<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Dayton Hudson Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO] DAYTON HUDSON CORPORATION
777 Nicollet Mall
Minneapolis, Minnesota 55402
612/370-6948
April 18, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Dayton Hudson Corporation to be held in Minneapolis at The Children's Theatre on
Wednesday, May 22, 1996, beginning at 9:30 a.m. I encourage you to attend.
Whether or not you plan to attend the meeting, I urge you to vote your proxy.
On behalf of your Board of Directors and employees, thank you for your
continued support of Dayton Hudson.
Sincerely,
/s/ Bob J. Ulrich
Robert J. Ulrich
Chairman of the Board
<PAGE>
[LOGO] DAYTON HUDSON CORPORATION
777 Nicollet Mall
Minneapolis, Minnesota 55402
Telephone: (612) 370-6948
Notice of Annual Meeting
of Shareholders
May 22, 1996
To Our Shareholders:
The Annual Meeting of Shareholders of Dayton Hudson Corporation will be
held at The Children's Theatre, Minneapolis Institute of Arts, 2400 3rd Avenue
South, Minneapolis, Minnesota, on Wednesday, May 22, 1996, at 9:30 a.m., Central
Daylight Time, for the following purposes:
(1) To elect four directors for three-year terms.
(2) To approve the appointment of Ernst & Young LLP as independent
auditors.
(3) To act upon any other business that may properly come before the
meeting, including a shareholder proposal.
Holders of record of Common Stock and Series B ESOP Convertible Preferred Stock
at the close of business on March 29, 1996 will be entitled to vote at the
meeting and any adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY IN THE
REPLY ENVELOPE PROVIDED AS SOON AS POSSIBLE. YOUR COOPERATION IN SIGNING AND
RETURNING YOUR PROXY PROMPTLY WILL HELP AVOID FURTHER SOLICITATION EXPENSE TO
YOUR CORPORATION.
/s/ James T. Hale
JAMES T. HALE
Secretary
Approximate Date of Mailing of Proxy Material:
April 19, 1996
<PAGE>
DAYTON HUDSON CORPORATION
777 NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55402
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1996
The Board of Directors of Dayton Hudson Corporation (the "Corporation")
solicits the enclosed proxy for the Annual Meeting of Shareholders to be held at
The Children's Theatre, Minneapolis Institute of Arts, 2400 3rd Avenue South,
Minneapolis, Minnesota, on Wednesday, May 22, 1996, at 9:30 a.m., Central
Daylight Time, and for any adjournment thereof. Shares represented by proxies in
the form solicited will be voted. Proxies may be revoked at any time before
being exercised by filing with the Secretary of the Corporation a proxy dated at
a later time or a written revocation dated after the date of the proxy.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted for the election of four nominees to serve as Class II
directors for three-year terms expiring in 1999 and until their successors are
elected. The four nominees are Livio D. DeSimone, Roger A. Enrico, William W.
George and James A. Johnson.
The Corporation's Restated Articles of Incorporation, as amended, provide
that the business and affairs of the Corporation shall be managed by or under
the direction of a Board of Directors consisting of not less than five nor more
than twenty-one persons. Directors are divided into three classes. Directors of
one class are elected each year for a term of three years. The Board of
Directors currently consists of thirteen members, five of whom are Class I
directors whose terms expire at the 1998 Annual Meeting, four of whom are Class
III directors whose terms expire at the 1997 Annual Meeting, and four of whom
are Class II directors whose terms expire at this Annual Meeting.
The Board of Directors has no reason to believe that any of the nominees is
not available or will not serve if elected. If for any reason any nominee
becomes unavailable for election, the Board of Directors may designate
substitute nominees, in which event the shares represented by the proxy cards
returned to the Corporation will be voted for such substitute nominees, unless
an instruction to the contrary is indicated on the proxy card.
All of the nominees are now directors. All of the present directors were
elected to the Board of Directors by the shareholders, except for Mr. Trujillo,
Mr. Johnson and Mr. Sanger who were elected by the Board of Directors. The Board
of Directors held seven meetings during the last fiscal year.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock and Series B ESOP Convertible Preferred Stock of the Corporation
present and entitled to vote on the election of directors is required for
election to the Board of Directors of each of the four director nominees. For
this purpose, a shareholder who abstains with respect to the election of
directors is considered to be present and entitled to vote on the election of
directors at the meeting, and is in effect casting a negative vote, but a
shareholder (including a broker) who does not give authority to a proxy to vote,
or withholds authority to vote, on the election of directors shall not be
considered present and entitled to vote on the election of directors.
1
<PAGE>
Following is information regarding the nominees and directors, including
information furnished by them as to their principal occupations and the number
of shares of Common Stock of the Corporation beneficially owned by them as of
April 1, 1996. See page 22 for stock ownership table.
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION AGE SINCE
---- ------------------------------------------ --- --------
<S> <C> <C> <C>
[PHOTO]
RAND V. ARASKOG Rand V. Araskog is Chairman of the Board and Chief Executive 64 1982
Class I Officer of ITT Corporation, a diversified multinational
Term expires in 1998 company. He served in the Office of the Secretary of Defense
from 1954 to 1960. From 1960 to 1966, he worked in the
defense, space and aeronautical fields with Honeywell Inc. He
joined ITT in 1966 and advanced through various management
positions. He was elected Senior Executive Vice President and
Chief Operating Officer in 1978. He was elected President and
Chief Executive Officer in 1979 and Chairman in 1980. He is a
director of Alcatel Alstham, Dow Jones & Company, Inc., ITT
Corporation, ITT Educational Services, ITT Hartford, ITT
Industries, Rayonier, Inc. and Shell Oil Corporation.
(1)(3)(5)
[PHOTO]
LIVIO D. DESIMONE Livio D. DeSimone is Chairman and Chief Executive Officer of 3M, 59 1987
Class II a diversified manufacturer. He joined 3M in 1957 and held various
Nominee for term international and domestic positions. He was elected Area Vice
expiring in 1999 President, Latin America in 1975, Vice President in 1979 and Executive
Vice President in 1981. He was elected Chairman and Chief Executive
Officer in 1991. He is a director of Cargill, Incorporated, General
Mills, Inc., 3M and Vulcan Materials Corporation. (1)(2)(5)(6)
[PHOTO]
ROGER A. ENRICO Roger A. Enrico is Chief Executive Officer of PepsiCo, Inc., a 51 1990
Class II domestic and international beverage and food business. He joined
Nominee for term PepsiCo in 1971 and advanced through various management positions
expiring in 1999 including Vice President of Marketing at Frito-Lay, Area Vice
President/South Latin America for Pepsi-Cola International and President
of Frito-Lay/Japan for PepsiCo Foods International. He
was President and Chief Executive Officer of Pepsi-Cola
USA from 1983 to 1986 when he became President and Chief
Executive Officer of Pepsi-Cola Company. He was President
and Chief Executive Officer of PepsiCo Worldwide
Beverages from 1986 to 1990. He was Chairman and Chief
Executive Officer of Frito-Lay from 1990 to 1992. In
1992, he was elected Chairman and Chief Executive Officer
of PepsiCo Worldwide Foods. In 1993, he was elected Vice
Chairman of PepsiCo, Inc. and in 1994 Chairman and Chief
Executive Officer of PepsiCo Worldwide Restaurants. In
1996, he was elected Chief Executive Officer of PepsiCo.,
Inc. He is a director of A.H. Belo Corp., PepsiCo, Inc.
and The Prudential Insurance Company of America.
(1)(3)(5)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION AGE SINCE
---- ------------------------------------------ --- --------
<S> <C> <C> <C>
[PHOTO]
WILLIAM W. GEORGE William W. George is President and Chief Executive Officer of 53 1993
Class II Medtronic, Inc., a therapeutic medical device company. He served
Nominee for term in the United States Department of Defense from 1966 to 1968
expiring in 1999 and worked in the United States Department of the Navy from
1968 to 1969. From 1969 to 1978, he worked for Litton Industries,
Inc., serving as president of Litton Microwave Cooking
Products from 1973 to 1978. He was elected to various
officer positions at Honeywell, Inc. from 1978 to 1989,
including President, Europe from 1980 to 1983, President,
Industrial Automation & Controls from 1987 to 1988 and
President, Space & Aviation Controls from 1988 to 1989.
He was elected President and Chief Operating Officer of
Medtronic in 1989 and was elected President and Chief
Executive Officer in 1991. He is a director of Medtronic,
Inc., Toro Company and Valspar Corporation.
(1)(2)(4)
[PHOTO]
ROGER L. HALE Roger L. Hale is President and Chief Executive Officer of Tennant 61 1982
Class I Company, an industrial equipment manufacturer. He is also Vice Chairman
Term expires in 1998 of the Executive Committee of the Board of Directors of the Corporation.
