Document:

Exhibit 10(I)

 

TARGET CORPORATION

OFFICER EDCP

(2010 PLAN STATEMENT)

 

Effective January 13, 2010

As Amended and Restated

 

 

TARGET CORPORATION

2010 OFFICER EDCP

(2010 Plan Statement)

 

TABLE OF CONTENTS

 

	
  SECTION 1 INTRODUCTION; DEFINITIONS

  	
   

  	
  1

  
	
  1.1  Name
  of Plan; History

  	
   

  	
  1

  
	
  1.2  Definitions

  	
   

  	
  1

  
	
  1.2.1 Account

  	
   

  	
  1

  
	
  1.2.2 Affiliate

  	
   

  	
  1

  
	
  1.2.3 Base Salary

  	
   

  	
  1

  
	
  1.2.4 Beneficiary

  	
   

  	
  2

  
	
  1.2.5  Board

  	
   

  	
  2

  
	
  1.2.6 Bonus

  	
   

  	
  2

  
	
  1.2.7 Certified Earnings

  	
   

  	
  2

  
	
  1.2.8  Change-in-Control

  	
   

  	
  2

  
	
  1.2.9 Code

  	
   

  	
  3

  
	
  1.2.10 Committee

  	
   

  	
  3

  
	
  1.2.11 Company

  	
   

  	
  3

  
	
  1.2.12 Company’s Fiscal Year

  	
   

  	
  3

  
	
  1.2.13 Crediting Rate
  Alternative

  	
   

  	
  4

  
	
  1.2.14 Deferral Credit

  	
   

  	
  4

  
	
  1.2.15 Disabled

  	
   

  	
  4

  
	
  1.2.16 Discretionary Credit

  	
   

  	
  4

  
	
  1.2.17 Earnings Credit

  	
   

  	
  4

  
	
  1.2.18 EDCP

  	
   

  	
  4

  
	
  1.2.19 Effective Date

  	
   

  	
  4

  
	
  1.2.20 Eligible Compensation

  	
   

  	
  4

  
	
  1.2.21 Employee

  	
   

  	
  4

  
	
  1.2.22 Enhancement

  	
   

  	
  4

  
	
  1.2.23 ERISA

  	
   

  	
  4

  
	
  1.2.24 ESBP

  	
   

  	
  4

  
	
  1.2.25 ESBP Benefit

  	
   

  	
  4

  
	
  1.2.26 ESBP Benefit Transfer
  Credits

  	
   

  	
  5

  
	
  1.2.27 Newly Eligible Employee

  	
   

  	
  5

  
	
  1.2.28 Officer

  	
   

  	
  5

  
	
  1.2.29 Participant

  	
   

  	
  5

  
	
  1.2.30 Participating Employer

  	
   

  	
  5

  
	
  1.2.31 Performance Share Award

  	
   

  	
  5

  
	
  1.2.32 Plan

  	
   

  	
  5

  
	
  1.2.33 Plan Administrator

  	
   

  	
  5

  
	
  1.2.34 Plan Rules

  	
   

  	
  5

  
	
  1.2.35 Plan Statement

  	
   

  	
  5

  
	
  1.2.36 Plan Year

  	
   

  	
  5

  
	
  1.2.37 Restoration Match Credit

  	
   

  	
  6

  
	
  1.2.38 Signing Bonus

  	
   

  	
  6

  

 

 

	
  1.2.39 SPP Benefit

  	
   

  	
  6

  
	
  1.2.40 SPP Benefit Transfer
  Credit

  	
   

  	
  6

  
	
  1.2.41 Specified Employee

  	
   

  	
  6

  
	
  1.2.42 Target 401(k) Plan

  	
   

  	
  6

  
	
  1.2.43 Target Pension Plan

  	
   

  	
  6

  
	
  1.2.44 Termination of
  Employment

  	
   

  	
  6

  
	
  1.2.45 Trust

  	
   

  	
  7

  
	
  1.2.46 Unforeseeable Emergency

  	
   

  	
  7

  
	
  1.2.47 Valuation Date

  	
   

  	
  7

  
	
  1.2.48 Year Of Service

  	
   

  	
  7

  
	
  SECTION 2 PARTICIPATION AND DEFERRAL ELECTIONS

  	
   

  	
  8

  
	
  2.1
  Eligibility

  	
   

  	
  8

  
	
  2.2 Special
  Rules for Participating Employees

  	
   

  	
  8

  
	
  2.3
  Termination of Participation

  	
   

  	
  8

  
	
  2.4 Rehires
  and Transfers

  	
   

  	
  8

  
	
  2.5 Effect on
  Employment

  	
   

  	
  9

  
	
  2.6 Condition
  of Participation

  	
   

  	
  9

  
	
  2.7 Deferral
  Elections

  	
   

  	
  10

  
	
  2.8 Base
  Salary Deferrals

  	
   

  	
  10

  
	
  2.9 Bonus
  Deferrals

  	
   

  	
  10

  
	
  2.10
  Performance Share Award Deferrals

  	
   

  	
  11

  
	
  2.11 Special
  Code section 162(m) Deferral Elections

  	
   

  	
  11

  
	
  2.12
  Cancellation of Deferral Elections

  	
   

  	
  12

  
	
  SECTION 3 CREDITS TO ACCOUNTS

  	
   

  	
  13

  
	
  3.1 Elective
  Deferral Credit

  	
   

  	
  13

  
	
  3.2
  Restoration Match Credit

  	
   

  	
  13

  
	
  3.3 SPP
  Benefit Transfer Credits

  	
   

  	
  13

  
	
  3.4 ESBP
  Benefit Transfer Credits

  	
   

  	
  15

  
	
  3.5
  Discretionary Credits

  	
   

  	
  16

  
	
  SECTION 4 ADJUSTMENTS OF ACCOUNTS

  	
   

  	
  17

  
	
  4.1
  Establishment of Accounts

  	
   

  	
  17

  
	
  4.2
  Adjustments of Accounts

  	
   

  	
  17

  
	
  4.3 Investment
  Adjustment

  	
   

  	
  17

  
	
  4.4
  Enhancement

  	
   

  	
  17

  
	
  4.5 Account
  Adjustments Upon a Change-in-Control or Plan Termination

  	
   

  	
  18

  
	
  SECTION 5 VESTING

  	
   

  	
  19

  
	
  5.1 Deferral
  Credits and Restoration Match Credits

  	
   

  	
  19

  
	
  5.2
  Discretionary Credits

  	
   

  	
  19

  
	
  5.3
  Enhancement

  	
   

  	
  19

  
	
  5.4 SPP
  Benefit Transfer Credit

  	
   

  	
  19

  
	
  5.5 ESBP
  Benefit Transfer Credit

  	
   

  	
  19

  
	
  5.6 Failure to
  Cooperate; Misinformation or Failure to Disclose

  	
   

  	
  19

  
	
  SECTION 6 DISTRIBUTION

  	
   

  	
  20

  
	
  6.1
  Distribution Elections

  	
   

  	
  20

  
	
  6.2 General
  Requirements

  	
   

  	
  20

  
	
  6.3 Six-Month
  Suspension for Specified Employees

  	
   

  	
  22

  
	
  6.4
  Distribution on Account of Death

  	
   

  	
  23

  

 

 

	
  6.5
  Distribution on Account of Unforeseeable Emergency.

  	
   

  	
  23

  
	
  6.6
  Designation of Beneficiaries

  	
   

  	
  23

  
	
  6.7 Facility
  of Payment

  	
   

  	
  25

  
	
  6.8 Tax
  Withholding

  	
   

  	
  25

  
	
  6.9 Payments
  Upon Rehire

  	
   

  	
  25

  
	
  6.10
  Application for Distribution

  	
   

  	
  25

  
	
  6.11
  Acceleration of Distributions

  	
   

  	
  25

  
	
  6.12 Delay of
  Distributions

  	
   

  	
  25

  
	
  SECTION 7 SOURCE OF PAYMENTS; NATURE OF INTEREST

  	
   

  	
  27

  
	
  7.1 Source of
  Payments

  	
   

  	
  27

  
	
  7.2 Unfunded
  Obligation

  	
   

  	
  27

  
	
  7.3
  Establishment of Trust

  	
   

  	
  27

  
	
  7.4
  Spendthrift Provision

  	
   

  	
  27

  
	
  7.5
  Compensation Recovery (Recoupment)

  	
   

  	
  28

  
	
  SECTION 8 ADOPTION, AMENDMENT AND TERMINATION

  	
   

  	
  29

  
	
  8.1 Adoption

  	
   

  	
  29

  
	
  8.2 Amendment

  	
   

  	
  29

  
	
  8.3
  Termination

  	
   

  	
  29

  
	
  SECTION 9 CLAIM PROCEDURES

  	
   

  	
  31

  
	
  9.1 Claim
  Procedures

  	
   

  	
  31

  
	
  9.2
  Rules and Regulations

  	
   

  	
  32

  
	
  9.3
  Limitations and Exhaustion

  	
   

  	
  33

  
	
  SECTION 10 PLAN ADMINISTRATION

  	
   

  	
  35

  
	
  10.1 Plan
  Administration

  	
   

  	
  35

  
	
  10.2 Conflict
  of Interest

  	
   

  	
  35

  
	
  10.3 Committee
  Membership and Authority

  	
   

  	
  36

  
	
  10.4 Service
  of Process

  	
   

  	
  36

  
	
  10.5 Choice of
  Law

  	
   

  	
  36

  
	
  10.6
  Responsibility for Delegate

  	
   

  	
  36

  
	
  10.7 Expenses

  	
   

  	
  36

  
	
  10.8 Errors in
  Computations

  	
   

  	
  36

  
	
  10.9
  Indemnification

  	
   

  	
  36

  
	
  10.10 Notice

  	
   

  	
  37

  
	
  SECTION 11 CONSTRUCTION

  	
   

  	
  38

  
	
  11.1 ERISA
  Status

  	
   

  	
  38

  
	
  11.2 IRC
  Status

  	
   

  	
  38

  
	
  11.3
  Rules of Document Construction

  	
   

  	
  38

  
	
  11.4
  References to Laws

  	
   

  	
  38

  
	
  11.5
  Appendices

  	
   

  	
  38

  
	
      APPENDIX
  A

  	
   

  	
  39

  

 

 

SECTION 1

INTRODUCTION; DEFINITIONS

 

1.1          Name of Plan;
History. This Plan (formerly known as the “Target Corporation
SMG Executive Officer Deferred Compensation Plan) is a non-qualified, unfunded
plan established for the purpose of allowing a select group of management or
highly compensated employees to defer the receipt of income. This Plan was
originally adopted effective as of January 1, 1997 and was amended at
various times thereafter. Effective April 30, 2002, Participants in this
Plan who were members of the Company’s Corporate Operating Committee received
credits under this Plan equal to the present value of their benefit under the
supplemental pension plans maintained by the Company. Each subsequent April,
the Participant receives annual SPP Benefit Transfer Credits equal to the
change in value of his or her benefit under the supplemental pension plans. Effective
July 31, 2002, this program was extended to include all officers of the
Company. Effective April 30, 2002, Participants in this Plan who were
members of the Company’s Corporate Operating Committee received credits under
this Plan equal to the present value of their benefit under the Company’s ESBP.
Each subsequent April, Participants received annual credits equal to the change
in value of his or her benefit under the ESBP. Effective October 28, 2005,
all officers who had not previously received ESBP Benefit Transfer Credits,
received a one-time transfer of the present value of their benefit under the
ESBP. As of January 28, 2006, a one-time ESBP credit was made to certain
executive committee members and no subsequent ESBP Benefit Transfer Credits
were made to those receiving the one-time ESBP credit. From time to time,
certain participants in the Target Corporation Deferred Compensation Plan —
Senior Management Group (“ODCP”) and the Company negotiated to transfer the
economic value of their benefit under ODCP to this Plan. Officers eligible to
receive performance share awards granted in the fiscal years ending February 1,
2003 and January 31, 2004 had an opportunity to defer receipt of the value
of the earned performance shares into this Plan at the end of the performance
period. The performance period for the shares granted in 2003 ended February 3,
2007. The performance period for the shares granted in 2004 ended February 2,
2008. Effective January 1, 2005 (and other effective dates as specifically
provided), this Plan was operated in compliance with Code section 409A. Effective
January 29, 2006, members of the Company’s executive committee ceased to
be eligible to receive enhanced earnings on their account balances. The Plan,
which is intended to comply with Code section 409A, was amended and restated effective
January 1, 2009. This Plan Statement, which was amended to incorporate the
Company’s recoupment policy, is effective January 13, 2010.

