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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JUNE 4, 1998
DAYTON HUDSON CORPORATION
---------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 1-6049 41-0215170
- -------------------------- ------------------ ----------------------
(STATE OR OTHER JURISDIC- (COMMISSION (IRS EMPLOYER
TION OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO. )
777 NICOLLET MALL
MINNEAPOLIS, MINNESOTA 55402
- ---------------------------------------- -------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
612-370-6948
------------------------------------------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
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FORM 8-K
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On June 4, 1998, Dayton Hudson Corporation completed a public offering
of $200,000,000 aggregate principal amount of Puttable Reset Securities
PURS-SM-due June 15, 2010 (the "Bonds"). The purpose of this Current Report
on Form 8-K is to file with the Securities and Exchange Commission the form
of the Bonds related to such offering.
(c) Exhibits
4.1 Form of Puttable Reset Securities PURS-SM- due June 15, 2010.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAYTON HUDSON CORPORATION
/s/ Stephen C. Kowalke
----------------------
Stephen C. Kowalke
Vice President
and Treasurer
Dated: June 4, 1998
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing
------- ----------- ----------------
<C> <S> <C>
4.1 Form of Puttable Reset Securities PURS-SM- Electronic Transmission
due June 15, 2010.
</TABLE>
<PAGE>
FORM OF BOND
[Face of Bond]
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. 239753 DK 9 PRINCIPAL AMOUNT: $______________
REGISTERED NO. __
DAYTON HUDSON CORPORATION
PUTTABLE RESET SECURITIES PURS-SM- DUE JUNE 15, 2010
DAYTON HUDSON CORPORATION, a corporation duly organized and existing under
the laws of the State of Minnesota (hereinafter called the "COMPANY", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of ____________________ Dollars ($______________) on
June 15, 2010 (the "FINAL MATURITY") and to pay interest thereon from June 4,
1998 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for semi-annually on June 15 and December 15 of each year
commencing December 15, 1998 at the rate described below, 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 the June 1 or December
1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. "Business Day" means any day other than a Saturday, a
Sunday, a legal holiday, or a day on which banking institutions or trust
companies in The City of New York are authorized or obligated by law or
executive order to close.
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
<PAGE>
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 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.
From and including June 4, 1998 to but excluding June 15, 2000, interest
shall accrue on the principal sum of this Security at an annual rate equal to
5.95% (the "INITIAL INTEREST RATE"). On June 15, 2000 (the "Reset Date"), the
interest rate on this Security shall be reset so as to equal a fixed rate
determined as described on the reverse hereof, unless the Company is obligated
to repurchase this Security on such date pursuant to the Put Option referred to
on the reverse hereof or pursuant to the Company's satisfaction of the payment
obligations of Goldman, Sachs & Co. in connection with its exercise of the Call
Option referred to on the reverse hereof. Notwithstanding the foregoing, reset
shall be subject to the occurrence of a Market Disruption Event or a Failed
Remarketing as described on the reverse hereof and the termination of the Call
Option at the election of Goldman, Sachs & Co. as described on the reverse
hereof.
Notwithstanding the foregoing, if any payment of interest, principal or
other amount to be made in respect of this Security (including any payment
pursuant to an exercise of the Call Option or Put Option) would otherwise be due
on a day that is not a Business Day, such payment may be made on the next
succeeding day that is a Business Day, with the same effect as if such payment
were made on the due date.
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 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 New York.
This Security has initially been issued in the form of a Global Security,
and the Company has initially designated The Depository Trust Company (the
"Depositary," which term shall include any successor) as the depositary for this
Security. For as long as this Security or any portion hereof is issued in such
form, and notwithstanding the foregoing, all payments of interest, principal and
other amounts in respect of this Security or such portion (including payments
pursuant to the Call Option and Put Option) shall be made to the Depositary or
its nominee in accordance with its Applicable Procedures (as defined on the
reverse hereof), in the coin or currency specified above and as further provided
on the reverse hereof.
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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. Such provisions include,
without limitation, provisions relating to the Call Option, the Put Option and
the interest rate reset mechanism.
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.
