Executive Severance Agreement – Target Corp.
AGREEMENT
THIS AGREEMENT is made by and between Target Corporation, a Minnesota
corporation and Target Enterprise, Inc., a subsidiary of Target Corporation
(“Enterprise”) (Target Corporation and Enterprise collectively referred to as
the “Company”), and Troy Risch (“Executive”).
RECITALS
A. Executive is employed by Enterprise; and
B. Enterprise and Executive wish to sever their relationship as employer and
employee respectively, on the terms and conditions set forth in this Agreement;
and
C. Target Corporation maintains an Income Continuance Policy (the “ICP”) for
which Executive is eligible, the terms and provisions of which Executive has
been subject to and is familiar with; and
D. The Company delivered Notice of Termination to Executive on January 3,
2011; and
E. The ICP requires a release in writing from Executive; and
F. Executive acknowledges he has been advised and encouraged to review this
Agreement with an attorney and is fully aware of the potential rights and
remedies he may have as a result of the severance of his employment; and
G. Executive and the Company wish to memorialize the resolution and
settlement of all Executive153s rights, remedies and obligations flowing from
Executive153s employment with Enterprise and the severance and termination of that
employment relationship.
H. Capitalized terms used, but not defined, in this Agreement shall have the
definitions ascribed to them in the ICP.
1. Employment Severance Date. Executive153s last
active day at work on the Company153s premises will be January 7, 2011 (the “Last
Day Worked”) and the employer-employee relationship of Executive and Enterprise
shall be terminated on January 15, 2011 (the “Employment Severance Date”). From
the Last Day Worked through the Employment Severance Date, Executive shall
perform the duties assigned to him by Enterprise, including availability for
telephone consultation.
2. Salary. Executive shall be paid his regular
salary for services rendered as an employee under Section 1 hereof through the
Last Day Worked. Enterprise agrees that Executive153s regular salary will continue
through the Employment Severance Date. Salary payments are subject to all
required and voluntary withholdings. Such payments will otherwise be made in
accordance with the standard payroll practices of Enterprise as in effect at the
time of payment.
3. Income Continuance Payments. Executive shall be entitled
to the equivalent of twenty-four (24) months of income continuance payments
pursuant to and subject to the terms and conditions of the ICP payable as
follows: (i) a payment on July 22, 2011 in the gross amount of $715,416
representing twelve (12) suspended bi-weekly payments and one (1) regularly
scheduled bi-weekly payment and (ii) thirty-nine (39) consecutive equal
bi-weekly (or such other interval as is consistent with payments under the
Company153s payroll system) payments each in the gross amount of $55,032 beginning
on or about August 5, 2011. This amount is based on a three-year average annual
bonus amount of $705,807 and a base salary of $725,000. The payments shall be
reduced for taxes and other amounts required to be withheld by the Company. No
payments shall be made if Executive revokes this Agreement.
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4. Vacation Pay. Enterprise shall pay to Executive
any unused vacation due Executive as of the Employment Severance Date consistent
with Enterprise practice.
5. Health Insurance. Executive may continue to
participate in the Company153s medical and dental programs to the extent, if any,
permitted by the Company153s medical and dental plans (the “Plans”). In order to
continue such coverage, Executive must maintain continuous coverage under the
Plans and pay 102% of the full cost of such Plans. Executive acknowledges that
the Company may modify its premium structure, the terms of the Plans and the
coverages of the Plans, including the termination of all or part of any Plan.
All insurance coverage shall terminate 18 months from the end of active
employment coverage or at such other date pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”).
6. Life Insurance. Executive may continue his life
insurance coverage, if any, after the Employment Severance Date pursuant to the
terms and conditions of the Company153s plan. In order to continue such coverage,
Executive must make all payments required under the policy.
7. Pension Plan : 401(k) Plan. Executive153s rights, if any,
under the Target Corporation Pension Plan and the Target Corporation 401(k) Plan
will be determined under the terms of such plans as amended from time to time.
8. Deferred Compensation Plan. Executive shall be
paid his deferred benefits, if any, under the Target Corporation Officer EDCP
pursuant to the terms of such plan as amended from time to time.