 

1.2          Definitions. When the
following terms are used herein with initial capital letters, they shall have
the following meanings:

 

1.2.1       Account. “Account” means
the separate bookkeeping account representing the separate unfunded and
unsecured general obligation of the Participating Employers established with
respect to each person who is a Participant in this Plan. Within each
Participant’s Account, separate subaccounts shall be maintained to the extent
the Plan Administrator determines it to be necessary or desirable for the
administration of this Plan.

 

1.2.2       Affiliate. An “Affiliate”
is the Company and all persons, with whom the Company would be considered a
single employer under Code section 414(b) or 414(c).

 

1.2.3       Base Salary.         “Base Salary” with respect
to a Plan Year means Certified Earnings as modified by the rules below:

 

1

 

(a)                                  the  limits imposed by Code section 401(a)(17) will not apply;

 

(b)                                 deferrals under
Section 2.8 of this Plan are included as Base Salary; and

 

(c)                                  Bonus and
Signing Bonus amounts are not included as Base Salary.

 

1.2.4       Beneficiary. “Beneficiary”
means an individual (human being), a trust that is a United Sates person within
the meaning of the Code, a person that has been recognized as a charitable
organization under Code section 170(b), or the Participant’s estate designated
in accordance with Section 6.7 to receive all or a part of the Participant’s
Account in the event of the Participant’s death prior to full distribution
thereof. A person so designated shall not be considered a Beneficiary until the
death of the Participant.

 

1.2.5       Board. “Board” is the
Board of Directors of the Company, or such committee of the Board of Directors
to which the Board of Directors of the Company has delegated the respective
authority.

 

1.2.6       Bonus. “Bonus” with
respect to a Plan Year means that portion of Certified Earnings that is equal
to the amount payable under any regular incentive plan of a Participating
Employer that is earned, or intended to be earned, over a period of at least a
calendar year or fiscal year as modified by the rules below:

 

(a)                                  the limits
imposed by Code section 401(a)(17) will not apply;

 

(b)                                 deferrals under
Section 2.9 of this Plan are included as Bonus; and

 

(c)                                  Signing Bonus
amounts are not included as Bonus

 

1.2.7       Certified Earnings. “Certified
Earnings” has the same meaning as the defined term in the Target 401(k) Plan.

 

1.2.8       Change-in-Control.

 

(a)                                  A “Change-in-Control”
shall be deemed to have occurred if:

 

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

 

A)                           for
whose election proxies shall have been solicited by the Board, or

 

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

 

(ii)                                  30% or more of
the outstanding voting power of the Voting Stock of the Company is acquired or
beneficially owned (as defined in Article IV of the Restated Articles of
Incorporation, as amended, of the Company) by any person (as defined in Article IV
of the Restated Articles of Incorporation, as amended, of the Company), other
than an entity

 

2

 

resulting from a Business Combination in which clauses (x) and (y) of
subparagraph (iii) apply, or

 

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

 

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

 

For
purposes of this 1.2.8, “Voting Stock” has the same meaning as defined in Article IV
of the Restated Articles of Incorporation, as amended, of the Company.

 

1.2.9       Code. “Code” means
the Internal Revenue Code of 1986, as amended (including, when the context
requires, all regulations, interpretations and rulings issued hereunder).

 

1.2.10     Committee. “Committee”
means the administrative committee appointed in accordance with Section 10.3.

 

1.2.11     Company. “Company”
means Target Corporation, a Minnesota corporation, or any successor thereto.

 

1.2.12     Company’s Fiscal Year. “Company’s
Fiscal Year” means the period commencing on the Sunday that immediately follows
the Saturday that is nearest to the last day in January through the
Saturday that is nearest to the last day in January in the following year.

 

3

 

1.2.13     Crediting Rate
Alternative. “Crediting Rate Alternative” means a hypothetical
investment option used for the purpose of measuring income, gains and losses to
the Accounts of Participants (as if the Accounts had in fact been so invested).
The Crediting Rate Alternatives shall be designated in writing by the Plan
Administrator.

 

1.2.14     Deferral Credit. A “Deferral
Credit” is the amount credited to a Participant’s Account pursuant to Section 3.1.

 

1.2.15     Disabled. A Participant
will be “Disabled” if he or she has become entitled to receive disability
income benefits under the provisions of the Social Security Act.

 

1.2.16     Discretionary Credit. A “Discretionary
Credit” is the amount credited to a Participant’s Account pursuant to Section 3.5.

 

1.2.17     Earnings Credit. “Earnings
Credit” means the investment adjustment credited to a Participant’s Account
pursuant to Section 4.3 or Section 4.5 as applicable.

 

1.2.18     EDCP. “EDCP” means
the Target Corporation EDCP, a non-qualified, unfunded deferred compensation
plan maintained by the Company and certain other Affiliates.

 

1.2.19     Effective Date. The “Effective
Date” of this Plan Statement is January 13, 2010, except as otherwise
provided.

 

1.2.20     Eligible Compensation. “Eligible
Compensation” means, the Base Salary, Bonus and Performance Share Award that
the Participant receives or is entitled to receive from his or her
Participating Employer for services rendered.

 

1.2.21     Employee. An “Employee”
is an individual who performs services for a Participating Employer as an
employee of the Participating Employer (as classified by the Participating
Employer at the time the services are preformed and without regard to any
subsequent reclassification) and does not include any individual who is
classified an independent contractor.

 

1.2.22     Enhancement. “Enhancement”
means an additional .1667% of investment earnings per month added to the
applicable Crediting Rate Alternatives as provided in Section 4.4.

 

1.2.23     ERISA. “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended (including,
when the context requires, all regulations, interpretations and rulings issued
thereunder).

 

1.2.24     ESBP. “ESBP” means
the Target Corporation Post Retirement Executive Survivor Benefit Plan.

 

1.2.25     ESBP Benefit. “ESBP Benefit”
means the actuarial lump sum present value of a Participant’s survivor benefit
under the ESBP determined as of a particular determination date under Section 3.4
but without regard to whether the Participant had experienced either an “early
retirement” or “normal retirement” under the Target Pension Plan as provided
under the ESBP. The present value of such survivor benefit will be determined
by the Company in its sole and absolute discretion based on such interest
rates, mortality factors and other assumptions deemed appropriate by the
Company.

 

4

 

1.2.26     ESBP Benefit Transfer
Credits. “ESBP Benefit Transfer Credits” are the initial and
annual credits to a Participant’s Account under Section 3.4.

 

1.2.27     Newly Eligible
Employee. “Newly Eligible Employee” means an Employee who
either (i) was not previously eligible to participate in this Plan or any
other non-qualified, deferred compensation plans maintained by a Participating
Employer or other Affiliate, (ii) had been paid all amounts previously
deferred under all non-qualified, deferred compensation plans maintained by a
Participating Employer or other Affiliate and had ceased to be eligible to
continue to participate in such plans on or before the date of payment of all
amounts due under such plans, or (iii) was not eligible to participate in
any non-qualified deferred compensation plans (other than the accrual of
earnings) maintained by a Participating Employer or other Affiliate at any time
during the 24-month period ending on the date the Employee has again become
eligible to participate in the Plan.

 

1.2.28     Officer. An “Officer” is
a member of the executive committee and any other Employee who is designated
and categorized as an officer of the Company by the Company’s Chief Executive
Officer.

 

1.2.29     Participant. A  “Participant” is an Employee who becomes a Participant in
this Plan in accordance with the provisions of Section 2. An Employee who
has become a Participant shall be considered to continue as a Participant in
this Plan until the date when the Participant no longer has any Account under
this Plan, or the date of the Participant’s death, if earlier.

 

1.2.30     Participating Employer.
“Participating Employer” means the Company and each other Affiliate
that, with the consent of the Company, adopts this Plan. A Participating
Employer shall cease to be a Participating Employer on the date it ceases to be
an Affiliate.

 

1.2.31     Performance Share
Award. “Performance Share Award” means a performance share award issued under
the Company’s Long-Term Incentive Plan of 1999 or the Company’s Long-Term
Incentive Plan of 2004.

 

1.2.32     Plan. “Plan” means
the nonqualified, unfunded income deferral program maintained by the Company
and established for the benefit of Participants eligible to participate
therein, as set forth in this Plan Statement. As used herein, “Plan” does not
refer to the documents pursuant to which this Plan is maintained. That document
is referred to herein as the “Plan Statement”. The Plan shall be referred to as
the “Target Corporation Officer EDCP” (formerly known as the Target Corporation
SMG Executive Deferred Compensation Plan).

 

1.2.33     Plan Administrator. “Plan
Administrator” means the Company or, if affirmatively designated by the
Company, some other individual or committee.

 

1.2.34     Plan Rules. “Plan Rules”
are rules, policies, practices or procedures adopted by the Plan Administrator
or its delegate pursuant to Section 10.1.5.

 

1.2.35     Plan Statement. “Plan Statement”
means this document entitled “Target Corporation Officer EDCP (2010 Plan
Statement),” as adopted by the Company, effective as of January 13, 2010,
as the same may be amended from time to time.

 

1.2.36     Plan Year. “Plan Year”
means the period from January 1 through December 31.

 

5

 

1.2.37     Restoration Match
Credit. “Restoration Match Credit” is the amount credited to
a Participant’s Account pursuant to Section 3.2.

 

1.2.38     Signing Bonus. “Signing Bonus”
is the cash remuneration earned following a period of employment provided to
certain new Employees related to their acceptance of employment with a
Participating Employer.

 

1.2.39     SPP Benefit. “SPP Benefit”
means the amount determined under Appendix A.

 

1.2.40     SPP Benefit Transfer
Credit. “SPP Benefit Transfer Credit” is the amount credited
to a Participant’s Account under Section 3.3.

 

1.2.41     Specified Employee. For purposes of
complying with the requirements of Code section 409A(a)(2)(B)(i) (relating
to the 6 month suspension of certain benefit distributions), an individual is a
“Specified Employee” if on his or her Termination of Employment, the Company or
other Affiliate has stock that is traded on an established securities market
within the meaning of Code section 409A(a)(2)(B) and such individual is a “key
employee” (defined below). For this purpose, an individual is a “key employee”
during the 12-month period beginning on April 1 immediately following the
calendar year in which the individual was employed by the Company and other
Affiliates, and satisfied, at any time within such calendar year, the
requirements of Code section 416(i)(1)(A)(i), (ii) or (iii) (without
regard to Code section 416(i)(5)). An individual will not be treated as a
Specified Employee if the individual is not required to be treated as a
Specified Employee under Treasury Regulations issued under Code section 409A.

 

1.2.42     Target 401(k) Plan.
“Target 401(k) Plan” means the tax-qualified defined contribution
retirement plan, with a qualified cash or deferred arrangement, established by
the Company for the benefit of employees eligible to participate therein, and
known as the Target Corporation 401(k) Plan.

 

1.2.43     Target Pension Plan. “Target Pension
Plan” means the tax qualified defined benefit pension plan, established for the
benefit of employees eligible to participate therein, and known as the Target
Corporation Pension Plan, including any predecessor plan(s) or successor
plan.

 

1.2.44     Termination of
Employment.

 

(a)                                  For purposes of
determining entitlement to or the amount of benefits under the Plan, “Termination
of Employment” means a severance of a Participant’s employment relationship
with each Participating Employer and all Affiliates, for any reason.

 

(b)                                 For purposes of
determining when a distribution will be made under the Plan, a “Termination of
Employment” will be deemed to occur if, based on the relevant facts and
circumstances to the Participant, the Participating Employer, all Affiliates
and Participant reasonably anticipate that the level of bona fide future
services to be performed by the Participant for the Participating Employer and
all Affiliates will permanently decrease to no more than 20% of the average
level of bona fide services performed over the immediately preceding 36-month
period.

 

(c)                                  A bona fide
leave of absence that is six months or less, or during which an individual
retains a reemployment right, will not cause a Termination of

 

6

 

Employment.  In the case of a leave of absence without a
right of reemployment that exceeds the time periods described in this
paragraph, a Termination of Employment will be deemed to occur once the leave
of absence exceeds six months.

