<PAGE>
As filed with the Securities and Exchange Commission on October 5, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DAYTON HUDSON CORPORATION
(Exact name of Registrant as specified in its charter)
Minnesota 41-0215170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Nicollet Mall
Minneapolis, Minnesota 55402-2055
(612) 370-6948
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Stephen C. Kowalke
Vice President and Treasurer
Dayton Hudson Corporation
777 Nicollet Mall
Minneapolis, Minnesota 55402-2055
(612) 370-6948
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
------------------------
With a copy to:
Timothy R. Baer Kris Sharpe
Dayton Hudson Corporation Faegre & Benson LLP
777 Nicollet Mall 2200 Norwest Center
Minneapolis, Minnesota 55402-2055 90 South Seventh Street
Minneapolis, Minnesota 55402-3901
------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
<PAGE>
CALCULATION OF REGISTRATION FEE (1)
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED (2) REGISTERED (3) UNIT (4) PRICE FEE
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<S> <C> <C> <C> <C>
Debt Securities, Preferred Shares,
Depositary Shares, Common
Stock, par value $.1667 per $1,500,000,000 $1,500,000,000(6)(7) $442,500
share (5), and Securities Warrants-------
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</TABLE>
(1) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee.
(2) Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(3) Includes such indeterminate number of Preferred Shares and shares of Common
Stock as may be issued at indeterminable prices, but with an aggregate
initial offering price not to exceed $1,500,000,000, plus such
indeterminate number of Preferred Shares as may be issued upon exercise of
Securities Warrants or in exchange for, or upon conversion of, Debt
Securities or other Preferred Shares registered hereunder, such
indeterminate number of Depositary Shares as may be issued in the event the
Registrant elects to offer fractional interests in Preferred Shares
registered hereunder, and such indeterminate number of shares of Common
Stock as may be issued upon exercise of Securities Warrants or in exchange
for, or upon conversion of, Debt Securities or Preferred Shares registered
hereunder. There remains $25,000,000 aggregate principal amount of Debt
Securities, Warrants to purchase Debt Securities and Debt Securities
issuable upon exercise of such Warrants previously registered on Form S-3,
Registration Statement No. 33-42364, that was filed with the Commission on
August 21, 1991, at which time a filing fee of $6,250 was paid in
connection with such securities. Also includes such additional
principal amount as may be necessary such that, if Debt Securities are
issued with an original issue discount, the aggregate initial offering
price of all Debt Securities will equal $1,500,000,000 less the dollar
amount of other securities previously issued.
(4) Omitted pursuant to General Instruction II.D of Form S-3.
(5) Associated with the Common Stock are preferred share purchase rights that
will not be exercisable or evidenced separately from the Common Stock prior
to the occurrence of certain events.
(6) No separate consideration will be received for Common Stock, Preferred
Shares or Depositary Shares that are issued upon conversion of Debt
Securities, Preferred Shares or Depositary Shares.
(7) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or composite currencies.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined prospectus relating also
to Debt Securities, Warrants to purchase Debt Securities and Debt Securities
issuable upon exercise of such Warrants registered on Form S-3, Registration
Statement No. 33-42364, previously filed by the Registrant and declared
effective on August 28, 1991.
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<PAGE>
PROSPECTUS
[LOGO OF DAYTON HUDSON CORPORATION APPEARS HERE]
Dayton Hudson Corporation
777 Nicollet Mall
14th Floor
Minneapolis, Minnesota 55402-2055
(612) 370-6948
$1,525,000,000
Debt Securities
Preferred Shares
Common Stock
Debt Warrants
Preferred Share Warrants
Common Stock Warrants
---------------------------
We will provide the specific terms of these securities in supplements to this
prospectus.
You should read this prospectus and the applicable supplement carefully before
you invest.
---------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated October __, 1998
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may sell:
- debt securities,
- preferred shares,
- common stock,
- debt warrants,
- preferred share warrants and
- common stock warrants,
either separately or in units, in one or more offerings up to a total dollar
amount of $1,525,000,000. This prospectus provides you with a general
description of those securities. Each time we sell securities, we will provide
a prospectus supplement that will contain specific information about the terms
of that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read this prospectus and
the applicable prospectus supplement together with the additional information
described under the heading "Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about
our company and the securities offered under this prospectus. That registration
statement can be read at the SEC web site or at the SEC offices mentioned under
the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. You can also obtain copies of the documents
at prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facilities. Our SEC filings are also available at the office of the New York
Stock Exchange. For further information on obtaining copies of our public
filings at the New York Stock Exchange, you should call (212) 656-5060.
We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and information that we file subsequently
with the SEC will automatically update this prospectus. We incorporate by
reference the documents listed below and any filings we make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
2
<PAGE>
after the initial filing of the registration statement that contains this
prospectus and prior to the time that we sell all the securities offered by this
prospectus:
- Annual Report on Form 10-K for the year ended January 31, 1998
(including information specifically incorporated by reference into our
Form 10-K from our 1997 Annual Report to Shareholders and our
definitive Notice and Proxy Statement for our 1998 Annual Meeting of
Shareholders);
- Quarterly Reports on Form 10-Q for the quarters ended May 2, 1998 and
August 1, 1998;
- Current Report on Form 8-K dated June 4, 1998;
- the description of the Company's common stock contained in the
Registration Statement on Form 8-A filed in connection with the
Company's common stock; and
- the description of the Company's preferred share purchase rights
contained in the Registration Statement on Form 8-A dated
September 12, 1996.
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing to or telephoning us at the following address:
Secretary
Dayton Hudson Corporation
777 Nicollet Mall
14th Floor
Minneapolis, Minnesota 55402-2055
(612) 370-6948
You should rely only on the information incorporated by reference or set
forth in this prospectus or the applicable prospectus supplement. We have not
authorized anyone else to provide you with different information. We may only
use this prospectus to sell securities if it is accompanied by a prospectus
supplement. We are only offering these securities in states where the offer is
permitted. You should not assume that the information in this prospectus or the
applicable prospectus supplement is accurate as of any date other than the dates
on the front of those documents.
3
<PAGE>
THE COMPANY
We focus on general merchandise retailing through three operating
divisions:
- Target is an upscale discounter that provides quality merchandise at
attractive prices in clean, spacious and guest-friendly stores. On
August 1, 1998, Target operated 828 stores in 40 states.
- Mervyn's California is a promotional, middle-market, neighborhood
department store. On August 1, 1998, Mervyn's operated 269 stores in
14 states.
- The Department Stores emphasize fashion leadership, quality
merchandise and superior guest service. On August 1, 1998, The
Department Stores operated 64 Dayton's, Hudson's and Marshall Field's
stores in 8 states.
When we refer to "OUR COMPANY," "WE," "OUR" and "US" in this prospectus
under the headings "The Company," "Use of Proceeds" and "Ratios of Earnings to
Fixed Charges and to Fixed Charges and Preferred Stock Dividends," we mean
Dayton Hudson Corporation and its subsidiaries. When such terms are used
elsewhere in this prospectus, we refer only to Dayton Hudson Corporation unless
the context indicates otherwise.
4
<PAGE>
The information below provides detail on the operations of our business
segments.
<TABLE>
<CAPTION>
Fiscal Year Ended
--------------------------------------------------------------------------
BUSINESS SEGMENT COMPARISONS January 29, January 28, February 3, February 1, January 31,
Millions of Dollars 1994 1995 1996* 1997 1998
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<S> <C> <C> <C> <C> <C>
REVENUES
Target $11,743 $13,600 $15,807 $17,853 $20,368
Mervyn's 4,436 4,561 4,516 4,369 4,227
Department Store Division 3,054 3,150 3,193 3,149 3,162
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues $19,233 $21,311 $23,516 $25,371 $27,757
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PRE-TAX SEGMENT PROFIT
Target $ 600 $ 732 $ 721 $ 1,048 $ 1,287
Mervyn's 172 198 117 272 280
Department Store Division 246 259 192 151 240
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Total pre-tax segment profit $ 1,018 $ 1,189 $ 1,030 $ 1,471 $ 1,807
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LIFO provision (expense)/credit 91 19 (17) (9) (6)
Real estate repositioning charge -- -- -- (134) --
Securitization adjustments:
Interest equivalent -- -- (10) (25) (33)
SFAS 125 gain -- -- -- -- 45
Interest expense, net (446) (426) (442) (442) (416)
Corporate and other (56) (68) (60) (78) (71)
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Earnings before income taxes and extraordinary charges $ 607 $ 714 $ 501 $ 783 $ 1,326
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ASSETS
Target $ 5,495 $ 6,247 $ 7,330 $ 8,257 $ 9,487
Mervyn's 2,750 2,917 2,776 2,658 2,281
Department Store Division 2,240 2,392 2,309 2,296 2,188
Corporate and other 293 141 155 178 235
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Total assets $10,778 $11,697 $12,570 $13,389 $14,191
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DEPRECIATION AND AMORTIZATION
Target $ 264 $ 294 $ 328 $ 377 $ 437
Mervyn's 146 145 150 151 126
Department Store Division 104 108 113 119 128
Corporate and other 1 1 3 3 2
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Total depreciation and amortization $ 515 $ 548 $ 594 $ 650 $ 693
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CAPITAL EXPENDITURES
Target $ 716 $ 842 $ 1,067 $ 1,048 $ 1,155
Mervyn's 180 146 273 79 72
Department Store Division 80 96 161 173 124
Corporate and other 2 11 21 1 3
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Total capital expenditures $ 978 $ 1,095 $ 1,522 $ 1,301 $ 1,354
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SEGMENT EBITDA**
Target $ 864 $ 1,026 $ 1,049 $ 1,425 $ 1,724
Mervyn's 318 343 267 423 406
Department Store Division 350 367 305 270 368
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Total Segment EBITDA** $ 1,532 $ 1,736 $ 1,621 $ 2,118 $ 2,498
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</TABLE>
* Consisted of 53 weeks
**Segment EBITDA is pre-tax segment profit before depreciation and amortization.
Pre-tax segment profit is first-in first-out (FIFO) earnings before
securitization effects, interest, corporate and other expense, and unusual
items. Our management uses EBITDA and pre-tax segment profit, among other
standards, to measure divisional operating performance. EBITDA supplements, and
is not intended to represent a measure of performance in accordance with,
disclosures required by generally accepted accounting principles. It is
included as a tool for analyzing our results.
Each operating division's assets and operating results include the retained
securitized receivables held by Dayton Hudson Receivables Corporation and
Retailers National Bank, as well as related income and expenses.
5
<PAGE>
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net
proceeds from the sale of the offered securities will be added to our general
funds and may be used to:
- meet our working capital requirements;
- fund capital expenditures relating to the construction and fixturing
of our new stores;
- remodel our existing stores;
- refinance debt; and
- finance acquisitions of real estate, other assets and companies.
Until the net proceeds have been used, they will be invested in short-term
marketable securities.
6
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR ENDED ENDED
--------------------------------------------------------------------------- -------------------------
JANUARY 29, JANUARY 28, FEBRUARY 3, FEBRUARY 1, JANUARY 31, AUGUST 2, AUGUST 1,
1994 1995 1996 1997 1998 1997 1998
--------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 2.19x 2.43 1.94 2.46 3.65 2.71 3.26
Ratio of Earnings to
Fixed Charges and
Preferred Stock
Dividends............ 2.04x 2.25 1.81 2.30 3.40 2.54 3.05
</TABLE>
- - For purposes of calculating the ratios, fixed charges consist of:
- interest on debt;
- amortization of discount on debt; and
- the interest portion of rental expense on operating leases.
- - The ratio of earnings to fixed charges is calculated as follows:
<TABLE>
<S><C>
(income before extraordinary charges and income taxes) + (fixed charges) - (capitalized interest)
- -------------------------------------------------------------------------------------------------
(fixed charges)
- - The ratio of earnings to fixed charges and preferred stock dividends is
calculated as follows:
(income before extraordinary charges and income taxes) + (fixed charges) - (capitalized interest)
- -------------------------------------------------------------------------------------------------
(fixed charges) + (pretax earnings required to cover preferred stock dividends)
</TABLE>
- - Pretax earnings required to cover preferred stock dividends are calculated
as follows:
preferred stock dividends, as adjusted for the tax
benefits related to unallocated shares
- --------------------------------------------------
1 - (our effective income tax rate)
7
<PAGE>
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the Debt
Securities (as defined below). The prospectus supplement will describe the
specific terms of the Debt Securities offered through that prospectus supplement
and any general terms outlined in this section that will not apply to those Debt
Securities.
The Debt Securities will be issued under an indenture (the "INDENTURE")
between us and the trustee named in the applicable prospectus supplement (the
"TRUSTEE"). As used in this prospectus, "DEBT SECURITIES" means the debentures,
notes, bonds and other evidences of indebtedness that we issue and the Trustee
authenticates and delivers under the Indenture.
We have summarized certain terms and provisions of the Indenture in this
section. The summary is not complete. We have also filed the form of the
Indenture as an exhibit to the registration statement. You should read the form
of Indenture for additional information before you buy any Debt Securities. The
summary that follows includes references to section numbers of the Indenture so
that you can more easily locate these provisions. Capitalized terms used but
not defined in this summary have the meanings specified in the Indenture.
GENERAL
The Debt Securities will be our direct, senior, unsecured obligations. The
Indenture does not limit the amount of Debt Securities that we may issue and
permits us to issue Debt Securities from time to time. Debt Securities issued
under the Indenture will be issued as part of a series that has been established
by us pursuant to the Indenture. (Section 301) Unless a prospectus supplement
relating to Debt Securities states otherwise, the Indenture and the terms of the
Debt Securities will not contain any covenants designed to afford holders of any
Debt Securities protection in a highly leveraged or other transaction involving
us that may adversely affect holders of the Debt Securities. If we ever issue
Bearer Securities we will summarize provisions of the Indenture that relate to
Bearer Securities in the applicable prospectus supplement.
A prospectus supplement relating to a series of Debt Securities being
offered will include specific terms relating to the offering. (Section 301)
These terms will include some or all of the following:
- the title and type of the Debt Securities;
- any limit on the total principal amount of the Debt Securities;
- the price at which the Debt Securities will be issued;
- the date or dates on which the principal of and premium, if any, on
the Debt Securities will be payable;
- the maturity date of the Debt Securities;
8
<PAGE>
- if the Debt Securities will bear interest:
- the interest rate on the Debt Securities;
- the date from which interest will accrue;
- the record and interest payment dates for the Debt Securities;
- the first interest payment date; and
- any circumstances under which we may defer interest payments;
- any optional redemption provisions that would permit us or the Holders
(as defined below) of Debt Securities to elect redemption of the Debt
Securities prior to their final maturity;
- any sinking fund provisions that would obligate us to redeem the Debt
Securities prior to their final maturity;
- the currency or currencies in which the Debt Securities will be
denominated and payable, if other than U.S. dollars;
- any provisions that would permit us or the Holders of the Debt
Securities to elect the currency or currencies in which the Debt
Securities are paid;
- whether the provisions described under the heading "Defeasance" below
apply to the Debt Securities;
- any changes to or additional Events of Default or covenants;
- whether the Debt Securities will be issued in whole or in part in the
form of Global Securities and, if so, the Depositary for those Global
Securities (a "GLOBAL SECURITY" means a Debt Security that we issue in
accordance with the Indenture to represent all or part of a series of
Debt Securities);
- any special tax implications of the Debt Securities; and
- any other terms of the Debt Securities.
A "HOLDER," with respect to a Registered Security, means the Person in whose
name such Registered Security is registered in the Security Register.
(Section 101)
PAYMENT; TRANSFER
In the applicable prospectus supplement, we will designate a Place of
Payment where you can receive payment of the principal of and any premium and
interest on the Debt Securities or transfer the Debt Securities. Even though we
will designate a Place of Payment, we may elect to pay any interest on the Debt
Securities by mailing a check to the Person listed as the owner of the Debt
Securities in the Security Register or by wire transfer to an account designated
by that Person in writing not less than ten days before the date of the interest
payment. (Sections 305, 307, 1002) There will be no service charge for any
registration of transfer or exchange of the
9
<PAGE>
Debt Securities, but we may require you to pay any tax or other governmental
charge payable in connection with a transfer or exchange of the Debt Securities.
(Section 305)
DENOMINATIONS
Unless the prospectus supplement states otherwise, the Debt Securities will
be issued only in registered form, without coupons, in denominations of $1,000
each or multiples of $1,000.
ORIGINAL ISSUE DISCOUNT
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities and sold at a substantial discount below their stated
principal amount. If a Debt Security is an "ORIGINAL ISSUE DISCOUNT SECURITY,"
that means that an amount less than the principal amount of the Debt Security
will be due and payable upon a declaration of acceleration of the maturity of
the Debt Security pursuant to the Indenture. (Section 101) The applicable
prospectus supplement will describe the federal income tax consequences and
other special factors which should be considered prior to purchasing any
Original Issue Discount Securities.
CLASSIFICATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Indenture contains certain restrictive covenants that apply to us and
all of our Restricted Subsidiaries. Those covenants do not apply to our
Unrestricted Subsidiaries. For example, (1) the assets and indebtedness of
Unrestricted Subsidiaries and (2) investments by us or our Restricted
Subsidiaries in Unrestricted Subsidiaries are not included in the calculations
described under the heading "--Restrictions on Secured Funded Debt" below. The
Indenture does not require us to maintain any Restricted Subsidiaries and, if we
do not, the Indenture will not provide any limitations on the amount of secured
debt created or incurred by our Subsidiaries.
A "SUBSIDIARY" is any corporation of which we own more than 50% of the
outstanding shares of Voting Stock directly or through one or more of our other
Subsidiaries. "VOTING STOCK" means stock that is entitled in the ordinary
course (I.E., not only as a result of the happening of certain events) to vote
in an election for directors.
"RESTRICTED SUBSIDIARIES" are all of our Subsidiaries other than
Unrestricted Subsidiaries. A "WHOLLY-OWNED RESTRICTED SUBSIDIARY" is a
Restricted Subsidiary of which we own all of the outstanding capital stock
directly or through our other Wholly-owned Restricted Subsidiaries.
Our "UNRESTRICTED SUBSIDIARIES" are:
- Eighth Street Development Company, Dayton Hudson Capital Corporation,
Dayton Hudson Receivables Corporation and The Associated Merchandising
Corp.;
- certain other finance Subsidiaries acquired or formed by us after the
date of this prospectus;
10
<PAGE>
- any Subsidiary that our Board of Directors in the future designates as
an Unrestricted Subsidiary pursuant to the Indenture; and
- any other Subsidiary if a majority of its Voting Stock is owned by an
Unrestricted Subsidiary.
Our Board of Directors can at any time change a Subsidiary's designation from an
Unrestricted Subsidiary to a Restricted Subsidiary if (1) the majority of that
Subsidiary's Voting Stock is not owned by an Unrestricted Subsidiary and (2)
after the change of designation, we would be in compliance with the restrictions
contained in the Secured Funded Debt covenant described under the heading
"--Restrictions on Secured Funded Debt" below. (Sections 101, 1010(a))
RESTRICTIONS ON SECURED FUNDED DEBT
The Indenture limits the amount of Secured Funded Debt that we and our
Restricted Subsidiaries may incur or otherwise create (including by guarantee).
Neither we nor our Restricted Subsidiaries may incur or otherwise create any new
Secured Funded Debt unless immediately after such incurrence or creation:
- the sum of:
- the aggregate principal amount of all of our outstanding Secured
Funded Debt and that of our Restricted Subsidiaries (other than
certain categories of Secured Funded Debt discussed below), plus
- the aggregate amount of our Attributable Debt and that of our
Restricted Subsidiaries relating to sale and lease-back
transactions,
- does not exceed 5% of our Consolidated Net Tangible Assets.
This limitation does not apply if the outstanding Debt Securities are secured
equally and ratably with or prior to the new Secured Funded Debt.
(Sections 1008(a), 1008(c))
"SECURED FUNDED DEBT" means Funded Debt which is secured by a mortgage,
lien or other similar encumbrance upon any of our assets or those of our
Restricted Subsidiaries. (Section 101)
"FUNDED DEBT" means:
- Indebtedness maturing (or which we may extend or renew to mature)
more than 12 months after the time the amount of Secured Funded
Debt is computed, plus
- guarantees of Indebtedness of the type described in (1) above, 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), plus
11
<PAGE>
- Funded Debt secured by a mortgage, lien or similar encumbrance on
our assets or those of our Restricted Subsidiaries, whether or
not such Funded Debt is assumed by us or one of our Restricted
Subsidiaries, plus
- in the case of a Subsidiary, all Preferred Stock of that
Subsidiary.
Funded Debt DOES NOT INCLUDE any amount relating to obligations under leases (or
guarantees of leases) whether or not those obligations would be included as
liabilities on our consolidated balance sheet. (Section 101)
"INDEBTEDNESS" means, except as set forth in the next sentence:
- all items of indebtedness or liability (except capital and surplus)
which under GAAP would be included in total liabilities on the
liability side of a balance sheet as of the date that indebtedness is
being determined;
- indebtedness secured by a mortgage, lien or other similar encumbrance
on property owned subject to that mortgage, lien or other similar
encumbrance, regardless of whether the indebtedness secured by that
mortgage, lien or other similar encumbrance was assumed; and
- guarantees, endorsements (other than for purposes of collection) and
other contingent obligations relating to, or to purchase or otherwise
acquire, indebtedness of others, unless such amount is included in the
preceding two bullet points.
Indebtedness does not include any obligations or guarantees of obligations
relating to lease rentals, even if such obligations or guarantees of obligations
would be included as liabilities on the consolidated balance sheet of us and our
Restricted Subsidiaries. (Section 101)
"ATTRIBUTABLE DEBT" means:
- the balance sheet liability amount of capital leases as
determined by GAAP, plus
- the amount of future minimum operating lease payments required to
be disclosed by GAAP, less any amounts required to be paid on
account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, discounted using
the methodology used to calculate the present value of operating
lease payments in our most recent Annual Report to Shareholders
reflecting that calculation.
The amount of Attributable Debt relating to an operating lease that can be
terminated by the lessee with the payment of a penalty will be calculated based
on the lesser of (1) the aggregate amount of lease payments required to be made
until the first date the lease can be terminated by the lessee plus the amount
of the penalty or (2) the aggregate amount of lease payments required to be made
during the remaining term of the lease. (Section 101)
"CONSOLIDATED NET TANGIBLE ASSETS" means the total consolidated amount of
our assets and those of our Restricted Subsidiaries (minus applicable reserves
and other properly deductible
12
<PAGE>
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 the calculation), minus
- all liabilities and liability items, including capital leases (or
guarantees of capital leases) which under GAAP would be included
in the balance sheet, except Funded Debt, capital stock and
surplus, surplus reserves and provisions for deferred income
taxes, and
- goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other similar intangibles.
(Section 101)
The following categories of Secured Funded Debt will not be considered in
determining whether we are in compliance with the covenant described in the
first paragraph under the heading "Restrictions on Secured Funded Debt":
- Secured Funded Debt of a Restricted Subsidiary owing to us or to one
of our Wholly-owned Restricted Subsidiaries;
- Secured Funded Debt resulting from a mortgage, lien or other similar
encumbrance in favor of the U.S. Government or any State or any
instrumentality thereof to secure certain payments;
- Secured Funded Debt resulting from a mortgage, lien or other similar
encumbrance on property, shares of stock or Indebtedness of any
company existing at the time that such company becomes one of our
Subsidiaries;
- Secured Funded Debt resulting from a mortgage, lien or other similar
encumbrance on property, shares of stock or Indebtedness which (1)
exists at the time that the property, shares of stock or Indebtedness
is acquired by us or one of our Restricted Subsidiaries (including
acquisitions by merger or consolidation), (2) secures the payment of
any part of the purchase price of or construction cost for such
property, shares of stock or Indebtedness or (3) secures any
indebtedness incurred prior to, at the time of, or within 120 days
after, the acquisition of such property, shares of stock or
Indebtedness or the completion of any construction of such property
for the purpose of financing all or a part of the purchase price or
construction cost of such property, shares of stock or Indebtedness,
provided that, in all cases, we continue to comply with the covenant
relating to mergers and consolidations discussed under the heading
"--Consolidation, Merger or Sale" below;
- Secured Funded Debt secured by a mortgage, lien or other similar
encumbrance in connection with the issuance of revenue bonds on which
the interest is exempt from federal income tax pursuant to the
Internal Revenue Code of 1986; and
- any extension, renewal or refunding of (1) any Secured Funded Debt
permitted under the first paragraph under the heading "Restrictions on
Secured Funded Debt," (2) any Secured Funded Debt outstanding at
February 3, 1996 of any then Restricted
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Subsidiary or (3) any Secured Funded Debt of any company outstanding
at the time such company became a Restricted Subsidiary.
(Section 1008(b))
RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that neither we nor any of our Restricted
Subsidiaries may enter into any sale and lease-back transaction involving any
Operating Property (as defined below) more than 120 days after its acquisition
or the completion of its construction and commencement of its full operation,
unless either:
- we or such Restricted Subsidiary could (1) create Secured Funded Debt
on such property equal to the Attributable Debt with respect to the
sale and lease-back transaction and (2) still be in compliance with
the restrictions on Secured Funded Debt (see "--Restrictions on
Secured Funded Debt" above); or
- we apply an amount (subject to credits for certain voluntary
retirements of Debt Securities and/or Funded Debt) equal to the
greater of (1) the fair value of such property or (2) the net proceeds
of such sale, within 120 days, to the retirement of Secured Funded
Debt.
This restriction will not apply to any sale and lease-back transaction (1)
between us and one of our Restricted Subsidiaries, (2) between any of our
Restricted Subsidiaries or (3) involving a lease for a period, including
renewals, of three years or less. (Section 1009)
"OPERATING PROPERTY" means any retail store, distribution center or other
property related to our general retail business or that of one of our
Subsidiaries, parking facilities and any equipment located at, or a part of, any
such property if it has a net book value greater than .35% of our Consolidated
Net Tangible Assets and has been owned and operated by us or one of our
Subsidiaries for more than 90 days. If we acquire a new Subsidiary that already
owns and operates such property, then such property will not be considered
Operating Property until 90 days after such acquisition. (Section 101)
CONSOLIDATION, MERGER OR SALE
The Indenture generally permits a consolidation or merger between us and
another corporation. It also permits the sale or transfer by us of all or
substantially all of our property and assets and the purchase by us of all or
substantially all of the property and assets of another corporation. These
transactions are permitted if:
- the resulting or acquiring corporation (if other than us) assumes all
of our responsibilities and liabilities under the Indenture, including
the payment of all amounts due on the Debt Securities and performance
of the covenants in the Indenture;
- immediately after the transaction, no Event of Default exists; and
- except in the case of a consolidation or merger of a Restricted
Subsidiary with or into us, either (1) we have obtained the consent of
the Holders of a majority in aggregate
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principal amount of the Outstanding Debt Securities of each series or
(2) immediately after the transaction, the resulting or acquiring
corporation could incur additional Secured Funded Debt and still be in
compliance with the restrictions on Secured Funded Debt (see
"--Restrictions on Secured Funded Debt" above). (Section 801)
Even though the Indenture contains the provisions described above, we are
not required by the Indenture to comply with those provisions if we sell all of
our property and assets to another corporation if, immediately after the sale:
- that corporation is one of our Wholly-owned Restricted Subsidiaries;
and
- we could incur additional Secured Funded Debt and still be in
compliance with the restrictions on Secured Funded Debt (see
"--Restrictions on Secured Funded Debt" above). (Section 803)
If we consolidate or merge with or into any other corporation or sell all
or substantially all of our assets according to the terms and conditions of the
Indenture, the resulting or acquiring corporation will be substituted for us in
the Indenture with the same effect as if it had been an original party to the
Indenture. As a result, such successor corporation may exercise our rights and
powers under the Indenture, in our name or in its own name and we will be
released from all our liabilities and obligations under the Indenture and under
the Debt Securities. (Section 802)
MODIFICATION AND WAIVER
Under the Indenture, certain of our rights and obligations and certain of
the rights of Holders of the Debt Securities may be modified or amended with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of each series of Debt Securities affected by the
modification or amendment. The following modifications and amendments will not
be effective against any Holder without its consent:
- a change in the stated maturity date of any payment of principal or
interest;
- a reduction in certain payments due on the Debt Securities;
- a change in the Place of Payment or currency in which any payment on
the Debt Securities is payable;
- a limitation of a Holder's right to sue us for the enforcement of
certain payments due on the Debt Securities;
- a reduction in the percentage of Outstanding Debt Securities required
to consent to a modification or amendment of the Indenture;
- a limitation of a Holder's right, if any, to repayment of Debt
Securities at such Holder's option; and
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- a modification of any of the foregoing requirements or a reduction in
the percentage of Outstanding Debt Securities required to waive
compliance with certain provisions of the Indenture or to waive
certain defaults under the Indenture. (Section 902)
Under the Indenture, the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series of Debt Securities may,
on behalf of all Holders of that series:
- waive compliance by us with certain restrictive covenants of the
Indenture; and
- waive any past default under the Indenture, except:
- a default in the payment of the principal of or any premium or
interest on any Debt Securities of that series; or
- a default under any provision of the Indenture which itself
cannot be modified or amended without the consent of the Holders
of each Outstanding Debt Security of that series.
