<PAGE>
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) April 15, 1999
---------------------------
DAYTON HUDSON CORPORATION
-----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MINNESOTA 1-6049 41-0215170
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
777 NICOLLET MALL
MINNEAPOLIS, MINNESOTA 55402
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 370-6948
---------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On April 15, 1999, Dayton Hudson Corporation established a Medium-Term
Note Program, Series I. The purpose of this Current Report on Form 8-K is to
file with the Securities and Exchange Commission the Distribution Agreement,
the forms of Fixed Rate and Floating Rate Notes and the Interest Calculation
Agency Agreement related to such program.
(c) Exhibits
1.1 Distribution Agreement dated April 15, 1999, among the
Company, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, J.P. Morgan Securities Inc. and Salomon
Smith Barney Inc.
4.1 Form of Medium-Term Fixed Rate Note
4.2 Form of Medium-Term Floating Rate Note
4.3 Interest Calculation Agency Agreement dated April 15, 1999,
between the Company and The First National Bank of Chicago
2
<PAGE>
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 hereunto duly authorized.
DAYTON HUDSON CORPORATION
Date: April 15, 1999 By /s/ Stephan C. Kowalke
-----------------------
Stephen C. Kowalke
Vice President and Treasurer
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing
- -------- ----------- ----------------
<S> <C> <C>
1.1 Distribution Agreement dated April 15, 1999, among
the Company, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc. and Salomon Smith Barney Inc. ....... Electronic Transmission
4.1 Form of Fixed Rate Note ............................. Electronic Transmission
4.2 Form of Floating Rate Note .......................... Electronic Transmission
4.3 Interest Calculation Agency Agreement dated April 15,
1999, between the Company and The First National
Bank of Chicago ..................................... Electronic Transmission
</TABLE>
4
<PAGE>
EXHIBIT 1.1
[Medium-Term Notes, Series I]
Dayton Hudson Corporation
$1,325,000,000
Medium-Term Notes, Series I
DISTRIBUTION AGREEMENT
April 15, 1999
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower
New York, New York 10281
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Salomon Smith Barney Inc.
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Dayton Hudson Corporation, a Minnesota corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series I
(the "Securities") in an aggregate amount up to $1,325,000,000 and agrees with
each of you (individually, an "Agent", and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf or
indirectly through other agents, the Company hereby (i) appoints each Agent as
an agent of the Company for the purpose of soliciting and receiving offers to
purchase Securities from the Company pursuant to Section 2(a) hereof and (ii)
agrees that, except as otherwise contemplated herein, whenever it determines to
sell Securities directly to any Agent as principal, it will enter into a
separate agreement (each a "Terms Agreement"), substantially in the form of
Annex I hereto, relating to such sale in accordance with Section 2(b) hereof.
This Distribution Agreement
<PAGE>
shall not be construed to create either an obligation on the part of the Company
to sell any Securities or an obligation of any of the Agents to purchase
Securities as principal.
The Securities will be issued pursuant to the 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"). The Securities shall have the maturity ranges, interest rates and
other terms set forth in the Prospectus referred to below as it may be amended
or supplemented from time to time. The Securities will be issued, and the terms
thereof established, from time to time by the Company in accordance with the
Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) Two registration statements on Form S-3 (File Nos. 333-65347 and
33-42364) in respect of the Securities have been filed with the Securities and
Exchange Commission (the "Commission"); such registration statements and any
post-effective amendment thereto, each in the form heretofore delivered or to be
delivered to such Agent, excluding exhibits to such registration statements, but
including all documents incorporated by reference in the prospectus included in
the latest registration statement, have been declared effective by the
Commission in such form; no other document with respect to such registration
statements or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended (the "Act") each in the form
heretofore delivered to the Agents); and no stop order suspending the
effectiveness of any such registration statements has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in such registration statements or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, are hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statements, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in the
registration statements at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such part
of the registration statements became effective, is hereinafter collectively
called the "Registration Statement"; the prospectus (including, if applicable,
any prospectus supplement) relating to the Securities, in the form in which it
has most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to the documents incorporated by reference therein pursuant to
the applicable form under the Act; any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the
Securities (a "Pricing Supplement"), shall be deemed to include, without
limitation, any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated in such Preliminary Prospectus or
Prospectus by reference; any reference to any amendment to the
2
<PAGE>
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to and include the Prospectus
as amended or supplemented (including by the applicable Pricing Supplement filed
in accordance with Section 4(a) hereof) in relation to Securities to be sold
pursuant to this Agreement, in the form filed or transmitted for filing with the
Commission pursuant to Rule 424(b) under the Act and in accordance with Section
4(a) hereof, including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, 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 in the Prospectus, or any
further amendment or supplement thereto, when such documents 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 or the Exchange Act, as applicable, 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
statement or omission made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(c) The Registration Statement, as of the applicable effective date,
and the Prospectus as of the applicable filing date, conformed, and any further
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 of 1939, as amended (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 amendment
or 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 statement or omission made in reliance upon
and in conformity with information furnished in writing to the Company by any
Agent expressly for use in the Prospectus as amended or supplemented to relate
to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or
3
<PAGE>
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and in the Prospectus, there
has not been any change in the capital stock (other than issuances of common
stock pursuant to stock option and other compensatory plans and arrangements
adopted by the Board of Directors of the Company, issuances of common stock upon
conversions of convertible preferred stock and repurchases by the Company under
its publicly announced common stock buy back program authorized by the Company's
Board of Directors on January 13, 1999) or any increases in the long-term debt
(excluding capital leases and commercial paper backed by long-term credit
facilities) 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;
(e) 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;
(f) 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 operations or its right to enforce a material contract against
others or expose it to 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 operations or
its right to enforce a material contract against others or expose it to
substantial liabilities in such jurisdiction;
(g) 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
4
<PAGE>
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;
(h) The establishment of the Medium-Term Note Program, Series I, of
the Company has been duly authorized. When the terms of a particular issuance
of the Securities have been established in accordance with the Indenture, and
such Securities are issued and delivered pursuant to this Agreement and any
Terms Agreement, such Securities will have been duly authorized, 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 Indenture conforms
and the Securities of any particular issuance of Securities will conform to the
descriptions thereof contained in the Prospectus as amended or supplemented to
relate to such issuance of Securities;
(i) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms 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 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 solicitation of offers to purchase Securities, the issue and sale of the
Securities or the consummation by the Company of the other transactions
contemplated by this Agreement, any Terms Agreement or the Indenture, except
such as have been obtained, or will have been obtained prior to the Commencement
Date (as defined in Section 3 hereof), under the Act or 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
solicitation by the Agents of offers to purchase the Securities from the Company
and with purchases of the Securities by the Agents as principals, as the case
may be, in each case in the manner conteplated hereby;
5
<PAGE>
(j) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or to 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 do not 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;
(k) 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;
(l) The discussion of the Year 2000 Problem in the Prospectus is, as
of the applicable filing date, and will be, as of the date of any amendment or
supplement thereto, accurate and complete in all material respects. The "Year
2000 Problem" as used herein means any significant risk that computer hardware
or software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data or the operation
of mechanical or electrical systems of any kind will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
2. (a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees to use its reasonable efforts, as
agent of the Company, to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus as
amended or supplemented from time to time. The Company may from time to time
sell Securities otherwise than through an Agent and may engage another agent
with respect to a specific purchase, provided that the Agents are given notice
of such purchase promptly after it is consummated. The Company reserves the
right to add another agent as a party to this Agreement. The Company also
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf. In the case of any such sale not
resulting from a solicitation made by any Agent, no commission will be payable
under this Agreement with respect to such sale. These provisions shall not
limit Section 4(f) hereof or any similar provision included in any Terms
Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement (unless such Terms
Agreement specifically provides that such provisions shall apply). Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the Administrative
Procedure. The
6
<PAGE>
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will forthwith suspend solicitation of
offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed. During such
period, the Company shall not be required to comply with the provisions of
Sections 4(h), 4(i), 4(j) and 4(k). Upon advising the Agents that such
solicitation may be resumed, however, the Company shall, upon request of the
Agents (unless the Company has accepted an offer to purchase Securities, in
which case no such request shall be necessary), simultaneously provide the
documents required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k), and
the Agents shall have no obligation to solicit offers to purchase the Securities
until such documents, if so requested, have been received by the Agents. In
addition, any failure by the Company to comply with its obligations hereunder,
including without limitation its obligation to deliver the documents required by
Sections 4(h), 4(i), 4(j) and 4(k), shall automatically terminate the Agents'
obligations hereunder to solicit offers to purchase the Securities hereunder as
agent.
The Company agrees to pay to each Agent (or jointly to two or more of
the Agents if such solicitation is jointly made) a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following percentage
of the principal amount of such Security sold:
<TABLE>
<CAPTION>
Commission (percentage of
aggregate principal
Range of Maturities amount of Securities sold)
-----------------------------------------------------------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to less than 30 years .700%
30 years and more *
</TABLE>
_________
*To be negotiated at the time of sale.
7
<PAGE>
Each Agent shall communicate to the Company, orally or in writing,
each offer to purchase Securities other than those rejected by such Agent. The
Company shall have the sole right to accept offers to purchase Securities and
may reject any proposed purchase of Securities as a whole or in part. Each
Agent shall have the right, in its discretion reasonably exercised, to reject
any offer received by it to purchase Securities, as a whole or in part, and any
such rejection by such Agent shall not be deemed a breach of its agreements
contained herein.
