Exhibit (10)A


 


TARGET CORPORATION


DEFERRED COMPENSATION PLAN


SENIOR MANAGEMENT GROUP


 


(As amended and restated on
September 12, 2007)


 


ARTICLE 1


PURPOSE


 


                The purpose of this Deferred
Compensation Plan (the “Plan”) is to provide a means whereby Target Corporation
(the “Company”) may afford financial security to a select group of employees
who are in the Senior Management Group of the Company and its subsidiaries and
who have rendered and continue to render valuable services to the Company or
its subsidiaries and who make an important contribution towards the Company’s
continued growth and success, by providing for additional future compensation
so that such employees may be retained and their productive efforts encouraged.
The Plan document has been amended to reflect certain administrative practices
in effect as of May 1, 1999.


 


ARTICLE 2


DEFINITIONS AND CERTAIN
PROVISIONS


 


                Active Status. “Active
Status” means the Participant is currently employed by the Company or has
terminated employment under Normal or Early Retirement or under other
conditions described in Section 5.2 and has not yet begun to receive payments
from the Plan associated with a particular Deferral Account.


 


                Beneficiary.
“Beneficiary” means the person or persons designated as such in accordance with
Article 6.


 


                Benefit Deferral Period. “Benefit
Deferral Period” means that period of one (1) or four (4) Plan Years as
determined pursuant to Article 4 over which a Participant defers a portion of
such Participant’s Earnings.


 


                Committee. “Committee”
means the plan administration committee appointed to administer the Plan
pursuant to Article 3.


 


                Cumulative Deferral Amount.
“Cumulative Deferral Amount” means the total cumulative amount by which a
Participant’s Earnings must be reduced over the period prescribed in Section
4.1. If for a Plan Year a Matching Allocation for an Employee who is a member
of the Senior Management Group of the Company pursuant to the Target
Corporation Supplemental Retirement, Savings and Employee Stock Ownership Plan
(“SRSP”) cannot be made because the Before Tax Deposits or After Tax Deposits
elected by the Employee are reduced to comply with the provisions of the SRSP, “Cumulative
Deferral Amount” also includes the amount of the Matching Allocation that
cannot be made.


 


                Declared Rate.
“Declared Rate” means with respect to any Plan Year the applicable rate
announced in advance by the Committee for such Plan Year. Under no
circumstances shall the minimum rate be less than twelve percent (12%) per
annum and the maximum rate shall not exceed


 

















 


twenty percent (20%) per annum. The rate to be announced, subject to
the minimum and maximum percentages referenced above, shall be a calculated
rate using the following formula:


 


                Moody’s Corporate Bond Yield Average. Monthly
Average Corporates as published by Moody’s Investors Service, Inc. or its
successor (or if said index is no longer available, its successor index, or if
no successor index exists, such other index as selected by the Committee as
most closely replicates the measure produced by said Moody index) for the month
of June for the year preceding the subject Plan Year to which the Declared Rate
shall apply, said rate of return to be rounded to the nearest .10% of said
reported rate, to which percentage rate shall be added six (6) percentage
points (e.g. an index of 7.16% rounded to 7.20% plus 6% equals a 13.2% “Declared
Rate”). Provided however, if any tax or insurance change shall occur
which in the reasoned judgment of the Committee shall have an ongoing adverse
economic effect on the underlying COLI financing assumptions related to the
Plan, then the Committee may adjust said Declared Rate to reflect such adverse
economic impact but in no event below the twelve percent (12%) minimum
referenced in the first paragraph hereof.


 


                Deferral Account. “Deferral
Account” means the account maintained on the books of account of the Company
pursuant to Section 4.4.


 


                Early Retirement. “Early
Retirement” means the termination of a Participant’s employment with the
Employer for a reason other than death on or after the date the Participant
attains age 55.


 


                Earnings. “Earnings”
means the base pay and incentive pay paid to a Participant by the Company or a
subsidiary, excluding car and other allowances and other cash and non-cash
compensation.


 


                Eligible Employee. “Eligible
Employee” means each Employee in the Senior Management Group of the Company who
executes an Enrollment Agreement to participate in the Plan.


 


                Employee. “Employee”
means any person employed by the Employer on a regular full-time salaried
basis, including officers of the Employer.


 


                Employer. “Employer”
means the Company and any of its wholly owned subsidiaries.


 


                Enrollment Agreement. “Enrollment
Agreement” means the written agreement entered into by the Employer and an
Eligible Employee pursuant to which the Eligible Employee becomes a Participant
in the Plan. In the sole discretion of the Company, authorization forms filed
by any Participant by which the Participant makes the elections provided for by
this Plan may be treated as a completed and fully executed Enrollment Agreement
for all purposes under the Plan.


 


                Normal Retirement. “Normal
Retirement” means the termination of a Participant’s employment with the
Employer for reasons other than death on or after the date the Participant
attains age 65.