3
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
DATED:
--------------------------
DAYTON HUDSON CORPORATION
By:
--------------------------------
Stephen C. Kowalke
Vice President and Treasurer
[SEAL]
Attest:
----------------------------
James T. Hale
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
--------------------------------
Authorized Signature
4
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[Reverse of Bond]
DAYTON HUDSON CORPORATION
PUTTABLE RESET SECURITIES PURS-SM- DUE JUNE 15, 2010
1. INDENTURE.
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 October 3, 1996, as amended or
supplemented from time to time (herein called the "INDENTURE"), between the
Company and The First National Bank of Chicago, 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 $200,000,000. The
provisions of this Security (including those relating to the Call Option and Put
Option), together with the provisions of the Indenture, shall govern the rights,
obligations, duties and immunities of the Holder of this Security, the Company
and the Trustee with respect to this Security, PROVIDED that, if any provision
of this Security necessarily conflicts with any provision of the Indenture, the
provision of this Security shall be controlling to the fullest extent permitted
under the Indenture.
The Securities of this series are not redeemable at the option of the
Company prior to Final Maturity and 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. No failure by Goldman, Sachs & Co. to
purchase any Security of this series pursuant to the Call Option shall be deemed
to be a default under this Security or the Indenture for any purpose.
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
5
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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 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.
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.
2. CALL OPTION.
Goldman, Sachs & Co., a New York limited partnership ("GOLDMAN, SACHS &
CO.") shall have the right to purchase, on the Reset Date, all of the Securities
of this series Outstanding on the Reset Date (in whole and not in part),
including this Security, from the Holders thereof (such right, the "CALL
OPTION"), in each case at a price equal to 100% of the principal amount (the
"FACE VALUE") of Securities of this series purchased and subject to Goldman,
Sachs & Co. giving notice of its intention to purchase the Outstanding
Securities of this series as described below (a "CALL NOTICE"). Whether or not
the Call Option is exercised, the Company shall remain obligated to pay all
accrued and unpaid interest due on this Security, and interest that becomes
payable on this Security on the Reset Date shall be payable to the Holder of
this Security on the corresponding Regular Record Date, as provided in this
Security and the Indenture.
To exercise the Call Option, Goldman, Sachs & Co. must give a Call Notice
to the Holder of this Security no later than the tenth Market Day (as defined
below) prior to the Reset Date, in the manner described in paragraph 7 below.
Subject to paragraph 5(a) below, in the event a Call Notice is duly given, the
Holder of this Security on the Reset Date shall be obligated to sell this
Security to Goldman, Sachs & Co., and Goldman, Sachs & Co. shall be obligated to
purchase this Security from such Holder, at the Face Value on the Reset Date.
Each such sale and purchase shall be effected through the facilities of the
Depositary, with the Holder being deemed to have automatically tendered this
Security for sale to Goldman, Sachs & Co. on the Reset Date in accordance with
the Depositary's Applicable Procedures as provided in paragraph 5 below. The
Holder's automatic tender of this Security on the Reset Date shall be subject to
receipt of payment of the Face Value of this Security as provided in
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paragraph 5(a) below. Notwithstanding the exercise of the Call Option with
respect to this Security, this Security shall remain Outstanding until it is
purchased or paid by the Company. As used herein, "MARKET DAY" means a Business
Day other than a day on which dealings in the U.S. Treasury bond market are
generally not being conducted.
If the Call Option is exercised, this Security shall be subject to purchase
by Goldman, Sachs & Co. on the Reset Date as provided herein and subject to
paragraph 5(a) below.
Upon the occurrence of an Event of Default (as defined in the Indenture)
and in certain other circumstances, Goldman, Sachs & Co. shall be entitled to
demand that the Company pay Goldman, Sachs & Co. an amount equal to the fair
market value of the Call Option (the "TERMINATION AMOUNT"). Upon payment of the
Termination Amount, (i) the Call Option will terminate, and (ii) on the Reset
Date the Holder of this Security will be deemed to have automatically exercised
its Put Option in whole and may not continue to hold this Security by giving a
Hold Notice.
Notwithstanding any provision herein to the contrary, Goldman, Sachs & Co.
may not transfer or assign the Call Option.
