{"id":40220,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/officer-deferred-compensation-plan-target-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"officer-deferred-compensation-plan-target-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/officer-deferred-compensation-plan-target-corp.html","title":{"rendered":"Officer Deferred Compensation Plan – Target Corp."},"content":{"rendered":"

\n

TARGET CORPORATION
\nOFFICER DEFERRED COMPENSATION PLAN<\/p>\n

\n

ARTICLE 1
\nPURPOSE<\/p>\n

\n

The purpose of this Target Corporation Officer Deferred Compensation Plan,
\nformerly known as the Target Corporation Deferred Compensation Plan : Senior
\nManagement Group, (the “Plan”) is to provide a means whereby Target Corporation
\n(the “Company”) may afford financial security to a select group of employees who
\nare in the Senior Management Group of the Company and its subsidiaries and who
\nhave rendered and continue to render valuable services to the Company or its
\nsubsidiaries and who make an important contribution towards the Company153s
\ncontinued growth and success, by providing for additional future compensation so
\nthat such employees may be retained and their productive efforts encouraged.
\nParticipants ceased to be eligible to defer Earnings into the Plan after
\nDecember 31, 1996. The Plan, which is intended to comply with Code section
\n409A, was amended and restated effective January 1, 2009. The Plan was amended
\nto incorporate the Company153s recoupment policy effective January 13, 2010. This
\nPlan document, which was amended to reflect Plan administration and amendment
\nchanges authorized by the Board of Directors on November 10, 2010 and
\nmodification of the Change in Control definition, is effective June 8, 2011.\n<\/p>\n<\/p>\n

ARTICLE 2
\nDEFINITIONS AND CERTAIN PROVISIONS<\/p>\n

\n

Active Status<\/u>. “Active Status” means the Participant is currently
\nemployed by the Company or has terminated employment under Normal or Early
\nRetirement or under other conditions described in Section 5.2 and has not yet
\nbegun to receive payments from the Plan associated with a particular Deferral
\nAccount.<\/p>\n<\/p>\n

Affiliate<\/u>. An “Affiliate” is the Company and all persons, with whom
\nthe Company would be considered a single employer under Code section 414(b) or
\n414(c).<\/p>\n<\/p>\n

Beneficiary<\/u>. “Beneficiary” means the person or persons designated as
\nsuch in accordance with Article 6.<\/p>\n<\/p>\n

Benefit Deferral Period<\/u>. “Benefit Deferral Period” means that period
\nof one (1) or four (4) Plan Years as determined pursuant to Article 4 over which
\na Participant defers a portion of such Participant153s Earnings.<\/p>\n<\/p>\n

Committee<\/u>. “Committee” means the plan administration committee
\nappointed to administer the Plan pursuant to Article 3; provided, solely for
\npurposes of the Plan amendment provisions of Section 7.1, “Committee” means the
\nChief Executive Officer and the senior ranking Human Resources officer, jointly
\nor individually.<\/p>\n<\/p>\n

Cumulative Deferral Amount<\/u>. “Cumulative Deferral Amount” means the
\ntotal cumulative amount by which a Participant153s Earnings must be reduced over
\nthe period prescribed in Section 4.1. If for a Plan Year a Matching Allocation
\nfor an Employee who is a member of the Senior Management Group of the Company
\npursuant to the Target Corporation Supplemental Retirement, Savings and Employee
\nStock Ownership Plan (“SRSP”) cannot be made because the Before Tax<\/p>\n

\n

1<\/p>\n

\n

<\/p>\n

\n

Deposits or After Tax Deposits elected by the Employee are reduced to comply
\nwith the provisions of the SRSP, “Cumulative Deferral Amount” also includes the
\namount of the Matching Allocation that cannot be made.<\/p>\n<\/p>\n

Declared Rate<\/u>. “Declared Rate” means with respect to any Plan Year
\nthe applicable rate announced in advance by the Committee for such Plan Year.
\nUnder no circumstances shall the minimum rate be less than twelve percent (12%)
\nper annum and the maximum rate shall not exceed twenty percent (20%) per annum.
\nThe rate to be announced, subject to the minimum and maximum percentages
\nreferenced above, shall be a calculated rate using the following formula:<\/p>\n<\/p>\n

Moody153s Corporate Bond Yield Average<\/u>. Monthly Average Corporates as
\npublished by Moody153s Investors Service, Inc. or its successor (or if said index
\nis no longer available, its successor index, or if no successor index exists,
\nsuch other index as selected by the Committee as most closely replicates the
\nmeasure produced by said Moody index) for the month of June for the year
\npreceding the subject Plan Year to which the Declared Rate shall apply, said
\nrate of return to be rounded to the nearest .10% of said reported rate, to which
\npercentage rate shall be added six (6) percentage points (e.g. an index of 7.16%
\nrounded to 7.20% plus 6% equals a 13.2% “Declared Rate”). Provided however, if
\nany tax or insurance change shall occur which in the reasoned judgment of the
\nCommittee shall have an ongoing adverse economic effect on the underlying COLI
\nfinancing assumptions related to the Plan, then the Committee may adjust said
\nDeclared Rate to reflect such adverse economic impact but in no event below the
\ntwelve percent (12%) minimum referenced in the first paragraph hereof.<\/p>\n<\/p>\n

Deferral Account<\/u>. “Deferral Account” means the account maintained on
\nthe books of account of the Company pursuant to Section 4.4.<\/p>\n<\/p>\n

Early Retirement<\/u>. “Early Retirement” means the Participant153s
\nTermination of Employment for a reason other than death on or after the date the
\nParticipant attains age 55 and prior to the date the Participant attains age 65.\n<\/p>\n<\/p>\n

