Exhibit
(10)B


 


TARGET
CORPORATION


SMG EXECUTIVE DEFERRED COMPENSATION PLAN


 


(As amended and restated on September 12, 2007)


 


ARTICLE I


 


GENERAL


 


Sec. 1.1  Name of Plan.  The name of the Plan set forth herein is the
Target Corporation SMG Executive Deferred Compensation Plan.  It is referred to herein as the “Plan.”


 


Sec. 1.2  Purpose.  The purpose of the Plan is to provide a means
whereby Target Corporation (the “Company”) may afford financial security to a
select group of Employees of the Company and its subsidiaries 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.


 


Sec. 1.3  Effective Date.  The Effective Date of the Plan is January 1,
1997.


 


Sec. 1.4  Company.  “Company” means all of the following:


 


(a)                                 Target Corporation, a Minnesota corporation.


 


(b)                                 Any successor of Target Corporation (whether direct or indirect, by
purchase of a majority of the outstanding voting stock of Target Corporation or
all or substantially all of the assets of Target Corporation, or by merger,
consolidation or otherwise).


 


(c)                                  Any
person that becomes liable for the obligations hereunder of the entities
specified in (a) and (b) above by operation of law.


 


Sec. 1.5  Participating Employers.  The Company is a Participating Employer in
the Plan.  With the consent of the Company,
by action of the Board or any duly authorized officer, any wholly-owned
subsidiary of the Company may, by action of its board of directors or any duly
authorized officer, also become a Participating Employer in the Plan effective
as of the date specified by it in its adoption of the Plan; but the subsidiary
shall cease to be a Participating Employer on the date it ceases to be a
wholly-owned subsidiary of the Company. 
The other Participating Employers on the Effective Date are:


 

















 


	
  Dayton’s
  Commercial Interiors, Inc. (Minnesota)

  	
   

  	
  Rivertown
  Trading Company (Minnesota) (April 15, 1998)

  
	
   

  	
   

  	
   

  
	
  Dayton’s Travel Service, Inc.

  	
   

  	
  The Daily Planet Company (April 15, 1998)

  
	
   

  	
   

  	
   

  
	
  Mervyn’s (California)

  	
   

  	
  High Bridge Company (April 15, 1998)

  
	
   

  	
   

  	
   

  
	
  Dayton Hudson Brands, Inc. (February 1, 1999)

  	
   

  	
  High Bridge Music Company (April 15, 1998)

  
	
   

  	
   

  	
   

  
	
  DHC Milwaukee, Inc. (Wisconsin)

  	
   

  	
  The Associated Merchandising Corporation — only U.S. based employees
  who pay U.S. income taxes (January 1, 1999)

  
	
   

  	
   

  	
   

  
	
  DHC Wisconsin, Inc. (Wisconsin)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Marshall Field & Company (Delaware)

  	
   

  	
  Mervyn’s Brands, Inc. (August 1, 1999)

  
	
   

  	
   

  	
   

  
	
  Marshall Field Stores, Inc. (Delaware)

  	
   

  	
  target.direct LLC (date company first hired employees)

  
	
   

  	
   

  	
   

  
	
  Retailers National Bank

  	
   

  	
  Hometown America (date company first hired employees)

  
	
   

  	
   

  	
   

  
	
  Northern Fulfillment Services Company (date company first hired
  employees)



  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Target Customs Brokers, Inc. (date company first hired employees)

  	
   

  	
   

  



 


Sec.
1.6  Construction and Applicable Law.  The Plan is intended to be an unfunded benefit
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated Employees, subject to the applicable
requirements of ERISA.  The Plan shall be
administered and construed consistently with said intent.  It shall also be construed and administered
according to the laws of the State of Minnesota to the extent such laws are not
preempted by 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.


Sec.
1.7  Rules of Construction.  The Plan shall be construed in accordance
with the following:


(a)                                 Headings at the beginning of articles and sections hereof are for
convenience of reference, shall not be considered as part of the text of the
Plan and shall not influence its construction.


(b)                                 Capitalized terms used in the Plan shall have their meaning as defined
in the Plan unless the context clearly indicates to the contrary.


 


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(c)                                  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.


(d)                                 Use of the words “hereof,” “herein,” “hereunder” or similar compounds
of the word “here” shall mean and refer to the entire Plan unless the context
clearly indicates to the contrary.


(e)                                  The provisions of the Plan shall be construed as a whole in such manner
as to carry out the provisions thereof and shall not be construed separately
without relation to the context.


Sec. 1.8 Supplements.  Some Plan provisions that have application to
a limited number of Participants or that otherwise do not apply equally to all
Plan participants may be described in a Supplement to the Plan.  In the event of a conflict between the terms
of a Plan Supplement and the terms of the remainder of the Plan, the terms of
the Plan Supplement will control.


ARTICLE II


 


DEFINITIONS


 


Sec.
2.1  Base Salary.  “Base Salary” is the salary an Employee is
expected to earn in a Benefit Deferral Period, assuming the Employee is
employed for the full Benefit Deferral Period.


 


Sec. 2.2  Beneficiary.  “Beneficiary” means the person or persons
designated as such in accordance with Article VI.


 


Sec. 2.3  Benefit Deferral Period.  “Benefit Deferral Period” means that period
of one Plan Year or such other period as designated by the Committee, as
determined pursuant to Article IV over which a Participant defers a portion of
such Participant’s Based Salary and/or Bonus.


