Exhibit 10(L)


 


TARGET CORPORATION


 


OFFICER INCOME CONTINUANCE
POLICY STATEMENT


 


As Amended and Restated November 12,
2008


 


I.              CONCEPTS


 


A.            GENERAL


 


The present policy of the Corporation is to
provide, under certain defined circumstances, Income Continuance Payments to
certain “Officers” or “Executives” whose employment is terminated at the
instance of the Corporation or who involuntarily or for good reason terminate
within two years after a Change in Control. This policy is intended to assist
in the occupational transition and financial security of those identified
Executives whose services are no longer deemed required within the Corporation,
who have during their tenure been faithful and honest employees, who do not
during the period of those payments engage in disqualifying misconduct, and to
the extent not compensated for services to a directly competitive employer and
to assist Executives who involuntarily or for good reason terminate employment
with the Corporation within two years after a Change in Control.


 


This will be known as the Officer Income
Continuance Policy (“Officer-ICP”) of the Corporation. It will be interpreted
and applied in accordance with this Statement of policy and with any subsequent
amendment or restatement applicable to the Executive. The Corporation’s Income
Continuance Policy Statement has been consolidated and transferred into the
Officer-ICP.


 


The Officer-ICP has been operated in
compliance with Internal Revenue Code (“Code”) Section 409A since January 1,
2005.  Effective January 1, 2009,
the Officer-ICP has been amended to comply with Code Section 409A with
respect to all amounts payable from the Officer-ICP that are considered
nonqualified deferred compensation.


 


B.            ELIGIBILITY


 


To be eligible under Officer-ICP, an
individual must be an Officer as specified in this Statement.


 


C.            REASSIGNMENT


 


An Executive will continue to have income
protection under Officer-ICP for at least 12 calendar months (Eligibility
Period) after internal reassignment to a position which does not otherwise
include eligibility for Officer-ICP benefits.


 

















 


D.            SPIN-OFF


 


An Executive who is employed by a business
unit on the closing date of any Spin-Off which includes such business unit is
no longer eligible for Officer-ICP.


 


E.             DISQUALIFICATION
AND REDUCTION


 


Serious and deliberate misconduct in
employment by an Executive resulting in discharge for cause can disqualify an
Executive from Officer-ICP eligibility. Except as otherwise expressly provided
in this Statement, after termination under Officer-ICP and normal windup of
former duties an Executive will not be required to perform any regular services
for the Corporation, and will be free to accept any other employment. Except as
otherwise provided in this Statement, Officer-ICP Payments otherwise payable to
an Executive will be reduced or excused in the amount of compensation from
Directly Competitive Employment as specifically defined to the Executive in
advance according to this Statement. An Executive otherwise entitled to
Officer-ICP Payments after Termination or Reassignment will be disqualified
from receiving future Payments by reason of serious and deliberate misconduct
which is unlawful or clearly and seriously harmful to the Corporation, or to
its interests.


 


F.             INTERPRETATION


 


Subject to the express terms of this
Statement, the Chief Executive Officer of the Corporation will have sole and
final authority to interpret the Officer-ICP and determine its application, and
will interpret it consistently. Section I of this Statement is intended as
a summary of the more detailed provisions of Section II. For that reason, Section II
will control in the event of any difference.


 


II.            APPLICATION


 


A.            ELIGIBILITY
PERIOD - DEFINITION


 


The “Eligibility Period” of an Executive is
determined by the Executive’s most recent Salary Grade on the Notice of
Termination or Reassignment by the Corporation; provided, however, in the event
of a downgrade or downgrades, the Eligibility Period of the Executive’s highest
Salary Grade shall continue to be applicable until the expiration of the
Eligibility Period for that Salary Grade and then the Eligibility Period for
the next highest Salary Grade shall be used until it expires and this process
shall continue until the Eligibility Period for the last Salary Grade for which
this Statement covers expires. It will be calculated according to the following
schedule:


 


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  Salary Grade

  	
   

  	
  Eligibility Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  37 or higher

  	
   

  	
  24
  months

  	
   

  
	
  35-36

  	
   

  	
  22
  months

  	
   

  
	
  32-34

  	
   

  	
  20
  months

  	
   

  
	
  30-31

  	
   

  	
  18
  months

  	
   

  
	
  28-29

  	
   

  	
  16
  months

  	
   

  
	
  26-27

  	
   

  	
  14
  months

  	
   

  
	
  lower than 26

  	
   

  	
  12
  months

  	
   

  



 


An Executive entitled to Officer-ICP Payments
will not be entitled to prepayment or other change in the payment schedule.


 


B.            ELIGIBILITY
PERIOD - USE


 


The Eligibility Period of an Executive will
determine the number of consecutive calendar months for which an Executive
remains eligible for Officer-ICP Payments under this Statement after:


 


1.             Reassignment to a new
position within the Corporation which is not designated an Officer Position, or


 


2.             A downgrade as set forth in
A. above.


 


C.            PAYMENT PERIOD
- DEFINITION


 


The Payment Period for an Executive will
consist of the same number of months as the Executive’s Eligibility Period,
measured from the time when Officer-ICP Payments first become payable to the
Executive under the terms of this Statement.


