Exhibit 10(O)


 


TARGET CORPORATION


DEFERRED COMPENSATION TRUST AGREEMENT


 


(As Amended and Restated Effective January 1,
2009)


 


This Agreement is made, effective as of the 1st day of January, 2009,
by and between TARGET CORPORATION, a Minnesota corporation (“Company”) and
STATE STREET BANK AND TRUST COMPANY (“Trustee”);


 


WHEREAS, Company and certain of its wholly-owned subsidiaries have
adopted the non-qualified deferred compensation plans and certain other
programs listed in Appendix A (collectively, the “Plans” and separately, a
“Plan”);


 


WHEREAS, Company, each wholly-owned subsidiary of Company which
participates in a Plan and which has indicated to the Trustee in writing its
acceptance of this Trust (or may so indicate in the future), and any
corporation which succeeds to the position of an employer hereunder by reason
of merger or consolidation, are referred to collectively herein as “Employers”
and individually as an “Employer”;


 


WHEREAS, the Employers have incurred or expect to incur liability under
the terms of the Plans with respect to the individuals participating in such
Plans;


 


WHEREAS, Company has previously established a trust (hereinafter called
“Trust”) to enable the Employers to contribute to the Trust assets that shall
be held therein, subject to the claims of each Employer’s creditors in the
event of an Employer’s Insolvency, as herein defined, until paid to Plan
participants and their beneficiaries in such manner and at such times as
specified in the Plans;


 


WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of any Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”);


 


WHEREAS, it is the intention of Company to make contributions to the
Trust and to cause contributions to be made to the Trust by other Employers to
provide a source of funds to assist in the meeting of the Employers’
liabilities under the Plans;


 


WHEREAS, Company and Trustee previously entered into a Trust Agreement
effective January 1, 2005;


 


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WHEREAS, it is the intention of Company to amend the Trust Agreement to
comply with Internal Revenue Code section 409A;


 


WHEREAS the parties have agreed to amend and restate the Trust
Agreement in its entirety to read as set forth herein;


 


NOW, THEREFORE, the parties do hereby amend and restate the Trust and
agree that the Trust shall hereafter be comprised, held and disposed of as
follows:


 


Section 1.  Maintenance of Trust.


 


(a)                    Company has previously deposited
with Trustee in trust certain amounts which currently constitute the principal
of the Trust and shall continue to be held, administered and disposed of by
Trustee as provided in this Trust Agreement along with such additional
contributions as may be deposited with Trustee in the future.


 


(b)                   The Trust hereby established shall
be irrevocable, except to the extent provided in Section 4.


 


(c)                    The Trust is intended to be a
grantor trust, of which each Employer is the grantor with respect to the
portion attributable to its contributions, within the meaning of
subpart E, part I, subchapter J, chapter 1, subtitle A
of the Internal Revenue Code of 1986, as amended, and shall be construed
accordingly.  Company or another Employer
shall pay any and all federal, state or local taxes on the Trust, or any part
thereof, and on the income of the Trust to the extent not paid by the assets of
the Trust.


 


(d)                   The principal of the Trust, and any
earnings thereon shall be held separate and apart from other funds of the
Employers and shall be used exclusively for the uses and purposes of Plan participants
and their beneficiaries and general creditors as herein set forth.  Plan participants and their beneficiaries
shall have no preferred claim on, or any beneficial ownership interest in, any
assets of the Trust.  Any rights created
under the Plans and this Trust Agreement shall be unsecured contractual rights
of Plan participants and their beneficiaries against the Employers.  Any assets held by the Trust which are
attributable to the contributions made by a particular Employer will be subject
to the claims of that Employer’s general creditors under federal and state law
in the event of Insolvency, as defined in Section 3(a) herein.


 


(e)                    Company, in its sole discretion,
may at any time, or from time to time, make (or cause other Employers to make)
additional deposits of cash or other eligible property in trust with Trustee to
augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. 
Neither Trustee nor any Plan participant or beneficiary shall have any
right to compel such additional deposits. 
Such deposits to the Trust will be subject to the following rules:


 


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(1)                       Company,
and other Employers, shall not make deposits of cash or eligible property solely
on the basis of a change in the Company’s (or respective Employer’s) financial
health.


 


(2)                       Company,
and other Employers, will not make deposits of cash or eligible property to the
extent restricted by Internal Revenue Code section 409A(b)(3).


