants or the relationship between such participants and the owners
of beneficial interests in a global Note owning through such participants or
for maintaining, supervising or reviewing any of the Depositary's records
relating to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or interest on any such global Note, the Depositary
will immediately credit, on its book-entry registration and transfer system,
the accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such global Note as
shown on the records of the Depositary. The accounts to be credited shall be
designated by the Underwriters. Payments by participants to owners of
beneficial interests in a global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for customer accounts registered in "street name", and
will be the sole responsibility of such participants.
No global Note may be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor of the Depositary or a nominee of such successor.
A global Note representing Notes is exchangeable for definitive Notes in
registered form, only if (x) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such global Note or if at any
time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934 (the "Exchange Act"), (y) the Company in its
sole discretion determines that such global Note shall be exchangeable for
definitive Notes in registered form and notifies the Trustee thereof or (z) an
Event of Default with respect to the Notes represented by such global Note has
occurred and is continuing. Any global Note that is exchangeable pursuant to
the preceding sentence shall be exchangeable for definitive Notes issuable in
authorized denominations in registered form, aggregating a like amount. Such
definitive Notes shall be registered in the names of the owners of the
beneficial interests in such global Note as the Depositary shall direct.
Except as provided above, owners of beneficial interests in such a global
Note will not be entitled to receive physical delivery of Notes in definitive
form and will not be considered the Holders thereof for any purpose under the
Indenture, and no global Note representing Notes shall be exchangeable.
Accordingly, each person owning a beneficial interest in such a global Note
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a Holder under the Indenture or
such global Note. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global Note.
The Indenture provides that the Depositary may grant proxies and otherwise
authorize participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder is entitled
to give or take under the Indenture or a global Note. The Company understands
that under existing industry practices, in the event that the Company requests
any action of Holders or that an owner of a beneficial interest in such a
global Note desires to give or take any action which a Holder is entitled to
give or take under the Indenture, the Depositary would authorize the
participants holding the relevant beneficial interests to give or take such
action, and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
S-3
<PAGE>
The Depositary has advised the Company that the Depositary is a limited-
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold the
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations, and certain other
organizations some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Settlement for the Notes will be made in immediately available funds. The
Notes will trade in the Depositary's Same-Day Funds Settlement System until
maturity, and therefore the Depositary will require secondary trading activity
in the Notes to be settled in immediately available funds. Secondary trading in
long-term notes and debentures of corporate issuers is generally settled in
clearing-house or next-day funds. No assurance can be given as to the effect,
if any, of settlement in immediately available funds on trading activity in the
Notes.
The Notes are subject to defeasance as described under "Description of Debt
Securities--Defeasance" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc (the "Underwriters"), and
the Underwriters have severally agreed to purchase, in equal proportions, the
entire principal amount of the Notes.
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose to offer the Notes in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of 0.30% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to
exceed 0.25% of the principal amount of the Notes to certain brokers and
dealers. After the Notes are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend
to make a market in the Notes but they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
VALIDITY OF NOTES
The validity of the Notes offered hereby is being passed upon for the Company
by Faegre & Benson, 2200 Norwest Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402, and for the Underwriters by Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004. Faegre & Benson may rely on Sullivan &
Cromwell as to matters of New York law, and Sullivan & Cromwell may rely on
Faegre & Benson as to matters of Minnesota law.
Members of the Faegre & Benson firm and members of their families own an
aggregate of less than .1% of the outstanding shares of the Company's Common
Stock.
S-4
<PAGE>
DAYTON HUDSON CORPORATION
DEBT SECURITIES AND/OR WARRANTS
TO PURCHASE DEBT SECURITIES
----------------
Dayton Hudson Corporation (the "Company") from time to time may offer its
senior debt securities consisting of debentures, notes and/or other unsecured
evidences of indebtedness (the "Debt Securities") in a principal amount and/or
warrants to purchase Debt Securities ("Warrants") in an amount sufficient to
result in aggregate net proceeds to the Company of up to $775,000,000 (or the
equivalent in foreign denominated currency or European Currency Units). The
Debt Securities and/or Warrants may be offered as separate series in amounts,
at prices and on terms to be set forth in supplements to this Prospectus
("Prospectus Supplements"). Debt Securities may be offered alone or with
Warrants (which may or may not be detachable from such Debt Securities), and
Warrants may be offered alone, all as set forth in a Prospectus Supplement. If
any Warrants are issued, Debt Securities will be issuable upon exercise of such
Warrants. The Company may sell Debt Securities and/or Warrants to or through
underwriters to be designated from time to time, and also may sell Debt
Securities and/or Warrants directly to other purchasers or through agents or
broker-dealers. See "Plan of Distribution".