 


D.            PAYMENTS


 


1.             Amount


 


Each monthly Officer-ICP amount during the
Payment Period will equal one twelfth (1/12) of the Executive’s Final Annual
Cash Compensation from the Corporation which will consist of the sum of:


 


a.             Base Compensation


 


The annual Base (regular monthly or other
fixed salary) rate payable as Cash Compensation to the Executive at the time of
Notice of Termination or effective date of Reassignment or downgrade, but in no
event less than the highest annual rate paid to the Executive at any time
during a number of months equal to the Executive’s Eligibility Period
immediately before the Notice of Termination or effective date of Reassignment
or downgrade, and


 


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b.             Performance Bonus


 


The average amount of the three annual
Performance Bonuses most recently paid or credited to the Executive as Cash
Compensation or deferred bonus, prior to Executive’s Notice of Termination or
effective date of Reassignment or downgrade. For purposes of Officer-ICP, the
Performance Bonus of an Executive shall be determined according to the
applicable Short Term Incentive Plan of the Corporation, shall also include, if
applicable, any discretionary bonus paid during said applicable period on
account of the Executive’s performance but outside of the purview of the then
applicable Short Term Incentive Plan.


 


c.             Adjustment


 


The annual rate in dollars of each merit
increase awarded to an Executive before Notice of Termination will be included
in Base Compensation to determine the Executive’s Officer-ICP Payments. If the
Executive’s annual rate of Base Compensation at the time of Notice of
Termination has been increased or decreased to reflect a change from the Short
Term Incentive Plan used to determine the Performance Bonus defined above, and
the change is for the purpose of altering the future relationship of Bonus to
total Annual Cash Compensation of the Executive, then the dollar amount of that
increase or decrease in annual rate of Base Compensation will be excluded in
determining ICP Payments.


 


d.             Installment Payments


 


Although the amount of an Executive’s benefit
is determined on a monthly basis, such monthly amount shall be converted to and
made at the same frequency as the Corporation’s standard payroll practices.
With respect to any benefit under Officer-ICP that is considered deferred
compensation pursuant to Code Section 409A, each installment payment shall
be considered a separate payment.


 


2.             Commencement


 


Officer-ICP Payments, or entitlement to begin
receiving them, will commence after the Corporation has received a valid
unrevoked Release and Agreement from Executive, subject to any Set-offs,
Adjustments and Withholding as specified herein. Unless the Executive is a
Specified Employee, Officer-ICP Payments shall commence not later than ninety
(90) days following the date of the Executive’s separation from service, as
defined under Code Section 409A. If at the time of the Executive’s
separation from service, as defined under Code Section 409A, the Executive
is a Specified Employee then no distribution of an Officer-ICP Payment that is
considered deferred compensation pursuant to Code Section 409A will be
made within 6 months of the separation from service, as defined under Code Section 409A,
unless such Officer-ICP Payment would 


 


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otherwise be exempt from the requirements of
Code Section 409A. Any Officer-ICP Payments suspended during such 6 month
period will be paid at the time of the first Officer-ICP Payment after such 6
month period. The Executive shall not be entitled to any compensation, benefits
or perquisites, other than Officer-ICP Payments, after the date of the
Executive’s separation from service, as defined under Code Section 409A.


 


3.             Set-Off and
Withholding


 


Officer-ICP Payments are not intended to
duplicate or be in addition to any other payment due between the Corporation
and the Executive.


 


a.             Reduction


 


Each Payment otherwise due from the
Corporation to the Executive will be reduced, dollar for dollar and in timing
by all amounts which the Executive receives or is entitled to receive from the
Corporation or under a plan, program or agreement maintained by and at the
expense of the Corporation after the Employment Severance Date. This will
include but not be limited to legally required payments during any required
notice period or in connection with a plant closing, mass layoff, termination,
severance or redundancy under any law, regulation or order. This will also
include such sources as life and disability insurance. It will not apply to
accrued vacation or expense reimbursement (both will be paid in cash at
termination), pension proceeds, 401(k) proceeds, deferred compensation
plans, Social Security, equity awards (for example, stock options, performance
shares or restricted stock awards) or benefits payable under any Worker’s
Compensation or similar law or regulation. Termination of employment by reason
of mandatory retirement under a lawful and uniform policy of the employer
applicable to the Executive will not be treated as a termination for
Officer-ICP purposes. In no circumstance whatsoever shall there be any
combination or duplication of any Officer-ICP Payments with any such other
legally required payment or payments which shall result in the Executive
receiving because of or due to termination of employment a combined total
amount from the Corporation which is greater than the amount of Officer-ICP
Payments to which Executive is entitled under this Officer-ICP before
accounting for such legally required other payments.


 


b.             Adjustments


 


Taxes and other amounts which the Corporation
reasonably determines are required by law or by the Executive’s written
instruction will be withheld from Officer-ICP amounts otherwise payable.