He joined Tennant in 1961. He was appointed Assistant to the President
in 1963 and was elected Vice President and Director, Systems and
Corporate development in 1968. In 1972, he was elected Vice President,
International and in 1975, he was elected President and Chief Operating
Officer. He was elected Chief Executive Officer in 1976. He is a
director of First Bank System, Inc. and Tennant Company. (1)(3)(5)(6)
[PHOTO]
BETTY RUTH Betty Ruth Hollander is Chairman of the Board and Chief Executive 66 1986
HOLLANDER Officer of Omega Technologies, Inc., a manufacturer of scientific
Class III measurement and control devices and systems, technical publishing
Term expires in 1997 and industrial and commercial real estate development. She founded
Omega Engineering, Inc. and was elected President in 1962. She was
elected Chairman and Chief Executive Officer of The Omega Group,
Inc. in 1978. She is a director of the People's Bank and the People's
Bank Trustees. (1)(3)(4)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION AGE SINCE
---- ------------------------------------------ --- --------
<S> <C> <C> <C>
[PHOTO]
MICHELE J. HOOPER Michele J. Hooper is Corporate Vice President, International 44 1990
Class I Businesses, Caremark International, Inc., a health care company.
Term expires in 1998 She joined Baxter Healthcare Corporation in 1976 and served in various
management positions before being named Vice President, Corporate
Planning for Baxter International in 1984. In 1988, she was elected
President of Baxter Healthcare Corporation, Canada. From 1991 to
1992 she was President, Alternate Site International, a unit of
Baxter Corporation. In 1992, she became President, International
Business Group, Caremark International, Inc. and in 1993, she became
Corporate Vice President, International Businesses, Caremark
International, Inc. She is a director of PPG Industries, Inc. (1)(2)(5)
[PHOTO]
JAMES A. JOHNSON James A. Johnson is Chairman of the Board and Chief Executive Officer 52 1996
Class II of the Federal National Mortgage Association (Fannie Mae), a
Nominee for term Congressionally chartered financial services company. From 1977
expiring in 1999 to 1981 he was Executive Assistant to Vice President Walter F. Mondale.
From 1981 to 1985 he was President of Public Strategies, a strategic
consulting firm, and from 1985 to 1989 he was a managing director
of Lehman Bros. In 1990, he was elected Vice Chairman of Fannie
Mae. In 1991, he was elected Chairman and Chief Executive Officer
of Fannie Mae. He is a director of Fannie Mae, Kaufman and Broad
Home Corp. and United HealthCare Corporation. (1)(4)(5)
[PHOTO]
MARY PATTERSON Mary Patterson McPherson is President of Bryn Mawr College. She 60 1988
MCPHERSON joined Bryn Mawr College as an Assistant, Fellow and Lecturer in
Class III 1961. She became Assistant Dean in 1964, Associate Dean in 1969
Term expires in 1997 and Dean, Undergraduate College in 1970. She became an Associate
Professor in 1970. She was Acting President from 1976 to 1977 and
became President in 1978. (1)(2)(4)(6)
[PHOTO]
STEPHEN W. Stephen W. Sanger is Chairman of the Board and Chief Executive Officer 49 1996
SANGER of General Mills, Inc., a consumer food products company. He joined
Class I General Mills in 1974 and held a series of positions in marketing
Term expires in 1998 and management across the company's consumer food businesses. He
served as President of the Big G Division, President of Yoplait
USA and General Manager of the New Business Development Division.
In 1991, he was elected Executive Vice President. In 1992, he was
elected Vice Chairman. In 1993, he was elected President. In 1995,
he was elected Chairman of the Board and Chief Executive Officer.
He is a director of Donaldson Company, Inc. and General Mills, Inc.
(1)(3)(5)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION AGE SINCE
---- ------------------------------------------ --- --------
<S> <C> <C> <C>
[PHOTO]
SOLOMON D. Solomon D. Trujillo is President and Chief Executive Officer of 44 1994
TRUJILLO U S West Communications, a business of U S West that provides
Class III telecommunication services to customers in 14 Western and
Term expires in 1997 Midwestern states. He joined Mountain Bell in 1974 and held
various management positions before being named Vice President and Chief
Executive Officer of Mountain Bell New Mexico in 1984. He
served as Vice President and General Manager of the Small
Business Services Market Unit of U S West from 1987 until he
was elected President and Chief Executive Officer of U S West
Marketing Resources Group in 1992. He was elected President
and Chief Executive Officer of U S West Communications
in 1995. (1)(3)(4)
[PHOTO]
ROBERT J. ULRICH Robert J. Ulrich is Chairman and Chief Executive Officer of the 52 1993
Class III Corporation and Chairman and Chief Executive Officer of Target,
Term expires in 1997 a division of the Corporation. Mr. Ulrich began his retailing career
as a merchandising trainee at Dayton's in 1967 and advanced through
various management positions. In 1981, Mr. Ulrich was named Executive
Vice President of Dayton's and later that year was named President
and Chief Executive Officer of Diamond's, a former operating company
of the Corporation. In 1984, Mr. Ulrich was named President of the
Department Store Division. Later that year he was named President
of Target. He became Chairman and Chief Executive Officer of Target
in 1987. He was elected Chief Executive Officer and Chairman of
the Corporation in 1994. (1)
[PHOTO]
JOHN R. WALTER John R. Walter is Chairman and Chief Executive Officer of R.R. 49 1991
Class I Donnelley & Sons Company, a provider of printing and printing related
Term expires in 1998 services. He joined R.R. Donnelley in 1969. He was elected Executive Vice
President - Operations in 1986. He was elected President in 1987
and was elected Chairman and Chief Executive Officer in 1989. He
is a director of Abbott Laboratories, Deere & Company and R.R. Donnelley
& Sons Company. (1)(2)(4)(6)
</TABLE>
- ------------------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Member of the Corporate Responsibility Committee.
(5) Member of the Finance Committee.
(6) Member of the Nominating Committee.
EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors is elected by the directors.
The Executive Committee consists of the Chairman of the Board of the Corporation
and all the independent directors. The members of the Executive Committee are
identified above. During the last fiscal year, the Executive Committee held
three meetings. The Executive Committee reviews the
5
<PAGE>
Compensation Committee's recommendations on performance and compensation of all
senior corporate officers and certain other senior executives within the
Corporation. As part of their responsibilities, the independent director members
of the Executive Committee conduct the annual evaluation of the Chief Executive
Officer of the Corporation. The Executive Committee also reviews the
compensation policies and practices of the Corporation and it monitors the
Corporation's managerial capabilities and requirements.
NOMINATING COMMITTEE
The Board of Directors has a Nominating Committee, consisting of the
independent directors identified above. The Nominating Committee held three
meetings during the last fiscal year. The Nominating Committee considers the
qualifications of and recommends each candidate and incumbent for election as a
director of the Corporation and nominates candidates to fill Board vacancies.
The Board of Directors created the Nominating Committee so that the selection of
directors would be made solely by independent directors.
The Nominating Committee will consider nomination by a shareholder of a
candidate for election as a director of the Corporation. Any shareholder who
wishes the Nominating Committee to consider a candidate should submit a written
request and related information to the Secretary of the Corporation on behalf of
the Nominating Committee no later than December 31 of the calendar year
preceding the next Annual Meeting of Shareholders (currently held in May). Under
the Corporation's Restated Articles of Incorporation, as amended, if a
shareholder plans to nominate a person as a director at a meeting, the
shareholder is required to place a proposed director's name in nomination by
written request received by the Secretary of the Corporation at least 60 days
prior to an annual or special meeting, together with the written consent of such
person to serve as a director.
COMPENSATION COMMITTEE
The Board of Directors has a Compensation Committee, consisting of the
independent directors identified above. The Compensation Committee held four
meetings during the last fiscal year. The Compensation Committee reviews
management proposals regarding compensation programs, plans and guidelines,
focusing on a "pay-for-performance" compensation philosophy. The Compensation
Committee reviews the performance of all senior corporate officers and certain
other senior executives within the Corporation and recommends their compensation
based on their performance. The Compensation Committee also determines awards
and payouts under the Corporation's long-term incentive plan and makes certain
determinations regarding short-term incentive compensation.
AUDIT COMMITTEE
The Board of Directors has an Audit Committee, consisting of the
independent directors identified above. The Audit Committee held three meetings
during the last fiscal year. In designating the members of the Audit Committee,
the Board specifically evaluates their independence of judgment according to
guidelines published by the New York Stock Exchange. The Audit Committee, among
other duties, reviews the overall audit scope, plans for internal and
independent audits, the Corporation's internal controls, emerging accounting
issues, officer and director expenses, audit fees and retirement plans. The
Audit Committee meets individually with the internal auditors and independent
auditors, without management present, to discuss the results of their audits.
The Audit Committee encourages the internal and independent auditors to
communicate closely with the Audit Committee.
FINANCE COMMITTEE
The Board of Directors has a Finance Committee, consisting of the
independent directors identified above. The Finance Committee met two times
during the last fiscal year. The duties of the Finance Committee include
reviewing the financial policies, performance objectives and financing
requirements of the Corporation.
6
<PAGE>
CORPORATE RESPONSIBILITY COMMITTEE
The Board of Directors has a Corporate Responsibility Committee,
consisting of the independent directors identified above. The Corporate
Responsibility Committee held two meetings during the last fiscal year. The
duties of the Corporate Responsibility Committee include review and evaluation
of the public affairs and community development programs of the Corporation. The
Corporate Responsibility Committee also reviews and evaluates the community
giving programs of the Corporation, its operating companies and the Dayton
Hudson Foundation and annually recommends the charitable gift of the Corporation
to the Foundation.