(Sections 1012, 513)
EVENTS OF DEFAULT
"EVENT OF DEFAULT," when used in the Indenture with respect to any series
of Debt Securities, means any of the following:
- failure to pay interest on any Debt Security of that series for 30
days after the payment is due;
- failure to pay the principal of or any premium on any Debt Security of
that series when due;
- failure to deposit any sinking fund payment when due on Debt
Securities of that series;
- failure to perform any other covenant in the Indenture that applies to
Debt Securities of that series for 90 days after we have received
written notice of the failure to perform in the manner specified in
the Indenture;
- default under any Indebtedness for borrowed money (including other
series of Debt Securities), or under any mortgage, lien or other
similar encumbrance, indenture or instrument (including the Indenture)
which secures any Indebtedness for borrowed money, and which results
in acceleration of the maturity of an outstanding principal amount of
Indebtedness greater than $20 million, unless such acceleration is
rescinded (or the Indebtedness is discharged) within 10 days after we
have received written notice of the default in the manner specified in
the Indenture;
- certain events in bankruptcy, insolvency or reorganization; or
- any other Event of Default that may be specified for the Debt
Securities of that series when that series is created. (Section 501)
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If an Event of Default for any series of Debt Securities occurs and continues,
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of the series may declare the entire principal of
all the Debt Securities of that series to be due and payable immediately. If
such a declaration occurs, the Holders of a majority of the aggregate principal
amount of the Outstanding Debt Securities of that series can, subject to certain
conditions, rescind the declaration. (Sections 502, 513)
The prospectus supplement relating to each series of Debt Securities which
are Original Issue Discount Securities will describe the particular provisions
that relate to the acceleration of maturity of a portion of the principal amount
of such series when an Event of Default occurs and continues.
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under the Indenture. The Indenture requires us to file an
Officers' Certificate with the Trustee each year that states that certain
defaults do not exist under the terms of the Indenture. (Section 1011) The
Trustee may withhold notice to the Holders of Debt Securities of any default
(except defaults in the payment of principal, premium, interest or any sinking
fund installment) if it considers such withholding of notice to be in the best
interests of the Holders. (Section 602)
Other than its duties in the case of a default, a Trustee is not obligated
to exercise any of its rights or powers under the Indenture at the request,
order or direction of any Holders, unless the Holders offer the Trustee
reasonable indemnification. (Sections 601, 603) If reasonable indemnification
is provided, then, subject to certain other rights of the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities of any
series may, with respect to the Debt Securities of that series, direct the time,
method and place of:
- conducting any proceeding for any remedy available to the Trustee; or
- exercising any trust or power conferred upon the Trustee.
(Sections 512, 603)
The Holder of a Debt Security of any series will have the right to begin
any proceeding with respect to the Indenture or for any remedy only if:
- the Holder has previously given the Trustee written notice of a
continuing Event of Default with respect to that series;
- the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made a written request
of, and offered reasonable indemnification to, the Trustee to begin
such proceeding;
- the Trustee has not started such proceeding within 60 days after
receiving the request; and
- the Trustee has not received directions inconsistent with such request
from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series during those 60 days.
(Section 507)
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However, the Holder of any Debt Security will have an absolute right to receive
payment of principal of and any premium and interest on the Debt Security when
due and to institute suit to enforce such payment. (Section 508)
DEFEASANCE
DEFEASANCE AND DISCHARGE. At the time that we establish a series of Debt
Securities under the Indenture, we can provide that the Debt Securities of that
series are subject to the defeasance and discharge provisions of the Indenture.
If we so provide, we will be discharged from our obligations on the Debt
Securities of that series if we deposit with the Trustee, in trust, sufficient
money or Government Obligations (as defined below) to pay the principal,
interest, any premium and any other sums due on the Debt Securities of that
series (such as sinking fund payments) on the dates such payments are due under
the Indenture and the terms of the Debt Securities. (Section 403) As used
above, "GOVERNMENT OBLIGATIONS" mean:
- securities of the same government which issued the currency in which
the series of Debt Securities are denominated and in which interest is
payable; or
- securities of government agencies backed by the full faith and credit
of such government. (Section 101)
In the event that we deposit funds in trust and discharge our obligations
under a series of Debt Securities as described above, then:
- the Indenture will no longer apply to the Debt Securities of that
series (except for certain obligations to compensate, reimburse and
indemnify the Trustee, to register the transfer and exchange of Debt
Securities, to replace lost, stolen or mutilated Debt Securities and
to maintain paying agencies and the trust funds); and
- Holders of Debt Securities of that series can only look to the trust
fund for payment of principal, any premium and interest on the Debt
Securities of that series. (Section 403)
Under federal income tax law, such deposit and discharge may be treated as
an exchange of the related Debt Securities for an interest in the trust
mentioned above. Each holder might be required to recognize gain or loss equal
to the difference between (1) the holder's cost or other tax basis for the Debt
Securities and (2) the value of the holder's interest in the trust. Holders
might be required to include in income a share of the income, gain or loss of
the trust, including gain or loss recognized in connection with any substitution
of collateral, as described in this section under the heading "--Substitution of
Collateral" below. You are urged to consult your own tax advisers as to the
specific consequences of such a deposit and discharge, including the
applicability and effect of tax laws other than federal income tax law.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT. At the time
that we establish a series of Debt Securities under the Indenture, we can
provide that the Debt Securities of that series are subject to the covenant
defeasance provisions of the Indenture. If we so provide and we make the
deposit described in this section under the heading "--Defeasance and Discharge"
above:
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- we will not have to comply with the following restrictive covenants
contained in the Indenture:
- Consolidation, Merger or Sale (Sections 801, 803);
- Restrictions on Secured Funded Debt (Section 1008);
- Restrictions on Sale and Lease-Back Transactions (Section 1009);
- Classification of Restricted and Unrestricted Subsidiaries
(Section 1010); and
- any other covenant we designate when we establish the series of
Debt Securities; and
- we will not have to treat the events described in the fourth bullet
point under the heading "--Events of Default" (see page 16) as they
relate to the covenants listed above that have been defeased and no
longer are in effect and the events described in the fifth, sixth and
seventh bullet points under the heading "--Events of Default" as
Events of Default under the Indenture in connection with that series.
In the event of a defeasance, our obligations under the Indenture and the Debt
Securities, other than with respect to the covenants and the Events of Default
specifically referred to above, will remain in effect. (Section 1501)
If we exercise our option not to comply with the certain covenants listed
above and the Debt Securities of such series become immediately due and payable
because an Event of Default has occurred (other than as a result of an Event of
Default specifically referred to above), the amount of money and/or Government
Obligations on deposit with the Trustee will be sufficient to pay the principal,
interest, any premium and any other sums, due on the Debt Securities of such
series (such as sinking fund payments) on the date such payments are due under
the Indenture and the terms of the Debt Securities, but may not be sufficient to
pay amounts due at the time of acceleration. However, we would remain liable
for the balance of the payments. (Section 1501)
SUBSTITUTION OF COLLATERAL. At the time that we establish a series of Debt
Securities under the Indenture, we can provide for our ability to, at any time,
withdraw any money or Government Obligations deposited pursuant to the
defeasance provisions described above if we simultaneously substitute other
money and/or Government Obligations which would satisfy our payment obligations
on the Debt Securities of that series pursuant to the defeasance provisions
applicable to those Debt Securities. (Section 402)
DESCRIPTION OF PREFERRED SHARES
This section describes the general terms and provisions of our preferred
stock ("PREFERRED STOCK") that may be offered by this prospectus ("PREFERRED
SHARES"). The prospectus supplement will describe the specific terms of the
series of the Preferred Shares offered through that prospectus supplement and
any general terms outlined in this section that will not apply to those
Preferred Shares.
We have summarized certain terms and provisions of the Preferred Shares in
this section. The summary is not complete. We have also filed our Restated
Articles of Incorporation and the form of Certificate of Designation,
Preferences and Rights of Preferred Shares as exhibits to the
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registration statement. You should read our Restated Articles of Incorporation
and the Certificate of Designation, Preferences and Rights ("CERTIFICATE OF
DESIGNATION") relating to the applicable series of the Preferred Shares for
additional information before you buy any Preferred Shares.
GENERAL
Pursuant to our Restated Articles of Incorporation, our Board of Directors
has the authority, without further shareholder action, to issue a maximum of
5,000,000 shares of Preferred Stock, including shares issued or reserved for
issuance. As of August 1, 1998, we had 349,183 shares of Preferred Stock
outstanding. The Board of Directors has the authority to determine or fix the
following terms with respect to shares of any series of Preferred Stock:
- the number of shares and designation or title of the shares;
- dividend rights;
- whether and upon what terms the shares will be redeemable;
- the rights of the holders upon our dissolution or upon the
distribution of our assets;
- whether and upon what terms the shares will have a purchase,
retirement or sinking fund;
- whether and upon what terms the shares will be convertible;
- the voting rights, if any, which will apply; and
- any other preferences, rights, limitations or restrictions of the
series.
If we purchase, redeem or convert shares of Preferred Stock, we will retire and
cancel them and restore them to the status of authorized but unissued shares of
Preferred Stock. Such shares will not be part of any particular series of
Preferred Stock and may be reissued by us.
As described under "Description of Depositary Shares" below, we may elect
to offer Depositary Shares represented by Depositary Receipts. If we so elect,
each Depositary Share will represent a fractional interest (to be specified in
the applicable prospectus supplement) in a Preferred Share. If we issue
Depositary Shares representing interests in Preferred Shares, those Preferred
Shares will be deposited with a Depositary.
The Preferred Shares will have the dividend, liquidation, redemption,
voting and conversion rights described in this section unless the applicable
prospectus supplement provides otherwise. You should read the prospectus
supplement relating to the particular series of the Preferred Shares it offers
for specific terms, including:
- the title and liquidation preference of the Preferred Shares and the
number of shares offered;
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- the initial public offering price at which we will issue the Preferred
Shares;
- the dividend rate or rates (or method of calculation), the dividend
periods, the dates on which dividends will be payable and whether the
dividends will be cumulative or noncumulative and, if cumulative, the
dates from which the dividends will start to cumulate;
- any redemption or sinking fund provisions;
- any conversion provisions;
- whether we have elected to offer Depositary Shares as described under
"Description of Depositary Shares" below; and
- any additional dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions.
When we issue the Preferred Shares, they will be fully paid and
nonassessable (I.E., the full purchase price for the outstanding Preferred
Shares will have been paid and the holders of such Preferred Shares will not be
assessed any additional monies for such Preferred Shares). Unless the
applicable prospectus supplement specifies otherwise:
- each series of the Preferred Shares will rank equally in all respects
with the outstanding shares of each other series of the Preferred
Shares;
- each series of the Preferred Shares will rank senior to our Series B
Preferred Stock and Series A Junior Participating Preferred Stock
described under the heading "--Outstanding Preferred Stock" below;
- the Preferred Shares will have no preemptive rights to subscribe for
any additional securities which we may issue in the future (I.E., the
holders of Preferred Shares will have no right, as holders of
Preferred Shares, to buy any portion of those issued securities); and
- First Chicago Trust Company of New York will be the transfer agent and
registrar for the Preferred Shares and any Depositary Shares.
DIVIDENDS
The holders of the Preferred Shares of each series will be entitled to
receive cash dividends, if declared by our Board of Directors or its duly
authorized committee, out of our assets that we can legally use to pay
dividends. The prospectus supplement relating to a particular series of
Preferred Shares will set forth the dividend rates and dates on which dividends
will be payable. The rates may be fixed or variable or both. If the dividend
rate is variable, the applicable prospectus supplement will describe the formula
used for determining the dividend rate for each dividend period. We will pay
dividends to the holders of record as they
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appear on our stock books on the record dates fixed by our Board of Directors or
its duly authorized committee.
The applicable prospectus supplement will also state whether the dividends
on any series of the Preferred Shares are cumulative or noncumulative. If our
Board of Directors does not declare a dividend payable on a dividend payment
date on any noncumulative series of Preferred Shares, then the holders of that
series will not be entitled to receive a dividend for that dividend period and
we will not be obligated to pay the dividend for that dividend period even if
the Board declares a dividend on that series payable in the future.
Our Board will not declare and pay a dividend on any of our stock ranking,
as to dividends, equal with or junior to the Preferred Shares unless full
dividends on the Preferred Shares have been declared and paid (or declared and
sufficient money is set aside for payment). Until full dividends are paid (or
declared and payment is set aside) on Preferred Shares ranking equal as to
dividends, then:
- we will declare any dividends pro rata among the Preferred Shares of
each series and any Preferred Stock ranking equal to the Preferred
Shares as to dividends (I.E., the dividends we declare per share on
each series of such Preferred Stock will bear the same relationship to
each other that the full accrued dividends per share on each such
series of the Preferred Stock bear to each other);
- other than such pro rata dividends, we will not declare or pay any
dividends or declare or make any distributions upon any security
ranking junior to or equal with the Preferred Shares as to dividends
or upon liquidation (except dividends or distributions paid for with
securities ranking junior to the Preferred Shares as to dividends and
upon liquidation); and
- we will not redeem, purchase or otherwise acquire (or set aside money
for a sinking fund for) any securities ranking junior to or equal with
the Preferred Shares as to dividends or upon liquidation (except by
conversion into or exchange for stock junior to the Preferred Shares
as to dividends and upon liquidation).
We will not owe any interest, or any money in lieu of interest, on any dividend
payment(s) on any series of the Preferred Shares which may be past due.
REDEMPTION
A series of the Preferred Shares may be redeemable, in whole or in part, at
our option, and may be subject to mandatory redemption pursuant to a sinking
fund or otherwise, as described in the applicable prospectus supplement.
Redeemed Preferred Shares will become authorized but unissued shares of
Preferred Stock that we may issue in the future.
If a series of the Preferred Shares is subject to mandatory redemption, the
applicable prospectus supplement will specify the number of shares that we will
redeem each year and the redemption price. If Preferred Shares are redeemed, we
will pay all accrued and unpaid dividends on those Preferred Shares to, but
excluding, the redemption date. The prospectus
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supplement will also specify whether the redemption price will be paid in cash
or other property. If (1) we are only permitted to pay the redemption price for
a series of Preferred Shares from the proceeds of a capital stock issuance and
(2) the proceeds from the issuance are insufficient or no such issuance has
occurred, then the terms of that series may provide that the Preferred Shares
will automatically and mandatorily be converted into such capital stock.
If fewer than all of the outstanding shares of any series of the Preferred
Shares are to be redeemed, our Board of Directors will determine the number of
shares to be redeemed. We will redeem the shares pro rata from the holders of
record in proportion to the number of shares held by them (with adjustments to
avoid redemption of fractional shares).
Even though the terms of a series of Preferred Shares may permit redemption
of the Preferred Shares in whole or in part, if any dividends, including
accumulated dividends, on that series are past due:
- we will not redeem any Preferred Shares of that series unless we
simultaneously redeem all outstanding Preferred Shares of that series;
and
- we will not purchase or otherwise acquire any Preferred Shares of that
series.
The prohibition discussed in the prior sentence will not prohibit us from
purchasing or acquiring Preferred Shares of that series pursuant to a purchase
or exchange offer if we make the offer on the same terms to all holders of that
series.
Unless the applicable prospectus supplement specifies otherwise, we will
give notice of a redemption by mailing a notice to each record holder of the
shares to be redeemed, between 30 to 60 days prior to the date fixed for
redemption (unless we issue Depositary Shares representing interests in
Preferred Shares, in which case we will send a notice to the Depositary between
40 to 70 days prior to the date fixed for redemption). We will mail the notices
to the holders' addresses as they appear on our stock records. Each notice will
state:
- the redemption date;
- the number of shares and the series of the Preferred Shares to be
redeemed;
- the redemption price;
- the place or places where holders can surrender the certificates for
the Preferred Shares for payment of the redemption price;
- that dividends on the shares to be redeemed will cease to accrue on
the redemption date; and
- the date when the holders' conversion rights, if any, will terminate.
If we redeem fewer than all shares of any series of the Preferred Shares held by
any holder, we will also specify the number of shares to be redeemed from the
holder in the notice.
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If we have given notice of the redemption and have provided the funds for
the payment of the redemption price, then beginning on the redemption date:
- the dividends on the Preferred Shares called for redemption will no
longer accrue;
- such shares will no longer be considered outstanding; and
- the holders will no longer have any rights as shareholders except to
receive the redemption price.
When the holder properly surrenders the redeemed shares, the redemption price
will be paid out of the funds provided by us. If we redeem fewer than all of
the shares represented by any certificate, we will issue a new certificate
representing the unredeemed shares without cost to the holder.
In the event that a redemption described above is deemed to be a "tender
offer" within the meaning of Rule 14e-1 under the Exchange Act, we will comply
with all applicable provisions of the Exchange Act.
CONVERSION
The applicable prospectus supplement relating to a series of convertible
Preferred Shares will describe the terms on which shares of that series are
convertible into shares of Common Stock or a different series of Preferred
Stock.
RIGHTS UPON LIQUIDATION
Unless the applicable prospectus states otherwise, if we voluntarily or
involuntarily liquidate, dissolve or wind up our business, the holders of shares
of each series of the Preferred Shares will be entitled to receive:
- liquidation distributions in the amount stated in the applicable
prospectus supplement; and
- all accrued and unpaid dividends (whether or not earned or declared).
We will pay these amounts to the holders of shares of each series of the
Preferred Shares, and all amounts owing on any Preferred Stock ranking equally
with such series of Preferred Shares as to distributions upon liquidation, out
of our assets available for distribution to shareholders before any distribution
is made to holders of any securities ranking junior to the series of Preferred
Shares upon liquidation.
The sale of all or substantially all of our property and assets, our merger
into or consolidation with any other corporation or the merger of any other
corporation into us will not be considered a dissolution, liquidation or winding
up of our business.
If (1) we voluntarily or involuntarily liquidate, dissolve or wind up our
business and (2) the assets available for distribution to the holders of the
Preferred Shares of any series and any
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other shares of our stock ranking equal with such series as to any such
distribution are insufficient to pay all amounts to which the holders are
entitled, then we will only make pro rata distributions to the holders of all
shares ranking equal as to distributions upon dissolution, liquidation or
winding up of our business (I.E., the distributions we pay to the holders of all
shares ranking equal as to distributions upon dissolution, liquidation or
winding up of our business will bear the same relationship to each other that
the full distributable amounts for which such holders are respectively entitled
upon such dissolution, liquidation or winding up of our business bear to each
other).
After we pay the full amount of the liquidation distribution to which the
holders of a series of the Preferred Shares are entitled, such holders will have
no right or claim to any of our remaining assets.
VOTING RIGHTS
Except as described in this section or in the applicable prospectus
supplement, or except as expressly required by applicable law, the holders of
the Preferred Shares will not be entitled to vote. If the holders of a series
of Preferred Shares are entitled to vote and the applicable prospectus
supplement does not state otherwise, then each Preferred Share will be entitled
to one vote.
As more fully described under "Description of Depositary Shares" below, if
we elect to provide for the issuance of Depositary Shares representing
fractional interests in a Preferred Share, the holders of each Depositary Share
will be entitled to a fraction of a vote.
For any series of Preferred Shares having one vote per share, the voting
power of the series, on matters on which holders of such series and holders of
any other series of Preferred Stock are entitled to vote as a single class, will
solely depend on the total number of shares in such series (not the aggregate
liquidation preference or initial offering price).
Unless we receive the consent of the holders of an outstanding series of
Preferred Shares and the outstanding shares of all other series of Preferred
Stock which (1) rank equal with such series either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up of our
business and (2) have voting rights that are exercisable and that are similar to
those of such series, we will not:
- authorize, create or issue, or increase the authorized or issued
amount of, any class or series of stock ranking prior to such
outstanding Preferred Shares with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up
of our business; or
- amend, alter or repeal, whether by merger, consolidation or otherwise,
the provisions of our Restated Articles of Incorporation or of the
resolutions contained in a Certificate of Designation creating such
series of the Preferred Shares so as to materially and adversely
affect any right, preference, privilege or voting power of such
outstanding Preferred Shares.
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This consent must be given by the holders of at least two-thirds of all such
outstanding Preferred Stock described in the preceding sentence, voting together
as a single class. We will not be required to obtain this consent with respect
to the actions listed in the second bullet point above, however, if we only (1)
increase the amount of the authorized Preferred Stock, (2) create and issue
another series of Preferred Stock, or (3) increase the amount of authorized
shares of any series of Preferred Stock, if such Preferred Stock in each case
ranks equal with or junior to the Preferred Shares with respect to the payment
of dividends and the distribution of assets upon liquidation, dissolution or
winding up of our business.
OUTSTANDING PREFERRED STOCK
We have established the terms of three series of Preferred Stock: the
Series A Junior Participating Preferred Stock (the "SERIES A PREFERRED STOCK"),
which is described more fully under the heading "Description of Common
Stock--Rights Agreement" below; and the Series B ESOP Convertible Preferred
Stock and the Series B-1 ESOP Convertible Preferred Stock (together, the "SERIES
B PREFERRED STOCK"). At this time, we have only issued shares of the Series B
Preferred Stock. As of August 1, 1998, we had 458,353 shares designated as
Series B Preferred Stock, of which 349,183 shares were outstanding, and
2,000,000 shares designated as Series A Preferred Stock.
Unless the applicable prospectus supplement specifies otherwise, the
Preferred Shares will rank senior to the outstanding Series B Preferred Stock
and to any Series A Preferred Stock that may be issued in the future. Our
Common Stock, including the Common Stock that we may issue pursuant to an
offering under this prospectus or upon conversion or exercise of other
securities offered under this prospectus, will be subject to any prior rights of
the Preferred Stock. As a result, our outstanding Preferred Stock, and any
Preferred Stock that we may issue in the future, may limit the rights of the
holders of our Common Stock.
A trustee acting on behalf of The Dayton Hudson Corporation 401(k) Plan
(the "PLAN") is the record holder of all outstanding shares of Series B
Preferred Stock. The Series B Preferred Stock provides for cumulative quarterly
dividends equal to $56.20 per year, subject to adjustment. The Series B
Preferred Stock is subject to redemption:
- in whole or in part, at our option, at any time after January 10, 2000
at a price equal to $864.60 per share plus accrued and unpaid
dividends to the date fixed for redemption (the "REDEMPTION PRICE");
- in whole or in part, at our option, at any time after a change in any
statute, rule or regulation causes us to lose any or all of the tax
deductions for certain amounts paid on the Series B Preferred Stock at
a price equal to the higher of (1) the Redemption Price or (2) the per
share fair market value of the Series B Preferred Stock (determined as
set forth in its Certificate of Designation);
- if the Plan is terminated or the employee stock ownership feature of
the Plan is terminated or eliminated from the Plan, at a price equal
to the higher of (1) the Redemption Price or (2) the per share fair
market value of the Series B Preferred
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Stock (determined as set forth in its Certificate of Designation) (and
must be so redeemed by us); and
- in whole or in part, at the option of the holder, in certain
circumstances related to (1) the payment by the holder of indebtedness
incurred by or for the benefit of the Plan or (2) distributions
required to be made by the holder under the Plan.
Once a redemption notice is sent, a holder of Series B Preferred Stock will have
the option of accepting the redemption price or converting such holder's Series
B Preferred Stock into Common Stock as described below. If a holder accepts the
redemption price, we will pay it in cash or, if we elect, in shares of Common
Stock or a combination of such shares and cash.
One share of the Series B Preferred Stock is convertible into 60 shares of
Common Stock, subject to adjustment for stock splits and certain other events.
The Series B Preferred Stock is mandatorily convertible, without any further
action by us or the holder, into Common Stock at the then applicable conversion
price (as defined in its Certificate of Designation) when record ownership of
the shares of Series B Preferred Stock is transferred to any person other than a
successor trustee under the Plan. In addition, a holder of Series B Preferred
Stock can convert shares of Series B Preferred Stock into shares of Common Stock
at the then applicable conversion price at any time prior to the date fixed for
redemption.
The Series B Preferred Stock does not have preemptive rights to subscribe
for any additional securities which we may issue in the future.
If we voluntarily or involuntarily liquidate, dissolve or wind up our
business, the holders of the Series B Preferred Stock are entitled to receive
$864.60 per share, plus accrued and unpaid dividends, out of the assets
available for distribution to our shareholders, before any distribution is made
to holders of Common Stock or any other capital stock ranking junior to the
Series B Preferred Stock with respect to the distribution of assets upon
liquidation, dissolution or winding up of our business.
Each share of Series B Preferred Stock entitles its holder to one vote for
each share of Common Stock into which it may be converted on all matters
submitted to a vote of our shareholders. The holders of Series B Preferred
Stock vote together with the holders of our Common Stock as one class. In
addition, the holders of at least two-thirds of the outstanding shares of each
series of the Series B Preferred Stock must vote to adopt any amendment of any
provision of the Restated Articles of Incorporation or the applicable
Certificate of Designation for such series of the Series B Preferred Stock, if
the amendment would adversely change the special rights of such shares of the
Series B Preferred Stock. Except as otherwise required by law or described
above, the holders of Series B Preferred Stock have no special voting rights.
DESCRIPTION OF DEPOSITARY SHARES
This section describes the general terms and provisions of the Depositary
Shares (as defined below). The prospectus supplement will describe the specific
terms of the Depositary Shares offered through that prospectus supplement and
any general terms outlined in this section that will not apply to those
Depositary Shares.
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We have summarized certain terms and provisions of the Deposit Agreement,
the Depositary Shares and the Depositary Receipts in this section. The summary
is not complete. We have also filed the form of Deposit Agreement, including
the form of Depositary Receipt, as an exhibit to the registration statement.