 


(f)                     The following
provisions shall apply in the event of an actual or potential Change of Control
as defined in Section 13(d):


 


(1)                       In the
event there is scheduled a duly called shareholders meeting of Company with
respect to which (i) any person or entity has filed a definitive proxy
statement with the Securities and Exchange Commission soliciting proxies to
effect at such meeting a Change of Control of the nature described in Section 13(d)(1) (a
“Change of Board Control”) or (ii) Company has included in a definitive
proxy statement of Company filed with the Securities and Exchange Commission
nominees of one or more persons or entities for election to the Board of
Directors whose election is opposed by the Board of Directors but the election
of whom would constitute a Change of Board Control, each Employer shall make
contributions to the Trust, no sooner than three business days or later than
one business day prior to the scheduled date of the meeting, of cash or other
eligible property which, together with amounts attributable to its previous
contributions to the Trust, have a value equal to the amount required under
paragraph (5), unless the Board of Directors of Company determines in its sole
discretion, not later than three business days prior to the scheduled date of
the meeting, that the Trust shall not be funded and provides a written notice
to the Employer of that determination prior to the time the Employer makes the
contribution.  However, no such
contribution shall be made pursuant to this paragraph (1) if, prior to the
time the Employer makes any such contribution, a written settlement agreement
is entered into with Company or the nominations of nominees are otherwise
withdrawn in such a manner that a Change of Board Control will not be further
pursued or effected at such meeting.


 


(2)                       In the
event a Change of Control that does not constitute a Change of Board Control,
or any offer or written agreement of the nature hereinafter described in clause
(i) that, if completed or consummated, would constitute a Change of
Control, occurs prior to any Change of Board Control, each Employer, as
promptly as practicable, but not sooner than 20 days (subject to extension as
hereinafter provided) and not later than 30 days (subject to extension as
hereinafter provided) after a public announcement of (i) any offer to
acquire beneficial ownership of Voting Stock (as defined in Article IV of
the Restated Articles of Incorporation, as amended, of Company) or of any
written agreement that would result in a Change of Control pursuant to Section 13(d)(2) or
(3) if the offer is completed or the agreement is consummated or (ii) the
occurrence of any Change of Control other than a Change of Board Control (the “Contribution


 


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Period”), shall make contributions to the Trust of cash or other
eligible property which, together with amounts attributable to its previous
contributions to the Trust, have a value equal to the amount required under
paragraph (5), unless the Board of Directors determines, in its sole
discretion, that funding of the Trust shall not occur and provides a written
notice to the Employer of that determination prior to the earlier of (X) the
time the Employer makes the contribution or (Y) a Change of Board
Control.  At any time prior to the
commencement of the Contribution Period (or any extension of such commencement
date made in accordance with this sentence), the Board of Directors (if no
Change of Board Control shall have occurred), in its sole discretion, may extend
the commencement date and/or the duration of the Contribution Period (or any
previous extension of either thereof) by written notice to the Employers.  However, no such contribution shall be made
pursuant to this paragraph (2) if, prior to the time the Employer makes
any such contribution, no Change of Control has occurred and the offer or
agreement that, if completed or consummated, would result in a Change of
Control is terminated.


 


(3)                       Any written
notice from the Board of Directors relating to a contribution pursuant to
paragraph (1) or (2) may be modified or withdrawn by a later dated
written notice of the Board of Directors delivered at any time or from time to
time prior to the earlier of (i) the time such contribution is made or (ii) the
end of the last day on which the original notice could have been given in
accordance with the provisions of paragraph (1) or (2).


 


(4)                       Neither
Trustee nor any Plan participant or beneficiary shall have any right to compel
any contributions under this subsection (f) or to compel any Employer or
the Board of Directors to take any action under this subsection.  In deciding whether or not to take any action
authorized under this subsection (f), the Board of Directors shall have no fiduciary
or other duty to participants and beneficiaries.


 


(5)                       If the
Trust is to be funded pursuant to paragraph (1) or (2), the amount of each
Employer’s contribution shall be 120% of the amount determined by the General
Counsel and the Chief Financial Officer of Company, in their sole discretion,
to be sufficient to pay the present value of the Employer’s total projected
liability under the Plans with respect to participants employed or formerly
employed by that Employer or their beneficiaries, plus two percent of such
amount as a reserve for payment of Trustee fees and expenses of the Trust.  The determination of an Employer’s “total
projected liability” under a Plan for purposes of this paragraph shall be made
utilizing the definition specified in Appendix B applicable to the Plan, if
any, and otherwise by utilizing the assumptions prescribed in Section 13(e).


 


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(6)                       On or
before the date of a contribution made pursuant to this subsection (f), each
Employer shall deliver to the Trustee a schedule showing its best estimate of
the aggregate amount of benefits payable by it under each Plan.