3. PUT OPTION.
If Goldman, Sachs & Co. does not exercise the Call Option, the Holder of
this Security on the Reset Date shall have the right to require the Company to
repurchase this Security (in whole and not in part) from such Holder on the
Reset Date (such right, the Holder's "PUT OPTION") at a price equal to 100% of
the principal amount of this Security repurchased (the "PUT PRICE"), in the
circumstances described in the next paragraph. In the event the Put Option is
exercised, the Put Price shall be payable by the Company to the Holder of this
Security on the Reset Date, whereas the accrued and unpaid interest on this
Security that becomes payable on the Reset Date shall be payable by the Company
to the Holder of this Security on the corresponding Regular Record Date, as
provided herein and in the Indenture. If for any reason payment of the Put
Price is not made when due on this Security, the accrued interest at the Initial
Interest Rate from the Reset Date to the date such payment is made would be
payable by the Company as part of the Put Price for this Security, to the person
entitled to receive the Put Price.
On the Reset Date, the Holder of this Security shall be deemed to have
exercised its Put Option automatically, without any action on its part, for the
full principal amount of this Security held of record by such Holder on the
Reset Date unless either (x) Goldman, Sachs & Co. has duly given a Call Notice
or (y) if Goldman, Sachs & Co. does not exercise the Call Option, (i) no later
than 10:00 A.M. (New York City time) on the seventh Market Day prior to the
Reset Date, the Holder of this Security gives notice to the Trustee that such
Holder elects not to sell this Security (or, as long as this Security is issued
in the form of a Global Security, a specified portion hereof) to the Company on
the Reset Date (a "HOLD NOTICE") and (ii) the notice is effective (an "EFFECTIVE
HOLD NOTICE") under the 10% Requirement (as defined
7
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below). A Hold Notice must be given in the manner described in paragraph 7
below. Consequently, with respect to this Security, if a Call Notice is not
duly given by Goldman, Sachs & Co. and an Effective Hold Notice is not duly
given by the Holder (or is duly given by the Holder only with respect to a
specified portion hereof) as provided above, the Company shall be obligated to
repurchase this Security in whole (or in whole but for any specified portion)
from the Holder on the Reset Date, and the Holder of this Security on the Reset
Date shall be obligated to sell this Security in whole (or in whole but for any
specified portion) to the Company, at the Put Price on the Reset Date. Any such
sale and purchase shall be effected through the facilities of the Depositary,
with the Holder of this Security on the Reset Date being deemed (in the absence
of an Effective Hold Notice) to have automatically tendered this Security in
whole (or in whole but for any specified portion) for sale to the Company on the
Reset Date, all in accordance with Depositary's Applicable Procedures as
provided in paragraph 5 below. Notwithstanding the foregoing, the Holder of
this Security shall be deemed to have exercised its Put Option and may not
continue to hold this Security by giving a Hold Notice if (i) the Company is
required to pay Goldman, Sachs & Co. the Termination Amount, (ii) the Company is
obligated to repurchase this Security in connection with the failure of Goldman,
Sachs & Co. to pay the Face Value of this Security on the Reset Date, as
provided in paragraph 5(a) below, or (iii) a Market Disruption Event and/or a
Failed Remarketing occurs as provided in paragraph 4 below. Notwithstanding any
exercise of the Put Option with respect to this Security, this Security shall
remain Outstanding until the Put Price (and accrued interest) in respect hereof
has been paid. If at any time a Security of this series is issued other than
in the form of a Global Security, the Put Option may be exercised and a Hold
Notice may be given with respect to such Security only in whole and not in part.
Notwithstanding the foregoing, no Hold Notice for this Security shall be
effective unless Hold Notices are duly given by the Holders of record of at
least 10% in aggregate principal amount of the Securities of this series
Outstanding no later than 10:00 a.m. (New York City time) on the seventh Market
Day prior to the Reset Date. The provision described in this paragraph is
called the "10% REQUIREMENT." If a Hold Notice is duly given for this Security
(or, if permitted, any portion hereof) but the 10% Requirement has not been
satisfied, the Trustee shall give written notice of that fact (a "10%
REQUIREMENT NOTICE") to the Holder of this Security and the Company not later
than the close of business on the seventh Market Day before the Reset Date, in
the manner described in paragraph 7 below.