The Securities and Exchange Commission ("SEC") proxy rules require
disclosure of those directors who attended fewer than 75% of the aggregate of
the total number of meetings of the Board and Board Committees on which the
director served during the last fiscal year. Roger A. Enrico attended 73% of
such meetings.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------
ANNUAL
COMPENSATION AWARDS PAYOUTS
--------------------------- ---------------------------- -------
RESTRICTED SECURITIES LTIP ALL OTHER
BONUS STOCK UNDERLYING PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) ($)(1)(2) AWARDS ($)(3) OPTIONS (#) ($)(4) ($)(5)(6)
- --------------------------- ---- ------------- --------- ------------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Ulrich 1995 1,009,125 423,365 251,918 165,066 0 199,278(7)
Chairman and Chief Executive 1994 981,525 754,510 247,124 39,671 0 178,590
Officer; Chairman and Chief 1993 842,796 206,357 247,664 12,821 158,852 143,198
Executive Officer of Target
Stephen E. Watson 1995 851,637 0 249,606 14,337 0 172,357(8)(9)
President; Chairman and 1994 808,594 261,782 160,638 8,596 0 173,218
Chief Executive Officer of 1993 770,509 0 222,866 11,539 158,852 134,481
The Department
Store Division
Kenneth B. Woodrow 1995 568,929 137,284 124,838 7,169 0 91,069(10)
President of Target 1994 498,375 350,972 43,280 12,605 0 79,035
Paul W. Sauser 1995 535,833 150,000 74,917 4,302 0 113,612(11)(12)
President and 1994 513,750 150,000 37,076 1,984 0 108,143
Chief Operating Officer
of Mervyn's
Gregg W. Steinhafel 1995 476,426 92,793 93,646 5,377 0 62,999(13)
Executive Vice President 1994 395,080 332,685 30,947 6,798 0 50,418
Merchandising of Target
</TABLE>
- ------------------
(1) Significant amounts of both salary and bonus for the five named executive
officers were not actually received. Receipt of such amounts was deferred
through the Corporation's Deferred Compensation Plan. Under this plan,
participants elect to defer a minimum per year of $5,000 of their
compensation and a maximum per year of 25% of base salary and 100% of
incentive bonuses up to an aggregate total of $250,000, plus any previously
deferred amount automatically paid out in the eighth year following each
separate deferral. Payout from the plan cannot be made until retirement,
death or termination and the payout is automatic in the eighth year
following each separate deferral. Amounts deferred are subject to the same
bankruptcy rules as are the Corporation's general debt obligations.
Deferred amounts accrue interest on an annual basis, a portion of which is
categorized as reportable by the SEC proxy rules. Further information
regarding reportable interest is provided in the footnotes below. Mr.
Sauser, Mr. Woodrow and Mr. Steinhafel became executive officers of the
Corporation in fiscal 1994.
7
<PAGE>
(2) Executive officers of the Corporation and certain other members of
management of the Corporation and its operating companies were eligible for
an incentive bonus under the Corporation's Executive Incentive Plan ("EIP")
during fiscal 1993. The amount, if any, of the incentive bonus was based on
(i) the Corporation's or the relevant operating company's financial results
and (ii) the individual executive's performance.
For fiscal 1994, executive officers of the Corporation and certain other
members of management of the Corporation and its operating companies were
eligible for incentive bonuses under the Personal Score Plan, the PTOC Plan
and the ROI Plan. In addition, Mr. Ulrich, Mr. Watson, Mr. Woodrow and Mr.
Steinhafel received bonuses for fiscal 1994 performance in September, 1995.
Such adjustment was paid after final 1994 financial results for applicable
benchmark companies were available.
For fiscal 1995, executive officers of the Corporation and certain other
members of management of the Corporation and its operating companies were
eligible for incentive bonuses under the Personal Score Plan and the
Executive Incentive Plan (PTOC & EVA). Information regarding these plans is
found in the Report of the Compensation Committee.
(3) Amounts reflected in the Restricted Stock Awards column reflect rights to
receive restricted stock of the Corporation based on the closing price of
the Corporation's Common Stock on the date of grant. The restrictions on
this right to receive restricted stock require the executive to remain an
employee of the Corporation for four years. Upon expiration of the 4-year
period, the shares are then issued and put into escrow and are generally
restricted until retirement. The holders of rights to receive restricted
stock do not hold voting or dividend rights until after the shares are
issued. Further information regarding restricted stock is included in the
Report of the Compensation Committee. The number and value of restricted
stock rights holdings at the end of the 1995 fiscal year (based on the
closing price at the end of the fiscal year) are as follows:
NUMBER VALUE
------ -----
Robert J. Ulrich............... 10,279 $769,640
Stephen E. Watson.............. 8,619 645,348
Kenneth B. Woodrow............. 3,174 237,653
Paul W. Sauser................. 3,995 299,126
Gregg W. Steinhafel............ 2,280 170,715
(4) Amounts reflect earnouts of performance shares under the Dayton Hudson
Corporation Executive Long Term Incentive Plan of 1981, as amended ("1981
Option Plan"). Based on competitive performance, none of the performance
shares granted in 1991 and to be paid in 1995 were earned. The Report of
the Compensation Committee includes a description of the 1981 Option Plan.
(5) The Corporation has an Excess Long-Term Disability Program for certain key
executives, including those executive officers individually listed above.
The program is designed in conjunction with the employee-paid broad-based
group disability plan (non-taxable benefit of $78,000 maximum per
individual per year). Taxable excess disability benefits are paid according
to a schedule based on compensation with the objective to replace total
after-tax income of approximately 80% at a compensation level of $50,000
per year decreasing to approximately 40% at a compensation level of
$2,000,000 per year. In order to receive excess benefits, the executive
must be participating under the group disability plan. The actual cost to
the Corporation would be the taxable disability payments. No claims for
benefits have ever been filed under the Excess Long-Term Disability
Program. No compensation is assumed for this program since the incremental
cost to the Corporation of this benefit cannot be determined actuarily.
8
<PAGE>
(6) The amounts reported below include the following:
- Matching contributions to the Dayton Hudson Corporation Supplemental
Retirement, Savings, and Employee Stock Ownership Plan ("SRSP") which
all participating employees receive.
- Amounts credited to the Deferred Compensation Plan for matching
contributions that could not be made to the SRSP because of
limitations imposed by the Internal Revenue Code.
- Amounts categorized by the SEC as reportable interest on compensation
deferred in current and previous years.
(7) Includes
$ 6,000 SRSP matching contribution
$ 69,428 deferred compensation credit for matching contributions which
could not be made to SRSP
$123,850 reportable interest on deferred compensation
(8) Includes
$ 6,119 SRSP matching contribution
$ 36,043 deferred compensation credit for matching contributions which
could not be made to SRSP
$130,195 reportable interest on deferred compensation
(9) Mr. Watson announced his retirement as President and a director of the
Corporation effective March 1, 1996. As part of Mr. Watson's retirement
arrangement, the Corporation has agreed to make certain cash payments to
him aggregating a present value of approximately $1,800,000, and, as
permitted by the relevant benefit plans, to extend certain option exercise
and performance share award periods and to prorate certain restricted stock
awards. Pursuant to currently vested interests, Mr. Watson will also
receive additional payments pursuant to the terms of the Corporation's
Deferred Compensation Plan, Pension Plans and related excess benefit plans,
and the SRSP, referred to elsewhere in this Proxy Statement.
(10) Includes
$ 6,197 SRSP matching contribution
$ 31,715 deferred compensation credit for matching contributions which
could not be made to SRSP
$ 53,157 reportable interest on deferred compensation
(11) Includes
$ 5,958 SRSP matching contribution
$ 23,859 deferred compensation credit for matching contributions which
could not be made to SRSP
$ 45,045 reportable interest on deferred compensation
$ 38,750 market value of interest on loan -- See footnote (12)
(12) The Corporation loaned Mr. Sauser $500,000, secured by a second deed of
trust on the home he purchased in California. Mr. Sauser transferred to
California at the Corporation's request. The 15-year note bears no
interest. No principal payments have been made on the note.
(13) Includes
$ 6,062 SRSP matching contribution
$ 21,416 deferred compensation credit for matching contributions which
could not be made to SRSP
$ 35,521 reportable interest on deferred compensation
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (11)
---------------------------------------------------- ---------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED OR BASE
GRANTED TO EMPLOYEES PRICE EXPIRATION
NAME (#)(1) IN FISCAL YEAR ($/SH) DATE 0% ($) 5% ($) 10% ($)
- ---- ---------- -------------- -------- ---------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Ulrich 3,767(2) 34% 66.375 4/12/05 0 628,899 1,593,752
3,766(3) 66.375 4/12/05
3,767(4) 66.375 4/12/05
3,766(5) 66.375 4/12/05
150,000(6) 72.3125 10/11/05 6,821,535 17,287,125
Stephen E. Watson 3,584(7) 3% 69.75 3/08/05 0 628,898 1,593,751
3,585(8) 69.75 3/08/05
3,584(9) 69.75 3/08/05
3,584(10) 69.75 3/08/05
Kenneth B. Woodrow 1,792(7) 1% 69.75 3/08/05 0 314,471 796,931
1,793(8) 69.75 3/08/05
1,792(9) 69.75 3/08/05
1,792(10) 69.75 3/08/05
Paul W. Sauser 1,076(7) 1% 69.75 3/08/05 0 188,709 478,225
1,075(8) 69.75 3/08/05
1,076(9) 69.75 3/08/05
1,075(10) 69.75 3/08/05
Gregg W. Steinhafel 1,344(7) 1% 69.75 3/08/05 0 235,864 597,726
1,345(8) 69.75 3/08/05
1,344(9) 69.75 3/08/05
1,344(10) 69.75 3/08/05
- --------------------
</TABLE>
(1) Under the 1981 Option Plan each option was granted at the market value of
the underlying Common Stock on the date of grant and has a 10-year term.