 


(g)                  In the event of
a final and unappealable determination by a court of competent jurisdiction or
the U. S. Department of Labor that one or more Plans do not satisfy the
requirements for being maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees for purposes of Title I of ERISA, Trustee shall immediately
segregate the assets attributable to such Plan or Plans into a separate
Trust.  Said separate Trust shall
continue to be held and administered by Trustee in accordance with this
Agreement until the provisions applicable to the separate Trust are amended
pursuant to Section 12.


 


(h)                  For purposes of
this Trust, “eligible property” means property in one or more of the following
categories:


 


(1)                       Cash.


 


(2)                       Treasury or
other government agency securities not exceeding one year in maturity.


 


(3)                       Money
market securities.


 


(4)                       An
ownership interest in the Target Corporation Credit Card Master Trust, which
may be evidenced by, among other things, a participation or certificates.


 


(5)                       Corporate
owned life insurance policies


 


(6)                       In the
event that the total of the property available under paragraphs (1) through
(4) is not sufficient to provide the entire contribution to be made by an
Employer under subsection (f), “eligible property” shall also include
unencumbered real property owned by the Employer with a fair market value that
is at least equal to the additional amount necessary to provide the entire
contribution that is to be made.


 


The fair market value of the property to be contributed under
paragraphs (2) through (6) of this subsection shall be determined by
the General Counsel and the Chief Financial Officer of Company in their sole
discretion, taking into account any reduction in that value that could result
from the lack of an orderly liquidation of a particular item or items of
property.


 


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Section 2.  Payments to Plan Participants and Their
Beneficiaries.


 


(a)


 


(1)                       As soon as
reasonably possible after a Change of Control occurs that results in funding of
the Trust under Section 1(f) (provided that the funding has not been
returned to the Employers pursuant to Section 4), Company’s Director of
Executive Compensation (or his or her successor) shall deliver to Trustee a
Payment Schedule showing the amount payable to each Plan participant or
beneficiary under each Plan.


 


(i)                        The Payment Schedule will
provide the amount payable, determined as of the date of the Change of Control,
as well as the method and rate to credit earnings on such amounts, if any,
until amounts are paid to the Plan participant, and the date on which the
amounts are payable.


 


(ii)                     The Payment Schedule shall, with
respect to any amounts subject to Internal Revenue Code section 409A, only
provide for payments under an allowable distribution event under Code section
409A.  The Payment Schedule shall reflect
the time and form of distribution as provided under the respective Plan.


 


(2)                       Except as
otherwise provided in subsection (c), Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment Schedule,
and may rely conclusively on such Payment Schedule in making payments.


 


(3)                       Trustee
shall make provision for the reporting and withholding of any federal, state or
local taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plans and shall pay amounts withheld to
the appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by the Employers. 
Trustee may rely on instructions from Company as to any required
withholding and shall be fully protected hereunder in relying on such
instructions.  For purposes of the
preceding sentence, a failure by Company to provide any instructions as to
required withholding may be deemed by Trustee to be an instruction by Company
that no withholding is required.


 


(b)                  Prior to a
Change of Control described in subsection (a), the entitlement of a Plan
participant or his or her beneficiaries to benefits under the Plans shall be
determined by Company or such party as it shall designate under the Plans, and
any claim for such benefits shall be considered and reviewed under the
procedures set out in the Plans.  Company
shall make (or cause other Employers to make) payment of benefits directly to
Plan participants or their beneficiaries as they become due under the terms of
the Plans, 


 


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and Trustee shall have no obligation to make such payments prior to
such Change of Control.


 


(c)                   In the event of
a dispute over a payment under subsection (a) following a Change of
Control, a participant or beneficiary who claims to be entitled to a larger
payment from the Plans than shown in the Payment Schedule may submit a written
claim for payment to Trustee within 90 days from the date the payment was
otherwise scheduled to be made.  The
claim shall be processed as follows:


 


(1)                       Trustee
shall give notice of the claim to Company. 
If Trustee receives no notice of response from Company within 30 days
after the date Company is given the notice of claim, Trustee shall pay the
participant or beneficiary the amount claimed from the assets in the Trust held
on behalf of such participant.  If a
notice of response is received within such 30 days, Trustee shall consider the
claim, including Company’s response.  If
the merits of the claim depend on compensation, service or other data in the
possession of Company and such information is not provided to Trustee by
Company, Trustee may rely upon information provided by the participant or
beneficiary.


 


(2)                       Trustee
shall give notice to the participant or beneficiary and Company of its decision
on the claim, which shall be made within any period applicable to the
particular Plan.  The participant or
beneficiary shall then pursue the appeals procedure for the Plan, if any, if he
or she wishes to contest Trustee’s decision. 
Either the participant or beneficiary (after any applicable claims
procedure has been exhausted) or Company may challenge Trustee’s decision by
filing suit in a court of competent jurisdiction.  If no such suit is filed within 60 days after
notice of Trustee’s decision (and exhaustion of any applicable appeals
procedure provided for a Plan), the decision shall become final and binding on
all parties.  If the decision is to grant
the claim, Trustee shall make payment to the participant or beneficiary of the
appropriate amount; provided, however, that the amount of any distribution from
the Trust shall not exceed the total amount of assets held in the Trust on
behalf of such participant.


