SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                 --------------

                                   FORM 10-Q



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934.

              For the quarterly period ended     April 30, 1994
                                              ---------------------



                       Commission file number   1-6049
                                               ----------



                           Dayton Hudson Corporation
- - -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Minnesota                                            41-0215170
- - -------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer 
incorporation or organization)                              Identification No.)



    777 Nicollet Mall             Minneapolis, Minnesota             55402
- - -------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)


Registrant's telephone number, including area code        (612) 370-6948
                                                   ----------------------------


                                     None
- - -------------------------------------------------------------------------------
   Former name, former address and former fiscal year, if changed since last 
                                    report.



The registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

The number of shares outstanding of common stock as of April 30, 1994 was
71,563,815.

 
                   DAYTON HUDSON CORPORATION AND SUBSIDIARIES

                               TABLE OF CONTENTS

PAGE NO. PART I FINANCIAL INFORMATION: ITEM 1 - FINANCIAL STATEMENTS Condensed Consolidated Results of Operations for the 1 Three Months and Twelve Months ended April 30, 1994 and May 1, 1993 Condensed Consolidated Statements of Financial Posi- 2 tion at April 30, 1994, January 29, 1994 and May 1, 1993 Condensed Consolidated Statements of Cash Flows for 3 the Three Months ended April 30, 1994 and May 1, 1993 Notes to Condensed Consolidated Financial Statements 4 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF 5-7 OPERATIONS AND FINANCIAL CONDITION PART II OTHER INFORMATION: ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY 8 HOLDERS ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 9 Signatures 10 Exhibit Index 11
PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED Dayton Hudson Corporation RESULTS OF OPERATIONS and Subsidiaries
(Millions of Dollars, Except Per-Share Data) Three Months Ended Twelve Months Ended - - ---------------------------------------------------------------------------------------- APRIL 30, May 1, APRIL 30, May 1, (Unaudited) 1994 1993 1994 1993 - - ---------------------------------------------------------------------------------------- REVENUES $4,465 $4,040 $19,658 $18,248 COSTS AND EXPENSES Cost of retail sales, buying and occupancy 3,253 2,973 14,444 13,392 Selling, publicity and administrative 820 698 3,297 3,020 Depreciation 129 124 503 472 Interest expense, net 106 112 440 441 Taxes other than income taxes 93 85 351 320 - - ---------------------------------------------------------------------------------------- Total Costs and Expenses 4,401 3,992 19,035 17,645 - - ---------------------------------------------------------------------------------------- Earnings Before Income Taxes 64 48 623 603 Provision for Income Taxes 25 18 239 225 - - ---------------------------------------------------------------------------------------- NET EARNINGS $ 39 $ 30 $ 384 $ 378 ======================================================================================== PRIMARY EARNINGS PER SHARE $ 0.48 $ 0.35 $ 5.11 $ 4.97 FULLY DILUTED EARNINGS PER SHARE $ 0.47 $ 0.35 $ 4.89 $ 4.77 ======================================================================================== DIVIDENDS DECLARED PER COMMON SHARE $ 0.42 $ 0.40 $ 1.62 $ 1.56 AVERAGE COMMON SHARES OUTSTANDING (MILLIONS): Primary 71.9 71.8 71.8 71.6 Fully Diluted 76.3 76.1 76.1 76.0 ========================================================================================
See accompanying Notes to Condensed Consolidated Financial Statements. 1
CONDENSED CONSOLIDATED STATEMENTS Dayton Hudson Corporation OF FINANCIAL POSITION and Subsidiaries APRIL 30, January 29, May 1, (Millions of Dollars) 1994 1994* 1993 - - ---------------------------------------------------------- ----------- ----------- ----------- (Unaudited) (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 181 $ 321 $ 156 Accounts receivable 1,409 1,536 1,280 Merchandise inventories 2,727 2,497 2,812 Other 119 157 107 - - ---------------------------------------------------------------------------------------------- Total Current Assets 4,436 4,511 4,355 PROPERTY AND EQUIPMENT 8,405 8,283 7,852 Accumulated depreciation (2,382) (2,336) (2,245) ------- ------- ------- Net Property and Equipment 6,023 5,947 5,607 OTHER 342 320 359 - - ---------------------------------------------------------------------------------------------- TOTAL ASSETS $10,801 $10,778 $10,321 ============================================================================================== LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES Commercial paper and current portion of long-term debt $ 167 $ 373 $ 472 Accounts payable 1,749 1,654 1,450 Other 984 1,048 866 - - ---------------------------------------------------------------------------------------------- Total Current Liabilities 2,900 3,075 2,788 LONG-TERM DEBT 4,454 4,279 4,485 DEFERRED INCOME TAXES AND OTHER 543 536 447 CONVERTIBLE PREFERRED STOCK 366 368 372 LOAN TO ESOP (204) (217) (255) COMMON SHAREHOLDERS' INVESTMENT 2,742 2,737 2,484 - - ---------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT $10,801 $10,778 $10,321 ============================================================================================== COMMON SHARES OUTSTANDING (MILLIONS) 71.6 71.5 71.4 ==============================================================================================
* The January 29, 1994 Statement of Financial Position is condensed from the audited financial statements. See accompanying Notes to Condensed Consolidated Financial Statements. 2 CONDENSED CONSOLIDATED Dayton Hudson Corporation STATEMENTS OF CASH FLOWS and Subsidiaries
Three Months Ended - - -------------------------------------------------------------------------------- APRIL 30, May 1, (Millions of Dollars) (Unaudited) 1994 1993 - - -------------------------------------------------------------------------------- OPERATING ACTIVITIES Net earnings $ 39 $ 30 Reconciliation to cash flow: Depreciation 129 124 Deferred tax provision (7) (6) Other noncash items affecting earnings 25 31 Changes in operating accounts providing/ (requiring) cash: Accounts receivable 127 234 Merchandise inventories (230) (194) Accounts payable 95 (143) Other (19) (65) - - ------------------------------------------------------------------------------- Cash Flow Provided by Operations 159 11 - - ------------------------------------------------------------------------------- INVESTING ACTIVITIES Expenditures for property (213) (171) - - ------------------------------------------------------------------------------- Cash Flow Required for Investing Activities (213) (171) - - ------------------------------------------------------------------------------- Net Financing Requirements (54) (160) - - ------------------------------------------------------------------------------- FINANCING ACTIVITIES (Decrease)/Increase in commercial paper (7) 130 Additions to long-term debt - 217 Reduction of long-term debt (24) (116) Dividends paid (36) (35) Other (19) 3 - - ------------------------------------------------------------------------------- Cash Flow (Used)/Provided by Financing Activities (86) 199 - - ------------------------------------------------------------------------------- Net (Decrease)/Increase in Cash and Cash Equivalents (140) 39 Cash & Cash Equivalents at Beginning of Period 321 117 - - ------------------------------------------------------------------------------- CASH & CASH EQUIVALENTS AT END OF PERIOD $ 181 $ 156 ===============================================================================
Amounts in this statement are presented on a cash basis and therefore may differ from those shown elsewhere in this 10-Q report. SUPPLEMENTAL CASH FLOW INFORMATION: . Interest paid (including interest capitalized) in the first three months of 1994 and 1993 was $59 million and $67 million, respectively. . Income tax payments of $106 million and $86 million were made during the first three months of 1994 and 1993, respectively. . In 1994, $193 million of commercial paper was classified as long-term debt and is not reflected in financing activities in this statement as it does not involve cash. See accompanying Notes to Condensed Consolidated Financial Statements. 3 NOTES TO CONDENSED CONSOLIDATED Dayton Hudson Corporation FINANCIAL STATEMENTS and Subsidiaries ACCOUNTING POLICIES The accompanying condensed consolidated financial statements should be read in conjunction with the financial statement disclosures contained in the Corporation's 1993 Annual Shareholders' Report throughout pages 21-32. As explained on page 31 of the Annual Report, the same accounting policies are followed in preparing quarterly financial data as are followed in preparing annual data. In the opinion of management, all adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. Due to the seasonal nature of the retail industry, earnings for periods which exclude the Christmas season are not indicative of the operating results that may be expected for the full fiscal year. MERCHANDISE INVENTORIES The last-in, first-out (LIFO) provision, included in cost of retail sales, in first quarter 1994 was zero versus a charge of $6 million ($.05 per share) in first quarter 1993. The cumulative LIFO provision was $80 million at April 30, 1994 and January 29, 1994, and $177 million at May 1, 1993. LONG-TERM DEBT Beginning in the first quarter 1994, commercial paper is classified as long-term debt and is supported by the Corporation's revolving credit agreement of $600 million which expires in 1999. Commercial paper will be classified as long-term, provided the term of the related credit agreement exceeds one year and any unused commitments thereunder equal or exceed the amount of commercial paper outstanding. PER SHARE DATA Primary earnings per share are computed by dividing net earnings less dividend requirements on ESOP preferred stock (net of tax benefits related to unallocated shares) by the average common stock and common stock equivalents outstanding during the period. Fully diluted earnings per share also assumes conversion of the ESOP preferred stock (net of tax benefits related to unallocated shares) into common stock. Additionally, it assumes adjustment of net earnings for the additional expense required to fund the ESOP debt service resulting from the assumed replacement of the ESOP preferred dividends with common stock dividends. The average allocated ESOP preferred shares outstanding were 1.8 million and 1.3 million for the first quarter 1994 and 1993, respectively, and 1.6 million and 1.1 million for the twelve-month period ended April 30, 1994 and May 1, 1993, respectively. References to earnings per share relate to fully diluted earnings per share. 4 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION FIRST QUARTER 1994 ANALYSIS OF OPERATIONS Earnings per share for the first quarter were $.47, compared with first quarter 1993 earnings per share of $.35, representing a 34% increase. First quarter net earnings were $39 million, compared with $30 million last year. The following table illustrates the impact of the major factors contributing to the changes in earnings per share:
First Quarter -------------- 1993 Earnings Per Share $ .35 Changes in earnings per share: Revenues .13 Gross margin rate .16 Operating expense rate (.10) Start-up expense (.04) Interest expense, net .05 Corporate expense and other (.08) ----- 1994 Earnings Per Share $ .47 =====
Our first quarter results met our expectations. All three operating divisions' revenue performance benefitted from value-pricing strategies. The overall gross margin rate improvement reflected lower markdowns partially offset by markup declines. Higher advertising expense at all three operating divisions contributed to the operating expense rate increase. Changes in our first quarter revenue mix, primarily the result of strong revenue growth at Target, our lowest margin division, affected changes in the gross margin and operating expense rates. If the revenue mix had remained constant with the first quarter 1993, the gross margin rate variance would have been $.23 and the operating expense rate variance would have been $(.18). Revenues - - -------- Total revenues increased 11% in the first quarter, while comparable-store revenues (revenues from stores open longer than a year) rose 5%. 5 Revenues by business segment for the first quarter were as follows:
First Quarter Percentage Change ----------------- ------------------- APRIL 30, May 1, All Comparable (Millions of Dollars) 1994 1993 Stores Stores --------- ------ ------- ---------- Target $2,819 $2,456 15% 7% Mervyn's 960 939 2 (1) Department Store Division (DSD) 686 645 6 6 ------ ------ -- -- Total $4,465 $4,040 11% 5% ====== ====== == ==
Target's strong total revenue growth was primarily due to new store expansion and solid improvement in base business revenues. Total revenue growth at Mervyn's was primarily due to new store expansion in existing markets. While Mervyn's comparable-store revenues declined slightly, customers are responding favorably to lower everyday prices and a shift to a more branded merchandising assortment. DSD's solid total and comparable revenue increase reflects consumers' positive response to the value-pricing strategy and promotional events. Operating Profit - - ---------------- First quarter operating profit (LIFO earnings from operations before corporate expense, interest and income taxes) showed a solid increase compared to the same period last year. TARGET'S operating profit showed a solid increase over the same quarter last year as a result of strong revenue growth. The gross margin rate was flat reflecting lower promotional markdowns offset by the continued impact of Target's value-pricing strategy. The expense rate was equal to last year because the benefit of sales leverage was offset by an increase in marketing expenses. MERVYN'S operating profit for the quarter was flat compared to last year, reflecting a slight increase in revenues and an improved gross margin rate offset by a higher operating expense rate. The gross margin rate improvement was the result of a substantial increase in the proportion of regular-priced merchandise sales and lower markdowns. The operating expense rate deterioration reflects lower sales leveraging as well as higher advertising expenses, which communicated Mervyn's value-strategy and renewed focus on fashion merchandise. Mervyn's remains committed to expense control. DSD's operating profit improved substantially for the three-month period, reflecting a solid increase in sales and an improved gross margin rate, partially offset by a higher operating expense rate. The gross margin rate improvement reflects favorable costs on merchandise purchases and reduced clearance markdowns associated with lower inventory levels. The operating expense rate increased primarily due to higher advertising costs associated with added promotional events. 6 Other Performance Factors - - ------------------------- The LIFO provision was zero in the first quarter of 1994 compared with a $6 million charge ($.05 per share) for the same period a year ago. The reduced provision in the first quarter reflects a lower estimated annual inflation rate compared with the estimated annual rate used in the first quarter last year. The inflation rate decline reflects the adoption of internally-generated price indices in the fourth quarter of 1993 at Mervyn's and DSD. Our internally- generated retail price indices, used in the LIFO calculations at all three operating divisions, capture the ongoing impact of our value-pricing strategies. Net interest expense for the quarter decreased 5% compared with last year, principally resulting from a substantial reduction in inventory levels and improved payables leveraging. During the first quarter, the Corporation entered into two interest rate swap agreements. These swaps effectively exchanged fixed interest rates ranging from 5.8% to 6.8% on approximately $175 million of debt for variable interest rates tied to three- and six-month LIBOR. The terms of the swaps range from one to three years. The estimated annual effective income tax rates were 39.0% and 37.5% for the first quarter 1994 and 1993, respectively. The increase in the 1994 rate was primarily the result of the increase in the federal statutory rate in the third quarter of 1993. Corporate expense and other includes charges related to the retirement of Kenneth A. Macke, former Chief Executive Officer of the Corporation, as discussed in the Registrant's 1994 Proxy Statement. FINANCIAL CONDITION Our overall financial condition improved in the first quarter 1994 compared with the same period last year. Our ratio of debt (including the present value of operating leases) to total capitalization was 58% at the end of the first quarter 1994, four percentage points lower than last year. The lower rate primarily reflects improved cash flow. We continue to expect the debt ratio to decline over time to the mid-point of our financial policy range of 45%-65%. Working capital of $1,536 million was 2% lower than a year ago reflecting planned reductions in inventory levels at Mervyn's and DSD and an increase in the financing of payables. The 7% increase in working capital from year-end reflects normal, seasonal fluctuations in our business. First quarter 1994 capital expenditures were $213 million, compared with $171 million for the same period a year ago. Approximately 81% of these expenditures were made by Target, 12% by Mervyn's and 7% by DSD. STORE DATA At April 30, 1994 Target operated 567 stores in 32 states, Mervyn's operated 279 stores in 15 states and the DSD operated 63 stores in nine states. 7 PART II. OTHER INFORMATION --------------------------- ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS a) The Company held its Annual Shareholders' Meeting on May 25, 1994. c) (1). The shareholders voted for four director nominees for three- year terms. The vote was as follows: Affirmative Name of Candidate Votes Withheld ----------------- ----------- -------- Betty Ruth Hollander 65,722,897 496,230 Kenneth A. Macke 65,706,748 512,379 Mary Patterson McPherson 65,716,301 502,826 Robert J. Ulrich 65,721,586 497,541 There were no abstentions and no broker non-votes. (2). The shareholders voted to approve the appointment of Ernst & Young as independent auditors of the Corporation. The vote was 65,835,806 for, 181,632 against and 201,689 abstentions. There were no broker non-votes. (3). The shareholders voted to approve PTOC short-term incentive plan. The vote was 61,496,435 for, 3,456,677 against and 1,266,015 abstentions. There were no broker non-votes. (4). The shareholders voted to approve the ROI short-term incentive plan. The vote was 61,439,047 for, 3,349,964 against and 1,430,116 abstentions. There were no broker non-votes. (5). The shareholders voted against the shareholder proposal concerning a classified board. The vote was 29,129,195 for, 31,249,805 against and 1,543,252 abstentions. There were 4,296,875 broker non-votes. (6). The shareholders voted against the shareholder proposal concerning an equal employment and affirmative action report. The vote was 5,494,654 for, 53,307,281 against and 3,120,417 abstentions. There were 4,296,775 broker non-votes. 8 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits (2). Not applicable (4). Instruments defining the rights of security holders, including indentures. Registrant agrees to furnish the Commission on request copies of instruments with respect to long-term debt. (10). Retirement Contract (11). Statements re Computations of Per Share Earnings (12). Statements re Computations of Ratios (15). Not applicable (18). Not applicable (19). Not applicable (22). Not applicable (23). Not applicable (24). Not applicable (27). Not applicable (99). Not applicable b) Reports on Form 8-K. Registrant did not file any reports on Form 8-K during the quarter ended April 30, 1994. 9 Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DAYTON HUDSON CORPORATION Registrant Date: June 10, 1994 By /s/ Douglas A. Scovanner ------------------------------- Douglas A. Scovanner Senior Vice President, Chief Financial Officer and Treasurer Date: June 10, 1994 By /s/ J.A. Bogdan ------------------------------- JoAnn Bogdan Controller and Chief Accounting Officer 10 Exhibit Index - - ------------- (10). Retirement Contract (11). Statements re Computations of Per Share Earnings (12). Statements re Computations of Ratios 11