You should read the forms of Deposit Agreement and Depositary Receipt relating
to a series of Preferred Shares for additional information before you buy any
Depositary Shares that represent Preferred Shares of such series.
GENERAL
We may offer fractional interests in Preferred Shares, rather than full
Preferred Shares. If we do, we will provide for the issuance by a Depositary
(as defined below) to the public of receipts for depositary shares ("DEPOSITARY
SHARES"), each of which will represent a fractional interest in a share of a
particular series of Preferred Shares.
The shares of any series of Preferred Shares underlying the Depositary
Shares will be deposited under a separate deposit agreement (the "DEPOSIT
AGREEMENT") between us and a bank or trust company having its principal office
in the United States and having a combined capital and surplus of at least
$50 million (the "DEPOSITARY"). We will name the Depositary in the applicable
prospectus supplement. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will have a fractional interest in all the rights
and preferences of the Preferred Share underlying such Depositary Share. Those
rights include any dividend, voting, redemption, conversion and liquidation
rights.
The Depositary Shares will be evidenced by depositary receipts issued under
the Deposit Agreement (the "DEPOSITARY RECEIPTS"). If you purchase fractional
interests in shares of the related series of Preferred Shares, you will receive
Depositary Receipts as described in the applicable prospectus supplement. While
the final Depositary Receipts are being prepared, we may order the Depositary to
issue temporary Depositary Receipts substantially identical to the final
Depositary Receipts although not in final form. The holders of the temporary
Depositary Receipts will be entitled to the same rights as if they held the
Depositary Receipts in final form. Holders of the temporary Depositary Receipts
can exchange them for the final Depositary Receipts at our expense.
If you surrender Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption), you are entitled to receive at such office the number of Preferred
Shares and any money or other property represented by such Depositary Shares.
We will not issue partial Preferred Shares. If you deliver Depositary Receipts
evidencing a number of Depositary Shares that represent more than a whole number
of Preferred Shares, the Depositary will issue you a new Depositary Receipt
evidencing such excess number of Depositary Shares at the same time that the
Preferred Shares are withdrawn. Holders of Preferred Shares received in
exchange for Depositary Shares will no longer be entitled to deposit such shares
under the Deposit Agreement or to receive Depositary Shares in exchange for such
Preferred Shares.
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DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received with respect to the Preferred Shares to the record
holders of Depositary Shares representing the Preferred Shares in proportion to
the numbers of Depositary Shares owned by the holders on the relevant record
date. The Depositary will distribute only the amount that can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent.
The balance not distributed will be added to and treated as part of the next sum
received by the Depositary for distribution to record holders of Depositary
Shares.
If there is a distribution other than in cash, the Depositary will
distribute property to the holders of Depositary Shares, unless the Depositary
determines that it is not feasible to make such distribution. If this occurs,
the Depositary may, with our approval, sell the property and distribute the net
proceeds from the sale to the holders of Depositary Shares.
The Deposit Agreement will also contain provisions relating to how any
subscription or similar rights offered by us to holders of the Preferred Shares
will be made available to the holders of Depositary Shares.
CONVERSION AND EXCHANGE
If any series of Preferred Shares underlying the Depositary Shares is
subject to conversion or exchange, the applicable prospectus supplement will
describe the rights or obligations of each record holder of Depositary Receipts
to convert or exchange the Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If the series of the Preferred Shares underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
redemption proceeds, in whole or in part, of such series of the Preferred Shares
held by the Depositary. The Depositary will mail notice of redemption between
30 to 60 days prior to the date fixed for redemption to the record holders of
the Depositary Shares to be redeemed at their addresses appearing in the
Depositary's records. The redemption price per Depositary Share will bear the
same relationship to the redemption price per Preferred Share that the
Depositary Share bears to the underlying Preferred Share. Whenever we redeem
Preferred Shares held by the Depositary, the Depositary will redeem, as of the
same redemption date, the number of Depositary Shares representing the Preferred
Shares redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares called for
redemption will no longer be outstanding. When the Depositary Shares are no
longer outstanding, all rights of the holders will cease, except the right to
receive money or other property that the holders of the Depositary Shares were
entitled to receive upon such redemption. Such payments will be made when
holders surrender their Depositary Receipts to the Depositary.
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VOTING THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the Preferred
Shares are entitled to vote, the Depositary will mail information about the
meeting contained in the notice to the record holders of the Depositary Shares
relating to such Preferred Shares. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Shares) will be entitled to instruct the Depositary as to how the
Preferred Shares underlying the holder's Depositary Shares should be voted.
The Depositary will try, if practical, to vote the number of Preferred
Shares underlying the Depositary Shares according to the instructions received.
We will agree to take all action requested by and deemed necessary by the
Depositary in order to enable the Depositary to vote the Preferred Shares in
that manner. The Depositary will not vote any Preferred Shares for which it
does not receive specific instructions from the holders of the Depositary Shares
relating to such Preferred Shares.
TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the Preferred Shares represented by the Depositary
Shares. Accordingly, for federal income tax purposes they will have the income
and deductions to which they would be entitled if they were holders of the
Preferred Shares. In addition:
- no gain or loss will be recognized for federal income tax purposes
upon the withdrawal of Preferred Shares in exchange for Depositary
Shares as provided in the Deposit Agreement;
- the tax basis of each Preferred Share to an exchanging owner of
Depositary Shares will, upon the exchange, be the same as the
aggregate tax basis of the Depositary Shares exchanged for such
Preferred Share; and
- the holding period for the Preferred Shares, in the hands of an
exchanging owner of Depositary Shares who held the Depositary Shares
as a capital asset at the time of the exchange, will include the
period that the owner held such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may be amended by agreement between us and
the Depositary at any time. However, any amendment that materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless approved by the record holders of at least a majority of
the Depositary Shares then outstanding. A Deposit Agreement may be terminated
by us or the Depositary only if:
- all outstanding Depositary Shares relating to the Deposit Agreement
have been redeemed; or
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- there has been a final distribution on the Preferred Shares of the
relevant series in connection with our liquidation, dissolution or
winding up of our business and the distribution has been distributed
to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay
associated charges of the Depositary for the initial deposit of the Preferred
Shares and any redemption of the Preferred Shares. Holders of Depositary Shares
will pay transfer and other taxes and governmental charges and any other charges
that are stated to be their responsibility in the Deposit Agreement.
MISCELLANEOUS
We will forward to the holders of Depositary Shares all reports and
communications that we must furnish to the holders of the Preferred Shares.
Neither the Depositary nor we will be liable if the Depositary is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. Our obligations and the Depositary's
obligations under the Deposit Agreement will be limited to performance in good
faith of duties set forth in the Deposit Agreement. Neither the Depositary nor
we will be obligated to prosecute or defend any legal proceeding connected with
any Depositary Shares or Preferred Shares unless satisfactory indemnity is
furnished to us and/or the Depositary. We and the Depositary may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Shares for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering notice to us. We may
also remove the Depositary at any time. Resignations or removals will take
effect upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50 million.
DESCRIPTION OF COMMON STOCK
This section describes the general terms and provisions of the shares of
our common stock (the "COMMON STOCK"). The prospectus supplement will describe
the specific terms of the Common Stock offered through that prospectus
supplement and any general terms outlined in this section that will not apply to
that Common Stock.
We have summarized certain terms and provisions of the Common Stock in this
section. The summary is not complete. We have also filed our Restated Articles
of Incorporation, our bylaws and the Certificate of Designation relating to the
Series A Preferred Stock as exhibits to the registration statement. You should
read our Restated Articles of Incorporation and our
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bylaws and the Certificate of Designation relating to the Series A Preferred
Stock for additional information before you buy any Common Stock.
GENERAL
SHARES OUTSTANDING. As of August 1, 1998, our authorized Common Stock was
3,000,000,000 shares, of which 439,944,303 shares were issued and outstanding.
DIVIDENDS. Holders of Common Stock may receive dividends when declared by
our Board of Directors out of our funds that we can legally use to pay
dividends. We may pay dividends in cash, stock or other property. In certain
cases, holders of Common Stock may not receive dividends until we have satisfied
our obligations to any holders of outstanding Preferred Stock.
VOTING RIGHTS. Holders of Common Stock have the exclusive power to vote on
all matters presented to our shareholders unless Minnesota law or the
certificate of designation for an outstanding series of Preferred Stock gives
the holders of that Preferred Stock the right to vote on certain matters. Each
holder of Common Stock is entitled to one vote per share. Holders of Common
Stock have no cumulative voting rights for the election of directors (I.E., a
holder of a single share of Common Stock cannot cast more than one vote for each
position to be filled on our Board of Directors).
OTHER RIGHTS. If we voluntarily or involuntarily liquidate, dissolve or
wind up our business, holders of Common Stock will receive pro rata, according
to shares held by them, any remaining assets distributable to our shareholders
after we have provided for any liquidation preference for outstanding shares of
Preferred Stock. When we issue securities in the future, holders of Common
Stock have no preemptive rights (I.E., the holders of Common Stock have no
right, as holders of Common Stock, to buy any portion of those issued
securities). Each share of Common Stock does include a right to purchase Series
A Preferred Stock if certain conditions occur. The conditions under which a
holder may exercise that purchase right are discussed under the heading
"--Rights Agreement" below.
LISTING. Our outstanding shares of Common Stock are listed on the New York
Stock Exchange and Pacific Stock Exchange under the symbol "DH." First Chicago
Trust Company of New York serves as the transfer agent and registrar for the
Common Stock.
FULLY PAID. The outstanding shares of Common Stock are fully paid and
nonassessable (I.E., the full purchase price for the outstanding shares of
Common Stock has been paid and the holders of such shares will not be assessed
any additional monies for such shares). Any additional Common Stock that we may
issue in the future pursuant to an offering under this prospectus or upon the
conversion or exercise of other securities offered under this prospectus will
also be fully paid and nonassessable.
ANTI-TAKEOVER PROVISIONS CONTAINED IN THE ARTICLES OF INCORPORATION AND BYLAWS
Certain provisions of our Restated Articles of Incorporation may make it
less likely that our management would be changed or someone would acquire voting
control of our company without our Board's consent. These provisions may delay,
deter or prevent tender offers or
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takeover attempts that shareholders may believe are in their best interests,
including tender offers or attempts that might allow shareholders to receive
premiums over the market price of their Common Stock.
FAIR PRICE PROVISION. Article IV of our Restated Articles of Incorporation
prohibits certain transactions ("BUSINESS COMBINATIONS") between our company and
direct and indirect owners of 10% or more of our voting stock ("INTERESTED
SHAREHOLDERS") unless those transactions are approved by holders of at least 75%
of our outstanding voting stock, voting together as a single class. This 75%
approval is in addition to any approval required by law. Business combinations
requiring the 75% approval include the following transactions, among others:
- any merger, consolidation, or statutory exchange of our shares with an
interested shareholder or a corporation affiliated with an interested
shareholder, subject to limited exceptions;
- any sale, lease, pledge, or other transfer or disposition of our
assets valued at 10% or more of the book value of our consolidated
assets to an interested shareholder or person or entity affiliated
with an interested shareholder, or any sale, lease, pledge, or other
transfer or disposition of an interested shareholder's assets with
such value to us;
- the issuance or transfer by us of any of our shares to an interested
shareholder or person or entity affiliated with an interested
shareholder, subject to limited exceptions that do not increase the
percentage of our shares owned by the interested shareholder or such
affiliated person or entity;
- the adoption of any plan proposed by or on behalf of an interested
shareholder or a person or entity affiliated with an interested
shareholder to liquidate or dissolve our company; and
- any transaction that increases the proportionate share of our stock
owned directly or indirectly by an interested shareholder or a person
or entity affiliated with an interested shareholder.
Shareholders do not need to approve a business combination under Article IV
of our Restated Articles of Incorporation if a majority of the continuing
directors approve the business combination. Continuing directors are those
directors, other than the interested shareholder or any representative or
affiliate of the interested shareholder, (1) who were members of the Board of
Directors before the interested shareholder involved in the business combination
became an interested shareholder or (2) whose election or nomination was
approved by a majority of such directors.
Shareholders also do not need to approve a business combination under
Article IV of our Restated Articles of Incorporation that meets certain
conditions specified in Article IV of our Restated Articles of Incorporation.
These conditions include, among other things, the following:
- holders of our capital stock receive at least the minimum amount of
consideration in the business combination determined pursuant to
Article IV of our Restated Articles
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(this condition is designed to assure that the price received by each
shareholder is at least as high as the highest price paid for our
shares by the interested shareholder in becoming an interested
shareholder or in the two years before the business combination is
announced, and also is at least as high as the higher of the fair
market value of our shares when the interested shareholder became an
interested shareholder or the business combination was announced);
- the interested shareholder does not acquire any additional shares of
our stock after becoming an interested shareholder (unless the
additional acquisition is approved by a majority of the continuing
directors); and
- a proxy or information statement describing the proposed business
combination is mailed to all holders of our stock at least 30 days
before the business combination is completed.
Holders of at least 75% of our outstanding voting stock, voting together as one
class, must approve a proposal to amend or repeal, or adopt provisions
inconsistent with, Article IV of our Restated Articles of Incorporation.
PREFERRED STOCK. Our Board of Directors can at any time, under our
Restated Articles of Incorporation and without shareholder approval, issue one
or more new series of Preferred Stock. In some cases, the issuance of Preferred
Stock without shareholder approval could discourage or make more difficult
attempts to take control of our company through a merger, tender offer, proxy
contest or otherwise. Preferred Stock with special voting rights or other
features issued to persons favoring our management could stop a takeover by
preventing the person trying to take control of our company from acquiring
enough voting shares necessary to take control.
CLASSIFIED BOARD. Members of our Board of Directors are divided into three
classes and serve staggered three-year terms under Article VI of our Restated
Articles of Incorporation. This means that only approximately one-third of our
directors are elected at each annual meeting of shareholders and that it would
take two years to replace a majority of the directors unless they are removed.
Under Article VI of our Restated Articles of Incorporation, directors can be
removed from office during their terms only if holders of at least 75% of our
outstanding voting stock, voting together as one class, approve the removal. At
least 75% of our outstanding voting stock, voting together as one class, must
approve any proposal to amend or repeal, or adopt any provisions inconsistent
with, this provision of our Restated Articles of Incorporation.
NOMINATION PROCEDURES. In addition to our Board of Directors, shareholders
can nominate candidates for our Board of Directors. However, a shareholder must
follow the advance notice procedures described in Article VI of our Restated
Articles of Incorporation. In general, a shareholder must submit a written
notice of the nomination to our corporate secretary at least 60 days before a
scheduled meeting of our shareholders. At least 75% of our outstanding voting
stock, voting together as one class, must approve any proposal to amend or
repeal, or adopt any provisions inconsistent with, this provision of our
Restated Articles of Incorporation.
PROPOSAL PROCEDURES. Shareholders can propose that business other than
nominations to our Board of Directors be considered at an annual meeting of
shareholders only if a shareholder
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follows the advance notice procedures described in our bylaws. In general, a
shareholder must submit a written notice of the proposal and the shareholder's
interest in the proposal at least 60 days before the date set for the annual
meeting of our shareholders.
AMENDMENT OF BYLAWS. Under our bylaws, our Board of Directors can adopt,
amend or repeal the bylaws, subject to limitations under the Minnesota Business
Corporation Act. Our shareholders also have the power to change or repeal our
bylaws.
RIGHTS AGREEMENT
Each share of our Common Stock, including those that may be issued in an
offering under this prospectus or upon the conversion or exercise of other
securities offered under this prospectus, carries with it one preferred share
purchase right (a "RIGHT"). If the Rights become exercisable, each Right
entitles the registered holder to purchase one six-hundredth of a share of the
Series A Preferred Stock (subject to a proportionate decrease in the fractional
number of shares of Series A Preferred Stock that may be purchased if a stock
split, stock dividend or similar transaction occurs with respect to the Common
Stock and a proportionate increase in the event of a reverse stock split).
Until a Right is exercised, the holder of the Right has no right to vote or
receive dividends or any other rights as a shareholder as a result of holding
the Right. The description and terms of the Rights are described in the Rights
Agreement, dated as of September 11, 1996, between us and First Chicago Trust
Company of New York, as Rights Agent, that has been filed with the SEC.
The Rights trade automatically with shares of Common Stock. A holder of
Common Stock may exercise the Rights only under the circumstances described
below. The Rights are designed to protect the interests of our company and
shareholders against coercive takeover tactics. The Rights are also designed to
encourage potential acquirors to negotiate with our Board of Directors before
attempting a takeover and to increase the ability of our Board to negotiate
terms of any proposed takeover that benefit our shareholders. The Rights may,
but are not intended to, deter takeover proposals that may be in the interests
of our shareholders.
Shares of Series A Preferred Stock will rank junior to all other series of
our Preferred Stock, including the Preferred Shares offered under this
prospectus, if our Board, in creating such Preferred Stock, provides that they
will rank senior to the Series A Preferred Stock. If our shareholders purchase
Series A Preferred Stock, we cannot repurchase such stock from shareholders who
do not want to resell it. Subject to the rights of our senior securities, a
holder of the Series A Preferred Stock will be entitled, for each such share
owned, to:
- a quarterly dividend payment equal to the greater of (1) $3.00 per
share or (2) 600 times the quarterly dividend declared per share of
Common Stock, before any amounts are distributed to holders of Common
Stock (if the dividend is not paid on the Series A Preferred Stock in
one or more quarters, no dividend may be paid on Common Stock until
all previously unpaid dividends on Series A Preferred Stock have been
paid);
- a liquidation payment equal to the greater of (1) $300 per share plus
all accrued and unpaid dividends or (2) 600 times the payment made per
share of Common Stock, if
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we liquidate our company, before any amounts are distributed to
holders of Common Stock;
- receive 600 times the amount received per share of Common Stock in the
event of any merger, consolidation, statutory share exchange or other
similar transaction; and
- 600 votes per share and will vote together with the Common Stock
unless applicable law requires otherwise.
These rights of the Series A Preferred Stock are protected by customary
antidilution provisions which automatically increase dividend, liquidation,
merger and voting rights in proportion to increases in Common Stock resulting
from stock dividends, stock splits and similar transactions. These rights are
proportionately decreased in the event of decreases in Common Stock resulting
from reverse stock splits and similar transactions.
The purchase price for each one six-hundredth of a share of Series A
Preferred Stock is $50. We must adjust the purchase price if certain events
occur, such as:
- if we pay stock dividends on the Series A Preferred Stock or split the
Series A Preferred Stock; or
- if we issue warrants for shares of Series A Preferred Stock to holders
of Series A Preferred Stock or other securities that could be
converted into shares of Series A Preferred Stock at less than the
then current market price of the Series A Preferred Stock.
Holders may exercise their Rights only following a "DISTRIBUTION DATE." A
distribution date will occur 15 days after (1) a person or group acquires 20% or
more of the outstanding shares of Common Stock or (2) a person or group makes or
announces an offer to purchase Common Stock, which, if successful, would result
in the acquisition of 30% or more of the outstanding shares of Common Stock (but
our Board may delay the distribution date following such an offer until the
person or group actually acquires at least 20% of the outstanding shares of
Common Stock). However, a distribution date will not occur, and the Rights
cannot be exercised, as long as our Board has the ability to redeem the Rights,
as described below.
The Rights have certain additional features that will be triggered upon the
occurrence of specified events, including:
- if a person or group acquires 20% or more of the outstanding shares of
Common Stock, holders of the Rights, other than such person or group,
may purchase our Common Stock (instead of our Series A Preferred
Stock) at 50% of the market value of the purchased Common Stock;
- if a person or group acquires 20% or more of the outstanding shares of
Common Stock, our Board of Directors may, at any time before the
person or group acquires 50% or more of the outstanding shares of
Common Stock, exchange all or part of the Rights (other than Rights
held or previously held by the 20% or greater shareholder) for Common
Stock or equivalent securities at an exchange ratio per Right equal to
the
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<PAGE>
exercise price of a Right divided by the current per share market
price of the Common Stock, subject to adjustment; and
- if our company is involved in certain business combinations or the
sale of 50% or more of our assets or earning power, the holders of the
Rights may purchase common stock of the acquiror or an affiliated
company at 50% of market value.
Any time before a person or group acquires 20% or more of the outstanding
shares of Common Stock and in certain circumstances within 20 days after such an
event, our Board of Directors may redeem the Rights in whole, but not in part,
at a price of $.005 per Right, subject to adjustment for stock dividends, stock
splits and similar transactions (the "RIGHTS REDEMPTION PRICE"). Our Board of
Directors in its sole discretion may establish the effective time, basis and
conditions of the redemption. Immediately upon redemption of the Rights, the
holder (1) can no longer exercise such Rights and (2) can only receive the
Rights Redemption Price.
In addition, our shareholders can, under certain circumstances, compel our
Board of Directors to redeem the Rights even if our Board of Directors believes
that a tender offer of the nature described in the following sentence is not in
our shareholders' best interests. A person making a cash tender offer for all
of our outstanding capital stock and satisfying certain other conditions can
demand a shareholders meeting to vote upon a resolution requesting our Board of
Directors to redeem the Rights and allow the completion of that tender offer, or
another cash tender offer for all of our capital stock at a price that is at
least as high as that contained in the original tender offer, without being
affected by the Rights. If two-thirds of the outstanding shares of our voting
stock approve such a resolution and certain other conditions are satisfied, our
Board must redeem the Rights and the Rights would not affect the completion of
the tender offer.
The Rights will expire on September 26, 2001, unless we redeem them before
then. Our Board of Directors may amend the terms of the Rights without the
consent of the holders of the Rights at any time before the distribution date in
any manner our Board deems desirable, except that amendments described below
that expressly require a shareholder vote must receive that vote. Our Board of
Directors may amend the terms of the Rights without the consent of the holders
of the Rights after the distribution date only if the amendment cures
ambiguities, corrects or supplements defective or inconsistent provisions, or
does not adversely affect the interests of the holders of the Rights. The
affirmative vote of holders of a majority of the shares of Common Stock voting
for or against a proposed amendment at a shareholders meeting is required to
amend the terms of the Rights to change the purchase price of the Rights, the
Rights Redemption Price, the number or type of shares for which the Rights are
exercisable, their expiration date, the percentage stock ownership by a person
or group that triggers the exercise of the Rights, or the shareholder voting
requirements for compelling redemption of the Rights.
DESCRIPTION OF SECURITIES WARRANTS
This section describes the general terms and provisions of the Securities
Warrants (as defined below). The prospectus supplement will describe the
specific terms of the Securities Warrants offered through that prospectus
supplement and any general terms outlined in this section that will not apply to
those Securities Warrants.
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<PAGE>
We may issue warrants for the purchase of Debt Securities, Preferred
Shares, Depositary Shares or Common Stock (the "SECURITIES WARRANTS").
Securities Warrants may be issued alone or together with Debt Securities,
Preferred Shares, Depositary Shares or Common Stock offered by any prospectus
supplement and may be attached to or separate from those securities. Each
series of Securities Warrants will be issued under a separate warrant agreement
(a "SECURITIES WARRANT AGREEMENT") between us and a bank or trust company, as
warrant agent (the "SECURITIES WARRANT AGENT"), which will be described in the
applicable prospectus supplement. The Securities Warrant Agent will act solely
as our agent in connection with the Securities Warrants and will not act as an
agent or trustee for any holders of Securities Warrants.
We have summarized certain terms and provisions of the Securities Warrant
Agreements and Securities Warrants in this section. The summary is not
complete. We have also filed the forms of Securities Warrant Agreements and the
certificates representing the Securities Warrants ("SECURITIES WARRANT
CERTIFICATES") as exhibits to the registration statement. You should read the
applicable forms of Securities Warrant Agreement and Securities Warrant
Certificate for additional information before you buy any Securities Warrants.
GENERAL
If we offer Securities Warrants, the applicable prospectus supplement will
describe their terms. If Securities Warrants for the purchase of Debt
Securities are offered, the applicable prospectus supplement will describe the
terms of such Securities Warrants, including the following if applicable:
- the offering price;
- the currencies in which such Securities Warrants are being offered;
- the designation, aggregate principal amount, currencies, denominations
and terms of the series of the Debt Securities that can be purchased
if a holder exercises such Securities Warrants;
- the designation and terms of any series of Debt Securities, Preferred
Shares or Depositary Shares with which such Securities Warrants are
being offered and the number of Securities Warrants offered with each
Debt Security, Preferred Share, Depositary Share or share of Common
Stock;
- the date on and after which the holder of such Securities Warrants can
transfer them separately from the related Common Stock or series of
Debt Securities, Preferred Shares or Depositary Shares;
- the principal amount of the series of Debt Securities that can be
purchased if a holder exercises such Securities Warrant and the price
at which and currencies in which such principal amount may be
purchased upon exercise;
- the date on which the right to exercise such Securities Warrants
begins and the date on which such right expires;
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- United States federal income tax consequences; and
- any other terms of such Securities Warrants.
Securities Warrants for the purchase of Debt Securities will be in registered
form only.
If Securities Warrants for the purchase of Preferred Shares, Depositary
Shares or Common Stock are offered, the applicable prospectus supplement will
describe the terms of such Securities Warrants, including the following where
applicable:
- the offering price;
- the total number of shares that can be purchased if a holder of such
Securities Warrants exercises them and, in the case of Securities
Warrants for Preferred Shares or Depositary Shares, the designation,
total number and terms of the series of Preferred Shares that can be
purchased upon exercise or that are underlying the Depositary Shares
that can be purchased upon exercise;
- the designation and terms of the series of Debt Securities, Preferred
Shares or Depositary Shares with which such Securities Warrants are
being offered and the number of Securities Warrants being offered with
each Debt Security, Preferred Share, Depositary Share or share of
Common Stock;
- the date on and after which the holder of such Securities Warrants can
transfer them separately from the related Common Stock or series of
Debt Securities, Preferred Shares or Depositary Shares;
- the number of Preferred Shares, Depositary Shares or shares of Common
Stock that can be purchased if a holder exercises such Securities
Warrant and the price at which such Preferred Shares, Depositary
Shares or Common Stock may be purchased upon each exercise;
- the date on which the right to exercise such Securities Warrants
begins and the date on which such right expires;
- United States federal income tax consequences; and
- any other terms of such Securities Warrants.
Securities Warrants for the purchase of Preferred Shares, Depositary Shares or
Common Stock will be in registered form only.
A holder of Securities Warrant Certificates may (1) exchange them for new
certificates of different denominations, (2) present them for registration of
transfer and (3) exercise them at the corporate trust office of the Securities
Warrant Agent or any other office indicated in the applicable prospectus
supplement. Until any Securities Warrants to purchase Debt Securities are
exercised, the holder of such Securities Warrants will not have any of the
rights of Holders of the Debt Securities that can be purchased upon exercise,
including any right to receive payments of
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<PAGE>
principal, premium or interest on the underlying Debt Securities or to enforce
covenants in the Indenture. Until any Securities Warrants to purchase Preferred
Shares, Depositary Shares or Common Stock are exercised, holders of such
Securities Warrants will not have any rights of holders of the underlying
Preferred Shares, Depositary Shares or Common Stock, including any right to
receive dividends or to exercise any voting rights.
EXERCISE OF SECURITIES WARRANTS
Each holder of a Securities Warrant is entitled to purchase the principal
amount of Debt Securities or number of Preferred Shares, Depositary Shares or
shares of Common Stock, as the case may be, at the exercise price described in
the applicable prospectus supplement. After the close of business on the day
when the right to exercise terminates (or a later date if we extend the time for
exercise), unexercised Securities Warrants will become void.