The designation, principal amount, currency or currencies of denomination and
payment, offering price, maturity, interest rate, if any, redemption
provisions, if any, and other terms of the Debt Securities, the duration,
offering price, exercise price, detachability and other terms of any Warrants,
and the name of each agent, broker-dealer or underwriter, if any, in connection
with the sale of the Debt Securities and/or Warrants will be set forth in a
Prospectus Supplement or Prospectus Supplements.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS APRIL 6, 1993.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and Exchange
Commission (the "Commission") are incorporated in and made a part of this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended February
1, 1992 (which incorporates by reference certain portions of the Company's
1991 Annual Report to Shareholders, including financial statements and
accompanying information, and certain portions of the Company's definitive
Notice and Proxy Statement for the Company's 1992 Annual Meeting of
Shareholders), filed pursuant to Section 13 of the Securities Exchange Act
of 1934 (the "Exchange Act").
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
May 2, 1992, August 1, 1992 and October 31, 1992 filed pursuant to Section
13 of the Exchange Act.
(c) The Company's Current Report on Form 8-K dated May 27, 1992 filed
pursuant to Section 13 of the Exchange Act.
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities and/or Warrants shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
in accompanying Prospectus Supplements modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS, EXCEPT WHERE SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION INCORPORATED INTO THIS PROSPECTUS). REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO THE SECRETARY, DAYTON HUDSON CORPORATION, 777
NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55402 (TELEPHONE 612/370-6948).
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549; 75
Park Place, New York, New York 10007; and Northwestern Atrium, 14th Floor, 500
West Madison, Chicago, Illinois 60661; and copies of such materials can be
obtained from the public reference section of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning the Company can also be inspected
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005, and the offices of the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104.
Additional information regarding the Company and the Debt Securities and
Warrants is contained in the Registration Statement, and the exhibits relating
thereto, in respect of the Debt Securities and Warrants, filed with the
Commission under the Securities Act of 1933 (the "Act"). For further
information pertaining to the Company and the Debt Securities and Warrants,
reference is made to the Registration Statement, and the exhibits thereto,
which may be inspected without charge at the office of the Commission at 450
Fifth Street N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates.
2
<PAGE>
THE COMPANY
Dayton Hudson Corporation is a national diversified retail company operating
through three separate operating divisions: Target upscale discount stores,
Mervyn's moderate-priced family department stores and the Department Store
Division. At January 30, 1993, these operating divisions operated 834 stores in
33 states.
Dayton Hudson Corporation was incorporated in Minnesota in 1902. All
references to the "Company" herein relate to Dayton Hudson Corporation and its
subsidiaries and their predecessors unless otherwise indicated by the context.
The Company's principal executive offices are located at 777 Nicollet Mall,
Minneapolis, Minnesota 55402 (telephone 612/370-6948).
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities and/or Warrants offered
hereby will be added to the general funds of the Company and may be used to
meet capital expenditure and working capital requirements relating to the
construction and fixturing of certain of the Company's new stores and
remodeling of certain of the Company's existing stores, to refinance certain
debt, or to finance acquisitions of real estate, other assets or companies.
Pending such applications, the funds may be used to reduce short-term
borrowings or may be invested in short-term marketable securities.
3
<PAGE>
BUSINESS
GENERAL
The data reported below detail the operations of the Company's business
segments.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------------------
JANUARY 30, JANUARY 28, FEBRUARY 3, FEBRUARY 2, FEBRUARY 1,
1988 1989 1990* 1991 1992
----------- ----------- ----------- ----------- -----------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Revenues
Target................. $ 5,306 $ 6,331 $ 7,519 $ 8,175 $ 9,041
Mervyn's............... 3,183 3,411 3,858 4,055 4,143
Department Store Divi-
sion ................. 1,552 1,693 1,801 2,509 2,931
Other.................. 636 769 466 -- --
------- ------- ------- ------- -------
Total.............. $10,677 $12,204 $13,644 $14,739 $16,115
======= ======= ======= ======= =======
Operating Profit
Target................. $ 323 $ 341 $ 449 $ 466 $ 458
Mervyn's............... 150 256 358 366 284
Department Store Divi-
sion ................. 122 159 179 183 168
------- ------- ------- ------- -------
Total.............. 595 756 986 1,015 910
Interest Expense, Net.. 152 218 267 325 398
Corporate and Other.... 44 66 41 31 40
------- ------- ------- ------- -------
Earnings Before Income
Taxes.................. $ 399 $ 472 $ 678 $ 659 $ 472
======= ======= ======= ======= =======
Operating Profit as a
Percent of Revenues
Target................. 6.1% 5.4% 6.0% 5.7% 5.1%
Mervyn's............... 4.7 7.5 9.3 9.0 6.9
Department Store Divi-
sion ................. 7.9 9.4 10.0 7.3 5.7
======= ======= ======= ======= =======
Assets
Target................. $ 2,638 $ 2,982 $ 3,505 $ 3,722 $ 4,393
Mervyn's............... 2,114 2,166 2,260 2,439 2,686
Department Store Divi-
sion ................. 761 808 838 2,261 2,317
Corporate and Other.... 563 567 81 102 89
------- ------- ------- ------- -------
Total.............. $ 6,076 $ 6,523 $ 6,684 $ 8,524 $ 9,485
======= ======= ======= ======= =======
Depreciation
Target................. $ 103 $ 146 $ 170 $ 190 $ 208
Mervyn's............... 82 91 98 107 117
Department Store Divi-
sion ................. 30 33 34 69 84
Corporate and Other.... 16 20 13 3 1
------- ------- ------- ------- -------
Total.............. $ 231 $ 290 $ 315 $ 369 $ 410
======= ======= ======= ======= =======
Capital Expenditures
Target................. $ 501 $ 457 $ 414 $ 374 $ 605
Mervyn's............... 207 154 133 210 303
Department Store Divi-
sion ................. 49 31 37 1,155 106
Corporate and Other.... 82 39 19 1 2
------- ------- ------- ------- -------
Total.............. $ 839 $ 681 $ 603 $ 1,740 $ 1,016
======= ======= ======= ======= =======
</TABLE>
- --------
*The year ended February 3, 1990 consisted of 53 weeks; all other years shown
above consisted of 52 weeks.