(b) Each sale of Securities to any Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent. Any Agent's commitment to purchase Securities as
principal pursuant to any Terms Agreement or otherwise shall be deemed to have
been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of Securities to
be purchased by any Agent pursuant thereto, the price to be paid to the Company
for such Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities, and the time, date and place of delivery of and payment for such
Securities. Such Terms Agreement shall also specify the procedural details
relating to the issue and delivery of such Securities and any requirements for
officers' certificates, opinions of counsel and accountants' letters pursuant to
Section 4 hereof. Each Agent proposes to offer Securities purchased by it as
principal for sale at prevailing market prices or prices related thereto at the
time of sale, which may be equal to, greater than or less than the price at
which such Securities are purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by any Agent as principal, whether set forth in a Terms Agreement or
in accordance with the Administrative Procedure, is referred to herein as a
"Time of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
8
<PAGE>
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of King & Spalding, 1185 Avenue of the Americas, New York, New York at
11:00 a.m., New York City time, on April 15, 1999 (the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus after the date of any Terms Agreement or other
agreement by an Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be disapproved by any Agent party to
such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof unless in the opinion of counsel to the Company
such amendment or supplement is required by law, PROVIDED, HOWEVER, that
the Company shall only be required to provide the Company's periodic
filings to be filed with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act to King & Spalding, counsel to the Agents,
on behalf of the Agents, on the business day prior to the date on which
such filings are to be transmitted for filing with the Commission;
(ii) to prepare, with respect to any Securities to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement
with respect to such Securities in a form previously approved by such Agent
and to file such Pricing Supplement pursuant to the applicable subparagraph
of Rule 424(b) under the Act not later than the time period specified
therein;
(iii) to make no amendment or supplement at any time to the
Registration Statement or Prospectus, other than any Pricing Supplement,
prior to having afforded each Agent a reasonable opportunity to review and
comment thereon, PROVIDED, HOWEVER, that the foregoing requirement shall
not apply to any of the Company's periodic filings with the Commission
required to be filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, except that the Company will give the Agents two days' notice
that such filings are to be made with the Commission and will cause copies
of such filings to be delivered to the Agents promptly after being
transmitted for filing with the Commission; PROVIDED, FURTHER, HOWEVER,
that to the extent any Agent shall disapprove of any of the Company's
periodic filings with the Commission required to be so filed pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, such Agent shall
have the right, in its sole discretion, to suspend solicitation of offers
to purchase Securities from the Company until such time as the Company
amends such filing or takes such other action as is satisfactory to such
Agent with respect to such filing;
(iv) to file promptly all reports and any 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 for so long as the delivery of a prospectus is required in connection
with the offering or sale of the
9
<PAGE>
Securities, and during such same period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or by
such Agent and other than documents incorporated by reference in the
Prospectus) has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Securities, 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 amendment or supplement of the
Registration Statement or Prospectus or for additional information; and
(v) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any such 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 such Agent may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; PROVIDED, HOWEVER, 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 such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time amended
or supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, both in such quantities as such Agent may
reasonably request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent as principal) 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 during such same period 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 such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than one
business day later); and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in
10
<PAGE>
writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or such Prospectus that
will correct such statement or omission or effect such compliance; PROVIDED,
HOWEVER, that if during such same period such Agent continues to own Securities
purchased from the Company by such Agent as principal or such Agent is otherwise
required to deliver a prospectus in respect of transactions in the Securities,
the Company shall promptly prepare and file with the Commission such an
amendment or supplement;
(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 (as defined in Rule 158 under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act (including, at the option of
the Company, Rule 158);
(e) During the period when this Agreement is in effect, to furnish to
such Agent copies of all reports or other communications (financial or other)
furnished to shareholders, and deliver to such Agent as soon as they are
available, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed, and, after termination of this Agreement
but during such time as any Securities are outstanding, furnish to any Agent
such reports, other communications and financial statements upon the request of
such Agent;
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and continuing
to and including the later of (i) the termination of any trading restrictions
for the Securities purchased thereunder as specified in the Terms Agreement
(such Agent to notify the Company of such termination), and (ii) the related
Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company which both mature more than nine months after
such Time of Delivery and are substantially similar to the Securities, without
the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the Company
of a Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company contained in
or made pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
11
<PAGE>
(h) That, if so requested by such Agent (unless the Company has
accepted an offer to purchase Securities, in which case no such request shall be
necessary), each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement to the Prospectus or
any other amendment or supplement relating solely to a change in the terms of
the Securities), including, without limitation, each time a document filed under
the Act or the Exchange Act is incorporated by reference into the Prospectus,
and each time the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies that King & Spalding,
counsel to the Agents, is required to deliver an opinion or opinions as a
condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish to such counsel, reasonably in advance of the date on
which such opinion is required, such papers and information as they may
reasonably request to enable them to furnish to such Agent the opinion or
opinions referred to in Section 6(b) hereof;
(i) That, if so requested by such Agent (unless the Company has
accepted an offer to purchase Securities, in which case no such request shall be
necessary), each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement to the Prospectus or
any other amendment or supplement relating solely to a change in the terms of
the Securities), including, without limitation, each time a document filed under
the Act or the Exchange Act is incorporated by reference into the Prospectus,
and each time the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies that the delivery of an
opinion under this Section 4(i) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent written opinions of the Company's General
Counsel and Faegre & Benson LLP, or other counsel satisfactory to such Agent in
its reasonable judgment, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may be, in
form satisfactory to such Agent in its reasonable judgment to the effect that
such Agent may rely on the opinions referred to in Sections 6(c) and 6(d) hereof
which were last furnished to such Agent to the same extent as though they were
dated the date of such letter authorizing reliance (except that statements in
such last opinions shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in lieu of such
opinions, opinions of the same tenor as the opinions referred to in Sections
6(c) and 6(d) hereof but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date;
(j) That, if so requested by such Agent (unless the Company has
accepted an offer to purchase Securities, in which case no such request shall be
necessary), each time the Registration Statement or the Prospectus shall be
amended or supplemented, including, without limitation, each time that a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, in any case to set forth financial information included in
or derived from the Company's consolidated financial statements or accounting
records, and, each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the delivery of
a letter under this Section 4(j) as a condition to the purchase of Securities
pursuant to such Terms Agreement,
12
<PAGE>
the Company shall cause the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement forthwith to furnish
such Agent a letter, dated the date of such amendment, supplement, incorporation
or Time of Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent in its reasonable judgment, of the same tenor as the
letter referred to in Section 6(e) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company, to the extent such financial statements and other information
are available as of a date not more than five business days prior to the date of
such letter; PROVIDED, HOWEVER, that with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with respect
to such financial information or other matter made in the letter referred to in
Section 6(e) hereof which was last furnished to such Agent; and
(k) That, if so requested by such Agent (unless the Company has
accepted an offer to purchase Securities, in which case no such request shall be
necessary), each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement to the Prospectus as
amended or supplemented or any other amendment or supplement relating solely to
a change in the terms of the Securities), including, without limitation, each
time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells Securities to
such Agent as principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of a certificate under this Section 4(k) as a condition
to the purchase of Securities pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to such Agent a certificate
executed by officers of the Company satisfactory to such Agent, dated the date
of such supplement, amendment, incorporation or Time of Delivery related to such
sale, as the case may be, in such form as shall be satisfactory to such Agent in
its reasonable judgment, to the effect that the statements contained in the
certificates referred to in Section 6(j) hereof which were last furnished to
such Agent are true and correct at such date, as though made at and as of such
date (except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(j) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date.
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees 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, the Prospectus and any Pricing Supplement and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees and expenses of counsel for the Agents in connection with
the
13
<PAGE>
establishment of the program contemplated hereby and, except as otherwise
provided in the following clause (iii), the transactions contemplated hereunder,
including rendering any opinions hereunder; (iii) unless otherwise specified in
a Terms Agreement or otherwise, the fees and expenses of counsel for the Agents
in connection with the transactions contemplated by such Terms Agreement,
including rendering any opinions thereunder; (iv) the cost of printing or
reproducing this Agreement, any Terms Agreement, the Indenture, any Blue Sky and
Legal Investment Memoranda, initial closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (v) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky and legal investment surveys; (vi) any fees
charged by securities rating services for rating the Securities; (vii) the cost
of preparing the Securities; (viii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with the Indenture and the Securities; (ix) any advertising
expenses connected with the solicitation of offers to purchase and the sale of
Securities so long as such advertising expenses have been approved by the
Company; and (x) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. Except as provided in Sections 7 and 8 hereof, each Agent shall pay
all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, to solicit
offers to purchase the Securities at any time (the "Solicitation Time"), and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
reasonable discretion, to the condition that all representations and warranties
and other statements of the Company herein (and, in the case of an obligation of
any Agent under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and, if and
to the extent requested by such Agent, at and as of any applicable date referred
to in Section 4(k) hereof, the condition that the Company shall have performed
all of its obligations hereunder theretofore in each case to be performed and
the following additional conditions:
(a) (i) With respect to any Securities sold pursuant to this
Agreement, any Terms Agreement or otherwise, the Prospectus as amended or
supplemented (including the Pricing Supplement) with respect to such Securities
shall have been filed with the Commission pursuant to Rule 424(b) under the Act
within the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof; (ii) 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 by the Commission; and (iii) all requests for additional information
on the part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;
14
<PAGE>
(b) King & Spalding, counsel to the Agents, shall have furnished to
such Agent (i) such opinion or opinions, dated the Commencement Date, with
respect to the matters covered in the first clause of paragraph (i) and
paragraphs (iv), (v), (vii) and (x) of subsection (d) below, as well as such
other related matters as such Agent may reasonably request, and (ii) if and to
the extent requested by such Agent, on each applicable date referred to in
Section 4(h), an opinion or opinions, dated such applicable date, to the effect
that such Agent may rely on the opinion or opinions which were last furnished to
such Agent pursuant to this Section 6(b) to the same extent as though it or they
were dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date) or, in any case, in lieu of such an opinion or opinions, an opinion or
opinions of the same tenor as the opinion or opinions referred to in clause (i)
but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and in each case 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, or another of the Company's lawyers satisfactory to the Agents, shall
have furnished to such Agent his or her written opinion, dated the Commencement
Date and, if and to the extent requested by such Agent, any applicable date
referred to in Section 4(i), as the case may be, in form and substance
satisfactory to such Agent, 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 such counsel believes that both such Agent
and such counsel 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
15
<PAGE>
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;
(iv) All of the issued shares of capital stock of each subsidiary
of the Company 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-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 such counsel believes that both such
Agent and such counsel are justified in relying upon such opinions and
certificates);
(v) 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;
(vi) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement, any applicable Terms Agreement, the Interest Calculation
Agency Agreement, dated as of April 15, 1999 (the "Interest Calculation
Agency Agreement"), between the Company and the First National Bank of
Chicago, as Calculation Agent, and the Letter of Representations, dated as
of April 15, 1999 (the "Letter of Representations"), among the Company, the
Trustee and The Depository Trust Company 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; and
(vii) The documents incorporated by reference in the
Prospectus (other than the financial statements and related schedules
therein, as to which such
16
<PAGE>
counsel need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act and
the rules and regulations of the Commission thereunder; and such counsel
has no reason to believe that any of such documents, when they became
effective or 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 to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, 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 the
Prospectus which are not filed or incorporated by reference or described as
required.
(d) Faegre & Benson LLP, counsel for the Company, shall have
furnished to such Agent their written opinion, dated the Commencement Date and,
if and to the extent requested by an Agent, any applicable date referred to in
Section 4(i), as the case may be, in form and substance satisfactory to such
Agent, 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 corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus;
(iii) 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 to 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;
(iv) Each of this Agreement (and any applicable Terms
Agreement), the Interest Calculation Agency Agreement and the Letter of
Representations has been duly authorized, executed and delivered by
the Company;
(v) The Medium-Term Note Program, Series I, of the Company
has been duly authorized by the Company. When the terms of a particular
issuance of the Securities have been established in accordance with the
Indenture and such Securities are issued and delivered by the Company in
accordance with the terms of this Agreement and any Terms Agreement, such
Securities will have been duly authorized, executed, authenticated, issued
and delivered by the Company and will
17
<PAGE>
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms and the Securities will conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(vi) Each of the Indenture, the Interest Calculation Agency
Agreement and the Letter of Representations has been duly authorized,
executed and delivered by the Company, and constitutes a valid and legally
binding instrument, enforceable against the Company 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;
(vii) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement and any applicable Terms Agreement, the Interest Calculation
Agency Agreement and the Letter of Representations 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 document filed or
incorporated by reference by the Company as an exhibit to its most recent
Annual Report on Form 10-K or any subsequent Quarterly Report on Form 10-Q
or Current Report on Form 8-K or any other material contract known to such
counsel, 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;
(viii) 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, any
applicable Terms Agreement, the Indenture, the Interest Calculation Agency
Agreement or the Letter of Representations, 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 connection with the
solicitation by the Agents of offers to purchase Securities from the
Company and with purchases of Securities by an Agent as principal, as the
case may be, in each case as contemplated by this Agreement; and
(ix) The statements set forth in the Prospectus under the
caption "United States Federal Taxation" insofar as they purport to
describe the provisions of
18
<PAGE>
the laws referred to therein, are accurate and fairly present the
information called for with respect to such matters of law; and
(x) The Registration Statement and the Prospectus (other than
the financial statements therein and documents incorporated by reference
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; although such
counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Prospectus (except as otherwise provided in subsection (ix) of this
Section 6(d)), such counsel has no reason to believe that the Registration
Statement contained, as of its effective date, or that the Prospectus as
amended or supplemented contained as of the date of such amendment or
supplement, or that either the Registration Statement or the Prospectus
contains as of the date of such opinion, 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 date of such opinion, to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(e) Not later than 10:00 a.m., New York City time, on the
Commencement Date, and, if and to the extent requested by an Agent, on each
applicable date referred to in Section 4(j), the independent accountants who
have certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Closing Date, in form and substance
satisfactory to such Agent, to the effect set forth in Annex 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 Prospectus prior to the Solicitation Time or
the date of the Pricing Supplement relating to the Securities to be delivered at
the relevant Time of Delivery, as the case may be, any 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 prior
to the Solicitation Time or the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery, as the case may be;
and (ii) since the respective dates as of which information is given in the
Prospectus prior to the Solicitation Time or the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery, as
the case may be, there shall not have been any change in the capital stock
(other than issuances of common stock pursuant to stock option and other
compensatory plans and arrangements adopted by the Board of Directors of the
Company, issuances of common stock upon conversions of convertible preferred
stock and repurchases by the Company under its publicly announced common stock
buy back program authorized by the Company's Board of Directors on January 13,
1999) or any increase in the long-term debt (excluding capital leases and
commercial paper backed by long term credit facilities) of the Company or any of
its subsidiaries or any change, or any development
19
<PAGE>
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 prior to the Solicitation Time or the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery, as
the case may be, the effect of which, in any such case described in clause (i)
or (ii), is in the judgment of such Agent so material and adverse as to make it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Securities or the purchase by such Agent of Securities from the Company
as principal pursuant to the applicable Terms Agreement or otherwise, as the
case may be, on the terms and in the manner contemplated in the Prospectus prior
to the Solicitation Time or the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery, as the case may be.
(g) During the period in which the Agents are soliciting offers to
purchase Securities or during the period between the date of any Terms Agreement
and the related Time of Delivery, as applicable, (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities 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, the effect of which, in any such case described in clause (i)
or (ii), in the judgment of such Agent makes it impracticable or inadvisable to
proceed with the solicitation of offers to purchase Securities or the purchase
by such Agent of Securities from the Company as principal pursuant to the
applicable Terms Agreement or otherwise, as the case may be, on the terms and in
the manner contemplated in the Prospectus as amended or supplemented.
(h) During the period in which the Agents are soliciting offers to
purchase Securities or during the period between the date of any Terms Agreement
and the related Time of Delivery, 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 suspension or material
limitation in trading in any securities issued by the Company; (iii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iv) an outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this clause (iv) in the judgment of such Agent makes it impracticable or
inadvisable to proceed with the solicitation of offers to purchase Securities or
the purchase by such Agent of Securities from the Company as principal pursuant
to the applicable Terms Agreement or otherwise, as the case may be, on the terms
and in the manner contemplated in the Prospectus as amended or supplemented.
