Document:

Exhibit 10(G)

 

TARGET CORPORATION

SPP III

(2010 Plan Statement)

 

Effective January 13, 2010

As Amended and Restated

 

 

TARGET CORPORATION

SPP III

(2010 Plan Statement)

 

TABLE OF CONTENTS

 

	
  SECTION 1 INTRODUCTION; DEFINITIONS

  	
  1

  
	
  1.1 History

  	
  1

  
	
  1.2 Definitions

  	
  1

  
	
  1.2.1
  Actuarial Equivalent

  	
  1

  
	
  1.2.2
  Affiliate

  	
  1

  
	
  1.2.3
  Beneficiary

  	
  1

  
	
  1.2.4 Board

  	
  1

  
	
  1.2.5
  Change-in-Control

  	
  1

  
	
  1.2.6 Code

  	
  2

  
	
  1.2.7
  Committee

  	
  2

  
	
  1.2.8 Company

  	
  3

  
	
  1.2.9 Officer

  	
  3

  
	
  1.2.10 Officer
  EDCP

  	
  3

  
	
  1.2.11
  Participant

  	
  3

  
	
  1.2.12
  Participating Employer

  	
  3

  
	
  1.2.13 Pension
  Plan

  	
  3

  
	
  1.2.14 Plan

  	
  3

  
	
  1.2.15 Plan
  Administrator

  	
  3

  
	
  1.2.16 Plan
  Rules

  	
  3

  
	
  1.2.17 Plan
  Statement

  	
  3

  
	
  1.2.18
  Termination of Employment

  	
  3

  
	
  1.2.19 Trust

  	
  4

  
	
   

  	
   

  
	
  SECTION 2 PARTICIPATION

  	
  5

  
	
  2.1
  Eligibility

  	
  5

  
	
  2.2
  Termination of Participation

  	
  5

  
	
  2.3 Rehire

  	
  5

  
	
  2.4 Effect on
  Employment

  	
  5

  
	
   

  	
   

  
	
  SECTION 3 BENEFIT — TRADITIONAL FINAL AVERAGE PAY
  FORMULA

  	
  6

  
	
  3.1 Amount of
  Pension

  	
  6

  
	
   

  	
   

  
	
  SECTION 4 VESTING

  	
  8

  
	
  4.1 General
  Rule

  	
  8

  
	
  4.2 Transfers
  to Officer EDCP

  	
  8

  
	
   

  	
   

  
	
  SECTION 5 TRANSFERS

  	
  9

  
	
  5.1 Benefit
  Distributions

  	
  9

  
	
  5.2 Transfers
  to Officer EDCP

  	
  9

  
	
   

  	
   

  
	
  SECTION 6 NATURE OF INTEREST

  	
  10

  
	
  6.1 Unfunded
  Obligation

  	
  10

  
	
  6.2
  Spendthrift Provision

  	
  10

  

 

 

	
  6.3
  Compensation Recovery (Recoupment)

  	
  10

  
	
   

  	
   

  
	
  SECTION 7 ADOPTION, AMENDMENT AND TERMINATION

  	
  11

  
	
  7.1 Adoption

  	
  11

  
	
  7.2 Amendment

  	
  11

  
	
  7.3
  Termination

  	
  11

  
	
   

  	
   

  
	
  SECTION 8 CLAIM PROCEDURES

  	
  13

  
	
  8.1  Claim Procedures

  	
  13

  
	
  8.2
  Rules and Regulations

  	
  15

  
	
  8.3
  Limitations and Exhaustion

  	
  15

  
	
   

  	
   

  
	
  SECTION 9 PLAN ADMINISTRATION

  	
  17

  
	
  9.1 Plan
  Administration

  	
  17

  
	
  9.2 Conflict
  of Interest

  	
  17

  
	
  9.3 Committee
  Membership and Authority

  	
  18

  
	
  9.4 Service of
  Process

  	
  18

  
	
  9.5 Choice of
  Law

  	
  18

  
	
  9.6
  Responsibility for Delegate

  	
  18

  
	
  9.7 Expenses

  	
  18

  
	
  9.8 Errors in
  Computations

  	
  18

  
	
  9.9
  Indemnification

  	
  18

  
	
  9.10 Notice

  	
  19

  
	
   

  	
   

  
	
  SECTION 10 CONSTRUCTION

  	
  20

  
	
  10.1 ERISA Status

  	
  20

  
	
  10.2 IRC
  Status

  	
  20

  
	