9. Supplemental Pension Plan. Executive153s vested
benefits, if any, under any Target Corporation SPP have been or will be
transferred to the Target Corporation Officer EDCP and will be determined and
paid out pursuant to such terms as amended from time to time.
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10. Stock Plans. Executive153s rights, if any, under the Target
Corporation Long-Term Incentive Plan (the “LTIP”) will be determined under the
terms of such plan and the applicable award agreements. Executive acknowledges
that Executive must exercise all options that are exercisable on the Employment
Severance Date within two hundred ten (210) days after such date or the options
will expire. No further installments will vest after the Employment Severance
Date.
Executive153s 2009 and 2010 Restricted Stock Units awards will be paid to him
at 50% of the award pursuant to the terms of the Restricted Stock Units
Agreement, net of applicable tax withholdings, provided Executive signs and does
not revoke this Agreement.
Executive will not be eligible for the 2008, 2009 and 2010 Performance Share
award payouts, if any.
11. Other Benefits. The Company will pay up to
$30,000 for reasonable outplacement services directly related to Executive153s
termination through January 15, 2012 provided Executive signs and does not
revoke this Agreement. Such outplacement fees shall be paid by the Company
directly to the mutually agreed upon outplacement firm engaged by Executive
after submission of its invoices to Company. Executive shall provide the Company
with the name of the outplacement firm he desires to engage for approval by the
Company. Such approval shall not be unreasonably withheld. Executive
acknowledges that he will not receive a bonus payment pursuant to the Short-Term
Incentive Plan (STIP) for fiscal year 2010 performance. Provided Executive signs
and does not revoke this Agreement and subject to compliance with the terms of
this Agreement, the Company will pay Executive one million dollars ($1,000,000)
in addition to payments under Section 3 of this Agreement. Payment will be made
as follows: a payment of $150,000 on June 10, 2011, a payment of $200,000 on
October 28, 2011, a payment of $200,000 on March 16, 2012, a payment of $150,000
on August 3, 2012
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and a payment of $300,000 on January 18, 2013. Each of the foregoing payments
will be treated as a separate payment for purposes of Internal Revenue Code
Section 409A. Applicable taxes as reasonably determined by the Company shall be
withheld from such payments.] Except as set forth in this
Agreement or as required by law, Executive is entitled to no other employee
benefits, fringe benefits or compensation.
12. No Recruiting. Executive agrees that while he is
an employee of Enterprise and through January 15, 2013 he will not recruit,
solicit or entice, directly or indirectly, for employment, any employee of the
Company or any of their subsidiaries or affiliated companies, unless Executive
has a written agreement signed by authorized persons of Target Corporation and
Enterprise allowing Executive to recruit persons named in that agreement. The
execution of that agreement shall be in the sole discretion of authorized
persons of Target Corporation and Enterprise.
13. Consultation and Cooperation. Following the
Employment Severance Date, the Company may request that Executive consult or
cooperate with the Company (including, without limitation, providing truthful
information to the Company or serving as a witness or testifying at the
Company153s request without subpoena), and Executive agrees to be available at
mutually agreeable times to perform such duties and provide such cooperation in
connection with various business and legal matters in which Executive was
involved or has knowledge as result of Executive153s employment with the Company.
In so consulting or cooperating, Executive shall be reimbursed his reasonable
out-of-pocket expenses. After the Employment Severance Date Executive shall not
be, nor represent to anyone that he is, an agent of the Company, unless
expressly authorized in writing to do so by an authorized officer of the
Company.
14. Directly Competitive Employment. For purposes of Section
II.G of the ICP and Section 18 of this Agreement, “Directly Competitive
Employment” shall be employment with
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Wal-Mart Stores, Inc.; Best Buy Co., Inc.; Kohl153s Corporation; Toys “R” Us,
Inc.; or CVS Caremark Corporation; or any parent, subsidiary, division or
affiliate of any such company (examples of affiliates include entities under
common control, joint venture partners and e-commerce affiliates). Executive
will promptly report to the Company Executive153s acceptance of or engagement in
any Directly Competitive Employment and provide such other information about any
Directly Competitive Employment as may be requested by the Company. Such
information shall be provided to the Corporate Secretary, Target Corporation,
1000 Nicollet Mall, TPS 2670, Minneapolis, Minnesota 55403.
15. Confidentiality. Executive understands and agrees that
Executive will keep confidential any information regarding the negotiations or
discussions relating to this Agreement, except that Executive may disclose such
information to Executive153s spouse or domestic partner, attorney, financial
advisor or tax advisor (all of whom must agree to keep it confidential) or
unless required by law. Executive is encouraged to share with an employer or
potential employer Section 12 and Section 15 of this Agreement.