(i) During the period in which the Agents are soliciting offers to
purchase Securities or during the period between the date of any Terms Agreement
and the related Time of Delivery, with respect to any Security denominated in a
currency other than the U.S. dollar, more than one currency or a composite
currency or any Security the principal or
20
<PAGE>
interest of which is indexed to such currency, currencies or composite currency,
there shall not have occurred a suspension or limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking activities in the
country or countries issuing such currency, currencies or composite currency,
the outbreak or escalation of hostilities involving, the occurrence of any
change in the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or countries issuing
such currency, currencies or composite currency or the imposition or proposal of
exchange controls by any governmental authority in the country or countries
issuing such currency, currencies or composite currency, the effect of which, in
any such case described in this Section 6(i), in the judgment of such Agent
makes it impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities or the purchase by such Agent of
Securities from the Company as principal pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented.
(j) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the Commencement Date
and, if and to the extent requested by such Agent, any applicable date referred
to in Section 4(k) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, in such form and executed by such officers of
the Company as shall be satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to the
performance by the Company of all of its obligations hereunder to be performed
at or prior to the Commencement Date or such applicable date, as the case may
be, as to the matters set forth in subsections (a), (f) and (g) of this Section
6, and as to such other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent 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, the
Prospectus, the Prospectus as amended or supplemented, or any other prospectus
relating to the Securities 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 such Agent for any legal or other
expenses reasonably incurred by such Agent in connection with investigating or
defending any such action or claim as such expenses are incurred; 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, the Prospectus,
the Prospectus as amended or supplemented or any other prospectus relating to
the Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein.
21
<PAGE>
(b) Each Agent 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, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, 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, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
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 as such expenses are incurred.
(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, 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. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in
22
<PAGE>
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 each Agent on the other from the offering of the
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. 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
each Agent 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 each Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
sale of Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect thereof.
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 required to be stated
therein or necessary in order to make the statements therein not misleading
relates to information suplied by the Company on the one hand or by any Agent on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Agent agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
all Agents 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), an Agent shall
not be required to contribute any amount in excess of the amount by which the
total public offering price at which the Securities purchased by or through it
were sold exceeds the amount of any damages which such Agent has otherwise been
required to 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
obligations of each of the Agents under this subsection (d) to contribute are
several in proportion to the respective purchases made by or through it to which
such loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company under this Section 7 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
Agent within the
23
<PAGE>
meaning of the Act; and the obligations of each Agent under this Section 7 shall
be in addition to any liability which such Agent 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.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as an agent for the Company, and not
as principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company has been accepted by the Company, but such Agent shall not have any
liability to the Company in the event such purchase for any reason is not
consummated. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall hold
each Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or 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 Agent or the Company or any of its officers, directors or controlling
persons, and shall survive each delivery of and payment for any of the
Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities may be suspended or terminated at any time by the
Company as to any or all Agents or by any Agent as to such Agent upon the giving
of written notice of such suspension or termination to such Agent or the
Company, as the case may be. In addition, this Agreement may be terminated at
any time by the Company as to any or all Agents or by any Agent as to such Agent
upon the giving of written notice of such suspension or termination to such
Agent or the Company, as the case may be. In the event of such suspension or
termination with respect to any Agent, (X) this Agreement shall remain in full
force and effect with respect to any Agent as to which such suspension or
termination has not occurred, (Y) this Agreement shall remain in full force and
effect with respect to rights and obligations of any party which have previously
accrued and which relate to Securities already issued or agreed to be issued (as
a result of the acceptance by the Company of any offer to purchase Securities)
at the time of such suspension or termination, and (Z) in any event, this
Agreement shall remain in full force and effect insofar as the fourth paragraph
of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Fax No. (212)363-7609, Attention:
Credit Department, if to Merrill Lynch, Pierce, Fenner & Smith Incorporated
shall be sufficient in
24
<PAGE>
all respects when delivered or sent by facsimile transmission or registered
mail to World Financial Center, North Tower, New York, New York 10281,
Fax No. (212) 449-2234, Attention: MTN Product Management,if to J.P. Morgan
Securities Inc. shall be sufficient in all respect when delivered or sent by
facsimile transmission or registered mail to 60 Wall Street, 3rd Floor,
New York, New York 10260, Fax No. (212) 648-5909, Attention: Medium-Term Notes
Desk, if to Salomon Smith Barney Inc. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to Seven World
Trade Center, New York, New York 10048, Fax No. (212) 783-2274, Attention:
Medium-Term Note Department; and if to the Company shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
Dayton Hudson Corporation, 777 Nicollet Mall, Minneapolis, Minnesota 55402,
Fax No. (612) 370-5508, Attention: Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any
Agent hereunder shall be deemed a successor or assign by reason of such
purchase.
13. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
14. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
25
<PAGE>
If the foregoing is in accordance with each of the Agents' understanding,
please sign and return to us five counterparts hereof, whereupon this letter and
the acceptance by each of the Agents thereof shall constitute a binding
agreement between the Company and each of the Agents in accordance with its
terms.
Very truly yours,
DAYTON HUDSON CORPORATION
By: /s/ Stephen C. Kowalke
-----------------------------
Stephen C. Kowalke
Vice President and Treasurer
Accepted in New York, New York, as of the
date hereof:
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
--------------------------------------
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By: /s/ Scott G. Primrose
--------------------------------------
J.P. MORGAN SECURITIES INC.
By: /s/ Robert Nordlinger
--------------------------------------
SALOMON SMITH BARNEY INC.
By: /s/ Martha D. Bailey
--------------------------------------
26
<PAGE>
ANNEX I
Dayton Hudson Corporation
$1,325,000,000 Medium-Term Notes, Series I
TERMS AGREEMENT
______________, 199_
[Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004]
[Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower
New York, New York 10281]
[J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260]
[Salomon Smith Barney Brothers Inc.
Seven World Trade Center
New York, New York 10048]
Dear Sirs:
Dayton Hudson Corporation (the "Company") proposes, subject to the terms
and conditions stated herein and in the Distribution Agreement, dated April 15,
1999 (the "Distribution Agreement"), between the Company on the one hand and
Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc. and Salomon Smith Barney Inc. on the
other hand (the "Agents"), to issue and sell to [NAME(S) OF AGENT(S)] the
securities specified in the Schedule hereto (the "Purchased Securities"). Each
of the provisions of the Distribution Agreement not specifically related to the
solicitation by the Agents, as agents of the Company, of offers to purchase
Securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Nothing contained herein or in
the Distribution Agreement shall make any party hereto an agent of the Company
or make such party subject to the provisions therein relating to the
solicitation of offers to purchase Securities from the Company, solely by virtue
of its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty with
respect to the Prospectus in Section 1 of the Distribution Agreement shall be
deemed to be a representation and warranty as of the date of the
I-1
<PAGE>
Distribution Agreement in relation to the Prospectus (as therein defined), and
also a representation and warranty as of the date of this Terms Agreement in
relation to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to you and you agree to purchase from the Company the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
If for any reason the Purchased Securities are not delivered by or on
behalf of the Company, the Company will reimburse you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by you in making preparations for the purchase,
sale and delivery of the Purchased Securities but then the Company shall be
under no further liability to you except as provided in Sections 5 and 7 of the
Distribution Agreement.
I-2
<PAGE>
If the foregoing is in accordance with the understanding of the parties
hereto, please sign and return to us five counterparts hereof, and upon
acceptance hereof by the parties hereto, this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between the parties hereto and
the Company.
DAYTON HUDSON CORPORATION
By:
-----------------------------
Authorized Officer
Accepted:
[GOLDMAN, SACHS & CO.
By:
--------------------------------------]
[MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
--------------------------------------]
[J.P. MORGAN SECURITIES INC.
By:
--------------------------------------]
[SALOMON SMITH BARNEY INC.
By:
--------------------------------------]
I-3
<PAGE>
Schedule to Annex I
Title of Purchased Securities:
% Medium-Term Notes, Series I
------
Aggregate Principal Amount:
$ or units of other Specified Currency
-------------
Price to Public:
Purchase Price by [Name(s) of Agent(s)]:
__% of the principal amount of the Purchased Securities, plus accrued
interest from ________________ to _________________ [and accrued
amortization, if any, from _____________ to _____________].
Method of Specified Funds for Payment of Purchase Price: Same Day Funds
Payment of Expenses:
Indenture:
Indenture, dated as of October 3, 1996, as amended or supplemented from
time to time between the Company and The First National Bank of Chicago, as
Trustee.
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[_____________%]
I-4
<PAGE>
Interest Payment Dates:
[months and dates]
Other Terms:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(l) The officers' certificate referred to in Section 4(k).]
[(2) The opinions of counsel to the Company referred to in Section
4(i).]
[(3) The opinion of counsel to the Agents referred to in Section
4(h).]
[(4) The accountants' letters referred to in Section 4(j).]
Syndicate Provisions:
[Set forth any syndicate terms, including any restrictions on sales of
securities similar to the Purchased Securities.]
Procedures Relating to Settlement:
I-5
<PAGE>
ANNEX II
DAYTON HUDSON CORPORATION
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated April 15, 1999 (the "Distribution Agreement"),
among Dayton Hudson Corporation (the "Company"), Goldman, Sachs & Co., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc. and Salomon Smith Barney Inc. (together, the "Agents"), to which
this Administrative Procedure is attached as Annex II. Defined terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture. To the extent any procedure set forth below conflicts with the
provisions of the Securities, the Indenture or the Distribution Agreement, the
relevant provisions of the Securities, the Indenture and the Distribution
Agreement shall control.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
The Trustee will be the initial Registrar, Calculation Agent,
Authenticating Agent and Paying Agent for the Securities and will perform the
duties specified herein. Each Security will be issued only in fully registered
form and will be represented by either a global security (a "Global Security")
delivered to the Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC (a "Book-Entry Security") or
a certificate issued in definitive form (a "Certificated Security") delivered to
a person designated by an Agent, as set forth in the applicable Pricing
Supplement. An owner of a Book-Entry Security will not be entitled to receive a
certificate representing such a Security, except as provided in the Indenture.
Book-Entry Securities, which may be payable only in U.S. dollars, will be
issued in accordance with the Administrative Procedure set forth in Part I
hereof as they may
II-1
<PAGE>
subsequently be amended as the result of changes in DTC's operating procedures
and Certificated Securities will be issued in accordance with the Administrative
Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC, dated the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC dated as of
May 26, 1989 (the "Certificate Agreement"), and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
POSTING RATES BY THE COMPANY:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
ACCEPTANCE OF OFFERS BY THE COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Book-Entry Securities. If the Company accepts an offer to purchase Book-Entry
Securities, it will confirm such acceptance in writing to the Selling Agent or
Purchasing Agent, as the case may be, and the Trustee.
COMMUNICATION OF SALE INFORMATION TO THE COMPANY BY SELLING AGENT AND SETTLEMENT
PROCEDURES:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the
II-2
<PAGE>
terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate, the
Interest Payment Dates, the initial Interest Payment Date and
whether such Security is an Amortizing Security, and if so, the
amortization schedule;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) If denominated or payable in a currency other than U.S. dollars,
the relevant provisions relating thereto;
(7) If payments thereon are to be determined by reference to an
index, the relevant provisions relating thereto;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Book-Entry Security, provisions
relating to such redemption or repayment;
(12) If a Floating Rate Book-Entry Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
II-3
<PAGE>
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Selling Agent or Purchasing Agent;
(16) Original Issue Discount provisions, if any; and
(17) Any other applicable terms.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through DTC's
Participant Terminal System, providing the following settlement information to
DTC, and DTC shall forward such information to such Agent and Standard & Poor's
Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by DTC on behalf of
the Selling Agent or Purchasing Agent, as the case may be;
(5) Whether such Security is an Amortizing Security (by an
appropriate notation in the comments field of DTC's Participant
Terminal System);
II-4
<PAGE>
(6) The interest payment period; and
(7) Initial Interest Payment Date for such Book-Entry Security.
D. The Trustee will complete the Global Security, in the form previously
approved by the Company, the Agents and the Trustee.
E. The Trustee will authenticate the Global Security representing such
Book-Entry Security.
F. DTC will credit such Book-Entry Security to the Trustee's participant
account at DTC.
G. The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Book-Entry Security to the
Trustee's participant account and credit such Book-Entry Security to such
Agent's participant account at DTC, and (ii) debit such Agent's settlement
account and credit the Trustee's settlement account for an amount equal to the
price of such Book-Entry Security less such Agent's commission. The entry of
such a deliver order shall constitute a representation and warranty by the
Trustee to DTC that (a) the Global Security representing such Book-Entry
Security has been issued and authenticated and (b) the Trustee is holding such
Global Security pursuant to the Certificate Agreement.
H. Unless the relevant Agent is the end purchaser of such security, such
Selling or Purchasing Agent, as the case may be, will enter an SDFS deliver
order through DTC's Participant Terminal System instructing DTC (i) to debit
such Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
I. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "G" and "H" will be settled in accordance with SDFS
operating procedures in effect on the Settlement Date.