A holder of Securities Warrants may exercise them by following the general
procedure outlined below:
- delivering to the Securities Warrant Agent the payment required by the
applicable prospectus supplement to purchase the underlying security;
- properly completing and signing the reverse side of the Securities
Warrant Certificate representing the Securities Warrants; and
- delivering the Securities Warrant Certificate representing the
Securities Warrants to the Securities Warrant Agent within five
business days of the Securities Warrant Agent receiving payment of the
exercise price.
If you comply with the procedures described above, your Securities Warrants
will be considered to have been exercised when the Securities Warrant Agent
receives payment of the exercise price. After you have completed those
procedures, we will, as soon as practicable, issue and deliver to you the Debt
Securities, Preferred Shares, Depositary Shares or Common Stock that you
purchased upon exercise. If you exercise fewer than all of the Securities
Warrants represented by a Securities Warrant Certificate, a new Securities
Warrant Certificate will be issued to you for the unexercised amount of
Securities Warrants. Holders of Securities Warrants will be required to pay any
tax or governmental charge that may be imposed in connection with transferring
the underlying securities in connection with the exercise of the Securities
Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
We may amend or supplement a Securities Warrant Agreement without the
consent of the holders of the applicable Securities Warrants if the changes are
not inconsistent with the provisions of the Securities Warrants and do not
materially adversely affect the interests of the holders of the Securities
Warrants. We, along with the Securities Warrant Agent, may also modify or amend
a Securities Warrant Agreement and the terms of the Securities Warrants if a
majority of the then outstanding unexercised Securities Warrants affected by the
modification or amendment consent. However, no modification or amendment that
accelerates the expiration date, increases the exercise price, reduces the
majority consent requirement for any such
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<PAGE>
modification or amendment, or otherwise materially adversely affects the rights
of the holders of the Securities Warrants may be made without the consent of
each holder affected by the modification or amendment.
COMMON STOCK WARRANT ADJUSTMENTS
Unless the applicable prospectus supplement states otherwise, the exercise
price of, and the number of shares of Common Stock covered by, a Common Stock
Warrant will be adjusted in the manner set forth in the applicable prospectus
supplement if certain events occur, including:
- if we issue capital stock as a dividend or distribution on the Common
Stock;
- if we subdivide, reclassify or combine the Common Stock;
- if we issue rights or warrants to all holders of Common Stock
entitling them (for a period expiring 45 days after the date fixed for
determining the shareholders entitled to receive such rights or
warrants) to purchase Common Stock at less than the current market
price (as defined in the Warrant Agreement for such series of Common
Stock Warrants); or
- if we distribute to all holders of Common Stock evidences of our
indebtedness or our assets (excluding certain cash dividends and
distributions described below) or rights or warrants (excluding those
referred to above).
Except as stated above, the exercise price and number of shares of Common
Stock covered by a Common Stock Warrant will not be adjusted if we issue Common
Stock or any securities convertible into or exchangeable for Common Stock, or
securities carrying the right to purchase Common Stock or securities convertible
into or exchangeable for Common Stock.
Holders of Common Stock Warrants may have additional rights under the
following circumstances:
- a reclassification or change of the Common Stock;
- a consolidation or merger involving our company; or
- a sale or conveyance to another corporation of all or substantially
all of our property and assets.
If one of the above transactions occurs and holders of our Common Stock are
entitled to receive stock, securities, other property or assets (including cash)
with respect to or in exchange for such Common Stock, the holders of the Common
Stock Warrants then outstanding will be entitled to receive upon exercise of
their Common Stock Warrants the kind and amount of shares of stock and other
securities or property that they would have received upon the reclassification,
change, consolidation, merger, sale or conveyance if they had exercised their
Common Stock Warrants immediately before the transaction.
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PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus through
agents, through underwriters or dealers or directly to one or more purchasers.
Underwriters, dealers and agents that participate in the distribution of
the securities offered pursuant to this prospectus may be underwriters as
defined in the Securities Act of 1933 and any discounts or commissions received
by them from us and any profit on the resale of the offered securities by them
may be treated as underwriting discounts and commissions under the Securities
Act. Any underwriters or agents will be identified and their compensation
(including underwriting discount) will be described in the applicable prospectus
supplement. The prospectus supplement will also describe other terms of the
offering, including any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which the offered securities may be
listed.
The distribution of the securities offered under this prospectus may occur
from time to time in one or more transactions at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
If the applicable prospectus supplement indicates, we will authorize
dealers or our agents to solicit offers by certain institutions to purchase
offered securities from us pursuant to contracts that provide for payment and
delivery on a future date. We must approve all institutions, but they may
include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
The institutional purchaser's obligations under the contract are only subject to
the condition that the purchase of the offered securities at the time of
delivery is allowed by the laws that govern the purchaser. The dealers and our
agents will not be responsible for the validity or performance of the contracts.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain civil liabilities.
When we issue the securities offered by this prospectus (except for shares
of Common Stock), they may be new securities without an established trading
market. If we sell a security offered by this prospectus to an underwriter for
public offering and sale, the underwriter may make a market for that security,
but the underwriter will not be obligated to do so and could discontinue any
market making without notice at any time. Therefore, we cannot give any
assurances to you concerning the liquidity of any security offered by this
prospectus.
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<PAGE>
Underwriters and agents and their affiliates may be customers of, engage in
transactions with, or perform services for us or our subsidiaries in the
ordinary course of their businesses.
LEGAL OPINIONS
James T. Hale, Esq., who is our General Counsel, or another of our lawyers,
will issue an opinion about the legality of the securities offered by this
prospectus. Mr. Hale owns, or has the right to acquire, a number of shares of
our Common Stock which represents less than 1% of the total outstanding Common
Stock. Any underwriters will be represented by their own legal counsel.
EXPERTS
Ernst &Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended January 31, 1998, as set forth in their report, which is incorporated in
this prospectus by reference. Our consolidated financial statements are, and
consolidated financial statements included in subsequent filings with the SEC
will be, incorporated by reference in this prospectus in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing (to the extent consolidated financial statements included in such
subsequent filings are covered by consents executed by such firm and filed
with the SEC).
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
<TABLE>
<S> <C>
Registration Fee----------------------------- $ 442,500
Legal Fees and Expenses*--------------------- 100,000
Trustee Fees and Expenses*------------------- 25,000
Accounting Fees and Expenses*---------------- 55,000
Blue Sky and Legal Investment Fees
and Expenses*------------------------------ 25,000
Printing and Engraving Fees*----------------- 80,000
Rating Agency Fees*-------------------------- 200,000
Listing Fees*-------------------------------- 50,000
Miscellaneous*------------------------------- 22,500
---------
Total---------------------------------------- $1,000,000
---------
---------
</TABLE>
- -------------
*Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is subject to Minnesota Statutes Chapter 302A, the Minnesota
Business Corporation Act (the "Corporation Act"). Section 302A.521 of the
Corporation Act provides in substance that, unless prohibited by its articles of
incorporation or bylaws, a corporation must indemnify an officer or director who
is made or threatened to be made a party to a proceeding by reason of the former
or present official capacity of the person against judgments, penalties, fines,
including, without limitation, excise taxes assessed against the person with
respect to an employee benefit plan, settlements, and reasonable expenses,
including attorneys' fees and disbursements, incurred by such person in
connection with the proceeding, if certain criteria are met. These criteria, all
of which must be met by the person seeking indemnification, are (a) that such
person has not been indemnified by another organization or employee benefit plan
for the same judgments, penalties, fines, including, without limitation, excise
taxes assessed against the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding with
respect to the same act or omissions; (b) that such person must have acted in
good faith; (c) that no improper personal benefit was obtained by such person
and such person satisfied certain statutory conflicts of interest provisions, if
applicable; (d) that in the case of a criminal proceeding, such person had no
reasonable cause to believe that the conduct was unlawful; and (e) that such
person must have acted in a manner he reasonably believed was in the best
interests of the corporation or, in certain limited circumstances, not opposed
to the best interests of the corporation. The determination as to eligibility
for indemnification is made by the members of
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the corporation's board of directors or a committee of the board who are at the
time not parties to the proceedings under consideration, by special legal
counsel, by the shareholders who are not parties to the proceedings or by a
court.
Pursuant to the terms of forms of underwriting agreements and form of
distribution agreement filed as Exhibits 1(a), 1(b), 1(c) and 1(d) to this
Registration Statement, the directors and officers of the Registrant will be
indemnified against certain civil liabilities that they may incur under the
Securities Act of 1933 in connection with this Registration Statement and the
related Prospectus and applicable Prospectus Supplement.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
The following Exhibits are filed as part of this Registration Statement:
<S> <C>
1(a) Form of Underwriting Agreement for Debt Securities.
1(b) Form of Underwriting Agreement for Preferred Shares.(1)
1(c) Form of Underwriting Agreement for Common Stock.(1)
1(d) Form of Distribution Agreement.(2)
4(a) Restated Articles of Incorporation.(3)
4(b) Certificate of Designation, Preferences and Rights relating to
Registrant's Series A Junior Participating Preferred Stock.(4)
4(c) Certificate of Designation, Preferences and Rights relating to
the Registrant's Series B ESOP Convertible Preferred Stock.(5)
4(d) Bylaws.(6)
4(e) Rights Agreement, dated as of September 11, 1996, between the
Registrant and First Chicago Trust Company of New York.(7)
4(f) Form of Indenture.(8)
4(g) Form of Senior Note.
4(h) Form of Certificate of Designation, Preferences and Rights of
Preferred Shares.(1)
4(i) Form of Preferred Stock Certificate.(1)
4(j) Form of Convertible Preferred Stock Certificate.(1)
4(k) Form of Deposit Agreement, including form of Depositary
Receipt.(1)
4(l) Form of Debt Warrant Agreement, including form of Debt Warrant
Certificate.(1)
4(m) Form of Preferred Shares Warrant Agreement, including form of
Preferred Shares Warrant Certificate.(1)
4(n) Form of Common Stock Warrant Agreement, including form of
Common Stock Warrant Certificate.(1)
4(o) Forms of Registered Medium-Term Notes.
4(p) Form of Common Stock Certificate.(8)
The Registrant and certain of its consolidated subsidiaries
have outstanding certain long-term debt. No individual series
of such debt exceeds 10% of the total assets of Dayton Hudson
Corporation and its consolidated subsidiaries. Copies of
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<PAGE>
instruments with respect to long-term debt will be furnished
to the Commission upon request.
4(q) Certificate of Designation, Preferences and Rights relating to
the Registrant's Series B-1 ESOP Convertible Preferred Stock.
5 Opinion of General Counsel of the Registrant.
12 Computations of ratio of earnings to fixed charges and ratio
of earnings to fixed charges and preferred stock dividends.(9)
23(a) Consent of General Counsel of the Registrant (included as part
of Exhibit 5).
23(b) Consent of Ernst & Young LLP.
24 Powers of Attorney.
</TABLE>
- ------------
(1) Incorporated by reference to the same numbered Exhibit to the Registrant's
Registration Statement on Form S-3, No. 333-389.
(2) Incorporated by reference to Exhibit 1(a) to Current Report on Form 8-K
dated January 31, 1992 (File No. 1-6049).
(3) Incorporated by reference to Exhibit 3A to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended May 2, 1998 (File No. 1-6049).
(4) Incorporated by reference to Exhibit A to Exhibit 1 to Current Report on
Form 8-K dated September 11, 1996.
(5) Incorporated by reference to Exhibit 3A to the Registrant's Annual Report
on Form 10-K for the year ended January 30, 1993 (File No. 1-6049).
(6) Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report
on Form 10-K for the year ended February 3, 1996 (File No. 1-6049).
(7) Incorporated by reference to Exhibit 1 to Current Report on Form 8-K dated
September 11, 1996 (File No. 1-6049).
(8) Incorporated by reference to the same numbered Exhibit to the Registrant's
Registration Statement on Form S-3, No. 333-12915.
(9) Incorporated by reference to Exhibit 12 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended August 1, 1998 (File No. 1-6049).
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar
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value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in
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<PAGE>
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
of 1933 shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(e) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis and the State of Minnesota, on the 5th
day of October, 1998.
DAYTON HUDSON CORPORATION
By /s/ Douglas A. Scovanner
--------------------------------------
Douglas A. Scovanner, Senior Vice
President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 5th day of October, 1998 by the
following persons in the capacities indicated:
/s/ Bob Ulrich Chairman of the Board and Chief Executive
- ------------------------- Officer (Principal Executive Officer)
Robert J. Ulrich
/s/ Douglas A. Scovanner Senior Vice President and Chief Financial
- ------------------------- Officer (Principal Financial Officer)
Douglas A. Scovanner
/s/ J. A. Bogdan Controller and Chief Accounting Officer
- ------------------------- (Principal Accounting Officer)
JoAnn Bogdan
Livio D. DeSimone )
Roger A. Enrico )
William W. George )
Michele J. Hooper )
James A. Johnson )
Richard M. Kovacevich ) Directors*
Susan A. McLaughlin )
Anne M. Mulcahy )
Stephen W. Sanger )
Solomon D. Trujillo )
Robert J. Ulrich )
*Stephen C. Kowalke, by signing his name hereto on the 5th day of October, 1998,
does hereby sign this document pursuant to powers of attorney duly executed by
the Directors named, filed with the Securities and Exchange Commission on behalf
of such Directors, all in the capacities and on the date stated, such persons
being all the Directors of the Registrant.
/s/ Stephen C. Kowalke
---------------------------------------------
Stephen C. Kowalke, Attorney-in-Fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION FORM OF FILING
- ------ -------------------- --------------
<S> <C> <C>
1(a) Form of Underwriting Agreement for Debt
Securities. . . . . . . . . . . . . . . . . . . . . . . Electronic Transmission
1(b) Form of Underwriting Agreement for Preferred
Shares. . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
1(c) Form of Underwriting Agreement for Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
1(d) Form of Distribution Agreement. . . . . . . . . . . . . Incorporated by Reference
4(a) Restated Articles of Incorporation. . . . . . . . . . . Incorporated by Reference
4(b) Certificate of Designation, Preferences and
Rights relating to the Registrant's Series A
Junior Participating Preferred Stock. . . . . . . . . . Incorporated by Reference
4(c) Certificate of Designation, Preferences and
Rights relating to the Registrant's Series B
ESOP Convertible Preferred Stock. . . . . . . . . . . . Incorporated by Reference
4(d) Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(e) Rights Agreement, dated as of September 11,
1996, between the Registrant and First
Chicago Trust Company of New York . . . . . . . . . . . Incorporated by Reference
4(f) Form of Indenture . . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(g) Form of Senior Note . . . . . . . . . . . . . . . . . . Electronic Transmission
4(h) Form of Certificate of Designation,
Preferences and Rights of Preferred Shares. . . . . . . Incorporated by Reference
4(i) Form of Preferred Stock Certificate . . . . . . . . . . Incorporated by Reference
4(j) Form of Convertible Preferred Stock
Certificate . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(k) Form of Deposit Agreement, including form of
Depositary Receipt. . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(l) Form of Debt Warrant Agreement, including
form of Debt Warrant Certificate. . . . . . . . . . . . Incorporated by Reference
4(m) Form of Preferred Shares Warrant Agreement,
including form of Preferred Shares Warrant
Certificate . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(n) Form of Common Stock Warrant Agreement,
including form of Common Stock Warrant
Certificate . . . . . . . . . . . . . . . . . . . . . . Incorporated by Reference
4(o) Forms of Registered Medium-Term Notes . . . . . . . . . Electronic Transmission
4(p) Form of Common Stock Certificate. . . . . . . . . . . . Incorporated by Reference
4(q) Certificate of Designation, Preferences and Rights
relating to the Registrant's Series B-1 ESOP
Convertible Preferred Stock . . . . . . . . . . . . . . Electronic Transmission
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
5 Opinion of General Counsel of the
Registrant. . . . . . . . . . . . . . . . . . . . . . . Electronic Transmission
12 Computations of ratio of earnings to fixed
charges and ratio of earnings to fixed
charges and preferred stock dividends.. . . . . . . . . Incorporated by Reference
23(a) Consent of General Counsel of the Registrant
(included as part of Exhibit 5).
23(b) Consent of Ernst & Young LLP. . . . . . . . . . . . . . Electronic Transmission
24 Powers of Attorney. . . . . . . . . . . . . . . . . . . Electronic Transmission
</TABLE>
<PAGE>
[THIS IS THE FORM OF UNDERWRITING AGREEMENT TO BE USED
FOR DAYTON HUDSON SHELF TRANSACTIONS.]
DAYTON HUDSON CORPORATION
----------------------
UNDERWRITING AGREEMENT
----------------------
[TRADE DATE]
To the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
Dayton Hudson Corporation, a Minnesota corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule II hereto (the "Underwriters"), the
principal amount set forth in Schedule II hereto of its debt securities
identified on Schedule I hereto (the "Securities"), to be issued under an
indenture, dated as of October 3, 1996, as amended or supplemented from time to
time (the "Indenture") between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"), less the principal amount of Securities
covered by Delayed Delivery Contracts (as defined in Section 3 hereof), if any,
as provided in Section 3 hereof and as may be specified in Schedule II hereto
(any Securities to be covered by Delayed Delivery Contracts being herein
sometimes referred to as "Contract Securities" and the Securities to be
purchased by the Underwriters (after giving effect to the deduction, if any, for
Contract Securities) being herein sometimes referred to as "Underwriters'
Securities"). If the firm or firms listed in Schedule II hereto include only
the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives" as used herein shall each be deemed to refer to such firm or
firms.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) [ ] registration statements (File Nos. _______), including a
preliminary prospectus for use in connection with the Securities pursuant
to Rule 429 under the Securities and Exchange Act of 1933, as amended (the
"Act") in respect of the Securities, have been filed with the Securities
and Exchange Commission (the "Commission") each in the form heretofore
delivered to you and, excluding exhibits to such registration statements,
but including all documents incorporated by reference therein, to you for
each of the other Underwriters; such registration statements, each in such
form, have been declared effective by the Commission; no stop orders
suspending the effectiveness of such registration statements have been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission; no amendment or supplement thereto or to any document
incorporated by reference therein has heretofore been filed with the
Commission; such
<PAGE>
preliminary prospectus included for use in connection with the Securities
pursuant to Rule 429 under the Act meets the requirements of the Act and
the rules and regulations thereunder for use for such preliminary
prospectus in connection with the Securities; and a supplemented prospectus
relating to the Securities, in the form heretofore delivered to you, is now
proposed to be filed with the Commission pursuant to Rule 424 under the Act
(any such preliminary prospectus, or any preliminary prospectus supplement
relating to the Securities, being hereinafter called a "Preliminary
Prospectus"; such registration statements, including all exhibits thereto
and the documents incorporated therein by reference but excluding Form T-1,
as amended at the time each such registration statement became effective,
being hereinafter called the "Registration Statement"; and such
supplemented prospectus being hereinafter called the "Prospectus"; and any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus, shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
you expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and any further documents so filed and incorporated by
reference, when they are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein;
-2-
<PAGE>
(d) The Registration Statement, as of the applicable effective
date, conformed and the Prospectus and any amendments or supplements to the
Registration Statement or the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder and did not and will
not, as of the applicable effective date of the Registration Statement and
any amendment thereto and as of the applicable filing date of the
Prospectus or any supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
you expressly for use therein;
(e) Since the respective dates as of which information is given in
the Registration Statement and in the Prospectus, there have not been, and
prior to the Time of Delivery (as defined in Section 4 hereof) there will
not be, any changes in the capital stock (other than issuances of Common
Stock upon exercises of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
preferred stock) or any increases in the long-term debt (excluding capital
leases) of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
shareholders' investment or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(f) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Minnesota,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction where, in light
of the nature of the business transacted or the property owned by it, such
qualification is necessary and the failure so to qualify might permanently
impair title to property material to its operation or its right to enforce
a material contract against others or expose it to
-3-
<PAGE>
substantial liabilities in such jurisdiction; and each subsidiary of the
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
where, in light of the nature of the business transacted or the property
owned by it, such qualification is necessary and the failure so to qualify
might permanently impair title to property material to its operation or its
right to enforce a material contract against others or expose it to
substantial liabilities in such jurisdiction;
(h) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except for directors' qualifying
shares, certain outstanding shares of non-voting common stock of The
Associated Merchandising Corporation and certain outstanding shares of
preferred stock of Dayton Development Company) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(i) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement, and, in the case of any Contract
Securities, pursuant to Delayed Delivery Contracts (as defined in Section 3
hereof) with respect to such Contract Securities, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture; the Indenture has been duly authorized, executed
and delivered and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform to the
description thereof in the Prospectus; and in the event any of the
Securities are purchased pursuant to Delayed Delivery Contracts, each of
such Delayed Delivery Contracts has been duly authorized by the Company
and, when executed and delivered by the Company and the purchaser named
therein, will constitute a valid and legally binding agreement of the
Company enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and any Delayed Delivery Contract will conform
to the description thereof in the Prospectus;
(j) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, each
of the Delayed Delivery Contracts, if any, and this Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or
-4-
<PAGE>
encumbrance upon any of the property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Restated Articles of
Incorporation or the By-Laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties; and no consent, approval authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation of
the other transactions contemplated by this Agreement or any Delayed
Delivery Contract or the Indenture, except such as have been obtained, or
will have been obtained at the Time of Delivery, under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and/or distribution of the
Securities by the Underwriters;
(k) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject, other than as set
forth in the Prospectus and other than litigation or governmental
proceedings incident to the kind of business conducted by the Company and
its subsidiaries which, if determined adversely to the Company and its
subsidiaries, would not individually or in the aggregate have a material
adverse effect on the financial position, shareholders' investment or
results of operations of the Company and its subsidiaries; and, to the best
of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price set forth in Schedule I hereto the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II
hereto, which principal amount shall be subject to reduction pursuant to
Section 3 hereof.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus. The Company may specify in Schedule I
hereto that the Underwriters are authorized to solicit offers to purchase
Securities from the Company pursuant to delayed delivery contracts (herein
called "Delayed Delivery Contracts"), substantially in the form of Schedule IV
attached hereto, but with such changes therein as the Underwriters and the
Company may authorize or
-5-
<PAGE>
approve. If so specified, the Underwriters will endeavor to make such
arrangements, and as compensation therefor the Company will pay to the
Underwriters, for their respective accounts, at the time specified in Section 4
hereof, such commission, if any, as may be set forth in Schedule I. Delayed
Delivery Contracts, if any, are to be with the investors of the types described
in the Prospectus and subject to other conditions therein set forth. The
Underwriters will not have any responsibility in respect of the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from the
principal amount of Securities to be purchased by each Underwriter as set forth
in Schedule II hereto shall be, in each case, the principal amount of Contract
Securities which the Company has been advised by the Underwriters have been
attributed to such Underwriter, PROVIDED that, if the Company has not been so
advised, the amount of Contract Securities to be so deducted shall be, in each
case, that proportion of Contract Securities which the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II hereto
bears to the total principal amount of the Securities set forth in Schedule II
hereto (rounded as the Underwriters may determine). The total principal amount
of Underwriters' Securities to be purchased by all the Underwriters hereunder
shall be the total principal amount of Securities set forth in Schedule II
hereto less the principal amount of the Contract Securities. The Company will
deliver to the Underwriters not later than 3:30 p.m., New York City time, on the
third business day preceding the Time of Delivery (or such other time and date
as the Underwriters and the Company may agree upon in writing) a written notice
setting forth the principal amount of Contract Securities.
4. Underwriters' Securities to be purchased by each Underwriter hereunder
shall be delivered by or on behalf of the Company to you for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor in same-day funds, at the office of King & Spalding,
1185 Avenue of the Americas, New York, New York 10036, at 9:30 a.m., New York
City time, on [CLOSING DATE], or at such other time and date as you and the
Company may agree upon in writing, such time and date being herein called the
"Time of Delivery". The Underwriters' Securities will be delivered by the
Company to you in the form of global Securities, representing all of the
Securities, which will be deposited by you on behalf of the Underwriters, with
The Depository Trust Company, or its nominee, for credit to the respective
accounts of the Underwriters.
Concurrently with the delivery of any Contract Securities to the purchasers
thereof pursuant to Delayed Delivery Contracts, the Company will deliver to the
Underwriters for their respective accounts a check payable to the order of [LEAD
UNDERWRITER] in the amount of any compensation payable by the Company to the
Underwriters in respect of any Delayed Delivery Contracts as provided in
Section 3 hereof and in Schedule I hereto.