 

(d)                                 Notwithstanding
the foregoing, a Termination of Employment shall not occur unless such
termination also qualifies as a “separation from service,” as defined under
Code section 409A and related guidance thereunder.

 

1.2.45     Trust.  “Trust” means the Target
Corporation Deferred Compensation Trust Agreement, dated January 1, 2009
by and between the Company and State Street Bank and Trust Company, as it is
amended from time to time, or similar trust agreement.

 

1.2.46     Unforeseeable
Emergency.  “Unforeseeable
Emergency” means a severe financial hardship to the Participant resulting from
an illness or accident of the Participant, the Participant’s spouse, or a
dependent (within the meaning of Code section 152(a)) of the Participant, loss
of the Participant’s property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the
control of the Participant, but only if and to the extent such Unforeseeable
Emergency constitutes an “unforeseeable emergency” under Code section 409A.

 

1.2.47     Valuation Date.  “Valuation Date” means each
business day on which the New York Stock Exchange is open.

 

1.2.48     Year of Service.  A “Year of Service” means
each 12-consecutive month period an individual is an Employee after the date
the individual is first eligible to participate under this Plan or any other
non-qualified deferred compensation plan maintained by a Participating
Employer.

 

7

 

SECTION 2

PARTICIPATION AND DEFERRAL ELECTIONS

 

2.1          Eligibility.

 

2.1.1       An Employee is
eligible to participate in this Plan on the first day of a Plan Year if, on
such day, he or she:

 

(a)                                  is a “qualified
employee” as that term is defined in the Target 401(k) Plan; and

 

(b)                                 is an Officer.

 

2.1.2       A Newly Eligible
Employee is eligible to participate in this Plan on the date that is 30 days
after he or she satisfies the requirements in Section 2.1.1.

 

2.1.3       An Employee
shall, as a condition of participation in this Plan, complete such forms and
make such elections in accordance with Plan Rules as the Plan
Administrator may require.  An Employee
who satisfies the requirements of this Section 2.1 is eligible to
participate in this Plan in accordance with and subject to the requirements of
this Plan.

 

2.1.4       An Employee who
has had a Termination of Employment as defined in Section 1.2.44(b), will
not be eligible to make deferral elections for subsequent Plan Years until
otherwise notified by the Plan Administrator. 
Any deferral election in effect at the time of such Termination of
Employment will continue to apply with respect to any Eligible Compensation
received from a Participating Employer or other Affiliate.  Such Employee will still be eligible to
receive credits, if any, pursuant to Sections 3.2, 3.3, 3.4 and 3.5.

 

2.2          Special Rules for
Participating Employees.  A Participant
who transfers employment from one Participating Employer to another Affiliate,
whether or not a Participating Employer will, for the duration of the Plan Year
in which the transfer occurs, continue to participate in this Plan in
accordance with the deferral election in effect at the time of such
transfer.  A Participant who is
simultaneously employed with more than one Participating Employer will participate
in this Plan as an Employee of each such Participating Employer on the basis of
a single deferral election applied separately to his or her respective,
Eligible Compensation from each Participating Employer.

 

2.3          Termination of
Participation.  Except as
otherwise specifically provided in this Plan Statement or by the Committee, an
Employee who ceases to satisfy the requirements of Section 2.1 is not
eligible to continue to participate in the Plan, provided, that any deferral
elections in effect, and irrevocable, will continue to apply with respect to
any Eligible Compensation received from a Participating Employer or other
Affiliate.  The Participant’s Account
will continue to be governed by the terms of the Plan until such time as the
Participant’s Account balance is paid in accordance with the terms of the
Plan.  A Participant or Beneficiary will
cease to be such as of the date on which his or her entire Account balance has
been distributed.

 

2.4          Rehires and
Transfers.

 

2.4.1       A Participant
who incurs a Termination of Employment and is rehired during the same calendar
year will continue Base Salary deferrals
for such calendar year in accordance with his or her election in effect
immediately prior to the Termination of Employment.

 

8

 

2.4.2       A Participant
who incurs a Termination of Employment and is rehired prior to the later of the
end of the Plan Year or the date the Bonus for such Plan Year is paid in cash,
will continue Bonus Deferrals for such Plan Year in accordance with his or her
election in effect immediately prior to the Termination of Employment.

 

2.4.3       Transfers from
Non-Officer Plan.  An Employee
who is a Participant in the EDCP and is promoted to an Officer position will
cease to be eligible to participate in the EDCP and will be eligible to
participate in this Plan, subject to the following rules:

 

(a)                                  The Employee
will become a Participant in this Plan immediately upon satisfying the
requirements to participate hereunder.

 

(b)                                 The Employee’s
deferral elections made under the EDCP will transfer to the Plan and continue
as an election made under Section 2.

 

(c)                                  The Employee’s
account maintained under the EDCP will be transferred to the Employee’s Account
under this Plan.

 

(d)                                 The Employee’s
distribution elections made under the EDCP (including any default
distributions) will transfer to this Plan and continue as the distribution
elections made under this Plan.

 

(e)                                  The Employee’s
beneficiary designation made under the EDCP will be treated as the Employee’s
Beneficiary designation under this Plan until changed in accordance with Section 6.7.

 

2.5          Effect on Employment.

 

2.5.1       Not a Term of
Employment.  Neither the
terms of this Plan Statement nor the benefits under this Plan (including the
continuance thereof) shall be a term of the employment of any Employee.

 

2.5.2       Not an Employment
Contract.   This Plan is not and shall not be deemed to
constitute a contract of employment between any Participating Employer and any
Employee or other person, nor shall anything herein contained be deemed to give
any Employee or other person any right to be retained in any Participating
Employer’s employ or in any way limit or restrict any Participating Employer’s
right or power to discharge any Employee or other person at any time and to
treat him or her without regard to the effect that such treatment might have
upon him or her as a Participant in this Plan.

 

2.6          Condition of
Participation

 

2.6.1       Cooperation.  Each Participant shall
cooperate with the Company by furnishing any and all information requested by
the Company in order to facilitate the payment of benefits hereunder and taking
such other relevant action as may be requested by the Company.  If a Participant refuses to cooperate,
neither the Company nor any Participating Employer shall have any further
obligation to the Participant under this Plan, other than payment to such
Participant of the aggregate amount of Eligible Compensation deferred under Section 3.1.

 

9

 

2.6.2       Plan Terms and
Rules.  Each Participant, as a
condition of participation in this Plan, is bound by all the terms and
conditions of this Plan and the Plan Rules.

 

2.7          Deferral Elections.  An Employee who satisfies the eligibility
requirements of Section 2 may, at the time and in the manner provided
hereunder, elect to defer the receipt of his or her Eligible Compensation.

 

2.7.1       General Rule.  Except as otherwise provided
in this Plan, an election shall be made before the beginning of the Plan Year
during which the Participant performs services for which the Eligible
Compensation is earned.  The election
must designate the percentage of the Base Salary, Bonus or Performance Share
Award which shall be deferred under this Plan. 
In accordance with Plan Rules, the Plan Administrator will determine the
manner and timing required to file a deferral election.  No deferral election shall be effective
unless prior to the deadline for making such election, the Participant has
filed with the Plan Administrator, in accordance with Plan Rules, an insurance
consent form permitting the Participating Employer or Company to purchase and
maintain life insurance coverage on the Employee with the Participating
Employer or Company as the beneficiary. 
An election to defer Eligible Compensation for the Plan Year or other
period is irrevocable once it has been accepted by the Plan Administrator and
the deadline for making such election has expired, except as otherwise provided
under this Plan.

 

2.7.2       Newly Eligible
Employees.  For a Newly
Eligible Employee, the deferral election may be made after the first day of a
Plan Year provided it is made within 30 days after becoming eligible to
participate in this Plan.  Such a
deferral election by a Newly Eligible Employee is irrevocable once it has been
received by the Plan Administrator and the deadline for making such election
has expired, except as otherwise provided under this Plan.  Such election will be effective with respect
to Eligible Compensation payable for services performed after becoming eligible
for this Plan and commencing with the next full pay period after the deferral
election becomes irrevocable.

 

2.7.3       Terminations of
Employment.  A
Participant who completes a deferral election in accordance with this Section 2.7,
but who has a Termination of Employment prior to the expiration of the deadline
for making such election, will be deemed to have made no deferral election for
the respective period.

 

2.8          Base Salary
Deferrals.   A Participant’s election to defer
Base Salary is subject to the following requirements:

 

2.8.1       A Base Salary
deferral election will be effective with respect to the first paycheck issued
during the Plan Year, including for the payroll period that includes the last
day of the preceding Plan Year, and such election will remain in effect through
the last paycheck issued during the Plan Year.

 

2.8.2       Except as
provided in Section 2.11, the Base Salary deferral percentage may not
exceed 80%.

 

2.9          Bonus Deferrals.  A Participant’s election to
defer his or her Bonus is subject to the following requirements:

 

2.9.1       A bonus
deferral election will be in effect for service periods that begin in the Plan
Year immediately following the date the election becomes irrevocable and
continue through

 

10

 

the
end of the Plan Year or if the Bonus is paid after such Plan Year, through the
date the Bonus would have been paid in cash.

 

2.9.2       Except as
provided in Section 2.11, a Participant’s Bonus effective deferral
percentage may not exceed 80%.  For
deferral elections that become effective after the beginning of a service
period, that portion of a Newly Eligible Employee’s Bonus that may be deferred
is limited to the total amount of the bonus multiplied by the ratio equal to
the number of days in the service period beginning after the date of the Bonus
deferral election became irrevocable over the total number of days in the
service period.

 

2.9.3       If the Plan
Administrator determines that a Participant’s Bonus is “performance-based
compensation” within the meaning of Code section 409A, then, consistent with
Plan Rules, the Participant’s deferral election may be made no later than six
months before the last day of the performance period during which the Bonus is
earned.

 

2.9.4       If a
Participant has a Termination of Employment before the end of the service
period for any Bonus, but is still entitled to receive a bonus, the Participant’s
existing Bonus deferral election will continue to apply.

 

2.10        Performance Share
Award Deferrals.  A Participant’s
election to defer his or her Performance Share Award is subject to the
following requirements:

 

2.10.1     The election is
available for Performance Share Awards issued in the Company’s Fiscal Year
ending in calendar year 2003 and 2004.

 

2.10.2     A Participant’s
Performance Share Award deferral percentage may not exceed 100%.

 

2.10.3     If the Plan
Administrator determines that a Participant’s Performance Share Award is “performance-based
compensation” within the meaning of Code section 409A, then the Participant’s
Performance Share Award deferral election must be made no later than
twenty-four (24) months prior to the date the Performance Share Award would
otherwise be paid in the form of cash or Company stock, or, if earlier, six (6) months
before the end of the period over which the services giving rise to the
Performance Share Award were performed.

 

2.10.4     The “Plan
Committee” as defined under the Company’s Long Term Incentive Plan shall
determine, in its sole and absolute discretion for each Plan Year during which
a Performance Share Award is issued, whether Participants in any group or class
are eligible to make deferral elections under this Section 2.10 with
respect to a Performance Share Award.

 

2.11        Special Code Section 162(m) Deferral
Elections.  Notwithstanding
Sections 2.8 and 2.9, a Participant who, prior to the beginning of a Plan Year,
is identified by the Plan Administrator as a potential “covered employee”
(within the meaning of Code section 162(m)) for the Company’s Fiscal Year
either ending in or beginning in the Plan Year may:

 

2.11.1     Make a Base Salary deferral election for the Plan
Year that consists of two parts:

 

(a)                                  the first part
of the election will apply with respect to the first paycheck issued during the
applicable Plan Year through the last paycheck issued prior to the end of the
Company’s Fiscal Year ending in the Plan Year, and

 

11

 

(b)                                 the second part
will apply to the paychecks issued after the beginning of the Company’s Fiscal
Year beginning in such Plan Year and issued prior to the end of such Plan Year.

 

2.11.2     Make a separate Bonus deferral election for the Plan
Year with respect to:

 

(a)                                  The Bonus
amounts that satisfy the requirements of performance-based compensation under
Code section 162(m), and

 

(b)                                 All other Bonus
amounts as determined by the Plan Administrator.

The Plan Administrator will set the maximum Bonus deferral percentage in its
sole discretion, on a Participant by Participant basis.