J. Upon confirmation of receipt of funds, the Trustee will transfer to
the Company's account, account number 150250099853, maintained at US Bank,
Minneapolis, Minnesota, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "G".
K. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
II-5
<PAGE>
L. Unless the relevant Agent is the end purchaser of such security, such
Selling or Purchasing Agent, as the case may be, will confirm the purchase of
such Book-Entry Security to the purchaser either by transmitting to the
participants with respect to such Book-Entry Security a confirmation order or
orders through DTC's institutional delivery system or by mailing a written
confirmation to such purchaser.
M. DTC will, at any time, upon request of the Company or the Trustee,
promptly furnish to the Company or the Trustee a list of the names and addresses
of the participants for whom DTC has credited Book-Entry Securities.
PREPARATION OF PRICING SUPPLEMENT BY COMPANY:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Security and arrange
to have delivered to the Selling Agent or Purchasing Agent, as the case may be,
at least ten copies of such Pricing Supplement, not later than 11:00 a.m., New
York City time, on the Business Day following the Trade Date (as defined below).
The Company will arrange to file a copy of the Pricing Supplement with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Deliveries of Pricing Supplements made in accordance with this section, if
sent to Merrill Lynch, Pierce, Fenner & Smith Incorporated, shall be sufficient
when delivered to TriTech Services, 44B Colonial Drive Piscataway, New Jersey
08854, Attention: Nachman Kimerling, Fax No. (732) 885-2774, Phone No. (732)
885-2768, and if sent to Salomon Smith Barney Inc., shall be sufficient when
delivered to Brooklyn Army Terminal, 140 58th Street, 5th Floor, Brooklyn, New
York 11220, Attention: Diane Graham, Fax No. (718) 765-6734, Phone No. (718)
765-6736.
In each instance that a Pricing Supplement is prepared, the relevant Agent
will provide a copy of such Pricing Supplement to each investor or purchaser of
the relevant Book-Entry Security or its agent. Pursuant to Rule 434 under the
Securities Act, the Pricing Supplement may be delivered separately from the
Prospectus. Outdated Pricing Supplements (other than those retained for files)
will be destroyed.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
II-6
<PAGE>
DATE OF SETTLEMENT:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is on or before the third Business Day after the Trade Date
pursuant to the "Settlement Procedure Timetable" set forth below, unless the
Company and the purchaser agree to settlement on another day, which shall be no
earlier than the next Business Day after the Trade Date.
SETTLEMENT PROCEDURE TIMETABLE:
For offers to purchase Book-Entry Securities solicited by a Selling Agent
and accepted by the Company for settlement on the first Business Day after the
Trade Date, Settlement Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the respective times (New York
City time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
-------------- -------------------------------------
<S> <C> <C>
A-B 11:00 a.m. on the Trade Date
C 2:00 p.m. on the Trade Date
D 3:00 p.m. on the day before the Settlement Date
E 9:00 a.m. on the Settlement Date
F 10:00 a.m. on the Settlement Date
G 2:00 p.m. on the Settlement Date
I 4:45 p.m. on the Settlement Date
J-L 5:00 p.m. on the Settlement Date
</TABLE>
If a sale is to be settled more than one Business Day after the Trade Date,
Settlement Procedures A, B and C shall be completed as soon as practicable but
in no event later that 11:00 a.m. and 2:00 p.m., as the case may be, on the
first Business Day after the Trade Date. If the initial interest rate for a
Floating Rate Book-Entry Security has not been determined at the time that
Settlement Procedure "A" is completed and the Settlement Date is at least three
Business Days after the Trade Date, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but no later than 11:00 a.m.
and 12:00 noon, respectively, on the second Business Day immediately preceding
the Settlement Date. Settlement Procedure "I" is subject to extension in
accordance with any extension of Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in effect on the Settlement
Date.
II-7
<PAGE>
If settlement of a Book-Entry Security is rescheduled or cancelled, the
Trustee, upon obtaining knowledge thereof, will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such effect by no later
than 2:00 p.m. on the Business Day immediately preceding the scheduled
Settlement Date.
FAILURE TO SETTLE:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "G", the Trustee may
deliver to DTC, through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to debit such Book-Entry
Security to the Trustee's participant account, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "cancelled", make appropriate entries in the Trustee's
records and send such cancelled Global Security to the Company. The CUSIP
number assigned to such Global Security shall, in accordance with the procedures
of the CUSIP Service Bureau of Standard & Poor's Corporation, be cancelled and
not immediately reassigned. If a withdrawal message is processed with respect
to one or more, but not all, of the Book-Entry Securities represented by a
Global Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Security or Securities
and shall be cancelled immediately after issuance and the other of which shall
represent the remaining Book-Entry Securities previously represented by the
surrendered Global Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in DTC, acting
on behalf of such purchaser), such participants and, in turn, the Agent for such
Book-Entry Security may enter delivery orders through DTC's Participant Terminal
System debiting such Book-Entry Security to such participant's account and
crediting such Book-Entry Security to such Agent's account and then debiting
such Book-Entry Security to such Agent's participant account and crediting such
Book-Entry Security to the Trustee's participant account and shall notify the
Company and the Trustee thereof. Thereafter, the Trustee will (i) immediately
notify the Company of such order and the Company shall transfer to such Agent
funds available for immediate use in an amount equal to the price of such
Book-Entry Security which was credited to the account of the Company maintained
at the Trustee in accordance with Settlement Procedure J, and (ii) deliver the
withdrawal message and take the related actions described in the preceding
paragraph. If such failure shall have occurred for any reason other than
default by the applicable Agent to perform its obligations hereunder or under
the Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for the loss of its use of funds during the period when the
funds were credited to the account of the Company.
II-8
<PAGE>
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Securities to have been
represented by a Global Security, the Trustee will provide, in accordance with
Settlement Procedures "D", "E" and G, for the authentication and issuance of a
Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
POSTING RATES BY COMPANY:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
ACCEPTANCE OF OFFERS BY COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
COMMUNICATION OF SALE INFORMATION TO THE COMPANY BY SELLING AGENT:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly on the Sale Date
the following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Certificated Securities to be purchased;
II-9
<PAGE>
(2) If a Fixed Rate Certificated Security, the interest rate, the Interest
Payment Dates, the initial Interest Payment Date and whether such
Security is an Amortizing Security, and if so, the Amortization
Schedule;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) If denominated or payable in a currency other than U.S. dollars, the
relevant provisions relating thereto;
(7) If payments thereon are to be determined by reference to an index, the
relevant provisions relating thereto;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Certificated Security, provisions
relating to such redemption or repayment;
(12) If a Floating Rate Certificated Security, such of the following as are
applicable:
(i) nterest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
II-10
<PAGE>
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s) and address for payment of principal and interest;
(14) Denomination of certificates to be delivered at settlement;
(15) Original Issue Discount provisions, if any;
(16) Selling Agent or Purchasing Agent; and
(17) Any other applicable terms.
PREPARATION OF PRICING SUPPLEMENT BY COMPANY:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to file a copy of the Pricing Supplement with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Deliveries of Pricing Supplements made in accordance with this section, if
sent to Merrill Lynch, Pierce, Fenner & Smith Incorporated, shall be sufficient
when delivered to TriTech Services, 44B Colonial Drive Piscataway, New Jersey
08854, Attention: Nachman Kimerling, Fax No. (732) 885-2774, Phone No. (732)
885-2768, and if sent to Salomon Smith Barney Inc., shall be sufficient when
delivered to Brooklyn Army Terminal, 140 58th Street, 5th Floor, Brooklyn, New
York 11220, Attention: Diane Graham, Fax No. (718) 765-6734, Phone No. (718)
765-6736.
In each instance that a Pricing Supplement is prepared, the relevant Agent
will provide a copy of such Pricing Supplement to each investor or purchaser of
the relevant Certificated Security or its agent. Pursuant to Rule 434 under the
Securities Act, the Pricing Supplement may be delivered separately from the
Prospectus. Outdated Pricing Supplements (other than those retained for files)
will be destroyed.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented
II-11
<PAGE>
(including the Pricing Supplement) in relation to such Certificated Security
prior to or together with the earlier of the delivery to such purchaser or its
agent of (a) the confirmation of sale or (b) the Certificated Security.
DATE OF SETTLEMENT:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third Business Day after the date of acceptance
of such offer, unless the Company and the purchaser agree to settlement (a) on
another Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
INSTRUCTION FROM COMPANY TO TRUSTEE FOR PREPARATION OF CERTIFICATED SECURITIES:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 12:00 noon, New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities, in which case such instruction will be given
by the Company by 11:00 a.m., New York City time.
PREPARATION AND DELIVERY OF CERTIFICATED SECURITIES BY TRUSTEE AND RECEIPT OF
PAYMENT THEREFOR:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 12:00 noon, New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission on or before
12:00 noon, New York City time, on the Settlement Date. The Company shall not
use any proceeds advanced by a Selling Agent to acquire securities prior to the
Selling Agent receiving the Certificated Securities from the Company.
II-12
<PAGE>
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 12:00 noon, New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
FAILURE OF PURCHASER TO PAY SELLING AGENT:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. If the
failure shall have occurred for any reason other than a default by such Selling
Agent in the performance of its obligations hereunder and under the Distribution
Agreement, then the Company will reimburse the Selling Agent on an equitable
basis for its loss of the use of funds during the period when they were credited
to the account of the Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-13
<PAGE>
ANNEX III
Pursuant to Sections 4(j) and 6(e), as the case may be, of the Distribution
Agreement, the Company's independent certified public accountants shall furnish
letters 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 the 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 Agents;
(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 five 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
III-1
<PAGE>
as it applies to Form 10-Q and the related published rules and regulations
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
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(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 common stock pursuant to stock option and other
compensatory plans and arrangements adopted by the Board of
Directors of the Company, issuances of common stock upon
conversions of convertible preferred stock and repurchases by the
Company under its publicly announced common stock buy back
program authorized by the Company's Board of Directors on
January 13, 1999, in each case which were outstanding on the date
of the latest balance sheet included or incorporated by reference
in the Prospectus), or
III-2
<PAGE>
- any increase in the consolidated long-term debt (excluding
capital leases and commercial paper backed by long-term credit
facilities) of the Company or any of its subsidiaries, or
- 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 Agents
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 Agents, 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 Agents, or
- any increases in any items specified by the Agents,
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 (vi) 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 Agents 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 Agents
or in documents incorporated by reference in the Prospectus specified by the
Agents, 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.
III-3
<PAGE>
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(e) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as defined in such Agreement,
as of the date of the amendment, supplement, incorporation or the Time of
Delivery relating to the Terms Agreement requiring the delivery of such letter
under Section 4(j) thereof.
III-4
<PAGE>
Exhibit 4.1
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT: $
REGISTERED NO.
DAYTON HUDSON CORPORATION
FORM OF
MEDIUM-TERM FIXED RATE NOTE, SERIES I
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
/ / Check this box if this Security is a Global Security.
Applicable if this Security is a Global Security:
[Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (55 Water Street, New York,
New York) ("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.]
[If applicable, this Security will contain information required by U.S.
Federal Income Tax "Original Issue Discount" rules, as that term is defined in
the Internal Revenue Code of 1986, as amended.]
ORIGINAL ISSUE DATE: ISSUE PRICE: % INTEREST RATE PER ANNUM:
STATED MATURITY DATE: INTEREST PAYMENT DATES: REGULAR RECORD DATES:
OPTIONAL REDEMPTION: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: PERCENTAGE REDUCTION:
INITIAL REDEMPTION DATE: SINKING FUND: OPTION TO ELECT REPAYMENT:
OPTIONAL REPAYMENT MINIMUM DENOMINATIONS: DEPOSITARY (Only applicable
DATE(S): / / $1,000 if this Security is a
/ / Other Global Security):
<PAGE>
OTHER TERMS:
DAYTON HUDSON CORPORATION, a corporation duly organized and existing under
the laws of the State of Minnesota (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of _______________________ Dollars ($______________)
on the Stated Maturity Date shown above (except to the extent redeemed or repaid
prior to such date) and to pay interest, if any, on the principal amount hereof
at the Interest Rate shown above (computed on the basis of a 360-day year of
twelve 30-day months), semi-annually on each Interest Payment Date set forth
above from and after the date of this Security and at Maturity until payment of
the principal amount hereof has been made or duly provided for. Unless this
Security is a Security which has been issued upon transfer of, in exchange for,
or in replacement of, a Predecessor Security, interest on this Security shall
accrue from the Original Issue Date indicated above. If this Security has been
issued upon transfer of, in exchange for, or in replacement of, a Predecessor
Security, interest on this Security shall accrue from the last Interest Payment
Date to which interest was paid on such Predecessor Security or, if no interest
was paid on such Predecessor Security, from the Original Issue Date indicated
above. The first payment of interest on a Security originally issued and dated
between a Regular Record Date specified above 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 herein below, the interest so payable on any Interest Payment Date will be
paid to the Person in whose name this Security is registered at the close of
business on the Regular Record Date (whether or not a Business Day) next
preceding such Interest Payment Date, and interest payable upon Maturity will be
paid to the person to whom principal is payable.