 


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E.             DEATH OF
EXECUTIVE


 


If an Executive should die after Notice of
Termination and before completion of the Executive’s Payment Period, the
remaining Payments will be made by the Corporation as follows, without
unnecessary interruption:


 


1.             Unless the Executive has
otherwise designated in unrevoked writing, acknowledged in writing by the CEO,
the surviving spouse of the Executive, if any, will be entitled to all
remaining Payments.


 


2.             If the Executive has
otherwise effectively designated in unrevoked writing, acknowledged in writing
by the CEO, then Payment will be made to or for the account of the person or
persons so designated as identified by the Corporation.


 


3.             In the absence of effective
prior written designation by the Executive and of a known surviving spouse, the
Corporation shall pay any remaining Payments to the Executive’s estate.


 


4.             In the interest of providing
uninterrupted income to authorized beneficiaries of the Executive, any
Officer-ICP Payment made with reasonable care and in good faith by the
Corporation shall conclusively constitute Payment by the Corporation in
accordance with and satisfaction of the entitlement of the Executive and Executive’s
beneficiaries under Officer-ICP. No interest or other charge shall be payable
by the Corporation or its representatives on any Payment delayed by the
Corporation to permit reasonable verification of authorized recipient(s).


 


F.             DISQUALIFICATION


 


No Executive will be disqualified from
receipt of future Officer-ICP Payments by reason of any act or omission of
anyone other than the Executive or one or more persons acting pursuant to the
conscious and effective control of the Executive. Disqualification will be
interpreted as follows:


 


1.             While Employed
in the Corporation


 


Deliberate and serious disloyal or dishonest
conduct in the course of employment will disqualify if it justifies and results
in prompt discharge for specific cause under the established policies and
practices of the Corporation as interpreted by the CEO for this purpose.
Examples would include material unlawful conduct, material and conscious
falsification or unauthorized disclosure of important records or reports,
embezzlement or unauthorized conversion of property, serious violation of
conflict of interest or vendor relations policies, and misuse or disclosure of
significant trade secrets or other information likely to be of use to the
detriment of the Corporation or its interests.


 


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2.             After Notice of
Termination


 


The Officer-ICP will not restrict an
Executive’s conduct or employment opportunities after Notice of Termination, or
any independent remedy of the Corporation or its representatives by reason of
the Executive’s conduct while employed. The obligation of the Corporation to or
for an Executive during the Eligibility and Payment Periods can be terminated
only by the deliberate conduct of the Executive or one acting under the
Executive’s conscious and effective control, and only as to any Officer-ICP
Payments not yet due, by reason of one or more of the following events:


 


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


 


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


 


c.             Providing materially false
or misleading information concerning post-termination employment, or failure or
refusal promptly and accurately to provide required information, verification
or authorization required by the CEO as provided in this Statement and
affecting any Officer-ICP payment due from the Corporation.


 


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


 


e.             Exercising the discretion,
authority or powers of an office or position held by an Executive after Notice
of Termination, and whether or not before an Employment Severance Date, unless
specifically authorized or directed in writing in advance by an authorized
executive of the Corporation.


 


3.             Preservation of
Rights


 


Neither Officer-ICP nor its application shall
waive, excuse, preclude or otherwise affect any right or remedy which the
Corporation or any agent or representative of the Corporation may have,
individually or collectively, under law by reason of conduct of the Executive
during or after employment within 


 


7

















 


the Corporation. Disqualification or
reduction of Payments under Officer-ICP will be an additional and not an
exclusive remedy.


 


G.            COMPETITIVE
EMPLOYMENT


 


An Executive will receive not less than the
full amount of the specified Officer-ICP Payments from the Employment Severance
Date through the full Payment Period whether or not compensated by another
employer for services in that period, unless disqualified under Section F.,
immediately above or as provided in this Section G. Compensation from
employment which is not identified as Directly Competitive Employment (“DCE”)
will be in addition to and will not reduce any Officer-ICP Payment. If an
Executive engages in DCE as specifically defined in advance and by this
Statement, then each Officer-ICP Payment otherwise payable to the Executive
will be currently reduced, dollar for dollar and in timing, by the amount of
all Cash Compensation earned (whether on a current or deferred payment basis)
from that source during the Payment Period.


 


These provisions will be interpreted and
administered as follows:


 


1.             Purpose of
Set-Off


 


Reduction of Officer-ICP Payments by the
amount of Cash Compensation determined to be from DCE is not intended to
restrict or penalize an Executive’s choice of alternative career opportunities,
but only to preserve and reconcile the personal income security intended to be
provided to Executives by Officer-ICP with the legitimate interests of the
Shareholders of the Corporation in its highly competitive business context.


 


2.             Competitors
Identified


 


At or about the time of Notice of
Termination, the Corporation will inform the Executive in writing of those employers
who have been individually and specifically determined to offer DCE for
Officer-ICP purposes with respect to the Executive’s former employment within
the Corporation. This designation will take into account existing operations
and known plans of the Corporation and of the employers listed, and will not
change during the Eligibility Period by reason of subsequent and mutually
unanticipated changes in the operations or plans of either.