  10.3
  Rules of Document Construction

  	
  20

  
	
  10.4
  References to Laws

  	
  20

  
	
  10.5
  Appendices

  	
  20

  

 

2

 

SECTION 1

INTRODUCTION; DEFINITIONS

 

1.1          History.  The Company originally established this Plan
(formerly known as the Target Corporation Supplemental Pension Plan III)
effective as of January 1, 1995. 
The Plan is a non-qualified, unfunded plan intended to provide certain
pension benefits for a select group of management or highly compensated
employees who are officers that cannot be provided under the Pension Plan due
to certain limitations imposed by the Code. 
The Plan is intended to be a “top hat plan” as defined under the
Employee Retirement Income Security Act of 1974, as amended from time to
time.   Effective as of November 8,
2000, no additional Officers could become eligible to participate in this
Plan.  Effective April 30, 2002, for
all Officers who had attained age 55, the Company transferred the present value
of the vested benefit due under this Plan to the Officer EDCP.  After such transfer, no benefits were due or
payable from this Plan. Further, after the transfer, the individuals would no
longer participate in this Plan or be eligible for further accruals under this
Plan.  Effective January 1, 2005
(and other effective dates as specifically provided), this Plan was operated in
compliance with Code section 409A.  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 include the Company’s
recoupment policy, is effective January 13, 2010.

 

1.2          Definitions.  Terms used herein with initial capital
letters will have same meaning as those used in the Pension Plan except as
otherwise defined below or where the context clearly indicates to the contrary.

 

1.2.1       Actuarial
Equivalent.  An “Actuarial
Equivalent” will be determined by using such factors and assumptions as the
Company considers appropriate in its sole and absolute discretion.

 

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       Beneficiary.  The “Beneficiary” is the “Beneficiary” as
defined under the Officer EDCP.

 

1.2.4       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.

 

1.2.5       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 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 1.2.5, “Voting Stock” has the same meaning as defined in Article IV
of the Restated Articles of Incorporation, as amended, of the Company.

 

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

 

1.2.7       Committee. “Committee”
means the administrative committee appointed in accordance with Section 9.3.

 

2

 

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

 

1.2.9       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.

 

1.2.10     Officer
EDCP.  “Officer EDCP” means the Target
Corporation Officer EDCP.

 

1.2.11     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 of
the Participant’s death or, if earlier, the date when the Participant is no
longer eligible and upon which the Participant no longer has a benefit due
under this Plan (that is, a transfer of the benefit has been made pursuant to Section 6,
or the Participant’s benefit under this Plan wears away, or the Participant’s
benefit under this Plan has been forfeited as hereinafter provided).

 

1.2.12     Participating
Employer.  “Participating
Employer” means the Company.

 

1.2.13     Pension
Plan.  “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.

 

1.2.14     Plan.  “Plan” means this Target Corporation SPP III
(formerly known as the Target Corporation Supplemental Pension Plan III).

 

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

 

1.2.16     Plan
Rules.  “Plan Rules” are rules,
policies, practices or procedures adopted by the Plan Administrator or its
delegate pursuant to Section 9.1.5.

 

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

 

1.2.18     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.

 

3

 

(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 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.

 

1.2.19     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.

 

4

 

SECTION 2

PARTICIPATION

 

2.1          Eligibility.  An Employee who is an
Officer previously designated as eligible to participate in this Plan by the
Chief Executive Officer of the Company prior to November 8, 2000 is
eligible to participate in this Plan on and after the date he:

 

(a)           is an active participant in
the Pension Plan; and

 

(b)           has attained the age of 55.

 

2.2          Termination
of Participation.  Except as
otherwise specifically provided in this Plan, an Employee who ceases to satisfy
the requirements of Section 2.1 or whose benefit is transferred to the Officer
EDCP pursuant to Section 5.2 is not eligible to continue to participate in
this Plan, and will not accrue any additional benefits under this Plan.  The Participant’s benefit under this Plan
will continue to be governed by the terms of this Plan until such time as the
Participant’s benefit is transferred, wears away, or is forfeited in accordance
with the terms of this Plan.  A
Participant or Beneficiary will cease to be such as of the date on which his
entire benefit under this Plan has been transferred, wears away, or forfeited.

 

2.3          Rehire.  A Participant under this
Plan who incurs a Termination of Employment and is rehired will not be eligible
to participate in this Plan.