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 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.
Until this Security is paid in full or payment therefor in full is duly
provided for, the Company will at all times maintain a Paying Agent (which
Paying Agent may be the Trustee) in New York City and Chicago, Illinois. The
Company has initially appointed The First National Bank of Chicago as the Paying
Agent at its offices at One First National Plaza, Suite
2
<PAGE>
0126, Chicago, Illinois 60670 and at 14 Wall Street, 8th Floor, Window 2, New
York, New York 10005.
If this Security is a Global Security: Payments of principal and any
premium and interest on this Security will be made to DTC or its nominee, as
Holder of this Security, by wire transfer of immediately available funds.
If this Security is not a Global Security: Payment of interest on this
Security (other than payments of interest at Maturity) will be made by check
mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or, in the case of a Holder of $50,000,000 or
more in aggregate principal amount of Securities of this series, by wire
transfer of immediately available funds to such account as may have been
designated by such Holder. Any such designation for wire transfer purposes
shall be made by filing the appropriate information with the Paying Agent at its
corporate trust office not later than 15 calendar days prior to the applicable
Interest Payment Date and, unless revoked by written notice to the Paying Agent
received by the Paying Agent on or prior to the Regular Record Date immediately
preceding the applicable Interest Payment Date, shall remain in effect with
respect to any further payments with respect to this Security payable to such
Holder. Payment of principal of and interest, if any, 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 New York City or Chicago,
Illinois.
The Company will pay any administrative costs imposed by banks on payors in
making payments on this Security in immediately available funds and the Holder
of this Security will pay any administrative costs imposed by banks on payees in
connection with such payments. Any tax, assessment or governmental charge
imposed upon payments on this Security will be borne by the Holder of this
Security.
Any payment on this Security due on any day which is not a Business Day
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 additional
interest shall accrue on the amount so payable for the period from and after
such date. For purposes of this Security, "Business Day" means any day other
than a Saturday, Sunday or a legal holiday or a day on which banking
institutions are authorized or required by law or regulation to close in New
York City or Chicago, Illinois.
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.
3
<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.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
---------------------------------
Authorized Signature
4
<PAGE>
[Reverse of Note]
DAYTON HUDSON CORPORATION
MEDIUM-TERM FIXED RATE NOTE, SERIES I
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
GENERAL
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 of the
Securities, which series is limited to an aggregate principal amount of
$1,325,000,000 or the equivalent thereof in one or more foreign or composite
currencies, designated as Medium-Term Notes, Series I, of the Company. The
Securities of this series may mature at different times, bear interest, if any,
at different rates, be redeemable at different times or not at all, be repayable
at the option of the Holder at different times or not at all, be issued at an
original issue discount and be denominated in different currencies.
EVENTS OF DEFAULT
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.
MODIFICATION AND WAIVERS; OBLIGATION OF THE COMPANY ABSOLUTE
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
5
<PAGE>
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 exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon 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.
DEFEASANCE AND COVENANT DEFEASANCE
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.
REDEMPTION
If so provided on the face hereof, the Company may at its option redeem
this Security in whole or from time to time in part in increments of $1,000
(provided that any remaining principal amount of this Security shall not be less
than the minimum authorized denomination hereof) on or after the date designated
as the Initial Redemption Date on the face hereof at 100% of the unpaid
principal amount hereof or the portion thereof redeemed multiplied by a
percentage (the "Redemption Percentage"), together with accrued interest, if
any, to the Redemption Date. The Redemption Percentage shall initially be equal
to the Initial Redemption Percentage specified on the face hereof and shall
decline at each anniversary of the Initial Redemption Date by the amount of the
Annual Redemption Percentage Reduction specified on the face hereof, until the
Redemption Percentage is equal to 100%. The Company may exercise such option by
causing the Trustee to mail a notice of such redemption at least 30 but not more
than 60 days prior to the applicable Redemption Date to each Holder of the
Securities of this series to be redeemed. In the event of redemption of this
Security in part only, the Company shall issue a new Security or Securities for
the unredeemed portion hereof in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities of this series with
like tenor and terms are to be redeemed, the Securities to be redeemed shall be
selected by the Trustee by such method as the Trustee shall deem fair and
appropriate.
6
<PAGE>
SINKING FUND
Unless otherwise specified on the face hereof, this Security will not be
entitled to any sinking fund.
REPAYMENT
If so provided on the face hereof, this Security will be repayable prior to
the Stated Maturity Date at the option of the Holder, in whole or in part and in
increments of $1,000 (provided that any remaining principal amount of this
Security surrendered for partial repayment shall not be less than the minimum
authorized denomination hereof), on or after the date designated as an Optional
Repayment Date on the face hereof at 100% of the principal amount to be repaid,
plus accrued interest, if any, to the Repayment Date. In order for this
Security to be repaid, the Company must receive at the applicable address of the
Paying Agent set forth below or at such other place or places of which the
Company shall from time to time notify the Holder of the within Security, at
least 30 but not more than 45 days prior to an Optional Repayment Date, either
(i) this Security, 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 Security, (b) the principal amount of this Security and the
amount of this Security 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 Security, 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
Security and form duly completed are received by the Company by such fifth
Business Day). Any such election shall be irrevocable. The address to which
such deliveries to The First National Bank of Chicago are to be made is One
First National Plaza, Suite 0126, Chicago, Illinois 60670 (or, at such other
place as the Company shall notify the Holders of the Securities of this series).
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for repayment will be determined by the Company,
whose determination will be final and binding. Upon any partial repayment, this
Security shall be cancelled and a new Security or Securities for the remaining
principal amount hereof shall be issued in the name of the Holder of this
Security.
AUTHORIZED DENOMINATIONS
Unless otherwise provided on the face hereof, this Security is issuable
only in registered form without coupons in denominations of $1,000 or any amount
in excess thereof which is an integral multiple of $1,000.
7
<PAGE>
REGISTRATION OF TRANSFER
Upon due presentment for registration of transfer of this Security at the
office or agency of the Company maintained in New York City or Chicago,
Illinois, 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.
If this Security is a Global Security (as specified above), 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, and the Company does not appoint a successor Depositary within 90 days
after receiving such notice or after becoming aware that the Depositary has
ceased to be so registered as a clearing agency, (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 Date and other terms and of authorized denominations
aggregating a like amount.
If this Security is a Global Security (as specified above), 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.
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 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 PERSONAL RECOURSE
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
8
<PAGE>
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.
DEFINED TERMS
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
GOVERNING LAW
This Security shall be governed by and construed in accordance with the law
of the State of Minnesota, without regard to principles of conflicts of laws.
9
<PAGE>
--------------------
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHT
--------------------
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Security (or the portion thereof specified below), pursuant to
its terms, on the Optional Repayment Date first occurring after the date of
receipt by the Company of the within Security as specified below (the "Repayment
Date"), at a Repayment Price equal to 100% of 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 option to elect repayment to be effective, the Company must
receive, at the applicable address of the Paying Agent set forth in the within
Security or at such other place or places of which the Company shall from time
to time notify the Holder of the within Security, at least 30 but not more than
45 days prior to an Optional Repayment Date, either (i) this Security, 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 Security, (b) the
principal amount of the Security and the amount of the Security to be repaid,
(c) a statement that the option to elect repayment is being irrevocably
exercised thereby, and (d) a guarantee stating that the Security to be repaid
with the form entitled "Option to Elect Repayment" on the addendum to the
Security 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 Security and form duly completed are received by the Company by
such fifth Business Day).
10
<PAGE>
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000) which the holder elects to have repaid: $__________.
If less than the entire principal amount of the within Security is to be
repaid, specify the denomination or denominations (which shall be $1,000 or an
integral multiple thereof) of the Security or Securities to be issued to the
holder for the portion of the within Securities not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid): $______________.
Date:
----------------- ----------------------------------------
Notice: The signature to this Option to
Elect Repayment must correspond with the
name as written upon page 2 of the
within Security in every particular
without alteration or enlargement or any
change whatsoever.
11
<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), assign(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 all rights thereunder and
does hereby irrevocably constitute and appoint __________________ attorney to
transfer the said Security on the books of the within-named Company, with full
power of substitution in the premises.
12
<PAGE>
Dated:
-------------------------
-----------------------------------
Signature Guaranteed:
-----------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Security in every particular, without
alteration or enlargement or any change whatsoever.
13
<PAGE>
Exhibit 4.2
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT: $
REGISTERED NO.
DAYTON HUDSON CORPORATION
FORM OF
MEDIUM-TERM FLOATING RATE NOTE, SERIES I
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
/ / Check box if this Security is a Global Security.
Applicable if this Security is a Global Security:
[Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (55 Water Street, New York,
New York) ("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.]
[If applicable, this Security will contain information required by U.S.
Federal Income Tax "Original Issue Discount" rules, as that term is defined in
the Internal Revenue Code of 1986, as amended.]
ORIGINAL ISSUE DATE: ISSUE PRICE: % STATED MATURITY DATE:
BASE RATE: INITIAL INTEREST RATE: INTEREST PAYMENT DATES:
REGULAR RECORD DATES: INTEREST DETERMINATION CALCULATION DATES:
DATES:
MAXIMUM RATE: MINIMUM RATE: INTEREST RESET PERIOD:
<PAGE>
INTEREST RESET DATES: INITIAL INTEREST RESET SPREAD MULTIPLIER:
DATE:
SPREAD: + INDEX MATURITY: DESIGNATED CMT MATURITY
- INDEX AND DESIGNATED
TELERATE PAGE
(Only applicable if the Base
Rate is CMT):
DESIGNATED LIBOR PAGE INDEX CURRENCY CALCULATION AGENT:
(Only applicable if the (Only applicable if
Base Rate is LIBOR): the Base Rate is LIBOR):
/ / LIBOR Telerate (p. __)
/ / LIBOR Reuters (p. __)
OPTIONAL REDEMPTION INITIAL REDEMPTION DATE INITIAL REDEMPTION
(at option of Company): (at option of Company): PERCENTAGE:
ANNUAL REDEMPTION SINKING FUND: OPTION TO ELECT REPAYMENT:
PERCENTAGE REDUCTION:
OPTIONAL REPAYMENT MINIMUM DENOMINATIONS: DEPOSITARY
DATE(S): / / $1,000 (Only applicable if this
/ / Other Security is a Global
Security):
OTHER TERMS:
DAYTON HUDSON CORPORATION, a corporation duly organized and existing under
the laws of the State of Minnesota (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ______________________________, or
registered assigns, the principal sum of
__________________________________Dollars ($_____________) on the Stated
Maturity Date shown above (except to the extent redeemed or repaid prior to such
date) and to pay interest, if any, 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 the principal
amount hereof at such offices and agencies, at a rate per annum equal to the
Initial Interest Rate specified above until the Initial 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 CD Rate", "Determination of
Commercial Paper Rate", "Determination of Federal Funds Rate", "Determination of
LIBOR", "Determination of Prime Rate", "Determination of Treasury Rate" or
"Determination of CMT Rate", depending
2
<PAGE>
upon whether the Base Rate is CD Rate, Commercial Paper Rate, Federal Funds
Rate, LIBOR, Prime Rate, Treasury Rate or CMT Rate, as specified above.
Any Interest Payment Date specified above that would fall on a day that is
not a Business Day, other than an Interest Payment Date that is also the date of
Maturity, shall be the following day that is a Business Day, except that, if the
Base Rate specified above is LIBOR and such following Business Day is in the
next calendar month, such Interest Payment Date shall be the immediately
preceding day that is a Business Day. If the date of Maturity would fall on a
day that is not a Business Day, the payment of principal and any premium and
interest shall be made on the following Business Day, with the same force and
effect as if made on the due date, and no additional interest shall accrue on
the amount so payable for the period from and after such date of Maturity. For
purposes of this Security, "Business Day" means (a) any day other than a
Saturday, Sunday or a legal holiday or a day on which banking institutions are
authorized or required by law or regulation to close in New York City or
Chicago, Illinois, and (b) if the Base Rate specified above is LIBOR, any such
day which is also a London Banking Day. For purposes of this Security, ("London
Banking Day" means any day on which dealings in deposits in the Index Currency
specified above are transacted in the London interbank market).
Interest payments on this Security shall be the amount of interest accrued
from and including the Original Issue Date specified above or from and including
the last date to which interest has been paid, or provided for, as the case may
be, to but excluding, the following Interest Payment Date or the date of
Maturity. If this Security has been issued upon transfer of, in exchange for,
or in replacement of, a Predecessor Security, interest on this Security shall
accrue from the last Interest Payment Date to which interest was paid on such
Predecessor Security or, if no interest was paid on such Predecessor Security,
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 shall be
paid to the Person in whose name this Security is registered at the close of
business on the Regular Record Date (whether or not a Business Day) next
preceding such Interest Payment Date, and interest payable upon the Maturity
(whether or not such date of Maturity is an Interest Payment Date) shall be paid
to the Person to whom principal is payable; provided, however, that the first
payment of interest on a Security originally issued and dated between a Regular
Record Date specified above and an Interest Payment Date shall 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.