 
                                                                    EXHIBIT (10)

                                   AGREEMENT
                                   ---------


     This Agreement is made by and between Kenneth A. Macke ("Macke") and Dayton
Hudson Corporation, a Minnesota corporation ("the Corporation"), as of April 13,
1994.
                                   BACKGROUND
                                   ----------

     A.  Macke has been employed by the Corporation for more than 30 years, most
recently as Chairman of the Board and Chief Executive Officer.

     B.  Macke has expressed to the Board of Directors of the Corporation ("the
Board") his desire to retire as a director, an officer, and an employee of the
Corporation, and the Board has agreed to his retirement.

     C.  Macke will retire as Chief Executive Officer of the Corporation as of
April 13, 1994.

     D.  Macke will retire as Chairman of the Board, Chairman of the Executive
Committee of the Board, a director, and an employee of the Corporation as of
July 1, 1994.

     E.  Incident to Macke's separation from employment with the Corporation,
Macke and the Corporation hereby agree to a full settlement of all issues of
present or potential dispute between them.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, and provisions contained in this Agreement and the attached releases
and resignation document, the parties agree and declare as follows:


 
                                   AGREEMENTS
                                   ----------

     1.  RELEASE OF CLAIMS BY MACKE.  At the same time Macke executes this
Agreement, he also shall execute a release ("the Macke Release"), in the form
attached to this Agreement as Exhibit A, in favor of the Corporation, its
insurers, subsidiaries, affiliates, divisions, committees, directors, officers,
employees, agents, successors, and assigns.  Macke shall re-execute the Macke
Release on July 1, 1994.  This Agreement shall not be interpreted or construed
to limit in any manner the Macke Release.

     2.  RELEASE OF CLAIMS BY CORPORATION.  At the same time the Corporation
executes this Agreement, the Corporation also shall execute a release ("the
Corporation Release"), in the form attached to this Agreement as Exhibit B, in
favor of Macke and his heirs and representatives.  The Corporation shall re-
execute the Corporation Release on July 1, 1994.  This Agreement shall not be
interpreted or construed to limit in any manner the Corporation Release.

     3.  RESIGNATIONS.  At the same time Macke executes this Agreement, he also
shall execute a resignation document ("the Resignation"), in the form attached
to this Agreement as Exhibit C, voluntarily resigning as Chief Executive Officer
of the Corporation effective as of April 13, 1994, and as Chairman of the Board,
Chairman of the Executive Committee of the Board, a director, and an employee of
the Corporation effective as of July 1, 1994.

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     4.  SPECIAL PAYMENTS AND CONSIDERATION.  The Corporation shall make the
special payments and provide the additional consideration set forth in
subparagraphs 4(a) through 4(i) below.

         a. LUMP SUM PAYMENT. The Corporation shall pay to Macke $3,060,000.00,
less all applicable payroll withholding, in lieu of any compensation that he may
be entitled to receive under the Corporation's Income Continuance Policy
Statement. The net amount shall be paid to Macke in a lump sum on or before July
5, 1994.

         b.  RETIREMENT SUPPLEMENT.  The Corporation shall pay to Macke
$1,000,000.00, less all applicable payroll withholding, as a special retirement
supplement.  The net amount shall be paid to Macke in a lump sum on or before
February 5, 1995.

         c.  BONUS.  The Corporation shall pay to Macke $500,000.00, less all
applicable payroll withholding, in lieu of any amount that he would have earned
in short-term incentive compensation for the current fiscal year.  The net
amount shall be paid to Macke in a lump sum on or before February 5, 1995.

         d. STOCK OPTIONS AND PERFORMANCE SHARES.  Promptly after Macke executes
this Agreement and the Macke Release, the Corporation, by actions of the
Compensation Committee and the Executive Committee of the Board, shall extend
until July 1, 1999 the time period within which Macke may exercise his rights to
the stock options previously granted to

                                      -3-

 
him and may receive payment for any performance shares previously granted to
him, provided that, in all other respects, the terms of the Corporation's
Executive Long Term Incentive Plan of 1981 shall continue to apply to the
vesting of the stock options and to Macke's rights to exercise the stock options
and receive payment for the performance shares previously granted to him.
Without limiting the foregoing, the 56,604 share option (grant no. 89-03) may be
exercised by Macke on or after June 14, 1994, and the 6,411 retention shares
(grant no. 93-04) shall be prorated by a factor of 18/48, resulting in 2,405
shares being paid out of escrow on or before February 5, 1995.  A listing of all
stock options and performance shares previously granted to Macke appears for
reference purposes as Attachment 1 to this Agreement.