 


                Participant. “Participant”
means an Eligible Employee who has filed a completed and executed Enrollment
Agreement or authorization form with the Committee and is participating in the
Plan in accordance with the provisions of Article 4. “Participant” also means
an Employee who is a member of the Senior Management Group of the Company who
has a Cumulative Deferral Amount based on Matching Allocation that could not be
made to the SRSP.


 


2

















 


                Pay Status. “Pay Status”
means that the Participant has terminated employment with the Company and has
begun to receive payments from the Plan associated with a particular Deferral
Account.


 


                Plan Year. “Plan Year”
means the calendar year beginning January 1 and ending December 31.


 


ARTICLE 3


ADMINISTRATION OF THE PLAN


 


A
Committee shall be appointed by the Chief Executive Officer of the Company to
administer the Plan and to establish, adopt or revise such rules and
regulations as it may deem necessary or advisable for the administration of the
Plan. The Committee shall have discretionary authority to determine eligibility
for benefits and to construe the terms of the Plan. Interpretations of the Plan
by the Committee shall be conclusive. Members of the Committee shall be
eligible to participate in the Plan while serving as members of the Committee,
but a member of the Committee shall not vote or act upon any matter which
relates solely to such member’s interest in the Plan as a Participant.


 


ARTICLE 4


PARTICIPATION


 


4.1           Election to Participate. Any
Employee who is a member of the Senior Management Group of the Company may
enroll in the Plan by filing a completed and fully executed Enrollment
Agreement or authorization form with the Committee. Pursuant to said Enrollment
Agreement or authorization form, the Employee shall irrevocably designate a
dollar amount by which the aggregate Earnings of such Participant would be
reduced over one (1) or four (4) Plan Years next following the execution of the
Enrollment Agreement (the “Benefit Deferral Period”), provided, however, that:


 


(a)           Minimum
Deferral. The reduction for any Plan Year shall not be less than Five
Thousand Dollars ($5,000.00)


 


(b)           Reduction
in Earnings.


 


(i)            In General. Except as otherwise provided in this
Section 4.1, the Earnings of the Participant for each of the Plan Years in the
Benefit Deferral Period shall be reduced by the amount specified in the
Enrollment Agreement (including any authorization form) applicable to such Plan
Year.


 


(ii)           Accelerated Reduction. A Participant may elect in a
written notice with the consent of the Committee to increase the amount of the
reduction of Earnings otherwise provided for by Section 4.1(b)(i) for any of
the Plan Years remaining in the Benefit Deferral Period, provided, however,
that any such increase in the reduction of Earnings for any remaining Plan
Years in the Benefit Deferral Period shall not increase the Cumulative Deferral
Amount, but shall act to shorten the length of the Benefit Deferral Period.


 


3

















 


(c)           Maximum
Reduction in Earnings. A Participant may not elect a Cumulative Deferral
Amount or an increase in reduction of Earnings pursuant to Section 4.1(b)(ii),
or any combination of the two, that would cause the aggregate total reduction
in Earnings in any Plan Year to exceed twenty-five percent (25%) of the base
pay and one hundred percent (100%) of the incentive pay payable during such
Plan Year up to a total of $250,000 per year plus the amount of any payout made
pursuant to Section 5.4, or such greater percent of base pay and/or incentive
pay or greater total amount as the Committee may permit in its sole discretion.
In the event that a Participant elects a Cumulative Deferral Amount or increase
in reduction of Earnings that would violate the limitation described in this
paragraph (c), the election shall be valid except that the Cumulative Deferral
Amount or increase in reduction of Earnings so elected shall automatically be
reduced to comply with such limitation, whichever is most appropriate in the
sole discretion of the Committee.


 


4.2           Deferral Accounts. The
Committee shall establish and maintain a separate Deferral Account for each
Participant. The amount by which a Participant’s Earnings are reduced pursuant
to Section 4.1 shall be credited by the Employer to the Participant’s Deferral
Account on the fifteenth (15th) day of the month in which such Earnings would
otherwise have been paid. The Participant’s Deferral Account shall be credited
with the annual SRSP lost Matching Allocation on January 15 following the year
of the lost Matching Allocation. Such Deferral Account shall be debited by the
amount of any payments made by the Employer to the Participant or the
Participant’s Beneficiary pursuant to this Plan.


 


(a)           Normal
and Early Retirement Interest. Each Deferral Account of a Participant who
attains Normal or Early Retirement shall be deemed to bear interest, in
accordance with Appendix A, Section 1, from the date such Deferral Account was
established through the date of commencement of payment of the Normal or Early
Retirement Benefit at a rate equal to the Declared Rate which is announced by
the Committee for each Plan Year. Following the date of commencement of payment
of the Normal or Early Retirement Benefit, a Participant’s Deferral Account
shall be deemed to bear interest on the balance of such Deferral Account in
accordance with Appendix A, Section 2.