Unless otherwise specified on the face hereof, "Regular Record Date" shall mean
the fifteenth calendar day (whether or not a Business Day) immediately preceding
the related Interest Payment Date.
Any interest not punctually paid or duly provided for shall 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
3
<PAGE>
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 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.
Until this Security is paid in full or payment therefor in full is duly
provided for, the Company shall at all times maintain a Paying Agent (which
Paying Agent may be the Trustee) in New York City and Chicago, Illinois. The
Company has initially appointed The First National Bank of Chicago as the Paying
Agent at its offices at One First National Plaza, Suite 0126, Chicago, Illinois
60670 and at 14 Wall Street, 8th Floor, Window 2, New York, New York 10005.
If this Security is a Global Security: Payments of principal and any
premium and interest on this Security shall be made to DTC or its nominee, as
Holder of this Security, by wire transfer of immediately available funds.
If this Security is not a Global Security: Payment of interest on this
Security (other than payments of interest at Maturity) shall be made by check
mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or, in the case of a Holder of $50,000,000 or
more in aggregate principal amount of Securities of this series, by wire
transfer of immediately available funds to such account as may have been
designated by such Holder. Any such designation for wire transfer purposes
shall be made by filing the appropriate information with the Paying Agent at its
corporate trust office not later than 15 calendar days prior to the applicable
Interest Payment Date and, unless revoked by written notice to the Paying Agent
received by the Paying Agent on or prior to the Regular Record Date immediately
preceding the applicable Interest Payment Date, shall remain in effect with
respect to any further payments with respect to this Security payable to such
Holder. Payment of principal of and interest, if any, on this Security at
Maturity shall be made against presentation of this Security at the office or
agency of the Company maintained for that purpose in New York City or Chicago,
Illinois.
The Company shall pay any administrative costs imposed by banks on payors
in making payments on this Security in immediately available funds and the
Holder of this Security will pay any administrative costs imposed by banks on
payees in connection with such payments. Any tax, assessment or governmental
charge imposed upon payments on this Security shall be borne by the Holder of
this Security.
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.
4
<PAGE>
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.
5
<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.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
----------------------------------
Authorized Signature
6
<PAGE>
[Reverse of Note]
DAYTON HUDSON CORPORATION
MEDIUM-TERM FLOATING RATE NOTE, SERIES I
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
GENERAL
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 of the
Securities, which series is limited to an aggregate principal amount of
$1,325,000,000 or the equivalent thereof in one or more foreign or composite
currencies, designated as Medium-Term Notes, Series I, of the Company. The
Securities of this series may mature at different times, bear interest, if any,
at different rates, be redeemable at different times or not at all, be repayable
at the option of the Holder at different times or not at all, be issued at an
original issue discount and be denominated in different currencies.
INTEREST RATE RESET
The interest rate in effect from the Original Issue Date 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 specified on the face hereof following the Original Issue Date specified on
the face hereof, the rate at which interest on this Security is payable shall be
adjusted daily, weekly, monthly, quarterly, semi-annually or annually as
specified on the face hereof under "Interest Reset Period". 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 Security 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 and adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, and/or by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
7
<PAGE>
If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be the following Business Day, except that
if the Base Rate specified above is LIBOR and if such following Business Day is
in the next calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.
Accrued interest shall be calculated by multiplying the principal amount by
an accrued interest factor. Such accrued interest factor shall be computed by
adding the interest factor calculated for each day in the period for which
interest is being paid. Unless otherwise specified on the face hereof, the
interest factor for each such day will be computed by dividing the interest rate
(expressed as a decimal) applicable to such day by 360, if the Base Rate is the
CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the Prime
Rate or by the actual number of days in the year, if the Base Rate is the
Treasury Rate or the CMT Rate.
Unless otherwise specified on the face hereof, all percentages resulting
from any calculation referred to herein shall be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of one percentage point rounded upward (e.g., 9.876545% (or. 09876545) being
rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being rounded to
9.87654% (or .0987654)), and all dollar amounts used in or resulting from any
such calculation on this Security shall be rounded to the nearest cent (with
one-half cent being rounded upwards).
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 Calculation Date.
The interest rate on this Security shall in no event be higher than the
maximum rate permitted by Minnesota law, as the same may be modified by United
States law of general application.
At the request of the Holder hereof, the Calculation Agent shall provide to
the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that shall become effective on the next Interest Reset Date
with respect to this Security. The Calculation Agent's determination of any
interest rate shall be final and binding in the absence of manifest error.
DETERMINATION OF CD RATE
If the Base Rate 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 (each, a "CD Interest Determination Date") shall equal the
rate on such date for negotiable certificates of deposit having the specified
Index Maturity as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest
8
<PAGE>
Rates" or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)."
The following procedures shall be followed if the CD Rate cannot be
determined as described above:
- If the above rate is not published in H.15(519) by 9:00 a.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on
the applicable CD Interest Determination Date set forth in the daily
update of H.15(519), available through the world wide website of the
Board of Governors of the Federal Reserve System at
http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication ("H.15 Daily Update"), or another recognized electronic
source used for the purpose of displaying this rate, for the day in
respect of certificates of deposit having the Index Maturity specified
on the face hereof under the caption "CDs (secondary market)."
- If such rate is not yet published in either H.15(519) or the H.15
Daily Update or another recognized electronic source by 3:00 p.m., New
York City time, on the Calculation Date, then the Calculation Agent
shall determine the CD Rate to be the arithmetic mean of the secondary
market offered rates as of 10:00 a.m., New York City time, on such CD
Interest Determination Date of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City
selected by the Calculation Agent for negotiable certificates of
deposit in a denomination of $5,000,000 of major United States money
center banks of the highest credit standing (in the market for
negotiable certificates of deposit) with a remaining maturity closest
to the Index Maturity specified on the face hereof.
- If the dealers selected by the Calculation Agent are not quoting as
mentioned immediately above, the CD Rate in effect immediately prior
to such CD Interest Determination Date shall not change and shall
remain the CD Rate in effect on such CD Interest Determination Date.
DETERMINATION OF COMMERCIAL PAPER RATE
If the Base Rate 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 (each, a "Commercial Paper Interest
Determination Date") shall equal the Money Market Yield (calculated as described
below) of the rate on such date for commercial paper having the Index Maturity
specified on the face hereof as published in H.15(519) under the heading
"Commercial Paper--Nonfinancial."
9
<PAGE>
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
- If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on the applicable Commercial Paper
Interest Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published in H.15 Daily
Update, or another recognized electronic source used for the purpose
of displaying this rate, under the heading "Commercial
Paper--Nonfinancial."
- If by 3:00 p.m., New York City time, on such Calculation Date such
rate is not yet published in either H.15(519) or H.15 Daily Update or
another recognized electronic source, then the Calculation Agent shall
determine the Commercial Paper Rate to be the Money Market Yield of
the arithmetic mean of the offered rates of 11:00 a.m., New York City
time, on such Commercial Paper Interest Determination Date of three
leading dealers of commercial paper in New York City selected by the
Calculation Agent for commercial paper having the Index Maturity
specified on the face hereof placed for an industrial issuer whose
bond rating is "Aa," or the equivalent, from a nationally recognized
statistical rating agency.
- If the dealers selected by the Calculation Agent are not quoting as
mentioned immediately above, the Commercial Paper Rate in effect
immediately prior to such Commercial Paper Interest Determination Date
shall not change and shall remain the Commercial Paper Rate in effect
on such Commercial Paper Interest Determination Date.
"Money Market Yield" will be a yield calculated in accordance with the
following formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
DETERMINATION OF FEDERAL FUNDS RATE
If the Base Rate 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 (each, a "Federal Funds Interest Determination
Date") shall equal the rate on that day for federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)."
10
<PAGE>
The following procedures shall be followed if the Federal Funds Rate cannot
be determined as described above:
- If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, the Federal Funds Rate shall be the rate on
the applicable Federal Funds Interest Determination Date as published
in H.15 Daily Update, or another recognized electronic source used for
the purpose of displaying this rate, under the heading "Federal
Funds/(Effective)."
- If such rate is not yet published in either H.15(519) or H.15 Daily
Update or another recognized electronic source by 3:00 p.m., New York
City time, on the Calculation Date, the Calculation Agent shall
determine the Federal Funds Rate to be the arithmetic mean of the
rates for the last transaction in overnight U.S. dollar Federal Funds
arranged by each of three leading brokers of U.S. dollar Federal Funds
transactions in New York City selected by the Calculation Agent prior
to 9:00 a.m., New York City time, on such Federal Funds Interest
Determination Date.
- If the brokers selected by the Calculation Agent are not quoting as
mentioned above, the Federal Funds Rate in effect immediately prior to
such Federal Funds Interest Determination Date shall not change and
shall remain the Federal Funds Rate in effect on such Federal Funds
Interest Determination Date.
DETERMINATION OF LIBOR
If the Base Rate specified on the face hereof is the London interbank
offered rate ("LIBOR"), the interest rate per annum determined with respect to
any Interest Determination Date specified on the face hereof (each, a "LIBOR
Interest Determination Date") shall be determined by the Calculation Agent as
follows:
- As of the LIBOR Interest Determination Date, LIBOR shall be either:
- if "LIBOR Reuters" is specified on the face hereof, the arithmetic
mean of the offered rates (unless the Designated LIBOR Page (as
defined below) by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in the
Index Currency (as defined below) having the Index Maturity
specified on the face hereof, commencing on the applicable
Interest Reset Date, that appear (or, if only a single rate is
provided as aforesaid, appears) on the Designated LIBOR Page as of
11:00 a.m., London time, on such LIBOR Interest Determination
Date; or
- if "LIBOR Telerate" is specified on the face hereof or if neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified on the face
hereof as the
11
<PAGE>
method for calculating LIBOR, the rate for deposits in the Index
Currency having the Index Maturity specified on the face hereof,
commencing on such Interest Reset Date, that appears on the
Designated LIBOR Page as of 11:00 a.m., London time, on such LIBOR
Interest Determination Date.
If fewer than the required number of applicable rates appear, LIBOR on such
LIBOR Interest Determination Date shall be determined in accordance with
the provisions described immediately below.
- With respect to a LIBOR Interest Determination Date on which fewer than
the required number of applicable rates appear on the Designated LIBOR
Page as specified immediately above, the Calculation Agent will request
the principal London offices of each of four major reference banks in
the London interbank market, as selected by the Calculation Agent, to
provide the Calculation Agent with its offered quotation for deposits
in the Index Currency for the period of the Index Maturity specified on
the face hereof, commencing on the applicable Interest Reset Date, to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such LIBOR Interest Determination Date and in a
principal amount not less than $1,000,000 (or the equivalent in the
Index Currency as applicable) that is representative for a single
transaction in such Index Currency in such market at such time. If at
least two quotations are so provided, then LIBOR on such LIBOR Interest
Determination Date shall be the arithmetic mean of such quotations.
- If only one or no such quotations are so provided, then LIBOR on such
LIBOR Interest Determination Date shall be the arithmetic mean of the
rates quoted at approximately 11:00 a.m., in the applicable principal
financial center for the country of the Index Currency, on such LIBOR
Interest Determination Date by three major banks in such principal
financial center selected by the Calculation Agent for loans in the
Index Currency to leading European banks, having the Index Maturity
specified on the face hereof and in a principal amount not less than
$1,000,000 (or the equivalent in the Index Currency as applicable) that
is representative for a single transaction in such Index Currency in
such market at such time.
- If the banks so selected by the Calculation Agent are not quoting as
mentioned immediately above, LIBOR in effect immediately prior to such
LIBOR Interest Determination Date shall not change and shall remain the
LIBOR in effect on such LIBOR Interest Determination Date.
12
<PAGE>
For purposes of the preceding discussion, the following capitalized terms
have the following meanings:
"Index Currency" means the currency specified on the face hereof (which may
be a composite currency) for which LIBOR shall be calculated. If no such
currency is specified, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means:
- if "LIBOR Reuters" is designated on the face hereof, the display on
the Reuters Monitor Money Rates Service (or any successor service) on
the page specified on the face hereof (or any other page as may
replace such page or such service (or any successor service)) for the
purpose of displaying the London interbank rates of major banks for
the applicable Index Currency; or
- if "LIBOR Telerate" is designated on the face hereof or neither "LIBOR
Reuters" nor "LIBOR Telerate" is designated on the face hereof as the
method for calculating LIBOR, the display on Dow Jones Markets Limited
(or any successor service) on page 3750 if the U.S. dollar is the
Index Currency or with respect to any other Index Currency, on the
page specified on the face hereof (or any other page as may replace
such page or such service (or any successor service)) for the purpose
of displaying the London interbank rates of major banks for the
applicable Index Currency.
DETERMINATION OF PRIME RATE
If the Base Rate 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 (each, a "Prime Interest Determination Date") shall
equal the rate on such date as published in H.15(519) under the heading "Bank
Prime Loan."