 


(3)                       Trustee may
decline to decide a claim and may file suit to have the matter resolved by a
court of competent jurisdiction.  All of
Trustee’s expenses in the court proceeding, including attorneys’ fees, shall be
allowed as administrative expenses of the Trust.


 


(4)                       In the
event of a dispute to be resolved under this subsection (c), Trustee may retain
a third party to review the calculations and the payment amounts and advise
Trustee as to the correct amount to be paid. 
All expenses of such a third party shall be allowed as administrative
expenses of the Trust.


 


(d)                  If payment is
made to a participant or beneficiary under this Section 2, the obligation
of the Employers under the terms of the applicable Plan or Plans shall be
extinguished to 


 


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the extent of the amount paid. 
Trustee has no obligation to make payments to a participant or
beneficiary from the Trust under this Section 2 except to the extent
amounts have been contributed to the Trust with respect to such person.


 


Section 3.  Trustee Responsibility Regarding Payments
When Employer is Insolvent.


 


(a)                   Trustee shall
cease payment of benefits to Plan participants and their beneficiaries
attributable to a particular Employer if the Employer is Insolvent.  An Employer shall be considered “Insolvent”
for purposes of this Trust Agreement if (i) it is unable to pay its debts
as they become due, or (ii) it is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.


 


(b)                  At all times
during the continuance of this Trust, as provided in Section 1(d) hereof,
the principal and income of the Trust attributable to a particular Employer
shall be subject to claims of general creditors of that Employer under federal
and state law as set forth below.


 


(1)                       The Board
of Directors and the Chief Executive Officer of Company shall have the duty to
certify to Trustee in writing of an Employer’s Insolvency.  If a person claiming to be a creditor of an
Employer alleges in writing to Trustee that an Employer has become Insolvent,
Trustee shall determine whether an Employer is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to its Plan
participants or their beneficiaries.


 


(2)                       Unless
Trustee has actual knowledge of an Employer’s Insolvency, or has received
notice from Company or a person claiming to be a creditor alleging that an
Employer is Insolvent, Trustee shall have no duty to inquire whether an
Employer is Insolvent.  Trustee may in
all events rely on such evidence concerning each Employer’s solvency as may be
furnished to Trustee and that provides Trustee with a reasonable basis for
making a determination concerning solvency.


 


(3)                       If at any
time Trustee has determined that an Employer is Insolvent, Trustee shall
discontinue payments to Plan participants or their beneficiaries and shall hold
the assets of the Trust attributable to that Employer for the benefit of the
Employer’s general creditors.  Nothing in
this Trust Agreement shall in any way diminish any rights of Plan participants
or their beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the Plans or otherwise.


 


(4)                       Trustee
shall resume the payment of benefits to Plan participants or their
beneficiaries in accordance with Section 2 of this Trust Agreement only
after Trustee has determined that an Employer is not Insolvent (or is no longer
Insolvent).


 


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(c)       Provided that there are
sufficient assets, if Trustee discontinues the payment of benefits from the
Trust pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall include the
aggregate amount of all payments due to the affected Plan participants or their
beneficiaries under the terms of the Plans for the period of such
discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company or another Employer in lieu of
the payments provided for hereunder during any such period of discontinuance.


 


Section 4. Payments to Employers.


 


Except as provided in Section 3 or this
Section, Company shall have no right or power to direct Trustee to return to
Company or another Employer or to divert to others any of the Trust assets
before all payments of benefits have been made to Plan participants and their
beneficiaries pursuant to the terms of the Plans and all other obligations of
the Trust, including fees and expenses of Trustee, have been paid. Notwithstanding
the foregoing sentence or anything else in this Trust Agreement to the
contrary, if any Employer is required to contribute assets to the Trust in
accordance with Section 1(f), Trustee shall return such assets plus the
earnings attributable to the assets to the Employer upon receipt of
notification from the Board of Directors that it has determined that the
anticipated Change of Control will not occur and determination by Trustee that
a Change of Control has not in fact occurred.


 


Section 5. Investment Authority.


 


(a)       In no event may Trustee
invest in assets other than eligible property as defined in Section 1(h). All
rights associated with assets of the Trust shall be exercised by Trustee or the
person designated by Trustee, and shall in no event be exercisable by or rest
with Plan participants.