 

2.12        Cancellation of
Deferral Elections.

 

2.12.1     401(k) Hardship.  Notwithstanding
any provisions in the Plan to the contrary, an election to defer under Sections
2.8, 2.9, and 2.10 will be cancelled to the extent necessary for the
Participating Employer to comply with the hardship withdrawal provisions of
such Participating Employer’s 401(k) plan.

 

(a)                                  An election to
defer Base Salary amounts for the Plan Year during which the hardship
withdrawal was made will be cancelled. 
Further, no Base Salary deferral election will be effective for the next
Plan Year if the hardship withdrawal occurs after June 30, and on or
before December 31 of the calendar year.

 

(b)                                 Any election to
defer Bonus or Performance Share Award amounts in effect at the time of the
hardship withdrawal will be cancelled. 
Further, no deferral election for a Bonus related to service in the next
Plan Year will be effective if the hardship withdrawal occurs after June 30,
and on or before December 31 of the calendar year.

 

2.12.2     Unforeseeable
Emergency.  Notwithstanding
any provisions in the Plan to the contrary, an election to defer under Sections
2.8, 2.9, and 2.10 will be cancelled for the remaining portion of the Plan Year
in the event the Participant has received a distribution on account of an
Unforeseeable Emergency under Section 6.5. 
The revocation shall be made at the time and in the manner specified in
Plan Rules and must otherwise comply with the requirements of Section 6.5.

 

12

 

SECTION 3

CREDITS TO ACCOUNTS

 

3.1          Elective Deferral
Credit.  The Plan Administrator shall
credit to the Account of each Participant the amount, if any, of Eligible
Compensation the Participant elected to defer pursuant to Section 2.  Such amount shall be credited as nearly as
practicable as of the time or times when the Eligible Compensation would have
been paid to the Participant but for the election to defer.

 

3.2          Restoration Match
Credit.

 

3.2.1       Eligibility for Credit.  An Employee who satisfies the eligibility
requirements of Section 2.1 during a Plan Year will receive a Restoration
Match Credit for the Plan Year if he or she: (i) was actively employed and
eligible to participate in this Plan on the last business day of the Plan Year;
(ii) has experienced a Termination of Employment as defined under Section 1.2.44(a) during
the Plan Year after attaining age 55 and completing five (5) “years of
vesting service” as defined in the Target Pension Plan; (iii) has
experienced a Termination of Employment as a result of death; or (iv) has
become Disabled during such Plan Year.

 

3.2.2       Amount of Credit.  A Participant who satisfies the requirements
of Section 3.2.1 is entitled to a Restoration Match Credit equal to the
sum of:

 

(a)                                  5% of the
Participant’s Base Salary and Bonus that is deferred under this Plan during the
Plan Year; and

 

(b)                                 5% of the
Participant’s Plan Year Base Salary and Bonus that is not deferred under this
Plan during the Plan Year and that exceeds the compensation limit in effect
under Code section 401(a)(17) for such Plan Year;

 

provided,
however, that: (y) no Restoration Match Credit shall be made for Base
Salary or Bonus paid prior to the date the Participant became eligible to
participate in the Target 401(k) Plan, and (z) the credit under this Section 3.2.2
will not exceed the amount of Deferral Credits made by the Participant under Section 3.1
during the Plan Year.

 

3.2.3       Crediting to Account.         The Plan Administrator shall credit to
a Participant’s Account as of the last business day of the Plan Year the amount
of the Restoration Match Credit determined for the Plan Year for that
Participant under Section 3.2.2.

 

3.2.4       Credit Upon
Change-in-Control.  Upon a
Change-in-Control that causes the Plan to be terminated under Section 8.3.2,
the Plan Administrator shall credit to a Participant’s Account as of the date
of the Plan termination a Restoration Match Credit determined for the Plan Year
for that Participant under Section 3.2.2 through such date.  Any subsequent determination of the
Restoration Match Credit during the same Plan Year will be made under Section 3.2.2,
less any amounts previously credited under this Section 3.2.4.

 

3.3          SPP Benefit Transfer
Credits.

 

3.3.1       Eligibility.  A Participant who satisfies
the eligibility requirements of Section 2.1 shall receive an SPP Benefit
Transfer Credit under this Plan if he or she: 
(i) is classified as an Officer of the Company; and (ii) has a
vested benefit under the Target Pension Plan, including a vested interest
arising on account of the Participant’s death.

 

13

 

3.3.2       Initial SPP Benefit
Transfer Credit.

 

(a)                                  A Participant
who satisfies the requirements of Section 3.3.1 receives an initial SPP
Benefit Transfer Credit on or about the April 30 (or immediately preceding
business day) immediately following the calendar year in which the Participant
becomes eligible under Section 3.3.1, in an amount equal to the actuarial
lump sum present value on March 31 (or immediately preceding business day)
for the Participant’s SPP Benefit accrued through the preceding December 31.  In the case of Participant who is an
executive officer, such transfer will be made and determined on or about the
last business day prior to the end of the Company’s Fiscal Year.

 

(b)                                 Upon a Plan
termination upon a Change-in-Control under Section 8.3.2, the Plan
Administrator shall credit the initial SPP Benefit Transfer Credit to a
Participant’s Account as of the Plan termination effective date in an amount
equal to the actuarial lump sum present value on the Plan termination effective
date.

 

3.3.3       Annual SPP Benefit
Transfer Credit.  A
Participant who has received an initial SPP Benefit Transfer Credit under the
Plan, who is eligible to receive credits pursuant to Section 3.3.1, and
who is employed by a Participating Employer during a Plan Year will receive an
annual SPP Benefit Transfer Credit to his or her Account under the Plan as
follows:

 

(a)                                  For each Plan
Year, the annual SPP Benefit Transfer Credit will be the difference between (i) the
SPP Benefit determined as the last day of the Plan Year expressed as the
actuarial lump sum present value on the determination date and (ii) the
aggregate amount of the previous SPP Benefit Transfer Credits to the
Participant’s Account increased by assumed earnings at an annual rate equal to
the sum of the average of the applicable Stable Value Crediting Rate
Alternative for the Plan Year plus two percent determined from the crediting
date through the determination date; provided that with respect to periods that
a Participant does not receive the Enhancement on their Account, the annual
rate will be equal to the average of the applicable Stable Value Crediting Rate
Alternative.

 

(b)                                 If the amount
of the annual or final SPP Benefit Transfer Credit is positive, a credit will
be made to the Participant’s Account.  If
the amount of the SPP Benefit Transfer Credit is negative and if, and only if, (i) the
Participant is an executive officer on the determination date, or (ii) the
Participant is an Employee and member of the Board, but was formerly an
executive officer, then such Participant’s Account will be debited by such
negative amount.  The debit will be made
prorata among all distribution options of the Plan other than fixed payment
dates.

 

(c)                                  The annual SPP
Benefit Transfer Credit (including a negative credit) will be made to the
Participant’s Account as of the April 30 (or immediately preceding
business day) following the determination date. 
In the case of a Participant who is an executive officer, such transfer
will be made and determined on or about the last business day prior to the end
of the Company’s Fiscal Year.

 

14

 

(d)                                 For purposes of
this section, “determination date” means on or about March 31; provided
that in the case of Participant who is an executive officer, “determination
date” shall mean on or about the last business day prior to the end of the
Company’s Fiscal Year.

 

(e)                                  Upon a Plan
termination on account of a Change-in-Control under Section 8.3.2, the
Plan Administrator shall credit to a Participant’s Account as of the Plan
termination effective date an SPP Benefit Transfer Credit as determined in this
Section 3.3.3 as of the Plan termination effective date.

 

(f)                                    Notwithstanding
the foregoing, a Participant’s final SPP Benefit Transfer Credit will be determined
within 60 days following his or her Termination of Employment as defined under Section 1.2.44(a).

 

3.3.4       Forfeiture.  A Participant’s SPP Benefit Transfer Credits
under this Section 3.3 and corresponding earnings adjustments under Section 4
are subject to forfeiture at the time and in the amount provided under Sections
3.3.3(b) and 5.4 and Section A-5 of Appendix A.

 

3.4          ESBP Benefit Transfer
Credits.

 

3.4.1       Eligibility.  A Participant who satisfies Section 2.1,
who has received an initial ESBP Benefit Transfer Credit under the Plan, who is
employed by a Participating Employer during the a Plan Year, and who has
provided advance written notice of his retirement/termination date prior to January 11,
2006 will receive an annual ESBP Benefit Transfer Credit to his Account under
the Plan.

 

(a)                                  For each Plan
Year, the annual ESBP Benefit Transfer Credit will be the difference between (i) the
ESBP Benefit determined as of the last day of the Plan Year as expressed as the
actuarial lump sum present value on the determination date, and (ii) the
aggregate amount of the previous ESBP Benefit Transfer Credits to the
Participant’s Account increased by earnings at an annual rate equal to the sum
of the average of the applicable Stable Value Crediting Rate Alternatives plus
two percent, from the crediting dates through the determination date.

 

(b)                                 The credit to
the Participant’s Account will be made as of the April 30 (or immediately
preceding business day) following the determination date.

 

(c)                                  For purposes of
this section, “determination date” means on or about March 30.

 

(d)                                 Upon a
Change-in-Control, the Plan Administrator shall credit to a Participant’s
Account as of the date of the Change-in-Control an ESBP Benefit Transfer Credit
as determined in this Section 3.4. as of the date of the
Change-in-Control.

 

(e)                                  Notwithstanding
the foregoing, a final annual ESBP Benefit Transfer Credit will be made to the
Participant’s Account 60 days following a Participant’s Termination of
Employment as defined under Section 1.2.44(a).

 

3.4.2       Forfeiture.  A Participant
who has a Termination of Employment as defined under Section 1.2.44(a) prior
to the attainment of age 55 and completion of 5 Years of Service will forfeit
his or her ESBP Benefit Transfer Credits, and an amount of Earnings Credits and

 

15

 

Enhancement equal to the investment adjustments that would
have been credited on the ESBP Benefit Transfer Credits at the Stable Value
Crediting Rate Alternative (or successor rate) plus an annual rate of two
percent 2%.  The amount to be forfeited
will be made prorata among all distribution options of the Plan.

 

3.5          Discretionary
Credits.  The Company in its sole and
absolute discretion may determine in writing for each Participant an amount
that shall be credited the Participant’s Account as a Discretionary
Credit.  Any Discretionary Credit to an
executive officer will require the approval of the Compensation Committee of
the Board.  The Plan Administrator shall
credit to a Participant’s Account the amount of a Participating Employer’s
Discretionary Credit, if any, determined for that Participant under this
Section.  Such amount shall be credited
as nearly as practicable as of the time or times fixed by the Participating
Employer when awarding such credit.  Any
special provisions relating to Discretionary Credits made on behalf of a
Participating Employer’s Employees will be set forth on an exhibit to the Plan
Statement.

 

16

 

SECTION 4

ADJUSTMENTS OF ACCOUNTS

 

4.1          Establishment
of Accounts.  There shall be
established for each Participant an Account which shall be adjusted as provided
under Section 4.

 

4.2          Adjustments
of Accounts.  On each
Valuation Date, the Plan Administrator shall cause the value of the Account (or
subaccount) to be increased (or decreased) for distributions, withdrawals,
credits, debits and investment income, gains or losses charged to the Account.

 

4.3          Investment
Adjustment.  The
investment income, gains and losses shall be determined for the Accounts in
accordance with the following:

 

4.3.1       Participant
Elections.  In
accordance with Plan Rules and procedures established by the Plan
Administrator, each Participant shall prospectively elect, as part of the initial
enrollment process, and from time to time thereafter, one or more Crediting
Rate Alternatives that shall be used to measure income, gains and losses until
the next Valuation Date.

 

4.3.2       Default
Rate.  If a Participant fails to
designate one or more Crediting Rate Alternatives to be used to measure income,
gains and losses with respect  to amounts
credited to his or her Account, such amounts will be deemed to be invested in a
default Crediting Rate Alternative designated by the Plan Administrator in accordance
with Plan Rules.

 

4.3.3       Crediting.  As of each Valuation Date, each Participant’s
Account shall be adjusted for income, gains and losses as if the Account had in
fact been invested in the Crediting Rate Alternative(s) so selected.

 

4.3.4       Responsibility
for Investing Adjustments.  The
Plan Administrator will not be responsible in any manner to any Participant,
Beneficiary or other person for any damages, losses or liabilities, costs or
expenses of any kind arising in connection with any designation or elimination
of a Crediting Rate Alternative or a Participant’s election of a Crediting Rate
Alternative.