4. RESET OF INTEREST RATE.
If the Company is not obligated to purchase this Security (or a specified
portion hereof) on the Reset Date pursuant to the Put Option or in connection
with the failure of Goldman, Sachs & Co. to pay the Face Value of this Security
on the Reset Date as described in paragraph 5 below, the Initial Interest Rate
on this Security (or any such portion) shall be reset on the Reset Date.
Notwithstanding the foregoing, reset of the interest rate shall be subject to
the occurrence of a Market Disruption Event or a Failed Remarketing as described
below and the termination of the Call Option at the election of Goldman, Sachs &
Co. as described in paragraph 2 above.
8
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Subject to its right to terminate the appointment of any such agent, the
Company shall take such action as is necessary to ensure that there shall at all
relevant times be a qualified financial institution appointed and acting as its
agent for the purpose of performing the actions contemplated hereby to be
performed by the Calculation Agent (such agent, including any successor agent,
the "CALCULATION AGENT"). The Company has initially appointed Goldman, Sachs &
Co. as Calculation Agent. If the Initial Interest Rate is to be reset, the
Calculation Agent shall effect the reset as follows:
Between the tenth Market Day prior to the Reset Date and 11:00 A.M., New
York City time, on the sixth Market Day prior to the Reset Date (the
"CALCULATION DATE"), the Calculation Agent shall request each of the following
financial institutions to participate as a reference dealer in accordance with
the terms described below: Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, J.P. Morgan Securities Inc. and Salomon Brothers Inc or
their respective successors; provided, however, that if any of the foregoing
cease to be a leading dealer of publicly-traded debt securities of the Company
in New York City (a "PRIMARY DEALER") or are unwilling to act as a reference
dealer, the Calculation Agent shall substitute therefor another Primary Dealer
(the "REFERENCE DEALERS"). If Goldman, Sachs & Co. has exercised the Call
Option and so requests, each Reference Dealer must include in its participation
agreement a written commitment (satisfactory to Goldman, Sachs & Co.) that, if
it is selected as a Final Dealer (as defined below), it will purchase from
Goldman, Sachs & Co. on the Calculation Date for settlement on the Reset Date
and at the Final Offer Price (as defined below), its Pro Rata (as defined below)
portion of all of the Securities of this series that Goldman, Sachs & Co.
purchases pursuant to the Call Option and tenders for resale to the Final
Dealers on the Reset Date as described below. For each Reference Dealer, the
Calculation Agent shall request the name of and telephone and facsimile numbers
for one individual to represent such Reference Dealer.
On the Calculation Date, the Calculation Agent shall undertake the
following actions to calculate a fixed rate at which interest will accrue on the
Securities of this series from and including the Reset Date to but excluding the
Final Maturity (such period, the "RESET PERIOD"). In paragraphs (a) and (b)
below, all references to specific hours are references to prevailing New York
City time, and each notice shall be given telephonically and shall be confirmed
as soon as possible by facsimile to each of the Calculation Agent and the
Company. The times set forth below are guidelines for action, and the
Calculation Agent shall use reasonable efforts to adhere to these times.
(a) At 12:00 P.M., the Calculation Agent shall:
(i) determine (or obtain from Goldman, Sachs & Co., if Goldman,
Sachs & Co. has exercised the Call Option) the approximate ten-year
U.S. Treasury bond yield at or about such time, which shall be
expressed as a percentage (the "DESIGNATED TREASURY YIELD") and shall
be based on the then-current, ten-year U.S. Treasury bond (the
"DESIGNATED TREASURY BOND");
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(ii) calculate and provide to the Reference Dealers, on a
preliminary basis, a hypothetical price at which the Securities of
this series might be offered for sale to a Reference Dealer on the
Reset Date (the "OFFER PRICE"). The Offer Price shall be expressed as
a percentage of the principal amount of the Securities of this series
Outstanding and shall equal 100% plus the Margin (as defined below),
if the Treasury Rate Difference (as defined below) is positive, or
100% minus the Margin, if the Treasury Rate Difference is negative.