 


(b)      Company shall have the
right, at any time, and from time to time in its sole discretion, to substitute
assets of equal fair market value for any asset held by the Trust, provided
that the substitute assets also qualify as eligible property under Section 1(h) —
(1) through (5).


 


(c)       Trustee shall hold, manage,
invest and otherwise administer the Trust pursuant to the terms of this
Agreement. The Trustee shall be responsible only for contributions actually
received by it hereunder. The amount of each contribution made by the Employers
to the Trust shall be determined in the sole discretion of the Executive
Committee or other persons allocated that responsibility herein, and Trustee
shall have no duty or responsibility with respect thereto. Except as otherwise
specifically agreed to by Trustee, Trustee shall not be responsible for the
administration of any Plan (including without limitation the determination of
Plan participation rights of employees of the Employers and the determination
of benefits of the participants in any Plan). Except to the extent that Trustee
has otherwise specifically agreed in writing, Trustee shall not be responsible,
directly or indirectly, for the investment or reinvestment of the assets of the



 


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Trust, which investment and reinvestment
shall be the sole responsibility of Company; provided, however, that upon a
Change of Control, Trustee shall become responsible for the investment and
reinvestment of the assets of the Trust as elsewhere provided herein. Prior to
a Change of Control, and unless Company and Trustee have mutually agreed in a
separate writing that Trustee shall have and exercise investment discretion, in
either case with respect to all or a portion of the assets of the Trust,
Company shall have complete discretion with respect to the investment of such
assets at all times, and shall direct Trustee accordingly.


 


Section 6. Disposition of Income.


 


During the term of this Trust, all income
received by the Trust, net of expenses and taxes, shall be accumulated and
reinvested in eligible property as defined in Section 1(h).


 


Section 7. Accounting by Trustee.


 


Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements, and other transactions
required to be made, including such specific records as shall be agreed upon in
writing between Company and Trustee. Within 60 days following the close of each
calendar year and within 60 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.


 


Section 8. Responsibility of Trustee.


 


(a)       Trustee shall act with the
care, skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims, provided, however, that Trustee shall incur no liability to any person
for any action taken pursuant to a direction, request or approval given by
Company which is contemplated by, and in conformity with, the terms of the Plans
or this Trust and is given in writing by Company, or for any failure to take
any action in the absence of such a direction, request or approval. The duties
of Trustee shall only be those specifically undertaken pursuant to this
Agreement or by means of a separate written agreement. In the event of a
dispute between Company and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.


 


(b)      The Employers and the Trust
hereby indemnify Trustee against, and agree to hold Trustee harmless from, all
liabilities and claims (including reasonable attorneys’ fees and expenses in
defending against such liabilities and claims) against Trustee as a result 


 


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of any breach of fiduciary responsibility by
a fiduciary other than Trustee or an agent of Trustee (excluding any agent
which is Company or an agent of Company), unless Trustee or such agent of
Trustee participates knowingly in such breach.


 


(c)       Trustee may consult with
legal counsel (who may also be counsel for Company generally) with respect to
any of its duties or obligations hereunder.


 


(d)      Trustee may hire agents,
accountants, actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or obligations
hereunder.


 


(e)       Trustee shall have, without
exclusion, all powers conferred on Trustees by applicable law, unless expressly
provided otherwise herein.


 


(f)       Notwithstanding any powers
granted to Trustee pursuant to this Trust Agreement or pursuant to applicable
law, Trustee shall not have any power that could give this Trust the objective
of carrying on a business and dividing the gains therefrom, within the meaning
of section 301.7701-2 of the Procedure and Administrative Regulations
promulgated pursuant to the Internal Revenue Code.


 


Section 9. Compensation and Expenses
of Trustee.


 


The Employers shall pay all administrative
and Trustee’s fees and expenses in such proportions as Company determines. Unless
and until so paid, such expenses and compensation shall be a charge on the
Trust and shall constitute a lien on the Trust in favor of Trustee. All
payments to, or reimbursements of, Trustee pursuant to this Trust Agreement may
be made without approval or direction of Company.


 


Section 10. Resignation and Removal
of Trustee.


 


(a)       Trustee may resign at any
time by written notice to Company, which shall be effective 60 days after
receipt of such notice unless Company and Trustee agree otherwise.


 


(b)      Trustee may be removed by Company
on 60 days notice or upon shorter notice accepted by Trustee.


 


(c)       Notwithstanding subsection
(b), upon a Change of Control, Trustee may not be removed by Company for three
years.


 


(d)      Upon resignation or removal
of Trustee and appointment of a successor Trustee, all assets shall
subsequently be transferred to the successor Trustee. The transfer shall be
completed within 60 days after receipt of notice of resignation, removal or
transfer, unless Company extends the time limit.