 

4.4          Enhancement.

 

4.4.1       General
Rule.  The Account of each Participant
who is employed by the Company or other Affiliate for the entire calendar month
will be credited by an amount equal to the Enhancement multiplied by the
balance of the Account on the first day of the month.  On the last business day of each month, this
amount will be credited according to the Crediting Rate Alternatives in effect
for new Deferral Credits.

 

4.4.2       Exception.  No Enhancement will be credited with respect
to the Participant during the remainder of the Company’s Fiscal Year in which
the Participant becomes an executive committee member or during any of the
Company’s Fiscal Years beginning after the date the Participant becomes an
executive committee member; provided that the Committee, in its sole
discretion, can cause the forfeiture of the Enhancement credited to a
Participant’s Account during the Company’s Fiscal Year in which a Participant
initially becomes an executive committee member.

 

17

 

4.5          Account
Adjustments Upon a Change-in-Control or Plan Termination.

 

4.5.1       In the event of
a Plan termination following a Change-in-Control under Section 8.3.2 that
causes a Trust to be established and funded pursuant to Section 7.3 where
distribution of a Participant’s Account may not be made from the Trust within
60 days of the event because of restrictions imposed by Code section 409A, then
the Participant’s Account as of the date of such event will no longer receive
adjustments determined pursuant to Sections 4.3 and 4.4.

 

4.5.2       On and after
the date of an event described in Section 4.5.1, the Account will have an
investment adjustment determined at an annual rate equal to the sum of the
10-Year U.S. Treasury Note plus 2%.  The
10-Year U.S. Treasury Note rate will be determined as of the date of the Plan
termination under Section 8.3.2, or if no such rate is available on that
date, the immediately preceding date such rate is available, and reset each
calendar quarter as necessary.

 

18

 

SECTION 5

VESTING

 

5.1          Deferral
Credits and Restoration Match Credits.  Deferral
Credits and Restoration Match Credits (and related Earnings Credits) of each
Participant shall be fully (100%) vested and nonforfeitable at all times except
as otherwise provided.

 

5.2          Discretionary
Credits.  A Participant will be vested
in any Discretionary Credits (and related Earnings Credits) as provided by the
Plan Administrator when such amounts are credited to the Participant’s Account.

 

5.3          Enhancement.

 

5.3.1       General
Rule.  Except as provided under Section 4.4.2,
the Enhancement credited to a Participant’s Account will become fully vested
and nonforfeitable upon the earliest occurrence of any of the following events
while the Participant is still in the employment of a Participating Employer or
other Affiliate:  (i) the
Participant’s death; (ii) the last day of the calendar month in which a
Participant attains age sixty-five (65) years; (iii) the determination
that the Participant is Disabled; (iv) the occurrence of a
Change-in-Control; (v) the Participant’s completion of five (5) Years
of Service; or (vi) such other date as provided in writing to a
Participant from the Plan Administrator.

 

5.3.2       Forfeiture.  Any forfeiture of the Enhancement will occur
as soon as practicable after the Participant’s Termination of Employment.  Forfeiture of the Enhancement that is not
vested under Section 5.3.1 is limited to the aggregate amount of the
Enhancement credited with respect to such amounts determined without regard to
Earnings Credits on such Enhancement. 
The amount of the Enhancement to be forfeited will be debited prorata
against the Participant’s distribution options.

 

5.4          SPP
Benefit Transfer Credit.  A
Participant has a forfeiture of the SPP Benefit to the extent there is a debit
as provided in Section 3.3 or Appendix A. 
The forfeiture amount will be debited against a Participant’s
Account.  The debit will be made prorata
among all distribution options of the Plan.

 

5.5          ESBP
Benefit Transfer Credit.  A
Participant has a forfeiture of the ESBP Benefit to the extent there is a
forfeiture as provided in Section 3.4.2. 
The forfeiture amount will be debited against a Participant’s
Account.  The debit will be made prorata
among all the Participant’s distribution options under the Plan.

 

5.6          Failure
to Cooperate; Misinformation or Failure to Disclose.  A Participant’s Account is
subject to forfeiture as provided under Sections 2.6.1.

 

19

 

SECTION 6

DISTRIBUTION

 

6.1          Distribution
Elections.  Except as
otherwise specifically provided in this Plan, a Participant may irrevocably elect
for each Plan Year the form and time of distribution of the credits made to his
or her Account for such Plan Year.

 

6.2          General
Rule.  A Participant’s distribution
election relating to Deferral Credits must be made prior to the date the
Participant’s deferral election becomes irrevocable.  The election shall be made in the form and
manner prescribed by Plan Rules. 
Distribution elections for Base Salary deferrals will also apply to
Restoration Match Credits related to the same Plan Year.  Earnings Credits and Enhancements will be
distributed in the same form and time as in effect for the related Account
credit.  All Discretionary Credits will
be distributed in the form of a single lump sum as of the time determined under
Section 6.2.2(b).

 

6.2.1       Form of
Distribution.  The Participant may elect among
the following forms of distribution.

 

(a)           Installments.  A series of annual
installments made over either five (5) years or ten (10) years
commencing at a time provided under Section 6.2.2(a) or (b).  For purposes of Code section 409A,
installment payments will be treated as a series of separate payments at all
times.

 

(b)           Lump Sum.  A single lump sum payment.

 

6.2.2       Time of
Payment.  The
Participant may elect among the distribution commencement times described in
this section; provided that: (y) SPP Benefit Transfer Credits determined
pursuant to Appendix A, Section A-4.3 will be distributed as provided in Section 6.2.5(b),
and (z) SPP Benefit Transfer Credits, other than those pursuant to
Appendix A, Section A-4.3, as well as unvested ESBP Benefit Transfer
Credits may not be distributed on a fixed payment date as described in
paragraph (c).

 

(a)           Termination of Employment.  Within 60 days following the
Participant’s Termination of Employment.

 

(b)           One-Year Anniversary of
Termination of Employment.  Within 60 days
following the one-year anniversary of the Participant’s Termination of
Employment.

 

(c)           Fixed Payment Date.  Within 60 days of January 1 of the
calendar year elected by the Participant at the time of deferral.  If a Participant has a Termination of
Employment as defined in Section 1.2.44 prior to the fixed payment date,
such amount shall be paid on the earlier of: (i) within 60 days following January 1
in the tenth year following the year of the Termination of Employment, or (ii) January 1
of the calendar year elected by the Participant at the time of deferral.  The Plan Administrator will establish Plan
Rules, procedures and limitations on establishing the number and times of the
fixed payment dates available for Participants to elect.

 

(d)           Payouts in 2008 and 2009.  During 2007 and 2008, consistent with
transition relief available under Code section 409A, and subject to Plan Rules:

 

20

 

(i)            Participants had an
opportunity to elect during 2007 to receive a distribution of all or a portion
of their Account valued as of December 31, 2007 to be distributed in January 2008.

 

(ii)           Participants had an
opportunity to elect during 2007 to receive a distribution of all or a portion
of their Bonus Deferral Credits for 2007 and Performance Share Awards in 2004,
if any, to be credited under this Plan in 2008, to be distributed on the date
such Bonus Deferral Credits or Performance Share Awards would otherwise have
been credited to this Plan, or, with respect to such Performance Share Awards,
such other date as specified in the election form.

 

(iii)          Participants had an
opportunity to elect during 2008 to receive a distribution of all or a portion
of their Account valued as of December 31, 2008 to be distributed in January 2009.

 

(iv)          Participants had an
opportunity to elect during 2008 to receive a distribution of all or a portion
of their Bonus Deferral Credits for 2008, if any, to be credited under this
Plan in 2009, to be distributed on the date such Bonus Deferral Credits would
otherwise have been credited to this Plan.

 

6.2.3       Installment
Amounts.  The amount of the annual
installments shall be determined by dividing the amount of the vested portion
of the Account as of the most recent Valuation Date preceding the date the
installment is being paid by the number of remaining installment payments to be
made (including the payment being determined).

 

6.2.4       Small
Benefit.  Subject to Section 6.3,  in the event that the vested Account balance of a
Participant who has died or experienced a Termination of Employment under the
Plan is less than the applicable dollar amount under Code section 402(g)(1)(B) for
that Plan Year as of the date on which the Company makes such determinations,
the Company reserves the right to have the Participant’s entire Account paid in
the form of a single lump sum payment, provided the Company’s exercise of
discretion complies with the requirements of Treas. Reg. Sec.
1.409A-3(j)(4)(v).

 

6.2.5       Default.
 If for any reason a
Participant shall have failed to make a timely designation of the form or time
of distribution with respect to credits for a Plan Year (including reasons
entirely beyond the control of the Participant), except as provided in Section 6.2.6,
the distribution shall be made as indicated below:

 

(a)           In the case of SPP Benefit
Transfer Credits, other than those pursuant to Appendix A, Section A-4.3
-  a single lump sum within 60 days
following the one-year anniversary of the Participant’s Termination of
Employment.

 

(b)           In the case of SPP Benefit
Transfer Credits pursuant to Appendix A, Section A-4.3:

 

(i)            Twenty-four (24) monthly installment payments
commencing within 60 days following the Participant’s Termination of
Employment;

 

21

 

(ii)           Each monthly installment payment will be determined
by dividing: (A) the amount of the vested portion of the Account
attributable to Appendix A, Section A-4.3 and an amount of Earnings
Credits equal to the investment adjustment that would have been credited on
such SPP Benefit Transfer Credits at the Stable Value Crediting Rate
Alternative   as of the most recent
Valuation Date preceding the date the installment is due, by (B) twenty-four
(24), less the number of monthly installment payments that have previously been
made from the Plan.

 

(c)           In all other cases - a
single lump sum payment within 60 days following the Participant’s Termination
of Employment.

 

6.2.6       Crediting
of Amounts after Benefit Distribution.  Notwithstanding
any provision in this Plan Statement to the contrary other than Section 6.3:

 

(a)           Deferral and Restoration Match
Credits.

 

(i)            Lump Sum Distribution.  If Deferral or Restoration
Match Credits are due after the complete distribution of the Participant’s
vested Account balance, or subaccount balance to which such Deferral or
Restoration Match Credit relate, then such subsequent credits will be made to
the Account and paid to the Participant in a single lump sum cash payment
within 60 days of being credited to the Account.

 

(ii)           Installment Distribution.  If Deferral or Restoration
Match Credits are due after a related installment distribution occurs, then
such subsequent credits will be made to the Account and included to determine
the amount of the remaining scheduled payments as applicable.

 

(b)           SPP or ESBP Benefit Transfer
Credit.  The SPP Benefit Transfer
Credit other than those pursuant to Appendix A, Section A-4.3 or ESBP
Benefit Transfer Credit, as applicable, arising after a Participant’s
Termination of Employment pursuant to Sections 3.3.3(f) and 3.4.1(e) shall
be distributed in a single lump sum within 60 days following the Termination of
Employment.

 

6.2.7       Vesting
in Benefits After the Distribution Date.  No portion of a Participant’s Account will be
distributed prior to being vested. 
Subject to Section 6.3, if Participant is scheduled to receive a
distribution of a portion of his or her Account that is not vested, such
unvested amount will not be paid until subsequently vested, at which time it
will be paid out in accordance with the respective distribution election.

 

6.2.8       No
Spousal Rights.  No spouse,
former spouse, Beneficiary or other person shall have any right to participate
in the Participant’s designation of a form or time of payment.

 

6.3          Six-Month
Suspension for Specified Employees.  Notwithstanding
any other provision in this Section 6 to the contrary, if a Participant is
a Specified Employee at Termination of Employment, then any distributions
arising on account of the Participant’s Termination of Employment (other than
on account of death) that are due shall be suspended and not be made until (6) months
have elapsed since such Participant’s Termination of Employment (or, if
earlier, upon the date of the Participant’s death).  Any payments that were otherwise payable
during the

 

22

 

six-month
suspension period referred to in the preceding sentence, will be paid within 60
days after the end of such six-month suspension period.

 

6.4          Distribution
on Account of Death.  Upon the death
of a Participant, the Participant’s Account balance will be paid to the
Participant’s Beneficiary in a single lump sum within 90 days following the
Participant’s death.