The Department Store Division includes the acquisition of Marshall Field and
its results of operation from June 24, 1990, the effective date of the
acquisition.
Other includes Lechmere through September 30, 1989, the effective date of
its sale.
Operating profit is LIFO earnings from operations before corporate expense,
interest and income taxes.
4
<PAGE>
TARGET
Target is an upscale discount chain which provides quality merchandise at
attractive prices in clean, spacious and customer-friendly stores. Target
operated 506 stores in 32 states at January 30, 1993.
MERVYN'S
Mervyn's is a moderate-priced softlines department store chain specializing
in apparel and home soft goods. Mervyn's stores provide customers with value,
fashion and convenience. Mervyn's operated 265 stores in 15 states at
January 30, 1993.
DEPARTMENT STORE DIVISION
The Department Store Division emphasizes fashion leadership, quality
merchandise and superior customer service. At January 30, 1993, the Department
Store Division operated 63 Dayton's, Hudson's and Marshall Field's stores in
nine states.
CORPORATE CITIZENSHIP
The policy of the Company is to strive to improve the communities in which it
operates through contributions and investments for socially responsible
purposes. The combined amount of these contributions and investments by the
Company, its operating divisions and the Dayton Hudson Foundation, a charitable
foundation of which certain directors and officers of the Company are the
Trustees, is approximately 5% of federally taxable income of the Company. The
principal portion of these funds is directed toward the development of programs
in the areas of social action and the arts.
DESCRIPTION OF DEBT SECURITIES
The following descriptions of the terms of the Debt Securities set forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement or
Prospectus Supplements relating to such Offered Debt Securities.
The Offered Debt Securities are to be issued under an Indenture dated as of
February 1, 1986, as amended and supplemented from time to time (collectively,
the "Indenture"), between the Company and First Trust National Association, as
Trustee (the "Trustee"). A copy of the Indenture is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Debt Securities and the Indenture do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all the provisions of
the Indenture, including the definition therein of certain terms. Section
numbers below refer to provisions of the Indenture.
GENERAL
The Debt Securities will be unsecured obligations of the Company.
The Indenture does not limit the amount of Debt Securities that may be issued
thereunder and provides that Debt Securities may be issued thereunder from time
to time in one or more series. (Section 301)
Reference is made to the Prospectus Supplement or Prospectus Supplements
relating to the particular series of Offered Debt Securities offered thereby
for the following terms of the Offered Debt Securities: (i) the title of the
Offered Debt Securities; (ii) any limit on the aggregate principal amount of
the Offered Debt Securities; (iii) the price (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Debt Securities will
be issued; (iv) the date or dates on which the Offered Debt Securities will
mature; (v) the rate or rates (which may be fixed or variable) per annum at
which the Offered Debt Securities will bear interest, if any; (vi) the date
from which such interest, if any, on the Offered Debt Securities will accrue,
the Interest Payment Dates on which such interest, if any, will be payable, the
date on which payment of such interest, if any, will commence and the Regular
Record Dates for such Interest Payment Dates, if any;
5
<PAGE>
(vii) the dates, if any, on which and the price or prices at which the Offered
Debt Securities will, pursuant to any mandatory sinking fund provisions, or
may, pursuant to any optional sinking fund provisions, be redeemed by the
Company, and the other detailed terms and provisions of such sinking fund;
(viii) the date, if any, after which and the price or prices at which the
Offered Debt Securities may, pursuant to any optional redemption provisions, be
redeemed at the option of the Company or of the Holder thereof and the other
detailed terms and provisions of such optional redemption; (ix) the currency or
currencies of denomination and payment; (x) if the currency or currencies of
payment are at the Company's or Holder's election, the manner in which such
election may be made; (xi) the application of defeasance provisions to the
Offered Debt Securities; (xii) any additional restrictive covenants included
for the benefit of Holders of the Offered Debt Securities; (xiii) any
additional Events of Default provided with respect to the Offered Debt
Securities; and (xiv) whether the Offered Debt Securities will be issued in
whole or in part in the form of one or more Global Securities and, if so, the
Depositary for such Global Securities. (Section 301)
Principal, premium, if any, and interest, if any, will be payable, and the
Debt Securities will be transferable, at the Place of Payment designated for
such Debt Securities, provided that payment of interest may, at the option of
the Company, be made by check mailed to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 305, 1002)
Unless otherwise indicated in the Prospectus Supplement or Prospectus
Supplements relating thereto, the Debt Securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiple thereof. (Section 302) No service charge will be made for any
registration of transfer or exchange of the Offered Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the Prospectus Supplement or Prospectus Supplements relating
thereto. "Original Issue Discount Security" means any security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof, upon the occurrence of
an Event of Default and the continuation thereof. (Section 101)
Unless otherwise indicated in the Prospectus Supplement relating to the
Offered Debt Securities, the covenants contained in the Indenture and the
Offered Debt Securities would not necessarily afford Holders of the Offered
Debt Securities protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect Holders.
RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The various restrictive provisions of the Indenture applicable to the Company
and its Restricted Subsidiaries do not apply to Unrestricted Subsidiaries. The
assets and indebtedness of Unrestricted Subsidiaries are not consolidated with
those of the Company and its Restricted Subsidiaries in calculating
Consolidated Net Tangible Assets under the Indenture and investments by the
Company or by its Restricted Subsidiaries in Unrestricted Subsidiaries are
excluded in computing Consolidated Net Tangible Assets. "Unrestricted
Subsidiaries" are those Subsidiaries defined as such by the Indenture, i.e.,
Dayton Credit Company and other finance Subsidiaries acquired or formed
subsequent to the date of the Indenture, Eighth Street Development Company,
those Subsidiaries which are designated as Unrestricted Subsidiaries by the
Board of Directors from time to time pursuant to the Indenture (in each case,
unless and until designated as Restricted Subsidiaries by the Board of
Directors pursuant to the Indenture) and any Subsidiary a majority of the
voting stock of which is owned by Unrestricted Subsidiaries. "Restricted
Subsidiaries" are all Subsidiaries other than Unrestricted Subsidiaries. A
"Wholly-owned Restricted Subsidiary" is a Restricted Subsidiary all of the
outstanding Funded Debt and capital stock of which (except directors'
qualifying shares) is owned by the Company and its other Wholly-owned
Restricted Subsidiaries. (Section 101)
An Unrestricted Subsidiary may not be designated a Restricted Subsidiary
unless the Company would be permitted immediately thereafter to incur
additional Secured Funded Debt and Attributable Debt under the terms of the
Indenture. (Section 1009(a))
6
<PAGE>
RESTRICTIONS ON SECURED FUNDED DEBT
The Company may not, and may not permit any Restricted Subsidiary to, issue,
assume, guarantee, incur or create any Secured Funded Debt without first making
effective provision whereby the Debt Securities shall be secured equally and
ratably with (or prior to) such Secured Funded Debt, unless immediately
thereafter the sum of the aggregate amount of all outstanding Secured Funded
Debt of the Company and its Restricted Subsidiaries together with all
Attributable Debt of the Company and its Restricted Subsidiaries in respect of
sale and leaseback transactions does not exceed 5% of Consolidated Net Tangible
Assets. The foregoing restriction does not prevent (i) Secured Funded Debt of a
Restricted Subsidiary owing to the Company or a Wholly-owned Restricted
Subsidiary, (ii) Secured Funded Debt resulting from the Mortgage of property of
the Company or any Restricted Subsidiary in favor of the United States or any
State or any instrumentality thereof to secure partial, progress, advance or
other payments, (iii) Secured Funded Debt secured by a Mortgage on property of,
or on any shares of stock or Indebtedness of, any corporation existing at the
time such corporation becomes a Subsidiary, (iv) Secured Funded Debt secured by
a Mortgage on property, shares of stock or Indebtedness existing at or incurred
within 120 days of the time of acquisition thereof (including acquisition
through merger or consolidation), purchase money Mortgages and construction
Mortgages, (v) Secured Funded Debt secured by a Mortgage incurred or assumed in
connection with an issuance of revenue bonds the interest on which is exempt
from federal income tax pursuant to Section 103(a) and related Sections of the
Internal Revenue Code of 1986, as amended, or (vi) any extension, renewal or
refunding, in whole or in part, of any Secured Funded Debt permitted under the
restrictions described in the first sentence of this paragraph or of any
Secured Funded Debt of any Restricted Subsidiary outstanding at February 2,
1985 or of any corporation outstanding at the time such corporation became a
Restricted Subsidiary. (Section 1007)
"Secured Funded Debt" means Funded Debt which is secured by a Mortgage upon
any assets of the Company or a Restricted Subsidiary. (Section 101)
"Funded Debt" means Indebtedness maturing more than 12 months after the time
of computation thereof, guarantees of Funded Debt or of dividends of others
(except guarantees in connection with the sale or discount of accounts
receivable, trade acceptances and other paper arising in the ordinary course of
business) and Funded Debt secured by a Mortgage on property of the Company or
any Restricted Subsidiary, whether or not assumed, and in the case of any
Subsidiary all Preferred Stock of such Subsidiary. Funded Debt does not include
any amount in respect of obligations under leases (or guarantees thereof),
whether or not such obligations would be included as liabilities on a
consolidated balance sheet of the Company and its Restricted Subsidiaries.