 


Sec. 2.4  Bonus. 
“Bonus” is the bonus under any bonus plan of a Participating
Employer.  Any part of a “Bonus” earned
in a Benefit Deferral Period, but otherwise payable in the year following the
Benefit Deferral Period, is governed by the deferral election made for the
Benefit Deferral Period.


 


Sec. 2.5  Board. 
“Board” means the board of directors of the Company, and includes any
committee thereof authorized to act for said board of directors.


 


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Sec. 2.6  Continuing Participating Salary.  “Continuing Participating Salary” shall be
the amount of compensation during the previous Plan Year necessary to make a
Participant a Highly Compensated Employee for the current Plan Year.


 


Sec. 2.7  Committee.  “Committee” means the Plan Administrative
Committee appointed in accordance with Section 7.1(d) hereof which is
authorized by the Board of Directors of the Company to act on behalf of the
Company in accordance with the terms of this Plan.


 


Sec. 2.8  Credited Service.  “Credited Service” of a Participant means the
number of years of service for vesting purposes a Participant would have under
the applicable defined benefit pension plan of the Company and/or a
Participating Employer.


 


Sec.
2.9  Crediting Rate.  “Crediting Rate” means the earnings or losses
for a day on Crediting Rate Alternative(s) available for the Plan.


 


Sec. 2.10  Crediting Rate Alternative.  “Crediting Rate Alternative(s)” means
Crediting Rate for any of the investment fund options available to Participants
in the TGT 401(k) Plan.


 


Sec. 2.11  Cumulative Deferral Amount.  “Cumulative Deferral Amount” means the total
cumulative amount by which a Participant’s Base Salary and/or Bonus must be
reduced over the period prescribed in Section 4.1.  If for a Plan Year a Matching Allocation for
a Participant pursuant to the TGT 401(k) 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 TGT 401(k), “Cumulative Deferral Amount” also
includes the amount of the Matching Allocation that cannot be made.  “Cumulative Deferral Amount” also includes
amounts transferred from the HCCAP.


 


Sec. 2.12  TGT 401(k) Plan.  “TGT 401(k) Plan” or “TGT
401(k)” means the Target Corporation 401(k) Plan, formerly known as “SRSP”
(Dayton Hudson Corporation Supplemental Retirement, Savings and Employee Stock
Ownership Plan).


 


Sec. 2.13  EMG. 
An “EMG” is a member of the Executive Management Group of the Company or
a Participating Employer, as that term is defined by the Vice President of
Personnel.


 


Sec. 2.14  Deferral Account.  “Deferral Account” means the accounts
maintained on the books of account of the Company pursuant to Section 4.2.


 


Sec. 2.15  Employee.  “Employee” means a Qualified Employee as that
term is defined in the TGT 401(k) Plan.


 


Sec. 2.16  Enhancement.  “Enhancement” means an additional .1667% per
month added to each Crediting Rate Alternative.


 


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Sec. 2.17  Enrollment Agreement.  “Enrollment Agreement” means the agreement
entered into by the Company and an Employee pursuant to which the 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.


 


Sec. 2.18  ERISA. 
“ERISA” means the Employee Retirement Income Security Act of 1974, as
from time to time amended.


 


Sec. 2.19  HCCAP. 
“HCCAP” is the Company’s Highly Compensated Capital Accumulation Plan.


 


Sec. 2.20  Highly Compensated Employee.  “Highly Compensated Employee” means a “Highly
Compensated Employee” as that term is defined in the TGT 401(k).


 


Sec. 2.21  Named Fiduciary.  The Company and the Vice President of
Personnel are “Named Fiduciaries” for purposes of ERISA with authority to control
and manage the operation and administration of the Plan.  Other persons are also Named Fiduciaries
under ERISA if so provided thereunder or if so identified by the Company, by
action of the Board or the Chief Executive Officer.  Such other person or persons shall have such
authority to control or manage the operation and administration of the Plan as
may be provided by ERISA or as may be allocated by the Company, by action of
the Board, the Chief Executive Officer, or the Vice President of Personnel.


 


Sec. 2.22  Participant.  “Participant” means an eligible Employee who
has filed a completed and executed Enrollment Agreement or authorization form
with the Company and is participating in the Plan in accordance with the
provisions of Article IV.  “Participant”
also means an Employee of the Company who has a Cumulative Deferral Amount
based on Matching Allocation that could not be made to the TGT 401(k)
Plan.


 


Sec. 2.23  Person.  “Person” means an individual, partnership,
corporation, estate, trust or other entity.


 


Sec. 2.24  Plan Year.  “Plan Year” means the period commencing with
the Effective Date and ending December 31, 1997 and each subsequent calendar
year.


 


Sec. 2.25  Rate of Return Alternative Change Form.  “Rate of Return Alternative Change Form” means
the form of authorization approved by the Company by which the Participant
notifies the Plan of its choices for Crediting Rate Alternatives for his
account under the Plans.


 


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Sec. 2.26  Signature.  “Signature” or “sign” as used herein shall
mean either the Participant’s written signature or the Participant’s electronic
signature evidenced by the use of an electronic personal identification number.


 


Sec. 2.27  SMG. 
A “SMG” is a member of the Senior Management Group of the Company or a
Participating Employer, as that term is defined by the Vice President of
Personnel.