 

6.5          Distribution
on Account of Unforeseeable Emergency.

 

6.5.1       When
Available.  A Participant
may receive a distribution from the vested portion of his or her Account (which
shall be deemed to include the deferral that would have been made but for the
cancellation under Section 6.5.3) if the Plan Administrator determines
that such distribution is on account of an Unforeseeable Emergency and the
conditions in Section 6.5.2 have been fulfilled.  To receive such a distribution, the
Participant must request a distribution by filing an application with the Plan
Administrator and furnish such supporting documentation as the Plan
Administrator may require.  In the
application, the Participant shall specify the basis for the distribution and
the dollar amount to be distributed.  If
such request is approved by the Plan Administrator, distribution shall be made
in a lump sum payment within 60 days following the approval by the Plan
Administrator of the completed application.

 

6.5.2       Limitations.  The amount that may be distributed with
respect to a Participant’s Unforeseeable Emergency shall not exceed the amounts
necessary to satisfy the emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into
account the extent to which such Unforeseeable Emergency is or may be relieved
through reimbursement or compensation by insurance or otherwise by liquidation
of the Participant’s assets (to the extent the liquidation of such assets would
not itself cause severe financial hardship), and/or cancellation of deferrals
pursuant to Section 6.5.3, provided the determination of such limitation
is consistent with the requirements of Code section 409A(a)(2)(B)(ii).

 

6.5.3       Cancellation
of Deferral Elections.  As provided by Section 2.12,
in the event of a distribution under Section 6.5.1 the Plan Administrator
will cancel the Participant’s deferral elections for the balance of the
applicable Plan Year.

 

6.6          Designation
of Beneficiaries.

 

6.6.1       Right
to Designate or Revoke.

 

(a)           Each Participant may
designate one or more primary Beneficiaries or secondary Beneficiaries to
receive all or a specified part of such Participant’s vested Account in the
event of such Participant’s death.  If
fewer than all designated primary or secondary Beneficiaries predecease the
Participant, then the amount of such predeceased Beneficiary’s portion shall be
allocated to the remaining primary or secondary Beneficiaries, as the case may
be.

 

(b)           The Participant may change
or revoke any such designation from time to time without notice to or consent
from any spouse, any person named as Beneficiary or any other person.

 

(c)           No such designation, change
or revocation shall be effective unless completed and filed with the Plan
Administrator in accordance with Plan Rules during the Participant’s lifetime.

 

23

 

6.6.2       Failure
of Designation.  If a
Participant:

 

(a)           fails to designate a
Beneficiary,

 

(b)           designates a Beneficiary and
thereafter revokes such designation without naming another Beneficiary, or

 

(c)           designates one or more
Beneficiaries and all such Beneficiaries so designated fail to survive the
Participant, such Participant’s vested Account, shall be payable to the first
class of the following classes of automatic Beneficiaries:

 

Participant’s
surviving spouse

Representative of Participant’s estate

 

6.6.3       Disclaimers
by Beneficiaries.  A
Beneficiary entitled to a distribution of all or a portion of a deceased
Participant’s vested Account may disclaim an interest therein subject to the
Plan Rules.

 

6.6.4       Special
Rules.  Unless the Participant has
otherwise specified in the Participant’s Beneficiary designation, the following
rules shall apply:

 

(a)           If there is not sufficient
evidence that a person designated as a Beneficiary was living at the time of
the death of the Participant, it shall be deemed that the Beneficiary was not
living at the time of the death of the Participant.

 

(b)           The automatic Beneficiaries
specified in Section 6.6.2 and the Beneficiaries designated by the
Participant shall become fixed at the time of the Participant’s death (subject
to Section 6.6.3) so that, if a Beneficiary survives the Participant but
dies before the receipt of all payments due such Beneficiary hereunder, such
remaining payments shall be payable to the representative of such Beneficiary’s
estate.

 

(c)           If the Participant
designates as a Beneficiary the person who is the Participant’s spouse on the
date of the designation, either by name or by relationship, or both, the
dissolution, annulment or other legal termination of the marriage between the
Participant and such person shall automatically revoke such designation.  The foregoing shall not prevent the
Participant from designating a former spouse as a beneficiary on a form that is
both executed by the Participant and received by the Plan Administrator (i) after
the date of the legal termination of the marriage between the Participant and
such former spouse and (ii) during the Participant’s lifetime.

 

(d)           A finalized marriage (other
than a common law marriage) of a Participant subsequent to the date of filing
of a Beneficiary designation shall revoke such designation unless the
Participant’s new spouse had previously been designated as the Beneficiary.

 

(e)           Any designation of a
nonspouse Beneficiary by name that is accompanied by a description of
relationship to the Participant shall be given effect without regard

 

24

 

to whether the relationship
to the Participant exists either then or at the Participant’s death.

 

(f)            Any designation of a
Beneficiary only by statement of relationship to the Participant shall be
effective only to designate the person or persons standing in such relationship
to the Participant at the Participant’s death.

 

6.7          Facility
of Payment.

 

6.7.1       Legal
Disability.  In case of the
legal disability, including minority, of an individual entitled to receive any
payment under this Plan, payment shall be made, if the Plan Administrator shall
be advised of the existence of such condition:

 

(a)           to the duly appointed
guardian, conservator or other legal representative of such individual, or

 

(b)           to a person or institution
entrusted with the care or maintenance of the incompetent or disable
Participant or Beneficiary, provided such person or institution has satisfied
the Plan Administrator that the payment will be used for the best interest and
assist in the care of such individual, and provided further, that no prior
claim for said payment has been made by a duly appointed guardian, conservator
or other legal representative of such individual.

 

6.7.2       Discharge
of Liability.  Any payment
made in accordance with the foregoing provisions of this Section 6.7 shall
constitute a complete discharge of any liability or obligation of the
Participating Employers under this Plan.

 

6.8          Tax
Withholding.  The
Participating Employer (or any other person legally obligated to do so) shall
withhold the amount of any federal, state or local income tax, payroll tax or
other tax that the payer reasonably determines is required to be withheld under
applicable law with respect to any amount payable under this Plan.  All benefits otherwise due hereunder shall be
reduced by the amount to be withheld.

 

6.9          Payments
Upon Rehire.  If a
Participant who is receiving installment payments or due a deferred lump sum
payment under this Plan is rehired, the payments will continue in accordance
with the prior distribution elections.

 

6.10        Application
for Distribution.  A Participant
may be required to make application to receive payment and to complete other
forms and furnish other documentation required by the Plan Administrator.  Distribution shall not be made to any
Beneficiary until such Beneficiary shall have filed an application for benefits
in a form acceptable to the Plan Administrator and such application shall have
been approved by the Plan Administrator and the Plan Administrator has
determined that the applicant is entitled to payment.

 

6.11        Acceleration
of Distributions.  The Plan
Administrator in its sole discretion may exercise discretion to accelerate the
distribution of any payment under this Plan to the extent allowed under Code
section 409A.

 

6.12        Delay
of Distributions.  The Plan
Administrator in its sole discretion may exercise discretion to delay the
distribution of any payment under this Plan to the extent allowed under Code
section 409A, including, but not limited to, as necessary to maximize the
Company’s tax 

 

25

 

deductions
as allowed pursuant to Code section 162(m) or to avoid violation of
federal securities or other applicable law.

 

26

 

SECTION 7

SOURCE OF PAYMENTS; NATURE OF INTEREST

 

7.1          Source
of Payments.

 

7.1.1       General
Assets.  Each Participating Employer
will pay, from its general assets, the distribution of the Participant’s
Account under Section 6, and all costs, charges and expenses relating
thereto.

 

7.1.2       Trust.  Upon a Change-in-Control
that causes the Plan to be terminated under Section 8.3.2, the trustee of
the Trust will make distributions to Participants and Beneficiaries from the
Trust in satisfaction of a Participating Employer’s obligations to make
distributions under this Plan in accordance with and subject to the terms of
the Trust to the extent such payments are not otherwise made directly by the
Participating Employer.

 

7.2          Unfunded
Obligation.  The obligation
of the Participating Employers to make payments under this Plan constitutes
only the unsecured (but legally enforceable) promise of the Participating
Employers to make such payments. 
Participants and their Beneficiaries, heirs, successors and assigns
shall have no legal or equitable rights, claims or interests in any specific
property or assets of the Company or a Participating Employer, nor shall they
be beneficiaries of, or have any rights, claims or interests in any life
insurance policies, annuity contracts or the proceeds therefrom owned or which
may be acquired by the Company.

 

7.3          Establishment
of Trust.  The
Participating Employers shall have no obligation to establish or maintain any
fund, trust or account (other than a bookkeeping account or reserve) for the
purpose of funding or paying the benefits promised under this Plan except as
provided in the Trust.  The Participating
Employers may from time to time transfer to the Trust cash, or other marketable
securities or other property acceptable to the trustee in accordance with the
terms of the Trust.  If the Participating
Employers have deposited funds in the Trust, such funds shall remain the sole
and exclusive property of the Participating Employer that deposited such funds.

 

7.4          Spendthrift
Provision.  Except as
otherwise provided in this Section 7.4, no Participant or Beneficiary
shall have any interest in any Account which can be transferred nor shall any
Participant or Beneficiary have any power to anticipate, alienate, dispose of,
pledge or encumber the same while in the possession or control of the
Participating Employers.  The Plan
Administrator shall not recognize any such effort to convey any interest under
this Plan.  No benefit payable under this
Plan shall be subject to attachment, garnishment, or execution following
judgment or other legal process before actual payment to such person.

 

7.4.1       Right
to Designate Beneficiary.  The power to
designate Beneficiaries to receive the Account of a Participant in the event of
such Participant’s death shall not permit or be construed to permit such power
or right to be exercised by the Participant  so as thereby
to anticipate, pledge, mortgage or encumber such Participant’s Account or any
part thereof, and any attempt of a Participant so to exercise said power in
violation of this provision shall be of no force and effect and shall be
disregarded by the Participating Employers.

 

7.4.2       Plan
Administrator’s Right to Exercise Discretion. 
This Section 7.4 shall not prevent the Plan Administrator from
exercising, in its discretion, any of the applicable powers and options granted
to it under any applicable provision hereof.

 

27

 

7.5          Compensation
Recovery (Recoupment).  Notwithstanding any other provision of the Plan,
a Participant who engaged in intentional misconduct that contributed directly
or indirectly, in whole or in part, to the need for a restatement of the
Company’s consolidated financial statements and who becomes subject to the
Company’s recoupment policy as adopted by the Compensation Committee of the
Company’s Board of Directors and amended from time to time (“Recoupment Policy”)
may have all or a portion of his or her benefit under this Plan forfeited
and/or all or a portion of any distributions payable to the Participant or his
or her Beneficiary recovered by the Company.

 

7.5.1       Any Deferral Credit and
related Earnings Credits resulting from the deferral of Eligible Compensation
that is subject to recovery under the Recoupment Policy may be forfeited and,
in such event, a corresponding adjustment will be made to the Participant’s
Account balance.

 

7.5.2       If a
Participant has commenced distributions and is subject to a claim for recovery
under the Recoupment Policy, then the Company may, subject to any limitations
under Code section 409A, retain all or any portion of the Participant’s (or his
or her Beneficiary’s) taxable distribution, net of state, federal or foreign
tax withholding, to satisfy such claim.

 

28

 

SECTION 8

ADOPTION, AMENDMENT AND TERMINATION

 

8.1          Adoption.  With the prior approval of
the Plan Administrator, an Affiliate may adopt the Plan and become a
Participating Employer by furnishing to the Plan Administrator a certified copy
of a resolution of its board of directors adopting this Plan.

 

8.2          Amendment.

 

8.2.1       General
Rule.  The Board may at any time
amend this Plan, in whole or in part, for any reason, including but not limited
to tax, accounting or insurance changes, a result of which may be to terminate
this Plan for future deferrals; provided, unless such amendment is necessary or
reasonable to comply with any changes in law, no amendment shall be effective
to decrease the benefits, nature or timing thereof payable under this Plan to
any Participant with respect to deferrals made (and benefits thereafter
accruing) prior to the date of such amendment. 
Notwithstanding the above, the Board authorizes the Committee to amend
this Plan to make changes to the Crediting Rate Alternatives by either adding
any new or deleting any existing Crediting Rate Alternatives, to impose
limitations on selection of or deferral into any Crediting Rate Alternative, or
to make any amendments to this Plan Statement deemed necessary or desirable by
the Committee for the operation and administration of this Plan provided such
amendment does not have a material financial impact on the Company.  Such changes will be considered an Amendment
to this Plan and shall be effective without further action by the Board.  Written notice of any amendment shall be
given to each Participant then participating in this Plan.