Executive represents and warrants that prior to signing this Agreement,
Executive has not disclosed the terms and conditions of this Agreement (except
for those terms and conditions disclosed by the Company) or any information
regarding the negotiations or discussions relating to this Agreement to anyone
other than Executive153s spouse or domestic partner, attorney, financial advisor
or tax advisor (all of whom have agreed to keep such information confidential).
Executive acknowledges and agrees that confidential information of the
Company and any of their subsidiaries and affiliates is a valuable, special and
unique asset and such confidential information includes without limitation:
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1) employee data and information (including, but not limited to, personnel
decisions relating to employees and applicants), and
2) present, past and future strategies, plans, and proposals (including, but
not limited to, customer, marketing, merchandising, sourcing, store operations,
technology, assets protection, distribution, benefits and compensation
strategies, plans and proposals), and
3) financial information, and
4) present, past and future personnel and labor relations strategies, plans,
practices, policies, training programs and goals.
as well as any information treated as confidential (“Confidential
Information”).
Executive will not, during or after Executive153s employment with Enterprise,
use or disclose or cause or permit to be used or disclosed any Confidential
Information to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever.
16. Company Property. Executive agrees to return all of the
Company153s property, including any copies or duplicates, in Executive153s
possession on or before the Employment Severance Date. In addition, as of the
Employment Severance Date, Executive represents and warrants that Executive has
not removed and agrees that Executive will not remove any of the Company153s
property, including any copies or duplicates, from the Company153s premises. This
includes but is not limited to the Company153s credit or charge cards; discount
cards; cellular phones or other mobile devices; pagers; personal computers;
identification badges; keys; business records, reports, policies, files, forms,
manuals and correspondence; customer lists and records; personnel lists,
information, plans, training materials and records; information regarding
suppliers and vendors; marketing plans; strategy information; contracts and
contract information; computer tapes and reports; and any type of computer or
digital storage media.
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17. Detrimental Conduct. Executive agrees that he
will not make any untrue statements about the Company or any of their
subsidiaries or affiliated companies or any of their management regarding any
events taking place during the employment period. Executive will not disparage
in any way the Company or any of their subsidiaries or affiliated companies, or
any of their officers, managers or employees.
18. Termination of Payments and Benefits. In addition to any
other remedies available to the Company, in the event Executive (a) engages in
Directly Competitive Employment while Executive has the right to receive
payments pursuant to Section 3 or Section 11 or exercise stock options under the
LTIP, or (b) breaches any of Executive153s obligations under the ICP or this
Agreement, then (i) the Company will be relieved of all liability and
obligations to make payments under this Agreement (including payments under both
Section 3 and Section 11), (ii) all of Executive153s stock options shall terminate
immediately and (iii) the Company may demand the return of any payments
previously paid to Executive under Section 3 and Section 11. Even if payments
and benefits are terminated pursuant to this Section 18, Executive153s obligations
under Sections 12, 13, 15, 16 and 17 hereof, and the release set forth in
Section 19 hereof shall remain in full force and effect.
19. Release.
A. DEFINITIONS. The definitions below are intended solely for the purpose of
this Section 19. All words used in this release are intended to have their plain
meanings in ordinary English. Specific terms in this release have the following
meanings:
1) “Executive” includes Executive and anyone who has or obtains any legal
rights or claims through Executive.
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2) “Target” means Target Corporation and any company related to Target
Corporation in the present or past (including without limitation, its
predecessors, parents, subsidiaries, affiliates and divisions) and any successor
of Target.
3) “Corporation” means Target and any company providing insurance to Target
in the present or past, any employee benefit plan sponsored or maintained by
Target and the present and past fiduciaries of any such plans, Target153s present
and past officers, directors, employees, committees and agents and any person
who acted on behalf of Target or on instructions from Target.
