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    Amended
and Restated 02-01-00 


 
 

TARGET CORPORATION
  
    EXECUTIVE EXCESS LONG TERM DISABILITY PLAN    
  


ARTICLE I



GENERAL 


    Sec.
1.1  Name of Plan.  The name of the benefit plan set forth herein is
"Target Corporation Executive Excess Long Term Disability Plan (the "Plan"). 


    Sec.
1.2  Purpose.  The Plan has been established by the Target Corporation
(the "Company") to provide long term disability income that the Target Corporation Long Term Disability Plan, the Mervyn's Disability Plus Plan, the AMC Long Term Disability Plan and/or the RTC Long
Term Disability Plan, as in effect from time to time, (the "TGT LTD Plans"), cannot provide to certain Participants in such plan(s) because of the limitations imposed by the Internal Revenue
Code of 1986, as amended, ("Code") relative to compensation above a certain maximum in connection with computing long term disability benefits under qualified plans. This Plan will apply to all
compensation in excess of the amount included in the TGT LTD Plans up to a cap of two million dollars. This cap may be changed by action of the Plan Administrative Committee for the
Non-Qualified Plans ("PAC") at any time. The Plan is intended to be a "top hat plan" as defined in Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended from time to time, ("ERISA") and shall be interpreted and administered accordingly. 


    Sec.
1.3  Qualified Plans.  The TGT LTD Plans are sometimes referred
to herein as a "Qualified Plans". 


    Sec.
1.4  Participation.  An employee of the Company or a subsidiary of the
Company who is a member of a select group of management and a highly compensated employee of the Company, or a subsidiary of the Company, becomes and remains a Participant in this Plan only if he is a
Participant in one of the TGT LTD Plans and has compensation in excess of the Code limits for qualified earnings under a qualified long term disability plan 


    Sec.
1.5  Miscellaneous.  The terms in this Plan shall have the same meaning
as those used in the Qualified Plans unless the context clearly indicates the contrary. 


ARTICLE II



EXCESS LONG TERM BENEFITS 



    Sec.
2.1  Amount of Excess Long Term Disability.  Each Participant in this
Plan shall be entitled to excess long term disability payments as set forth on Schedule A. 


    Sec.
2.2  Payments of Excess Long Term Disability.  Taxable payments shall
be made in accordance with procedures established by the PAC or its designee. 


ARTICLE III



MISCELLANEOUS 


    Sec.
3.1  Unfunded.  This Plan shall be unfunded. No person entitled to a
benefit under this Plan shall, by virtue of this Plan, have any interest in any specific asset or assets of the Company. Such persons have only an unsecured contract right to receive payments in
accordance with this Plan. 







    Sec. 3.2  Benefits May Not Be Assigned or Alienated.  Except as required by
law, the interests of persons entitled to benefits under this Plan may not in any manner whatsoever be assigned or alienated, whether voluntarily or involuntarily, or directly or indirectly. 



    Sec.
3.3  Not Employment Agreement.  This Plan is not an employment
agreement and does not assure the continued employment of any employee or Participant for any time or period. 


    Sec.
3.4  Administration.  The PAC or its designee shall control and manage
the operations and administration of this Plan and make all decisions and determinations incident thereto. 


    Sec.
3.5  Claims Procedure.  If you believe that the Company's determination
is incorrect in any way, you must file a written claim with the PAC. The PAC ordinarily will respond to the claim within 90 days of the date on which it is received. However, if special
circumstances require an extension of the period of time for processing a claim, the 90 day period can be extended for an additional 90 days by giving you written notice of the extension
and the reason that the extension is necessary. In no event will the PAC determine a Participant to be eligible under this Plan if they are not eligible and participating under the TGT LTD
Plans. 


    If
the claim for a benefit is approved, you will receive written notice of the amount of your benefit and the date on which payments will begin. If your claim is denied in whole or in
part, you will be told in writing the specific reasons for the decision and will receive an explanation of the procedures for reviewing the decision. 


    If
you do not agree with the decision, you can request that the PAC reconsider its decision by filing a written request for review within 60 days after receiving notice that
the claim has been denied. You or your representative can also present written statements which explain why you believe that the benefit claimed should be paid and may review all pertinent plan
documents. 