The options, (except one option granted to Mr. Ulrich, which is exercisable
in 5 years), are exercisable 25% after the first year, with an additional
25% after each of the next 3 years. The Report of the Compensation
Committee includes additional information regarding the 1981 Option Plan.
(2) Exercisable April 12, 1996.
(3) Exercisable April 12, 1997.
(4) Exercisable April 12, 1998.
(5) Exercisable April 12, 1999.
(6) Exercisable October 11, 2000.
(7) Exercisable March 8, 1996.
(8) Exercisable March 8, 1997.
(9) Exercisable March 8, 1998.
(10) Exercisable March 8, 1999.
(11) SEC rules require the information set forth in the 5% and 10% columns. The
actual gains, if any, on stock option exercises depend on the future stock
price of the Corporation's Common Stock. Since there is no means of
accurately predicting the future price of the Corporation's Common Stock,
no determination can be made as to the value of a stock option at the time
of the grant.
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
EXERCISE REALIZED ------------------------------ -------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Ulrich 0 0 50,455 167,156 582,131 617,047
Stephen E. Watson 7,512 273,718 93,663 16,427 2,133,751 112,144
Kenneth B. Woodrow 1,753 62,450 17,009 7,691 499,610 47,968
Paul W. Sauser 0 0 7,599 8,522 90,969 66,765
Gregg W. Steinhafel 0 0 9,008 5,795 134,522 36,388
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR
NUMBER OF OTHER PERIOD ESTIMATED FUTURE PAYOUTS
SHARES, UNITS UNTIL UNDER NON-STOCK PRICE-BASED PLANS
OR OTHER MATURATION ---------------------------------------------
NAME RIGHTS (#)(1) OR PAYOUT THRESHOLD (#) TARGET (2) MAXIMUM (#)(3)
- ---- ------------- -------------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Robert J. Ulrich 11,300 4 fiscal years 4,520 -- 11,300
Stephen E. Watson 10,753 4 fiscal years 4,302 -- 10,753
Kenneth B. Woodrow 5,377 4 fiscal years 2,151 -- 5,377
Paul W. Sauser 3,226 4 fiscal years 1,291 -- 3,226
Gregg W. Steinhafel 4,033 4 fiscal years 1,614 -- 4,033
</TABLE>
- ----------------
(1) The Executive Long-Term Incentive Plan provides for the potential of
earning awards of Corporation Common Stock during a performance cycle of
four fiscal years. As performance shares are earned at the end of each
performance period of four fiscal years, the Common Stock earned is issued
and put into escrow and is generally restricted until retirement. Further
information regarding performance shares is included in the Report of the
Compensation Committee.
(2) There is no "Target" level of performance as that term is defined by the
SEC for purposes of amounts payable pursuant to performance shares.
(3) Maximum performance shares to be issued if competitive performance targets
are reached.
INCOME CONTINUANCE POLICY
No officer of the Corporation is a party to an employment contract with the
Corporation. As an alternative to the use of such contracts, the Corporation has
adopted an Income Continuance Policy and a Senior Management Group ("SMG")
Income Continuance Policy for certain officers of the Corporation.
Mr. Ulrich, together with others, are participants under the Income
Continuance Policy. In 1988, the Income Continuance Policy was amended to
exclude additional participants under the Policy. Mr. Woodrow, Mr. Sauser and
Mr. Steinhafel were not participants under the Policy at the time it was
amended. In the event a participant's employment is terminated by management,
the participant's compensation (salary and bonus) continues for a period of 18
to 24 months, depending on his or her length of service. If the participant's
service with the Corporation is less than three years, the continuation is for
18 months; over eight years, the continuation is for 24 months; and between
three and eight years, an amount determined by a schedule (more than 18 months
but less than 24 months).
11
<PAGE>
Participants under the SMG Income Continuance Policy are members of the
Corporation's Senior Management Group who are not participants under the Income
Continuance Policy. The policy is similar to the Income Continuance Policy,
except its time parameters are based on the participant's salary grade.
Compensation may extend from 12 months to 24 months, based on a schedule which
provides longer income continuation to those participants with higher grade
levels. Mr. Woodrow, Mr. Sauser and Mr. Steinhafel participate in the SMG Income
Continuance Policy.
All executive officers who are members of the Corporation's Senior
Management Group are covered by one of these policies. Both policies include
offset provisions for certain other compensation from the Corporation and non-
disparagement and non-competition requirements. Both policies provide that the
policies cannot be terminated or future benefits be reduced under them unless
two years prior notice has been given to the persons eligible under the terms of
the respective policies. Both policies also provide that any executive who
terminates employment or is terminated within two years of a Change in Control
(as defined in the 1981 Option Plan) will be paid the present value of payments
immediately after termination.
AMOUNTS PAID UPON TERMINATION
When an executive terminates his or her employment with the Corporation,
the executive will receive payments from his or her deferred compensation
plan(s), the SRSP and pension plans. The executive may also be entitled to
exercise options and, in certain circumstances, receive performance shares and
restricted stock under the 1981 Option Plan. Further information regarding
performance shares and restricted stock is provided in the Report of the
Compensation Committee.
PENSION
All executive officers and other employees of the Corporation and its
subsidiaries who have worked over 1,000 hours in a year and are at least 21
years of age are initially covered by the Corporation's Pension Plans. The
following table shows the annual benefits that will be made under the
Corporation's Pension Plans at age 65, on a life only basis, given the years of
service and compensation set forth below:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
COMPENSATION OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 200,000 35,925 47,900 59,875 62,375 64,875
400,000 74,925 99,900 124,875 129,875 134,875
600,000 113,925 151,900 189,875 197,375 204,875
800,000 152,925 203,900 254,875 264,875 274,875
1,000,000 191,925 255,900 319,875 332,375 344,875
1,200,000 230,925 307,900 384,875 399,875 414,875
1,400,000 269,925 359,900 449,875 467,375 484,875
1,600,000 308,925 411,900 514,875 534,875 554,875
1,800,000 347,925 463,900 579,875 602,375 624,875
2,000,000 386,925 515,900 644,875 669,875 694,875
2,200,000 425,925 567,900 709,875 737,375 764,875
</TABLE>
Currently under ERISA, as amended, the maximum annual amount that can be
paid under the Qualified Pension Plans to any individual is $120,000, unless
grandfathered under prior limits. Amounts in excess of that maximum are paid
under separate plans. In addition, the Corporation has supplemental plans that
use the same formula the Qualified Pension Plans use to pay benefits on
compensation that is excluded from the Qualified Pension Plans formula by ERISA.
The years of present credited service for benefit purposes of the Corporation's
executive officers named in the Summary Compensation Table are as follows: Mr.
Ulrich, 28 years; Mr. Watson, 22 years; Mr. Woodrow, 26 years; Mr. Sauser, 27
years; and Mr. Steinhafel, 16 years. Average Compensation is the average cash
remuneration, including deferred compensation, for the highest five calendar
years of credited service in the last ten years. The compensation reflected in
12
<PAGE>
the Summary Compensation Table is cash compensation, including deferred
compensation, for the fiscal year. If the employment of a participant is
terminated prior to age 55, his or her pension will be less than the amount
shown in the table, even if commencement of benefit payments is deferred until
age 65. The amounts set forth in the table are not subject to any deductions for
Social Security benefits or other offset amounts. All executive officers, who
are members of the Senior Management Group, participate in a program whereby
such person's survivor will receive the equivalent of a joint and 100% surviving
spouse option with no reduction from the life only pension amount, payable to
the officer for as long as he or she lives. Normally the life only amount would
be reduced by approximately 20% for this option. The percentage reduction
depends on age differentials. The Corporation also has a supplemental plan that
treats certain of its Senior Management Group as being five years older, but not
older than 65, for purposes of the actuarial reduction of pension benefits at
early retirement. All excess and supplemental plans pay the lump sum present
value of their respective benefits in the year following retirement. The pension
table reflects amounts payable under all pension plans, whether qualified or
non-qualified.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Corporation has a pay-for-performance compensation philosophy for its
management employees, including its executive officers. The total compensation
plan for executive officers of the Corporation includes base salary, the
opportunity for an annual incentive bonus, long-term incentive compensation and
benefits.