4) “Executive Claims” means all of the rights Executive has now to any relief
of any kind from the Corporation, including without limitation:
a. all claims arising out of or relating to Executive153s employment with
Target and Executive153s employment termination; and
b. all claims arising out of or relating to statements, actions, or omissions
of the Corporation; and
c. all claims for any alleged unlawful discrimination, harassment,
retaliation or reprisal, or other alleged unlawful practices arising under the
laws of the United States or any other country or of any state, province,
municipality, or other unit of government including without limitation, claims
under the Age Discrimination in Employment Act, Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, 42 U.S.C § 1981, the Employee
Retirement Income Security Act, the Equal Pay Act, the Worker Adjustment and
Retraining Notification Act, the Family and Medical Leave
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Act, the Fair Credit Reporting Act, the Sarbanes-Oxley Act, and workers153
compensation non-interference or non-retaliation statutes; and
d. all claims for alleged wrongful discharge; breach of contract; breach of
implied contract; failure to keep any promise; breach of a covenant of good
faith and fair dealing; breach of fiduciary duty; estoppel; Executive153s
activities, if any, as a “whistleblower”; defamation; infliction of emotional
distress; fraud; misrepresentation; negligence; harassment; retaliation or
reprisal; constructive discharge; assault; battery; false imprisonment; invasion
of privacy; interference with contractual or business relationships; any other
wrongful employment practices; and violation of any other principle of common
law; and
e. all claims for compensation of any kind, including without limitation,
bonuses, commissions, vacation pay, perquisites, and expense reimbursements; and
f. all claims for back pay, front pay, reinstatement, other equitable relief,
compensatory damages, damages for alleged personal injury, liquidated damages,
and punitive damages; and
g. all claims for attorney153s fees, costs, and interest.
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However, Executive Claims do not include any claims that the law does not
allow to be waived or any claims that may arise after the date on which
Executive signs this Agreement.
B. AGREEMENT TO RELEASE EXECUTIVE CLAIMS. Executive will receive
consideration from Target as set forth in this Agreement if he signs and does
not revoke this Agreement as provided in Section 25 below. Executive understands
and acknowledges that the consideration is in addition to anything of value that
Executive would be entitled to receive from the Corporation if Executive did not
sign this Agreement or if Executive revoked this Agreement. In exchange for that
consideration, Executive gives up and releases all of Executive Claims.
Executive will not make any demands or claims against the Corporation for
compensation or damages relating to Executive Claims. This provision shall not
preclude Executive from filing a charge of discrimination with the Equal
Employment Opportunity Commission. However, Executive hereby agrees that he
releases any right to compensation arising out of such a charge, agrees not to
seek any compensation in such a charge, and specifically agrees to return any
compensation that he receives in connection with such a charge to Target. The
consideration that Executive is receiving is a full and fair payment for the
release of Executive Claims.
C. ADDITIONAL AGREEMENTS AND UNDERSTANDINGS. Even though Target will provide
consideration for Executive to settle and release Executive Claims, the
Corporation does not admit that it is responsible or legally obligated to
Executive. In fact, the Corporation denies that it engaged in any unlawful or
improper conduct toward Executive and denies that it has engaged in any
wrongdoing.
20. Miscellaneous. This Agreement shall be binding
upon the Company and its successors and assigns and Executive, his heirs,
executors, successors and assigns. This
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Agreement, together with the plans and award agreements specifically referred
to herein, embody the entire agreement and understanding between the Company and
Executive, and supersedes all prior agreements and understandings (oral or
written) between them relating to the subject matter hereof. The terms of this
Agreement may only be modified by an agreement in writing signed by Executive
and authorized persons of Target Corporation and Enterprise.
21. Construction and Applicable Law. The ICP and its
implementation pursuant to this Agreement is intended to be a welfare benefit
plan subject to the applicable requirements of ERISA. The ICP and this Agreement
shall be administered and construed consistently with that intent and with the
applicable provisions of the Internal Revenue Code. The laws of the State of
Minnesota, without regard to Minnesota153s choice-of-law principles, govern all
matters arising out of or related to this Agreement to the extent such laws are
not preempted by laws of the United States of America. The parties agree that
the exclusive forum and venue for any legal action arising out of or related to
this Agreement shall be the United States District Court for the District of
Minnesota, and the parties submit to the personal jurisdiction of that court. If
neither subject matter nor diversity jurisdiction exists in the United States
District Court for the District of Minnesota, then the exclusive forum and venue
for any such action shall be the courts of the State of Minnesota located in
Hennepin County, and the parties submit to the personal jurisdiction of that
court.