 


Sec. 2.28  Termination of Employment.  The “Termination of Employment” of an
Employee from its Participating Employer for purposes of the Plan shall be
deemed to have occurred one month after the occurrence of the following:  his or her resignation, discharge,
retirement, death, failure to return to active work at the end of an authorized
leave of absence, or the authorized extension or extensions thereof, failure to
return to work when duly called following a temporary layoff, or upon the
happening of any other event or circumstance which, under the policy of his
Participating Employer as in effect from time to time, results in the termination
of the Employer/Employee relationship; provided, however, that “termination of
employment” shall not be deemed to have occurred upon transfer between any
combination of participating employers, affiliates and predecessor employers.


 


Sec. 2.29  Vice President of Personnel.  “Vice President of Personnel” means the most
senior officer of the Company who is assigned responsibility for compensation
and benefits matters or such other officer as may be designated from time to
time by the Board of Directors.


 


Sec.
2.30  Year of Vesting.  A “Year of Vesting” is a full year of
participation under HCCAP or a full year of participation in a deferred
compensation plan of the Company.


ARTICLE III


 


ELIGIBILITY


 


Sec. 3.1  Eligibility.  An Employee shall be a Participant while, and
only while, he or she is a regular Employee of a Participating Employer,
subject to the following:


 


(a)                                 An
Employee will become a Participant on the first day of the first Plan Year in
which he or she is a Highly Compensated Employee.


 


(b)                                 An Employee must be a SMG or EMG on the first day of the Plan Year, or
he or she cannot become a Participant.


 


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(c)                                  If an Employee’s Base Salary is below the Continuing Participating
Salary, he or she will continue to be a Participant, but no further deferrals
will be allowed and no TGT 401(k) match will be added to the Cumulative
Deferral Amount.


 


(d)                                 The Employee must complete an enrollment and sign an insurance consent
form in the form that the Company determines in order to defer Base Salary
and/or Bonus.  The insurance consent form
will allow the Company to purchase life insurance on the Employee with the
Company as beneficiary.


 


Sec. 3.2  Eligibility Upon Hire.  Notwithstanding anything contained in this Article
3, to the contrary, if an Employee is initially hired by a Participating
Employer as a SMG or EMG that Employee shall be eligible to be a Participant on
his/her date of employment provided that the Employee has met the requirements
of Section 3.1(d).  If the Employee does
not meet the requirements of Section 3.1(d) on the date of hire, the Employee
must meet the requirements of Section 3.1 to be eligible to participate in the
Plan.


 


Sec.
3.3  No Guarantee of Employment.  Participation in the Plan does not constitute
a guarantee or contract of employment with any Participating Employer.  Such participation shall in no way interfere
with any rights a Participating Employer would have in the absence of such
participation to determine the duration of the Employee’s employment.


ARTICLE IV


 


PARTICIPATION
AND BENEFITS


 


Sec. 4.1  Election to Participate.  Any Employee of a Participating Employer who
is eligible to participate may enroll in the Plan by completing the Enrollment
Agreement or authorization form with the Company in a form acceptable to the
Company.  Pursuant to said Enrollment
Agreement or authorization form, the Employee shall irrevocably designate the
percentage amount by which the Base Salary and/or the percentage amount by
which the Bonus of such Participant would be reduced over the Benefit Deferral
Period next following the execution of the Enrollment Agreement; provided,
however, that:


 


(a)                                 Reduction in Earnings.  Except as otherwise provided in this Section
4.1, the Base Salary and/or Bonus of the Participant for the Benefit Deferral
Period shall be reduced by the amount specified in the Enrollment Agreement
(including any authorization form) applicable to such Plan Year.


 


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(b)                                 Maximum Reduction in Earnings.  A Participant may not elect a Cumulative
Deferral Amount that would cause the reduction in Base Salary in any Plan Year
to exceed eighty percent (80%) of the Base Salary and eighty percent (80%) of
the Bonus payable during such Plan Year or such greater amount or percent of
base pay and/or incentive pay or greater total amount as the Company may permit
in its sole discretion.  In no event can
Base Salary be reduced below one hundred and ten percent (110%) of the
Continuing Participating Salary in the previous Plan Year.  In the event that a Participant elects a
Cumulative Deferral Amount that would violate the limitation described in this
paragraph (b), the election shall be valid except that the Cumulative Deferral
Amount so elected shall automatically be reduced to comply with such
limitation, whichever is most appropriate in the sole discretion of the
Company.


 


(c)                                  Mid-Year Elections to Participate.  Notwithstanding any provision of the Plan to
the contrary, an Employee who met the requirements of Sec. 3.1(a), (b) and (c)
on the first day of the Plan Year, but who did not file an Enrollment Agreement
prior to the Benefit Deferral Period commencing on that date, may file an
Enrollment Agreement in advance of July 1 of that year during a period
specified by the Committee and in accordance with such rules as the Committee
may establish, which shall be effective as of July 1, and shall apply to the
Participant’s Base Salary for the last six months of the Plan Year.  Any Enrollment Agreement made under this
subsection (c) shall not apply to any Bonus payable to the Participant with
respect to the Benefit Deferral Period in which the Agreement is filed.