 

2.4          Effect on Employment.

 

2.4.1       Not a
Term of Employment.  Neither the
terms of this Plan Statement nor the benefits under this Plan or the
continuance thereof shall be a term of the employment of any Employee.

 

2.4.2       Not an
Employment Contract.  The 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 without regard to the effect that such
treatment might have upon him as a Participant in this Plan.

 

5

 

SECTION 3

BENEFIT — TRADITIONAL FINAL AVERAGE PAY FORMULA

 

3.1          Amount of Pension.

 

3.1.1       General
Rule.       A Participant of this Plan
shall be entitled to a pension benefit under this Plan that is the Actuarial
Equivalent of  the excess, if any, of:

 

(a)           The pension benefit of the
Participant as determined under Article VI of the Pension Plan applied:

 

(i)            without regard to the
maximum benefit limits imposed by Code section 415,

 

(ii)           without regard to the
maximum compensation limits imposed by Code section 401(a)(17),

 

(iii)          without regard to the
alternative benefit formula of Sections 4.6(a)(3) and 4.6(b)(2) of
the Pension Plan,

 

(iv)          as if the definition of “certified
earnings” 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, and

 

(v)           for purposes of the early
reduction factors used under the Pension Plan, as if the Participant was five
years older than his actual age (but in no case shall  the Participant’s age be deemed to be greater
than age 65).

 

Over

 

(b)           The pension benefit of the
Participant as determined under Article VI of the Pension Plan applied:

 

(i)            without regard to the
maximum benefit limits imposed by Code section 415,

 

(ii)           without regard to the
maximum compensation limits imposed by Code section 401(a)(17),

 

(iii)          without regard to the
alternative benefit formula of Sections 4.6(a)(3) and 4.6(b)(2) of
the Pension Plan, and

 

(iv)          as if the definition of “certified
earnings” 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.

 

Such
benefit will be determined as of the date of transfer as provided in Section 5.

 

6

 

3.1.2       Death
Benefit.  Subject to the vesting
requirements of Section 4, if a Participant dies prior to a transfer of
his benefit under this Section 3, the death benefit to be transferred
pursuant to Section 5 will be calculated in the same manner as the
Participant’s benefit under this Section 3, and for purposes of Section 3.1.1,
as if the Participant were alive and entitled to a benefit under the Pension
Plan and the Officer EDCP as of his date of death.

 

7

 

SECTION 4

VESTING

 

4.1          General
Rule.  A Participant will be vested
in his benefit under this Plan, unless:

 

(a)                                  The Participant
incurs a Termination of Employment as defined in Section 1.2.18(a) 
prior to attaining age 55, or

 

(b)                                 The Participant
is entitled to payments under an income continuation plan or policy of an
Affiliate.

 

4.2          Transfers
to Officer EDCP.  A Participant
whose benefit under this Plan is transferred to the Officer EDCP pursuant to Section 5
will no longer have any rights under this Plan effective as of the date of such
transfer.

 

8

 

SECTION 5

TRANSFERS

 

5.1                               Benefit
Distributions.

 

5.1.1       Benefit
Transfer to Officer EDCP.  No benefits
accrued under this Plan will be paid directly to Participants or
Beneficiaries.  All vested benefits due
under this Plan, as determined under Section 3, will be transferred to the
Officer EDCP, and paid to the Participant or Beneficiary pursuant to the terms
of the Officer EDCP.

 

5.1.2       Form and
Timing of Benefit Distribution.  Benefits earned
under this Plan will be paid in the form of twenty-four (24) monthly
installment payments commencing within 60 days following the date that the
Participant incurs a Termination of Employment. 
Any benefits earned under this Plan will be  transferred to the Officer EDCP and subject
to the distribution terms of the Officer EDCP, including any provisions
regarding the acceleration or delay of distribution (to the extent allowed
under Code section 409A).

 

5.2          Transfers
to Officer EDCP.   A Participant’s
vested benefit under this Plan will be transferred to the Officer EDCP as
provided below:

 

5.2.1       Timing
of Benefit Transfer.

 

(a)                                  On or about the last
business day prior to the end of the Company’s fiscal year immediately
following the calendar year in which a Participant is first eligible for a
benefit under this Plan, a Participant will have his or her benefit determined
under this Plan and transferred to the Officer EDCP.  The transfer will be an amount equal
to the actuarial lump sum present value of the Participant’s benefit accrued
under this Plan.

 

(b)                                 Notwithstanding
the foregoing, in the case of a Termination of Employment as defined under Section 1.2.18(a) or
a Plan termination on account of a Change-in-Control under Section 7.3.2
prior to the date in Section 5.2.1(a), the transfer will be made within 60
days following such event.