     e.  CONSULTING.  Between July 2, 1994 and December 31, 1994, Macke may be
called upon to consult with the Chief Executive Officer and directors of the
Corporation, at their request, regarding significant business matters of the
Corporation.  Commencing on or about July 5, 1994, and continuing thereafter on
or about the 5th day of each succeeding month of the consulting period specified
above, the Corporation shall pay to Macke $50,000.00 per month as a consulting
fee.

     f.  OFFICE ALLOWANCE.  The Corporation shall provide Macke with an
allowance, not to exceed $100,000.00 per year, to reimburse him for his actual
expenses of maintaining a business office for the period from July 2, 1994
through June 30,

                                      -4-

 
2003.  Macke shall be entitled to receive reimbursement from the Corporation for
all the ordinary and necessary expenses of operating his business office,
including rent, insurance, depreciation, furniture, equipment, supplies,
telephones and telecommunications, secretarial and clerical personnel, travel,
entertainment, membership fees and dues, and subscriptions.  Macke shall be
solely responsible for all state and federal income taxes arising from the
Corporation's reimbursement to him of the expenses of operating his business
office.  If the Corporation, at Macke's request, provides any business office
facilities, secretarial or clerical personnel employed by the Corporation, or
other office support to Macke or for his benefit, then Macke shall not be
entitled to claim reimbursement for the actual costs to the Corporation of the
facilities, personnel, or support, and the actual costs of such items shall be
deducted from the amount of the annual allowance specified above.  Macke shall
request reimbursement for his business office expenses specified above in
writing at or near the end of each calendar quarter.  The Corporation shall make
the reimbursement payment to Macke, subject to the amount of the annual
allowance specified above, within 30 days after receipt of his written request
for reimbursement.  If, before July 1, 2003, Macke, without the written
authorization of the Corporation's Chief Executive Officer, engages in self-
employment more than one-half time, becomes an employee of any for-profit
business organization (excluding a family business), or becomes a consultant or
an

                                      -5-

 
advisor to or a director of any retail competitor of the Corporation, or if
Macke decides to close his business office for any reason, then the Corporation
shall have no further obligation to make any of the payments specified in this
paragraph.

          g. LIFE INSURANCE.  The Corporation shall continue to pay until
December 31, 1994 the employer's portion of the premium for Macke's current life
insurance coverage provided by the Corporation.

          h.  FINANCIAL COUNSELING.  The Corporation shall pay $15,000.00 in
reimbursement of Macke's anticipated expenses for financial counseling for 1995.
The Corporation shall make this payment in a lump sum on or about July 5, 1994,
either to Macke directly or to a financial counseling organization that he
designates in writing.

          i. ATTORNEYS' FEES.  The Corporation shall pay to the law firm of
Munger, Tolles & Olson an amount not to exceed $100,000.00 for attorneys' fees
and costs incurred in connection with Macke's separation from employment with
the Corporation. The law firm of Munger, Tolles & Olson shall submit its invoice
for fees and costs directly to the Corporation's Senior Vice President and
General Counsel, and the Corporation shall make payment of the amount of the
invoice, subject to the limit specified above, within 30 days after receipt of
the invoice.

     5.  NON-COMPETITION AGREEMENT; OTHER LIMITATIONS.  Macke shall immediately
forfeit any continuing rights he may have to exercise any stock options or
receive payment for any

                                      -6-

 
performance shares as described in paragraph 3(d) above if, on or before July 2,
1999, Macke takes employment with or accepts compensation as a consultant or an
advisor to Sears, Federated Department Stores, or K-Mart, or Macke or a person
acting under his conscious and effective control engages in any of the types of
deliberate conduct described below:

          a.   Unauthorized removal, use, or disclosure of strategic or
               operating plans, trade secrets, customer lists, internal systems,
               or other significant proprietary information of or concerning the
               Corporation or its personnel, the use or disclosure of which is
               intended or likely to cause substantial loss or reduction of
               business advantage or substantial injury to the Corporation or
               its management, business opportunities, or interests.

          b.   Expression of or endorsement of publication of untrue statements
               which are intended or likely to receive broad public attention
               and to bring the Corporation or its interests, methods, or
               representatives into disrepute.

          c.   Provision of materially false or misleading information
               concerning his post-separation employment, or failure or refusal
               promptly and accurately to provide information requested by the
               Corporation's Chief Executive Officer in connection with
               subparagraph 4(f) above and this paragraph, which may affect
               payments due to Macke from the Corporation.

          d.   Solicitation of or an offer to an employee within the Corporation
               to accept employment elsewhere, where the selection of or offer
               to the recruited employee was based in the whole or in part upon
               Macke's knowledge or experience concerning the employee which was
               acquired by Macke while employed within the Corporation or
               through one or more personal acquaintances employed within the
               Corporation, unless authorized in writing by the Corporation's
               Chief Executive Officer.

          e.   Exercise of the discretion, authority, or powers of any office or
               position held by Macke after July

                                      -7-

 
               1, 1994, unless specifically authorized or directed in writing in
               advance by an authorized executive of the Corporation or member
               of its Board.

The parties intend that, if any court of competent jurisdiction holds that any
restriction contained in this paragraph exceeds the limit of a restriction that
is enforceable under applicable law, then the restriction shall nevertheless
apply to the maximum extent that is enforceable under applicable law.

          6.   EMPLOYEE BENEFITS.  The Corporation confirms that it shall
provide to Macke the following compensation and employee benefits to which he is
entitled by reason of his employment with the Corporation.  The Corporation
shall provide to Macke a schedule of the employee benefits described in
subparagraphs 6(c) through 6(f) below as soon as practicable after he executes
this Agreement.

               a.   BASE SALARY.  The Corporation shall continue to pay Macke
his base salary of $93,333.33 per month until July 1, 1994.

               b.   VACATION PAY.  The Corporation shall pay to Macke
$170,000.00, less all applicable payroll withholding, as earned and accrued
vacation pay.  The net amount shall be paid to Macke in a lump sum on or before
July 5, 1994.

               c.   MEDICAL PLAN.  After July 1, 1994, Macke shall be entitled
to enroll himself, his spouse, and his minor dependents in the Corporation's
Retiree Medical Plan at the same cost charged to similarly-situated former
executive employees,

                                      -8-

 
the cost to be paid by Macke in accordance with the terms of the Retiree Medical
Plan, as it may exist from time to time.

          d. RETIREMENT PLANS. Macke is a participant in the Corporation's
Qualified Pension Plan, Excess Pension Plan, and Supplemental Pension Plan II
(together "the Retirement Plans"). Macke shall be entitled to begin drawing his
retirement benefits and to receive the lump sum payments to which he is entitled
at the times and under the terms set forth in the Retirement Plans. If Macke 
pre-deceases his spouse, his surviving spouse shall be entitled to receive the
equivalent of a joint and 100% surviving spouse annuity for her lifetime in
accordance with the program that applies to all members of the Corporation's
Senior Management Group on the date of this Agreement.

          e. SUPPLEMENTAL RETIREMENT AND SAVINGS PLAN.  Macke is a participant
in the Corporation's Supplemental Retirement, Savings, and Employee Stock
Ownership Plan (the "SRSP"). Macke shall be entitled to receive his benefits
under the SRSP at the times and under the terms set forth in the SRSP.

          f. DEFERRED COMPENSATION.  Macke is a participant in the
Corporation's Deferred Compensation Plan. Macke shall be entitled to receive
payments of deferred compensation and bonuses at the times and under the terms
set forth in the Deferred Compensation Plan.

          g. DISCOUNT.  As a retired employee of the Corporation, Macke shall
be entitled after July 1, 1994 to

                                      -9-

 
receive discount privileges at the employee discount rate at Target, Mervyn's,
and the Corporation's department stores.