 


3.             Criteria


 


The following criteria will be employed in
determining and administering Officer-ICP application to DCE.


 


a.             Selective
Potential Detriment


 


A position will not be determined to
constitute DCE for this purpose unless the CEO determines that the competitive
effectiveness of the 


 


8

















 


Executive and the new employer would be
materially enhanced by the Executive’s current knowledge of such matters as the
particular methods, policies, customers, suppliers, personnel or plans of the
Corporation or its relevant business unit, as distinguished from the skills,
experience and services of the Executive generally. The Corporation will
identify for DCE purposes not more than five persons, firms or corporations who
are determined for this purpose to be the leading direct and immediate
competitors of the affected business of the Corporation.


 


b.             Preservation of
Employment Opportunities


 


Whether or not an Executive’s most recent
employment within the Corporation involved direct participation in the
management of one or more business units, this section will not be used to
discourage or penalize otherwise suitable employment opportunities in retailing
or otherwise. The Corporation may require, as a condition of avoiding DCE
designation for the Executive, a suitable written undertaking by the Executive
and the new employer that the Executive remains obliged not to use or divulge
trade secrets or proprietary information of the Corporation and that the
Executive will not volunteer or be expected or required to violate that
obligation in the course of the new employment.


 


c.             Relevant
Considerations


 


In determining DCE, the CEO will give
suitable consideration to geographic, product and price-line marketing
overlaps, the nature and content of the Executive’s particular knowledge of
strategies and plans within the Corporation, and the extent to which the
Executive’s knowledge, as distinguished from skills, is likely to be a
significant factor in generating an employment opportunity. Employment
exclusively with a component of a larger business entity, which component is
not presently or known to be planned to be a direct and immediate competitor of
the Executive’s former business unit, will not be treated as DCE merely because
one or more other components of that entity is or may become a competitor of
the Corporation or one or more of its business units.


 


4.             Officer-ICP
Payment Reduction


 


Uniform and responsible administration of
Officer-ICP will require reliable information and verification to the
Corporation.


 


a.             Reporting


 


To be eligible for any Officer-ICP Payment
during a period of DCE, an Executive must, in addition to all other required
reporting, provide to the Corporation in writing an accurate statement of the
amount and payment schedule of all Cash Compensation or its equivalent to be
received from 


 


9

















 


the new DCE employer and of any subsequent
change or correction of that amount, in such form and with such verification as
the CEO may request in writing. An Executive will not be or become entitled to
receive or retain any portion of any Officer-ICP Payment on account of any
Payment Period for which that information, and any required verification, is
not currently and accurately provided.


 


b.             Verification and
Reconciliation


 


Required verification may include
authorization for written confirmation from the employer and confidential
disclosure of completed W-2, payroll and income tax forms of the Executive on
which taxes have been or will be paid. If the Corporation withholds for more
than 30 days any Officer-ICP Payment pending receipt of required information or
verification which is later received and found satisfactory, the Corporation
will pay interest at a realistic rate determined by the CEO for the period of
delay. The Corporation and the Executive will each fairly and promptly adjust
by payment any discrepancy later discovered between reported and actual Cash
Compensation of the Executive, but the Corporation will have no liability for
any amount not claimed by an Executive in writing before final expiration of
the Executive’s Payment Period.


 


H.            REASSIGNMENT
AND SPIN-OFF


 


1.             Reassignment
and Other Adjustments


 


The Corporation may transfer an Executive to
another position within the Corporation or reduce the Executive’s Base
Compensation in Executive’s current position (collectively referred to as “Reassignment”).
An Executive in the case of either event may elect Officer-ICP Payments if the
Executive’s total monetary compensation after Reassignment will be measurably
and substantially below the total monetary compensation of the Executive
immediately before notice of Reassignment. For this purpose, total monetary
compensation will include salary and bonus and continuation, or payment of the
substantial equivalent in Cash Compensation, of all non-cash personal benefits
and perquisites which the Executive was receiving immediately before and does
not receive after the Reassignment and which are susceptible of accurate and
objective measurement in dollars as determined by the CEO. An Executive who
elects Officer-ICP Payments must terminate employment with the Corporation
within thirty (30) days after notice of Reassignment to be eligible for such
payments.


 


2.             Spin-Off


 


An Executive who is employed by a business
unit on the closing date of any Spin-Off that includes such business unit is no
longer eligible for Officer-ICP. A Spin-Off will be deemed to have occurred for
purposes of this paragraph whether or not afterward: (a) the Executive has
a personal ownership or incentive interest in the severed business unit or
operation; or (b) the severed 


 


10

















 


business unit or operation becomes, as a
result of or after the severance, a part of one or more other legal entity or
entities.


 


I.              REPORTING


 


For convenience and uniformity of
administration, each Executive while eligible for or entitled to Officer-ICP
Payments after Notice of Termination will be expected as a pre-condition
currently and accurately to inform the Corporation in writing of the name and
business address of each employer of Executive during the Eligibility and
Payment Periods, including a summary description of the nature and principal
business locations of the new employer and the title, principal duties, address
and telephone number of the Executive. Significant changes in employment,
duties or location will also be promptly reported. The Corporation will not be
required to make any Officer-ICP Payment for any period for which it has not
received a current and accurate report as required by, or by the CEO in
accordance with, this Statement.