    Generally,
the decision will be reviewed within 60 days after the PAC receives a request for reconsideration. However, if special circumstances require a delay, the review may
take up to 120 days. (If a decision cannot be made within the 60-day period, you will be notified of this fact in writing.) You will receive a written notice of the decision which
will explain the reasons for the decision by making specific reference to the Plan provisions on which the decision is based. 


ARTICLE IV



AMENDMENT, TERMINATION AND APPLICABLE LAW 


    Sec.
4.1  Amendment and Termination.  This Plan may be amended or terminated
at any time by action of the Board of Directors of the Company, the PAC or the Chief Executive Officer of the Company. 


    Sec.
4.2  Applicable Law.  The provisions of this Plan shall be construed
and enforced according to the laws of the State of Minnesota to the extent that such laws are not preempted by the laws of the United States of America. All controversies, disputes, and claims arising
hereunder shall be submitted to the United States District Court for the District of Minnesota. 





 
 

Schedule A    
  



	Benefit Calculation Provisions	 	Example (see assumptions below)
	

1.	
 	

Calculate the dollar difference between $2 million (that is, the highest compensation level covered by the Excess Long-Term Disability Plan) and the highest compensation level currently eligible for the qualified Long-Term Disability
Plan.	
 	

Step 1:	
 	

$2,000,000 - $160,000=$1,840,000
	

2.	
 	

Divide this difference by 40. (That is, the percentage point difference between the bottom (40%) and top end (80%) of the compensation replacement rate range. Call this result the decremental replacement factor.)	
 	

Step 2:	
 	

$1,840,000/40=$46,000
	

3.	
 	

Calculate the difference between the participant's current before-tax total TGT compensation (current base salary plus the average of the latest three years' bonuses) and the highest level of compensation currently eligible for the qualified
Long-Term Disability Plan.	
 	

Step 3:	
 	

$400,000 - $160,000=$240,000
	

4.	
 	

Divide this difference by the decremental replacement factor and subtract this amount from the top end of the compensation replacement rate. (Call this amount the target after-tax replacement rate.)	
 	

Step 4:	
 	

80 - ($240,000/$46,000)=80 - 5.2=74.8
	

5.	
 	

Find the after-tax value of participant's total compensation using the estimates of the participant's applicable Federal income, FICA, Medicare and state income taxes. (Assume no income source beyond TGT-paid compensation. Call this the after-tax
total compensation.)	
 	

Step 5:	
 	

$400,000 - $140,000=$260,000
	

6.	
 	

Given the participant's current after-tax total compensation, solve for the after-tax Excess LTD benefit that, when added to the qualified LTD benefit, yields the target after-tax replacement rate.	
 	

Step 6:	
 	

Solve for X where (82,000+X)/$260,000=.748 X=$112,480
	

7.	
 	

Calculate the before-tax value of the excess LTD benefit, using estimates of the executive's applicable Federal income, FICA, Medicare and state income taxes, assuming that the executive has no other taxable income for the year.	
 	

Step 7:	
 	

Solve for Y where (Y - $7,000 - $8,800 - $46,720)=$112,480

Y=$175,000
	
Example Assumptions	
 	

 	
 	

 
	

Executive's current total TGT compensation (base salary and average latest three year bonuses) is $400,000	
 	

 	
 	

 
	

Income limit for the qualified Long-Term Disability Plan is $160,000	
 	

 	
 	

 
	

Combined current federal income, FICA, Medicare, and state income taxes equal 35% of the executive's total compensation	
 	

 	
 	

 
	

Current maximum qualified Long-Term Disability Plan benefit is $82,000 at $160,000 of eligible income	
 	

 	
 	

 
	

On $175,000 in before-tax Excess LTD payments, the executive pays $7,000 in FICA/Medicare, $8,800 in state income taxes, and $46,720 in federal income taxes	
 	

 	
 	

 











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TARGET CORPORATION EXECUTIVE EXCESS LONG TERM DISABILITY PLAN

Schedule A