 


Sec. 4.2  Deferral Accounts.  The Company shall establish and maintain
separate Deferral Accounts for each Participant.  The amount by which a Participant’s Base
Salary or Bonus are reduced pursuant to Section 4.1 shall be credited by the
Company to the Participant’s Deferral Accounts as soon as administratively
possible after the end of each pay cycle in which such Base Salary or Bonus
would otherwise have been paid.  The
Participant’s Deferral Account shall be credited with the annual TGT
401(k) lost Matching Allocation no later than the last day of January following
the year of the lost Matching Allocation. 
Such Deferral Accounts shall be debited by the amount of any payments
made by the Company to the Participant or the Participant’s Beneficiary
pursuant to this Plan.  A separate
Deferral Account shall be maintained for each type of deferral 


 


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election made and for each Crediting Rate
Alternative.  Effective January 1, 2008, a Participant’s
lost Matching Allocation for a Plan Year will not exceed the reductions
credited to the Participant’s Deferral Account pursuant to Section 4.1 during
such Plan Year.


 


Sec. 4.3  HCCAP. 
All persons who become Participants in this Plan on January 1, 1997 will
have the balance of their HCCAP Account transferred to this Plan effective
January 1, 1997.  All persons who become
Participants in this Plan after January 1, 1997 will have the balance in their
HCCAP account transferred on the January 1 they become Participants.  Unless the Participant completes a new
election, the balances of a participant’s HCCAP account shall be deposited in
this Plan in the same Crediting Rate Alternatives and at the same percentages
as in the Participant’s HCCAP account. 
The Deferral Accounts transferred from HCCAP will be paid in immediate
lump sum payouts after Termination of Employment.


 


Sec. 4.4  Crediting Rate Alternatives.  The Participant shall select the Crediting
Rate Alternatives, using full percentages, that are to be applied to his or her
Deferral Accounts.  Participants may
change their Crediting Rate Alternatives daily by completing a Rate of Return
Alternative Change Form.  If a
Participant does not make an election, the Crediting Rate Alternative will
remain the same as previously chosen by Participant.  If Participant has not previously made an
election in HCCAP or under this Plan, the Crediting Rate Alternative will be a
default Crediting Rate Alternative selected by the Committee.


 


Sec. 4.5  Benefit Payment Elections.  At the time a Participant executes an
Enrollment Agreement, he or she must also elect the method of benefit payment
and the time to start the benefit.  The
elections are to be made for each Plan Year.


 


(a)                                 Method of Benefit Payment.  Benefits for each Plan Year can be paid in a
lump sum, five annual installments or ten annual installments.


 


(b)                                 Commencement of Benefit.


 


(i)                                     The benefit for each Plan
Year may be started as soon as possible following Termination of Employment or
one year following Termination of Employment.


 


(ii)                                  With respect to his or her
Account other than Supplemental Pension Plan Benefit Transfer Credits and
related earnings, a Participant may elect a lump sum payment as of January 1 of
the calendar year elected by the 


 


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Participant
at the time of deferral.  If a
Participant has a Termination of Employment prior to the fixed payment date,
such amount shall be paid on the earlier of: (A) within 60 days following
January 1 in the tenth year following the year of the Termination of
Employment, or (B) January 1 of the calendar year elected by the Participant at
the time of deferral.  The Plan
Administrator will establish Plan Rules, procedures and limitations on
establishing the number and times of the fixed payment dates available for
Participants to elect.


 


(iii)                               Consistent with transition
relief available under Code section 409A, and subject to Plan Rules, the Plan
Administrator, in its sole discretion, may offer an opportunity to Participants
to elect to receive a distribution of all or a portion of their Account prior
to Termination of Employment.


 


(iv)                              If a Participant is a
specified employee (as defined under Code section 409A) 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.


 


(c)                                  Benefit Payment.  If no form of benefit payment is elected, the
method of benefit payment shall be lump sum.


 


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Sec. 4.6  Crediting.  Each Deferral Account will be credited on the
balance in the Deferral Account as follows:


 


(a)                                 Employee.


 


(i)  Crediting Rate Alternative.  Each Deferral Account of an Employee will be
credited at the end of a day on the balance in the Deferral account at the
beginning of that day using the Crediting Rate Alternative.


 


(ii)  Enhancement.  The total balance in all Deferral Accounts on
the first day of the month will be credited at the end of the month at a rate
equal to the Enhancement.  The amount
will be credited among Participant’s Deferral Accounts at the time the
Enhancement is credited in an amount equal to the proportion which each
Deferral Account has to the Participant’s entire balance.  No Enhancement will be credited after January
29, 2006 with respect to any Participant who is an executive committee member
as of such date, or with respect to any fiscal year of the Company for a
Participant who becomes an executive committee member after that date; provided  the Committee, in its sole discretion, can
allow the Enhancement to be credited with 


 


11

















 


respect to a Participant’s
Account during the portion of the fiscal year of the Company prior to when the
Participant initially becomes an executive committee member.


 


(b)                                 Terminated Employee.  Each Deferral Account of an Employee who has
had a Termination of Employment will be credited at the end of a day on the
balance in the Deferral Account at the beginning of that day, using the
Crediting Rate Alternative.


 


(c)                                  Vesting.  Each Employee who has a Termination of
Employment and does not have five Years of Vesting will have his or her
Deferral Accounts revalued using only the Crediting Rate Alternative and not
receiving the Enhancement.  Provided,
however, if an Employee’s Termination of Employment is because of death or
permanent and total disability, or on or after age 65, the Employee will be
treated as if he or she had five years of vesting.


 


Sec. 4.7  [Intentionally left blank.].


 


Sec. 4.8  Statement of Accounts.  The Company shall submit to each Participant,
within one hundred twenty days after the close of each Plan Year, a statement
in such form as the Company deems desirable, setting forth the balance standing
to the credit of each Participant in his Deferral Accounts.