The Margin shall also be expressed as a percentage of the principal
amount of the Securities of this series Outstanding and shall equal
the present value of the absolute value of the Treasury Rate
Difference applied to twenty semi-annual periods (i.e., ten years),
discounted at the Designated Treasury Yield divided by two. The
"TREASURY RATE DIFFERENCE" means the percentage (which may be positive
or negative) equal to (x) 5.55% (the "INITIAL TREASURY YIELD") minus
(y) the Designated Treasury Yield; and
(iii) request each Reference Dealer to provide to the
Calculation Agent, when notified of the Final Offer Price as described
in paragraph (b) below, a firm bid, expressed as a percentage
representing an interest rate spread over the Designated Treasury
Yield (the "SPREAD"), at which such Reference Dealer would be willing
to purchase on the Calculation Date for settlement on the Reset Date,
at the Final Offer Price, all of the Securities of this series then
Outstanding. Each such firm bid is to be given on an "all-in" basis
and is to remain open for at least 30 minutes after it is given.
(b) At 12:30 P.M., the Calculation Agent shall determine (or obtain
from Goldman Sachs & Co., if Goldman, Sachs & Co. has exercised the Call
Option) the Designated Treasury Yield on a final basis, and calculate and
provide to the Reference Dealers the Offer Price on a final basis (the
"FINAL OFFER PRICE") and request each Reference Dealer to submit its bid
immediately as described in clause (a)(iii) above. If the Calculation
Agent receives at least three bids, the following will occur:
(i) the Reference Dealer providing the bid representing the
lowest all-in Spread (the "FINAL SPREAD") will be the "FINAL DEALER";
provided that if more than one Reference Dealer has provided a bid
representing the lowest all-in Spread (a "QUALIFYING REFERENCE
DEALER"), the Calculation Agent will so notify each Qualifying
Reference Dealer and each Qualifying Reference Dealer will have the
opportunity immediately thereafter to submit a second firm bid in the
manner and on the terms specified in clause (a)(iii) above, and the
Qualifying Reference Dealer providing the bid representing the lowest
all-in Spread will be the Final Dealer and if more than one Qualifying
Reference Dealer has provided a bid representing the lowest all-in
Spread, each of such Qualifying Reference Dealers will be a Final
Dealer;
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(ii) if Goldman, Sachs & Co. has exercised the Call Option,
each Final Dealer shall be obligated to purchase from Goldman, Sachs &
Co. at the Final Offer Price, for settlement on the Reset Date, its
Pro Rata portion of the Securities of this series that Goldman, Sachs
& Co. purchases pursuant to the Call Option and tenders for resale to
the Final Dealers on the Reset Date (assuming that the Initial
Interest Rate on the Bonds will be reset so as to equal the Adjusted
Rate (as defined below) during the Reset Period) (as used herein "Pro
Rata" shall mean the amount equal to the aggregate principal amount of
the Securities of this series Outstanding that Goldman, Sachs & Co.
purchases pursuant to the Call Option divided by the number of Final
Dealers); as described below, a Final Dealer will not be obligated to
purchase any Securities of this series if Goldman, Sachs & Co. has not
exercised the Call Option;
(iii) the Calculation Agent shall calculate and provide to the
Company the "ADJUSTED RATE," which shall be the semi-annual,
bond-equivalent, fixed interest rate on the Securities of this series
required to produce, during the Reset Period, a semi-annual,
bond-equivalent yield on the Securities of this series that equals the
sum of the Final Spread plus the final Designated Treasury Yield,
assuming that the Securities of this series are purchased on the Reset
Date at the Final Offer Price; and
(iv) the Initial Interest Rate on the Securities of this
series shall be adjusted so as to equal the Adjusted Rate, effective
from and including the Reset Date to but excluding the Final Maturity.
If Goldman, Sachs & Co. has not exercised the Call Option and an
Effective Hold Notice is given for this Security (or any portion
hereof), the Company shall promptly give written notice of the
Adjusted Rate to the Holder.
All determinations regarding the Designated Treasury Yield and the
Designated Treasury Bond as described in clause (a)(i) and the first sentence of
clause (b) above shall be made by Goldman, Sachs & Co. if another party is
acting as the Calculation Agent, unless Goldman, Sachs & Co. has elected not to
exercise the Call Option, in which case such determinations shall be made as
necessary by the Calculation Agent.