5. The Company agrees with each of the Underwriters:
(a) To make no further amendment or supplement to the Registration
Statement or to the Prospectus prior to the Time of Delivery which shall be
disapproved by you
-6-
<PAGE>
promptly after reasonable notice thereof; to advise you promptly of any
such amendment or supplement after the Time of Delivery and furnish you
with copies thereof and to file promptly all reports and definitive proxy
or information statements required to be 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 the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
become effective or any supplement to the Prospectus or any amended
Prospectus has been filed, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or of the Prospectus or for additional information; and in the
event of the issuance of any stop order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution, PROVIDED that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as you may from time to time reasonably request, and if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus and if at such time
any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Securities at any time nine months
or more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver
-7-
<PAGE>
to such Underwriter as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act; and
(e) During the period beginning from the date hereof and continuing
to and including the later of the Time of Delivery or such earlier time as
you may notify the Company, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Securities.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
(except as otherwise expressly provided in Section 5(c) hereof) amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing this Agreement, the
Indenture, any Delayed Delivery Contracts, and the Blue Sky and Legal Investment
Memoranda; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
Securities; (vi) the fees and expenses of the Trustees and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee and any such
agent in connection with the Indenture and the Securities; and (vii) all of the
other costs and expenses incident to the performance of its obligations
hereunder and under any Delayed Delivery Contracts which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened
-8-
<PAGE>
by the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to your reasonable
satisfaction;
(b) King & Spalding, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to the incorporation of the Company, the validity of the Indenture,
the Securities, the Delayed Delivery Contracts, if any, the Registration
Statement, the Prospectus, and other related matters as you may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(c) James T. Hale, Esq., Senior Vice President and Secretary of the
Company, shall have furnished to you his written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction where, in light of the
nature of the business transacted or the property owned by it, such
qualification is necessary and the failure so to qualify might in such
counsel's opinion permanently impair title to property material to its
operations or its right to enforce a material contract against others
or expose it to substantial liabilities in such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, PROVIDED that such
counsel shall state that he believes that both you and he are
justified in relying upon such opinions and certificates);
(iii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction where,
in light of the nature of the business transacted or the property
owned by it, such qualification is necessary and the failure so to
qualify might in such counsel's opinion permanently impair title to
property material to its operations or its right to enforce a material
contract against others or expose it to substantial liabilities in
such jurisdiction; all of the issued shares of capital stock of each
subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the outstanding shares of
capital stock of each such subsidiary (except for directors'
qualifying shares, certain outstanding shares of non-
-9-
<PAGE>
voting common stock of The Associated Merchandising Corporation and
certain outstanding shares of preferred stock of Dayton Development
Company) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its subsidiaries, PROVIDED
that such counsel shall state that he believes that both you and he
are justified in relying upon such opinions and certificates); and
(iv) To the best of such counsel's knowledge there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, other than as set forth in
the Prospectus and other than litigation or governmental proceedings
which individually and in the aggregate are not material to the
Company and its subsidiaries; and to the best of such counsel's
knowledge no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(d) Faegre & Benson LLP, counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus;
(ii) To the best of such counsels' knowledge there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, other than as set forth in
the Prospectus and other than litigation or governmental proceedings
which individually and in the aggregate are not material to the
Company and its subsidiaries; and to the best of such counsels'
knowledge no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company; and in the event any of the Securities are
to be purchased pursuant to Delayed Delivery Contracts, each of the
Delayed Delivery Contracts has been duly authorized, executed and
delivered by the Company and, assuming such contract has been duly
executed and delivered by the purchaser named therein, constitutes a
valid and legally binding agreement of the Company enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other
-10-
<PAGE>
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and any Delayed Delivery
Contracts conform to the description thereof in the Prospectus;
(iv) The Securities have been duly authorized; the
Underwriters' Securities have been duly executed, authenticated,
issued and delivered and constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; the Contract Securities, if any, when executed,
authenticated, issued and delivered pursuant to the Indenture and the
Delayed Delivery Contracts, if any, will constitute valid and legally
binding obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Prospectus;
(v) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(vi) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture, each of the Delayed Delivery Contracts and this Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Restated Articles of Incorporation or the
By-Laws of the Company or any statute or any order, rule or regulation
applicable to the Company and known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the
issue and sale of the Securities or the consummation of the other
transactions contemplated by this Agreement or the Indenture or any of
the Delayed Delivery Contracts, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in
-11-
<PAGE>
connection with the purchase and/or distribution of the Securities by
the Underwriters;
(vii) The documents incorporated by reference in the
Prospectus (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), when they
were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and such counsel have no
reason to believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not
misleading;
(viii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to the Time of Delivery (other than the financial statements therein,
as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel
have no reason to believe that the Registration Statement contained as
of its effective date or that the Prospectus contained as of the date
of the supplement comprising a part thereof, or that either the
Registration Statement or the Prospectus contains as of the Time of
Delivery (or that any further amendment or supplement thereto made by
the Company prior to the Time of Delivery contained as of its date or
contains as of the Time of Delivery) an untrue statement of material
fact or that the Registration Statement omitted as of such effective
date, or that the Prospectus omits as of the Time of Delivery to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and such counsel does not know of
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or in the Prospectus which are
not filed or incorporated by reference or described as required; and
(ix) The Company has an authorized capitalization as set
forth in the Prospectus;
(e) At the Time of Delivery, Ernst & Young LLP shall have furnished
to you a letter or letters, dated the Time of Delivery, in form and
substance satisfactory to you, to the effect set forth in Schedule III
hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the
-12-
<PAGE>
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
other than as set forth or contemplated in the Prospectus; and (ii) since
the respective dates as of which information is given in the Prospectus
there shall not have been any decrease in the capital stock or any increase
in the long-term debt (excluding capital leases) of the Company or any of
its subsidiaries or a change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' investment or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i)
or (ii), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Prospectus;
(g) On or after the date of this Agreement, there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
general moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) an outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, the effect of any such
event specified in this clause (iii) in your judgment makes it impractical
or inadvisable to proceed with the public offering or the delivery of the
Underwriters' Securities on the terms and in the manner contemplated by the
Prospectus; and
(h) On or after the date of this Agreement (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities
or preferred stock the effect of which, in any event specified in clause
(i) or (ii), in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on the
terms and in the manner contemplated in the Prospectus; and
(i) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of the Time of Delivery and as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Time of Delivery and the Company also shall
have furnished to you a certificate of officers of the Company satisfactory
to you as to the matters set forth in subsections (a), (f) and (h) of this
Section.
-13-
<PAGE>
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement in the form in which it
was initially declared effective, or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such action or claim; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or such Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through you
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement in
the form in which it was initially declared effective, or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement
or such Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified,
-14-
<PAGE>
to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the
Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to
-15-
<PAGE>
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Underwriters' Securities which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another party or
other parties to purchase such Underwriters' Securities on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Underwriters'
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Underwriters' Securities on such
terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such
Underwriters' Securities, or the Company notifies you that it has so
arranged for the purchase of such Underwriters' Securities, you or the
Company shall have the right to postpone the Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under the Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Underwriters' Securities of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the aggregate
principal amount of such Underwriters' Securities which remains unpurchased
does not exceed one-eleventh of the aggregate principal amount of all the
Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of
Underwriters' Securities which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities
which such Underwriter agreed to purchase hereunder) of the Underwriters'
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have
-16-
<PAGE>
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If after giving effect to any arrangements for the purchase of
the Underwriters' Securities of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above the aggregate
principal amount of Underwriters' Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Underwriters' Securities of a defaulting Underwriter or Underwriters, then
this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to
be borne by the Company and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but if for any other reason the
Underwriters' Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Underwriter except as
provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by [LEAD UNDERWRITER] on behalf of you as the
Representatives and may assume that such statement, request, notice or agreement
has been duly authorized by such Underwriter.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters, shall be sufficient in all respects if delivered or sent by
registered mail to you as the Representatives in care of [NAME AND ADDRESS OF
LEAD UNDERWRITER], Attention: __________________; and if to the Company, shall
be sufficient in all respects if delivered or sent by registered mail to Dayton
Hudson Corporation, 777 Nicollet Mall,
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<PAGE>
Minneapolis, Minnesota 55402, Attention: Treasurer; PROVIDED, HOWEVER, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by registered mail to such Underwriter at its address set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire delivered
to the Company.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be construed in accordance with the laws of the
State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of a telex,
copies of which, to the extent practicable and upon request, shall be submitted
to the Company for examination, but without warranty on your part as to the
authority of the senders thereof.
Very truly yours,
DAYTON HUDSON CORPORATION
By:
------------------------------
Accepted as of the date hereof at New York,
New York:
[REPRESENTATIVE(S)]
By:
---------------------------------
On behalf of each of the Underwriters
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<PAGE>
SCHEDULE I
Underwriting Agreement dated [PRICING DATE]
Registration Statement Nos.[____________]
Representatives:
Description of Securities:
Title:
Maturity:
Interest Rate:
Interest Payment Dates:
Aggregate principal amount and currency:
Purchase price and currency: $______________ plus accrued interest from
[INITIAL INTEREST ACCRUAL DATE]
Sinking fund provisions: [The Securities shall not be entitled to any
sinking fund.]
Redemption provisions: [The Securities are not redeemable prior to
maturity.]
Other provisions: [Defeasance provisions set forth in Articles Four and
Fifteen of the Indenture shall apply to the Securities]
Closing Date, Time and Location: [CLOSING DATE] at 9:30 a.m. at the
office of King & Spalding, 1185 Avenue of the Americas, New York, New
York, 10036.
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF SECURITIES
----------- TO BE PURCHASED
----------------
<S> <C>
............................................................ $_____________
............................................................
Total....................................................... $
--------------
--------------
</TABLE>
<PAGE>
SCHEDULE III
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules examined by them and
included or incorporated by reference in the Registration Statement or
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to the Representatives;
(iii) In their opinion, the unaudited selected financial information
with respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
changes in financial position included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference
in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act as its
applies to Form 10-Q and the related published rules and regulations
<PAGE>
thereunder or are not in conformity with generally accepted accounting
principles for interim financial statements applied on a basis
substantially consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and consolidated
statements of changes in financial position included or incorporated
by reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder;
(E) as of a specified date not more than five days prior to
the date of such letter, when compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, there have been
- any changes in the consolidated capital stock (other than
issuances of capital stock upon the exercise of stock
options, pursuant to performance shares or restricted
stock awards and upon the conversion of convertible
securities, in each case which were outstanding on the
date of the latest balance sheet included or incorporated
by reference in the Prospectus), or
- any increase in the consolidated long-term debt
(excluding capital leases) of the Company and its
subsidiaries, or
S-2
<PAGE>
- any decrease in consolidated working capital greater
than 1.5% of the Company's most recent fiscal year-end
total consolidated assets (treating all commercial
paper as a current liability), or
- any decreases in consolidated shareholders' investment
greater than 0.5% of the Company's most recent fiscal
year-end total consolidated assets (excluding decreases
resulting from normally recurring dividends), or
- any decreases or increases in other items specified by
the Representatives
in each case except for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E), when compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, there were
- any decreases in consolidated net sales or earnings
before income taxes and extraordinary charges, or
- any decreases in the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or
- any increases in any items specified by the
Representatives
in each case except for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents
S-3
<PAGE>
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
S-4
<PAGE>
SCHEDULE IV
DELAYED DELIVERY CONTRACT
Dayton Hudson Corporation
c/o
-----------------------
-----------------------
Attention:
-----------------
Dear Sirs:
The undersigned hereby agrees to purchase from Dayton Hudson Corporation
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned,
$__________
principal amount of the Company's ____________ (hereinafter called the
"Securities"), offered by the Company's Prospectus dated _________ and
Prospectus Supplement dated _____________, receipt of a copy of which is hereby
acknowledged, at a purchase price of _______% of the principal amount thereof,
plus accrued interest from the date from which interest accrues as set forth
below, and on the further terms and conditions set forth in this contract.
The undersigned will purchase the Securities from the Company on _______,
19__ (the "Delivery Date") and interest on the Securities so purchased will
accrue from ___________.
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds at the office of
_______________________________________, or by wire transfer to a bank account
specified by the Company, on the Delivery Date upon delivery to the undersigned
of the Securities then to be purchased by the undersigned in definitive fully
registered form and in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
the Securities on the Delivery Date shall be subject to the condition that the
purchase of the Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject. The obligation of the undersigned to take delivery of
and make payment for the Securities shall not be affected by the failure of any
purchaser to take delivery of and make payment for the Securities pursuant to
other contracts similar to this contract.
The undersigned understands that underwriters (the "Underwriters") are also
purchasing Securities from the Company, but that the obligations of the
undersigned hereunder are not
<PAGE>
contingent on such purchases. Promptly after completion of the sale to the
Underwriters the Company will mail or deliver to the undersigned at its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Securities
hereby agreed to be purchased by it under the laws of the jurisdiction to which
the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this contract) is in the Company's sole discretion and that,
without limiting the foregoing, acceptances of such contracts need not be on a
first-come, first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered by the Company.
Yours very truly,
------------------------------
By:
---------------------------
(Signature)
---------------------------
(Name and Title)
---------------------------
(Address)
Accepted:____________________, 19__
Dayton Hudson Corporation
By:
-------------------------------
[Title]
S-2
<PAGE>
[Face of Debenture]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
CUSIP NO. ___________ PRINCIPAL AMOUNT: $___________
REGISTERED NO. __
DAYTON HUDSON CORPORATION
____% DEBENTURES DUE ____
DAYTON HUDSON CORPORATION, a corporation duly organized and existing under
the laws of the State of Minnesota (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & Co., or registered assigns,
the principal sum of ___________________________ ($___________) on
______________ and to pay interest thereon from _____________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for semi-annually on __________ and __________ of each year commencing
________________ at the rate of ____% per annum, until the principal hereof is
paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be __________ or _____________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
Any interest not punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior
<PAGE>
to such Special Record Date, or be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture.
Payment of interest on this Security will be made in immediately available
funds at the office or agency of the Company maintained for that purpose in the
City of Minneapolis, Minnesota, or the City of _________________, or, at the
option of the Holder hereof, at the office or agency to be maintained for that
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the
option of the Company, payment of interest may be paid by check mailed to the
Person entitled thereto at such Person's last address as it appears in the
Security Register or by wire transfer to such account as may have been
designated by such Person. Payment of principal of and interest on this
Security at Maturity will be made against presentation of this Security at the
office or agency of the Company maintained for that purpose in the City of
Minneapolis, Minnesota, or the City of _________________, or, at the option of
the Holder hereof, at the office or agency to be maintained for that purpose in
the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
DATED: ______________
DAYTON HUDSON CORPORATION
By:
-------------------------------------
Its
---------------------------------
[SEAL]
Attest:
---------------------------------
Its
---------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
- ----------------------------------,
as Trustee
By:
-------------------------------------
Authorized Signature
3
<PAGE>
[Reverse of Debenture]
DAYTON HUDSON CORPORATION
____% DEBENTURES DUE ____
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an indenture dated as of _______________, as amended or
supplemented from time to time (herein called the "Indenture"), between the
Company and __________________________________, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $___________.
[**The Securities of this series are not subject to redemption prior to
______________.] [**The Securities of this series are subject to redemption
prior to _________________ as follows: _______________________________________]
The Securities will not be entitled to any sinking fund.
If an Event of Default, as defined in the Indenture, with respect to
Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in
4
<PAGE>
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness on this Security and (b) certain restrictive covenants and
certain Events of Default, upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Security.
Upon due presentment for registration of transfer of this Security at the
office or agency of the Company in the City of Minneapolis, Minnesota, or the
City of _________________, or, at the option of the Holder hereof, at the office
or agency to be maintained for that purpose in the Borough of Manhattan, The
City of New York, a new Security or Securities of this series in authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, as provided in the Indenture and subject to the
limitations provided therein and to the limitations described below, without
charge except for any tax or other governmental charge imposed in connection
therewith.
This Security is exchangeable for definitive Securities in registered form
only if (x) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for this Security or if at any time the Depositary
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, (y) the Company in its sole discretion determines that this
Security shall be exchangeable for definitive Securities in registered form and
notifies the Trustee thereof or (z) an Event of Default with respect to the
Securities represented hereby has occurred and is continuing. If this Security
is exchangeable pursuant to the preceding sentence, it shall be exchangeable for
definitive Securities in registered form, bearing interest at the same rate,
having the same date of issuance, redemption provisions, Stated Maturity and
other terms and of authorized denominations aggregating a like amount.
This Security may not 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. Except as
provided above, owners of beneficial interests in this global Security will not
be entitled to receive physical delivery of Securities in definitive form and
will not be considered the Holders hereof for any purpose under the Indenture.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed, except that in the event the Company deposits money or Government
Obligations as provided in Section 401 or 403 of the Indenture, such payments
will be made only from proceeds of such money or Government Obligations.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this
5
<PAGE>
Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right
of survivorship and not
as tenants in common
UNIF GIFT MIN ACT -- _____________________ Custodian _________________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
- -----------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
- --------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
the within Security of DAYTON HUDSON CORPORATION and does hereby irrevocably
constitute and appoint __________________ attorney to transfer the said Security
on the books of the Company, with full power of substitution in the premises.
7
<PAGE>
Dated:
-------------------------
-----------------------------------
-----------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
8
<PAGE>
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
DAYTON HUDSON CORPORATION
MEDIUM-TERM NOTE, SERIES __
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
If the registered owner of this Note (as indicated below) is Cede &
Co. and The Depository Trust Company is named below as Depositary, this Note is
a "Global Note", and unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
The following summary of terms is subject to the information set forth
on the reverse hereof.
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: ISSUE PRICE (As a MATURITY DATE:
percentage of principal
amount): %
INDEX MATURITY: INTEREST RATE BASIS: INITIAL INTEREST RATE:
INTEREST PAYMENT INTEREST RATE RESET MINIMUM INTEREST
PERIOD: PERIOD: RATE:
MAXIMUM INTEREST INTEREST PAYMENT INTEREST
RATE: DATES: CALCULATION DATES:
<PAGE>
<S> <C> <C>
INITIAL INTEREST INTEREST SPREAD MULTIPLIER:
RESET DATE: DETERMINATION DATES:
SPREAD: + REDEEMABLE ON OR REDEEMABLE ON OR
AFTER (At option of the AFTER (At option of the
Holder): Company):
INITIAL REDEMPTION ANNUAL REDEMPTION SINKING FUND:
PERCENTAGE: PERCENTAGE
REDUCTION:
DEPOSITARY (Only
applicable if Note is a
Global Note):
</TABLE>
DAYTON HUDSON CORPORATION, a corporation duly organized and existing
under the laws of the State of Minnesota (herein called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ____________ at the office or agency of
the Company in the City of Minneapolis, Minnesota, the City of
_____________________ or in the Borough of Manhattan, The City of New York, on
the maturity date shown above, or if such date is not a Business Day (as defined
below), the next succeeding Business Day ("Stated Maturity"), in such coin or
currency as at the time of payment shall be legal tender for the payment of
public and private debts in the United States of America, and to pay interest
monthly, quarterly, semi-annually or annually as specified above under "Interest
Payment Period", on the Interest Payment Dates specified above, commencing with
the first Interest Payment Date specified above following the original Issue
Date specified above, and at Maturity, on said principal sum at said offices or
agencies, in like coin or currency, at a rate per annum equal to the Initial
Interest Rate specified above until the first Interest Reset Date specified
above following the Original Issue Date specified above and thereafter at a rate
per annum determined in accordance with the provisions on the reverse hereof
under the heading "Determination of Interest Rate Per Annum for Commercial Paper
Rate Notes", "Determination of Interest Rate Per Annum for Prime Rate Notes",
"Determination of Interest Rate Per Annum for LIBOR Notes", "Determination of
Interest Rate Per Annum for Treasury Rate Notes", "Determination of Interest
Rate Per Annum for CD Rate Notes" or "Determination of Interest Rate Per Annum
for Federal Funds Rate Notes", depending upon whether the Interest Rate Basis is
Commercial Paper Rate, Prime Rate, LIBOR, Treasury Rate, CD Rate
2
<PAGE>
or Federal Funds Rate, as specified above; PROVIDED, HOWEVER, that if any
Interest Payment Date specified above would otherwise fall on a day that it not
a Business Day, such Interest Payment Date will be the following day that is a
Business Day, except that in the event that the Interest Rate Basis for this
Note is LIBOR, if such day falls in the next calendar month, such Interest
Payment Date will be the next preceding day that is a Business Day. Interest on
this Note shall accrue (a) if the rate at which interest on this Note is payable
shall be adjusted monthly, quarterly, semi-annually or annually, as specified
above under "Interest Rate Reset Period" and as determined in accordance with
the provisions on the reverse hereof, from the Interest Payment Date next
preceding the date of this Note to which interest has been paid, unless the date
hereof is an Interest Payment Date to which interest has been paid, in which
case from the date of this Note, or unless no interest has been paid on this
Note, in which case from the Original Issue Date specified above, until payment
of said principal sum has been made or duly provided for or (b) if the rate at
which interest on this Note is payable shall be adjusted weekly, as specified
above under "Interest Rate Reset Period" and as determined in accordance with
the provisions on the reverse hereof, from the Regular Record Date (as defined
herein) next preceding the date of this Note through which interest has been
paid, unless the date hereof is a Regular Record Date through which interest has
been paid, in which case from the day after the date of this Note, or unless no
interest has been paid on this Note, in which case from the Original Issue Date
specified above, until payment of said principal sum has been made or duly
provided for; PROVIDED, HOWEVER, that if the Original Issue Date is after any
Regular Record Date preceding any Interest Payment Date and before such Interest
Payment Date, interest on this Note shall accrue from such Interest Payment Date
unless the rate at which interest on this Note is payable shall be adjusted
weekly, as provided above under ''Interest Rate Reset Period" and as determined
in accordance with the provisions on the reverse hereof, in which case interest
on this Note shall accrue from such Regular Record Date, or, in either case, if
no interest has been paid on this Note, from the Original Issue Date specified
above; PROVIDED FURTHER, that if the Company shall default in the payment of
interest due on any Interest Payment Date, then interest on this Note shall
accrue from and including the next preceding Interest Payment Date or from the
Regular Record Date, as the case may be, to which interest has been paid, or if
no interest has been paid on this Note, from the Original Issue Date specified
above. Subject to certain exceptions provided in the Indenture referred to on
the reverse hereof, the interest so payable on any Interest Payment Date will be
paid to the Person in whose name this Note is registered at the close of
business on the Regular Record Date next preceding such Interest Payment Date,
and interest payable at Maturity (other than a Maturity date which is an
Interest Payment Date) will be paid to the Person to whom said principal sum is
payable; PROVIDED, HOWEVER, that the first payment of interest on a Note
originally issued between a Regular Record Date and an Interest Payment Date
will be due and payable on the Interest Payment Date following the next
succeeding Regular Record Date to the registered owner on such next succeeding
Regular Record Date. "Regular Record Date" shall mean the fifteenth calendar
day prior to any Interest Payment Date, whether or not such date shall be a
Business Day. "Business Day" shall mean, as used herein with respect to any
particular location, each Monday, Tuesday, Wednesday, Thursday or Friday which
is (a) not a day on which banking institutions in such location are generally
authorized or obligated by law or executive order to close and (b) in the event
that the Interest Rate Basis for this Note is LIBOR, a London
3
<PAGE>
Business Day. "London Business Day" shall mean any Business Day on which
dealings in deposits in U.S. dollars are transacted in the London interbank
market.
Payment of the principal of (and premium, if any) and any interest due
on this Note to the Holder hereof at Maturity will be made, in immediately
available funds, upon presentation of this Note at the office or agency of the
Company maintained for that purpose in the City of Minneapolis, Minnesota, or
the City of __________________, or, at the option of the Holder hereof, at the
office or agency to be maintained for that purpose in the Borough of Manhattan,
The City of New York. Payment of interest on this Note due on any Interest
Payment Date (other than interest on this Note due to the Holder hereof at
Maturity) will be payable at such office or agency of the Company, PROVIDED,
HOWEVER, that, at the option of the Company, payment of interest may be made by
check mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or by wire transfer to such account as may have
been designated by such Holder as set forth herein.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its Corporate Trust
Office in the City of ____________________ or its agency in The City of New York
and, unless revoked by written notice to the Trustee received by the Trustee on
or prior to the Regular Record Date immediately preceding the applicable
Interest Payment Date or the fifteenth calendar day preceding the date of
Maturity, as the case may be, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
If a payment with respect to this Note cannot be made by wire transfer
because the required designation has not been received by the Trustee on or
before the requisite date or for any other reason, a notice will be mailed to
the Holder at its registered address requesting a designation pursuant to which
such wire transfer can be made and, upon the Trustee's receipt of such a
designation, such payment will be made within five Business Days of such
receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holders of the
Notes in respect of which payments are made.
Any payment on this Note due on any day which is not a Business Day in
The City of New York or which is not a Business Day in the City of Minneapolis,
Minnesota, or the City of ____________________, need not be made on such day,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the due date, and no interest shall accrue for the period
from and after such date.
IF THIS NOTE IS A GLOBAL NOTE AS SPECIFIED ON THE FACE HEREOF, THE
FOLLOWING LEGEND IS APPLICABLE: "EXCEPT UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED ON THE REVERSE HEREOF, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY, TO THE
DEPOSITARY, ANOTHER NOMINEE OF THE DEPOSITARY, A SUCCESSOR OF THE DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR".
4
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: DAYTON HUDSON CORPORATION
By:
---------------------------
(Title)
[SEAL] Attest:
-----------------------
(Title)
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
, as Trustee
- --------------------------
By:
---------------------------
Authorized Signature
or
, as Trustee
- --------------------------
By: ,
---------------------------
Authenticating Agent
By:
----------------------------
Authorized Signature
5
<PAGE>
[Reverse of Note]
DAYTON HUDSON CORPORATION
MEDIUM-TERM NOTE, SERIES __
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
This Note is one of a duly authorized issue of securities of the
Company, (hereinafter called the "Securities") , issued and to be issued in one
or more series under an indenture dated as of ____________________ (hereinafter
called the "Indenture"), between the Company and ____________________________,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
a series of the Securities designated as the Medium-Term Notes, Series __ of the
Company (the "Notes"), due 9 months or more from date of issue. The Notes are
limited to $______________ in aggregate principal amount. The Notes may mature
at different times, bear interest, if any, at different rates, be redeemable by
the Company at different times or not at all and be repayable at the option of
the Holder at different times or not at all.
The interest rate in effect from the date of issue to the Initial
Interest Reset Date specified on the face hereof shall be the Initial Interest
Rate specified on the face hereof. Commencing with the Initial Interest Reset
Date following the Original Issue Date specified on the face hereof, the rate at
which interest on this Note is payable shall be adjusted weekly, monthly,
quarterly, semi-annually or annually as specified on the face hereof under
"Interest Rate Reset Period"; PROVIDED, HOWEVER, that the interest rate in
effect hereon for the 10 calendar days immediately prior to the Maturity hereof
will be that in effect on the tenth day next preceding the Maturity. Each such
adjusted rate shall be applicable from and including the Interest Reset Date to
which it relates to but not including the next succeeding Interest Reset Date or
until Maturity, as the case may be. Subject to applicable provisions of law and
except as specified herein, on each Interest Reset Date, the rate of interest on
this Note shall be the rate determined with respect to the Interest
Determination Date next preceding such Interest Reset Date in accordance with
the provisions of the applicable heading below.
DETERMINATION OF INTEREST RATE PER ANNUM FOR PRIME RATE NOTES. If the
Interest Rate Basis specified on the face hereof is Prime Rate, the interest
rate per annum determined with respect to any Interest Determination Date
specified on the face hereof shall equal the rate, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
<PAGE>
hereof, and calculated to one hundred-thousandth of a percentage point, rounded
up, set forth for the relevant Prime Rate Interest Determination Date in
"Statistical Release H.15(519), Selected Interest Rates", published by the Board
of Governors of the Federal Reserve System under the heading "Bank Prime Loan",
or any successor publication ("Release H.15(519)"). In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the relevant
Calculation Date, then the Prime Rate with respect to such Interest Reset Date
will be the arithmetic mean (adjusted or multiplied and calculated as described
above) of the rates of interest publicly announced by each bank that appears on
the display designated as page "NYMF" on the Reuter Monitor Money Rates Service
(or such other page as may replace the NYMF page on that service for the purpose
of displaying prime rates or base lending rates of major United States banks)
("Reuters Screen NYMF Page") as such bank's prime rate or base lending rate as
in effect for such Prime Rate Interest Determination Date as quoted on the
Reuters Screen NYMF Page on such Prime Rate Interest Determination Date. If
fewer than four such rates appear on the Reuters Screen NYMF Page on such Prime
Rate Interest Determination Date, the Prime Rate with respect to such Interest
Reset Date will be the arithmetic mean (adjusted or multiplied and calculated as
described above) of the prime rates or base lending rates (quoted on the basis
of the actual number of days in the year divided by a 360-day year) as of the
close of business on such Prime Rate Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent; PROVIDED,
HOWEVER, that if fewer than three banks selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, the Prime Rate with respect to
such Interest Reset Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
DETERMINATION OF INTEREST RATE PER ANNUM FOR LIBOR NOTES. If the
Interest Rate Basis specified on the face hereof is LIBOR, the interest rate per
annum determined with respect to any Interest Determination Date specified on
the face hereof shall equal the arithmetic mean (as calculated by the
Calculation Agent specified on the face hereof to one hundred-thousandth of a
percentage point, rounded up) of offered rates for deposits of not less than
U.S. $1,000,000 having the Index Maturity specified on the face hereof,
commencing on the second Business Day immediately following such LIBOR Interest
Determination Date, which appear on the Reuters Screen LIBO Page (as defined
herein) as of 11:00 A.M., London time, on such Interest Determination Date,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; PROVIDED, HOWEVER, that if fewer than two such offered rates so
appear on the Reuters Screen LIBO Page, the Calculation Agent shall request the
principal London office of each of four major banks in the London interbank
market selected by the Calculation Agent to provide a quotation of the rate at
which such bank offered to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination Date,
deposits in U.S. dollars having the Index Maturity specified on the face hereof
commencing on the second Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount not less than U.S. $1,000,000 and
equal to an amount that in the Calculation Agent's judgment is representative
for a single transaction in such market at such time, and the interest rate per
annum hereon shall equal the arithmetic mean (adjusted or multiplied and
calculated as described above) of (a) such quotations, if at least two
quotations are provided,
2
<PAGE>
or (b) if fewer than two such quotations are provided, the rates quoted at
approximately 11:00 A.M., New York City time, on such Interest Determination
Date by three major banks in The City of New York, selected by the Calculation
Agent, for loans in U.S. dollars to leading European banks having the Index
Maturity specified on the face hereof commencing on the Interest Reset Date and
in a principal amount that is not less than U.S. $1,000,000 and in the
Calculation Agent's judgment is representative for a single transaction in such
market at such time; PROVIDED, HOWEVER, that if not all of the three banks
selected by the Calculation Agent pursuant to clause (b) above are quoting as
described above, the interest rate per annum hereon with respect to such
Interest Determination Date shall be the LIBOR in effect thereon on such
Interest Determination Date. "Reuters Screen LIBO Page" shall mean the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such
other page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks).