 


ARTICLE V


 


CERTAIN
BENEFIT PAYMENTS


 


Sec. 5.1  Termination of Enrollment in Plan.  With the written consent of the Company, a
Participant may terminate his or her enrollment in the Plan by filing with the
Company a written request to terminate enrollment.  The Company 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 Base Salary or Bonus pursuant to his or her Enrollment Agreement,
and the Participant shall immediately cease to be eligible for any benefits
under the Plan for the current year other than payments from his or her
Deferral Accounts.  


 


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In its sole discretion, the Committee may pay the
Deferral Accounts on a date earlier than the Participant’s Termination of
Employment with the Participating Employer, in which event the Committee shall
calculate an amount which is appropriate in accordance with the unforeseeable
financial emergency and that amount shall be paid as if the Participant had a
Termination of Employment with the Participating Employer on the date of such
payment.


 


Notwithstanding anything
contained hereinto the contrary in the event Participant makes a hardship
withdrawal under the TGT 401(k) Plan or any other qualified plan
sponsored by the Company, then the Participant’s deferrals under this Plan
shall be terminated until a period which is one year from the date on which the
hardship withdrawal was taken.


 


Sec. 5.2  Survivor Benefits


 


(a)                                 Death While Employed.  If a Participant dies while employed by a
Participating Employer, the Company will pay the amount in his or her Deferral
Accounts to the Participant’s Beneficiary as soon as possible after death in a
lump sum.


 


(b)                                 Death After Termination of Employment.  If a Participant dies after Termination of
Employment, and has not received all of his or her payments, and the
Participant’s Beneficiary is his or her spouse, payments shall be made to the
spouse pursuant to the Participant’s payout elections.  If the Participant’s spouse dies before
receiving all payments, the remaining amount in the Deferral Accounts will be
paid in a lump sum as soon as possible after the spouse’s death to the spouse’s
estate.  If a Participant dies after Termination
of Employment, has not received all of his or her payments, and the
Participant’s Beneficiary is a Person other than his or her spouse, then
payment shall be made in a lump sum as soon as possible after the Participant’s
death.


 


Sec. 5.3  Small Benefit.  In the event that the Company 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 Company may pay
the benefit in the form of a lump sum, notwithstanding any provision of this
Article or Article IV to the contrary.


 


Sec. 5.4  Withholding.  To the extent required by the law in effect
at the time payments are made, the Company shall withhold from payments made
hereunder or any other payment owing by the Company to the Participant the
taxes required to be withheld by the federal or any state or local government.


 


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Sec. 5.5  [Intentionally left
blank.]


 


ARTICLE VI


 


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 Company during the Participant’s lifetime on a form prescribed by the
Company.


 


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.


 


If a
Participant fails to designate a Beneficiary as provided above, or if his or
her 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 Company shall direct the distribution of such
benefits to the Participant’s spouse, if any, and if there is no spouse to the
Participant’s estate.


ARTICLE VII


 


ADMINISTRATION
OF PLAN


 


Sec.
7.1  Administration by Company.  The Company is the “administrator” of the
Plan for purposes of ERISA.  Except as
expressly otherwise provided herein, the Company shall control and manage the
operation and administration of the Plan, make all decisions and determinations
incident thereto and construe the provisions thereof.  In carrying out its Plan responsibilities,
the Company shall have discretionary authority to construe the terms of the
Plan.  Except in cases where the Plan
expressly requires action on behalf of the Company to be taken by the Board,
action on behalf of the Company may be taken by any of the following:


 


(a)                                 The Board.


 


14

















 


(b)                                 The Chief Executive Officer of the Company.


 


(c)                                  The Vice President of Personnel of the Company.


 


(d)                                 Any person or persons, natural or otherwise, or committee, to whom
responsibilities for the operation and administration of the Plan are allocated
by the Company, by resolution of the Board or by written instrument executed by
the Chief Executive Officer or the Vice President of Personnel of the Company
and filed with its permanent records, but action of such person or persons or
committee shall be within the scope of said allocation.


 


Sec. 7.2  Certain Fiduciary Provisions.  For purposes of the Plan:


 


(a)                                 Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.


 


(b)                                 A Named Fiduciary, or a fiduciary designated by a Named Fiduciary
pursuant to the provisions of the Plan, may employ one or more persons to
render advice with regard to any responsibility such fiduciary has under the
Plan.


 


(c)                                  Any time the Plan has more than one Named Fiduciary, if pursuant to the
Plan provisions fiduciary responsibilities are not already allocated among such
Named Fiduciaries, the Company, by action of the Board or its chief executive
officer, may provide for such allocation.


 


(d)                                 Unless expressly prohibited in the appointment of a Named Fiduciary
which is not the Company acting as provided in Sec. 7.1, such Named Fiduciary
by written instrument may designate a person or persons other than such Named
Fiduciary to carry out any or all of the fiduciary responsibilities under the
Plan of such Named Fiduciary.


 


(e)                                  A person who is a fiduciary with respect to the Plan, including a Named
Fiduciary, shall be recognized and treated as a fiduciary only with respect to
the particular fiduciary functions as to which such person has responsibility.


 


Sec. 7.3  Evidence.  Evidence required of anyone under this Plan
may be by certificate, affidavit, document or other instrument which the person
acting in reliance thereon considers to be pertinent and reliable and to be
signed, made or presented by the proper party.