 

5.2.2       Benefit
to Be Transferred.  The benefit
transferred to the Officer EDCP is the vested benefit accrued under this Plan
and determined at the time of transfer to the Officer EDCP provided in Section 5.2.1.  The transfer to the Officer EDCP will not
change the payment form, payment timing, or vested status of the benefit
determined under this Plan.  After the
transfer to the Officer EDCP, the benefit will thereafter be subject to the
terms of the Officer EDCP, including the acceleration or delay of distributions
permitted thereunder.

 

9

 

SECTION 6

NATURE OF INTEREST

 

6.1          Unfunded Obligation.  The obligation of the Participating Employers
to provide benefits pursuant to this Plan constitutes only the unsecured (but
legally enforceable) promise of the Participating Employers to provide such
benefits.  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.

 

6.2          Spendthrift Provision.  Except as otherwise provided in this Section 6.2,
no Participant or Beneficiary shall have any interest in any benefit 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.  This Section 6.2 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.

 

6.3          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.

 

(a)          Any portion of the Participant’s benefit resulting
from the receipt of 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 benefit under this Plan.

 

(b)         If a Participant (or his or her Beneficiary) is
entitled to receive a distribution under this Plan and the Participant 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 the Beneficiary’s) taxable distribution, net
of state, federal or foreign tax withholding, to satisfy such claim.

 

10

 

SECTION 7

ADOPTION, AMENDMENT AND TERMINATION

 

7.1          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 the Plan.

 

7.2          Amendment.

 

7.2.1       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; 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.  The Committee is
authorized 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.

 

7.2.2       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.

 

7.2.3       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.

 

7.3          Termination.

 

7.3.1       General Rule.

 

(a)                                  To the extent
necessary or reasonable to comply with any changes in law, the Board may at any
time terminate this Plan, provided such termination 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 this Plan,  in whole or in
part, as it relates to the impacted Participant.

 

7.3.2       Plan
Termination on Account of a Change-in-Control.  Upon a Change-in-Control the Plan will
terminate and the transfer of all amounts under the Plan will be accelerated if
and to the extent provided in this Section 7.3.2.

 

(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 1.2.5(a), and (ii) a funding

 

11

 

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, transfer of all amounts under the Plan will be accelerated and
distributed under the Officer EDCP.

 

(ii)                                  If the
Change-in-Control does not  qualify as a “change
in control event” for purposes of Code section 409A, transfer of all amounts
under the Plan will be accelerated and distributed under the Officer EDCP.

 

12

 

SECTION 8

CLAIM PROCEDURES

 

8.1          Claim Procedures.  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 the Plan.  An application for a distribution or
withdrawal shall be considered as a claim for the purposes of this Section.

 

8.1.1       Initial Claim.  An individual
may, subject to any applicable deadline, file with the Plan Administrator a  written claim for benefits under  the 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.

 

8.1.2       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 determination,

 

(b)                                 references to
the specific provisions of the 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.

 

8.1.3       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.

 

8.1.4       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.

 

13

 

(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.

 

8.1.5       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 the 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).

 

14

 

8.2          Rules and Regulations.

 

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

 

8.2.2       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
relevant to the claimant’s claim for benefits.

 

(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 so 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.

 

8.3          Limitations and Exhaustion.

 

8.3.1       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 

 

15

 

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.

 

8.3.2       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.

 

8.3.3       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.

 

8.3.4       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.

 

16

 

SECTION 9

PLAN ADMINISTRATION

 

9.1                   Plan Administration.

 

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

 

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

 

(a)                                  The Board.

 

(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.

 

9.1.3       Determinations.  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 the 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.

 

9.1.4       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.

 

9.1.5       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.

 

9.2          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 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.

 

17

 

9.3          Committee Membership and
Authority.

 

9.3.1       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.

 

9.3.2       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.

 

9.4          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.

 

9.5          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.

 

9.6          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.

 

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

 

9.8          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.

 

9.9          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

 

18

 

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 the Plan, but only if such person did not act dishonestly, or
in bad faith, or in willful violation of the law or regulations under which
such liability, loss, cost or expense arises.

 

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

 

19

 

SECTION 10

CONSTRUCTION

 

10.1        ERISA Status.  The 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.  The Plan shall be interpreted and
administered accordingly.

 

10.2        IRC Status.  The 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 the
Plan will be construed and administered in a manner that is consistent with and
gives effect to such intention.