DETERMINATION OF INTEREST RATE PER ANNUM FOR TREASURY RATE NOTES. If
the Interest Rate Basis specified on the face hereof is Treasury Rate, the
interest rate per annum determined with respect to any Interest Determination
Date specified on the face hereof shall equal the rate for the most recent
auction of direct obligations of the United States ("Treasury bills") having the
Index Maturity specified on the face hereof as published in Release H.15(519),
under the heading "U.S. Government Securities/Treasury Bills/Auction Average
(Investment)" on such Interest Determination Date or, if not so published by
9:00 A.M., New York City time, on the Interest Calculation Date (as specified on
the face hereof) pertaining to such Interest Determination Date, the auction
average rate (expressed as a bond equivalent, calculated to one
hundred-thousandth of a percentage point, rounded up, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) for such auction
as otherwise announced by the United States Department of the Treasury, in
either case adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof. In the event that the results of such
auction of Treasury bills are not published or reported as provided above by
3:00 P.M., New York City time, on such Interest Calculation Date or if no such
auction is held by the applicable Interest Determination Date, then the interest
rate per annum with respect to such Interest Calculation Date shall be the rate
set forth in Release H.15(519) for the specified Index Maturity under the
heading "U.S. Government Securities/Treasury Bills/Secondary Markets". In the
event such rate is not so published by 3:00 P.M., New York City time, on the
relevant Interest Calculation Date, then the interest rate per annum hereon
shall be calculated by the Calculation Agent and shall be the yield to maturity
(expressed as a bond equivalent, calculated to one hundred-thousandth of a
percentage point, rounded up, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean (adjusted or
multiplied and calculated as described above) of the secondary market bid rates,
as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity specified on the face hereof;
PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as described in this sentence, the interest rate per annum
hereon with respect to such
3
<PAGE>
Interest Determination Date shall be the Treasury Rate in effect hereon on such
Interest Determination Date.
DETERMINATION OF INTEREST RATE PER ANNUM FOR COMMERCIAL PAPER RATE
NOTES. If the Interest Rate Basis specified on the face hereof is Commercial
Paper Rate, the interest rate per annum determined with respect to any Interest
Determination Date specified on the face hereof shall equal (a) the Money Market
Yield (as defined herein) of the per annum rate (quoted on a bank discount
basis) on such Interest Determination Date for commercial paper having the Index
Maturity specified on the face hereof, (i) as such rate is published in Release
H.15(519) under the heading "Commercial Paper", or (ii) if such rate is not
published at or prior to 9:00 A.M., New York City time, on the Interest
Calculation Date (as specified on the face hereof) pertaining to such Interest
Determination Date, as published by the Federal Reserve Bank of New York in its
daily statistical release, "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication of the Federal Reserve Bank of New York
("Composite Quotations") under the heading "Commercial Paper", or (b) if by 3:00
P.M., New York City time, on such Interest Calculation Date, such rate is not
published in either of such publications, the Money Market Yield of the
arithmetic mean (calculated to one hundred-thousandth of a percentage point,
rounded up) of the offered per annum rates (quoted on a bank discount basis), as
of 11:00 A.M., New York City time, on such Interest Determination Date, of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper having the Index Maturity specified on
the face hereof placed for industrial issuers whose bond rating is "AA", or the
equivalent, from a nationally recognized rating agency, in each of the above
cases adjusted by the addition or subtraction of the Spread, if any, specified
on the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof; PROVIDED, HOWEVER, that if fewer than three such
dealers are quoting as described above, the interest rate per annum hereon with
respect to such Interest Determination Date shall be the Commercial Paper Rate
in effect hereon on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = 100 x 360 x D
-----------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as at decimal calculated to seven decimal places,
without rounding; and "M" refers to the actual number of days in the period
corresponding to the specified Index Maturity.
DETERMINATION OF INTEREST RATE PER ANNUM FOR CD RATE NOTES. If the
Interest Rate basis specified on the face hereof is CD Rate, the interest rate
per annum determined with respect to any Interest Determination Date specified
on the face hereof shall equal the rate, adjusted by the addition or subtraction
of the Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof and
4
<PAGE>
calculated to one hundred-thousandth of a percentage point, rounded up, for the
relevant CD Interest Determination Date for negotiable certificates of deposit
having the specified Index Maturity as published in Release H.15(519) under the
heading "CDs (Secondary Market)". In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the relevant Calculation Date, then
the CD Rate with respect to such Interest Reset Date shall be the rate (adjusted
or multiplied and calculated as described above) on such CD Rate Interest
Determination Date for negotiable certificates of deposit having the specified
Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either Release H.15(519) or
Composite Quotations, the CD Rate with respect to such Interest Reset Date shall
be calculated by the Calculation Agent and shall be the arithmetic mean
(adjusted or multiplied and calculated as described above) of the secondary
market offered rates, as of 10:00 A.M., New York City time, on such CD Rate
Interest Determination Date, of three primary nonbank dealers of negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks with a remaining maturity closest to the specified Index
Maturity in a denomination of U.S. $5,000,000; PROVIDED, HOWEVER, that, if fewer
than three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the CD Rate with respect to such Interest Reset Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
DETERMINATION OF INTEREST RATE PER ANNUM FOR FEDERAL FUNDS RATES
NOTES. If the Interest Rate Basis specified on the face hereof is Federal Funds
Rate, the interest rate per annum determined with respect to any Interest
Determination Date specified on the face hereof shall equal the rate, adjusted
by the addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified on the
face hereof and calculated to one hundred-thousandth of a percentage point,
rounded up, on the relevant Federal Funds Interest Determination Date for
Federal Funds as published in Release H.15(519) under the heading "Federal Funds
(Effective)". In the event that such rate is not published prior to 9:00 A.M.,
New York City time, on the relevant Calculation Date, then the Federal Funds
Rate with respect to such Interest Reset Rate will be the rate (adjusted or
multiplied and calculated as described above) on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3: 00 P.M., New York City time, on such
Calculation Date such rate is not published in either Release H.15(519) or
Composite Quotations, the Federal Funds Rate with respect to such Interest Reset
Date shall be calculated by the Calculation Agent and shall be the arithmetic
mean (adjusted or multiplied and calculated as described above) of the rates, as
of 11:00 A.M., New York City time, on such Federal Funds Interest Determination
Date, for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York selected
by the Calculation Agent; PROVIDED, HOWEVER, that if fewer than three brokers
selected as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the Federal Funds Rate with respect to such Interest Reset Date will
be the Federal Funds Rate in effect on such Federal Funds Interest Determination
Date.
5
<PAGE>
Notwithstanding the foregoing, the interest rate per annum hereon
shall not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the foregoing
on or before each Interest Calculation Date.
The interest rate on this Note will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general application.
At the request of the Holder hereof, the Calculation Agent will
provide to the Holder hereof the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as a result of a
determination made on the most recent Interest Determination Date with respect
to this Note. The Calculation Agent's determination of any interest rate will
be final and binding in the absence of manifest error.
Interest payments hereon will include interest accrued to but
excluding the applicable Interest Payment Date; PROVIDED, HOWEVER, that if the
rate at which interest on this Note is payable shall be adjusted weekly as
specified on the face hereof under ''Interest Rate Reset Period" and as
determined in accordance with the provisions hereof, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal hereof is payable, will include interest accrued to but excluding the
day following the Regular Record Date next preceding such Interest Payment Date.
Accrued interest hereon from the Original Issue Date or from the last date to
which interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest factors
calculated for each day from the Original Issue Date or from the last date to
which interest shall have been paid or duly provided for, as the case may be, up
to but not including the date for which accrued interest is being calculated.
The interest factor (expressed as a decimal calculated to seven decimal places,
rounding up) for each such day shall be computed by dividing the interest rate
per annum (expressed as a decimal calculated to seven decimal places, rounding
up) applicable to such day by 360 if the Interest Rate Basis specified on the
face hereof is Prime Rate, LIBOR, Commercial Paper Rate, CD Rate or Federal
Funds Rate or by the actual number of days in the year if the Interest Rate
Basis specified on the face hereof is Treasury Rate.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount
6
<PAGE>
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders of
this Note and of any Note issued upon the registration or transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
If so provided on the face of this Note, this Note may be redeemed by
the Company on and after the date so indicated on the face hereof. On and after
the date, if any, from which this Note may be redeemed, this Note may be
redeemed in whole or in part at the option of the Company at a redemption price
equal to the product of the principal amount of this Note to be redeemed
multiplied by the Redemption Percentage, plus accrued interest, if any, to the
date of redemption. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified on the face of this Note, and shall decline at
each anniversary of the initial date that this Note is redeemable by the amount
of the Annual Redemption Percentage Reduction specified on the face of this
Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall be at least
$100,000, on any Business Day on or after the date so indicated on the face
hereof under "Redeemable On or After (At Option of the Holder)", at the option
of the Holder, at 100% of the principal amount to be repaid, plus accrued
interest, if any, to the repayment date. In order for the exercise of the
option to be effective and the Notes to be repaid, the Company must receive at
the applicable address of the Trustee set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of the
Note, on or before the fifteenth, but not earlier than the twenty-fifth,
calendar day or, if such day is not a Business Day, the next succeeding Business
Day, prior to the repayment date, either (i) this Note, with the form below
entitled "Option to Elect Repayment" duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America setting forth (a) the name,
address and telephone number of the Holder of this Note, (b) the principal
amount of this Note and the principal amount of this Note to be repaid, (c) a
statement that the option to elect repayment is being exercised thereby, and (d)
a guarantee stating that the Company will receive this Note, with the form below
entitled "Option to Elect Repayment" duly completed, not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and this Note and form duly completed are received by the Company by
such fifth Business Day). Any such election shall be irrevocable. Deliveries
shall be made by hand, courier service, regular or registered mail, telegram or
facsimile transmission to ___________________________, Attention: Corporate
Trust Office, _____________________________________ (or at such other places as
the Company shall notify the Holders of the Notes). All questions as to the
validity, eligibility
7
<PAGE>
(including time of receipt) and acceptance of any Note for repayment will be
determined by the Company, whose determination will be final and binding.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Events of Default, upon compliance by the Company with
certain conditions set forth therein, which provisions apply to this Note.
The Notes are issuable in global or definitive form without coupons in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Upon due presentment for registration of transfer of this Note at the office or
agency of the Company in the City of Minneapolis, Minnesota, or the City of
__________________, or, at the option of the Holder hereof, at the office or
agency to be maintained for that purpose in the Borough of Manhattan, The City
of New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like interest rate and maturity will be issued to
the transferee in exchange herefor, subject to the limitations provided in the
Indenture and to the limitations described below if applicable, without charge
except for any tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note 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 this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this 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 hereby
has occurred and is continuing. If this Note is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Notes in registered
form, bearing interest (if any) at the same rate or pursuant to the same
formula, having the same date of issuance, redemption provisions, if any, Stated
Maturity and other terms and of differing denominations aggregating a like
amount.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
8
<PAGE>
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
----------------------------------
- -------------------------------------------------------------------------------
- -----------------------------------------------------------------------------.
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Company must receive at the applicable
address of the Trustee set forth above or at such other place or places of which
the Company shall from time to time notify the holder of the within Note, on or
before the fifteenth, but not earlier than the twenty-fifth, calendar day or, if
such day is not a Business Day, the next succeeding Business Day, prior to the
repayment date (i) this Note, with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the holder of the Note, (b) the principal amount of the Note and the principal
amount of the Note to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby, and (d) a guarantee stating that the Note
to be repaid with the form entitled "Option to Elect Prepayment" on the reverse
of the Note duly completed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and such Note and form duly completed are received by the Company by
such fifth Business Day).
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000 which the holder elects to have repaid: ____________; and specify the
denomination or denominations (which shall be $100,000 or an integral multiple
of $1,000 in excess thereof) of the Note or Notes to
9
<PAGE>
be issued to the holder for the portion of the within Note not being repaid (in
the absence of any such specification, one such Note will be issued for the
portion not being repaid):
-----------------------------------------------------
- -------------------------------------------------------------------------------.
Dated:
---------------------------- --------------------------------------
Notice: The signature to this Option to
Elect Repayment must correspond with the
name as written upon the face of the
Note in every particular without
alteration or enlargement or any other
change whatsoever.
-----------------------------
10
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT ACT: ______ Custodian _______
(Cust) (Minor)
Under Uniform Gifts to Minors Act
------------------------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s)
unto:
Please Insert Social Security or
Other Identifying Number of Assignee
---------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
11
<PAGE>
the within Note of DAYTON HUDSON CORPORATION and does hereby irrevocably
constitute and appoint _______________ attorney to transfer the said Note on the
books of the Company, with full power of substitution in the premises.
Dated:
---------------------------- --------------------------------------
--------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
12
<PAGE>
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
DAYTON HUDSON CORPORATION
MEDIUM-TERM NOTE, SERIES __
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
If the registered owner of this Note (as indicated below) is Cede &
Co. and The Depository Trust Company is named below as Depositary, this Note is
a "Global Note", and unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
If applicable, the following will be completed solely for purposes of
the U.S. Federal Income Tax "Original Issue Discount" rules, as that term is
defined in Section 1273 of the Internal Revenue Code of 1986, as amended. This
information is provided solely for the purposes of applying the U.S. Federal
Income Tax Original Issue Discount ("OID") rules to the certificate and is based
on an interpretation of proposed Treasury regulations. The Issue Date of this
certificate is ____________. This certificate has been issued with ______ of
OID per $1,000 of initial principal amount. The annual yield to maturity is __%
based on semiannual compounding. The amount of OID attributable to the initial
accrual period is ___________ per $1,000 of initial principal amount, computed
under the _______________ method as defined in proposed Treasury regulations.
The following summary of terms is subject to the information set forth
on the reverse hereof.
<PAGE>
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: ISSUE PRICE (As a MATURITY DATE:
percentage of principal
amount): %
INTEREST RATE PER INTEREST PAYMENT DEFAULT RATE (Only
ANNUM: DATES: applicable if Note issued
at original issue
discount):
OID DEFAULT AMOUNT REDEEMABLE ON OR REDEEMABLE ON OR
(only applicable if Note AFTER (At option of the AFTER (At option of the
issued at original issue Holder): Company):
discount):
ANNUAL REDEMPTION SINKING FUND:
INITIAL REDEMPTION PERCENTAGE
PERCENTAGE: REDUCTION:
DEPOSITARY (Only
applicable if Note is a
Global Note):
</TABLE>
DAYTON HUDSON CORPORATION, a corporation duly organized and existing
under the laws of the State of Minnesota (herein called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
____________________________________________ or registered assigns, the
principal sum of _________________________ at the office or agency of the
Company in the City of Minneapolis, Minnesota, the City of ____________________
or in the Borough of Manhattan, The City of New York, on the maturity date shown
above, or if such date is not a Business Day (as defined below), the next
succeeding Business Day ("Stated Maturity"), in such coin or currency as at the
time of payment shall be legal tender for the payment of public and private
debts in the United States of America, and to pay interest on said principal sum
at the rate per annum (computed on the basis of a 360-day year of twelve 30-day
months) shown above, in like coin or currency, semi-annually on each Interest
Payment Date set forth above from and after the date of this Note and at
Maturity until payment of said principal sum has been made or duly provided for.
Unless this Note is a Note which has been issued upon transfer of, in exchange
for, or in
2
<PAGE>
replacement of a predecessor Note, interest on this Note shall accrue from the
Original Issue Date indicated above. If this Note has been issued upon transfer
of, in exchange for, or in replacement of a predecessor Note, interest on this
Note shall accrue from the last Interest Payment Date to which interest was paid
on such predecessor Note, or if no interest was paid on such predecessor Note,
from the Original Issue Date indicated above. The first payment of interest on
a Note originally issued and dated between a Regular Record Date (as defined
below) and an Interest Payment Date will be due and payable on the Interest
Payment Date following the next succeeding Regular Record Date to the registered
owner on such next succeeding Regular Record Date. Subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, the
interest so payable on any Interest Payment Date will be paid to the Person in
whose name this Note is registered at the close of business on the fourteenth
calendar day next preceding such Interest Payment Date (each such date a
"Regular Record Date"), and interest payable at Maturity (other than a Maturity
date which is an Interest Payment Date) will be paid to the Person to whom said
principal sum is payable. Payment of interest on this Note with respect to any
Interest Payment Date will include interest accrued to but excluding such
Interest Payment Date. If the Company shall default in the payment of interest
due on any Interest Payment Date, then interest on this Note shall accrue from
the next preceding Interest Payment Date to which interest has been paid, or if
no interest has been paid on this Note, from the Original Issue Date indicated
above.
Payment of the principal of (and premium, if any) and any interest due
on this Note to the Holder hereof at Maturity will be paid, in immediately
available funds, upon presentation of this Note at the office or agency of the
Company maintained for that purpose in the City of Minneapolis, Minnesota, or
the City of ____________________, or, at the option of the Holder hereof, at the
office or agency to be maintained for that purpose in the Borough of Manhattan,
The City of New York. Payment of interest on this Note due on any Interest
Payment Date (other than interest on this Note due to the Holder hereof at
Maturity) will be payable at such office or agency of the Company, provided,
however, that, at the option of the Company, payment of interest may be paid by
check mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or by wire transfer to such account as may have
been designated by such Holder as set forth herein.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its Corporate Trust
Office in the City of ____________________ or its agency in The City of New York
and, unless revoked by written notice to the Trustee received by the Trustee on
or prior to the Regular Record Date immediately preceding the applicable
Interest Payment Date or the fifteenth calendar day preceding the date of
Maturity, as the case may be, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
If a payment with respect to this Note cannot be made by wire transfer
because the required designation has not been received by the Trustee on or
before the requisite date or for any other reason, a notice will be mailed to
the Holder at its registered address requesting a designation pursuant to which
such wire transfer can be made and, upon the
3
<PAGE>
Trustee's receipt of such a designation, such payment will be made within five
Business Days of such receipt. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer, but any
tax, assessment or governmental charge imposed upon payments will be borne by
the Holders of the Notes in respect of which payments are made.
Any payment on this Note due on any day which is not a Business Day in
The City of New York or which is not a Business Day in the City of Minneapolis,
Minnesota, or the City of ____________________, need not be made on such day,
but may be made on the next succeeding Business Day, with the same force and
effect as if made on the due date, and no interest shall accrue for the period
from and after such date.
IF THIS NOTE IS A GLOBAL NOTE AS SPECIFIED ON THE FACE HEREOF, THE
FOLLOWING LEGEND IS APPLICABLE: "EXCEPT UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED ON THE REVERSE HEREOF, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY, ANOTHER NOMINEE OF THE DEPOSITARY, A SUCCESSOR OF THE DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR".
"Business Day" shall mean, as used herein with respect to any
particular location, each Monday, Tuesday, Wednesday, Thursday or Friday which
is not a day on which banking institutions in such location are generally
authorized or obligated by law or executive order to close.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: DAYTON HUDSON CORPORATION
By:
-----------------------------
(Title)
[SEAL] Attest:
-------------------------
(Title)
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
, as Trustee
- --------------------------
By:
---------------------------
Authorized Signature
or
, as Trustee
- --------------------------
By: ,
--------------------------
Authenticating Agent
By:
----------------------------
Authorized Signature
5
<PAGE>
[Reverse of Note]
DAYTON HUDSON CORPORATION
MEDIUM-TERM NOTE, SERIES __
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
This Note is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
more series under an indenture dated as of ____________________ (hereinafter
called the "Indenture"), between the Company and ____________________________,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
a series of the Securities designated as the Medium-Term Notes, Series __ of the
Company (the "Notes"), due 9 months or more from date of issue. The Notes are
limited to $____________ in aggregate principal amount. The Notes may mature at
different times, bear interest, if any, at different rates, be redeemable by the
Company at different times or not at all, be repayable at the option of the
Holder at different times or not at all and issued at an original issue
discount.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
<PAGE>
If so provided on the face of this Note, this Note may be redeemed by
the Company on and after the date so indicated on the face hereof. On and after
the date, if any, from which this Note may be redeemed, this Note may be
redeemed, in whole or in part, at the option of the Company at a redemption
price equal to the product of the principal amount of this Note to be redeemed
multiplied by the Redemption Percentage, plus accrued interest, if any, to the
date of redemption. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified on the face of this Note, and shall decline at
each anniversary of the initial date that this Note is redeemable by the amount
of the Annual Redemption Percentage Reduction specified on the face of this
Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall the at
least $100,000, on any Business Day on or after the date so indicated on the
face hereof under "Redeemable On or After (At Option of the Holder)", at the
option of the Holder, at 100% of the principal amount to be repaid, plus accrued
interest, if any, to the repayment date. In order for the exercise of the
option to be effective and the Notes to be repaid, the Company must receive at
the applicable address of the Trustee set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of the
Note, on or before the fifteenth, but not earlier than the twenty-fifth,
calendar day or, if such day is not a Business Day, the next succeeding Business
Day, prior to the repayment date, either (i) this Note, with the form below
entitled "Option to Elect Repayment" duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America setting forth (a) the name,
address and telephone number of the Holder of this Note, (b) the principal
amount of this Note and the principal amount of this Note to be repaid, (c) a
statement that the option to elect repayment is being exercised thereby, and (d)
a guarantee stating that the Company will receive this Note, with the form below
entitled "Option to Elect Repayment" duly completed, not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and this Note and form duly completed are received by the Company by
such fifth Business Day). Any such election shall be irrevocable. Deliveries
shall be made by hand, courier service, regular or registered mail, telegram or
facsimile transmission to __________________________, Attention: Corporate Trust
Office, __________________________________________, (or, at such other places as
the Company shall notify the Holders of the Notes). All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final
and binding.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Events of Default, upon compliance by the Company with
certain conditions set forth therein, which provisions apply to this Note.
2
<PAGE>
If this Note is issued with an original issue discount, (i) if an
Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of principal of this Note which may be declared due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture, shall be determined in the manner set forth under "OID Default
Amount" on the face hereof, and (ii) in the case of a default of payment in
principal upon acceleration, redemption, repayment at the option of the Holder
or at the Stated Maturity hereof, in lieu of any interest otherwise payable, the
overdue principal of this Note shall bear interest at a rate of interest per
annum equal to the Default Rate stated on the face hereof (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such acceleration, redemption, repayment at the option of the
Holder or Stated Maturity, as the case may be, to the date payment has been made
or duly provided for or such default has been waived in accordance with the
terms of the Indenture.
The Notes are issuable in global or definitive form without coupons in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Upon due presentment for registration of transfer of this Note at the office or
agency of the Company in the City of Minneapolis, Minnesota, or the City of
____________________, or, at the option of the Holder hereof, at the office or
agency to be maintained for that purpose in the Borough of Manhattan, The City
of New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like interest rate and maturity will be issued to
the transferee in exchange herefor, subject to the limitations provided in the
Indenture and to the limitations described below if applicable, without charge
except for any tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note 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 this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this 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 hereby
has occurred and is continuing. If this Note is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Notes in registered
form, bearing interest (if any) at the same rate or pursuant to the same
formula, having the same date of issuance, redemption provisions, if any, Stated
Maturity and other terms and of differing denominations aggregating a like
amount.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
3
<PAGE>
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
4
<PAGE>
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
----------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------.
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Company must receive at the applicable
address of the Trustee set forth above or at such other place or places of which
the Company shall from time to time notify the holder of the within Note, on or
before the fifteenth, but not earlier than the twenty-fifth, calendar day or, if
such day is not a Business Day, the next succeeding Business Day, prior to the
repayment date (i) this Note, with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the holder of the Note, (b) the principal amount of the Note and the principal
amount of the Note to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby, and (d) a guarantee stating that the Note
to be repaid with the form entitled "Option to Elect Prepayment" on the reverse
of the Note duly completed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and such Note and form duly completed are received by the Company by
such fifth Business Day).
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000, which the Holder elects to have repaid: ______________________; and
specify the denomination or denominations (which shall be $100,000 or an
integral multiple of $1,000 in excess thereof) of the Note or Notes to be issued
to the Holder for the portion of the within Note not being
5
<PAGE>
repaid (in the absence of any specification, one such Note will be issued for
the portion not being repaid): _____________________
Dated:
---------------------------- ------------------------------------
Notice: The signature to this Option to
Elect Repayment must correspond with the
name as written upon the face of the
Note in every particular without
alteration or enlargement or any other
change whatsoever.
-------------------------
6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT ACT: ______ Custodian _______
(Cust) (Minor)
Under Uniform Gifts to Minors Act
-------------------------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s)
unto:
Please Insert Social Security or
Other Identifying Number of Assignee
--------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
7
<PAGE>
the within Note of DAYTON HUDSON CORPORATION and does hereby irrevocably
constitute and appoint _______________ attorney to transfer the said Note on the
books of the Company, with full power of substitution in the premises.
Dated:
---------------------------- ------------------------------------
------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
8
<PAGE>
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES B-1 ESOP CONVERTIBLE PREFERRED STOCK
OF
DAYTON HUDSON CORPORATION
Pursuant to Section 302A.401 of the Business Corporation Act
of the State of Minnesota
We, Robert J. Ulrich, Chairman and Chief Executive Officer, and James T.
Hale, Secretary, of Dayton Hudson Corporation, a corporation organized and
existing under the Business Corporation Act of the State of Minnesota, in
accordance with the provisions of Section 302A.401 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Articles of Incorporation, as amended, of said Corporation, said Board
of Directors on September 9, 1998, authorized the creation and issuance of a new
series of Preferred Stock and determined the designation and amount thereof, and
the voting powers, preferences, rights and limitations of the shares of such
series and that the issuance of the shares of said series of Preferred Stock
shall be conclusive evidence of the terms of said series established by said
Board of Directors and the approval thereof by said Board of Directors; and
That pursuant to the authority granted to it by the Restated Articles of
Incorporation, as amended, of said Corporation, said Board of Directors adopted
the following resolution establishing a series of Twenty Thousand (20,000)
shares of Preferred Stock designated as Series B-1 ESOP Convertible Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Restated Articles of
Incorporation, as amended, a series of Preferred Stock of the Corporation be,
and it hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
1. DESIGNATION AND AMOUNT; SPECIAL PURPOSE RESTRICTED TRANSFER ISSUE.
(A) The shares of such series shall be designated as "Series B-1 ESOP
Convertible Preferred Stock" (the "Series B-1 Preferred Stock") and the number
of shares constituting such series shall be 20,000.