It is the responsibility of the Compensation Committee to develop and
administer the total compensation plan for executive officers of the
Corporation. In addition, the Compensation Committee reviews compensation levels
of executive officers who are members of the Corporate Operating Committee (the
"COC Officers") and evaluates the performance of top management, including the
five highest paid executive officers. Individual written performance appraisals
are given annually to each executive officer, including the Chief Executive
Officer ("CEO").
Reflecting the pay-for-performance philosophy of the Corporation, the
compensation policies established by the Compensation Committee provide that a
portion of the annual compensation of each executive officer is contingent upon
the financial performance of the Corporation or relevant operating company, as
well as the individual performance of the executive officer.
PERFORMANCE EVALUATIONS
The Compensation Committee, together with all other outside directors,
established the performance criteria it planned to use to evaluate Mr. Ulrich's
fiscal 1995 performance as Chairman of the Board and CEO. The Compensation
Committee together with all other independent directors prepared an annual
written performance evaluation of Mr. Ulrich's fiscal 1995 performance and
determined Mr. Ulrich's performance score. In addition to evaluating Mr. Ulrich
in his role as CEO, the independent directors also specifically evaluated his
performance as Chairman of the Board. Factors used by the independent directors
to evaluate Mr. Ulrich's performance as CEO included management succession
planning, strategic planning, organizational development and formulation of
major corporate policies. In his role as Chairman of the Board, Mr. Ulrich was
evaluated on factors such as chairing effective meetings of the Board of
Directors and the Executive Committee, keeping the Board fully informed of the
condition of the Corporation, developing sound corporate governance policies and
working with the directors to effectively use their talents to the best
strategic advantage of the Corporation.
The written evaluation was reviewed with Mr. Ulrich and constituted 50% of
the weighting for his annual incentive bonus compensation. The remaining 50% of
Mr. Ulrich's incentive compensation was based on the Corporation's financial
performance as further described under Short-Term Incentive Compensation. In
addition, Mr. Ulrich's performance was discussed with him in a meeting with all
of the independent directors. The Compensation Committee also adopts a "Bonus
Matrix" which assigns varying bonus percentages based on the participant's job
grade and
13
<PAGE>
Personal Score. The bonus amount for each participant under the Personal Score
Plan is calculated by taking the participant's bonus percentage from the Bonus
Matrix, multiplying it by his or her Midpoint of Salary Range (the midpoint of
the salary range of a participant's job grade level) and then multiplying that
result by the participant's percentage of participation in the Personal Score
Plan. For example, if the participant is participating in the Personal Score
Plan at 50%, the result is multiplied by 1/2 . Mr. Ulrich's bonus percentage is
applied against his base salary.
All other executive officers of the Corporation received performance
appraisals based on prescribed objectives (such as succession planning and
strategy execution), key job responsibilities and financial performance. The
fiscal 1995 written performance appraisal scores and incentive bonuses of the
executive officers were approved by the Compensation Committee.
BASE SALARY
In April 1994, the Compensation Committee approved Mr. Ulrich's base
salary. When the Compensation Committee considered Mr. Ulrich's base salary, it
reviewed two established annual third-party retail compensation surveys covering
approximately 90 retailers throughout the United States (the "Competitive
Surveys"). Many, but not all, of the companies included in the performance graph
are included in the Competitive Surveys. The Compensation Committee also
received information on base salaries and other compensation from a review of
proxy statements of competitive retailers (the "Proxy Survey"). The Compensation
Committee set Mr. Ulrich's base salary at approximately the median of the base
salaries for CEOs of these retailers, adjusted for the size of the companies. In
April 1995, the Compensation Committee did not adjust Mr. Ulrich's base salary.
This was in accordance with its salary plan adopted in April, 1994.
Base salaries of the other executive officers of the Corporation are based
on competitive practices, and are at approximately the median of base salary
plus annual incentive bonus when compared with domestic, non-food retailers,
adjusted for the size of the companies. The Competitive Surveys are used to
determine base salaries. Executive officers receive a higher base salary than
the industry average because the threshold for payout of short-term incentive
compensation by the Corporation is set at a higher level than it is for a
majority of competitive retailers. Increases in base salary result from
promotional increases reflecting job scope changes and from merit increases
determined by the executive's performance score, the executive's position in the
salary range and company performance. Merit increase guidelines are established
each year based on the performance of the relevant operating company or the
Corporation and current economic and marketplace conditions. Once overall
guidelines are established and an individual performance score is assigned, the
actual percentage increase is affected by the executive's position in the salary
range for his or her grade, that is, the lower the placement in the range the
greater the percentage increase.
SHORT-TERM INCENTIVE COMPENSATION
Under the Corporation's Executive Incentive Plans, executive officers of
the Corporation and certain other members of the senior management of the
Corporation and its operating companies were eligible for annual incentive
bonuses for fiscal 1995.
In addition to the Personal Score Plan, for fiscal 1995, the Corporation
had one financial performance based incentive plan (EIP -- Executive Incentive
Plan) that consisted of two parts, PTOC (pre-tax operating contribution) and
EVA(R) (Economic Value Added(R)).
PTOC. PTOC measures an operating company's and/or the Corporation's
performance against annually pre-determined PTOC goals to determine how and
whether bonuses will be paid. The outside directors set PTOC goals in
conjunction with establishing other financial performance goals for the
operating companies and the Corporation. The Compensation Committee then uses
________________________
(R)Economic Value Added and EVA are registered trademarks.
14
<PAGE>
the PTOC goals to establish the PTOC bonus range for use in conjunction with the
PTOC part of EIP and determines what level of bonuses will be paid if PTOC
performance falls within the PTOC performance goals.
PTOC is FIFO (first-in, first-out) gross margin dollars less operating
expenses and other expenses plus other income. It excludes LIFO (last-in, first-
out) provision, interest and corporate expenses.
The PTOC Score for the fiscal year is determined from a schedule, approved
by the Compensation Committee, that designates a score for each varying level of
PTOC performance achieved by an operating company and/or the Corporation. The
Compensation Committee also adopts a "Bonus Matrix" which assigns varying bonus
percentages based on the participant's job grade and PTOC Score. Bonuses are
then determined under a non-pooled or pooled calculation at the discretion of
the Compensation Committee.
The bonus amount for each participant whose operating company uses a non-
pooled basis is calculated by taking the participant's bonus percentage from the
Bonus Matrix, multiplying it by his or her Midpoint of Salary Range (the
midpoint of the salary range of a participant's job grade level), except Mr.
Ulrich whose base salary is used, and then multiplying that result by the
participant's percentage of participation in the PTOC part of EIP. For example,
if the participant is participating in the PTOC part of EIP at 25%, the result
is multiplied by 1/4.
The bonus amount for each participant whose operating company uses a pooled
basis is calculated in the same manner as for the non-pooled bonuses, however
all related bonuses are added together to form a bonus pool. The bonus payable
to each participant under the PTOC part of EIP is based on a ratio of his or her
bonus to all bonuses paid under the Personal Score Plan. The percentage
determined by that ratio will be multiplied by the bonus pool. Target is the
only operating company that uses a pooled basis.
In order to receive a bonus under the PTOC part of EIP a participant's
score under the Personal Score Plan must equal or exceed a minimum score set by
the Compensation Committee.
EVA. The EVA part of EIP measures an operating company's and/or the
Corporation's performance against annually pre-determined EVA goals to determine
how and whether bonuses will be paid. The outside directors set EVA goals in
conjunction with establishing other financial performance goals for the
operating companies and the Corporation. The Compensation Committee then uses
the EVA goals to establish the EVA bonus range for use in conjunction with the
EVA part of the EIP and determines what level of bonuses will be paid if EVA
performance falls within the performance goals.
EVA is PTOC after taxes less a Capital Charge. A "Capital Charge" is the
cost of capital invested in the business operation, adjusted for the maturity of
the assets employed by that business operation.
The EVA Score for the fiscal year is determined from a schedule, approved
by the Compensation Committee, that designates a score for each varying level of
EVA performance achieved by an operating company and/or the Corporation. The
Compensation Committee also adopts a "Bonus Matrix" which assigns varying bonus
percentages based on the participant's job grade and EVA Score. Bonuses are then
determined under a non-pooled or pooled calculation at the discretion of the
Compensation Committee.
The bonus amount for each participant whose operating company uses non-
pooled basis is calculated by taking the participant's bonus percentage from the
Bonus Matrix, multiplying it by his or her Midpoint of Salary Range (the
midpoint of the salary range of a participant's job grade level), except Mr.
Ulrich whose base salary is used, and then multiplying that result by the
participant's percentage of participation in the EVA part of EIP. For example,
if the participant is participating in the EVA part of EIP at 25%, the result is
multiplied by 1/4.
The bonus amount for each participant whose operating company uses a pooled
basis is calculated in the same manner as for the non-pooled bonuses, however
all related bonuses are
15
<PAGE>
added together to form a bonus pool. The bonus payable to each participant under
the EVA part of EIP is based on a ratio of his or her bonus to all bonuses paid
under the Personal Score Plan. The percentage determined by that ratio will be
multiplied by the bonus pool. Target is the only operating company that uses a
pooled basis.
In order to receive a bonus under the EVA part of EIP a participant's score
under the Personal Score Plan must equal or exceed a minimum score set by the
Compensation Committee.