 


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(e)       If Trustee resigns or is
removed, a successor shall be appointed, in accordance with Section 11
hereof, by the effective date of resignation or removal under paragraph(s) (a) or
(b) of this section. If no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of Trustee in connection with the proceeding
shall be allowed as administrative expenses of the Trust.


 


Section 11. Appointment of Successor.


 


(a)       If Trustee resigns or is
removed in accordance with Section 10(a) or (b) hereof, Company
may appoint any national bank or trust company with capital in excess of
$50,000,000 as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably required by Company or the successor Trustee
to evidence the transfer.


 


(b)      The successor Trustee need
not examine the records and acts of any prior Trustee and may retain or dispose
of existing Trust assets, subject to Sections 7 and 8 hereof. The successor
Trustee shall not be responsible for and Company shall indemnify and defend the
successor Trustee from any claim or liability resulting from any action or
inaction of any prior Trustee or from any other past event, or any condition
existing at the time it becomes successor Trustee.


 


Section 12. Amendment or Termination.


 


(a)       This Trust Agreement may be
amended by a written instrument executed by Trustee and Company. Notwithstanding
the foregoing, no such amendment shall conflict with the terms of the Plans or
shall make the Trust revocable after it has become irrevocable in accordance
with Section 1(b) (subject to Sections 3 and 4).


 


(b)      The Trust shall not
terminate until the date on which Plan participants and their beneficiaries are
no longer entitled to benefits pursuant to the terms of the Plans. Upon
termination of the Trust, any assets remaining in the Trust shall be returned
to the Employers in such proportions as Company determines.


 


(c)       Upon written approval of
participants or beneficiaries entitled to payment of benefits pursuant to the
terms of the Plans, Company may terminate this Trust prior to the time all
benefit payments under the Plans have been made. All assets in the Trust at
termination shall be returned to the Employers in such proportions as Company
determines.


 


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Section 13. Miscellaneous.


 


(a)       Any provision of this Trust
Agreement prohibited by law shall be ineffective to the extent of any such
prohibition, without invalidating the remaining provisions hereof.


 


(b)      Benefits payable to Plan
participants and their beneficiaries under this Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.


 


(c)       This Trust Agreement shall
be governed by and construed in accordance with the laws of the State of
Minnesota, to the extent such laws are not preempted by laws of the United
States of America.


 


(d)      For purposes of this Trust,
a “Change of Control” shall be deemed to have occurred if:


 


(1)       50% or more of the directors of Company shall be
persons other than persons


 


(i)         for whose election
proxies shall have been solicited by the Board of Directors of Company or


 


(ii)        who are then serving as
directors appointed by the Board of Directors to fill vacancies on the Board of
Directors caused by death or resignation (but not by removal) or to fill
newly-created directorships, or


 


(2)       30% or more of the
outstanding voting power of the Voting Stock of Company is acquired or
beneficially owned (as defined in Article IV of the Restated Articles of
Incorporation, as amended, of Company) by any person (as defined in Article IV
of the Restated Articles of Incorporation, as amended, of Company) other than
an entity resulting from a Business Combination in which clauses (X) and (Y) of
subparagraph (3) apply, or


 


(3)       The consummation of a
merger or consolidation of Company with or into another entity, a statutory
share exchange, a sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of Company’s assets or a similar
business combination (each, a “Business Combination”), in each case unless,
immediately following such Business Combination, (X) all or substantially
all of the beneficial owners of Company’s Voting Stock immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
60% of the voting power of the then outstanding shares of voting stock (or
comparable voting equity interests) of the surviving or acquiring entity
resulting from such Business Combination (including such beneficial ownership
of an entity that, as a result of such transaction, owns Company or all or
substantially all of Company’s assets either directly or through one or more
subsidiaries), in substantially the same proportions (as compared to the other
beneficial owners of Company’s 


 


13

















 


Voting Stock immediately prior to such
Business Combination) as their beneficial ownership of Company’s Voting Stock
immediately prior to such Business Combination, and (Y) no person (as
defined in Article IV of the Restated Articles of Incorporation, as
amended, of Company) beneficially owns, directly or indirectly, 30% or more of
the voting power of the outstanding voting stock (or comparable equity
interests) of the surviving or acquiring entity (other than a direct or
indirect parent entity of the surviving or acquiring entity, that, after giving
effect to the Business Combination, beneficially owns, directly or indirectly,
100% of the outstanding voting stock (or comparable equity interests) of the
surviving or acquiring entity), or


 


(4)       Approval by the
shareholders of a definitive agreement or plan to liquidate or dissolve
Company.