 


J.             INTERPRETATION


 


1.             Any decision of the CEO will
be: (1) Final and conclusive of the rights and obligations of all affected
parties and (2) Applied uniformly as to all Executives then similarly situated
(subject to subsequent Officer-ICP amendment); and (3) Not subject to
separate determination or review by any public or private agency or authority
except as expressly provided in this Statement.


 


2.             References to compensation
and other monetary rates or measurements in this Statement and its applications
are in current dollars, unadjusted by reason of inflation, deflation or
otherwise.


 


3.             Any portion of a full
calendar month or year will be prorated on a full calendar basis, without
differential related to such considerations as working days or holidays. Any
portion of a day will be treated as a full day, and measurement days will begin
and end at midnight, current time. The fiscal year of the Corporation will be
treated for all purposes as it is for financial reporting purposes.


 


4.             In the event of application
or interpretation of Officer-ICP to an individual Executive who is a Director
of the Corporation, or otherwise in its sole discretion, the Board of Directors
of the Corporation or its authorized committee shall have and may exercise the
sole, exclusive and final authority and discretion of the CEO for any purpose
under Officer-ICP.


 


K.            RELEASE


 


Payment and receipt of Officer-ICP Payments
will be in full and final satisfaction of all claims by or through an Executive
against the Corporation and its representatives by reason of the employment of
the Executive and its termination, except as otherwise expressly provided in
this Statement or as required by applicable law or regulation. A signed and unrevoked
written Release to that effect, in form approved by the CEO, will 


 


11














 


be delivered by the Executive
or the Executive’s representative to the Corporation before any Officer-ICP
Payment will become payable by the Corporation to or on account of the
Executive. Such Release must be delivered to the Corporation within 60 days of
the date of Executive’s separation from service, as defined under Code Section 409A.
The Release may, without limitation, require a representation that no
confidential documents concerning the Corporation or its intentions have been
or will be removed or retained by the Executive without specific authority, and
that the Executive will not engage in disqualifying misconduct as defined in
this Statement, in reference to the Corporation. The Release will not affect
any conversion, vested or continuing rights available to an Executive under a
plan of the Corporation other than Officer-ICP.


 


L.                                      GENERAL


 


The Officer-ICP and this
Statement will not constitute or infer an obligation or undertaking to employ
any person for any future period of time or in any specific position.
Officer-ICP Eligibility or Payments after Notice of Termination will not
create, continue or evidence any employment relationship with the Corporation.
All employment privileges, benefits and perquisites not expressly and in
writing reserved to an Executive under Officer-ICP will terminate on Executive’s
separation from service, as defined under Code Section 409A, unless
otherwise expressly agreed in advance in writing by the Corporation. This will
not affect any conversion, vested or other continuing benefits or rights
available to an Executive under a plan of the Corporation other than
Officer-ICP.


 


M.                                 AMENDMENT


 


Officer-ICP and this Statement
may not be terminated and may not be amended to reduce benefits with respect an
Executive subject to the Officer-ICP until twelve months after the Executive
receives written notice of the proposed termination or amendment. Except as set
forth in the first sentence hereof, Officer-ICP and this Statement can be
amended (including modification, restatement, suspension and termination) at
any time, without prior written notice to or consultation with any Executive,
by the Board of Directors or any committee appointed by the Board of Directors
having the authority of the Board for that purpose. Any such change will have
effect as follows:


 


1.                                       Effective
Date of Change


 


Except as set forth below, any
amendment will be effective on the date of its adoption by the Board or
committee or such other such subsequent date or dates as may be specified in
the amendment or the resolution by which it is adopted. Unless otherwise
mutually agreed in writing by the parties, (a) an amendment or termination
will have no effect upon any Executive who at the time has received Notice of
Termination under Officer-ICP and (b) a termination or an amendment that
reduces benefits will not be effective as to an Executive subject to the
Officer-ICP until twelve months after the Executive receives written notice of
the termination or amendment.


 


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2.                                       Notice
of Amendment


 


The Corporation will promptly
after any amendment provide to each Executive then eligible for Officer-ICP
benefits a written statement of Officer-ICP as amended, and no amendment will
be effective as to an Executive until the later of the date the Executive
receives such written statement, or twelve months after notice as provided in 1
above. An Executive will be deemed to have received the written statement if it
is delivered to the Executive in person, or after 48 hours following its hand
delivery or dispatch by mail or other suitable means of delivery to the last
known address of the Executive.


 


3.                                       Acquiescence


 


An amendment will apply in full
to an Executive if mutually agreed in writing by the Executive and the
Corporation, or if the Executive or the Executive’s representative knowingly
receives a benefit or improvement under Officer-ICP as amended which would not
have been available without the amendment. If any such benefit from an
amendment is knowingly received by an Executive with the consent of the
Corporation, then all elements of that amendment and all prior Officer-ICP
Statements and amendments then currently in effect will also be applicable to
the Executive.