 


Sec. 7.4  Records.  Each Participating Employer, each fiduciary
with respect to the Plan and each other person performing any functions in the
operation or administration of the Plan shall keep 


 


15

















 


such records as may be necessary or appropriate in the
discharge of their respective functions hereunder, including records required
by ERISA or any other applicable law. 
Records shall be retained as long as necessary for the proper
administration of the Plan and at least for any period required by ERISA or
other applicable law.


 


Sec. 7.5  General Fiduciary Standard.  Each fiduciary shall discharge his duties
with respect to the Plan solely in the interests of Participants and with the
care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like aims.


 


Sec. 7.6  Waiver of Notice.  Any notice required hereunder may be waived
by the person entitled thereto.


 


Sec. 7.7  Agent for Legal Process.  The Company shall be the agent for service of
legal process with respect to any matter concerning the Plan, unless and until
the Company designates some other person as such agent.


 


Sec. 7.8  Indemnification.  In addition to any other applicable
provisions for indemnification, the Participating Employers jointly and
severally agree to indemnify and hold harmless, to the extent permitted by law,
each director, officer and Employee of the Participating Employers against any
and all liabilities, losses, costs or expenses (including legal fees) of
whatsoever kind and nature which may be imposed on, incurred by or asserted
against such person at any time by reason of such person’s services as a
fiduciary in connection with the Plan, but only if such person did not act
dishonestly, or in bad faith or in willful violation of the law or regulations
under which such liability, loss, cost or expense arises.


 


Sec. 7.9  Correction of Errors.  It is recognized that in the operation and
administration of the Plan certain mathematical and accounting errors may be
made or mistakes may arise by reason of factual errors in information supplied
to the Company or Trustee.  The Company
shall have power to cause such equitable adjustments to be made to correct for
such errors as the Company , in its discretion, considers appropriate.  Such adjustments shall be final and binding
on all persons.


 


ARTICLE VIII


 


AMENDMENT
AND TERMINATION OF PLAN


 


Sec.
8.1 Amendment.  The Board 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 


 


16

















 


which
may be to terminate the Plan for future deferrals; 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.  Notwithstanding the above, the Board
authorizes the Committee to amend the Plan to make changes to the Credit Rate
Alternatives by either adding any new or deleting any existing Crediting Rate
Alternatives, to impose limitations on selection of/or deferral into any
Crediting Rate Alternative, or 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
TGT.  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.


 


Sec.
8.2 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.


 


Sec.
8.3 Payments Upon Automatic Termination. 
Upon any Plan termination under Sec. 8.2, the Participants will be
deemed to have terminated their enrollment under the Plan as of the date of
such termination.  The Company 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 and elected to be paid as soon as possible
following Termination of Employment.


 


Sec.
8.4 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 


 


17

















 


deceased
Participant) will be paid the entire value of his or her Deferral Accounts in a
lump sum, determined as if the Participant had a Termination of Employment on
the date the Change of Control occurs, had at least five Years of Vesting on
that date, and had elected to be paid his or her entire benefit in a lump sum
as soon as possible following Termination of Employment.  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.


 


ARTICLE IX


 


MISCELLANEOUS


 


Sec.
9.1  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 the Company or a Participating
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 the Company (“Policies”).  Such Policies or other assets of
Participating Employers shall not be held under any trust (except they may be
placed in a Rabbi 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 Participating Employers under this Plan.  Any and all of a Participating Employer’s
assets and Policies shall be, and remain, the general, unpledged, unrestricted
assets of the Participating Employer. 
Participating Employers obligations under the Plan shall be merely that
of an unfunded and unsecured promise of a Participating Employer to pay money
in the future.


Sec. 9.2  Nonassignability.  Neither a Participant nor any other person
shall have any right to sell, assign, transfer, pledge, anticipate, mortgage,
commute 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, not be
transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency.


 


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Sec. 9.3  Protective Provisions.  Each Participant shall cooperate with the
Company by furnishing any and all information requested by the Company in order
to facilitate the payment of benefits hereunder, taking such physical
examinations as the Company may deem necessary and taking such other relevant
action as may be requested by the Company. 
If a Participant refuses so to cooperate, the Company shall have no
further obligation to the Participant under the Plan, other than payment to
such Participant of the cumulative reductions in base salary and or bonus
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 Base Salary and or Bonus theretofore made pursuant
to this Plan, provided, that in the Company’s sole discretion, benefits may be
payable in an amount reduced to compensate the Company for any loss, cost,
damage or expense suffered or incurred by the Company as a result in any way of
such misstatement or nondisclosure.


 


Sec. 9.4  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.


 


Sec. 9.5  Notice.  Any notice or filing required or permitted to
be given to the Company 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 Company, directed to the attention of the President of the
Company.  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.


 


Sec. 9.6  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.


 


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SUPPLEMENT A


 


Benefit
Transfer Credits


 


Sec. A-1.  Purpose
and Application.  The purpose of this
Supplement A to the Target Corporation SMG Executive Deferred Compensation Plan
is to modify and supplement the provisions of this Plan as they relate to
certain participants whose Deferral Accounts are to be credited with amounts
transferred from certain other non-qualified retirement plans sponsored by the
Company.


Sec. A-2.  Definitions.  For purposes of this Supplement A, each of
the following terms have the meaning given it in this Section:


(a)  “ESBP”
means the Target Corporation Post Retirement Executive Survivor Benefit Plan.