 


(b)           Other
Interest. In the case of any termination of a Participant’s employment with the
Employer other than by Normal or Early Retirement or upon the Participant’s
termination of enrollment in this Plan pursuant to Section 5.2(b), the
Participant’s Deferral Account shall be deemed to bear interest from the date
such Deferral Account was established through the date of the earlier of
termination of employment or termination of enrollment in this Plan on the
balance in such Deferral Account in accordance with Appendix A, Section 1,
except that the interest rate used to calculate interest earned in the Deferral
Account shall be ten percent (10%) per annum, provided, however, that if more
than five (5) years have elapsed since the first day of the Benefit Deferral
Period, the Participant’s Deferral Account shall be deemed to bear interest
from the date such Deferral Account was established through the date of the
earlier of termination of employment or termination of enrollment in this Plan
on the balance in such Deferral Account at a rate equal to the Declared Rate
which is announced by the Committee for each Plan Year, in accordance with
Appendix A, Section 1. Following the earlier of the date of commencement of
payment of the Termination Benefit or the date of termination of enrollment in
this Plan, a Participant’s Deferral Account shall be deemed to bear interest on
the balance in such Deferral Account in accordance with Appendix A, Section 1,
if the Participant is in Active Status with respect to the Deferral Account or
in accordance with Appendix A, Section 2, if the Participant is in Pay Status
with respect to the Deferral Account.




4



















However, in either case the interest rate used to calculate interest earned in
the Deferral Account shall be twelve percent (12%) per annum. Notwithstanding
anything contained herein to the contrary, if a Participant has begun receiving
benefits under this plan and the calculation of future benefits, using the
method of calculation set forth on Appendix A causes a reduction in benefits,
the future payments shall be made in accordance with the method used at the
time of the Participant’s initial payment.


 


4.3           Rollover Deferred Compensation
Account. In its sole discretion, the Committee may permit a Participant to
make a special rollover election to transfer any amounts which were previously
deferred under the Company’s existing deferred compensation plans to this Plan.


 


In
such event, the Committee shall establish and maintain a separate Rollover
Deferral Account for each Participant who makes a rollover transfer to this
Plan. Such Rollover Deferral Account shall be deemed to bear interest at the
same rate and subject to the same conditions as other Deferral Accounts
pursuant to Section 4.2. Each Participant who makes a rollover transfer to a
Rollover Deferral Account shall be treated for purposes of determining benefits
under the Plan as having a separate Cumulative Deferral Amount and Deferral
Account which shall initially be in the amount of the rollover transfer. A
Participant who makes a rollover transfer shall be deemed to waive all rights
under the Company’s existing deferred compensation plans from which rollover
transfers are made with respect to the amounts transferred to this Plan,
including the right to make elections regarding the time or manner of payment
as permitted thereunder. Rollover transfers shall be subject to the minimum
deferral amount set forth in Section 4.1(a), but shall not be subject to any
maximum deferral limitation.


 


4.4           Valuation of Accounts. The
value of a Deferral Account as of any date shall equal the amounts theretofore
credited to such account less any payments debited to such account plus the
interest deemed to be earned on such account in accordance with Section 4.2. Interest
shall be credited in accordance with Appendix A.


 


4.5           Statement of Accounts. The
Committee shall submit to each Participant, within one hundred twenty (120)
days after the close of each Plan Year, a statement in such form as the
Committee deems desirable setting forth the balance standing to the credit of
each Participant in his Deferral Account.


 


ARTICLE 5


BENEFITS


 


5.1           Normal or Early Retirement. Upon
Normal or Early Retirement, the payment of benefits shall commence on the first
day of the month following retirement, or following such later date which the
Participant elected in his Enrollment Agreement (including any authorization
form). A Participant may elect in his Enrollment Agreement (including any
authorization form) to have payments commence from one (1) to ten (10) years
following retirement, but not later than age 65 (or five (5) years after the
first day of the Benefit Deferral Period, if later).


 


(a)           Single
Participant. In the case of a Participant who is single when payments
commence, the Employer shall make periodic payments to the Participant in an
amount in accordance with Appendix A, Section 2.B., for the life of the
Participant, but not less than fifteen (15) years. The payments shall be the
actuarial equivalent of the aggregate of the


 


5



















Participant’s Deferral Account at the time payments commence and the interest
that will accrue on the unpaid balance in such Deferral Account during the
payment period pursuant to Section 4.2(a). The payment amount will be
redetermined annually to reflect the changes in the Declared Rate.


 


(b)           Married
Participant. In the case of a Participant who is married when payments
commence, the Employer shall make actuarially reduced payments in accordance
with Appendix A, Section 2.B., to the Participant for his life and thereafter,
if the Participant is survived by a spouse who was married to the Participant
when Normal or Early Retirement Benefit payments commenced, shall continue to
make payments to the Participant’s spouse for his life, with payments to be
made for an aggregate period of not less than fifteen (15) years. The payments
shall be the actuarial equivalent of the payments which would be made to the
Participant pursuant to Section 5.1(a) if he were single. The monthly amount of
payments will be redetermined annually to reflect changes in the Declared Rate.


