Target Troy Risch Executive Severance Agreement
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.
2
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.
3
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
4
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
5
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:
6
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.
7
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.
8
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
9
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.
10
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
11
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
12
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.
13
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.
14
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.
|
TARGET CORPORATION |
||||
|
Date: |
2/1, 2011 |
By: |
/s/ Jodeen Kozlak |
|
|
Title: |
EVP HR |
|||
|
TARGET ENTERPRISE, INC. |
||||
|
Date: |
2/1, 2011 |
By: |
/s/ Jodeen Kozlak |
|
|
Title: |
EVP HR |
|||
|
Date: |
1/26, 2011 |
/s/ Troy Risch |
||
|
Troy Risch |
Stay Up-to-Date With How the Law Affects Your Life