 


(b)  “Other
Plan” means any non-qualified deferred compensation plan, arrangement or
agreement maintained by a Participating Employer.


 


(c)  “SPP I” means the Target Corporation
Supplemental Pension Plan I.


 


(d)  “SPP II” means the Target Corporation
Supplemental Pension Plan II.


 


(e)  “SPP III” means the Target Corporation
Supplemental Pension Plan III.


 


Sec. A-3.  Deferral
Account.  A Participant’s benefit
transfer credit or adjustment required under this Supplement A will be made to
his or her Deferral Account.


Sec. A-4.  ESBP
Benefit Transfer Credits.


(a)  A Participant is eligible to receive a
One-Time ESBP Benefit Transfer Credit and annual adjustments thereto under this
Sec. A-4 if he or she is a member of the Target Corporation Corporate Operating
Committee on April 30, 2002, had a vested interest under the Company’s
Qualified Plan, was eligible to become a participant with a survivor benefit under
the ESBP (without regard to attaining retirement age), and executes a Consent
and Release waiving all rights to a benefit under the ESBP.


 


(b)  An eligible Participant will receive a
One-Time ESBP Benefit Transfer Credit as of April 30, 2002 in an amount equal
to the actuarial lump sum present value of the Participant’s survivor benefit
under the ESBP as of December 31, 2001, determined without regard to whether
the Participant had an Early or Normal Retirement under a Qualified Plan within
the meaning of the ESBP.  The present
value of such survivor benefit will be determined by the Company in its sole
and absolute discretion based on 


 


20

















 


interest rate and mortality factors and other
assumptions deemed appropriate by the Company.


 


(c)  A Participant who has received a One-Time
ESBP Benefit Transfer Credit under Paragraph (b) and who is employed by a
Participating Employer during a calendar year after 2001 will receive an annual
adjustment debited or credited to his or her Deferral Account on or about each
April 30, for the preceding calendar year, beginning on or about April 30,
2003, as provided under this Paragraph (c). 
For each calendar year, the annual adjustment will be the difference
between (i) an amount equal to a recalculated hypothetical one-time ESBP
transfer credit determined as of the determination date in the manner provided
under Paragraph (b), above, and (ii) the aggregate amount of the previous ESBP
benefit transfer credits (and debits) to the Participant’s Deferral Account
under this Sec. A-4 increased by earnings at a rate equal to the sum of the
Stable Value Crediting Rate Alternative plus an annual two percent rate, from
the crediting date through the determination date.  If the amount of the adjustment is positive,
a credit will be made to the Participant’s Deferral Account and if the amount
of the adjustment is negative, a debit equal to such negative amount will be
made to the Deferral Account.  The credit
or debit will be made as of the determination date.  Notwithstanding the foregoing, a
Participant’s final annual adjustment will be made as soon as administratively
practicable following his or her Termination of Employment.


 


(d)  A Participant who has a Termination of
Employment prior to attaining age 55 will forfeit that portion of his or her
Deferral Account equal to the ESBP Benefit Transfer Credits under Sec. A-4(b)
and (c) of this Supplement A and corresponding earnings credits equal to the
amount that would have been credited at a rate equal to the sum of the Stable
Value Crediting Rate plus an annual two percent rate.


 


(e)  Notwithstanding paragraphs (a)-(d) above,
with respect to a Participant who has previously received a One-Time ESBP
Benefit Transfer Credit and who has not provided advance written notice of his
or her retirement/termination date, nor had a Termination of Employment prior
to January 11, 2006:


 


(i)                                     Such Participant will receive a final
annual adjustment as of January 28, 2006 in an amount equal to the actuarial lump
sum present value of the sum of future estimated annual adjustments related to
service after 2005 that would have 


 


21

















 


been made until the Participant had attained age
65.  The present value is determined by
the Company in its sole and absolute discretion based on interest rate factors,
mortality factors, and other assumptions deemed appropriate by the Company.


 


(ii)                                  Such Participant will be fully vested in
their ESBP Transfer Credits as of January 11, 2006.


 


(iii)                               Consistent with transition relief allowed under the
proposed regulations of Code section 409A, such Participant will elect the form
of distribution for the final annual adjustment credited as of January 28, 2006
from the methods identified in Section 4.5(a); provided that:


 


(A) the distribution commences one year following the
Participant’s Termination of Employment,


 


(B) the election must be completed no later than
February 24, 2006, and


 


(C) if no election is received by February 24, 2006,
or the election is not valid because the transition relief allowed under the
proposed regulations of Code section 409A regarding distribution elections in
2006 would not apply, the distribution will be made consistent with the ESBP
distribution election made in 2004 related to adjustments in 2006.


 


In all cases, no ESBP Benefit Transfer Credits will be
made after January 28, 2006.


 


(f)  With respect to a Participant who has
previously received a One-Time ESBP Benefit Transfer Credit and who has
provided advance written notice of his or her retirement/termination date, or
had a Termination of Employment prior to January 11, 2006, the provisions of
paragraphs (a) — (d) above remain in full force and effect.


 


Sec. A-5.  Supplemental
Pension Plan Benefit Transfer Credits.


(a)  A Participant shall receive a Supplemental
Pension Plan (SPP) Benefit Transfer Credit if he or she is an Officer of Target
Corporation at a level of Vice President or higher and is eligible to receive a
supplemental pension benefit under SPP I, SPP II or SPP III.