 

10.3        Rules of Document Construction. 
In the event any provision of the Plan Statement is held invalid, void
or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of the Plan. 
The titles given to the various Sections of the Plan Statement are
inserted for convenience of reference only and are not part of the Plan
Statement, and they shall not be considered in determining the scope, purpose,
meaning or intent of any provision hereof. 
The provisions of the 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.

 

10.4        References  to Laws.  Any reference in the 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.

 

10.5        Appendices.  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 the Plan Statement.  In the
event of a conflict between the terms of a Plan Statement appendix and the
terms of the remainder of the Plan Statement, the terms of the Plan Statement
appendix control.

 

20Exhibit 10(H)

 

TARGET CORPORATION

OFFICER DEFERRED COMPENSATION PLAN

 

ARTICLE 1

PURPOSE

 

The purpose of this Target Corporation Officer
Deferred Compensation Plan, formerly known as the Target Corporation Deferred
Compensation Plan — Senior Management Group, 
(the “Plan”) is to provide a means whereby Target Corporation (the “Company”)
may afford financial security to a select group of employees who are in the
Senior Management Group of the Company and its subsidiaries and who have
rendered and continue to render valuable services to the Company or its
subsidiaries and who make an important contribution towards the Company’s
continued growth and success, by providing for additional future compensation
so that such employees may be retained and their productive efforts
encouraged.  Participants ceased to be
eligible to defer Earnings into the Plan after December 31, 1996.  The Plan, which is intended
to comply with Code section 409A, was amended and restated effective January 1,
2009.  This Plan document, which was
amended to incorporate the Company’s recoupment policy, is effective January 13,
2010.

 

ARTICLE 2

DEFINITIONS AND CERTAIN PROVISIONS

 

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

 

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).

 

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

 

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

 

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

 

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

 

 

Declared Rate.  “Declared Rate”
means with respect to any Plan Year the applicable rate announced in advance by
the Committee for such Plan Year.  Under
no circumstances shall the minimum rate be less than twelve percent (12%) per
annum and the maximum rate shall not exceed twenty percent (20%) per
annum.  The rate to be announced, subject
to the minimum and maximum percentages referenced above, shall be a calculated
rate using the following formula:

 

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

 

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

 

Early Retirement.  “Early
Retirement” means the Participant’s Termination of Employment for a reason
other than death on or after the date the Participant attains age 55 and prior
to the date the Participant attains age 65.

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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.

 

Termination of Employment.

 

(a)                                  For purposes of
determining entitlement to or amount of benefits under the Plan, “Termination
of Employment” means a severance of a Participant’s employment relationship
with the Employer and all other 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 Employer, all other Affiliates, and Participant
reasonably anticipate that the level of bona fide future services to be
performed by the Participant for the Employer and all other 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 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.

 

3

 

ARTICLE 3

ADMINISTRATION OF
THE PLAN

 

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

 

ARTICLE 4

PARTICIPATION

 

4.1           Election to
Participate.  Effective for Plan
Years beginning on and after January 1, 1997, Participants ceased to be
eligible to defer Earnings into this Plan. 
For Plan Years beginning prior to January 1, 1997, any Employee who
is a member of the Senior Management Group of the Company may enroll in the
Plan by filing a completed and fully executed Enrollment Agreement or
authorization form with the Committee. Pursuant to said Enrollment Agreement or
authorization form, the Employee shall irrevocably designate a dollar amount by
which the aggregate Earnings of such Participant would be reduced over one (1) or
four (4) Plan Years next following the execution of the Enrollment
Agreement (the “Benefit Deferral Period”), provided, however, that:

 

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

 

(b)           Reduction
in Earnings.

 

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

 

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

 

(c)           Maximum
Reduction in Earnings.  A Participant
may not elect a Cumulative Deferral Amount or an increase in reduction of
Earnings pursuant to Section 4.1(b)(ii), or any combination of the two,
that would cause the aggregate total reduction in Earnings in any Plan Year to
exceed twenty-five percent (25%) of the base pay and one hundred percent (100%)
of the incentive pay payable during such Plan Year up to a total of $250,000
per year plus the amount of any payout made pursuant to Section 5.4, or
such greater percent of base 

 

4

 

pay and/or incentive pay or greater total amount as the Committee may
permit in its sole discretion.  In the
event that a Participant elects a Cumulative Deferral Amount or increase in
reduction of Earnings that would violate the limitation described in this
paragraph (c), the election shall be valid except that the Cumulative Deferral
Amount or increase in reduction of Earnings so elected shall automatically be
reduced to comply with such limitation, whichever is most appropriate in the
sole discretion of the Committee.