          7.   CORPORATION COOPERATION.  The Corporation shall ensure that all
steps are followed to pay to Macke the amounts that he is entitled to receive
under the employee benefit plans specified in paragraph 6 above according to his
written instructions and shall promptly provide him and his advisors with the
information that they reasonably require in accordance with the terms of
employee benefit plans sponsored by the Corporation in which Macke is a
participant.

          8.   PUBLIC DISCLOSURE.  The parties understand that the Corporation
shall release certain information regarding Macke's retirement from the
Corporation and the compensation and other consideration that he is entitled to
receive in connection with his retirement to the Corporation's stockholders in
the form of proxy statements.  The parties also understand that the Corporation
shall release certain information regarding Macke's retirement from the
Corporation to the public at large in the form of media statements.  Without
Macke's prior approval, the Corporation shall not change the content of the
proxy statements or media statements, insofar as they relate to Macke, from that
which Macke has approved prior to the execution of this Agreement.  Macke and
the official spokespersons for the Corporation shall respond to any governmental
or media inquiries regarding Macke's employment with, retirement from, or
consulting agreement with the Corporation in a manner consistent with the

                                      -10-

 
tone and content of the proxy statements and media statements released prior to
the date of any such inquiry.

          9.   INDEMNIFICATION.  Notwithstanding Macke's retirement from the
Corporation, with respect to events during his tenure as an officer or director
of the Corporation, Macke shall be entitled, as a former officer or director of
the Corporation, to the same rights to indemnification and advancement of
expenses provided in the charter documents of the Corporation and under
applicable law and to indemnity and a legal defense under any applicable general
liability and/or directors' and officers' liability insurance policies
maintained by the Corporation, as such rights exist now or in the future, and as
such rights are afforded to senior executive officers of the Corporation.

          10.  RECORDS, DOCUMENTS, AND PROPERTY.  On or before July 2, 1994,
Macke shall return to the Corporation all records, correspondence, documents,
financial data, strategic or operating plans, trade secrets, customer lists,
internal systems, computer disks, computer tapes, and other tangible property in
his possession belonging to the Corporation.

          11.  NO ADMISSION OF WRONGDOING.  Macke understands that this
Agreement does not constitute an admission that the Corporation has violated any
local ordinance, state or federal statute, or principle of common law, or that
the Corporation has engaged in any improper or unlawful conduct or wrongdoing
against Macke.  Macke shall not characterize this Agreement or the

                                      -11-

 
payment of any money or other consideration in accordance with this Agreement as
an admission that the Corporation has engaged in any improper or unlawful
conduct or wrongdoing against him.

          12.  ATTORNEYS' FEES.  In any action to enforce any of the provisions
of this Agreement or to prosecute or defend any action arising under this
Agreement, the prevailing party shall be entitled, in addition to whatever
remedies are available to such party, to attorneys' fees, costs, and other
expenses reasonably incurred by it in such enforcement, prosecution, or defense.

          13.  AUTHORITY.  Macke represents and warrants that he has full
authority to enter into this Agreement, the Macke Release, and the Resignation,
and that no causes of action, claims, or demands released pursuant to this
Agreement and the Macke Release have been assigned to any person or entity not a
party to this Agreement.  The Corporation represents that it has full authority
to enter into this Agreement, the Corporation Release, and the Resignation, and
that no causes of action, claims, or demands released pursuant to this Agreement
and the Corporation Release have been assigned to any person or entity not a
party to this Agreement.

          14.  REPRESENTATIONS.  Macke acknowledges that he has been represented
by his own attorneys in this matter, that he has had a full opportunity to
consider this Agreement, the Macke Release, the Corporation Release, and the
Resignation, that he has had a full opportunity to ask any questions that he may
have

                                      -12-

 
concerning this Agreement, the Macke Release, the Corporation Release, the
Resignation, or the settlement of his claims against the Corporation, and that
he has not relied upon any statements or representations made by the Corporation
or its attorneys, written or oral, other than the statements and representations
that are explicitly set forth in this Agreement, the Macke Release, the
Corporation Release, the Resignation, and any employee benefit plans sponsored
by the Corporation in which Macke is a participant.

          15.  SUCCESSORS AND ASSIGNS.  This Agreement, the Macke Release, and
the Corporation Release shall be binding upon and inure to the benefit of the
parties and their respective heirs, representatives, successors, and assigns,
but will not be assignable by either party without the prior written consent of
the other party.

          16.  ENTIRE AGREEMENT.  Before executing this Agreement, the Macke
Release, the Corporation Release, and the Resignation, the parties and their
representatives had numerous conversations, including preliminary discussions,
informal conversations, and formal negotiations, and generated correspondence
and other writings, in which the parties and their representatives discussed the
matters that are the subject of this Agreement, the Macke Release, the
Corporation Release, and the Resignation.  In such conversations and writings,
the parties and their representatives may have expressed their judgments and
beliefs concerning the intentions, capabilities, and practices of

                                      -13-

 
the parties, and may have forecast future events.  The parties recognize,
however, that all business transactions, including the transactions upon which
the parties' judgments, beliefs, and forecasts are based, contain an element of
risk, and that it is normal business practice to limit the legal obligations of
contracting parties only to those promises and representations that are
essential to the transaction so as to provide certainty as to their respective
future rights and remedies.  Accordingly, this Agreement, the Macke Release, the
Corporation Release, the Resignation, the employee benefit plans sponsored by
the Corporation in which Macke is a participant, and the written agreements
executed by the parties in connection with such employee benefit plans are
intended to define the full extent of the legally enforceable undertakings of
the parties, and no promises or representations, written or oral, that are not
set forth explicitly in this Agreement, the Macke Release, the Corporation
Release, the Resignation, the employee benefit plans sponsored by the
Corporation in which Macke is a participant, and the written agreements executed
by the parties in connection with such employee benefit plans are intended by
either party to be legally binding, and all other agreements and understandings
between the parties are hereby superseded.

          17.  HEADINGS.  The descriptive headings of the paragraphs and
subparagraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement.

                                      -14-

 
          18.  COUNTERPARTS.  This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

          19.  GOVERNING LAW.  This Agreement, the Macke Release, the
Corporation Release, and the Resignation will be interpreted and construed in
accordance with, and any dispute or controversy arising from any breach or
asserted breach of this Agreement, the Macke Release, the Corporation Release,
or the Resignation will be governed by, the laws of Minnesota.

          IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.

                              /s/ KENNETH A. MACKE
                              _______________________________
                              KENNETH A. MACKE



                              DAYTON HUDSON CORPORATION


                                  /s/ ROGER L. HALE
                              By:____________________________
                                 ROGER L. HALE
                                 DIRECTOR AND VICE CHAIRMAN OF THE EXECUTIVE
                                    COMMITTEE


                              /s/ ROBERT A. BURNETT
                              _______________________________
                              ROBERT A. BURNETT
                              CHMN COMPENSATION COMMITTEE


                                      -15-

 
                                 MACKE RELEASE
                                 -------------


DEFINITIONS.  All words used in this Release have their plain meanings in
ordinary English.  Specific terms used in this Release have the following
meanings:

     A.   "I", "me", and "my" mean both me and anyone who has or obtains any
          legal rights or claims through me.

     B.   "Employer" means Dayton Hudson Corporation ("the Corporation"), any
          company providing insurance to the Corporation in the present or past,
          any present or past employee benefit plans sponsored by the
          Corporation, any present or past subsidiaries, affiliates, divisions,
          committees, directors, officers, employees, agents, successors, or
          assigns of the Corporation, and any person who acted on behalf of or
          on instructions from the Corporation.