 


22

















 


(b)  An eligible Participant will receive a
One-Time SPP Benefit Transfer Credit as follows:


 


(i)  For an eligible Participant who is a member
of the Target Corporation Corporate Operating Committee on April 30, 2002, such
Participant will receive a credit equal to the April 30, 2002 actuarial lump
sum present value of the Participant’s pension benefit(s) under SPP I, SPP II
and, SPP III accrued through December 31, 2001.


 


(ii)  For an eligible Participant on July 31, 2002
who is not included in clause (i), such Participant will receive a credit equal
to the July 31, 2002 actuarial lump sum present value of the Participant’s
pension benefit(s) under SPP I, SPP II and SPP III accrued through December 31,
2001.


 


(iii)  For an eligible Participant not included in
clause (i) or (ii), such Participant will receive a credit, on or about the
April 30 immediately following the calendar year in which the Participant
becomes eligible under Paragraph (a), in an amount equal to the actuarial lump
sum present value of the Participant’s pension benefit(s) under SPP I, SPP II
and SPP III accrued through the preceding December 31.


 


The actuarial lump sum present value of such pension
benefit(s) will be determined by the Company in its sole and absolute
discretion using the factors and assumptions deemed appropriate by the Company.


 


(c)  A Participant who has received a One-Time SPP
Benefit Transfer Credit under Paragraph (b) and who is employed by a Participating
Employer during a calendar year after 2001 will receive an annual adjustment
credited or debited to his or her Deferral Account on or about each April 30,
for the preceding calendar year, beginning on or about April 30, 2003, as
provided under this Paragraph (c).  For
each calendar year, the annual adjustment will be the difference between (i)
the amount of a recalculated hypothetical one-time SPP benefit transfer credit
determined in the manner provided under Paragraph (b), above, and (ii) the aggregate
amount of the previous SPP benefit transfer credits (and debits) to the
Participant’s Deferral Account under this Sec. A-5 increased by earnings at a
rate equal to the sum of the Stable Value Crediting Rate Alternative plus an
annual two percent rate, from the crediting date through the determination
date; provided that with respect to a Participant who is or has been an
executive committee member, the earnings rate will be equal to the Stable Value



 


23

















 


Crediting Rate during the period where the Participant
did not receive the Enhancement on his or her Deferral Account.  If the amount of the adjustment is positive,
a credit will be made to the Participant’s Deferral Account; if the amount of
the adjustment is negative, the Participant’s Deferral Account will be debited
by such negative amount.  The annual
adjustment credit or debit will be made as of the determination date.  Notwithstanding the foregoing, a
Participant’s final annual adjustment will be made and credited as soon as
administratively practicable following his or her Termination of Employment.


 


Sec. A-6.  Other Plan Benefit Transfer Credit.


 


(a)  A former employee of the Company who has a
benefit payable under an Other Plan and who, at the request of the Company,
executes an Agreement, Consent and Release (the “Agreement”) waiving his or her
rights to receive all or a portion of his or her benefit payable under the
Other Plan, shall be treated as a Participant eligible to receive an Other Plan
Benefit Transfer Credit as provided in Paragraph (b) below.


 


(b)  An eligible Participant shall receive a
credit equal to the lump sum present value of all or a portion of the
Participant’s accrued benefit under the Other Plan (the “Affected Benefit Amount”).  The actuarial lump sum present value of the
Affected Benefit Amount shall be determined by the Company in its sole and
absolute discretion based on such factors and assumptions deemed appropriate by
the Company and as otherwise specified in each Agreement.  The credit to the Participant’s Deferral
Account shall be made as of the date the Participant executes the Agreement
releasing his or her claim to the Affected Benefit Amount.


 


(c)  Determination and payment of a Participant’s
Other Plan Benefit Transfer Credit shall be subject to such other conditions,
restrictions or modifications as determined by the Company in its sole and
absolute discretion and reflected in the Agreement.  Benefit payments will also be subject to the
terms of the SMG EDCP.


 


Sec. A-7.  Benefit Payments.


 


(a)  A Participant will be provided a one-time
election as to the form and commencement of distribution of his or her Deferral
Account attributable to the One-Time ESBP Benefit Transfer Credit and One-Time
SPP Benefit Transfer Credit on account of a Termination of Employment after age
55 or due to an involuntary 


 


24

















 


termination.  The election shall be made before the date
the amount is credited to the Participant’s Deferral Account and shall
otherwise be consistent with the provisions of Sec. 4.5 of the Plan.  Thereafter, the provisions of Secs. 4.5 and
4.7 will determine the method and commencement of benefit payments.


 


(b)  Payment of the Other Plan Benefit Transfer
Credit and related earnings credits to the Participant shall commence as
provided in the Agreement, but not later than the date the Affected Benefit
Amount would have been paid, nor in amounts which are less than the payments
the Participant was receiving or was eligible to receive under the Other
Plan.  Payments of a Participant’s Other
Plan Benefit Transfer Credit and related earnings credits will be made in ten
annual installments unless the Company and the Participant have, pursuant to
the Agreement, provided for an accelerated form of payment, or as otherwise
provided under the terms of the SMG EDCP.


 


Sec.
A-8.  Crediting Rate Alternative.  Amounts credited to a Participant’s Deferral
Account under this Supplement A will be subject to the Stable Value Crediting
Rate Alternative until the Participant selects another Crediting Rate
Alternative.”


 


25