(B) Shares of Series B-1 Preferred Stock shall be issued only to a
trustee (the "Trustee") acting on behalf of the Dayton Hudson Corporation 401(k)
Plan, or any successor to such plan (the "Plan"). All references to the holder
of shares of Series B-1 Preferred Stock shall
<PAGE>
mean the Trustee or any company with which or into which the Trustee may merge
or any successor trustee under the trust agreement with respect to the Plan. In
the event of any transfer of record ownership of shares of Series B-1 Preferred
Stock to any person other than any successor trustee under the Plan, the shares
of Series B-1 Preferred Stock so transferred, upon such transfer and without any
further action by the Corporation or the holder thereof, shall be automatically
converted into shares of Common Stock on the terms otherwise provided for the
conversion of shares of Series B-1 Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof and no such transferee shall have any of the voting
powers, preferences and relative, participating, optional or special rights
ascribed to shares of Series B-1 Preferred Stock hereunder but, rather, only the
powers and rights pertaining to the Common Stock into which such shares of
Series B-1 Preferred Stock shall be so converted. In the event of such a
conversion, the transferee of the shares of Series B-1 Preferred Stock shall be
treated for all purposes as the record holder of the shares of Common Stock into
which such shares of Series B-1 Preferred Stock have been automatically
converted as of the date of such transfer. Certificates representing shares of
Series B-1 Preferred Stock shall bear a legend to reflect the foregoing
provisions. Notwithstanding the foregoing provisions of this paragraph (B) of
Section 1, shares of Series B-1 Preferred Stock (i) may be converted into shares
of Common Stock as provided by Section 5 hereof and the shares of Common Stock
issued upon such conversion may be transferred by the holder thereof as
permitted by law and (ii) shall be redeemable by the Corporation upon the terms
and conditions provided by Sections 6, 7 and 8 hereof.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series B-1 Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends ("Preferred Dividends") in an amount per
share equal to $56.20 per share per annum, and no more, payable quarterly in
arrears, one-quarter on the 10th day of March, one-quarter on the 10th day of
June, one-quarter on the 10th day of September and one-quarter on the 10th day
of December of each year (each a "Dividend Payment Date") commencing on December
10, 1998, to holders of record at the start of business on such Dividend Payment
Date. In the event that any Dividend Payment Date shall fall on any day other
than a "Business Day" (as hereinafter defined), the dividend payment due on such
Dividend Payment Date shall be paid on the Business Day immediately following
such Dividend Payment Date. Preferred Dividends shall begin to accrue on
outstanding shares of Series B-1 Preferred Stock from the date of issuance of
such shares of Series B-1 Preferred Stock. Preferred Dividends shall accrue on
a daily basis whether or not the Corporation shall have earnings or surplus at
the time, but Preferred Dividends accrued after issuance on the shares of Series
B-1 Preferred Stock for any period less than a full quarterly period between
Dividend Payment Dates (or, in the case of the first dividend payment, from the
date of issuance through December 10, 1998, which is the first Dividend Payment
Date) shall be computed on the basis of a 360-day year of 30-day months.
Accrued but unpaid Preferred Dividends shall cumulate as of the Dividend Payment
Date on which they first become payable, but no interest shall accrue on
accumulated but unpaid Preferred Dividends.
2
<PAGE>
(B) So long as any shares of Series B-1 Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other series of stock ranking on a parity with the Series B-1 Preferred
Stock as to dividends, unless there shall also be or have been declared and paid
or set apart for payment on the Series B-1 Preferred Stock dividends for all
dividend payment periods of the Series B-1 Preferred Stock ending on or before
the dividend payment date of such parity stock, ratably in proportion to the
respective amounts of dividends accumulated and unpaid through such dividend
period on the Series B-1 Preferred Stock and accumulated and unpaid or payable
on such parity stock through the dividend payment period on such parity stock
next preceding such dividend payment date. In the event that full cumulative
dividends on the Series B-1 Preferred Stock have not been declared and paid or
set apart for payment when due, the Corporation shall not declare or pay or set
apart for payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption or other retirement of any other
class of stock or series thereof of the Corporation ranking, as to dividends or
as to distributions in the event of a liquidation, dissolution or winding-up of
the Corporation, junior to the Series B-1 Preferred Stock until full cumulative
dividends on the Series B-1 Preferred Stock shall have been paid or declared and
set apart for payment; PROVIDED, HOWEVER, that the foregoing shall not apply to
(i) any dividend payable solely in any shares of any stock ranking, as to
dividends and as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Series B-1 Preferred Stock or (ii)
the acquisition of shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series B-1 Preferred Stock either (A) pursuant to any
employee or director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Corporation or any
subsidiary of the Corporation, heretofore or hereafter adopted or (B) in
exchange solely for shares of any other stock ranking, as to dividends and as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series B-1 Preferred Stock.
3. VOTING RIGHTS. The holders of shares of Series B-1 Preferred Stock
shall have the following voting rights:
(A) The holders of Series B-1 Preferred Stock shall be entitled to vote
on all matters submitted to a vote of the stockholders of the Corporation,
voting together with the holders of Series B ESOP Convertible Preferred Stock
and Common Stock as one class. The holder of each share of Series B-1 Preferred
Stock shall be entitled to a number of votes equal to the number of shares of
Common Stock into which such share of Series B-1 Preferred Stock could be
converted on the record date for determining the stockholders entitled to vote,
rounded to the nearest one-hundredth of a vote; it being understood that
whenever the "Conversion Price" (as defined in Section 5 hereof) is adjusted as
provided in Section 9 hereof, the voting rights of the Series B-1 Preferred
Stock shall also be similarly adjusted.
(B) Except as otherwise required by law or set forth herein, holders of
Series B-1 Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Series B ESOP Convertible Preferred Stock and Common Stock as set
forth herein) for the taking of any corporate action; PROVIDED,
3
<PAGE>
HOWEVER, that the vote of at least 66-2/3% of the outstanding shares of Series
B-1 Preferred Stock, voting separately as a series, shall be necessary to adopt
any alteration, amendment or repeal of any provision of the Restated Articles of
Incorporation of the Corporation, as amended, or this Resolution (including any
such alteration, amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting corporation), if such
amendment, alteration or repeal would alter or change the powers, preferences,
or special rights of the shares of Series B-1 Preferred Stock so as to affect
them adversely.
4. LIQUIDATION, DISSOLUTION OR WINDING-UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the holders of Series B-1 Preferred Stock shall
be entitled to receive out of assets of the Corporation which remain after
satisfaction in full of all valid claims of creditors of the Corporation and
which are available for payment to stockholders, and subject to the rights of
the holders of any stock of the Corporation ranking senior to or on a parity
with the Series B-1 Preferred Stock in respect of distributions upon
liquidation, dissolution or winding-up of the Corporation, before any amount
shall be paid or distributed among the holders of Common Stock or any other
shares ranking junior to the Series B-1 Preferred Stock in respect of
distributions upon liquidation, dissolution or winding-up of the Corporation,
liquidating distributions in the amount of $864.60 per share, plus an amount
equal to all accrued and unpaid dividends thereon to the date fixed for
distribution, and no more. If, upon any liquidation, dissolution or winding-up
of the Corporation, the amounts payable with respect to the Series B-1 Preferred
Stock and any other stock ranking as to any such distribution on a parity with
the Series B-1 Preferred Stock are not paid in full, the holders of the Series
B-1 Preferred Stock and such other stock shall share ratably in any distribution
of assets in proportion to the full respective preferential amounts to which
they are entitled. After payment of the full amount to which they are entitled
as provided by the foregoing provisions of this paragraph (A) of this Section 4,
the holders of shares of Series B-1 Preferred Stock shall not be entitled to any
further right or claim to any of the remaining assets of the Corporation.
(B) Neither the merger or consolidation of the Corporation with or into
any other corporation, nor the merger or consolidation of any other corporation
with or into the Corporation, nor the sale, lease, exchange or other transfer of
all or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or winding-up of the affairs of the Corporation for
purposes of this Section 4, but the holders of Series B-1 Preferred Stock shall
nevertheless be entitled in the event of any such merger or consolidation to the
rights provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
Series B-1 Preferred Stock in such circumstances shall be payable, shall be
given by hand delivery, by courier, by standard form of telecommunication or by
first-class mail (postage prepaid) delivered, sent or mailed, as the case may
be, not less than twenty (20) days prior to any payment date stated therein, to
the holders of Series B-1 Preferred
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Stock, at the address shown on the books of the Corporation or any transfer
agent for the Series B-1 Preferred Stock.
5. CONVERSION INTO COMMON STOCK.
(A) A holder of shares of Series B-1 Preferred Stock shall be entitled,
at any time prior to the close of business on the date fixed for redemption of
such shares pursuant to Sections 6, 7 and 8 hereof, to cause any or all of such
shares to be converted into shares of Common Stock, initially at a conversion
price equal to $14.41 per share of Common Stock, with each share of Series B-1
Preferred Stock being valued at $864.60 for such purpose, and which conversion
price per share of Common Stock shall be adjusted as hereinafter provided (and,
as so adjusted, is hereinafter sometimes referred to as the "Conversion Price")
(that is, a conversion rate initially equivalent to 60 shares of Common Stock
for each share of Series B-1 Preferred Stock so converted, which is subject to
adjustment as the Conversion Price is adjusted as hereinafter provided).
(B) Any holder of shares of Series B-1 Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender the certificate
or certificates representing the shares of Series B-1 Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer agent for the
Series B-1 Preferred Stock or such office or offices in the continental United
States of an agent for conversion as may from time to time be designated by
notice to the holders of the Series B-1 Preferred Stock by the Corporation or
the transfer agent for the Series B-1 Preferred Stock, accompanied by written
notice of conversion. Such notice of conversion shall specify (i) the number of
shares of Series B-1 Preferred Stock to be converted and the name or names in
which such holder wishes the certificate or certificates for Common Stock and
for any shares of Series B-1 Preferred Stock not to be so converted to be issued
and (ii) the address to which such holder wishes delivery to be made of such new
certificates to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share or shares of
Series B-1 Preferred Stock for conversion, the Corporation shall issue and send
by hand delivery, by courier or by first-class mail (postage prepaid) to the
holder thereof or to such holder's designee, at the address designated by such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled upon conversion. In the event that there
shall have been surrendered a certificate or certificates representing shares of
Series B-1 Preferred Stock, only part of which are to be converted, the
Corporation shall issue and deliver to such holder or such holder's designee, in
the manner set forth in the preceding sentence, a new certificate or
certificates representing the number of shares of Series B-1 Preferred Stock
which shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series B-1 Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion
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thereof or (ii) the commencement of business on the second Business Day after
the surrender of the certificate or certificates for the shares of Series B-1
Preferred Stock to be converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto) and
accompanied by all documentation required to effect the conversion, as provided
by this Resolution. On and after the effective date of conversion, the person
or persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock, but no allowance or adjustment shall be made in respect of
dividends payable to holders of Common Stock in respect of any period prior to
such effective date. The Corporation shall not be obligated to pay any
dividends which shall have been declared and shall be payable to holders of
shares of Series B-1 Preferred Stock on a Dividend Payment Date if the record
date for such dividend is subsequent to the effective date of conversion of such
shares.
(E) The Corporation shall not be obligated to deliver to holders of
Series B-1 Preferred Stock any fractional share or shares of Common Stock
issuable upon any conversion of such shares of Series B-1 Preferred Stock, but
in lieu thereof may make a cash payment in respect thereof in any manner
permitted by law.
(F) If the Corporation shall issue shares of Common Stock upon
conversion of shares of Series B-1 Preferred Stock as contemplated by this
Section 5, the Corporation shall, to the extent provided for, and subject to the
limitations set forth in, the Rights Agreement hereafter described, issue
together with each such share of Common Stock one right to purchase Series A
Junior Participating Preferred Stock of the Corporation (or other securities in
lieu thereof) pursuant to the Rights Agreement dated as of September 11, 1996
between the Corporation and Morgan Shareholder Services Trust Company as Rights
Agent, as such agreement may from time to time be amended (the "Rights
Agreement"), or any rights issued to holders of Common Stock of the Corporation
in addition thereto or in replacement therefor, whether or not such rights shall
be exercisable at such time, but only if such rights are issued and outstanding
and held by other holders of Common Stock of the Corporation at such time and
have not expired (such rights issued and issuable pursuant to the Rights
Agreement being hereinafter referred to as the "Rights").
(G) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series B-1 Preferred Stock as herein provided, free from
any preemptive rights, such number of shares of Common Stock as shall from time
to time be issuable upon the conversion of all the shares of Series B-1
Preferred Stock then outstanding. The Corporation shall prepare and shall use
its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all requirements as to registration or qualification of the Common Stock, in
order to enable the Corporation lawfully to issue and deliver to each holder of
record of Series B-1 Preferred Stock such number of shares of its Common Stock
as shall from time to time be sufficient to effect the conversion of all shares
of Series B-1 Preferred Stock then outstanding and convertible into shares of
Common Stock.
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6. REDEMPTION AT THE OPTION OF THE CORPORATION.
(A) The Series B-1 Preferred Stock shall be redeemable, in whole or in
part, (i) at the option of the Corporation at any time after January 10, 2000 at
$864.60 per share, plus an amount equal to all accrued and unpaid dividends
thereon to the date fixed for redemption, and (ii) as otherwise permitted or
required by this Section 6 and by Section 7 hereof. Payment of the redemption
price shall be made by the Corporation in cash or shares of Common Stock, or a
combination thereof, as permitted by paragraph (E) of this Section 6. From and
after the date fixed for redemption, dividends on shares of Series B-1 Preferred
Stock called for redemption will cease to accrue, such shares will no longer be
deemed to be outstanding and all rights in respect of such shares of the
Corporation shall cease, except the right to receive the redemption price. If
less than all of the outstanding shares of Series B-1 Preferred Stock are to be
redeemed, the Corporation shall either redeem a portion of the shares of each
holder determined pro rata based on the number of shares held by each holder or
shall select the shares to be redeemed by lot, as may be determined by the Board
of Directors of the Corporation. If the full cumulative dividends have not been
paid, contemporaneously declared and set aside for payment on all outstanding
shares of Series B-1 Preferred Stock for all past Dividend Payment Dates, the
Company may not redeem fewer than all the outstanding shares of Series B-1
Preferred Stock pursuant to this Section 6.
(B) Unless otherwise required by law, notice of redemption will be sent
to the holders of Series B-1 Preferred Stock at the address shown on the books
of the Corporation or any transfer agent for the Series B-1 Preferred Stock by
hand delivery, by courier, by standard form of telecommunication or by
first-class mail (postage prepaid) delivered, sent or mailed, as the case may
be, not less than twenty (20) days nor more than sixty (60) days prior to the
redemption date. Each such notice shall state: (i) the redemption date; (ii)
the total number of shares of the Series B-1 Preferred Stock to be redeemed and,
if fewer than all the shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (iii) the redemption price; (iv)
whether the redemption price shall be paid in cash or in shares of Common Stock,
or in a combination of such Common Stock and cash; (v) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; (vi) that dividends on the shares to be redeemed will cease to accrue on
such redemption date; and (vii) the conversion rights of the shares to be
redeemed, the period within which conversion rights may be exercised, and the
Conversion Price and number of shares of Common Stock issuable upon conversion
of a share of Series B-1 Preferred Stock at the time. Upon surrender of the
certificate for any shares so called for redemption and not previously converted
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the date fixed for redemption and at the
redemption price set forth in this Section 6 or Section 7 hereof, as the case
may be.
(C) In the event (i) of a change in any statute, rule or regulation of
the United States of America which has the effect of limiting or making
unavailable to the Corporation all or any of the tax deductions for amounts paid
(including dividends) on the Series B-1 Preferred Stock when such amounts are
used as provided under Section 404(k)(2) of the Internal Revenue Code
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of 1986, as amended and in effect on the date shares of Series B-1 Preferred
Stock are initially issued or (ii) the Plan is not initially determined by the
Internal Revenue Service to be qualified within the meaning of Section 401(a)
and Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended, the
Corporation may, in its sole discretion and notwithstanding anything to the
contrary in paragraph (A) of this Section 6, elect to redeem any or all of such
shares for cash or, if the Corporation so elects, in shares of Common Stock, or
a combination of such shares of Common Stock and cash, any such shares of Common
Stock to be valued for such purpose at their Fair Market Value (as defined in
paragraph (G) of Section 9 hereof), at a redemption price equal to the higher of
(x) $864.60 per share plus accrued and unpaid dividends thereon to the date
fixed for redemption or (y) the fair market value per share of Series B-1
Preferred Stock as determined by an independent appraiser, appointed by the
Corporation in accordance with the provisions of the Plan, as of the most recent
Valuation Date, as defined in the Plan.
(D) In the event that the Plan is terminated or the employee stock
ownership plan feature of the Plan is terminated or eliminated from the Plan in
accordance with its terms, and notwithstanding anything to the contrary in
paragraph (A) of this Section 6, the Corporation shall, as soon thereafter as
practicable, call for redemption all then outstanding shares of Series B-1
Preferred Stock for cash or, if the Corporation so elects, in shares of Common
Stock and cash, any such shares of Common Stock to be valued for such purpose at
their Fair Market Value (as defined in paragraph (G) of Section 9 hereof), at a
redemption price equal to the higher of (x) $864.60 per share plus accrued and
unpaid dividends thereon to the date fixed for redemption or (y) the fair market
value per share of Series B-1 Preferred Stock as determined by an independent
appraiser, appointed by the Corporation in accordance with the provisions of the
Plan, as of the most recent Valuation Date, as defined in the Plan.
(E) The Corporation, at its option, may make payment of the redemption
price required upon redemption of shares of Series B-1 Preferred Stock in cash
or in shares of Common Stock, or in a combination of such Common Stock and cash,
any such shares of Common Stock to be valued for such purposes at their Fair
Market Value (as defined in paragraph (G) of Section 9 hereof).
7. OTHER REDEMPTION RIGHTS. Shares of Series B-1 Preferred Stock shall be
redeemed by the Corporation for cash or, if the Corporation so elects, in shares
of Common Stock, or a combination of such shares and cash, any such shares of
Common Stock to be valued for such purpose at their Fair Market Value (as
defined in paragraph (G) of Section 9 hereof), at a redemption price of $864.60
per share plus accrued and unpaid dividends thereon to the date fixed for
redemption, at the option of the holder, at any time and from time to time upon
notice to the Corporation given not less than five (5) business days prior to
the date fixed by the holder in such notice for such redemption, upon
certification by such holder to the Corporation of the following events: (i)
when and to the extent necessary for such holder to make any payments of
principal, interest or premium due and payable (whether as scheduled, upon
acceleration or otherwise) under note from the Plan to the Corporation or any
indebtedness, expenses or costs incurred by the holder for the benefit of the
Plan; or (ii) in the event that the Plan is not initially determined by the
Internal Revenue Service to be qualified within the meaning of Section 401(a)
and Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended. Shares
of Series B-1 Preferred
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Stock shall also be redeemed by the Corporation for cash or, if the Corporation
so elects, in shares of Common Stock, or a combination of such shares and cash,
any such shares of Common Stock to be valued for such purpose at their Fair
Market Value (as defined in paragraph (G) of Section 9 hereof), at a redemption
price equal to the higher of (x) $864.60 per share plus accrued and unpaid
dividends thereon to the date fixed for redemption or (y) the fair market value
per share of Series B-1 Preferred Stock as determined by an independent
appraiser appointed by the Corporation in accordance with the provisions of the
Plan, as of the most recent Valuation Date, as defined in the Plan, at the
option of the holder, at any time and from time to time upon notice to the
Corporation given not less than five (5) business days prior to the date fixed
by the holder in such notice for such redemption, upon certification by such
holder to the Corporation that it is necessary for such holder to provide for
distributions required to be made under, or to satisfy an investment election
provided to participants in accordance with Section 9.6 of, the Plan.
8. CONSOLIDATION, MERGER, ETC.
(A) In the event that the Corporation shall consummate any consolidation
or merger or similar business combination, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into stock of any successor or resulting
corporation (including the Corporation) that constitutes "qualifying employer
securities" with respect to a holder of Series B-1 Preferred Stock within the
meaning of Section 409(1) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
amended, or any successor provisions of law, and, if applicable, for a cash
payment in lieu of fractional shares, if any, the shares of Series B-1 Preferred
Stock of such holder shall, in connection with such consolidation, merger or
similar business combination, be assumed by and shall become preferred stock of
such successor or resulting corporation, having in respect of such corporation,
insofar as possible, the same powers, preferences and relative, participating,
optional or other special rights (including the redemption rights provided by
Sections 6, 7 and 8 hereof), and the qualifications, limitations or restrictions
thereon, that the Series B-1 Preferred Stock had immediately prior to such
transaction, except that after such transaction each share of the Series B-1
Preferred Stock shall be convertible, otherwise on the terms and conditions
provided by Section 5 hereof, into the number and kind of qualifying employer
securities so receivable by a holder of the number of shares of Common Stock
into which such shares of Series B-1 Preferred Stock could have been converted
immediately prior to such transaction; PROVIDED, HOWEVER, that if by virtue of
the structure of such transaction, a holder of Common Stock is required to make
an election with respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made by the holders of
the Series B-1 Preferred Stock, then the shares of Series B-1 Preferred Stock
shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or exchanged for the aggregate amount
of stock, securities, cash or other property (payable in kind) receivable by a
holder of the number of shares of Common Stock into which such shares of Series
B-1 Preferred Stock could have been converted immediately prior to such
transaction if such holder of Common Stock failed to exercise any rights of
election to receive any kind or amount of stock, securities, cash or other
property (other than such qualifying employer securities and a cash payment, if
applicable, in lieu of fractional shares) receivable upon such transaction
(provided that, if the kind or amount of
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qualifying employer securities receivable upon such transaction is not the same
for each non-electing share, then the kind and amount so receivable upon such
transaction for each non-electing share shall be the kind and amount so
receivable per share by the plurality of the non-electing shares). The rights
of the Series B-1 Preferred Stock as preferred stock of such successor or
resulting corporation shall successively be subject to adjustments pursuant to
Section 3 and Section 9 hereof after any such transaction as nearly equivalent
as practicable to the adjustment provided for by such sections prior to such
transaction. The Corporation shall not consummate any such merger,
consolidation or similar transaction unless all then outstanding shares of
Series B-1 Preferred Stock shall be assumed and authorized by the successor or
resulting corporation as aforesaid.
(B) In the event that the Corporation shall consummate any consolidation
or merger or similar business combination, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged for or changed,
reclassified or converted into other stock or securities or cash or any other
property, or any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series B-1 Preferred Stock shall,
without any action on the part of the Corporation or any holder thereof (but
subject to paragraph (C) of this Section 8), be automatically converted by
virtue of such merger, consolidation or similar transaction immediately prior to
such consummation into the number of shares of Common Stock into which such
shares of Series B-1 Preferred Stock could have been converted at such time so
that each share of Series B-1 Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be
converted into or exchanged for the aggregate amount of stock, securities, cash
or other property (payable in like kind) receivable by a holder of the number of
shares of Common Stock into which such shares of Series B-1 Preferred Stock
could have been converted immediately prior to such transaction; PROVIDED,
HOWEVER, that if by virtue of the structure of such transaction, a holder of
Common Stock is required to make an election with respect to the nature and kind
of consideration to be received in such transaction, which election cannot
practicably be made by the holders of the Series B-1 Preferred Stock, then the
shares of Series B-1 Preferred Stock shall, by virtue of such transaction and on
the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property
(payable in kind) receivable by a holder of the number of shares of Common Stock
into which such shares of Series B-1 Preferred Stock could have been converted
immediately prior to such transaction if such holder of Common Stock failed to
exercise any rights of election as to the kind or amount of stock, securities,
cash or other property receivable upon such transaction (provided that, if the
kind or amount of stock, securities, cash or other property receivable upon such
transaction is not the same for each non-electing share, then the kind and
amount of stock, securities, cash or other property receivable upon such
transaction for each non-electing share shall be the kind and amount so
receivable per share by a plurality of the non-electing shares).
(C) In the event the Corporation shall enter into any agreement
providing for any consolidation or merger or similar business combination
described in paragraph (B) of this Section 8, then the Corporation shall as soon
as practicable thereafter (and in any event at least
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ten (10) business days before consummation of such transaction) give notice of
such agreement and the material terms thereof to each holder of Series B-1
Preferred Stock and each such holder shall have the right to elect, by written
notice to the Corporation, to receive, upon consummation of such transaction (if
and when such transaction is consummated), from the Corporation or the successor
of the Corporation, in redemption and retirement of such Series B-1 Preferred
Stock, a cash payment equal to the higher of (x) $864.60 per share plus accrued
and unpaid dividends thereon to the date of consummation of such transaction or
(y) the fair market value per share of Series B-1 Preferred Stock as determined
by an independent appraiser, appointed by the Corporation in accordance with the
provisions of the Plan, as of the last business day of the month immediately
preceding the month in which such fair market value is being determined. No
such notice of redemption shall be effective unless given to the Corporation
prior to the close of business on the second business day prior to consummation
of such transaction, unless the Corporation or the successor of the Corporation
shall waive such prior notice, but any notice of redemption so given prior to
such time may be withdrawn by notice of withdrawal given to the Corporation
prior to the close of business on the second business day prior to consummation
of such transaction.
9. ANTI-DILUTION ADJUSTMENTS.
(A) In the event the Corporation shall, at any time or from time to time
while any of the shares of the Series B-1 Preferred Stock are outstanding, (i)
pay a dividend or make a distribution in respect of the Common Stock in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or consolidation
to which Section 8 hereof does not apply) or otherwise, subject to the
provisions of paragraphs (E) and (F) of this Section 9, the Conversion Price in
effect immediately prior to such action shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately before such event, and the denominator
of which is the number of shares of Common Stock outstanding immediately after
such event. An adjustment made pursuant to this paragraph 9(A) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of stockholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the effective date thereof.
(B) In the event that the Corporation shall, at any time or from time to
time while any of the shares of Series B-1 Preferred Stock are outstanding,
issue to holders of shares of Common Stock as a dividend or distribution,
including by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as such a right or warrant (i) any security convertible into or
exchangeable for shares of Common Stock or (ii) any Rights issued pursuant to or
governed by the Rights Agreement or any successor agreement thereto) at a
purchase price per share less than the Fair Market Value (as hereinafter
defined) of a share of Common Stock on the date of issuance of such right or
warrant, then, subject to the provisions of paragraphs (E) and (F) of this
Section 9,
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the Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus the
number of shares of Common Stock which could be purchased at the Fair Market
Value of a share of Common Stock at the time of such issuance for the maximum
aggregate consideration payable upon exercise in full of all such rights or
warrants, and the denominator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or warrants plus
the maximum number of shares of Common Stock that could be acquired upon
exercise in full of all such rights and warrants.