     C.   "My Claims" mean all of my existing rights to any relief of any kind
          from the Employer, whether or not I now know about those rights,
          including, but not limited to:

          1.   all claims that arise out of or that relate to my employment or
               my separation from employment with the Employer;

          2.   all claims that arise out of or that relate to the statements or
               actions of the Employer;

          3.   all claims for any alleged unlawful discrimination or any other
               alleged unlawful practices that arise out of or that relate to
               the statements or actions of the Employer, including, but not
               limited to, claims under the Civil Rights Act of 1964, the Age
               Discrimination in Employment Act, the Americans with Disabilities
               Act, the Civil Rights Act of 1991, the Minnesota Human Rights
               Act, the Minnesota Workers' Compensation Act, and any federal or
               state wage and hour laws; and claims that the Employer engaged in
               conduct prohibited on any other basis under any federal, state,
               or local statute, ordinance, or regulation;

          4.   all claims for alleged unpaid compensation, expenses, and
               employee benefits; wrongful discharge; harassment; retaliation or
               reprisal; constructive discharge; assault or battery; defamation;
               intentional or negligent infliction of emotional distress;
               invasion of privacy; fraud or misrepresentation; interference
               with contractual



                                   EXHIBIT A
                                   ---------


 
               or business relationships; violation of public policy; my conduct
               as a "whistleblower"; negligence; false imprisonment; breach of
               contract; breach of fiduciary duty; breach of the covenant of
               good faith and fair dealing; promissory or equitable estoppel;
               and any other wrongful employment practices; and

          5.   all claims for compensatory damages, liquidated damages, punitive
               damages, attorneys' fees, costs, and disbursements;

          but excluding all claims that I may have under the Agreement, the
          employee benefit plans sponsored by the Employer in which I am a
          participant, or the written agreements executed by the Corporation and
          me in connection with such employee benefit plans, or my rights to
          indemnification and advancement of expenses as provided in the charter
          documents of the Corporation and under applicable law and to indemnity
          and a legal defense under any applicable general liability and/or
          directors' and officers' liability insurance policies maintained by
          the Corporation.

     D.   "Agreement" means the Agreement between the Corporation and me that I
          am executing on the same date that I first execute this Release,
          together with all the documents attached to the Agreement.

AGREEMENT TO RELEASE MY CLAIMS.  I will receive certain sums of money and other
consideration from the Employer as set forth in the Agreement if I sign this
Release.  In exchange for that money and other consideration, I agree to give up
all My Claims.  I will not bring any lawsuits or make any other demands against
the Employer based on My Claims.  The money and other consideration that I will
receive in exchange for this Release and the Agreement is a full and fair
payment for the release of My Claims.  The Employer does not owe me anything for
the release of My Claims in addition to the money and other consideration that I
am receiving in exchange for this Release and the Agreement.

ADDITIONAL AGREEMENTS AND UNDERSTANDINGS.  Even though the Employer will pay me
for the release of My Claims, the Employer does not admit that it is responsible
or legally obligated to me for My Claims.  In fact, I understand that the
Employer denies that it is responsible or legally obligated for My Claims or
that it has engaged in any improper or unlawful conduct or wrongdoing against
me.

     I have read this Release and the Agreement carefully and I understand all
their terms.  I have discussed this Release and the Agreement with my own
attorneys, who have fully explained them to me.  In agreeing to sign this
Release and the Agreement, I have not relied on any statements or explanations
made by the Employer or its attorneys, other than statements made in this

                                      -2-

 
Release, the Agreement, the Release executed by the Corporation, the employee
benefit plans sponsored by the Employer in which I am a participant, and the
written agreements executed by the Corporation and me in connection with such
employee benefit plans.

     I understand and agree that this Release, the Agreement, the Release
executed by the Corporation, the employee benefit plans sponsored by the
Employer in which I am a participant, and the written agreements executed by the
Corporation and me in connection with such employee benefit plans contain all
the agreements between the Employer and me relating to this settlement.  We have
no other written or oral agreements relating to this settlement.

     I am not under any legal disabilities that prevent me from being legally
bound by the agreements that I am making in this Release and the Agreement.  I
am legally able and entitled to receive the money and other consideration that I
will receive from the Employer as set forth in the Agreement in settlement of My
Claims.


                                         /s/ KENNETH A. MACKE
DATED:  APRIL 13, 1994.                  _________________________
                                         KENNETH A. MACKE


WITNESSES:

/s/ R. GREGORY MORGAN 
_________________________

/s/ JAMES M. SAMPLES
_________________________


          I am executing this Release again on the last day of my employment
with the Corporation, and I intend that all of the terms contained in this
Release will fully apply to My Claims as they exist today.


DATED:  JULY 1, 1994.                    _________________________
                                         KENNETH A. MACKE

WITNESSES:

_________________________

_________________________


                                      -3-

 
                              CORPORATION RELEASE
                              -------------------


DEFINITIONS.  All words used in this Release have their plain meanings in
ordinary English.  Specific terms used in this Release have the following
meanings:

     A.   "Corporation" means Dayton Hudson Corporation, any company providing
          insurance to Dayton Hudson Corporation in the present or past, any
          present or past employee benefit plans sponsored by Dayton Hudson
          Corporation, any present or past subsidiaries, affiliates, divisions,
          committees, successors, or assigns of Dayton Hudson Corporation, and
          any person who acted on behalf of or on instructions from Dayton
          Hudson Corporation.

     B.   "Macke" means Kenneth A. Macke and anyone who has or obtains any legal
          rights or claims through him.

     C.   "Corporation's Claims" mean all of the Corporation's existing rights
          to any relief of any kind from Macke, including, but not limited to:

          1.   all claims the Corporation has now, whether or not the
               Corporation now knows about the claims;

          2.   all claims the Corporation could have made in response to any
               claims that Macke has or could have asserted against the
               Corporation; and

          3.   all claims for compensatory damages, liquidated damages, punitive
               damages, attorneys' fees, costs, and disbursements;

          but excluding all claims that the Corporation may have under the
          Agreement.

     D.   "Agreement" means the Agreement between the Corporation and Macke that
          the Corporation is executing on the same date that the Corporation
          first executes this Release, together with all the documents attached
          to the Agreement.

AGREEMENT TO RELEASE CORPORATION'S CLAIMS.  The Corporation will receive certain
consideration from Macke as set forth in the Agreement and the Release executed
by him.  In exchange for that consideration, the Corporation agrees to give up
all the Corporation's Claims.  The Corporation will not bring any lawsuits or
make any other demands against Macke based on the


                                   EXHIBIT B
                                   ---------


 
Corporation's Claims.  The consideration that the Corporation will receive in
exchange for this Release and the Agreement is a full and fair payment for the
release of the Corporation's Claims.  Macke does not owe the Corporation
anything for the release of the Corporation's Claims in addition to the
consideration that the Corporation is receiving in exchange for this Release and
the Agreement.

ADDITIONAL AGREEMENTS AND UNDERSTANDINGS.  Even though Macke will provide
consideration to the Corporation for the release of the Corporation's Claims,
Macke does not admit that he is responsible or legally obligated to the
Corporation for the Corporation's Claims.  In fact, the Corporation understands
that Macke denies that he is responsible or legally obligated for the
Corporation's Claims or that he has engaged in any improper or unlawful conduct
or wrongdoing against the Corporation.