 


5.2           Termination Benefit.


 


(a)           Terminations
of Employment. If a Participant shall cease to be an Employee for any
reason other than death or Normal or Early Retirement or Certain Terminations
of Employment under Section 5.2(b), the Employer shall pay to the Participant
in one lump sum an amount (the “Termination Benefit”) equal to the value of the
Deferral Account as of the date of payment and such Participant shall be
entitled to no further benefits under this Plan, provided, however, at the sole
discretion of the Committee, no lump sum shall be payable and, instead, the
Employer shall pay to the Participant the balance of the Deferral Account over
a four (4) year period in accordance with Appendix A, Section 2.C. Upon
termination of employment the Participant shall immediately cease to be
eligible for any benefits under the Plan other than the Termination Benefit. No
other benefit shall be payable to either the Participant or any Beneficiary of
such Participant.


 


(b)           Certain
Terminations of Employment. If a Participant shall cease to be an Employee
for any reason other than death or Normal or Early Retirement and shall be at
least age 50, have worked for the Company for at least 10 years and has
received an ICP Contract under the Company’s Income Continuance Policy that is
signed by Participant and Company and not rescinded, the payment of benefits
shall commence on the first day of the month following termination, or
following such later date which the Participant elected in his Enrollment
Agreement (including any authorization form). A Participant may elect in his
Enrollment Agreement (including any authorization form) to have payments
commence from one (1) to ten (10) years following retirement, but not later
than age 65 (or five (5) years after the first day of the Benefit Deferral
Period, if later).


 


(i)            Single Participant. In the case of a Participant
who is single when payments commence, the Employer shall make periodic payments
to the Participant in an amount in accordance with Appendix A, Section 2.B for
the life of the Participant, but not less than fifteen (15) years. The payments
shall be the actuarial equivalent of the aggregate of the Participant’s
Deferral Account at the time payments commence and the interest that will
accrue on the unpaid balance in such Deferral Account during the payment period
pursuant to Section 4.2(a). The amount of payments will be redetermined
annually to reflect changes in the Declared Rate.


 


6

















 


(ii)           Married Participant. In the case of a Participant
who is married when payments commence, the Employer shall make actuarially
reduced payments in accordance with Appendix A, Section 2.B, to the Participant
for his life and thereafter, if the Participant is survived by a spouse who was
married to the Participant when Normal or Early Retirement Benefit payments
commenced, shall continue to make pay period payments to the Participant’s
spouse for his life, with payments to be made for an aggregate period of not
less than fifteen (15) years. The payments shall be the actuarial equivalent of
the payments which would be made to the Participant pursuant to Section 5.1(a)
if he were single. The monthly amount of payments will be redetermined annually
to reflect changes in the Declared Rate.


 


(c)           Termination
of Enrollment in Plan. With the written consent of the Committee, a
Participant may terminate his enrollment in the Plan by filing with the
Committee a written request to terminate enrollment. The Committee will consent
to the termination of a Participant’s enrollment in the Plan in the event of an
unforeseeable financial emergency of the Participant. An unforeseeable
financial emergency shall mean an unexpected need for cash arising from an
illness, casualty loss, sudden financial reversal or other such unforeseeable
occurrence. Cash needs arising from foreseeable events such as the purchase of
a house or education expenses for children shall not be considered to be the
result of an unforeseeable financial emergency. Upon termination of enrollment,
no further reductions shall be made in the Participant’s Earnings pursuant to
his Enrollment Agreement, and the Participant shall immediately cease to be
eligible for any benefits under the Plan other than the Termination Benefit. No
other benefit shall be payable to either the Participant or any Beneficiary of
such Participant. In its sole discretion, the Committee may pay the Termination
Benefit on a date earlier than the Participant’s termination of employment with
the Employer, in which event the Termination Benefit shall be calculated as if
the Participant had terminated employment with the Employer on the date of such
payment. Following termination of enrollment in the Plan, a Participant’s
Deferral Account shall be deemed to bear interest on the balance in such
Deferral Account in accordance with Appendix A, Section 1, except that the
interest rate used to calculate interest earned in the Deferral Account shall
be twelve percent (12%) per annum.


 


5.3           Lump Sum Election. Other
provisions of Section 5.1 and Section 5.2 notwithstanding, if a Participant in
his Enrollment Agreement (including any authorization form) has elected a lump
sum payment to be made after his retirement, the amount of his Deferral Account
(including interest) for the Benefit Deferral Period covered by that Agreement
shall be paid to the Participant in a lump sum at the time specified in that
Agreement.