(Section 101)
"Attributable Debt" means (i) the balance sheet liability amount of capital
leases (capital lease obligations and current portion thereof) determined under
generally accepted accounting principles, plus (ii) the amount of future
minimum lease payments under operating leases required to be disclosed by
generally accepted accounting principles, less any amounts required to be paid
on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, discounted at the average interest rate per annum
used to calculate the present value of operating lease payments for the most
recent year in the Company's most recent Annual Report to Shareholders.
(Section 101)
"Consolidated Net Tangible Assets" means the total amount of assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries (less
applicable reserves and other properly deductible items and after excluding any
investments made in Unrestricted Subsidiaries or in corporations while they
were Unrestricted Subsidiaries but which are not Subsidiaries at the time of
computation) after deducting (i) all liabilities and liability items, including
amounts in respect of obligations under leases (or guarantees thereof) which
under generally accepted accounting principles would be included on such
balance sheet, except Funded Debt, capital stock and surplus, surplus reserves
and provisions for deferred income taxes and (ii) goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles. (Section 101)
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
Neither the Company nor any Restricted Subsidiary may enter into any sale and
leaseback transaction involving any Operating Property which has been or is to
be sold or transferred more than 120 days after the
7
<PAGE>
acquisition thereof or the completion of construction and commencement of full
operations thereof, unless (a) the Company or such Restricted Subsidiary could
create Secured Funded Debt on such property pursuant to Section 1007 (see
"Restrictions on Secured Funded Debt" above) in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the Debt Securities or (b) the Company, within 120
days, applies to the retirement of its Secured Funded Debt an amount equal to
the greater of (i) the net proceeds of the sale of an Operating Property leased
pursuant to such arrangement or (ii) the fair value of the Operating Property
so leased (subject to credits for certain voluntary retirements of Funded
Debt). This restriction will not apply to any sale and leaseback transaction
(a) between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries, or (b) involving the taking back of a lease for a period of three
years or less. (Section 1008) "Operating Property" is defined as any retail
store, warehouse or other property related to the general retail business of
the Company or any Subsidiary, parking facilities, and any equipment located at
or comprising a part of any such property having a net book value in excess of
.35% of Consolidated Net Tangible Assets (which has been owned and operated by
the Company or any Restricted Subsidiary for more than 90 days). (Section 101)
RESTRICTIONS ON MERGER AND SALE OF ASSETS
The Company may consolidate with or merge into any other corporation, or
transfer substantially all its properties and assets to any Person, and any
other Person may consolidate with or merge into the Company, or transfer
substantially all its properties and assets to the Company, provided that (i)
the Person (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such
property and assets shall assume payment of the principal of, premium, if any,
and interest on the Debt Securities and the performance and observance of the
covenants of the Indenture, and (ii) except in the case of a merger or
consolidation of the Company and a Restricted Subsidiary, either (a) the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of each series shall have consented thereto or (b) immediately
thereafter under the terms of the Indenture the successor corporation would be
permitted to become liable for an additional amount of Secured Funded Debt.
(Section 801) Notwithstanding the provisions summarized in this paragraph, the
Company may, without complying with such provisions, sell all of its property
and assets to another corporation if, immediately after giving effect to such
sale, such corporation is a Wholly-owned Restricted Subsidiary of the Company
and the Company would be permitted to become liable for an additional amount of
Secured Funded Debt. (Section 803)
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture may be made by the
Company and the Trustee only with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the stated maturity date of the principal
of, or any instalment of principal of or interest on, any such Debt Security;
(ii) reduce the principal amount of, or the interest (or premium, if any) on,
any such Debt Security (including in the case of an Original Issue Discount
Security the amount payable upon acceleration of the Maturity thereof); (iii)
change the Place of Payment where, or the coin or currency in which, any
principal or interest (or premium, if any) on any such Debt Security is
payable; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (v) reduce the above-
stated percentage of Outstanding Debt Securities of any series the consent of
the Holders of which is necessary to modify or amend the Indenture; or (vi)
modify the foregoing requirements or reduce the percentage of aggregate
principal amount of Outstanding Debt Securities of any series necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults. (Section 902)
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1012) The Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of (or
premium, if any) or interest on any Debt
8
<PAGE>
Security of that series or in respect of a provision which under the Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of that series affected. (Section 513)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 30 days in
any payment of interest on such series; (ii) default in any payment of
principal of (or premium, if any, on) such series when due; (iii) default in
the payment of any sinking fund instalment with respect to such series when
due; (iv) default for 60 days after appropriate notice in performance of any
other covenant or warranty in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of series of Debt Securities
other than that series); (v) default under any evidence of Indebtedness for
money borrowed (including a default with respect to Debt Securities other than
that series) or under any Mortgage, indenture or instrument under which any
such Indebtedness is issued or secured (including the Indenture), which results
in acceleration of the maturity of such Indebtedness, if such acceleration is
not annulled (or if such Indebtedness is not discharged) within 10 days after
written notice as provided in the Indenture; (vi) certain events in bankruptcy,
insolvency or reorganization; or (vii) any other Event of Default provided with
respect to Debt Securities of that series. In case an Event of Default shall
occur and be continuing with respect to any series of Debt Securities, the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debt Securities of that series may declare the principal of
such series (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms of that series) to be due and payable. Any Event of Default with respect
to a particular series of Debt Securities may be waived by the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
such series, except in each case a failure to pay principal of (or premium, if
any) or interest on such Debt Security or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security of that series affected. (Sections 501, 502,
513)
Reference is made to the Prospectus Supplement or Prospectus Supplements
relating to each series of Offered Debt Securities which are Original Issue
Discount Securities for the particular provisions relating to acceleration of
the Maturity of a portion of the principal amount of such Original Issue
Discount Securities upon the occurrence of an Event of Default and the
continuation thereof.