     The Corporation through its undersigned officer has read this Release and
the Agreement carefully and understands all their terms.  The Corporation has
consulted with its own attorneys prior to executing this Release and the
Agreement, who have fully explained them to the Corporation.  In agreeing to
sign this Release and the Agreement, the Corporation has not relied on any
statements or explanations made by Macke or his attorneys, other than statements
made in the Agreement and the Release executed by Macke.

     The Corporation understands and agrees that this Release, the Agreement,
the Release executed by Macke, the employee benefit plans sponsored by the
Corporation in which Macke is a participant, and the written agreements executed
by Macke and the Corporation in connection with such employee benefit plans
contain all the agreements between the Corporation and Macke relating to this
settlement.  The Corporation and Macke have no other written or oral agreements
relating to this settlement.

     The undersigned officer of the Corporation has the authority to legally
bind the Corporation by the agreements that the Corporation is making in this
Release and the Agreement, and represents that the Corporation is not under any
legal disabilities that prevent it from being legally bound by the agreements
that the Corporation is making in this Release and the Agreement.

                                      -2-

 
DATED:  APRIL 13, 1994.             DAYTON HUDSON CORPORATION


                                        /s/ ROGER L. HALE
                                    BY:_________________________
                                       ROGER L. HALE
                                       DIRECTOR AND VICE CHAIRMAN
                                       OF THE EXECUTIVE COMMITTEE

WITNESSES:

/s/ JAMES T. HALE
_________________________

/s/ JAMES M. SAMPLES
_________________________


          The Corporation is executing this Release again on the last day of
Macke's employment with the Corporation, and the Corporation intends that all of
the terms contained in this Release will apply fully to the Corporation's Claims
as they exist today.



DATED:  JULY 1, 1994.               DAYTON HUDSON CORPORATION



                                    BY:_________________________
                                       ROGER L. HALE
                                       DIRECTOR AND VICE CHAIRMAN
                                       OF THE EXECUTIVE COMMITTEE

WITNESSES:

_________________________

_________________________




                                      -3-

 
                                  RESIGNATION
                                  -----------



     In consideration of and pursuant to the terms of the Agreement dated April
13, 1994 between Dayton Hudson Corporation ("the Corporation") and me, I hereby
voluntarily resign as the Chief Executive Officer of the Corporation as of April
13, 1994, and as Chairman of the Board, Chairman of the Executive Committee of
the Board of Directors, a director, and an employee of the Corporation effective
as of July 1, 1994.

Dated:  April 13, 1994.             /s/ KENNETH A. MACKE
                                    ______________________________
                                        KENNETH A. MACKE






                                   EXHIBIT C
                                   ---------



LTIP ACCOUNT STATUS REPORT ADJUSTED FOR STOCK SPLITS PRINTED: 02/04/94 NAME: KENNETH A. MACKE (###-##-####) COMPANY: CORPORATE STATUS: ACTIVE CONSENT: Y GRANT OPTION CURRENT ______________________INFORMATION_______________________ _______AVAILABILITY_______ _____STATUS______ ________ACTIVITY_________ SHARES TOTAL NUMBER GRANT OPTION GRANT SHARES GRANT INSTALL INSTALL- EXPIRE AVAIL SHARES ACTIVITY ACTIVITY OF GNO DATE TYPE TYPE PLAN GRANTED PRICE DATE MENTS DATE NOW REMAINING DATE TYPE SHARES - - ----- -------- ------ ------- ---- ------- -------- ------- ------- -------- ------ --------- -------- -------- ------ 77-1 07/13/77 NQ REGULAR 1976 12,000 8.703125 N/A N/A 07/13/87 0 0 06/06/84 EXER 12,000 78-3 07/12/78 NQ REGULAR 1976 14,000 9.312500 N/A N/A 07/12/88 0 0 06/06/84 EXER 14,000 79-1 07/11/79 NQ REGULAR 1976 14,000 9.968750 N/A N/A 07/11/89 0 0 02/01/88 EXER 14,000 80-3 08/13/80 NQ REGULAR 1976 18,000 12.359375 N/A N/A 08/13/90 0 0 02/01/88 EXER 18,000 81-2 08/12/81 NQ REGULAR 1981 15,744 14.296875 N/A N/A 08/12/91 0 0 04/03/90 EXER 15,744 82-1 08/11/82 NQ REGULAR 1981 10,038 17.437500 N/A N/A 08/11/92 0 0 04/03/90 EXER 10,038 82-2 08/11/82 ISO REGULAR 1981 3,012 17.437500 N/A N/A 08/11/92 0 0 04/03/90 EXER 3,012 83-04 08/10/83 NQ REGULAR 1981 5,846 33.875000 N/A N/A 08/10/93 0 0 10/20/92 EXER 5,846 83-05 08/10/83 NQ SPECIAL 1981 1,949 33.875000 N/A N/A 08/10/93 0 0 10/20/92 EXER 1,949 83-06 08/10/83 ISO REGULAR 1981 2,108 33.875000 N/A N/A 08/10/93 0 0 10/20/92 EXER 2,108 83-07 08/10/83 ISO SPECIAL 1981 703 33.875000 N/A N/A 08/10/93 0 0 10/20/92 EXER 703 84-2 08/08/84 NQ REGULAR 1981 9,689 36.125000 N/A N/A 08/08/94 0 0 04/16/93 EXER 9,689 84-3 08/08/84 NQ SPECIAL 1981 1,938 36.125000 N/A N/A 08/08/94 0 0 04/16/93 EXER 1,938 85-1 08/14/85 NQ REGULAR 1981 20,032 39.937500 N/A N/A 08/14/95 10,000 10,000 04/16/93 EXER 10,032 85-2 08/14/85 NQ SPECIAL 1981 30,047 39.937500 N/A N/A 08/14/95 30,047 30,047 86-1 07/09/86 NQ REGULAR 1981 9,401 53.187500 N/A N/A 07/09/96 9,001 9,001 04/03/90 EXER 200 04/16/93 EXER 200 87-02 07/08/87 NQ REGULAR 1981 9,926 50.375000 N/A N/A 07/08/97 9,926 9,926 88-04 07/13/88 NQ REGULAR 1981 14,210 35.187500 N/A N/A 07/13/98 14,210 14,210
ATTACHMENT 1, PAGE 1
LTIP ACCOUNT STATUS REPORT ADJUSTED FOR STOCK SPLITS PRINTED: 02/04/94 NAME: KENNETH A. MACKE (###-##-####) COMPANY: CORPORATE STATUS: ACTIVE CONSENT: Y GRANT OPTION CURRENT _____________________INFORMATION________________________ _______AVAILABILITY________ _____STATUS______ ________ACTIVITY_________ SHARES TOTAL NUMBER GRANT OPTION GRANT SHARES GRANT INSTALL INSTALL- EXPIRE AVAIL SHARES ACTIVITY ACTIVITY OF GNO DATE TYPE TYPE PLAN GRANTED PRICE DATE MENTS DATE NOW REMAINING DATE TYPE SHARES - - ----- -------- ------ ------- ---- ------- --------- -------- ------ -------- ------ --------- -------- ------- ------ 89-02 06/14/89 NQ REGULAR 1981 18,868 53.000000 N/A N/A 06/14/99 18,868 18,868 89-03 06/14/89 NQR SPECIAL 1981 56,604 53.000000 06/14/94 56,604 06/14/99 0 56,604 90-04 06/13/90 NQ REGULAR 1981 19,868 75.500000 06/13/91 4,967 06/13/00 14,901 19,868 06/13/92 4,967 06/13/93 4,967 06/13/94 4,967 91-01 04/10/91 NQ REGULAR 1981 27,096 73.812500 04/10/92 6,774 04/10/01 13,548 27,096 04/10/93 6,774 04/10/94 6,774 04/10/95 6,774 92-01 04/08/92 NQ REGULAR 1981 16,719 59.812500 04/08/93 4,180 04/08/02 4,180 16,719 04/08/94 4,180 04/08/95 4,179 04/08/96 4,180 93-02 04/14/93 NQ REGULAR 1981 25,642 78.000000 04/14/94 6,411 04/14/03 0 25,642 04/14/95 6,410 04/14/96 6,411 04/14/97 6,410
ATTACHMENT 1, PAGE 2 SO1031 1981 LTIP PERFORMANCE SHARES DATE: 09/13/93 ADJUSTED FOR STOCK SPLITS KENNETH A. MACKE (###-##-####)
GRANT GRANT SHARES SHARES GRANT PAYOUT PAYOUT INCOME SHARES NO. DATE GRANTED REMAINING TYPE DATE MKT PRICE REALIZED ISSUED - - ----- -------- ------- --------- ------- -------- --------- ----------- -------- 81-5 08/12/81 7,872 0 REGULAR 08/14/85 $39.9375 $248,411.25 3,110 82-3 08/11/82 7,170 0 REGULAR 04/09/86 $50.4375 $361,636.88 3,585 83-09 08/10/83 4,429 0 REGULAR 09/09/87 $49.7500 $220,342.75 2,215 83-10 08/10/83 1,477 0 SPECIAL 09/09/87 $49.7500 $ 73,480.75 739 84-6 08/08/84 4,845 0 REGULAR 09/14/88 $38.1250 $169,961.25 2,229 84-7 08/08/84 969 0 SPECIAL 09/14/88 $38.1250 $ 34,007.50 446 86-2 07/09/86 6,268 0 REGULAR 09/12/90 $56.4375 $254,702.44 2,257 87-04 07/08/87 6,618 0 REGULAR 09/11/91 $75.1875 $398,117.81 2,648 88-05 07/13/88 9,474 0 REGULAR 09/10/92 $67.6250 $435,707.88 3,222 89-04 06/14/89 12,579 0 REGULAR 09/08/93 $65.7500 $529,353.25 4,026 90-05 06/13/90 13,246 13,246 REGULAR 91-02 04/10/91 18,064 18,064 REGULAR 92-03 04/08/92 11,146 11,146 REGULAR 93-03 04/14/93 19,231 19,231 PERFORM 93-04 04/14/93 6,411 6,411 RETENTI TOTAL 68,098 $2,725,721.76 24,477
PAYOUT MADE IN 50% CASH AND 50% STOCK, THEREFORE "INCOME REALIZED" = THE MARKET VALUE OF SHARES ISSUED PLUS CASH PORTION OF PAYOUT ATTACHMENT 1, PAGE 3