The maximum bonus payable under the EIP (PTOC and EVA combined) is equal to
250% of the salary of the CEO or named executive officer, as the case may be,
set forth in the previous year's Proxy Statement. If the CEO or named executive
officer held a different office or was not employed in his or her position for
the full year covered by that Proxy Statement, the maximum bonus is 250% of the
highest salary reported in such year. Provided, however, in either case the
aggregate of all bonuses paid to the CEO or named executive officer under any
combination of the EIP and Personal Score Plan may not exceed 250% of the
relevant salary. The aggregate of all bonuses paid to any other executive not
listed above under any combination of the EIP and Personal Score Plan may not
exceed 250% of his or her base salary.
Mr. Ulrich's bonus for fiscal 1995 was based on 50% Personal Score Plan,
25% EIP-PTOC Corporation and 25% EIP-EVA-Corporation. Mr. Watson's, Mr.
Woodrow's, Mr. Sauser's and Mr. Steinhafel's bonuses were based on 33 1/3 %
Personal Score Plan, 33 1/3 % EIP-PTOC and 33 1/3 % EIP-EVA. For fiscal 1995
minimum performance goals were not achieved and no bonuses were paid based on
EIP-PTOC or EIP-EVA. Bonuses were paid on the basis of the Personal Score Plan
as follows: Mr. Ulrich $423,365, Mr. Woodrow $137,284 and Mr. Steinhafel
$92,793. Mr. Sauser's bonus was $150,000, a guaranteed minimum bonus. Mr. Watson
did not receive a bonus for fiscal 1995.
LONG-TERM INCENTIVE COMPENSATION
The Compensation Committee determines the amount of options, performance
shares and restricted stock to issue annually by using guidelines based on
studies of outside expert compensation consultants. The Compensation Committee
reviews the Competitive Surveys and Proxy Survey and sets its grants at
approximately the median of competitive companies of similar size. The
Compensation Committee, using the Competitive Surveys and Proxy Survey,
determines the grant size for the CEO and other executive officers. The
Compensation Committee then creates several long-term incentive pools: one for
each operating company and the corporate staff. The size of the pool varies with
the Corporation's or relevant operating company's performance, that is, the
better the performance, the larger the pool. However, the precise size of each
pool is based on the subjective judgment of the Compensation Committee. The
Compensation Committee determined in 1995 that for certain corporate executives,
including all Executive Officers, the amount of the pool granted to them would
be divided as follows: options, 50%; performance shares, 37.5%; and restricted
stock, 12.5%. Individual awards from the pool are based on the individual's
responsibilities, performance, future potential and previous grants.
For fiscal 1995, the Compensation Committee determined that the non-stock
option portion of the long-term incentive plan generally requires participants
to continue as employees of the Corporation until retirement in order to
ultimately receive the performance shares and restricted stock granted under the
plan. In addition, one year's notice of retirement is generally required to
allow for orderly management succession. This action was intended to tie the
executive's compensation to shareholder value by giving these executives an
incentive to remain with the Corporation until retirement.
PERFORMANCE SHARES
All of the COC Officers participate in the performance share component of
the Executive Long Term Incentive Plan of 1981. The primary purpose of
performance shares is to offer incentive to participating officers to achieve
long-term performance of the Corporation or the individual operating company.
The plan provides for the potential of earning awards of Corporation Common
Stock during a cycle of four fiscal years based upon the Corporation's
performance, measured by
16
<PAGE>
defined criteria, as compared to the performance of certain benchmark companies
during that period. The benchmark companies used were the same companies used
for the short-term incentive plan in the years that the grants were made. The
financial performance score for each of the four years was averaged. As with
short-term incentive compensation, a threshold level of performance is required
before any payout occurs. A matrix is used to determine the actual payout
amount. No performance share payout was made in 1995 based on the Corporation's
financial performance during the performance cycle of four fiscal years
beginning in 1991.
Beginning with the 1993 performance share grant potentially payable in
1997, additional restrictions have been added to grants of performance shares.
As performance share grants are earned at the end of each performance period of
four fiscal years, the Common Stock earned is issued and put into escrow and
restricted until retirement. Any participant who terminates employment prior to
early retirement (age 55 and five years of service) and fails to meet certain
requirements forfeits all the Common Stock held in escrow. If the executive
terminates employment after age 55, and provides the Corporation with one year's
notice of retirement, 100% of the Common Stock is released to the executive. In
such cases, if the executive fails to give one year's notice, the shares are
forfeited unless the Plan Committee approves the release of all or part of the
shares. If the executive is terminated, qualifies for early retirement under the
Corporation's pension plans and receives payments under the Corporation's Income
Continuance Policies ("ICP"), 100% of the Common Stock is paid to the executive.
If the executive terminates other than for early retirement and receives an ICP
(but is not part of a reduction in force), 50% of the Common Stock is released
to the executive. If the executive does not receive an ICP the executive
forfeits all the shares. If at any time the executive's termination is a result
of death, total and permanent disability, reduction in force or Change of
Control, 100% of the Common Stock is released to the executive. Recipients hold
voting and dividend rights for all shares held in escrow during the restriction
period; however, they may not sell or assign the shares.
RESTRICTED STOCK
Beginning in 1993, certain executives of the Corporation, including all COC
Officers, received rights to receive restricted Common Stock of the Corporation.
The restrictions on this right to receive restricted stock require the executive
to remain an employee of the Corporation for an additional four years. Upon
expiration of the four-year period, the shares are then issued and put into
escrow and restricted until retirement. Release from escrow is under the same
terms as described above for performance shares. After the shares are issued and
put into escrow, holders of restricted stock hold voting and dividend rights
during the restriction period; however, they may not sell or assign the shares.
STOCK OPTIONS
During 1995, the Compensation Committee also considered and made stock
option grants to each of the executive officers of the Corporation, based on the
individual's responsibilities, performance, future potential and previous
grants. Each option was granted at the market value of the underlying Common
Stock on the date of grant and has a 10-year term. Except for the option grant
listed below, the options are exercisable 25% after the first year, with an
additional 25% after each of the next three years. In October 1995, Mr. Ulrich
was granted a 10-year nonqualified option to purchase 150,000 shares of Common
Stock at a price equal to the fair market value on the date of grant. That
option vests in full five years after the date of grant and is consistent with
the goals of linking compensation to performance and long-term commitment to the
Corporation.
17
<PAGE>
CORPORATE GOVERNANCE AND CERTAIN TAX CONSEQUENCES OF PLANS
As part of its corporate governance responsibilities, the Compensation
Committee, together with all the other outside directors, has established
certain measures of performance for COC Officers, including the CEO, that it
believes are critical to the overall performance of the Corporation. Certain
measures of performance, such as succession planning and strategic planning, are
vital to the long-term performance of the Corporation. Beginning in 1994,
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") prohibits the
Corporation from deducting as compensation expense amounts exceeding $1,000,000
a year for certain officers, unless the payment of such compensation is based on
pre-established, objective performance goals approved by the shareholders. A
significant part of executive compensation will meet the Code requirement for
deductibility. A portion of such compensation, however, will continue to be
based on critical, subjective measures that may cause certain compensation not
to be deductible under the Code. The Compensation Committee and the other
outside directors strongly believe that the benefit of their ability to evaluate
the performance of COC Officers, including the CEO, on vital subjective
performance measures outweighs the cost of the Code's limitation on such
deductibility.
No member of the Compensation Committee is a current or former officer or
employee of the Corporation or any of its subsidiaries.
COMPENSATION COMMITTEE
Roger A. Enrico, Chairman
Rand V. Araskog Betty Ruth Hollander
Roger L. Hale Solomon D. Trujillo
18
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEARS ENDING JANUARY 31
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Dayton Hudson
Corporation 100 101.50 123.83 107.07 114.16 126.53
S&P 500 Index 100 122.69 135.67 153.14 153.96 213.33
Retail Stores Composite 100 139.73 166.79 160.75 148.85 160.46
</TABLE>
The graph above compares the cumulative total shareholder return on the
Common Stock of the Corporation for the last five fiscal years with cumulative
total return on the S&P 500 Index and the S&P Retail Composite Index over the
same period. The graph assumes the investment of $100 in the Corporation's
Common Stock, the S&P 500 Index and the S&P Retail Composite Index on January
31, 1991, and reinvestment of all dividends.
DIRECTOR COMPENSATION
Directors who are not employees of the Corporation are paid an annual fee
of $25,000, plus $1,000 for each directors' meeting or committee meeting they
attend. Directors may defer receipt of their fees. If they do, their fees are
credited with interest at a fluctuating rate. Directors may also direct the
Corporation to forward their fees to their broker to purchase Common Stock of
the Corporation for their account at then current prices. The Corporation pays
the brokerage fees for such purchases. Non-employee directors also receive
$10,000 of restricted stock of the Corporation each year. The Vice Chairman of
the Executive Committee receives an additional $10,000 of restricted stock of
the Corporation each year. Employee directors are not compensated separately for
services as a director or committee member but receive their regular
compensation as employees. Non-employee directors receive options for $50,000 of
the Corporation's Common Stock on the second Wednesday of April. Non-employee
directors also receive merchandise discounts of varying amounts at the stores of
each of the Corporation's operating companies that are the same as the discount
employees of each operating company receive.