 


For purposes
of this paragraph (d), “Voting Stock” has the same meaning as defined in Article IV
of the Restated Articles of Incorporation, as amended, of Company


 


(e)       A “Change of Control”
qualifies as a “change in control event” as long as it satisfies the
requirements of Code section 409A


 


(f)        For purposes of this
Trust, the phrase “the present value of the Employer’s total projected
liability” shall be interpreted to require the calculation of such present
value to be done as follows:


 


(1)        By using the methods
specified in Appendix B in the case of the Plans listed in that Appendix.


 


(2)        In the case of a Plan not
listed in Appendix B, by discounting the projected cash flow of each future
year by a rate equal to the then current market yield for U.S. Treasury
securities maturing in said future year. To the extent that said calculation
requires the use of an actuarial equivalent factor reflecting matters other
than interest, said factor shall be determined in accordance with the
provisions then in effect of Section 417(e)(3)(ii)(I) of the Internal
Revenue Code of 1986, as amended, or any successor or substitute provisions of
said Code or its replacement, or if there are no such applicable provisions,
the corresponding factor then being used to calculate immediate lump sum
distributions under the Target Corporation Employees’ Retirement Plan or its
successor.


 


(g)       Company hereby represents
and warrants to the Trustee that this Trust shall constitute an unfunded
arrangement and shall not affect the status of any Plan as an unfunded plan
maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
ERISA.


 


(h)       The Trust and all assets
under the Trust shall be located in the United States.


 


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Section 14. Effective Date.


 


The effective date of this Trust Agreement
shall be January 1, 2009. The original effective date of the Trust was January 1,
1987.


 


IN WITNESS WHEREOF,
the Company and the Trustee have caused this Agreement to be executed by their
duly authorized officers this          day
of                 ,
2009.


 


 


	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  



 


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APPENDIX A


 


The following plans maintained by Company or
any other Employer which has indicated in writing its acceptance of the Trust
to Trustee and Company are “Plans” covered by the Deferred Compensation Trust
Agreement:


 


·                              Target
Corporation Officer EDCP (formerly known as Target Corporation Deferred
Compensation Plan—Senior Management Group)


·                              Target
Corporation DDCP (formerly known as Target Corporation Director Deferred
Compensation Plan)


·                              Target
Corporation EDCP (formerly known as Executive Deferred Compensation Plan)


·                              Officer
Executive Deferred Compensation Plan


·                              Deferred
Compensation Plan Directors


·                              SPP
I (formerly known as Supplemental Pension Plan I)


·                              SPP
II (formerly known as Supplemental Pension Plan II)


·                              SPPIII
(formerly known as Supplemental Pension Plan III)


·                              SPP
IV (formerly known as Supplemental Pension Plan IV)


·                              SPP
V (formerly known as Supplemental Pension Plan V)


·                              Pilot
Supplemental Pension


·                              Board
of Director Consulting Fee


·                              Long
Term Incentive Plan (but only with respect to awards considered deferred
compensation under Code section 409A)


·                              Individual
deferred compensation agreements to the extent the agreement requires the
obligation to be funded under a rabbi trust.


 


In addition, the following programs are also “Plans”,
but solely with respect to individuals whose employment or directorship with
the Employers has terminated prior to the date a contribution is required under
Section 1(f):


 


·                              Executive
Survivor Benefit Plan


·                              Income
Continuance Policy (formerly known as the SMG Income Continuance Policy)


·                              Excess
Long Term Disability Plan


·                              Severance
or Supplemental Payment Accruals, but only to the extent the underlying
agreement requires the obligation to be funded under a rabbi trust.


 


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APPENDIX B


Definitions
for Funding Purposes


 


Reference Yield


The yield on Moody’s AA Corporate Bond Index (rounded to the nearest
..1%) as determined by Bloomberg on the day prior to the funding of the Trust. If
this yield information is no longer available from Bloomberg, an alternative
provider of the information will be chosen by the Chief Financial Officer.


 


Deferred Compensation Plan — Senior
Management Group and Directors


The present value of all payments expected to be made to participants
and their spouses (or beneficiaries) based on the most recent calculation of
the value of participants’ plan account balances (the “plan valuation”). In
accordance with the plan document, expected payments shall be based on (1) the
participants’ marital status, (2) participants’ and their spouses’ life
expectancies at the time the participants have scheduled to begin receiving
payments, (3) the assumed retirement ages of participants and the time
following retirement that the participants have scheduled to begin receiving
payments, (4) the assumed crediting rate on participants’ account
balances, which is equal to the crediting rate as of the most recent plan
valuation, and (5) the accumulated balances in participants’ accounts as
of the latest plan valuation. The discount rate applied to these expected
payments shall be the interest rate used to calculate interest credited to
participants’ plan account balances during the current plan year less 600 basis
points. Should the Trust be activated after the date of the latest plan
valuation (1) the total liability shall be increased by an amount equal to
the total liability as of the latest plan valuation times the discount rate
times the number of days since the latest plan valuation divided by 365 and (2) the
total liability shall be reduced by the present value of any payments made to
participants since the latest plan valuation.