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture. (Section 1011) The Indenture provides that the Trustee may
withhold notice to the Holders of the Debt Securities of any default (except in
payment of principal (or premium, if any) or interest or any sinking fund
instalment) if it considers it in the interest of the Holders of the Debt
Securities to do so. (Section 602)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to
such provisions for indemnification and certain other rights of the Trustee,
the Indenture provides that the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series affected shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of such series. (Sections 512,
603)
No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Debt Securities of that series
and unless also the Holders of at least 25% in aggregate principal amount of
the Outstanding Debt Securities of that series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as trustee, and the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) However, the Holder of
any Debt
9
<PAGE>
Security will have an absolute right to receive payment of the principal of
(and premium, if any) and interest on such Debt Security on or after the due
dates expressed in such Debt Security and to institute suit for the enforcement
of any such payment. (Section 508)
DEFEASANCE
Defeasance and Discharge. If the terms of a series of Debt Securities so
provide and the Company deposits or causes to be deposited with the Trustee as
trust funds in trust for the purpose money and/or Government Obligations, as
hereinafter defined, which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay and discharge (i) the principal of (and premium, if any) and
each instalment of principal (and premium, if any) and interest on the
Outstanding Debt Securities of such series on the Stated Maturity of such
principal or instalment of principal or interest (or on the Redemption Date of
the Outstanding Debt Securities of such series if the Company has elected to
redeem such Outstanding Debt Securities in accordance with Section 1102 of the
Indenture), and (ii) any mandatory (or, if applicable, optional) sinking fund
payments applicable to the Outstanding Debt Securities of such series on the
day on which such payments are due and payable, then the Indenture will cease
to be of further effect with respect to such series (except for certain
obligations to compensate, reimburse and indemnify the Trustee, to register the
transfer or exchange of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold monies for payment in
trust), and the Company will be deemed to have satisfied and discharged the
Indenture with respect to such series. (Section 403) In the event of any such
defeasance, holders of Debt Securities of such series would be able to look
only to such trust fund for payment of principal (and premium, if any) and
interest, if any, on their Debt Securities. The term "Government Obligations"
as used herein shall mean securities of the government which issued the
currency in which the Debt Securities of such series are denominated and/or in
which interest is payable or of government agencies backed by the full faith
and credit of such government. (Section 101)
Under current federal income tax law, such defeasance will be treated as a
taxable exchange of the related Debt Securities for an interest in the trust.
As a consequence, each holder of such Debt Securities will recognize gain or
loss equal to the difference between the holder's cost or other tax basis for
the Debt Securities and the value of the holder's interest in the trust, and
thereafter will be required to include in income a share of the income, gain
and loss of the trust, including gain or loss recognized in connection with any
substitution of collateral, as described below. Prospective investors are urged
to consult their own tax advisors as to the specific consequences of such a
defeasance.