(C) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series B-1 Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than pursuant to (i) any right or
warrant to purchase or acquire shares of Common Stock (including as such a right
or warrant any security convertible into or exchangeable for shares of Common
Stock), (ii) any Rights issued pursuant to or governed by the Rights Agreement
or any successor agreement thereto and (iii) any employee or director incentive
or benefit plan or arrangement (including any employment, severance or
consulting agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted) for a consideration having a Fair Market Value,
on the date of such issuance, sale or exchange, less than the Fair Market Value
of such shares on the date of issuance, sale or exchange, then, subject to the
provisions of paragraphs (E) and (F) of this Section 9, the Conversion Price
shall be adjusted by multiplying such Conversion Price by the fraction the
numerator of which shall be the sum of (i) the Fair Market Value of all the
shares of Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (ii) the Fair Market
Value of the consideration received by the Corporation in respect of such
issuance, sale or exchange of shares of Common Stock, and the denominator of
which shall be the product of (a) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (b) the sum of the number of shares of
Common Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Corporation. In the event the Corporation
shall, at any time or from time to time while any shares of Series B-1 Preferred
Stock are outstanding, issue, sell or exchange any right or warrant to purchase
or acquire shares of Common Stock (including as such a right or warrant any
security convertible into or exchangeable for shares of Common Stock), other
than any such issuance (i) to holders of shares of Common Stock as a dividend or
distribution (including by way of a reclassification of shares or a
recapitalization of the Corporation), (ii) pursuant to any employee or director
incentive or benefit plan or arrangement (including any employment, severance or
consulting agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted and (iii) of Rights issued pursuant to or
governed by the Rights Agreement or any successor agreement thereto, for a
consideration having a Fair Market Value, on the date of such issuance, sale or
exchange, less than the Non-Dilutive Amount (as hereinafter defined), then,
subject to the provisions of paragraphs (E) and (F) of this Section 9, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction the numerator of which shall be the sum of (I) the Fair Market Value of
all the shares of Common Stock outstanding on the day immediately preceding the
first public announcement of such issuance, sale or exchange
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plus (II) the Fair Market Value of the consideration received by the Corporation
in respect of such issuance, sale or exchange of such right or warrant plus
(III) the Fair Market Value at the time of such issuance of the consideration
which the Corporation would receive upon exercise in full of all such rights or
warrants, and the denominator of which shall be the product of (i) the Fair
Market Value of a share of Common Stock on the day immediately preceding the
first public announcement of such issuance, sale or exchange multiplied by (ii)
the sum of the number of shares of Common stock outstanding on such day plus the
maximum number of shares of Common Stock which could be acquired pursuant to
such right or warrant at the time of the issuance, sale or exchange of such
right or warrant (assuming shares of Common Stock could be acquired pursuant to
such right or warrant at such time).
(D) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series B-1 Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs
(E) and (F) of this Section 9, be adjusted by multiplying such Conversion Price
by the fraction the numerator of which is the difference between (i) the product
of (x) the number of shares of Common Stock outstanding immediately before such
Extraordinary Distribution or Pro Rata Repurchase multiplied by (y) the Fair
Market Value of a share of Common Stock on the day before the ex-dividend date
with respect to an Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution which is paid
other than in cash, or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata Repurchase, or on
the date of purchase with respect to any Pro Rata Repurchase which is not a
tender offer, as the case may be, and (ii) the Fair Market Value of the
Extraordinary Distribution or the aggregate purchase price of the Pro Rata
Repurchase, as the case may be, and the denominator of which shall be the
product of (a) the number of shares of Common Stock outstanding immediately
before such Extraordinary Dividend or Pro Rata Repurchase minus, in the case of
a Pro Rata Repurchase, the number of shares of Common Stock repurchased by the
Corporation multiplied by (b) the Fair Market Value of a share of Common Stock
on the day before the ex-dividend date with respect to an Extraordinary
Distribution which is paid in cash and on the distribution date with respect to
an Extraordinary Distribution which is paid other than in cash, or on the
applicable expiration date (including all extensions thereof) of any tender
offer which is a Pro Rata Repurchase or on the date of purchase with respect to
any Pro Rata Repurchase which is not a tender offer, as the case may be. The
Corporation shall send each holder of Series B-1 Preferred Stock (i) notice of
its intent to make any dividend or distribution and (ii) notice of any offer by
the Corporation to make a Pro Rata Repurchase, in each case at the same time as,
or as soon as practicable after, such offer is first communicated (including by
announcement of a record date in accordance with the rules of any stock exchange
on which the Common Stock is listed or admitted to trading) to holders of Common
Stock. Such notice shall indicate the intended record date and the amount and
nature of such dividend or distribution, or the number of shares subject to such
offer for a Pro Rata Repurchase and the purchase price payable by the
Corporation pursuant to such offer,
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as well as the Conversion Price and the number of shares of Common Stock into
which a share of Series B-1 Preferred Stock may be converted at such time.
(E) Notwithstanding any other provisions of this Section 9, the
Corporation shall not be required to make any adjustment to the Conversion Price
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Conversion Price.
(F) If the Corporation shall make any dividend or distribution on the
Common Stock or issue any Common Stock, other capital stock or other security of
the Corporation or any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment to the Conversion
Price pursuant to the foregoing provisions of this Section 9, the Board of
Directors of the Corporation shall consider whether such action is of such a
nature that an adjustment to the Conversion Price should equitably be made in
respect of such transaction. If in such case the Board of Directors of the
Corporation determines that an adjustment to the Conversion Price should be
made, an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Corporation (which adjustment shall in no event
adversely affect the powers, preferences or special rights of the Series B-1
Preferred Stock as set forth herein). The determination of the Board of
Directors of the Corporation as to whether an adjustment to the Conversion Price
should be made pursuant to the foregoing provisions of this paragraph 9(F), and,
if so, as to what adjustment should be made and when, shall be final and binding
on the Corporation and all stockholders of the Corporation. The Corporation
shall be entitled to make such additional adjustments in the Conversion Price,
in addition to those required by the foregoing provisions of this Section 9, as
shall be necessary in order that any dividend or distribution in shares of
capital stock of the Corporation, subdivision, reclassification or combination
of shares of stock of the Corporation or any recapitalization of the Corporation
shall not be taxable to the holders of the Common Stock.
(G) For purposes of this Resolution, the following definitions shall
apply:
"Adjustment Period" shall mean the period of five (5) consecutive trading
days preceding the date as of which the Fair Market Value of a security is to be
determined.
"Business Day" shall mean each day that is not a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are not required to be open.
"Current Market Price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or any other
issuer for any day shall mean the last reported sales price, regular way, or, in
the event that no sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in either case as reported on the New
York Stock Exchange Composite Tape or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which
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<PAGE>
such security is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or, if such security is not quoted on such National Market System,
the average of the closing bid and asked prices on each such day in the over-the
counter market as reported by NASDAQ or, if bid and asked prices for such
security on each such day shall not have been reported through NASDAQ, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in such security selected
for such purpose by the Board of Directors of the Corporation or a committee
thereof.
"Extraordinary Distribution" shall mean any dividend or other distribution
to holders of Common Stock (effected while any of the shares of Series B-1
Preferred Stock are outstanding) (i) of cash (other than a regularly scheduled
quarterly dividend not exceeding 135% of the average quarterly dividend for the
four quarters immediately preceding such dividend), where the aggregate amount
of such cash dividend or distribution together with the amount of all cash
dividends and distributions made during the preceding period of 12 months, when
combined with the aggregate amount of all Pro Rata Repurchases (for this
purpose, including only that portion of the aggregate purchase price of such Pro
Rata Repurchase which is in excess of the Fair Market Value of the Common Stock
repurchased as determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer which is a Pro Rata
Repurchase, or the date of purchase with respect to any other Pro Rata
Repurchase which is not a tender offer or exchange offer made during such
period), exceeds ten percent (10%) of the aggregate Fair Market Value of all
shares of Common Stock outstanding on the day before the ex-dividend date with
respect to such Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution which is paid
other than in cash, and/or (ii) of any shares of capital stock of the
Corporation (other than shares of Common Stock), other securities of the
Corporation (other than securities of the type referred to in paragraph (B) or
(C) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of the
Corporation) or any combination thereof. The Fair Market Value of an
Extraordinary Distribution for purposes of paragraph (D) of this Section 9 shall
be equal to the sum of the Fair Market Value of such Extraordinary Distribution
plus the amount of any cash dividends (other than regularly scheduled dividends
not exceeding 135% of the aggregate quarterly dividends for the preceding period
of 12 months) which are not Extraordinary Distributions made during such
12-month period and not previously included in the calculation of an adjustment
pursuant to paragraph (D) of this Section 9.
"Fair Market Value" shall mean, as to shares of Common Stock or any other
class of capital stock or securities of the Corporation or any other issue which
are publicly traded, the average of the Current Market Prices of such shares or
securities for each day of the Adjustment Period. The "Fair Market Value" of
any security which is not publicly traded or of any other property shall mean
the fair value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation or a
committee thereof, or, if no such investment banking or appraisal firm is in the
good faith judgment of the Board of Directors or such
15
<PAGE>
committee available to make such determination, as determined in good faith by
the Board of Directors of the Corporation or such committee. The fair market
value of the Series B-1 Preferred Stock for purposes of paragraphs (C) and (D)
of Section 6, for purposes of Section 7 and for purposes of paragraph (C) of
Section 8 shall be as determined by an independent appraiser, appointed by the
Corporation in accordance with the provisions of the Plan, as of the most recent
Valuation Date, as defined in the Plan.
"Non-Dilutive Amount" in respect of an issuance, sale or exchange by the
Corporation of any right or warrant to purchase or acquire shares of Common
Stock (including any security convertible into or exchangeable for shares of
Common Stock) shall mean the difference between (i) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such date upon the exercise
in full of such rights and warrants (including upon the conversion or exchange
of all such convertible or exchangeable securities), whether or not exercisable
(or convertible or exchangeable) at such date, and (ii) the aggregate amount
payable pursuant to such right or warrant to purchase or acquire such maximum
number of shares of Common Stock; PROVIDED, HOWEVER, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the foregoing sentence,
in the case of a security convertible into or exchangeable for shares of Common
Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of Common Stock by
the Corporation or any subsidiary thereof, whether for cash, shares of capital
stock of the Corporation, other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation), or any combination
thereof, effected while any of the shares of Series B-1 Preferred Stock are
outstanding, pursuant to any tender offer or exchange offer subject to Section
13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; PROVIDED, HOWEVER, that no purchase
of shares by the Corporation or any subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase. For purposes of this
paragraph (G) of this Section 9, shares shall be deemed to have been purchased
by the Corporation or any subsidiary thereof "in open market transactions" if
they have been purchased substantially in accordance with the requirements of
Rule 10b-18, as in effect under the Exchange Act, on the date shares of Series
B-1 Preferred Stock are initially issued by the Corporation or on such other
terms and conditions as the Board of Directors of the Corporation or a committee
thereof shall have determined are reasonably designed to prevent such purchases
from having a material effect on the trading market for the Common Stock.
(H) Whenever an adjustment to the Conversion Price and the related
voting rights of the Series B-1 Preferred Stock is required pursuant to this
Resolution, the Corporation shall forthwith place on file with the transfer
agent for the Common Stock and the Series B-1 Preferred Stock, and with the
Secretary of the Corporation, a statement signed by two officers of
16
<PAGE>
the Corporation stating the adjusted Conversion Price determined as provided
herein and the resulting conversion ratio, and the voting rights (as
appropriately adjusted), of the Series B-1 Preferred Stock. Such statement
shall set forth in reasonable detail such facts as shall be necessary to show
the reason and the manner of computing such adjustment, including any
determination of Fair Market Value involved in such computation. Promptly after
each adjustment to the Conversion Price and the related voting rights of the
Series B-1 Preferred Stock, the Corporation shall mail a notice thereof and of
the then prevailing conversion ratio to each holder of shares of the Series B-1
Preferred Stock.
10. RANKING; ATTRIBUTABLE CAPITAL AND ADEQUACY OF SURPLUS; RETIREMENT OF
SHARES.
(A) The Series B-1 Preferred Stock shall rank on parity with the Series
B ESOP Convertible Preferred Stock and senior to the Common Stock and the Series
A Junior Participating Preferred Stock of the Corporation (the "Series A
Preferred Stock") as to the payment of dividends and the distribution of assets
on liquidation, dissolution and winding-up of the Corporation, and, unless
otherwise provided in the Restated Articles of Incorporation of the Corporation,
as the same may be amended, or a Certificate of Designation relating to a
subsequent series of Preferred Stock of the Corporation, the Series B-1
Preferred Stock shall rank junior to all series of the Corporation's Preferred
Stock, other than the Series B ESOP Convertible Preferred Stock and the Series A
Preferred Stock, as to the payment of dividends and the distribution of assets
on liquidation, dissolution or winding-up.
(B) In addition to any vote of stockholders required by law or by
paragraph (B) of Section 3 hereof, the vote of the holders of a majority of the
outstanding shares of Series B-1 Preferred Stock shall be required to increase
the capital of the Corporation allocable to the Common Stock for the purpose of
the Business Corporation Act of the State of Minnesota (the "MBCA"), if, as a
result thereof, the surplus of the Corporation for purposes of the MBCA would be
less than the amount of Preferred Dividends that would accrue on the then
outstanding shares of Series B-1 Preferred Stock during the following three
years.
(C) Any shares of Series B-1 Preferred Stock acquired by the Corporation
by reason of the conversion or redemption of such shares as provided by this
Resolution, or otherwise so acquired, shall be retired as shares of Series B-1
Preferred Stock and restored to the status of authorized but unissued shares of
Preferred Stock of the Corporation, undesignated as to series, and may
thereafter be reissued as part of a new series of such Preferred Stock as
permitted by law.
11. MISCELLANEOUS.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of delivery
thereof if by hand delivery, by courier or by standard form of telecommunication
or three (3) Business Days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms of this Resolution) with postage prepaid, addressed: (i) if to the
Corporation, to its office at 777 Nicollet Mall, Minneapolis, Minnesota 55402
(Attention: Secretary) or to the transfer agent for the Series B-1 Preferred
Stock, or other agent of the Corporation designated as
17
<PAGE>
permitted by this Resolution or (ii) if to any holder of the Series B-1
Preferred Stock or Common Stock, as the case may be, to such holder at the
address of such holder as listed in the stock record books of the Corporation
(which may include the records of any transfer agent for the Series B-1
Preferred Stock or Common Stock, as the case may be) or (iii) to such other
address as the Corporation or any such holder, as the case may be, shall have
designated by notice similarly given.
(B) The term "Common Stock" as used in this Resolution means the
Corporation's Common Stock as the same exists at the date of filing of a
Certificate of Designation relating to Series B-1 Preferred Stock or any other
class of stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that, at any time as
a result of an adjustment made pursuant to Section 9 of this Resolution, the
holder of any share of the Series B-1 Preferred Stock upon thereafter
surrendering such shares for conversion, shall become entitled to receive any
shares or other securities of the Corporation other than shares of Common Stock,
the Conversion Price in respect of such other shares or securities so receivable
upon conversion of shares of Series B-1 Preferred Stock shall thereafter be
adjusted, and shall be subject to further adjustment from time to time, in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in Section 9 hereof, and the provisions of
Sections 1 through 8, 10 and 11 of this Resolution with respect to the Common
Stock shall apply on like or similar terms to any such other shares or
securities.
(C) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of Series B-1 Preferred Stock or shares of Common Stock or other securities
issued on account of Series B-1 Preferred Stock pursuant hereto or certificates
representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issuance or delivery of shares of Series B-1 Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Series B-1 Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
(D) In the event that a holder of shares of Series B-1 Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Series B-1 Preferred Stock should be made
or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
Series B-1 Preferred Stock as shown on the records of the Corporation and to
send the certificate or certificates representing such shares, or such payment,
to the address of such holder shown on the records of the Corporation.
18
<PAGE>
(E) Unless otherwise provided in the Restated Articles of Incorporation,
as the same may be amended, of the Corporation, all payments in the form of
dividends, distributions on voluntary or involuntary dissolution, liquidation or
winding-up or otherwise made upon the shares of Series B-1 Preferred Stock and
any other stock ranking on a parity with the Series B-1 Preferred Stock with
respect to such dividend or distribution shall be pro rata, so that amounts paid
per share on the Series B-1 Preferred Stock and such other stock shall in all
cases bear to each other the same ratio that the required dividends,
distributions or payments, as the case may be, then payable per share on the
shares of the Series B-1 Preferred Stock and such other stock bear to each
other.
(F) Any determination required or permitted to be made by the
Corporation's Board of Directors hereunder may be made by a committee appointed
by the Corporation's Board of Directors which need not include members of the
Corporation's Board of Directors.
(G) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series B-1 Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by hand delivery, by courier, by standard form of telecommunication or
by first-class mail (postage prepaid) to each holder of record of Series B-1
Preferred Stock.
The foregoing resolution establishing, designating and fixing the rights
and preferences of Series B-1 ESOP Convertible Preferred Stock of Dayton Hudson
Corporation was authorized by the Board of Directors of the Corporation,
pursuant to the authority vested in it by the Restated Articles of Incorporation
of the Corporation, as amended, and Section 302A.401 of the Minnesota Business
Corporation Act, at a meeting of the Board duly held on the 9th day of
September, 1998.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate this
9th day of September, 1998.
/s/ Bob Ulrich
-----------------------------------
Robert J. Ulrich
Chairman and Chief Executive
Officer
/s/ James T. Hale
- -----------------------------------
James T. Hale
Secretary
19
<PAGE>
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 9th day of
September, 1998 by Robert J. Ulrich, as Chairman and Chief Executive Officer of
Dayton Hudson Corporation.
/s/ LuJean A. Larson
-----------------------------------
Notary Public
(NOTARIAL SEAL)
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 9th day of
September, 1998 by James T. Hale, as Secretary of Dayton Hudson Corporation.
/s/ Deborah A. Pennington
-----------------------------------
Notary Public
(NOTARIAL SEAL)
20
<PAGE>
October 5, 1998
Dayton Hudson Corporation
777 Nicollet Mall
Minneapolis, Minnesota 55402-1055
RE: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of Dayton
Hudson Corporation (the "Corporation") and, as such, I and the attorneys that I
supervise have acted as counsel for the Corporation in the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the proposed offer and sale
of the following securities (the "Securities") of the Corporation having an
aggregate initial offering price of up to $1,500,000,000:
(i) unsecured debt securities (the "Debt Securities"), issuable
directly or upon exercise of Warrants (as defined below);
(ii) preferred stock, $0.01 par value per share (the "Preferred
Stock"), of the Corporation, interests in which may be evidenced by
appropriately prepared depositary shares (the "Depositary Shares"),
issuable directly or upon exercise of Warrants (as defined below);
(iii) common stock, $0.1667 par value per share (the "Common Stock")
of the Corporation, issuable directly or upon conversion of Debt Securities
or Preferred Stock, or Depositary Shares, or upon exercise of Warrants (as
defined below);
(iv) warrants to purchase Debt Securities, Preferred Stock,
Depositary Shares or Common Stock (collectively, the "Warrants"); and
(v) units comprised of one or more of the above-referenced
securities offered together in different combinations (the "Units").
The Securities may be offered in separate series, in amounts, at
prices, and on terms to be set forth in the prospectus and one or more
supplements to the prospectus (collectively, the "Prospectus") constituting a
part of the Registration Statement, and in the Registration Statement.
<PAGE>
Dayton Hudson Corporation
October 5, 1998
Page 2
The Debt Securities are to be in the forms filed as Exhibits 4(g) and
4(o) to the Registration Statement, whichever is appropriate and with
appropriate insertions, and are to be issued under one or more indentures in the
form filed as Exhibit 4(f) to the Registration Statement, with appropriate
insertions (the "Indenture"), to be entered into by the Corporation and a
trustee or trustees to be named by the Corporation. The shares of Preferred
Stock are to be evidenced by the forms of preferred stock certificate filed as
Exhibits 4(i) and 4(j) to the Registration Statement, whichever is appropriate
and with appropriate insertions. Each series of Preferred Stock is to be issued
under the Corporation's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), and a certificate of designations (a "Certificate
of Designations") to be approved by the Board of Directors of the Company or a
committee thereof and filed with the Secretary of State of the State of
Minnesota (the "Minnesota Secretary of State") in accordance with
Section 302A.401 of the Minnesota Business Corporation Act. The Depositary
Shares are to be issued under a deposit agreement in the form filed as
Exhibit 4(k) to the Registration Statement, with appropriate insertions (the
"Deposit Agreement"), to be entered into by the Corporation, a depositary to be
named by the Corporation, and the holders from time to time of depositary
receipts evidencing Depositary Shares. The Common Stock is to be evidenced by
the form of common stock certificate filed as Exhibit 4(p) to the Registration
Statement, with appropriate insertions, and issued under the Articles of
Incorporation. The Warrants are to be issued under warrant agreements in the
forms filed as Exhibits 4(l), 4(m) and 4(n) to the Registration Statement,
whichever is appropriate and with appropriate insertions (the "Warrant
Agreements"), to be entered into by the Corporation and warrant agents to be
named by the Corporation.
As part of the corporate action taken and to be taken in connection
with the issuance of the Securities (the "Corporate Proceedings"), the Board of
Directors will, before they are issued, authorize the issuance of any Securities
other than the Debt Securities, and certain terms of the Securities to be issued
by the Corporation from time to time will be approved by the Board of Directors
of the Corporation or a committee thereof or certain authorized officers of the
Corporation.
I, or attorneys that I supervise, have examined or are otherwise
familiar with the Articles of Incorporation, the By-Laws of the Corporation, as
amended, the Registration Statement, such of the Corporate Proceedings as have
occurred as of the date hereof, and such other documents, records and
instruments as I have deemed necessary or appropriate for the purposes of this
opinion.
Based on the foregoing and the assumptions that follow, I am of the
opinion that:
(i) upon the execution and delivery by the Corporation of the
Indenture, the Indenture will become a valid and binding obligation of the
Corporation;
<PAGE>
Dayton Hudson Corporation
October 5, 1998
Page 3
(ii) upon (a) the execution and delivery by the Corporation of the
Indenture, (b) the completion of all required Corporate Proceedings
relating to the issuance of Debt Securities, (c) the due execution and
delivery of the Debt Securities, and (d) the due authentication of the Debt
Securities by a duly appointed trustee, such Debt Securities will be valid
and binding obligations of the Corporation;
(iii) upon (a) the due authorization, execution, acknowledgment,
delivery and filing by the Corporation with, and recording by, the
Minnesota Secretary of State of the applicable Certificate of Designations,
(b) the completion of all required Corporate Proceedings relating to the
issuance of Preferred Stock, and (c) the due execution, issuance and
delivery of certificates representing the Preferred Stock pursuant to such
Certificate of Designations, the Preferred Stock will be validly authorized
and issued, fully paid and non-assessable;
(iv) upon (a) the completion of all required Corporate Proceedings
relating to the issuance of Common Stock, and (b) the execution, issuance
and delivery of the certificates representing Common Stock, the Common
Stock will be validly authorized and issued, fully paid and non-assessable;
(v) upon (a) the completion of all required Corporate Proceedings
relating to the issuance of Warrants, (b) the due execution and delivery of
Warrant Agreements, (c) the due execution and delivery of the related
Warrants, and (d) the due authentication of the related Warrants by the
Warrant Agent, such Warrants will be legally issued, valid and binding
obligations of the Corporation; and
(vi) upon (a) the completion of all required Corporate Proceedings
relating to the issuance of Depositary Shares, (b) the due execution and
delivery of a Deposit Agreement, and (c) the due execution and delivery by
the Corporation of receipts evidencing interests in the Depositary Shares,
the Deposit Agreement will be a valid and binding agreement of the
Corporation and the Depositary Shares will be validly authorized and
issued, fully paid and non-assessable.
The foregoing opinions assume that (a) the consideration designated in
the applicable Corporate Proceedings for any Security shall have been received
by the Corporation in accordance with applicable law; (b) the Indenture and any
Deposit Agreement or Warrant Agreement shall have been duly authorized, executed
and delivered by all parties thereto other than the Corporation; (c) the
Registration Statement shall have become effective under the Securities Act; and
(d) the Indenture shall have become qualified under the Trust Indenture Act of
1939, as amended. To the extent they relate to enforceability, each of the
foregoing opinions is subject to the limitation that the provisions of the
referenced instruments and agreements may be limited by bankruptcy or other laws
of general application affecting the enforcement of creditors' rights and by
general equity
<PAGE>
Dayton Hudson Corporation
October 5, 1998
Page 4
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law).
I have also assumed (a) the accuracy and truthfulness of all public
records of the Corporation and of all certifications, documents and other
proceedings examined by me that have been produced by officials of the
Corporation acting within the scope of their official capacities, without
verifying the accuracy or truthfulness of such representations, and (b) the
genuineness of such signatures appearing upon such public records,
certifications, documents and proceedings. I express no opinion as to the laws
of any jurisdiction other than the laws of the State of Minnesota and the
federal laws of the United States of America. To the extent that the governing
law provision of a Deposit Agreement or a Warrant Agreement may relate to the
laws of a jurisdiction as to which I express no opinion, the opinions set forth
herein are given as if the law of Minnesota governs the Deposit Agreement and
the Warrant Agreements.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to being named in the Prospectus included therein
under the caption "Legal Opinions" with respect to the matters stated therein
without implying or admitting that I am an "expert" within the meaning of the
Securities Act, or other rules and regulations of the Securities and Exchange
Commission issued thereunder with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
/s/ James T. Hale
James T. Hale
Senior Vice President, General Counsel
and Secretary
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Dayton Hudson
Corporation for the registration of $1,500,000,000 in various debt and equity
securities (under a universal shelf registration) and to the incorporation by
reference therein of our report dated March 3, 1998, with respect to the
consolidated financial statements of Dayton Hudson Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended January 31, 1998
filed with the Securities and Exchange Commission.
Minneapolis, Minnesota ERNST & YOUNG LLP
October 2, 1998
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ L. DeSimone
---------------------------
Livio D. DeSimone
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 23rd
day of March, 1998.
/s/ Roger A. Enrico
--------------------------
Roger A. Enrico
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ William W. George
------------------------------
William W. George
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Michele J. Hooper
-----------------------------
Michele J. Hooper
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ James A. Johnson
--------------------------------
James A. Johnson
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Richard M. Kovacevich
-------------------------------
Richard M. Kovacevich
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Susan A. McLaughlin
---------------------------
Susan A. McLaughlin
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Anne M. Mulcahy
---------------------------
Anne M. Mulcahy
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Stephen W. Sanger
------------------------------
Stephen W. Sanger
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Solomon D. Trujillo
---------------------------------
Solomon D. Trujillo
<PAGE>
DAYTON HUDSON CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of DAYTON HUDSON CORPORATION, a Minnesota corporation (the
"Corporation"), does hereby make, constitute and appoint ROBERT J. ULRICH, JAMES
T. HALE, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE and TIMOTHY R. BAER and each
or any one of them, the undersigned's true and lawful attorneys-in-fact, with
power of substitution, for the undersigned and in the undersigned's name, place
and stead, to sign and affix the undersigned's name as director and/or officer
of the Corporation to (1) a Form 10-K, Annual Report, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, for the fiscal year ended January
31, 1998, or other applicable form, including any and all exhibits, schedules,
supplements and supporting documents thereto, including, but not limited to, the
Form 11-K Annual Reports of the DHC 401(k) Plan (formerly referred to as the
"Supplemental Retirement, Savings, and Employee Stock Ownership Plan") and
similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and all amendments, supplementations and
corrections thereto, to be filed by the Corporation with the Securities and
Exchange Commission (the "SEC"), as required in connection with its registration
under the 1934 Act, as amended; (2) one or more Form 3, Form 4 or Form 5
pursuant to Section 16(a) of the 1934 Act and all amendments, supplementations
and corrections thereto, to be filed with the SEC as required under the 1934
Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
other applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the SEC in connection with the
registration under the Securities Act of 1933, as amended, of debentures or
other securities of the Corporation, and to file the same, with all exhibits
thereto and other supporting documents, with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of
them, full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
IN WITNESS WHEREOF, the undersigned has signed below as of this 11th
day of March, 1998.
/s/ Bob Ulrich
--------------------------
Bob Ulrich