If the Calculation Agent determines that, on the Calculation Date, (x) a
Market Disruption Event (as defined below) has occurred or is continuing or (y)
fewer than three Reference Dealers have provided firm bids in a timely manner
pursuant to participation agreements satisfactory to Goldman Sachs & Co.
substantially as described above (a "FAILED REMARKETING"), the steps
contemplated above shall be taken on the next Market Day on which the
Calculation Agent determines that no Market Disruption Event has occurred or is
continuing and at least three Reference Dealers have provided bids pursuant to
participation agreements satisfactory to Goldman, Sachs & Co. substantially as
contemplated above. If the Calculation Agent determines that a Market
Disruption Event and/or a Failed Remarketing has occurred or is continuing for
at least four consecutive Market Days starting on the
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Calculation Date, then Goldman, Sachs & Co. shall be deemed not to have
exercised the Call Option and the Company shall repurchase this Security (in
whole and not in part) on the Reset Date at the Put Price from the Holder hereof
on the Reset Date, all as if the Put Option on this Security had been exercised
in full (and the Company shall pay Goldman, Sachs & Co. an amount equal to the
Margin, if the Treasury Rate Difference is positive). In these circumstances,
the Holder may not continue to hold this Security (or any portion hereof) by
giving an Effective Hold Notice. The Calculation Agent shall notify the Company
of such determination promptly after the close of business on such fourth Market
Day. The Company shall give notice to the Holder that this Security will be
repurchased by the Company on the Reset Date at the Put Price, from the Holder
on the Reset Date, such notice to be given no later than the second Market Day
prior to the Reset Date in the manner described below. Notwithstanding the
foregoing, if at any time relevant to the Reset Date, Goldman, Sachs & Co. is
not acting as Calculation Agent, then the determinations and notice to the
Company described in this paragraph shall be made and given by Goldman, Sachs &
Co., unless Goldman, Sachs & Co. does not exercise the Call Option in which case
such determinations and notice will be made and given by the Calculation Agent.
"MARKET DISRUPTION EVENT" means any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange or the establishment of minimum prices on such exchange; (ii) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities; (iii) any material adverse change in the existing
financial, political or economic conditions in the United States of America;
(iv) an outbreak or escalation of hostilities involving the United States of
America or the declaration of a national emergency or war by the United States
of America; or (v) any material disruption of the U.S. government securities
market, U.S. corporate bond market and/or U.S. federal wire system.
All determinations regarding Market Disruption Events and Failed
Remarketings, including whether or not any event has occurred or is continuing,
shall be made by the Calculation Agent (or Goldman, Sachs & Co., if applicable
as provided above) in its sole discretion.
All percentages resulting from any calculation with respect to the
Securities of this series will be rounded upwards, if necessary, to the nearest
one ten-thousandth of a percentage point (e.g., 5.76531% (or 0.0576531) being
rounded to 5.7654 (or 0.057654)), and all U.S. dollar amounts will be rounded to
the nearest cent (with one-half cent being rounded upwards).]
All determinations made by the Calculation Agent (or Goldman, Sachs & Co.)
regarding the matters described herein shall be final, conclusive and binding on
all concerned and will not give rise to any liability on the part of the
Calculation Agent (or Goldman, Sachs & Co.), the Trustee or the Company.
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5. SETTLEMENT ON EXERCISE OF THE PUT AND CALL OPTIONS.
For as long (but only for as long) as this Security or any portion hereof
is issued in the form of a Global Security, the provisions of paragraph 5(a)
through 5(d) below, inclusive, shall apply with respect to this Security or such
portion, as the case may be.
(a) If the Call Option is exercised, then, on the Reset Date, all
beneficial interests in this Security held by or through Agent Members (as
defined below) shall be transferred to a Depositary account designated by
Goldman, Sachs & Co. The transfers shall be made automatically, without
any action on the part of any beneficial owner, by book entry through the
facilities of the Depositary. Goldman, Sachs & Co. shall be obligated to
make payment of the Face Value of this Security to the Depositary or its
nominee, for credit to the accounts of the Agent Members by or through
which beneficial interests in this Security are held, by the close of
business on the Reset Date. Each such transfer shall be made against the
corresponding payment, and each such payment shall be made against the
corresponding transfer, in accordance with the Depositary's Applicable
Procedures. In all cases, the Company shall remain obligated to make
payment of accrued and unpaid interest due on this Security, with interest
payable on the Reset Date being payable to the Holder on the corresponding
Regular Record Date.