Defeasance of Certain Covenants and Certain Events of Default. If the terms
of the Debt Securities of any series so provide, the Company may omit to comply
with certain restrictive covenants in Sections 801, 803 and 804 (Consolidation,
Merger, Conveyance, Transfer or Lease), and Sections 1005 (Maintenance of
Properties), 1006 (Payment of Taxes and Other Claims), 1007 (Restriction on the
Creation of Secured Funded Debt), 1008 (Restriction on Sale and Lease-Back
Transactions) and 1009 (Restriction on Permitting Unrestricted Subsidiaries to
become Restricted Subsidiaries), and Sections 501(4), 501(5), 501(6), 501(7)
and 501(8) (if Section 501(8) is specified in the Prospectus Supplement or
Prospectus Supplements relating to such Debt Securities), as described in
clauses (iv) through (vii) under "Events of Default" above, shall not be deemed
to be Events of Default under the Indenture with respect to such series, upon
the deposit with the Trustee, in trust, of money and/or Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
and discharge (i) the principal of (and premium, if any) and each instalment of
principal (and premium, if any) and interest on the Outstanding Debt Securities
of such series on the Stated Maturity of such principal or instalment of
principal or interest (or on the Redemption Date of the Outstanding Debt
Securities of such series if the Company has elected to redeem such Outstanding
Debt Securities in accordance with Section 1102 of the Indenture) and (ii) any
mandatory (or, if applicable, optional) sinking fund payments applicable to the
Outstanding Debt Securities of such series on the day on which such payments
are due and payable. The obligations of the Company under the Indenture and the
Debt Securities other than with respect to the covenants referred to above and
the Events of Default other than the Events of Default referred to above shall
remain in full force and effect. (Section 1010)
10
<PAGE>
In the event the Company exercises its option to omit compliance with certain
covenants of the Indenture with respect to the Debt Securities of any series as
described above and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default other than Events of
Default described in clauses (iv) through (vii) under "Events of Default"
above, the amount of money and/or Government Obligations on deposit with the
Trustee will be sufficient to pay amounts due on the Debt Securities of such
series on their Stated Maturity or Redemption Date, but may not be sufficient
to pay amounts due on such Debt Securities at the time of the acceleration
resulting from such Event of Default. However, the Company shall remain liable
for such payments. (Section 1010)
Substitution of Collateral. If the terms of a series of Debt Securities so
provide, the Company will be permitted at any time to withdraw any money or
Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that the Company in substitution therefor simultaneously
deposits money and/or Government Obligations which would then be sufficient to
satisfy the Company's payment obligations in respect of the Securities in the
manner contemplated by such defeasance provisions.
REGARDING THE TRUSTEE
The Trustee acts as trustee under (i) the Indenture relating to the Company's
10 3/4% Sinking Fund Debentures due 2013, and (ii) the Indenture relating to
the Company's 9 1/4% Debentures due 2006, 7 7/8% Notes due 1996, 8 3/8% Notes
due 1996, 9 1/2% Sinking Fund Debentures due 2016, 9 1/4% Sinking Fund
Debentures due 2016, 9 7/8% Sinking Fund Debentures due 2017, Medium-Term
Notes, Series A, 9 5/8% Debentures due 2008, 9.11% Notes due 1995, Medium-Term
Notes, Series B, 9 5/8% Notes due 1993, 9 3/4% Notes due 1998, Medium-Term
Notes, Series C, Medium-Term Notes, Series D, Medium-Term Notes, Series E, 9
3/4% Notes due 2002, 9 7/8% Debentures due 2020, Medium-Term Notes, Series F,
10% Notes due 2000, 10% Notes due 2011, 9.40% Notes due 2001, Medium-Term
Notes, Series G, 9.70% Debentures due 2021, 9.25% Debentures due 2011, 9%
Debentures due 2021, 8.60% Debentures due 2012, Medium-Term Notes, Series H, 8
7/8% Debentures due 2022, 8.80% Debentures due 2022, 7.25% Notes due 2004,
8.50% Debentures due 2022 and 6 5/8% Notes due 2003.
Kenneth A. Macke, Chairman of the Board, Chairman of the Executive Committee
of the Board and Chief Executive Officer of the Company, and Roger L. Hale, a
director of the Company, are directors of First Bank System, Inc., which owns
substantially all of the capital stock of the Trustee.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities. Warrants
may be issued independently or together with any Debt Securities offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities. The Warrants are to be issued under Warrant Agreements to be
entered into between the Company and a bank or trust company, as Warrant Agent,
all as set forth in the Prospectus Supplement relating to the particular issue
of Warrants. The Warrant Agent will act solely as an agent of the Company in
connection with the Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant Certificates
or beneficial owners of Warrants. Copies of the forms of Warrant Agreement,
including the form of Warrant Certificate representing the Warrants, are filed
as an exhibit to the Registration Statement. The following summaries of certain
provisions of the forms of Warrant Agreement and Warrant Certificate do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Warrant Agreement and the Warrant
Certificate.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the terms of
the Warrants, including the following: (i) the offering price; (ii) the
currency for which Warrants may be purchased; (iii) the designation, aggregate
principal amount, currency of denomination and payment and terms of the Debt
Securities purchasable upon exercise of the Warrants; (iv) if applicable, the
designation and terms of the Debt Securities with which the Warrants are issued
and the number of Warrants issued with each such Debt Security; (v) if
applicable, the date on and after which the Warrants and the related Debt
Securities will be
11
<PAGE>
separately transferable; (vi) the principal amount of Debt Securities
purchasable upon exercise of one Warrant and the price at and the currency in
which such principal amount of Debt Securities may be purchased upon such
exercise; (vii) the date on which the right to exercise the Warrants shall
commence and the date (the "Expiration Date") on which such right shall expire;
(viii) federal income tax consequences; and (ix) any other terms of the
Warrants.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations, may be presented for registration of transfer, and may
be exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the Prospectus Supplement. Prior to the exercise of their
Warrants, holders of Warrants will not have any of the rights of holders of the
Debt Securities purchasable upon such exercise, including the right to receive
payments of principal of (premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise or to enforce covenants in the
Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities at such exercise price as shall in each case be set forth in,
or calculable from, the Prospectus Supplement relating to the Warrants.