 


4.                                       Adjustment


 


A change in or addition or
deletion of any benefit or perquisite plan or program of the Corporation
applicable to an Executive may be expressly made subject to prior written
agreement by the Executive upon a corresponding change in the interpretation or
application of Officer-ICP to the Executive, to prevent redundant or other
unintended benefits or detriments to the Executive or the Corporation which
might otherwise result.


 


5.                                       Change
in Control


 


No amendment or termination
that would adversely affect the benefits or protections under the Officer-ICP
of any eligible Executive as of the date of such amendment or termination shall
be effective as to such individual unless no Change in Control occurs within
twelve (12) months of the adoption of such amendment or termination, and any
such attempted amendment or termination adopted within twelve (12) months prior
to a Change in Control shall retroactively be null and void from the date of
adoption as it relates to all such Executives who were eligible for benefits
under the Officer-ICP prior to such adoption.


 


For two (2) years after a
Change in Control, the Officer-ICP and this Statement may not be amended in any
manner that would adversely affect the benefits or protections under the
Officer-ICP of the Executives who are eligible for benefits under the
Officer-ICP at the time of the Change in Control.


 


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N.                                    APPLICABLE
LAW


 


It is intended that the
decision of the CEO, as specified in the Officer-ICP statement, will be
exclusive and final with respect to any application or interpretation of
Officer-ICP. If any body of law should be used or applied in determining the
meaning or effect of Officer-ICP, in the interest of consistency this will be
deemed an agreement made and executed in the State of Minnesota and the law of
the State of Minnesota will control to the extent not preempted by federal law.


 


O.                                    DEFINITIONS


 


As used in this Statement:


 


1.                                       “Cash
Compensation”


 


Means all amounts earned,
whether or not currently payable, as wages, salary, bonus or a combination by
an Executive, payable in cash or its equivalent or agreed to be in lieu of cash
compensation. This will not include any stock-based compensation (whether such
stock-based compensation is settled in cash or otherwise), or the value of
employee or executive perquisites or benefits accrued or received pursuant to a
plan of the employer which is uniformly applied to all of the employees of the
employer who are similarly situated or is consistent with established prior
practice for the position occupied by the Executive.


 


2.                                       “CEO”


 


Means the Chief Executive
Officer of Target Corporation, as then currently designated by its Board of
Directors, or as otherwise expressly provided in the Officer-ICP Statement.


 


3.                                       “Corporation”


 


Means Target Corporation and
each and all of its business units, including divisions and subsidiaries,
unless otherwise clearly intended by the written context, and any person with
whom Target Corporation would be considered a single employer under Code
Sections 414(b) and 414(c).


 


4.                                       “Directly
Competitive Employment” (or “DCE”)


 


Means personal services to, or
for the direct and intended benefit of, a person, firm or corporation
determined by the CEO and specified in writing to the Executive at or about the
time of Notice of Termination as constituting DCE for Officer-ICP purposes.


 


5.                                       “Employment
Severance Date”


 


All employment relationships
between the Executive and the Corporation shall cease on the Employment
Severance Date.


 


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6.                                       “Executive”
or “Officer” (both of which shall have the same definition)


 


Means an Executive Officer (as
defined by the Securities and Exchange Commission) of the Corporation or an
individual employed as an executive within the Corporation who currently is, or
within the designated Eligibility Period has been designated and categorized as
an officer of the Corporation by the CEO. Unless clearly otherwise intended by
the written context, Executive or Officer will include all beneficiaries of and
persons claiming by or through the designated employee or former employee.


 


An Executive or Officer is not
eligible for Officer-ICP unless (1) his or her services are performed
within the continental United States (including Alaska) or Hawaii or (2) his
or her principal base of operations to which he or she frequently returns is
within the continental United States (including Alaska ) or Hawaii.


 


7.                                       “Notice
of Termination” (or “Notice”)


 


Means an unconditional written
or oral statement of an Executive’s organizational superior that the Executive’s
employment in the Corporation is terminated at the instance of the Corporation.
Notice that an Executive’s employment will end because of achievement of the
age of mandatory retirement under lawful policies of the Corporation will not
be a Notice of Termination for Officer-ICP purposes.


 


8.                                       “Payments”
(or “ICP Payments”)


 


By the Corporation will include
all of those payments made by or on account of the Corporation under
Officer-ICP and will include all of those made to or for the account of an
Executive or a designated creditor or authorized representative or beneficiary
of an Executive or deceased Executive.


 


9.                                       “Reassignment”


 


Means the transfer of an
Executive to another position within the Corporation or a reduction on the
Executive’s Base Compensation in Executive’s current position.


 


10.                                 “Spin-Off”


 


Means a sale of assets or stock
or other disposition as a going business of the Corporation’s ownership or
control of a business unit or other operation previously a part of the
Corporation.