 

4.2           Deferral
Accounts.  The Committee shall
establish and maintain a separate Deferral Account for each Participant. The
amount by which a Participant’s Earnings are reduced pursuant to Section 4.1
shall be credited by the Employer to the Participant’s Deferral Account on the
fifteenth (15th) day of the month in which such Earnings would otherwise have
been paid.  The Participant’s Deferral
Account shall be credited with the annual SRSP lost Matching Allocation on January 15
following the year of the lost Matching Allocation.  Effective for Plan Years beginning on and
after January 1, 1997, Participants ceased to be eligible for the annual
SRSP lost Matching Allocation.  Such
Deferral Account shall be debited by the amount of any payments made by the
Employer to the Participant or the Participant’s Beneficiary pursuant to this
Plan.

 

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

 

(b)           Other
Interest.  In the case of any
Termination of Employment other than by Normal or Early Retirement or upon the
Participant’s termination of enrollment in this Plan pursuant to Section 5.2(b),
the Participant’s Deferral Account shall be deemed to bear interest from the
date such Deferral Account was established through the date of the earlier of
Termination of Employment or termination of enrollment in this Plan under Section 5.2(c) on
the balance in such Deferral Account in accordance with Appendix A, Section 1,
except that the interest rate used to calculate interest earned in the Deferral
Account shall be ten percent (10%) per annum, provided, however, that if more
than five (5) years have elapsed since the first day of the Benefit
Deferral Period, the Participant’s Deferral Account shall be deemed to bear
interest from the date such Deferral Account was established through the date
of the earlier of Termination of Employment or termination of enrollment in
this Plan on the balance in such Deferral Account at a rate equal to the
Declared Rate which is announced by the Committee for each Plan Year, in
accordance with Appendix A, Section 1. 
Following the earlier of the date of commencement of payment of the
Termination Benefit or the date of termination of enrollment in this Plan, a
Participant’s Deferral Account shall be deemed to bear interest on the balance
in such Deferral Account in accordance with Appendix A, Section 1, if the
Participant is in Active Status with respect to the Deferral Account or in
accordance with Appendix A, Section 2, if the Participant is in Pay Status
with respect to the Deferral Account. 
However, in either case the interest rate used to calculate interest
earned in the Deferral Account shall be twelve percent (12%) per annum.  Notwithstanding anything contained herein to
the contrary, if a Participant has begun receiving benefits under this Plan and
the calculation of future benefits, using the method of calculation set forth
on Appendix A causes a reduction in benefits, the future 

 

5

 

payments shall be made in accordance with the method
used at the time of the Participant’s initial payment.

 

4.3           Rollover Deferred
Compensation Account.  In its sole
discretion, the Committee may permit a Participant to make a special rollover
election to transfer any amounts which were previously deferred under the
Company’s existing deferred compensation plans to this Plan.  Notwithstanding the foregoing, no such
special rollover elections or transfers to this Plan shall be permitted after December 31,
2008.

 

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

 

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

 

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

 

4.6           No Future
Deferrals.   No Employee or
Participant can make additional deferrals into the Plan.

 

ARTICLE 5

BENEFITS

 

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

 

(a)           Single
Participant.  In the case of a
Participant who is single when payments commence, the Employer shall make
periodic payments to the Participant in an 

 

6

 

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

 

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

 

5.2                                 Termination Benefit.

 

(a)           Terminations
of Employment.  If a Participant has
a Termination of Employment for any reason other than death or Normal or Early
Retirement, the Employer shall pay to the Participant in one immediate lump sum
an amount (the “Termination Benefit”) equal to the value of the Deferral
Account as of the date of payment and such Participant shall be entitled to no
further benefits under this Plan.  Upon
Termination of Employment (as defined in paragraph (a) of that definition)
the Participant shall immediately cease to be eligible for any benefits under
the Plan other than the Termination Benefit. 
Payment will be made as soon as practicable but not more than 90 days
following the Participant’s Termination of Employment or at such later time
provided in Section 5.3.  Except as
provided in paragraph (b) below, no other benefit shall be payable to
either the Participant or any Beneficiary of such Participant.