 


5.4           Early Payment Option. The
Employer shall pay to the Participant, if he is an Employee of the Company, the
amount by which the Participant’s Earnings were reduced in any Plan Year
pursuant to Section 4.1 during the eighth (8th) year following the Plan Year (“Early
Payment”), provided that such amount has not previously been paid out under
other provisions of the Plan. Such Early Payment shall not include any interest
credited to the Participant’s Deferral Account pursuant to Section 4.2. Notwithstanding
any other provisions of this Plan, the Participant may elect prior to the
beginning of any year in which such an Early Payment will be made to him to
reduce his Earnings during the year in which such Early Payment is made by an
amount equal to the Early Payment. An Early Payment shall not result in any
change in the Survivor Benefits payable pursuant to Section 5.5, other than as
a result of the reduction in the Participant’s Cumulative Deferral Account and
Deferral Account balance by the amount of the Early Payment.


 


7

















 


5.5           Survivor Benefits.


 


(a)           If a
Participant dies while employed with an Employer prior to Early or Normal
Retirement, the Employer will pay to the Participant’s Beneficiary an annual
benefit for the greater of:


 


(i)
ten (10) years, or


 


(ii)
until the Participant would otherwise have attained age 65,


 


                                                equal to fifty
percent (50%) of the Cumulative Deferral Amount. However, if the Committee
determines that a distribution of the Participant’s Deferral Account would
produce a greater benefit, such Deferral Account balance shall be paid to the
Participant’s Beneficiary in equal annual installments in accordance with
Appendix A, Section 2.C.2, but over the period specified above.


 


(b)        If a Participant dies after Early or
Normal Retirement, but prior to commencement of payment of any Early or Normal
Retirement Benefit under the Plan, the Employer will pay to the Participant’s
Beneficiary the benefit that such Participant would have received had the
Participant retired on the day prior to such Participant’s death, provided,
however, that if the present value of the benefit described in this Section
5.5(b) is less than the present value of the benefit described in Section
5.5(a), using in each case twelve percent (12%) as the discount factor, then
the Beneficiary described in this Section 5.5(b) shall receive the benefit
described in Section 5.5(a) and not the benefit described in this Section
5.5(b).


 


(c)        If a Participant (who was unmarried at
the commencement of the payment of any Early or Normal Retirement Benefit, or
whose spouse who was married to the Participant at the time of commencement of
payment of any Early or Normal Retirement Benefit predeceases the Participant)
dies after the commencement of the payment of any Early or Normal Retirement
Benefit, the Employer will pay to the Participant’s Beneficiary the remaining
installments of any such benefit for the balance of the fifteen (15) years
minimum payment period. If a spouse who was married to the Participant at the
time of commencement of payment of the Early or Normal Retirement Benefit
survives beyond such fifteen (15) years minimum payment period, payments shall
continue to be made to the spouse until the spouse’s death. If the spouse who
was married to the Participant at the time of commencement of payment of the
Early or Normal Retirement Benefit survives the Participant, but does not
survive past the fifteen (15) years minimum payment period, the Employer will
pay to the Participant’s Beneficiary the remaining installments of any such
benefit for the balance of the fifteen (15) years minimum payment period. In
computing any benefits to be paid following the Participant’s death pursuant to
this paragraph (c), the Participant’s Deferral Account shall be deemed to bear
interest following the Participant’s death on the balance in such Deferral
Account annually in accordance with Appendix A, Section 2.B.


 


(d)        If a Participant, who does not receive a
lump sum Termination Benefit, dies prior to the time he has received the four
(4) annual payments referred to in Section 5.2(a), the remaining payments for
such 4 year-period shall be paid to the Participant’s Beneficiary.


 


8

















 


(e)        Notwithstanding other provisions of the
Plan, if the Beneficiary is not a spouse, the present value of the installment
payments as described in Section 5.2(a), shall be paid as soon as
administratively feasible after the death of the Participant. The interest rate
used to compute the present value shall be the average of the Declared Rate for
the Plan Year in which the Participant dies and twelve percent (12%).


 


(f)         Solely for purposes of this Section
5.5, a Participant who has a Certain Termination of Employment as defined in
Section 5.2(b) shall be deemed to have had an Early Retirement and the benefit
payable under Section 5.2(b) shall be deemed to be an Early Retirement Benefit.


 


5.6           Small Benefit.
In the event that the Committee determines in its sole discretion that the
amount of any benefit is too small to make it administratively convenient to pay
such benefit over time, the Committee may pay the benefit in the form of a lump
sum equal to the value of the Deferral Account at the time of the distribution,
notwithstanding any provision of this Article 5 to the contrary.


 


5.7           Withholding. To
the extent required by the law in effect at the time payments are made, the
Employer shall withhold from payments made hereunder the minimum taxes required
to be withheld by the federal or any state or local government.