The following procedures shall be followed if the Prime Rate cannot be
determined as described above:
- If the rate is not published prior to 9:00 a.m., New York City time,
on the Calculation Date, then the Prime Rate shall be the rate on such
Prime Interest Determination Date as published in H.15 Daily Update,
or another recognized electronic source used for the purpose of
displaying this rate, opposite the caption "Bank Prime Loan."
- If the rate is not published prior to 3:00 p.m., New York City time,
on the Calculation Date, in either H.15(519) or H.15 Daily Update or
another recognized electronic source, then the Calculation Agent shall
determine the Prime Rate to be the arithmetic mean of the rates of
interest publicly
13
<PAGE>
announced by each bank that appears on the Reuters Screen US Prime1
Page (as defined below) as such bank's prime rate or base lending rate
as in effect for that Prime Interest Determination Date.
- If fewer than four rates appear on the Reuters Screen US Prime 1 Page
on such Prime Rate Interest Determination Date, then the Calculation
Agent shall determine the Prime Rate to be the arithmetic mean of the
prime rates or base lending rates (quoted on the basis of the actual
number of days in the year divided by 360) as of the close of business
on such Prime Interest Determination Date by at least three major
money center banks in New York City selected by the Calculation Agent.
- If the banks selected are not quoting as mentioned immediately above,
the Prime Rate in effect immediately prior to such Prime Interest
Determination Date shall not change and shall remain the Prime Rate in
effect on such Prime Interest Determination Date.
"Reuters Screen US Prime1 Page" means the display designated as page
"USPrime1" on the Reuters Monitor Money Rates Service (or such other page as may
replace the US Prime1 page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
DETERMINATION OF TREASURY RATE
If the Base Rate 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 (each, a "Treasury Interest Determination
Date") shall equal the rate applicable to the auction held on such date of
direct obligations of the United States ("Treasury bills") having the Index
Maturity specified on the face hereof under the caption "Investment Rate" on the
display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any
other page as may replace such page on such service ) ("Telerate Page 56") or
page 57 (or any other page as may replace such page on such service) ("Telerate
Page 57") or, if not so published by 3:00 p.m., New York City time, on the
related Calculation Date, the Bond Equivalent Yield (as hereinafter defined) of
the rate for such Treasury bills as published in H.15(519) Daily Update, or such
other recognized electronic source used for the purpose of displaying such rate,
under the heading "U.S. Government Securities/Treasury Bills/Auction High".
The following procedures shall be followed if the Treasury Rate cannot be
determined as described above:
- If the above rate is not published by 3:00 p.m., New York City time,
on the Calculation Date, the Treasury Rate shall be the Bond
Equivalent Yield of the auction rate of such Treasury bills on such
Treasury Interest Determination Date as announced by the United States
Department of the Treasury.
14
<PAGE>
- In the event that the auction rate of Treasury bills having the Index
Maturity specified on the face hereof is not published or announced as
provided above by 3:00 p.m., New York City time, on such Calculation
Date, or if no such auction is held on such Treasury Interest
Determination Date, then the Calculation Agent shall determine the
Treasury Rate to be the Bond Equivalent Yield of the rate on such
Treasury Rate Interest Determination Date of Treasury bills having the
Index Maturity specified on the face hereof as published in H.15(519)
under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market" or, if not yet published by 3:00 p.m., New York City time, on
the related Calculation Date, the rate on such Treasury Rate Interest
Determination Date of such Treasury bills as published in H.15 Daily
Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet
published in H.15(519), H.15 Daily Update or another recognized
electronic source, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Treasury 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.
- If the dealers selected by the Calculation Agent are not quoting as
mentioned immediately above, the Treasury Rate in effect immediately
prior to such Treasury Interest Determination Date shall not change
and shall remain the Treasury Rate in effect on such Treasury Interest
Determination Date.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for the security quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the interest period
for which interest is being calculated.
DETERMINATION OF CMT RATE
If the Base Rate specified on the face hereof is CMT Rate, the interest
rate per annum determined with respect to any Interest Determination Date
specified on the face hereof
15
<PAGE>
(each, a "CMT Interest Determination Date") shall equal the rate displayed on
the Designated CMT Telerate Page (as defined below) under the caption "Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
Approximately 3:45 p.m.," under the column for the Designated CMT Maturity Index
(as defined below) for:
(i) if the Designated CMT Telerate Page is 7051, such CMT Interest
Determination Date; and
(ii) if the Designated CMT Telerate Page is 7052, the week or the
month, as applicable, ended immediately before the week in which the
related CMT Interest Determination Date occurs.
The following procedures shall be used if the CMT Rate cannot be determined
as described above:
- If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be such treasury constant maturity rate
for the Designated CMT Maturity Index (as defined below) as published
in H.15(519).
- If that rate is no longer published, or if not published by 3:00 p.m.,
New York City time, on the related Calculation Date, then the CMT Rate
shall be such treasury constant maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Interest Determination Date
with respect to such Interest Reset Date as may then be published by
either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519).
- If such information is not provided by 3:00 p.m., New York City time,
on the related Calculation Date, then the Calculation Agent shall
determine the CMT Rate to be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as
of approximately 3:30 p.m., New York City time, on the CMT Interest
Determination Date reported, according to their written records, by
three leading primary United States government securities dealers
(each, a "Reference Dealer") in New York City selected by the
Calculation Agent as described in the following sentence. The
Calculation Agent shall select five Reference Dealers and shall
eliminate the highest quotation (or, in the event of overlap, one of
the highest) and the lowest quotation (or, in the event of overlap,
one of the lowest), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury notes") with an
original maturity of approximately the Designated CMT
16
<PAGE>
Maturity Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year.
- If the Calculation Agent cannot obtain three such Treasury notes
quotations, the Calculation Agent shall determine the CMT Rate to be a
yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 p.m., New York City time,
on the CMT Interest Determination Date of three Reference Dealers in
New York City (selected using the same method described above) for
Treasury notes with an original maturity of the number of years that
is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100,000,000. If two Treasury
notes with an original maturity as described above have remaining
terms to maturity equally close to the Designated CMT Maturity Index,
the Calculation Agent shall obtain quotations for the Treasury note
with the shorter remaining term to maturity.
- If three or four (but not five) of such Reference Dealers are quoting
as described above, then the CMT Rate shall be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the
lowest of such quotes shall be eliminated.
- If fewer than three Reference Dealers selected by the Calculation
Agent are quoting as mentioned immediately above, the CMT Rate in
effect immediately prior to such CMT Interest Determination Date shall
not change and shall remain the CMT Rate in effect on such CMT
Interest Determination Date.
"Designated CMT Telerate Page" means the display on the Telerate (or any
successor service) on the page specified on the face hereof (or any other page
as may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)). If no such page is specified,
the Designated CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate shall be
calculated.
EVENTS OF DEFAULT
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.
17
<PAGE>
MODIFICATION AND WAIVERS; OBLIGATION OF THE COMPANY ABSOLUTE
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 exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon 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
shall be made only from proceeds of such money or Government Obligations.
DEFEASANCE AND COVENANT DEFEASANCE
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.
REDEMPTION
If so provided on the face hereof, the Company may at its option redeem
this Security in whole or from time to time in part in increments of $1,000
(provided that any remaining principal amount of this Security shall not be less
than the minimum authorized denomination hereof) on or after the date designated
as the Initial Redemption Date on the face hereof at 100% of the unpaid
principal amount hereof or the portion thereof redeemed multiplied by a
percentage (the "Redemption Percentage"), together with accrued interest, if
any, to the Redemption Date. The Redemption Percentage shall initially be equal
to the Initial Redemption Percentage specified on the face hereof and shall
decline at each anniversary of the Initial Redemption Date by the amount of the
Annual Redemption Percentage Reduction specified on the face hereof, until the
Redemption Percentage is equal to 100%. The Company may exercise such option by
causing the Trustee to mail a notice of such redemption at least 30 but not more
than 60 days prior to the applicable Redemption Date to each Holder of the
18
<PAGE>
Securities of this series to be redeemed. In the event of redemption of this
Security in part only, the Company shall issue a new Security or Securities for
the unredeemed portion hereof in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities of this series with
like tenor and terms are to be redeemed, the Securities to be redeemed shall be
selected by the Trustee by such method as the Trustee shall deem fair and
appropriate.
SINKING FUND
Unless otherwise specified on the face hereof, this Security shall not be
entitled to any sinking fund.
REPAYMENT
If so provided on the face hereof, this Security will be repayable prior to
the Stated Maturity Date at the option of the Holder, in whole or in part and in
increments of $1,000 (provided that any remaining principal amount of this
Security surrendered for partial repayment shall not be less than the minimum
authorized denomination hereof), on or after the date designated as an Optional
Repayment Date on the face hereof at 100% of the principal amount to be repaid,
plus accrued interest, if any, to the Repayment Date. In order for this
Security to be repaid, the Company must receive at the applicable address of the
Paying Agent set forth below or at such other place or places of which the
Company shall from time to time notify the Holder of the within Security, at
least 30 but not more than 45 days prior to an Optional Repayment Date, either
(i) this Security, 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 Security, (b) the principal amount of this Security and the
amount of this Security 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 Security, 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
Security and form duly completed are received by the Company by such fifth
Business Day). Any such election shall be irrevocable. The address to which
such deliveries to The First National Bank of Chicago are to be made is One
First National Plaza, Suite 0126, Chicago, Illinois 60670 (or, at such other
place as the Company shall notify the Holders of the Securities of this series).
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for repayment will be determined by the Company,
whose determination will be final and binding. Upon any partial repayment, this
Security shall be cancelled and a new Security or Securities for the remaining
principal amount hereof shall be issued in the name of the Holder of this
Security.
19
<PAGE>
AUTHORIZED DENOMINATIONS
Unless otherwise provided on the face hereof, this Security is issuable
only in registered form without coupons in denominations of $1,000 or any amount
in excess thereof which is an integral multiple of $1,000.
REGISTRATION OF TRANSFER
Upon due presentment for registration of transfer of this Security at the
office or agency of the Company maintained in New York City or Chicago,
Illinois, 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.
If this Security is a Global Security (as specified above), 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, and the Company does not appoint a successor Depositary within 90 days
after receiving such notice or after becoming aware that the Depositary has
ceased to be so registered as a clearing agency, (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 Date and other terms and of authorized denominations
aggregating a like amount.
If this Security is a Global Security (as specified above), 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.
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 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.
20
<PAGE>
NO PERSONAL RECOURSE
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, shareholder, 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.
DEFINED TERMS
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
GOVERNING LAW
This Security shall be governed by and construed in accordance with the law
of the State of Minnesota, without regard to principles of conflicts of laws.
21
<PAGE>
--------------------
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHT
--------------------
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Security (or the portion thereof specified below), pursuant to
its terms, on the Optional Repayment Date first occurring after the date of
receipt by the Company of the within Security as specified below (the "Repayment
Date"), at a Repayment Price equal to 100% of 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 option to elect repayment to be effective, the Company must
receive, at the applicable address of the Paying Agent set forth in the within
Security or at such other place or places of which the Company shall from time
to time notify the Holder of the within Security, at least 30 but not more than
45 days prior to an Optional Repayment Date, either (i) this Security, 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 Security, (b) the
principal amount of the Security and the amount of the Security to be repaid,
(c) a statement that the option to elect repayment is being irrevocably
exercised thereby, and (d) a guarantee stating that the Security to be repaid
with the form entitled "Option to Elect Repayment" on the addendum to the
Security 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 Security and form duly completed are received by the Company by
such fifth Business Day).
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000) which the Holder elects to have repaid: $__________.
22
<PAGE>
If less than the entire principal amount of the within Security is to be
repaid, specify the denomination or denominations (which shall be $1,000 or an
integral multiple thereof) of the Security or Securities to be issued to the
Holder for the portion of the within Securities not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid): $______________.
Date:
----------------- ----------------------------------------
Notice: The signature to this Option to
Elect Repayment must correspond with the
name as written upon page 2 of the
within Security in every particular
without alteration or enlargement or any
change whatsoever.
23
<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), assign(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 all rights thereunder and
does hereby irrevocably constitute and appoint __________________ attorney to
transfer the said Security on the books of the within-named Company, with full
power of substitution in the premises.
24
<PAGE>
Dated:
-------------------------
------------------------------
Signature Guaranteed:
------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Security in every particular, without
alteration or enlargement or any change whatsoever.