If Goldman, Sachs & Co. fails to pay the Face Value of this Security
on the Reset Date, the Call Option shall be deemed not to have been
exercised and the Put Option will be deemed to have been exercised on this
Security in whole. In these circumstances, the Holder on the Reset Date
may not continue to hold this Security (or any portion hereof) by giving an
Effective Hold Notice, and the Company will be obligated to pay, not later
than two Business Days following the Reset Date, the Put Price for this
Security (plus accrued interest at the Initial Interest Rate from the Reset
Date to the date payment is made), with settlement occurring as described
in paragraph (b) below.
As used herein, (i) "AGENT MEMBER" means, at any time, any person who
is a member of, or participant in, the Depositary at such time and (ii)
"APPLICABLE PROCEDURES" means, with respect to any payment, transfer or
other transaction to be effected with respect to a Global Security through
the facilities of the Depositary at any time, the policies and procedures
of the Depositary applicable to such transaction, as in effect at such
time.
(b) If the Put Option is exercised as to this Security (or any
portion hereof), then, on the Reset Date, all beneficial interests in this
Security or any such portion held by or through Agent Members shall be
transferred to a Depositary account designated by the Company. The
transfers shall be made automatically, without any action on the part of
any holder or beneficial owner, by book entry through the facilities of the
Depositary. The Company shall be obligated to make payment of the Put
Price of this
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Security (or any such portion) to the Depositary or its nominee, for credit
to the accounts of the Agent Members by or through which beneficial
interests in this Security (or any such portion) are held, by the close of
business on the Reset Date (or, if the Put Option is deemed to have been
exercised as contemplated by the second paragraph of paragraph 5(a) above,
by the closing of business on the second Business Day following the Reset
Date). Each such transfer shall be made against the corresponding payment,
and each such payment shall be made against the corresponding transfer, in
accordance with the Depositary's Applicable Procedures. If the Company
fails to pay the Put Price of this Security (or any such portion) on the
Reset Date, accrued interest at the Initial Interest Rate from the Reset
Date to the date the payment is made shall be payable as part of the Put
Price, in the same manner and for credit to the same accounts as such Put
Price. Whether or not purchased pursuant to the Put Option, the Company
shall remain obligated to make payment of accrued and unpaid interest due
on this Security, with interest payable on the Reset Date being payable to
the Holder on the corresponding Regular Record Date, as provided herein and
in the Indenture.
(c) The transactions described in paragraphs 5(a) and 5(b) above
shall be executed on the Reset Date (or the second Business Day thereafter,
to the extent specified above) through the facilities of the Depositary in
accordance with its Applicable Procedures, and the accounts of the
respective Agent Members shall be debited and credited and beneficial
interests in this Security shall be delivered by book entry as necessary to
effect the purchases and sales provided for above. Unless the Depositary's
Applicable Procedures require otherwise, such transactions shall settle,
and all other payments in respect of the Securities of this series shall be
made, in immediately available funds through the Depositary's Same-Day
Funds Settlement System. Notwithstanding any provision hereof or of the
Indenture, neither the Company, the Trustee nor Goldman, Sachs & Co., nor
any agent of any such person, shall have any responsibility with respect to
the Applicable Procedures or for any payments, transfers or other
transactions, or any notices or other communications, among the Depositary,
its Agent Members, any other direct or indirect participants therein and
any beneficial owners of a Global Security. For all purposes of this
Security and the Indenture, any payment or notice to be made or given with
respect to this Security by the Company or Goldman, Sachs & Co. shall be
deemed made or given when made or given to the Depositary or its nominee,
in accordance with its Applicable Procedures.
(d) The settlement procedures described in paragraphs 5(a), 5(b) and
5(c) above may be modified, notwithstanding any contrary terms of the
Securities of this series or the Indenture, to the extent required by the
Depositary. In addition, the Company may, notwithstanding any contrary
terms of the Securities of this series or the Indenture, modify the
settlement procedures described in paragraphs 5(a), 5(b) and 5(c) above in
order to facilitate the settlement process.
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(e) If any Securities of this series are issued in non-book-entry
form, the Company shall modify the provisions of paragraphs 5(a) through
5(d) above, inclusive, so as to ensure that Reset Date settlements of
transactions in such Securities of this series are effected in as
comparable a manner as practical, PROVIDED that such modified procedures
shall not adversely affect the interests of the holders of the Outstanding
Securities of this series.