 


5.8           Delay
in Payment Required by Code Section 409A.  Notwithstanding any other
provision in this Article 5, if a Participant is a specified employee at
termination of employment, then any distributions arising on account of the
Participant’s termination of employment (other than on account of death) shall
be suspended and not be made until (6) months have elapsed since such
Participant’s termination of employment (or, if earlier, upon the date of the
Participant’s death). Any payments that were otherwise payable during the
six-month suspension period referred to in the preceding sentence, will be paid
within 60 days after the end of such six-month suspension period.


 


ARTICLE 6


BENEFICIARY DESIGNATION


 


Each Participant shall have the right, at any time, to designate any
person or persons as Beneficiary or Beneficiaries to whom payment under this
Plan shall be made in the event of the Participant’s death prior to complete
distribution to the Participant of the benefits due under the Plan. Each
Beneficiary designation shall become effective only when filed in writing with
the Committee during the Participant’s lifetime on a form prescribed by the
Committee.


 


The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed. Any finalized divorce or marriage
(other than a common law marriage) of a Participant subsequent to the date of
filing of a Beneficiary designation form shall revoke such designation unless
in the case of divorce the previous spouse was not designated as Beneficiary
and unless in the case of marriage the Participant’s new spouse had previously
been designated as Beneficiary. The spouse of a married Participant domiciled
in a community property jurisdiction shall join in any designation of
Beneficiary or Beneficiaries other than the spouse.


 


9

















 


If a Participant fails to designate a Beneficiary as provided above, or
if his Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant’s benefits, then the Committee shall direct the distribution of
such benefits to the Participant’s estate.


 


ARTICLE 7


AMENDMENT AND TERMINATION OF PLAN


 


7.1           Amendment.
The Board of Directors of the Company may at any time amend the Plan , in whole
or in part for any reason, including but not limited to tax, accounting or
insurance changes, a result of which may be to terminate the Plan for future
deferrals (excluding from such power to terminate future deferrals those future
deferrals provided for in Section 5.4 Early Payout Option); provided,
however, that no amendment shall be effective to decrease the benefits, nature
or timing thereof payable under the Plan to any Participant with respect to
deferrals made (and benefits thereafter accruing) prior to the date of such
amendment. Written notice of any amendment shall be given each Participant then
participating in the Plan. Notwithstanding the above, the Board authorizes the
Committee to amend the Plan to make any other amendments to this Plan deemed
necessary or desirable by the Committee for the operation and administration of
this Plan provided such amendment does not have a material financial impact on
DHC. Such changes will be considered an Amendment to this Plan and shall be
effective without further action by the Board. Written notice of any amendment
shall be given to each Participant then participating in the Plan.


 


7.2           Automatic
Termination of Plan. The Plan shall terminate only under the following
circumstances. The Plan shall automatically terminate upon (a) a determination
by the Company that a final decision of a court of competent jurisdiction or
the U. S. Department of Labor holding that the Plan is not maintained “primarily
for the purpose of providing deferred compensation for a select group of
management or highly-compensated employees,” and therefore is subject to Parts
2, 3 and 4 of Title I of ERISA, would require that the Plan be funded and would
result in immediate taxation to Participants of their vested Plan benefits, or
(b) a determination by the Company that a final decision of a court of
competent jurisdiction has declared that the Participants under the Plan are in
constructive receipt under the Internal Revenue Code of their vested Plan
benefits.


 


7.3           Payments
Upon Automatic Termination. Upon any Plan termination under Section 7.2,
the Participants will be deemed to have terminated their enrollment under the
Plan as of the date of such termination. The Employer will pay all Participants
the value of each Participant’s Deferral Accounts in a lump sum, determined as
if each Participant had a Termination of Employment on the date of such
termination of the Plan as provided under Section 5.2(a) hereof.


 


7.4           Payments Upon
Change of Control. Notwithstanding any provision of this Plan to the
contrary, if a “Change of Control” as defined in the Target Corporation
Deferred Compensation Trust Agreement (as it may be amended from time to time)
occurs and results in funding of the trust established under that Agreement,
each Participant (or Beneficiary of a deceased Participant) will be paid the
entire value at that time of his or her Deferral Accounts in a lump sum,
determined as provided in Appendix B of the Target Corporation Deferred
Compensation Trust Agreement. However, this section shall not apply, and no
amounts shall be payable to Participants or Beneficiaries under this section,
in the event the assets of said trust are returned to the Participating
Employers pursuant to the Trust Agreement because no Change of Control actually
occurred.