22. Severability. If any provision of this Agreement is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not be affected or impaired, unless enforcement of
this Agreement as so invalidated would be unreasonable or grossly inequitable
under all the circumstances or would frustrate the purposes of this Agreement.
23. Relationship to Income Continuance Plan. This Agreement
is entered into for the purpose of implementing the ICP. The terms of this
Agreement are intended to be construed in
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concert with the terms of the ICP. To the extent there is conflict between
the terms of this Agreement and the terms of the ICP, the terms of this
Agreement shall prevail.
24. Acceptance Period. Executive understands that the terms
of this Agreement shall be open for acceptance for a period of twenty-one (21)
days from the date of its receipt and a signed copy of this Agreement must be
delivered to the Company within twenty-five (25) days of receipt of this
Agreement. During this time, Executive may consider whether or not to accept
this Agreement or seek counsel to advise him regarding the same. Executive
agrees that changes to this Agreement, whether material or immaterial, will not
restart this acceptance period.
25. Revocation. Executive understands that he may revoke
(that is cancel) this Agreement, including the release set forth in Section 19,
if he does so within fifteen (15) calendar days of signing this Agreement. Such
revocation must be made in a written statement that is hand delivered or post
marked within fifteen (15) calendar days of the date Executive signs this
Agreement and must be addressed to the Corporate Secretary, Target Corporation,
1000 Nicollet Mall, TPS 2670, Minneapolis, Minnesota 55403. Executive
understands that if he mails such a revocation, mailing by certified mail,
return receipt requested, is recommended to show proof of mailing.
26. Remedies. In the event of a breach or threatened breach
by Executive of the provisions of Sections 12, 13, 15, 16 or 17 of this
Agreement, the Company shall be entitled to an injunction restraining Executive
from breaching, in whole or in part, any of his duties, obligations, or
covenants in those sections. Executive acknowledges that such remedy is
appropriate. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any additional or other remedy or remedies available to it
for such breach or threatened breach, including but not limited to the other
remedies specifically provided for in this Agreement and the recovery of
damages, together with costs and attorney153s fees.
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27. Reporting. Until all payments are made pursuant to this
Agreement, Executive shall promptly inform the Company of the name and business
address of each employer of Executive and shall provide a summary description of
the nature and principal business locations of the employer. Executive shall
also provide the title, principal duties, address and phone number of Executive.
Significant changes in employment, duties or location must be promptly reported.
Such reports shall be provided to the Executive Vice President, Human Resources,
Target Corporation, 1000 Nicollet Mall, TPS 0999, Minneapolis, Minnesota 55403.
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Please read carefully before signing
– Executive acknowledges that the Company is hereby advising and encouraging
Executive to consult with an attorney prior to signing this Agreement.
– By signing this Agreement, Executive acknowledges that he has not relied on
any statements or explanations made by the Company, its agents or its attorneys.
– Executive acknowledges that he has been given twenty-one (21) days (or
more) to consider whether to sign this Agreement. Executive acknowledges that if
he signs this Agreement before the end of the twenty-one (21) day period, it was
Executive153s personal voluntary decision to do so.
– Executive understands that this Agreement shall not become effective or
enforceable until the revocation period has expired. No payment shall be made to
Executive until after the revocation period has expired.
– Executive understands that if he revokes this Agreement it will terminate
and Executive will not receive any benefits under this Agreement, including the
income continuance payments set forth in Section 3, the payments set forth in
Section 11, and the Restricted Stock Units awards payouts set forth in Section
10.
In signing below, each party agrees to the terms and conditions above.
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TARGET CORPORATION |
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Date: |
2/1, 2011 |
By: |
/s/ Jodeen Kozlak |
|
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Title: |
EVP HR |
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TARGET ENTERPRISE, INC. |
||||
|
Date: |
2/1, 2011 |
By: |
/s/ Jodeen Kozlak |
|
|
Title: |
EVP HR |
|||
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Date: |
1/26, 2011 |
/s/ Troy Risch |
||
|
Troy Risch |
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