6. TRANSFER; GLOBAL SECURITIES.
Upon due presentment for registration of transfer of this Security at the
office or agency of the Company 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.
Notwithstanding any other provision of this Security or the Indenture, this
Security is exchangeable for definitive Securities in registered form only if
(y) 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, or (z) an Event of Default with respect to the Securities represented
hereby has occurred and is continuing or except as the Company may request in
order to facilitate the purchase of this Security or any portion thereof by
Goldman, Sachs & Co. pursuant to the Call Option or by the Company pursuant to
the Put Option on the Reset Date (provided that, after consummation of any such
purchase pursuant to the Call Option, this Security or the portion so purchased
may be reissued in the form of a Global Security in accordance with the
Applicable Procedures). 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.
7. CERTAIN NOTICES.
For so long as this Security is issued in the form of a Global Security,
each Call Notice, 10% Requirement Notice and other notice to be given to the
holder of this Security shall be deemed to have been duly given to such holder
when given to the Depositary, or its nominee, in accordance with its Applicable
Procedures.
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If at any time this Security is not issued in the form of a Global
Security, each Call Notice, 10% Requirement Notice and other notice to be given
to the holder of this Security shall be deemed to have been duly given to such
holder upon the mailing of such notice to the Holder at such Holder's address as
it appears on the Security Register maintained by the Company or its agent as of
the close of business preceding the day such notice is given.
Neither the failure to give any notice nor any defect in any notice given
to the holder of this Security or any other Security of this series will affect
the sufficiency of any notice given to another holder of any Securities of this
series.
With respect to this Security, whether or not issued in the form of a
Global Security, Hold Notices may be given by the Holder hereof only by
facsimile transmission or by mail and must actually be received by the Trustee
at the following address no later than 10:00 A.M., New York City time, on the
seventh Market Day prior to the Reset Date:
The First National Bank of Chicago
One North State Street, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Administration
Facsimile no.: 312-407-1708
Hold Notices may be given with respect to this Security only by the Holder
hereof.
8. HOLDER.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee, any agent of the Company or the Trustee and Goldman,
Sachs & Co. may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, including the making of any payment in
respect hereof, any exercise of the Call Option or the Put Option and
consummation of any sale and purchase hereof pursuant thereto, the giving of any
Call Notice, Hold Notice or other notice with respect hereto, and the giving of
any consent or taking of any other action with respect hereto, 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.
9. PROVISIONS RELATING TO GOLDMAN, SACHS & CO.
Insofar as the provisions of this Security purport to provide rights to
Goldman, Sachs & Co. against any holder of this Security, such rights (including
such rights to purchase this Security pursuant to the Call Option on the Reset
Date) shall also be rights of the Company and shall be enforceable by the
Company against such holder. Each holder of this Security shall hold this
Security (and by holding the same be deemed to have agreed to do so) subject to
the foregoing. Without limiting the foregoing, Goldman, Sachs & Co. may take
any action under this Security (including giving any notice, making any
determination and
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<PAGE>
effecting any settlement pursuant to paragraphs 2, 4 and 5 hereof) that the
provisions of this Security contemplate may be taken by Goldman, Sachs & Co.
Pursuant to Section 6 of the Calculation Agency Agreement, dated as of June
4, 1998, Goldman, Sachs & Co. has agreed with the Company, for the benefit of
the applicable holders of this Security from time to time, that, if Goldman,
Sachs & Co. exercises the Call Option when this Security is Outstanding,
Goldman, Sachs & Co. will purchase this Security from the Holder hereof on the
Reset Date, upon the terms and subject to the conditions set forth herein.
Except as may be expressly provided in Section 6 of such Agreement, no holder of
this Security shall have any right, remedy or claim against Goldman, Sachs & Co.
under this Security, the Indenture or such Agreement.
No provision of this Security shall be invalid or unenforceable by reason
of any reference herein to Goldman, Sachs & Co. In addition, no provision of
this paragraph shall be construed to impair or otherwise affect any rights that
Goldman, Sachs & Co. may have at any time as a holder of any Securities.
10. MISCELLANEOUS.
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.
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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.
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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.
19