 


10

















 


ARTICLE 8


MISCELLANEOUS


 


8.1           Unsecured General
Creditor. Participants and their Beneficiaries, heirs, successors, and
assigns shall have no legal or equitable rights, claims, or interests in any
specific property or assets of Employer, nor shall they be beneficiaries of, or
have any rights, claims, or interests in any life insurance policies, annuity
contracts, or the proceeds therefrom owned or which may be acquired by Employer
(“Policies”). Such Policies or other assets of Employer shall not be held under
any trust for the benefit of Participants, their Beneficiaries, heirs,
successors, or assigns, or held in any way as collateral security for the
fulfilling of the obligations of Employer under this Plan. Any and all of
Employer’s assets and Policies shall be, and remain, the general, unpledged,
unrestricted assets of Employer. Employer’s obligation under the Plan shall be
merely that of an unfunded and unsecured promise of Employer to pay money in
the future.


 


8.2           Nonassignability.
Neither a Participant nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, or interest therein which are, and all rights
to which are, expressly declared to be unassignable and non-transferable. No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.


 


8.3           Employment Not
Guaranteed. Nothing contained in this Plan nor any action taken hereunder
shall be construed as a contract of employment or as giving any Employee any
right to be retained in the employ of the Employer.


 


8.4           Protective
Provisions. Each Participant shall cooperate with the Employer by
furnishing any and all information requested by the Employer in order to
facilitate the payment of benefits hereunder, taking such physical examinations
as the Employer may deem necessary and taking such other relevant action as may
be requested by the Employer. If a Participant refuses so to cooperate, the
Employer shall have no further obligation to the Participant under the Plan,
other than payment to such Participant of the cumulative reductions in Earnings
theretofore made pursuant to this Plan. If a Participant commits suicide during
the two (2) year period beginning on the later of (a) the date of adoption of
this Plan or (b) the first day of the first Plan Year of such Participant’s
participation in the Plan, or if the Participant makes any material
misstatement of information or nondisclosure of medical history, then no
benefits will be payable hereunder to such Participant or his Beneficiary,
other than payment to such Participant of the cumulative reductions in Earnings
theretofore made pursuant to this Plan, provided, that in the Employer’s sole
discretion, benefits may be payable in an amount reduced to compensate the Employer
for any loss, cost, damage or expense suffered or incurred by the Employer as a
result in any way of such misstatement or nondisclosure.


 


8.5           Gender, Singular
and Plural. All pronouns and any variations thereof shall be deemed to
refer to the masculine or feminine as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural and
the plural as the singular.


 


8.6           Captions. The
captions of the articles, sections, and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.


 


11

















 


8.7           Validity. In
the event any provision of this Plan is held invalid, void, or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.


 


8.8           Notice. Any
notice or filing required or permitted to be given to the Committee under the
Plan shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, to the principal office of the Employer, directed
to the attention of the President of the Employer. Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification.


 


8.9           Applicable Law.
This Plan shall be governed and construed in accordance with the laws of the
State of Minnesota as applied to contracts executed and to be wholly performed
in such state.


 


12

















 


APPENDIX
A


Section 1


 


Participant Deferral Account Interest Crediting While in Active Status
Assuming No Further Deferrals


 


A.           A Participant shall receive
interest credited monthly equal to the Participant’s beginning-of-year (BOY)
Deferral Account balance times the Declared Rate divided by twelve:


 


                        Interest crediting
occurs up to the day the Participant begins to receive annuity payments from
the Plan.


 


                        Example of interest
credited calculation


 


	
  BOY Deferral Account
  balance at 1/1/99

  	
  =

  	
  $500,000.00

  
	
  Declared Rate

  	
  =

  	
  13.7%

  
	
  Declared Rate divided
  by 12 = 13.7%/12

  	
  =

  	
  1.1417%

  
	
  Credited interest for each month of 1999

  	
  =

  	
  $500,000  ́ .011417 = $5,708.50

  



 


B.             A participant’s Deferral Account
balance shall be increased each month by taking the beginning-of-month (BOM)
balance plus interest credited for the month to equal the end-of-month (EOM)
balance.


 


                        BOM balance +
monthly interest credited = EOM balance


 


                        Example of monthly
account growth


 


	
  BOM balance at 1/1/99

  	
  =

  	
   $500,000.00

  	
   

  
	
  Monthly crediting dollars for 1998

  	
  =

  	
   $5,708.50

  	
   

  
	
  EOM at 1/31/99

  	
  =

  	
   $500,000.00 +
  5,708.50 = $505,708.50

  	
   

  
	
  EOM at 2/28/99

  	
  =

  	
   $505,708.500
  + 5,708.50 = $511,417.00

  	
   

  



 


13

















 


Section 2:


Interest Crediting, Deferral Account Balances, and Payments While in
Pay Status


 


A.   Definition of
Variables for Participant Payment Calculation


 


1.               “n” = number of payments
expected to be made to a Participant and spouse. The number of expected
payments shall be determined by: (1) The ages of the Participant and spouse at
the time annuity payments first begin. (2) The number of years that the
Participant and spouse are expected to live, as determined by an
actuarially-based mortality table selected by the Committee. (3) The frequency
of payments made to the Participant. This frequency shall be determined by the
payroll procedures of the Company’s operating division responsible for
administering the Participant’s payments.