 

8.2.2       Amendment
to Benefit of Executive Officer.  Any amendment
to the benefit of an executive officer under this Plan, to the extent approval
of such amendment by the board of directors would be required by the Securities
and Exchange Commission and its regulations or the rules of any applicable
securities exchange, will require the approval of the Board.

 

8.2.3       No Oral
Amendments.  No modification
of the terms of this Plan Statement shall be effective unless it is in
writing.  No oral representation
concerning the interpretation or effect of this Plan Statement shall be
effective to amend this Plan Statement.

 

8.3          Termination
and Liquidation.

 

8.3.1       General
Rule.

 

(a)                                  To the extent
necessary or reasonable to comply with any changes in law, the Board may at any
time terminate and liquidate this Plan, provided such termination and
liquidation satisfies the requirements of Code section 409A.

 

(b)                                 To the extent
that a Participant’s benefit under the Plan will be immediately included in the
income of the Participant, as determined by a court of competent jurisdiction
or the Internal Revenue Service, to the extent permitted under Code section
409A, the Board may terminate and liquidate this Plan,  in
whole or in part, as it relates to the impacted Participant.

 

8.3.2       Plan
Termination and Liquidation on Account of a Change-in-Control.  Upon a Change-in-Control, the Plan will
terminate and payment of all amounts under the Plan will be accelerated if and
to the extent provided in this Section 8.3.2.

 

29

 

(a)                                  The Plan will
be terminated effective as of the first date on which there has occurred both (i) a
Change-in-Control under Section 1.2.8(a), and (ii) a funding of the
Trust on account of such Change-in-Control (referred to herein as the “Plan
termination effective date”) unless, prior to such Plan termination effective
date, the Board affirmatively determines that the Plan will not be terminated
as of such effective date. The Board will be deemed to have taken action to
irrevocably terminate the Plan as of the Plan termination effective date by its
failure to affirmatively determine that the Plan will not terminate as of such date.

 

(b)                                 The
determination by the Board under paragraph (a) constitutes a determination
that such termination will satisfy the requirements of Code section 409A,
including an agreement by the Company that it will take such additional action
or refrain from taking such action as may be necessary to satisfy the
requirements necessary to terminate and liquidate the Plan under paragraph (c) below.

 

(c)                                  In the event
the Board does not affirmatively determine not to terminate the Plan as
provided in paragraph (a),  such
termination shall be subject to either (i) or (ii), as follows:

 

(i)                                     If the
Change-in-Control qualifies as a “change in control event” for purposes of Code
section 409A, payment of all amounts under the Plan will be accelerated and
made in a lump sum as soon a administratively practicable but not more than 90
days following the Plan termination effective date, provided the requirements
of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B) have been
satisfied.

 

(ii)                                  If the
Change-in-Control does not qualify as a “change in control event” for purposes
of Code section 409A, payment of all amounts under the Plan will be accelerated
and made in a lump sum as soon as administratively practicable but not more
than 60 days following the 12 month anniversary of the Plan termination
effective date, provided the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(C) have
been satisfied.

 

30

 

SECTION 9

CLAIM PROCEDURES

 

9.1          Claims
Procedure.  Until modified
by the Plan Administrator, the claim and review procedures set forth in this Section shall
be the mandatory claim and review procedures for the resolution of disputes and
disposition of claims filed under this Plan. 
An application for a distribution or withdrawal shall be considered as a
claim for the purposes of this Section.

 

9.1.1       Initial
Claim.  An individual may, subject
to any applicable deadline, file with the Plan Administrator a written claim
for benefits under this Plan in a form and manner prescribed by the Plan
Administrator.

 

(a)                                  If the claim is
denied in whole or in part, the Plan Administrator shall notify the claimant of
the adverse benefit determination within ninety (90) days after receipt of the
claim.

 

(b)                                 The ninety (90)
day period for making the claim determination may be extended for ninety (90)
days if the Plan Administrator determines that special circumstances require an
extension of time for determination of the claim, provided that the Plan
Administrator notifies the claimant, prior to the expiration of the initial
ninety (90) day period, of the special circumstances requiring an extension and
the date by which a claim determination is expected to be made.

 

9.1.2       Notice
of Initial Adverse Determination.  A notice of an
adverse determination shall set forth in a manner calculated to be understood
by the claimant.

 

(a)                                  The specific
reasons for the adverse determinations,

 

(b)                                 references to
the specific provisions of this Plan Statement (or other applicable Plan
document) on which the adverse determination is based,

 

(c)                                  a description
of any additional material or information necessary to perfect the claim and an
explanation of why such material or information is necessary, and

 

(d)                                 a description
of the claim and review procedures, including the time limits applicable to
such procedure, and a statement of the claimant’s right to bring a civil action
under ERISA section 502(a) following an adverse determination on review.

 

9.1.3       Request
for Review.  Within sixty
(60) days after receipt of an initial adverse benefit determination notice, the
claimant may file with the Plan Administrator a written request for a review of
the adverse determination and may, in connection therewith submit written
comments, documents, records and other information relating to the claim
benefits.  Any request for review of the
initial adverse determination not filed within sixty (60) days after receipt of
the initial adverse determination notice shall be untimely.

 

9.1.4       Claim
on Review.  If the claim,
upon review, is denied in whole or in part, the Plan Administrator shall notify
the claimant of the adverse benefit determination within sixty (60) days after
receipt of such a request for review.

 

31

 

(a)                                  The sixty (60)
day period for deciding the claim on review may be extended for sixty (60) days
if the Plan Administrator determines that special circumstances require an
extension of time for determination of the claim, provided that the Plan
Administrator notifies the claimant, prior to the expiration of the initial
sixty (60) day period, of the special circumstances requiring an extension and
the date by which a claim determination is expected to be made.

 

(b)                                 In the event
that the time period is extended due to a claimant’s failure to submit
information necessary to decide a claim on review, the claimant shall have
sixty (60) days within which to provide the necessary information and the
period for making the claim determination on review shall be tolled from the date
on which the notification of the extension is sent to the claimant until the
date on which the claimant responds to the request for additional information
or, if earlier, the expiration of sixty (60) days.

 

(c)                                  The Plan
Administrator’s review of a denied claim shall take into account all comments,
documents, records, and other information submitted by the claimant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

 

9.1.5       Notice
of Adverse Determination for Claim on Review. 
A notice of an adverse determination for a claim on review shall set
forth in a manner calculated to be understood by the claimant.

 

(a)                                  the specific
reasons for the denial,

 

(b)                                 references to
the specific provisions of this Plan Statement (or other applicable Plan
document) on which the adverse determination is based,

 

(c)                                  a statement
that the claimant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all 
documents, records, and other information relevant to the claimant’s
claim for benefits,

 

(d)                                 a statement
describing any voluntary appeal procedures offered by the Plan and the claimant’s
right to obtain information about such procedures, and

 

(e)                                  a statement of
the claimant’s right to bring an action under ERISA section 502(a).

 

9.2          Rules and
Regulations.

 

9.2.1       Adoption
of Rules.  Any rule not
in conflict or at variance with the provisions hereof may be adopted by the
Plan Administrator.

 

32

 

9.2.2       Specific
Rules.

 

(a)                                  No inquiry or
question shall be deemed to be a claim or a request for a review of a denied
claim unless made in accordance with the established claim procedures.  The Plan Administrator may require that any
claim for benefits and any request for a review of a denied claim be filed on
forms to be furnished by the Plan Administrator upon request.

 

(b)                                 All decisions
on claims and on requests for a review of denied claims shall be made by the
Plan Administrator unless delegated as provided for in the Plan, in which case
references in this Section 9 to the Plan Administrator shall be treated as
references to the Plan Administrator’s delegate.

 

(c)                                  Claimants may
be represented by a lawyer or other representative at their own expense, but
the Plan Administrator reserves the right to require the claimant to furnish
written authorization and establish reasonable procedures for determining
whether an individual has been authorized to act on behalf of a claimant.  A claimant’s representative shall be entitled
to copies of all notices given to the claimant.

 

(d)                                 The decision of
the Plan Administrator on a claim and on a request for a review of a denied
claim may be provided to the claimant in electronic form instead of in writing
at the discretion of the Plan Administrator.

 

(e)                                  In connection
with the review of a denied claim, the claimant or the claimant’s
representative shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information
necessary to make a benefit determination accompanies the filing.

 

(f)                                    The time period
within which a benefit determination will be made shall begin to run at the
time a claim or request for review is filed in accordance with the claims
procedures, without regard to whether all the information necessary to make a
benefit determination accompanies the filing.

 

(g)                                 The claims and
review procedures shall be administered with appropriate safeguards to that
benefit claim determinations are made in accordance with governing plan
documents and, where appropriate, the plan provisions have been applied
consistently with respect to similarly situated claimants.

 

(h)                                 The Plan
Administrator may, in its discretion, rely on any applicable statute of
limitation or deadline as a basis for denial of any claim.

 

9.3          Limitations
and Exhaustion.

 

9.3.1       Claims.  No claim shall be considered
under these administrative procedures unless it is filed with the Plan
Administrator within two (2) years after the Participant knew (or
reasonably should have known) of the general nature of the dispute giving rise
to the claim.  Every untimely claim shall
be denied by the Plan Administrator without regard to the merits of the claim.

 

33

 

9.3.2       Lawsuits.  No suit may be brought by or
on behalf of any Participant or Beneficiary on any matter pertaining to this
Plan unless the action is commenced in the proper forum within two (2) years
from the earlier of:

 

(a)                                  the date the
Participant knew (or reasonably should have known) of the general nature of the
dispute giving rise to the action, or

 

(b)                                 the date the
claim was denied.

 

9.3.3       Exhaustion
of Remedies.  These
administrative procedures are the exclusive means for resolving any dispute
arising under this Plan.  As to such
matters:

 

(a)                                  no Participant
or Beneficiary shall be permitted to litigate any such matter unless a timely
claim has been filed under these administrative procedures and these
administrative procedures have been exhausted, and

 

(b)                                 determinations
by the Plan Administrator (including determinations as to whether the claim was
timely filed shall be afforded the maximum deference permitted by law.

 

9.3.4       Imputed
Knowledge.  For the purpose
of applying the deadlines to file a claim or a legal action, knowledge of all
facts that a Participant knew or reasonably should have known shall be imputed
to every claimant who is or claims to be a Beneficiary of the Participant or
otherwise claims to derive an entitlement by reference to the Participant for
the purpose of applying the previously specified periods.

 

34

 

SECTION 10

PLAN ADMINISTRATION

 

10.1        Plan
Administration

 

10.1.1     Administrator.  The Company is the “administrator”
of the Plan for purposes of section 3(16)(A) of ERISA.  Except as expressly otherwise provided
herein, the Company shall control and manage the operation and administration
of this Plan and make all decisions and determinations.

 

10.1.2     Authority and Delegation.  Except in cases where this
Plan expressly requires action on behalf of the Company to be taken by the
Board, action on behalf of the Company may be taken by any of the following:

 

(a)                                  The Board.

 

(b)                                 The Chief
Executive Officer of the Company.

 

(c)                                  The senior Vice
President of Human Resources of the Company.

 

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

 

10.1.3     Determination.  The Plan Administrator shall
make such determinations as may be required from time to time in the
administration of this Plan.  The Plan
Administrator shall have the discretionary authority and responsibility to
interpret and construe this Plan Statement and to determine all factual and
legal questions under this Plan, including but not limited to the entitlement
of Participants and Beneficiaries, and the amounts of their respective
interests.

 

10.1.4     Reliance.  The Plan Administrator may
act and rely upon all information reported to it hereunder and need not inquire
into the accuracy thereof, nor be charged with any notice to the contrary.

 

10.1.5     Rules and Regulations.  Any rule, regulation,
policy, practice or procedure not in conflict or at variance with the
provisions hereof may be adopted by the Plan Administrator.

 

10.2        Conflict
of Interest.  If any
individual to whom authority has been delegated or redelegated hereunder shall
also be a Participant in this Plan, such Participant shall have no authority
with respect to any matter specially affecting such Participant’s individual
interest hereunder or the interest of a person superior to him or her in the
organization (as distinguished from the interests of all Participants and
Beneficiaries or a broad class of Participants and Beneficiaries), all such
authority being reserved exclusively to other individuals as the case may be,
to the exclusion of such Participant, and such Participant shall act only in
such Participant’s individual capacity in connection with any such matter.