 
                                                                    EXHIBIT (11)
                   DAYTON HUDSON CORPORATION AND SUBSIDIARIES
                       COMPUTATIONS OF PER SHARE EARNINGS

                      (In Millions, Except Per-Share Data)


Three Months Ended Twelve Months Ended ------------------------------------ ----------------------------------- April 30, 1994 May 1, 1993 April 30, 1994 May 1, 1993 ---------------- -------------- ---------------- ------------- Earnings Shares Earnings Shares Earnings Shares Earnings Shares -------- ------ -------- ------ -------- ------ -------- ------ Primary Computations - - -------------------- Net earnings $ 39 $ 30 $ 384 $ 378 Less: Dividend requirements on ESOP preferred shares, net of tax benefit on unallocated shares 5 5 18 23 ----- ----- ----- ----- Adjusted net earnings $ 34 $ 25 $ 367 $ 355 ===== ===== ===== ===== Average common shares outstanding 71.5 71.4 71.5 71.3 Average number of common share equivalents: Stock options 0.2 0.2 0.1 0.2 Performance shares 0.2 0.2 0.2 0.1 ---- ---- ---- ---- Adjusted common equivalent shares outstanding-primary 71.9 71.8 71.8 71.6 ==== ==== ==== ==== PRIMARY EARNINGS PER SHARE $0.48 $0.35 $5.11 $4.97 ===== ===== ===== ===== Fully Diluted Computations - - -------------------------- Net earnings $ 39 $ 30 $ 384 $ 378 Less: Earnings impact of assumed ESOP preferred share conversion, net of tax benefit on unallocated shares 3 3 13 17 ----- ----- ----- ----- Adjusted net earnings $ 36 $ 27 $ 371 $ 361 ===== ===== ===== ===== Average common and common equivalent shares-primary 71.9 71.8 71.8 71.6 Additional common stock equivalents attributable to application of the treasury stock method 0.1 - - 0.1 Assumed conversion of ESOP preferred shares 4.3 4.3 4.3 4.3 ---- ---- ---- ---- Adjusted common equivalent shares outstanding-fully diluted 76.3 76.1 76.1 76.0 ==== ==== ==== ==== FULLY DILUTED EARNINGS PER SHARE $0.47 $0.35 $4.89 $4.77 ===== ===== ===== =====

 
                                                                    EXHIBIT (12)
                           DAYTON HUDSON CORPORATION

              COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED CHARGES
           FOR THE THREE MONTHS ENDED APRIL 30, 1994 AND MAY 1, 1993
                 AND FOR THE FIVE YEARS ENDED JANUARY 29, 1994

                             (Millions of Dollars)

Three Months Ended Fiscal Year Ended ------------------ -------------------------------------------------- Apr. 30, May 1, Jan. 29, Jan. 30, Feb. 1, Feb. 2, Feb. 3, 1994 1993 1994 1993 1992 1991 1990 ------- ------ -------- ------- ------ ------ ------ Earnings: Consolidated net earnings........... $ 39 $ 30 $ 375 $ 383 $ 301 $ 412 $ 410 Income taxes........................ 25 18 232 228 171 249 268 ----- ----- ------ ------ ----- ------ ----- Total earnings.................... 64 48 607 611 472 661 678 ----- ----- ------ ------ ----- ------ ----- Fixed charges: Interest expense.................... 108 115 459 454 421 333 283 Dividends on preferred stock (pre-tax basis).................... 10 10 39 39 39 39 2 Interest portion of rental expense.. 12 9 45 43 39 46 45 ----- ----- ------ ------ ----- ------ ----- Total fixed charges............... 130 134 543 536 499 418 330 Less: Dividends on preferred stock (pre-tax basis).................... (10) (10) (39) (39) (39) (39) (2) Capitalized interest................ (1) (1) (5) (6) (11) (8) (10) ----- ----- ------ ------ ----- ------ ----- Fixed charges in earnings......... 119 123 499 491 449 371 318 ----- ----- ------ ------ ----- ------ ----- Earnings available for fixed charges.. $ 183 $ 171 $1,106 $1,102 $ 921 $1,032 $ 996 ===== ===== ====== ====== ===== ====== ===== Ratio of earnings to fixed charges.... 1.40 1.28 2.04 2.06 1.85 2.47 3.02 ===== ===== ====== ====== ===== ====== =====