 


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11.                                 “Change
in Control”


 


A “Change in
Control” shall be deemed to have occurred if:


 


(a)                                  50%
or more of the directors of Target shall be persons other than persons


 


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


 


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


 


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


 


(c)                                  the
consummation of a merger or consolidation of Target 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 Target’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 Target’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
Target or all or substantially all of Target’s assets either directly or
through one or more subsidiaries), in substantially the same proportions (as
compared to the other beneficial owners of Target’s Voting Stock immediately
prior to such Business Combination) as their beneficial ownership of Target’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 Target) 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


 


16

















 


(d)                                 approval
by the shareholders of a definitive agreement or plan to liquidate or dissolve
Target.


 


For purposes of this Section II.O.11,
“Voting Stock” has the same meaning as defined in Article IV of the
Restated Articles of Incorporation, as amended, of Target.


 


For purposes of this Section II.O.11,
“Target” shall mean Target Corporation, a Minnesota corporation, and any
successor thereof.


 


12.                                 “Salary
Grade”


 


The numerical “Salary Grade”
that the Executive is assigned under the Corporation’s salary grading system.


 


13.                                 “Auditor”


The “Auditor” is the
independent auditor selected by a committee of two or more members of the
Compensation Committee of the Board of Directors who are appointed from time to
time by the Board and who are outside, independent Board members.


 


14.                                 “Specified
Employee”


“Specified Employee” means an
Executive who as of the date of his or her separation from service, as defined
under Code Section 409A, is a “key employee” (as defined below), and the
Corporation has stock that is traded on an established securities market
(within the meaning of Code Section 409A(a)(2)(B)). The Executive is a “key
employee” during the 12-month period beginning on the April 1 immediately
following a calendar year, any time during which such Executive was a key
employee as defined in Code Section 416(i) (without regard to Code Section 416(i)(5)),
of the Corporation. An Executive will not be treated as a Specified Employee if
he or she would not be a “specified employee” as defined under Treasury
regulations issued under Code Section 409A.


 


NOTE:                        Additional
Definitions for particular purposes are contained in the text.


 


P.                                      CHANGE
IN CONTROL


 


Other provisions of this
Statement to the contrary notwithstanding, in the event of a Change in Control:


 


1.                                       If
an Executive’s employment with the Corporation is terminated, whether
involuntarily or by the Executive for “good reason” (as defined in Section II.P.5),
within two years following a Change in Control, an Executive shall be eligible
for Officer-ICP Payments.


 


17

















 


2.                                       To
the extent the Officer ICP-Payments are not subject to Code Section 409A
(including pursuant to a short-term deferral exception under Treasury
Regulation Section 1.409A-1(b)(4) and separation pay plan exception
under Treasury Regulation Section 1.409A-1(b)(9)), or such Change in
Control qualifies as a “change in control event” under Code Section 409A,
the Officer-ICP Payments shall be made in a lump sum payment within 20 days of
the Executive’s separation of service, as defined under Code Section 409A;
provided that if the Executive is a Specified Employee, the distribution of any
such Officer-ICP Payments subject to Code Section 409A will be made 6
months after the separation of service, as defined under Code Section 409A.  The lump sum amount shall be determined by
discounting the periodic Officer-ICP Payments by a rate equivalent to the
annual prime rate as published in the Wall Street Journal on the first business
day following the Officer-ICP Payments.


 


3.                                       To
the extent the Officer-ICP Payments are subject to Code Section 409A,
(after considering any exceptions to Code Section 409A, including the
short-term deferral exception under Treasury Regulation Section 1.409A-1(b)(4) and
separation pay plan exception under Treasury Regulation Section 1.409A-1(b)(9))  and such Change in Control does not qualify
as a change in control event under Code Section 409A, the Officer-ICP
Payments shall be made according to the payment schedule set forth in Section II.D
of this Statement; provided that if the Executive is a Specified Employee, the
distribution of any such Officer-ICP Payments subject to Code Section 409A
will be made 6 months after Executive’s separation from service, as defined
under Code Section 409A.


 


4.                                       Except
for the Release required by Section II.K of this Statement, all other
obligations or restrictions of Executive under this Statement shall terminate.


 


5.                                       For
purposes of this Section II.P, “good reason” shall mean any material diminution
of the Executive’s position, authority, duties or responsibilities (including
the assignment of duties materially inconsistent with the Executive’s position
or a material increase in the time Executive is required by the Corporation or
its successor to travel), any reduction in salary or in the Executive’s
aggregate bonus and incentive opportunities, any material reduction in the
aggregate value of the Executive’s employee benefits (including retirement,
welfare and fringe benefits), or relocation to a principal work site that is
more than 40 miles from the Executive’s principal work site immediately prior
to the Change in Control.


 


6.                                       If
an Executive’s employment was terminated prior to a Change in Control, such
Executive is receiving or is entitled to receive Officer-ICP Payments that will
continue after the Change in Control, and the Change in Control qualified as a “change
in control event” for purposes of Code Section 409A, then, subject to the
six month delay for Specified Employees in effect under Section II.D.2,
the Officer-ICP Payments due after such change in control event will be
accelerated and paid to Executive in a lump sum as soon as practicable, but not
more than 


 


18

















 


90 days following such change
in control event. The lump sum under this Section II.P.6 will be
calculated in the same manner as the lump sum calculated under Section II.P.2
above.