 

35

 

10.3        Committee
Membership and Authority.

 

10.3.1     Appointment.  The Company may, in its
discretion, appoint a committee to act as agent of the Company in performing
the duties of the Plan Administrator.

 

10.3.2     Membership and Authority.  The committee will consist
of three or more persons appointed by the Board and shall be subject to the
following:

 

(a)                                  The committee
shall act by a majority of its then members by meeting or by writing filed
without meeting.

 

(b)                                 A committee
member may resign at any time by giving ten days’ advance written notice to the
Company and the other committee members. 
The Board may remove a committee member by giving advance written notice
to him or her and the other committee members.

 

(c)                                  The Board may
fill any vacancy in the membership of the committee and shall give prompt
written notice thereof to the other committee members.  While there is a vacancy in the membership of
the committee, the remaining committee members shall have the same powers as
the full committee until the vacancy is filled.

 

(d)                                 A certificate
of either the secretary to the committee or a majority of the members of the
committee that the committee has taken or authorized any action will be
conclusive in favor of any person relying on the certificate.

 

10.4        Service
of Process.  In the absence
of any designation to the contrary by the Plan Administrator, the General
Counsel of the Plan Administrator is designated as the appropriate and
exclusive agent for the receipt of service of process directed to this Plan in
any legal proceeding, including arbitration, involving this Plan.

 

10.5        Choice
of Law.  Except to the extent that
federal law is controlling, this Plan Statement will be construed and enforced
in accordance with the laws of the State of Minnesota.

 

10.6        Responsibility
for Delegate.  No person shall
be liable for an act or omission of another person with regard to a responsibility
that has been allocated to or delegated to such other person pursuant to the
terms of the Plan Statement or pursuant to procedures set forth in the Plan
Statement.

 

10.7        Expenses.  All expenses of
administering the benefits due under this Plan shall be borne by the
Participating Employers.

 

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

 

10.9        Indemnification.  In addition to any other
applicable provisions for indemnification, the Participating Employers jointly
and severally agree to indemnify and hold harmless, to the extent permitted by
law, each director, officer and Employee of the Participating Employers against
any

 

36

 

and
all liabilities, losses, costs or expenses (including legal fees) of whatsoever
kind and nature which may be imposed on, incurred by or asserted against such
person at any time by reason of such person’s services as an administrator in
connection with this Plan, but only if such person did not act dishonestly, or
in bad faith, or in willful violation of the law or regulations under which
such liability, loss, cost or expense arises.

 

10.10      Notice.  Any notice required under
this Plan Statement may be waived by the person entitled thereto.

 

37

 

SECTION 11

CONSTRUCTION

 

11.1        ERISA
Status.  This Plan was adopted and is
maintained with the understanding that it is an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees as provided in section 201(2),
section 301(a)(3) and section 401(a)(1) of ERISA.  This Plan shall be interpreted and
administered accordingly.

 

11.2        IRC
Status.  This Plan is intended to be
a nonqualified deferred compensation arrangement that will comply in form and
operation with the requirements of Code section 409A and this Plan will be
construed and administered in a manner that is consistent with and gives effect
to such intention.

 

11.3        Rules of
Document Construction.  In
the event any provision of this Plan Statement is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of this Plan. 
The titles given to the various Sections of this Plan Statement are
inserted for convenience of reference only and are not part of this Plan
Statement, and they shall not be considered in determining the scope, purpose,
meaning or intent of any provision hereof. 
The provisions of this Plan Statement shall be construed as a whole in
such manner as to carry out the provisions thereof and shall not be construed
separately without relation to the context.

 

11.4        References
to Laws.  Any reference in this Plan
Statement to a statute or regulation shall be considered also to mean and refer
to any subsequent amendment or replacement of that statute or regulation
unless, under the circumstances, it would be inappropriate to do so.

 

11.5        Appendices.  The Plan provisions that
have application to a limited number of Participants or that otherwise do not
apply equally to all Participants may be described in an appendix to this Plan
Statement.  In the event of a conflict
between the terms of an appendix and the terms of the remainder of this Plan
Statement, the appendix will control.

 

38

 

APPENDIX A

 

SPP Benefit

 

A-1         Purpose
and Application.  The purpose of
this Appendix A to this Plan Statement is to establish the rules for
determining the amount of the SPP Benefit Transfer Credit under this Plan.

 

A-2         Background.

 

A-2.1      Transfer
Credits.                The Company has
adopted and maintained several nonqualified supplemental pension plans to
provide retirement income to a select group of highly compensated and key
management employees in excess of the retirement income that can be provided
under the Target Pension Plan on account of limitations imposed by the
Code.  Effective April 30, 2002, the
Company began converting the accrued supplemental pension benefits of certain
participants to credits under this Plan as adjusted annually to reflect changes
in such benefits.

 

A-2.2      Cash
Balance Formula.      Effective January 1,
2003, the Target Pension Plan was amended to add a cash balance pension plan
formula (referred to as the “personal pension account”).  Depending on the date participation commences
or an election was made, a Participant who has a benefit under the Target
Pension Plan may have his or her accrued benefit under such plan based solely
on the final average pay formula (the “traditional formula”), solely on the
personal pension account, or a combination of the traditional formula (frozen
as of December 31, 2002) and the personal pension account.

 

A-3         Definitions.

 

A-3.1      SPP I      “SPP I” means the Target
Corporation SPP I.

 

A-3.2      SPP II    “SPP II” means the Target
Corporation SPP II.

 

A-3.3      SPP III   “SPP III” means the Target
Corporation SPP III.

 

A-4         SPP
Benefit.  Each Participant’s SPP
Benefit is equal to the sum of the benefits under Section A-4.1, Section A-4.2
and Section A-4.3.

 

A-4.1      Traditional
Formula Benefit.  A Participant’s
SPP Benefit is the excess, if any, of the monthly pension benefit under (a) over
the monthly pension benefit under (b):

 

(a)                                  The monthly
pension benefit the Participant would be entitled to under the Target Pension
Plan, based on the “traditional formula,” if such formula were applied

 

(i)                                     without regard
to the maximum benefit limitation required by Code section 415;

 

(ii)                                  without regard
to the maximum compensation limitation under Code section 401(a)(17);

 

39

 

(iii)                               as if the
definition of “certified earnings” under the Target Pension Plan for a plan
year included compensation that would have been paid in the plan year in the
absence of the Participant’s election to defer payment of the compensation to a
later date pursuant to the provisions of a deferred compensation plan;

 

(iv)                              without regard
to the alternative benefit formula of Sections 4.6(a)(3) and 4.6(b)(2) of
the Target Pension  Plan.

 

(b)                                 The monthly
pension benefit the Participant is entitled to receive under the Target Pension
Plan on account of the “traditional formula.”

 

A-4.2      Personal
Pension Account.  A Participant’s
SPP Benefit includes the excess, if any, of the amount determined under (a) over
the amount determined under (b):

 

(a)                                  The amount that
would have been credited each quarter (including both “pay credits” and “interest
credits”) to the Participant’s “personal pension account” under the Target
Pension Plan, if such account were applied:

 

(i)                                     without regard
to the maximum benefit limitations required by Code section 415;

 

(ii)                                  without regard
to the maximum compensation limitation under Code section 401(a)(17);

 

(iii)                               as if the definition
of “certified earnings” under the Target Pension Plan for a calendar quarter
included compensation that would have been paid during such calendar quarter in
the absence of the Participant’s election to defer payment of the compensation
to a later date pursuant to the provisions of a deferred compensation plan;

 

(iv)                              as if a
distribution had been made from such account equal to any SPP Benefit Transfer
Credits made under Section 3.3.

 

(b)                                 The amount of
the credits actually made to the Participant’s “personal pension account” under
the Target Pension Plan.

 

A-4.3      SPP
III.  For a Participant who was
participating in SPP III, the Participant’s SPP Benefit includes the actuarial
equivalent lump sum present value of the monthly pension benefit under (a) over
the monthly pension benefit under (b):

 

(a)                                  The monthly
pension benefits determined under Section A-4.1(a) determined by
treating the Participant as five (5) years older than his or her actual
age solely for purposes of determining the early reduction factor (but in no
case shall the Participant’s age be deemed to be greater than age 65).

 

(b)                                 The monthly
pension benefits determined under Section A-4.1(a).

 

A-4.4      Company
Determination.  The actuarial
lump sum present value of a Participant’s benefit determined under this
Appendix A will be determined by the Company, in 

 

40

 

its
sole and absolute discretion, by using such factors and assumptions as the
Company considers appropriate in its sole and absolute discretion as of the
date of distribution or transfer.

 

A-5         Forfeiture
of SPP III Benefit.

 

A-5.1      Pre-Age
55 SPP III Forfeiture.        A Participant
who has a Termination of Employment prior to attaining age 55 will forfeit that
portion of his or her SPP Benefit Transfer Credit and Earnings Credit
determined under Section A-5.3.

 

A-5.2      ICP
Eligibility SPP III Forfeiture.  A Participant
who becomes entitled to receive payments under an income continuation plan or
policy of an Affiliate on account of his or her Termination of Employment after
attaining age 55 will forfeit that portion of his or her SPP Benefit Transfer
Credit and Earnings Credit determined under Section A-5.3.

 

A-5.3      Amount
of SPP III Forfeiture.  A Participant’s
forfeiture under Sections A-5.1 or A-5.2 is that portion of the SPP Benefit
Transfer Credits attributable to his or her SPP Benefit determined under Section A-4.3
of Appendix A, and an amount of Earnings Credits equal to the investment
adjustment that would have been credited on such SPP Benefit Transfer Credits
at the Stable Value Crediting Rate Alternative.

 

41Exhibit 10(L)

 

TARGET CORPORATION

 

OFFICER INCOME CONTINUANCE
POLICY STATEMENT

 

As Amended and Restated January 13,
2010

 

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 was 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:

 

2

 

	
  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

 

3

 

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 

 

4

 

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.

 

5

 

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

 

1.                                       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:

 

a.                                       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.

 

6

 

b.                                      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:

 

1)              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.

 

2)              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.

 

3)              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.

 

4)              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.

 

5)              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.

 

2.                                       Recoupment

 

Notwithstanding
any other provisions of the Officer-ICP, pursuant to the Corporation’s
recoupment policy as adopted by the Compensation Committee of 

 

7

 

the
Board of Directors (the “Committee”) and as amended from time to time (“Recoupment
Policy”), an Officer who engaged in intentional misconduct that contributed
directly or indirectly, in whole or in part, to the need for a restatement of
the Corporation’s consolidated financial statements may be disqualified from
receipt of Officer-ICP Payments and the Committee retains the discretion to
recover Officer-ICP Payments in such event.

 

a.                                       If the
Committee determines Officer-ICP Payments are subject to recovery by the
Corporation under this Section II.F.2. and the Recoupment Policy, the
Committee shall be entitled, in its discretion, to demand repayment or
cancellation of all or a portion of the maximum amount that can be recovered or
cancelled, to the extent necessary to avoid unjust enrichment of the recipient
under the circumstances.

 

b.                                      Pending a
determination by the Committee on the application of this Section II.F.2.
and the Recoupment Policy to a recipient of Officer-ICP Payments, the Committee
shall have the authority to suspend any payments under the Officer-ICP.

 

c.                                       Upon a
determination by the Committee that Officer-ICP payments are subject to
recovery by the Corporation, the Corporation shall have the right, to the
extent permitted by law, to set-off amounts due under this Section II.F.2.
and the Recoupment Policy against any amount owed by the Corporation to the
recipient of Officer-ICP Payments under any deferred compensation plan.

 

d.                                      An amendment of
the Recoupment Policy shall not be treated as an amendment of the Officer-ICP
under Section II.M.

 

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 the Corporation. Any remedies or rights set
forth in this Section II.F. will be additional and not exclusive remedies.

 

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 

 

8

 

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 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 

 

9

 

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 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-

 

10

 

 

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 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 

 

11

 

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 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.

 

12

 

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.

 

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.

 

 

13

 

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.

 

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.

 

14

 

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.

 

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 

 

15

 

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.

 

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

 

16

 

(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

 

(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.

 

17

 

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.

 

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-

 

18

 

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 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.

 

19

 

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 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 

 

20

 

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.

 

21

 

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.

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