 

(b)           Certain
Terminations of Employment.  If a
Participant has a Termination of Employment after attaining age 50, but prior
to attaining age 55, and the Participant has worked for the Company for at
least 10 years, and has received an ICP Contract under the Company’s Income
Continuance Policy that is signed by Participant and Company and not rescinded,
the Participant will be entitled to an additional, immediate lump sum
distribution equal to the difference between:

 

(i) The actuarial equivalent lump sum value of
the periodic payments scheduled to be made to the Participant determined in
accordance with Appendix A, Section 2.B for the life of the Participant,
but not less than fifteen (15) years payments; and

 

(ii)  The value of the Participant’s Deferral
Account.

 

(c)           Termination of Enrollment in Plan.  With the written consent of the Committee, a
Participant may terminate his enrollment in the Plan by filing with the
Committee a written request to terminate enrollment.  The Committee will consent to the termination
of a Participant’s enrollment in the Plan in the event of an unforeseeable
financial emergency of the Participant. 
An unforeseeable financial emergency shall mean an unexpected need for
cash 

 

7

 

arising from an illness,
casualty loss, sudden financial reversal or other such unforeseeable
occurrence, but only if and to the extent such unforeseeable
emergency constitutes an “unforeseeable emergency” under Code section 409A. 
Cash needs arising from foreseeable events such as the purchase of a
house or education expenses for children shall not be considered to be the
result of an unforeseeable financial emergency. 
Upon termination of enrollment, no further reductions shall be made in
the Participant’s Earnings pursuant to his Enrollment Agreement, and the
Participant shall immediately cease to be eligible for any benefits under the
Plan other than the Termination Benefit. 
No other benefit shall be payable to either the Participant or any
Beneficiary of such Participant.  In its
sole discretion, to the extent necessary to relieve the unforeseeable
emergency, the Committee may pay such benefit on a date earlier than the
Participant’s Termination of Employment with the Employer.  Following termination of enrollment in the
Plan, a Participant’s Deferral Account shall be deemed to bear interest on the
balance in such Deferral Account in accordance with Appendix A, Section 1,
except that the interest rate used to calculate interest earned in the Deferral
Account shall be twelve percent (12%) per annum.

 

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

 

5.4               [Deleted]

 

5.5           Survivor Benefits.  Paragraphs (a) and (b) shall apply
to Participants whose death occurs prior to Termination of Employment.  Paragraph (c) reflects the survivor
benefit rules that apply to annuity benefits that are payable on account
of a Participant’s Termination of Employment.

 

(a)        If a Participant dies prior to his or
her Termination of Employment prior to attaining age 55, the Employer will pay
to the Participant’s Beneficiary an annual benefit for the greater of:

 

(i)  ten (10) years,
or

 

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

 

in an amount equal to
fifty percent (50%) of the Cumulative Deferral Amount; provided, however, if
the Committee determines that installment distribution of the Participant’s
Deferral Account (determined below) would produce a greater benefit, such
Deferral Account balance shall be paid to the Participant’s Beneficiary in
equal annual installments in accordance with Appendix A, Section 2.C.2,
but over the period specified above. 
Payments will commence immediately (within 60 days) following the
Participant’s death, and will be made each subsequent anniversary of the
Participant’s death.

 

(b)        If a Participant dies prior to
Termination of Employment after attaining age 55, the Employer will pay to the
Participant’s Beneficiary the benefit that such Participant would have received
had the Participant retired on the day prior to such Participant’s death.  Payments will commence immediately (within 60
days) following the Participant’s death, and will be made each subsequent
anniversary of the Participant’s death. 
Additionally, if the present 

 

8

 

value of the benefit
described in this Section 5.5(b) is less than the present value of
the benefit described in Section 5.5(a), using in each case twelve percent
(12%) as the discount factor, then the Beneficiary shall receive an immediate
lump sum payment equal to difference of such present values.

 

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

 

5.6           Small Benefit.  Subject to Section 5.8,
in the event that the vested Deferral Account balance under the Plan of a
Participant who has died or experienced a Termination of Employment 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 Deferral 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).

 

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

 

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

 

5.9           Acceleration of Distributions.  The Committee 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.

 

9

 

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

 

ARTICLE 6

BENEFICIARY DESIGNATION

 

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

 

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

 

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

 

ARTICLE 7

AMENDMENT AND
TERMINATION OF PLAN

 

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

 

10

 

 

7.2                                 Termination of Plan. 
The Plan shall terminate only under the following circumstances.