 


Q.                                    CERTAIN
REDUCTION OF PAYMENTS BY THE CORPORATION


 


1.                                       Anything
in this Officer-ICP to the contrary notwithstanding, the provisions of this Section Q
shall apply to an Executive if the Auditor determines that each of a and b
below are applicable.


 


a.                                       Payments
hereunder, determined without application of this Section Q, either alone
or together with other payments in the nature of compensation to the Executive
which are contingent on or accelerated by a change in the ownership or
effective control of the Corporation, or in the ownership of a substantial
portion of the assets of the Corporation, or otherwise, would result in any
portion of the payments hereunder being subject to an excise tax on excess
parachute payments imposed under Code Section 4999.


 


b.                                      The
excise tax imposed on the Executive under Section 4999 of the Code on
excess parachute payments, from whatever source, would result in a lesser net
aggregate present value of payments and distributions to the Executive (after
subtraction of the excise tax) than if payments and distributions to the
Executive were reduced to the maximum amount that could be made without
incurring the excise tax.


 


2.                                       Under
this Section Q the payments under this Officer-ICP shall be reduced (but
not below zero) so that the present value of such payments and distributions
shall equal the Reduced Amount. The “Reduced Amount” (which may be zero) shall
be an amount expressed as the present value of the payments and distributions
under this Officer-ICP that can be made without causing such payments and
distributions to be subject to the excise tax under Section 4999 of the
Code. To the extent necessary, the reductions in the payments and distributions
will be applied to those Officer-ICP payments nearest the Employment Severance
Date until the full amount of the necessary reductions have been applied. The
determinations and reductions under this Section Q shall be made before
any eliminations or reductions, if any, have been made under the Corporation’s
Long Term Incentive Plan.


 


3.                                       If
the Auditor determines that this Section Q is applicable to an Executive,
it shall so advise the Corporation. The Corporation shall then promptly give
the Executive notice to that effect together with a copy of the detailed
calculation supporting such determination which shall include a statement of
the Reduced Amount. Such notice shall also include a description of which and
how much of the payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the payments equals the Reduced
Amount.) For purposes of this Section Q, present value shall be determined
in accordance with 


 


19

















 


Section 280G of the Code.
All the foregoing determinations made by the Auditor under this Section Q
shall be made as promptly as practicable after it is determined that parachute
payments will be made to the Executive if an elimination or reduction is not
made. As promptly as practicable following the election hereunder, the
Corporation shall pay to or for the benefit of the Executive such amounts as
are then due to the Executive under this Officer-ICP and shall promptly pay to
or for the benefit of the Executive in the future such amounts as become due to
the Executive under this Officer-ICP.


 


4.                                       As
a result of the uncertainty in the application of Section 280G of the Code
at the time of the initial determination by the Auditor hereunder, it is
possible that payments under this Officer-ICP will have been made which should
not have been made (“Overpayment”) or that additional payments which will have
not been made could have been made (“Underpayment”), in each case, consistent
with the calculation of the Reduced Amount hereunder. In the event that the
Auditor, based upon the assertion of a deficiency by the Internal Revenue
Service against the Corporation or the Executive which the Auditor believes has
a high probability of success, determines that an Overpayment has been made,
any such Overpayment shall be treated for all purposes as a loan to the
Executive which the Executive shall repay together with interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the
Code; provided, however, that no amount shall be payable by the Executive if
and to the extent such payment would not reduce the amount which is subject to
the excise tax under Section 4999 of the Code. In the event that the
Auditor, based upon controlling precedent, determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid to or for the benefit of
the Executive together with interest at the applicable Federal rate provided for
in Section 7872(f)(2)(A) of the Code.


 


5.                                       In
making its determination under this Section Q, the value of any non-cash
benefit shall be determined by the Auditor in accordance with the principles of
Section 280G(d)(3) of the Code.


 


6.                                       All
determinations made by the Auditor under this Section Q shall be binding
upon the Corporation and the Executive.


 


20

















 


CLAIMS PROCEDURE


for
the


Target
Corporation


Officer
Income Continuance Policy Statement


 


When your employment with Target Corporation
(the “Company”) terminates, the Company will tell you whether you are eligible
for benefits from the above-referenced plan and, if so, the amount and timing
of the payments that will be made to you.


 


If you believe that the Company’s
determination is incorrect in any way, you must file a written claim with the
Chief Executive Officer of the Company. The Chief Executive Officer or his or
her delegate ordinarily will respond to the claim within 90 days of the date on
which it is received. However, if special circumstances require an extension of
the period of time for processing a claim, the 90-day period can be extended
for an additional 90 days by giving you written notice of the extension and the
reason that the extension is necessary.


 


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


 


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


 


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


 


These Claims Procedures must be followed
before you can file a lawsuit seeking recovery of any Officer-ICP Payments to
which you claim to be entitled.