Warrants may be exercised at any time up to 5:00 P.M. New York time on the
Expiration Date set forth in the Prospectus Supplement relating to such
Warrants. After the close of business on the Expiration Date (or such later
date to which such Expiration Date may be extended by the Company), unexercised
Warrants will become void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities purchasable upon such exercise together with certain
information set forth on the reverse side of the Warrant Certificate. Warrants
will be deemed to have been exercised upon receipt of the exercise price,
subject to the receipt within five business days of the Warrant Certificate
evidencing such Warrants. Upon receipt of such payment and the Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the
Debt Securities purchasable upon such exercise. If fewer than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
General. The Company may sell Debt Securities and/or Warrants to or through
underwriters to be designated from time to time, and also may sell Debt
Securities and/or Warrants directly to other purchasers or through agents or
broker-dealers, including broker-dealers acting as principals. Debt Securities
may be offered alone or with Warrants (which may or may not be detachable from
such Debt Securities), and Warrants may be offered alone, all as set forth in
the Prospectus Supplement or Prospectus Supplements relating thereto. If any
Warrants are issued, Debt Securities will be issuable upon exercise of such
Warrants.
The distribution of the Debt Securities and/or Warrants may be effected from
time to time in one or more transactions at a fixed price or prices, which may
be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Debt Securities and/or Warrants are a new issue of securities with no
established trading market. It has not presently been established whether the
underwriter(s), if any, of the Debt Securities and/or Warrants will make a
market in such securities. If a market in the Debt Securities and/or Warrants
is made by such underwriter(s), such market making may be discontinued at any
time without notice. No assurance can be given as to the liquidity of the
trading market for the Debt Securities and/or Warrants.
In connection with the sale of Debt Securities and/or Warrants, underwriters
may receive compensation from the Company or from purchasers of Debt Securities
and/or Warrants for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate
in the distribution of Debt Securities and/or Warrants may be deemed to be
underwriters, and any discounts or commissions received by them and any profit
on the resale of Debt Securities and/or Warrants by them may
12
<PAGE>
be deemed to be underwriting discounts and commissions, under the Act. Any such
underwriter or agent will be identified, and any such compensation will be
described, in the Prospectus Supplement or Prospectus Supplements relating to
such securities.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities
and/or Warrants may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Act.
Delayed Delivery Arrangements. If so indicated in the Prospectus Supplement
or Prospectus Supplements relating to such securities, the Company will
authorize dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities and/or Warrants from
the Company pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases
such institutions must be approved by the Company. The obligations of any
purchaser under any such contract will not be subject to any conditions except
that the purchase of the Offered Debt Securities (as defined above) and/or
Warrants shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The dealers and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
EXPERTS
The consolidated financial statements and related schedules of Dayton Hudson
Corporation and subsidiaries included or incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended February 1, 1992 have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included or incorporated therein by reference and incorporated
herein by reference. Such financial statements are, and audited financial
statements to be included in subsequently filed documents will be, incorporated
herein in reliance upon the reports of Ernst & Young pertaining to such
financial statements (to the extent covered by consents filed with the
Commission) given upon the authority of such firm as experts in accounting and
auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three-month periods ended May 2, 1992 and May 4, 1991, the
six-month periods ended August 1, 1992 and August 3, 1991 and the nine-month
periods ended October 31, 1992 and November 2, 1991, incorporated by reference
in this Prospectus, Ernst & Young have reported that they have applied limited
procedures in accordance with professional standards for a review of such
information. However, their separate reports, included in Dayton Hudson
Corporation's Quarterly Reports on Form 10-Q for the quarters ended May 2,
1992, August 1, 1992 and October 31, 1992, and incorporated herein by
reference, state that they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree of reliance on
their reports on such information should be restricted in light of the limited
nature of the review procedures applied. The independent auditors are not
subject to the liability provisions of Section 11 of the Act for their reports
on the unaudited interim financial information because the reports are not a
"report" or a "part" of the Registration Statement prepared or certified by the
auditors within the meaning of Sections 7 and 11 of the Act.
13
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTA-
TIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPEC-
TUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE NOTES DESCRIBED
IN THIS PROSPECTUS SUPPLEMENT, OR AN OFFER TO SELL OR A SOLICITATION OF AN OF-
FER TO BUY SUCH NOTES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIV-
ERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUN-
DER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF DAYTON HUDSON CORPORATION SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSE-
QUENT TO ITS DATE.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Ratios of Earnings to Fixed Charges........................................ S-2
Description of Notes....................................................... S-2
Underwriting............................................................... S-4
Validity of Notes.......................................................... S-4
BASIC PROSPECTUS
Incorporation of Certain Documents by Reference............................ 2
Additional Information..................................................... 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Business................................................................... 4
Description of Debt Securities............................................. 5
Description of Warrants.................................................... 11
Plan of Distribution....................................................... 12
Experts.................................................................... 13
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$150,000,000
DAYTON HUDSON
CORPORATION
7 1/2% NOTES DUE 1999
-----------------
LOGO
-----------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