 


                        Example of number
of expected payments (assuming payments to begin on 10/1/99)


 


	
   

  	
   

  	
  Frequency
  of payments

  	
   

  	
  =
  monthly

  
	
   

  	
   

  	
  Participant age on 10/1/99

  	
   

  	
  = 50 yrs. old

  
	
   

  	
   

  	
  Spouse age on 10/1/99

  	
   

  	
  = 48 yrs. old

  
	
   

  	
   

  	
  Participant’s and spouse’s joint expected remaining
  lives

  	
   

  	
  = 476 months

  
	
   

  	
   

  	
  “n” for 10/1/99

  	
   

  	
  = 476

  
	
   

  	
   

  	
  “n” for 1/1/00

  	
   

  	
  = 473

  
	
   

  	
   

  	
  “n” for 1/1/01

  	
   

  	
  = 461

  



 


2.               “i” = interest rate per payment
period such that when compounded over the entire year equals the Declared Rate.


 


                        “i” shall be
expressed either as a weekly or monthly interest rate, depending on the
frequency of annuity payments made by the operating division administering the
Participant’s payments. If weekly, “i” is the interest rate that, when
compounded over 52 periods, will equal the Declared Rate. If monthly, “i” is
the interest rate that, when compounded over 12 periods, will equal the
Declared Rate.


 


                        Example of weekly
and monthly interest rates


 


Declared Rate = 13.7%


Weekly “i” = (1.137)1/52 = .002472 or .2472%


Monthly “i” = (1.137)1/12 = .010757 or 1.0757%


 


3.               The beginning-of-period balance
(BOP balance) is the Participant’s Deferral Account balance at any time before
credited interest has been added for the period and payments have been
subtracted for the period.


 


                        End-of-period
balance (EOP balance) is the Participant’s Deferral Account balance at any
point in time after credited interest has been added for the period and
payments have been subtracted for the period.


 


                        Example of EOP
balance calculation


 


14

















 


                        EOP balance = BOP
balance + interest crediting – payment


 


B.   Payments


 


1.               Calculation of payments


 


At the beginning of each year (or at the beginning of a month when a
Participant’s Deferral Account is first transferred from active status to
payment status), a payment shall be calculated for each Participant who has a
Deferral Account that is in the payment status. The periodicity of payments
shall depend on the payroll procedures of the operating division administering
the Participant’s payments. The amount of the payment shall be effective for
that calendar year (or portion of the calendar year).


 


The calculation of the payment amount is based on the present value of
an annuity formula. Specifically, the payment is given by:


 





 


                        Example of a
calculation with monthly payments


 


                                                n = 476 months


                                                Monthly i = 1.0757%


                                                BOP balance =
$500,000.00


                                                Payment = $5,411.73


 


                        Example of a
calculation with weekly payments


 


                                                n = 2,070 weeks


                                                Weekly i = 0.2472%


                                                BOP balance =
$500,000.00


                                                Payment = $1,243.50


 


2.               Interest Crediting for Payments


 


Interest crediting shall be calculated every payment period, with the
interest amount equal to the beginning-of-period Deferral Account balance times
the periodic interest rate


 


                        Example of interest
crediting calculation (assuming monthly payments and a 13.7% Declared Rate)


 


                                                BOP balance =
$500,000.00


                                                Monthly i = 1.0757%


                                                Interest crediting
= $500,000.00  ́ .010757 =
$5,378.50


 


15

















 


3.               Amortization of Participant
Deferral Account Balances


 


Participant Deferral Account balances shall be amortized over the
remaining number of expected payment periods by adding to the
beginning-of-period balance the interest credits earned during the period less
the payment made for the period to produce an end-of-period Deferral Account
balance.


 


                        Example of Deferral
Account balance amortization (assuming monthly payments and a 13.7% Declared
Rate)


 


                                                BOP balance =
$500,000.00


                                                Monthly i = 1.0757%


                                                Interest crediting
= $5,378.50


                                                Payment = $5,411.73


                                                EOP balance =
$500,000.00 + $5,378.50 - $5,411.73 = $499,966.77


 


C.   Installment
Termination Payments


 


1.               At the Company’s discretion, if
a participant terminates employment with the Company prior to Normal or Early
Retirement, as described in Article 5, Section 5.2(a), a participant’s balance
may be paid out over a four (4) year installment period (one payment a year)
instead of as an immediate lump sum payment.


 


2.               The four equal annual
installment payments are determined by using the present value of an annuity
formula referenced in Section 2.B.1. of this Appendix. The interest rate used
in calculating the four payments shall be 12%.


 


                        Example of a
four-year annual installment payout of a Deferral Account balance


 


                                                n = 4


                                                Annual i = 12%


                                                BOP balance =
$500,000.00


                                                Annual installment
payments = $164,617.22


 


16