 

(a)                                  General Rule.  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 this Plan,  in whole or in
part, as it relates to the impacted Participant.  Upon any such termination of the Plan, the Employer will pay the respective
Participant the value of the Participant’s Deferral Accounts in an immediate
lump sum, determined as if the Participant had a Termination of Employment on
the date of such termination of the Plan as provided under Section 5.2(a) hereof.

 

(b)                                 Plan
Termination and Liquidation on Account of a Change-in-Control.  Upon a Change-in-Control, as defined in Section 7.3
hereof, the Plan will terminate and payment of all amounts under the Plan will
be accelerated if and to the extent provided in this Section 7.2(b) hereof.

 

(i)                                     The Plan will
be terminated effective as of the first date on which there has occurred both (i) a
Change-in-Control under Section 7.3(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.

 

(ii)                                  The
determination by the Board under paragraph (b)(i) 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 (iii) below.

 

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

 

(A)                        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.

 

(B)                          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 90 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.

 

11

 

(iv)                              Any lump sums paid pursuant to this Section 7.2(b) will
be calculated as provided in Appendix B of the Target Corporation Deferred
Compensation Trust Agreement.

 

7.3                                 Change-in-Control Definition.

 

(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 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 

 

12

 

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

 

ARTICLE 8

 

MISCELLANEOUS

 

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

 

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

 

8.3                                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 

 

13

 

all or a portion of any distributions payable to the
Participant or his or her Beneficiary recovered by the Company.  If distributions to or on behalf of a
Participant have commenced and the Participant 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

APPENDIX
A

Section 1

 

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

 

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

 

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

 

Example of interest
credited calculation

 

	
  BOY Deferral Account balance at 1/1/99

  	
   

  	
  = $500,000.00

  	
   

  
	
  Declared Rate

  	
   

  	
  = 13.7%

  	
   

  
	
  Declared Rate
  divided by 12 = 13.7%/12 = 1.1417%

  	
   

  
	
  Credited interest for each month of 1999

  	
   

  	
  = $500,000  ́ .011417 = $5,708.50

  	
   

  

 

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

 

BOM balance + monthly
interest credited = EOM balance

 

Example of monthly
account growth

 

	
  BOM balance at 1/1/99

  	
   

  	
  = $500,000.00

  	
   

  
	
  Monthly crediting dollars for 1998

  	
   

  	
  = $5,708.50

  	
   

  
	
  EOM at 1/31/99

  	
   

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

  	
   

  
	
  EOM at 2/28/99

  	
   

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

  	
   

  

 

15

 

Section 2:

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

 

A.                                   Definition of Variables for Participant
Payment Calculation

 

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

 

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

 

	
  Frequency of payments

  	
   

  	
  = monthly

  	
   

  
	
  Participant age on 10/1/99

  	
   

  	
  = 50 yrs. old

  	
   

  
	
  Spouse age on 10/1/99

  	
   

  	
  = 48 yrs. old

  	
   

  
	
  Participant’s and spouse’s joint expected remaining
  lives

  	
   

  	
  = 476 months

  	
   

  
	
  “n” for 10/1/99

  	
   

  	
  = 476

  	
   

  
	
  “n” for 1/1/00

  	
   

  	
  = 473

  	
   

  
	
  “n” for 1/1/01

  	
   

  	
  = 461

  	
   

  

 

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

 

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

 

Example of weekly and monthly interest rates

 

Declared Rate = 13.7%

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

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

 

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

 

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

 

Example of EOP balance calculation

 

EOP balance = BOP balance + interest crediting -
payment

 

 

16

 

B.             Payments

 

1.               Calculation of payments

 

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

 

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

 

 

Example of a calculation
with monthly payments

 

n = 476 months

Monthly i = 1.0757%

BOP balance = $500,000.00

Payment = $5,411.73

 

Example of a calculation
with weekly payments

 

n = 2,070 weeks

Weekly i = 0.2472%

BOP balance = $500,000.00

Payment = $1,243.50

 

2.               Interest Crediting for Payments

 

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

 

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

 

BOP balance = $500,000.00

Monthly i = 1.0757%

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

 

17

 

3.               Amortization of Participant Deferral Account Balances

 

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

 

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

 

BOP balance = $500,000.00

Monthly i = 1.0757%

Interest crediting = $5,378.50

Payment = $5,411.73

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

 

C.             Installment Termination Payments

 

1.               [Intentionally left blank.]

 

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

 

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

 

n = 4

Annual i = 12%

BOP balance = $500,000.00

Annual installment
payments = $164,617.22

 

18

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