25
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
INTEREST CALCULATION
AGENCY AGREEMENT
BETWEEN
DAYTON HUDSON CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
Dated as of April 15, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
SECTION 1. APPOINTMENT OF CALCULATION AGENT 1
SECTION 2. CALCULATION OF BASE RATES 1
SECTION 3. NEW BASE RATES 2
SECTION 4. FEES AND EXPENSES 2
SECTION 5. RIGHTS AND LIABILITIES OF CALCULATION AGENT 2
SECTION 6. RIGHT OF CALCULATION AGENT TO OWN FLOATING RATE NOTES 3
SECTION 7. DUTIES OF CALCULATION AGENT 3
SECTION 8. TERMINATION, RESIGNATION OR REMOVAL OF CALCULATION AGENT 3
SECTION 9. APPOINTMENT OF SUCCESSOR CALCULATION AGENT 3
SECTION 10. INDEMNIFICATION 3
SECTION 11. MERGER, CONSOLIDATION OR SALE OF BUSINESS BY CALCULATION AGENT 4
SECTION 12. NOTICES 4
SECTION 13. BENEFIT OF AGREEMENT 4
SECTION 14. GOVERNING LAW 4
SECTION 15. AMENDMENTS 5
SECTION 16. COUNTERPARTS 5
</TABLE>
<PAGE>
[Medium-Term Notes, Series I]
INTEREST CALCULATION
AGENCY AGREEMENT
BETWEEN
DAYTON HUDSON CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
Dated as of April 15, 1999
DAYTON HUDSON CORPORATION, a Minnesota corporation (the "Issuer"), proposes
to issue and sell its Medium-Term Notes, Series I (the "Notes"), from time to
time under, and pursuant to, the terms of an Indenture, dated as of October 3,
1996, between the Issuer and The First National Bank of Chicago, as trustee (in
such capacity, the "Trustee") (the "Indenture"). All capitalized terms used
herein but not defined shall have the meanings as set forth in the Prospectus,
dated October 13, 1998, as supplemented by the Prospectus Supplement dated April
15, 1999, which is attached hereto as Exhibit A.
For the purpose of providing for an agent of the Issuer to (i) calculate
the base rates applicable to those Notes on which interest is to accrue at a
variable or floating rate ("Floating Rate Notes"), determined by reference to
the CD Rate, the Commercial Paper Rate, Federal Funds Rate, LIBOR, the Prime
Rate, the Treasury Rate, or the CMT Rate, (collectively, the "Base Rates") as
are specified and described in the form of the Floating Rate Notes, a copy of
which is attached hereto as Exhibit B, and (ii) determine the interest payable
with respect to the Floating Rate Notes, the Issuer and The First National Bank
of Chicago hereby agree as follows:
SECTION 1. APPOINTMENT OF CALCULATION AGENT. The Issuer hereby appoints
The First National Bank of Chicago as Calculation Agent (in such capacity, the
"Calculation Agent") of the Issuer with respect to any Floating Rate Notes to be
issued by the Issuer under and pursuant to the terms of the Indenture, and the
Calculation Agent hereby accepts its obligations as set forth in this Agreement
upon the terms and conditions set forth herein.
SECTION 2. CALCULATION OF BASE RATES. As soon as reasonably practical on
or after each Interest Determination Date set forth in a Floating Rate Note (but
on or before the applicable Calculation Date provided in such Note), the
Calculation Agent shall (i) determine the applicable Base Rate in accordance
with such Floating Rate Note and (ii) determine the amount of interest payable
on such Floating Rate Note on the applicable Interest Payment Date or maturity,
redemption or repayment date, as the case may be, and shall notify the Issuer,
the Trustee and the Paying Agent of such Base Rate and amount of interest so
payable. If at any time the Calculation Agent is not also acting as Trustee
under the Indenture, the Issuer will cause the
<PAGE>
Trustee to give the Calculation Agent at least three Business Days notice of
each Interest Determination Date. The Calculation Agent will, upon the request
of the holder of any Floating Rate Note, provide the interest rate then in
effect with respect to such Floating Rate Note and, if determined, the interest
rate with respect to such Floating Rate Note which will become effective on the
next Interest Reset Date.
In the event that the calculation of the applicable Base Rate requires the
Calculation Agent to select (i) leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in New York City (in connection with determining
the CD Rate), (ii) leading dealers of commercial paper in New York City (in
connection with determining the Commercial Paper Rate), (iii) leading brokers of
U.S. dollar Federal Funds transactions in New York City (in connection with
determining the Federal Funds Rate), (iv) principal London offices of major
reference banks in the London interbank market (in connection with determining
LIBOR), (v) major money center banks in New York City (in connection with
determining the Prime Rate), (vi) leading primary United States government
securities dealers (in connection with determining the Treasury Rate), or
(vii) leading primary United States government securities dealers in New York
City (in connection with determining the CMT Rate), the Calculation Agent will
notify the Issuer, prior to the applicable Calculation Date, in accordance with
Section 12 hereof, of which entities it has so selected; PROVIDED, HOWEVER, that
any failure to so notify the Issuer will have no effect on the validity of the
Notes.
SECTION 3. NEW BASE RATES. If the Issuer proposes to issue Floating Rate
Notes whose interest rate will be determined on a basis or formula not referred
to above (a "New Base Rate"), the Issuer shall give a description of such New
Base Rate to the Calculation Agent. The Calculation Agent shall determine if it
is able and willing to calculate the New Base Rate and upon its agreement in
writing to do so the "Base Rates" shall be deemed to include the New Base Rate.
If the Calculation Agent notifies the Issuer that it is not able or willing to
calculate the New Base Rate, or that it is only willing to do so on the basis of
an increase of its fees not acceptable to the Issuer, the Calculation Agent
shall have no responsibility with respect to such New Base Rate and the Issuer
shall appoint a different calculation agent to determine the New Base Rate.
SECTION 4. FEES AND EXPENSES. The Calculation Agent shall be entitled to
such compensation for its services under this Agreement as may be agreed upon
with the Issuer, and the Issuer shall pay such compensation and shall reimburse
the Calculation Agent, upon receiving a statement thereof from the Calculation
Agent, for all reasonable out-of-pocket expenses, disbursements and advances
(including the fees of any of its agents and attorneys) incurred or made by the
Calculation Agent in connection with the services rendered by it under this
Agreement, except any such expenses, disbursements or advances attributable to
its negligence, willful misconduct or bad faith.
SECTION 5. RIGHTS AND LIABILITIES OF CALCULATION AGENT. The Calculation
Agent shall incur no liability for, or in respect of, any action taken, omitted
to be taken or suffered by it in good faith in reliance upon, any Floating Rate
Note or certificate, affidavit, instruction, notice, request, direction, order,
statement or other paper, document or other communication reasonably believed by
it to be genuine. Any certificate, affidavit, instruction, notice, request,
direction, order, statement or other communication from the Issuer made or given
by it and sent, delivered or directed to the Calculation Agent under, pursuant
to or as permitted by any provisions of this Agreement shall be sufficient for
purposes of this Agreement if such communication is in writing and signed by any
person whom the Calculation Agent reasonably believes to be a duly authorized
officer of the Issuer. With respect to matters of law, the Calculation Agent
may consult with counsel satisfactory to it, and the advice or opinion of such
counsel shall constitute full and complete authorization and protection of the
Calculation Agent with respect to any action taken, omitted to be taken or
2
<PAGE>
suffered by it hereunder in good faith and in accordance with and in reliance
upon the advice or opinion of such counsel.
SECTION 6. RIGHT OF CALCULATION AGENT TO OWN FLOATING RATE NOTES. The
Calculation Agent may act as Trustee under the Indenture and it, its officers,
employees and shareholders may become owners of, or acquire any interests in,
Floating Rate Notes, with the same rights as if the Calculation Agent were not
the Calculation Agent hereunder, and may engage in, or have an interest in, any
financial or other transaction with the Issuer as if the Calculation Agent were
not the Calculation Agent hereunder.
SECTION 7. DUTIES OF CALCULATION AGENT. In acting under this Agreement
and in connection with the Floating Rate Notes, the Calculation Agent shall be
obligated to perform only such duties as are specifically set forth herein and
no other duties or obligations on the part of the Calculation Agent, in its
capacity as such, shall be implied by this Agreement. In acting under this
Agreement, the Calculation Agent (in its capacity as such) does not assume any
obligation towards, or any relationship of agency or trust for or with, the
holders of the Notes.
SECTION 8. TERMINATION, RESIGNATION OR REMOVAL OF CALCULATION AGENT. The
Calculation Agent may at any time resign and terminate its obligations under
this Agreement by giving no less than 90 days written notice to the Issuer,
unless the Issuer consents in writing to a shorter time. Upon receipt of notice
of such resignation and termination by the Calculation Agent, the Issuer agrees
promptly to appoint a successor Calculation Agent. The Issuer may remove the
Calculation Agent at any time by giving written notice to the Calculation Agent
and specifying the date when the removal shall become effective; PROVIDED,
HOWEVER, that so long as any Floating Rate Notes are outstanding, no resignation
or removal, whether by the Calculation Agent or by the Issuer, shall become
effective prior to the date of the appointment, by the Issuer, as provided in
Section 9 hereof, of a successor Calculation Agent and the acceptance of such
appointment by such successor Calculation Agent. If an instrument of acceptance
by a successor Calculation Agent shall not have been delivered to the resigning
Calculation Agent within 30 days after its giving of such notice of resignation,
the resigning Calculation Agent may petition any court of competent jurisdiction
for the appointment of a successor Calculation Agent. Upon resignation or
removal of the Calculation Agent pursuant to the provisions of this Section,
such Calculation Agent (the "Retiring Calculation Agent") shall be entitled to
the payment of any compensation owed to it by the Issuer hereunder and to the
reimbursement, upon provision of a statement thereof by the Retiring Calculation
Agent, of all reasonable expenses, disbursements and advances incurred or made
by the Retiring Calculation Agent in connection with the services rendered by it
hereunder, as provided by Section 4 hereof, and the provisions of Section 10
shall remain in effect following such resignation or removal.
SECTION 9. APPOINTMENT OF SUCCESSOR CALCULATION AGENT. Any successor
Calculation Agent appointed by the Issuer or by a court pursuant to this
Agreement as a result of the resignation or removal of a Calculation Agent
pursuant to the provisions of Section 8 hereof shall execute and deliver to the
Retiring Calculation Agent and to the Issuer an instrument accepting such
appointment, and thereupon such successor Calculation Agent shall, without any
further act or instrument, become vested with all the rights, immunities, duties
and obligations of the Retiring Calculation Agent, with like effect as if
originally named as Calculation Agent hereunder, and the Retiring Calculation
Agent shall thereupon be obligated to transfer and deliver, and such successor
Calculation Agent shall be entitled to receive and accept, copies of any
available records maintained by the Calculation Agent in connection with the
performance of its obligations hereunder.
3
<PAGE>
SECTION 10. INDEMNIFICATION. The Issuer shall indemnify and hold harmless
the Calculation Agent, its officers and employees from and against all actions,
claims, damages, liabilities, losses and reasonable expenses (including legal
fees and expenses) which it may incur or sustain relating to or arising out of
the exercise by the Calculation Agent of its powers and duties hereunder, except
actions, claims, damages, liabilities, losses and expenses caused by the
negligence, willful misconduct or bad faith of the Calculation Agent, its
officers or employees. This Section 10 shall survive the payment in full of all
obligations under the Floating Rate Notes, whether by redemption, repayment or
otherwise, the termination of this Agreement, or the resignation or removal of
the Calculation Agent.
SECTION 11. MERGER, CONSOLIDATION OR SALE OF BUSINESS BY CALCULATION
AGENT. Any corporation into which the Calculation Agent may be merged,
converted or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Calculation Agent may be a party, or
any corporation to which the Calculation Agent may sell or otherwise transfer
all or substantially all of its corporate trust business, shall, to the extent
permitted by applicable law, become the Calculation Agent under this Agreement
without the execution of any document or any further act by the parties hereto;
PROVIDED that such successor Calculation Agent shall assume, or be deemed to
have assumed, all of the obligations and liabilities of the predecessor
Calculation Agent under this Agreement.
SECTION 12. NOTICES. Any notice or other communication given hereunder
shall be delivered in person, sent by letter, telecopy or telex or communicated
by telephone (subject, in the case of communication by telephone, to written
confirmation dispatched within 24 hours) to the addresses given below or such
other address as the party to receive such notice may have previously specified:
To the Issuer:
Dayton Hudson Corporation
777 Nicollet Mall
Minneapolis, MN 55402
Attention: Treasurer
Telecopy: (612) 370-5508
To the Calculation Agent or to the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Department
Telecopy: (312) 407-4656
Any notice hereunder given by letter, telecopy or telex shall be deemed to have
been received when it would have been received in the ordinary course of post or
transmission, as the case may be.
4
<PAGE>
SECTION 13. BENEFIT OF AGREEMENT. Except as provided herein this
Agreement is solely for the benefit of the parties hereto and their successors
and assigns and no other person shall acquire or have any rights under or by
virtue hereof.
SECTION 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 15. AMENDMENTS. This Agreement may only be amended by a writing
signed by the parties hereto.
SECTION 16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into the date and year
first above written.
DAYTON HUDSON CORPORATION
By:/s/ Stephen C. Kowalke
-----------------------------------
Name: Stephen C. Kowalke
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO
By:/s/ R. Tarnas
----------------------------
Name: R. Tarnas
Title: Vice President
6