The Board has a policy requiring members to retire from the Board upon
reaching age 68 or after serving 15 years as a non-employee director. Upon a
substantial change in principal employment a director is required to offer his
or her resignation. As part of this overall program, the Corporation has a
policy of paying outside directors who resign as directors by reason of age,
serving 15 years, physical disability or substantial change in principal
employment an amount equal to the director's annual fee as a director at the
time of resignation for a period that is the lesser of the director's years of
service or 15 years. The present value of the amount is paid in a
19
<PAGE>
lump sum in the year following resignation, except that in the case of a change
in control such amounts are payable immediately. In addition, if a non-employee
director dies while in office or before receiving payment, the director's
beneficiary will receive the payment. In the case of a director who dies while
in office, the beneficiary will receive the payment the director would have
received had the director resigned the day before his or her death.
CERTAIN TRANSACTIONS
The Corporation and operating companies have transactions in the ordinary
course of business with unaffiliated corporations of which certain of the non-
employee directors are officers. The Corporation does not consider the amounts
involved in such transactions material in relation to its business and believes
that any such amounts are not material in relation to the business of such other
unaffiliated corporations or the interests of the non-employee directors
involved.
PROPOSAL NUMBER TWO
APPOINTMENT OF AUDITORS
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to approve the appointment by the Board of Directors of Ernst
& Young LLP as independent auditors of the accounts of the Corporation and its
subsidiaries for the fiscal year ending February 1, 1997. Ernst & Young LLP has
been employed in this capacity by the Corporation since 1931. The Corporation
has been advised by Ernst & Young LLP that they are independent certified public
accountants with respect to the Corporation within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations promulgated under such act.
A representative from Ernst & Young LLP will be at the Annual Meeting and
will have the opportunity to make a statement if such representative so desires
and will be available to respond to questions during the meeting.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS THAT THE SHAREHOLDERS
OF THE CORPORATION VOTE TO APPROVE THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS.
SHAREHOLDER PROPOSAL
The Corporation has received a shareholder proposal for inclusion in this
proxy statement. The proposal is set forth below, together with the proponent's
statement in support of the proposal and the Corporation's reasons for its
opposition to the proposal. The name and address of each proponent, and the
number of shares of Common Stock held by each proponent, will be furnished by
the Corporation to any person, orally or in writing as requested, promptly upon
receipt of an oral or written request.
SHAREHOLDERS' PROPOSAL CONCERNING EQUAL EMPLOYMENT AND
AFFIRMATIVE ACTION REPORT
[PROPOSAL 3 ON THE ACCOMPANYING PROXY CARD]
SHAREHOLDER'S PROPOSAL AND STATEMENT
In 1994, corporations spent more than $2.2 billion on legal fees and
related discrimination settlements. Also, the Equal Employment Opportunity
Commission (EEOC) reported that over 155,000 discrimination complaints were
filed in 1994. The high cost of legal expenses, the potential loss of government
contracts and the social and financial consequences of a damaged corporate image
from discrimination allegations has placed this issue high upon a priority list
for shareholders. Companies must better reflect the marketplace, the customer,
trading partners, and the diverse workforce through all levels of its
organization.
20
<PAGE>
CEOs from 28 major companies have cited changing demographics of the labor
force, the diverse national consumer market and rapid globalization of the
marketplace as reasons for expanding diversity. Over 100 major employers
publicly report work diversity and EEO-1 information. Corporation publications
available to shareholders such as Capital Cities/ABC's Commitment Report for
shareholders, USAir's Affirming Workplace Diversity, Amoco's Diverse Work Force,
and Sears' Corporate Responsibility Report, just to name a few, disclose EEO
statistics for public review.
Many California corporations provide this data voluntarily, including all
regulated utilities and most major banks. Southern California Edison, for
example, has informed the Glass Ceiling Commission that it supports public
reporting of this kind.
The bi-partisan Glass Ceiling Commission was established to study and make
recommendations regarding the Glass Ceiling by 1995. Concerned investors have
closely watched the development of this study. Secretary of Labor Robert Reich
and a 21 member Glass Ceiling Commission released a report, "Good for Business:
Making Full Use of the Nation's Human Capital." This report is an important
analysis for shareholders because it shows that in the U.S. we select from less
than 1/2 the total talent in our workforce. For example, women and minorities,
who represent over 57% of the workforce, represent only 3% of executive
management positions. This is a serious deficiency in our ability to select the
most talented people for our top management positions. It affects our
competitive position if we stifle this gifted portion of our workforce.
This resolution asks our company to report to shareholders on the progress
we have made and the obstacles we still have to overcome in achieving workplace
diversity and eliminating workplace discrimination.
Be it resolved: A report shall be prepared at reasonable cost by September
1996 excluding confidential information and focusing on the following areas:
1. Make a copy of the consolidated EEO-1 report for 1993, 1994, and
1995 available to shareholders upon request.
2. Report the number of discrimination complaints and lawsuits concerning
race, gender, and the physically challenged and the cost to the company and
shareholders from discrimination lawsuits and alternatives to resolve the
issue.
3. Report any federal audit, corporate management review, letter of
compliance with corrective measures enacted to protect the company's
government contracts, and legal penalties.
4. Report on race, ethnicity and gender among top management.
5. Describe any policies and programs utilizing the purchase of goods
and services from minority-and/or female-owned business enterprises.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS THAT THE SHAREHOLDERS
OF THE CORPORATION VOTE AGAINST THIS RESOLUTION.
-------
CORPORATION'S STATEMENT OF OPPOSITION
The Corporation believes that its employees should reflect the diversity of
the customers and communities it serves. To be competitive the Corporation must
attract and retain a diverse work force. The Corporation is fully committed to
complying with applicable equal employment opportunity laws. The Corporation
provides detailed statistical information on equal employment opportunity to the
federal government as required by law. In addition, the various companies of the
Corporation are all equal opportunity employers and communicate to their
employees information regarding equal employment opportunity and each company's
commitment to equal employment opportunity. The Corporation also supports
economic development through the use of minority and women-owned contractors and
service providers. The Corporation encourages and supports the efforts of all of
its employees, suppliers and vendors to adhere to these principles of corporate
responsibility. As a result, the Corporation has been recognized nationally for
its efforts to promote the diversity of its employees and the communities where
they live and work.
21
<PAGE>
The Corporation believes that the reports and publicity requested by this
proposal would not enhance its commitment to equal employment opportunity and
creating a diverse workforce. The Corporation's commitment to such programs is
part of its ordinary business operations and, consequently, is part of the job
responsibilities of each executive. Both management and the Board of Directors
are entrusted with the obligation and opportunity to make such programs
successful. Providing reports and publicizing certain programs would require
time and expense without further enhancing these efforts.
The affirmative vote of a majority of the shares present and entitled to
vote is required for adoption of the resolution. Abstentions are treated as
present and entitled to vote and broker non-votes are treated as not present and
not entitled to vote.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS THAT THE SHAREHOLDERS
OF THE CORPORATION VOTE AGAINST THIS RESOLUTION.
-------
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of Common Stock and Series B ESOP Convertible Preferred Stock
of record at the close of business on March 29, 1996 will be entitled to vote at
the meeting and any adjournment thereof. At the close of business on such record
date, the Corporation had outstanding 72,019,463 shares of Common Stock and
398,650 shares of Series B ESOP Convertible Preferred Stock. Each share of
Common Stock has one vote and each share of Series B ESOP Convertible Preferred
Stock has ten votes. Common Stock and Series B ESOP Convertible Preferred Stock
vote as a single class, except as required by law.
Set forth below is information regarding equity securities of the
Corporation or any of its parents or subsidiaries owned beneficially (as defined
by the SEC for proxy purposes) on April 1, 1996 by all directors and nominees,
each of the named executive officers and all directors and executive officers of
the Corporation as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF INDIVIDUAL OF BENEFICIAL OWNERSHIP PERCENT
OR NUMBER OF TITLE OF ------------------------------------------ OF
PERSONS IN GROUP CLASS OWNED (2)(3) OPTIONS (5) TOTAL CLASS
------------------ ------------ ------------- ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Rand V. Araskog Common 5,959 718 6,677 *
Livio D. DeSimone Common 1,850(4) 718 2,568 *
Roger A. Enrico Common 4,687 718 5,405 *
William W. George Common 1,679 718 2,397 *
Roger L. Hale Common 1,577 718 2,295 *
Betty Ruth Hollander Common 5,749 718 6,467 *
Michele J. Hooper Common 954 718 1,672 *
James A. Johnson Common 1,344 0 1,344 *
Mary Patterson McPherson Common 1,149 718 1,867 *
Stephen W. Sanger Common 0 0 0 *
Solomon D. Trujillo Common 475 718 1,193 *
Robert J. Ulrich (1) Common 51,156 76,845 128,001(6) *
John R. Walter Common 838 718 1,556 *
Stephen E. Watson (1) Common 10,726(4) 117,256 127,982(6) *
Kenneth B. Woodrow (1) Common 2,111 24,509 26,620(6) *
Paul W. Sauser (1) Common 1,015 12,377 13,392(6) *
Gregg W. Steinhafel(1) Common 317 14,319 14,636(6) *
All directors and executive
officers of the Corporation as
a group (28 persons) Common 114,600 331,324 445,924(6) *
</TABLE>
- --------------------
*Less than 1%
(1) Executive officer.