 


Executive Deferred Compensation Plan


The total value of participants’ balances as of the close of business
on the day preceding the funding of the Trust.


 


Executive Deferred Compensation Plan — Senior
Management Group and Directors


The total value of participants’ balances as of the close of business
on the day preceding the funding of the Trust.


 


Supplemental Pension Plans I and IV


The difference in the present values of all pension annuities that (1) participants
would earn excluding any deferred income, but not taking into account IRS
limits on qualified income, and that (2) participants would earn excluding
any deferred income and taking into account IRS qualified income limitations. The
calculation of this liability is based on the annual actuarial factors
applicable for Supplemental Pension Plans I and IV respectively. Should the
Trust be activated after the date of the latest plan valuation, the amount of
the total liability shall be increased by (1) an amount equal to the total
liability as of the most recent plan valuation times the discount rate used in
that valuation divided by the number of days since the plan valuation was
conducted divided by 365 and (2) service credited since the latest annual
actuarial valuation.


 


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Supplemental Pension Plans II and V


The difference in the present values of the pension annuities that (1) participants
would earn if the participants had not deferred any income and (2) participants
would earn excluding any deferred income, after taking into account any
benefits due under Supplemental Pension Plans I or IV. The calculation of this
liability is based on the annual actuarial factors applicable for Supplemental
Pension Plans II and V respectively. Should the Trust be activated after the date
of the latest plan valuation, the amount of the total liability shall be
increased by (1) an amount equal to the total liability as of the most
recent plan valuation times the discount rate used in that valuation divided by
the number of days since the plan valuation was conducted divided by 365 and (2) service
credited since the latest annual actuarial valuation.


 


Supplemental Pension Plan III


The difference in the present values of the pension annuities that (1) participants
would earn by adding 5 years to their actual ages (but in no case will the
participant’s age be deemed to be greater than age 65) and (2) the
benefits that these participants would earn without such an age adjustment,
after taking into account any benefits due under Supplemental Pension Plans I
and II. The calculation of this liability is based on the annual actuarial
factors applicable for Supplemental Pension Plan III. Should the Trust be
activated after the date of the latest plan valuation, the amount of the total
liability shall be increased by (1) an amount equal to the total liability
as of the most recent plan valuation times the discount rate used in that
valuation divided by the number of days since the plan valuation was conducted
divided by 365 and (2) service credited since the latest annual actuarial
valuation.


 


Pilot Supplemental Pension Plan


The present value of all annuity payments either currently committed
to, or expected to be made to, participants between the ages of 55 and 65. The
discount rate applied to the expected annuity payments shall be the discount
rate used in the latest qualified pension plan annual actuarial valuation.


 


Board of Director Consulting Fee


The present value of all consulting fees committed to members of the
Board of Directors as of the date of the Trust’s funding. The discount rate
applied to the committed consulting fees shall be the Reference Yield.


 


Executive Survivor Benefit Plan


The present value of all benefits expected to be paid to the surviving
spouses of participants. Expected payments are calculated based on (1) the
existing pension benefit formula, applied to a Joint and 100% Survivor annuity,
(2) expected growth in participants’ compensation until retirement, which
is equal to the average assumed rate of compensation increase presented in the
Company’s annual report pension footnote, (3) participants’ marital status
and age of their spouses, and (4) the assumed retirement age of
participants. For purposes of calculating the duration of expected annuity
payments to surviving spouses, the differences in the expected lives of
participants and their spouses as of the date of the Trust’s funding shall be
used. The discount rate applied to the expected annuity payments shall be the
Reference Yield.


 


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Income Continuance Policy


The present value of all Income Continuance Policy severance agreement
payments committed to at the time of the Trust’s funding. The discount rate
applied to these payments shall be the Reference Yield.


 


Non-Income Continuance Policy Severance
Accruals


The present value of all non-Income Continuance Policy severance
agreement payments committed to at the time o the Trust’s funding. The discount
rate applied to the expected annuity payments shall be the Reference Yield.


 


Excess Long-Term Disability Plan


The present value of all excess long-term disability payments committed
to plan participants at the time of the Trust’s funding, assuming that those
payments continue until the disabled participants reach the age of 65. The
discount rate applied to these projected payments shall be the Reference Yield.


 


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