22
<PAGE>
(2) The persons listed have sole voting and investment power with respect to
the shares listed except as follows: Sole voting and investment power: Mr.
Araskog, 749 shares; Mr. DeSimone, 750 shares; and Mr. Johnson, 344 shares.
The persons listed have shared voting and investment power: Mr. Araskog,
5,210 shares; Mr. DeSimone, 500 shares; and Mr. Johnson 1,000 shares.
Restricted Stock owned by directors is listed as sole voting and investment
power.
(3) Includes shares of Common Stock held in the Corporation's Supplemental
Retirement, Savings, and Employee Stock Ownership Plan as of February 3,
1996.
(4) Includes shares of Common Stock owned as of April 1, 1996 by certain family
members as follows: Mr. DeSimone, 600 shares and Mr. Watson, 234 shares as
to which shares each named individual disclaims beneficial ownership.
(5) Shares that the named individuals may acquire on or before June 1, 1996
pursuant to options held by them under the Corporation's 1981 Option Plan
or its 1995 Director Stock Option Plan.
(6) Ownership of such Preferred Stock is not reflected in the table above. As
of February 3, 1996, Mr. Ulrich owned 57 shares of Series B ESOP
Convertible Preferred Stock ("Preferred Stock"), Mr. Watson owned 55 shares
of Preferred Stock, Mr. Woodrow owned 57 shares of Preferred Stock, Mr.
Sauser owned 58 shares of Preferred Stock, Mr. Steinhafel owned 57 shares
of Preferred Stock and all directors and executive officers of the
Corporation owned 731 shares of Preferred Stock.
The table below sets forth certain information, as to each person or entity
known to the Corporation to be the beneficial owner of more than five percent of
any class of the Corporation's voting securities:
<TABLE>
<CAPTION>
NAME AND ADDRESS TITLE OF NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER CLASS BENEFICIALLY OWNED OF CLASS
------------------- -------- ------------------ --------
<S> <C> <C> <C>
FMR Corp. Common 5,699,024(1) 7.93%
82 Devonshire Street
Boston, Massachusets 02109
</TABLE>
- ---------------------
(1) FMR Corp. ("FMR") reported its beneficial ownership as of December 31, 1995
on a Schedule 13G filed with the Securities and Exchange Commission. The
filing indicates that FMR has sole voting power for 153,919 shares, shared
voting power for 0 shares, sole dispositive power for 5,699,024 shares and
shared dispositive power for 0 shares.
ADDITIONAL INFORMATION
POLICY ON CONFIDENTIAL VOTING
It is the policy of the Corporation that all shareholder meeting proxies,
ballots and voting tabulations of a shareholder are to be confidential, if the
shareholder has requested confidentiality on the proxy card or ballot.
If the shareholder so requests, no such document will be available for
examination nor will the particular vote of such shareholder be disclosed prior
to the tabulation of the final vote at the annual shareholder meeting except (i)
to meet applicable legal requirements; or (ii) to allow the independent election
inspectors to count and certify the results of the shareholder vote; or (iii)
where there is a proxy solicitation in opposition to the Board of Directors,
based upon an opposition proxy statement filed with the Securities and Exchange
Commission. The independent election inspectors may at any time inform the
Corporation whether or not a shareholder has voted.
EQUAL EMPLOYMENT OPPORTUNITY
The Corporation believes that its employees should reflect the diversity of
the customers and communities it serves. To be competitive the Corporation must
attract and retain a diverse work
23
<PAGE>
force. The Corporation is fully committed to complying with applicable equal
employment opportunity laws. The Corporation also supports economic development
through the use of minority and women-owned contractors and service providers.
The Corporation provides detailed statistical information on equal
employment opportunity to the federal government as required by law. In
addition, the various companies of the Corporation are equal opportunity
employers and communicate to their employees information regarding equal
employment opportunity.
The Corporation encourages and supports the efforts of all of its
employees, suppliers and vendors to adhere to these principles of corporate
responsibility.
GENERAL
As of the date of this proxy statement, management knows of no matters that
will be presented for determination at the meeting other than those referred to
herein. If any other matters properly come before the meeting calling for a vote
of shareholders, it is intended that proxies in the enclosed form will be voted
in accordance with the judgment of the individual voting the proxies.
Expenses in connection with the solicitation of proxies will be paid by the
Corporation. Proxies are being solicited principally by mail and by telephone.
Georgeson & Company, Inc. has been retained by the Corporation to act as a proxy
solicitor for a fee estimated not to exceed $20,000 plus reimbursement of
out-of-pocket expenses. In addition, directors, officers and regular employees
of the Corporation may solicit proxies personally, by telephone, by fax or by
special letter. The Corporation may reimburse brokerage firms and others for
their expenses in forwarding proxy materials to the beneficial owners of shares
of the Corporation.
The Annual Report of the Corporation for the fiscal year ended February 3,
1996, including financial statements, is enclosed.
SHAREHOLDER PROPOSALS
Any shareholder proposals for the Corporation's 1997 Annual Meeting must be
received by the Secretary of the Corporation by December 19, 1996 in order to be
included in the proxy statement. Under the Corporation's By-laws, as amended, if
a shareholder plans to propose an item of business to be considered at any
annual or special meeting of shareholders, that shareholder is required to give
notice of such proposal to the Secretary of the Corporation at least 60 days
prior to the meeting and to comply with certain other requirements. The
proposals also must comply with all applicable statutes and regulations.
By Order of the Board of Directors
JAMES T. HALE
Secretary
Minneapolis, Minnesota
April 18, 1996
24
<PAGE>
- --------------------------------------------------------------------------------
DAYTON HUDSON CORPORATION
Proxy Solicited on Behalf of the Board of Directors for
Annual Meeting of Shareholders May 22, 1996
P
Robert J. Ulrich, Douglas A. Scovanner and James T. Hale, and each
of them, are hereby appointed proxies, with power of substitution to
R each, to represent and to vote as designated below and on the reverse
side hereof, all shares of capital stock of Dayton Hudson Corporation,
a Minnesota corporation, held by the undersigned at the Annual Meeting
O of Shareholders to be held on May 22, 1996, and at any adjournment
thereof. This Proxy will be voted as directed, but if no direction is
given it will be voted FOR proposals set forth in Items 1 and 2 and
X AGAINST the proposal set forth in item 3 hereof. The proxies cannot
vote your shares unless you sign this card on the reverse side and
return this card.
Y
For participants in the Supplemental Retirement, Savings and
Employee Stock Ownership Plan, this proxy card will constitute voting
instructions to the Trustee under this Plan. As a participant in this
Plan, the undersigned understands that, in accordance with the terms
of the Plan, these instructions shall be held in the strictest
confidence by the Trustee and shall not be divulged or released to any
person, including officers or employees of the Company. These
instructions will be followed as directed, but if no direction is
given, the Trustee is instructed to vote FOR proposals set forth in
Items 1 and 2 and AGAINST the proposal set forth in item 3 hereof.
Shares held in the Plan for which no voting instructions are received
by the Trustee will be voted in the same proportion as votes actually
| cast by Plan participants.
(INSTRUCTION: To withhold authority to vote for any named nominee or a
substitute nominee designated by the Board of Directors, write that
nominee's name or the words "substitute nominee" on the space provided
on the reverse side.)
----------------
| SEE REVERSE |
| SIDE |
----------------
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
ANNUAL MEETING
OF
DAYTON HUDSON CORPORATION SHAREHOLDERS
Wednesday, May 22, 1996
9:30 a.m. CDT
The Children's Theatre
2400 3rd Avenue South
Minneapolis, Minnesota
---------------------------------------------------------
| |
| Please present this ADMISSION TICKET at the Annual |
| Shareholders' Meeting as verification of your |
| Dayton Hudson share ownership. |
| |
---------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
|
| 0361
|
--------
----- Please mark your
| X | votes as in this
----- example.
----------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposals 1 and 2.
----------------------------------------------------------------------
FOR WITHHELD
----- -----
1. Election of Directors | | | |
----- -----
For, except withhold from the following nominee(s):
- ----------------------------
1. Election of Directors, Nominees:
Livio D. DeSimone, Roger A. Enrico, William W. George and
James A. Johnson
FOR AGAINST ABSTAIN
2. Appointment of Ernst ----- ----- -----
& Young as Independent | | | | | |
Auditors ----- ----- -----
The Board of Directors
recommends a vote AGAINST
the shareholder proposal
regarding:
FOR AGAINST ABSTAIN
3. Equal Employment and ----- ----- -----
Affirmative Action | | | | | |
Report ----- ----- -----
In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting.
Mark here if you would like your voting -----
instructions to be confidential pursuant to the | |
Dayton Hudson Corporation Policy on Confidential -----
Voting described in the 1996 Proxy Statement.
Signature(s) Date
--------------------------------------- ----------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign
when signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
[LOGO] DAYTON HUDSON CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
------------------------------
| ADMISSION TICKET |
------------------------------