Earnings<\/u>. “Earnings” means the base pay and incentive pay paid to a
\nParticipant by the Company or a subsidiary, excluding car and other allowances
\nand other cash and non-cash compensation.<\/p>\n<\/p>\n

Eligible Employee<\/u>. “Eligible Employee” means each Employee in the
\nSenior Management Group of the Company who executes an Enrollment Agreement to
\nparticipate in the Plan.<\/p>\n<\/p>\n

Employee<\/u>. “Employee” means any person employed by the Employer on a
\nregular salaried basis, including officers of the Employer.<\/p>\n<\/p>\n

Employer<\/u>. “Employer” means the Company and any of its wholly owned
\nsubsidiaries.<\/p>\n<\/p>\n

Enrollment Agreement<\/u>. “Enrollment Agreement” means the written
\nagreement entered into by the Employer and an Eligible Employee pursuant to
\nwhich the Eligible Employee becomes a Participant in the Plan. In the sole
\ndiscretion of the Company, authorization forms filed by any Participant by which
\nthe Participant makes the elections provided for by this Plan may be treated as
\na completed and fully executed Enrollment Agreement for all purposes under the
\nPlan.<\/p>\n

\n

2<\/p>\n

\n

<\/p>\n

Normal Retirement<\/u>. “Normal Retirement” means the Termination of
\nEmployment of a Participant with the Employer for reasons other than death on or
\nafter the date the Participant attains age 65.<\/p>\n<\/p>\n

Participant<\/u>. “Participant” means an Eligible Employee who has filed a
\ncompleted and executed Enrollment Agreement or authorization form with the
\nCommittee and is participating in the Plan in accordance with the provisions of
\nArticle 4. “Participant” also means an Employee who is a member of the Senior
\nManagement Group of the Company who has a Cumulative Deferral Amount based on
\nMatching Allocation that could not be made to the SRSP.<\/p>\n<\/p>\n

Pay Status<\/u>. “Pay Status” means that the Participant has had a
\nTermination of Employment with the Company and has begun to receive payments
\nfrom the Plan associated with a particular Deferral Account.<\/p>\n<\/p>\n

Plan Year<\/u>. “Plan Year” means the calendar year beginning January 1
\nand ending December 31.<\/p>\n<\/p>\n

Specified Employee<\/u>. For purposes of complying with the requirements
\nof Code section 409A(a)(2)(B)(i) (relating to the 6 month suspension of certain
\nbenefit distributions), an individual is a “Specified Employee” if on his or her
\nTermination of Employment, the Company or other Affiliate has stock that is
\ntraded on an established securities market within the meaning of Code section
\n409A(a)(2)(B) and such individual is a “key employee” (defined below). For this
\npurpose, an individual is a “key employee” during the 12-month period beginning
\non April 1 immediately following the calendar year in which the individual was
\nemployed by the Company and other Affiliates, and satisfied, at any time within
\nsuch calendar year, the requirements of Code section 416(i)(1)(A)(i), (ii) or
\n(iii) (without regard to Code section 416(i)(5)). An individual will not be
\ntreated as a Specified Employee if the individual is not required to be treated
\nas a Specified Employee under Treasury Regulations issued under Code section
\n409A.<\/p>\n<\/p>\n

Termination of Employment<\/u>.<\/p>\n<\/p>\n

(a) For purposes of determining entitlement
\nto or amount of benefits under the Plan, “Termination of Employment” means a
\nseverance of a Participant153s employment relationship with the Employer and all
\nother Affiliates, for any reason.<\/p>\n<\/p>\n

(b) For purposes of determining when a
\ndistribution will be made under the Plan, a “Termination of Employment” will be
\ndeemed to occur if, based on the relevant facts and circumstances to the
\nParticipant, the Employer, all other Affiliates, and Participant reasonably
\nanticipate that the level of bona fide future services to be performed by the
\nParticipant for the Employer and all other Affiliates will permanently decrease
\nto no more than 20% of the average level of bona fide services performed over
\nthe immediately preceding 36-month period.<\/p>\n<\/p>\n

(c) A bona fide leave of absence that is six
\nmonths or less, or during which an individual retains a reemployment right, will
\nnot cause a Termination of Employment. In the case of a leave of absence
\nwithout a right of reemployment that exceeds the time periods described in this
\nparagraph, a Termination of Employment will be deemed to occur once the leave of
\nabsence exceeds six months.<\/p>\n

\n

3<\/p>\n

\n

<\/p>\n

(d) Notwithstanding the foregoing, a
\nTermination of Employment shall not occur unless such termination also qualifies
\nas a “separation from service,” as defined under Code section 409A and related
\nguidance thereunder.<\/p>\n<\/p>\n

ARTICLE 3
\nADMINISTRATION OF THE PLAN<\/p>\n

\n

A Committee (of one or more individuals) shall be appointed by the Board of
\nDirectors of the Company to administer the Plan and to establish, adopt or
\nrevise such rules and regulations as it may deem necessary or advisable for the
\nadministration of the Plan. The Committee shall have discretionary authority to
\ndetermine eligibility for benefits and to construe the terms of the Plan.
\nInterpretations of the Plan by the Committee shall be conclusive. Members of
\nthe Committee shall be eligible to participate in the Plan while serving as
\nmembers of the Committee, but a member of the Committee shall not vote or act
\nupon any matter which relates solely to such member153s interest in the Plan as a
\nParticipant.<\/p>\n

\n

4<\/p>\n

\n

<\/p>\n

\n

ARTICLE 4<\/p>\n

PARTICIPATION<\/p>\n<\/p>\n

4.1 Election to Participate<\/u>. Effective for Plan Years
\nbeginning on and after January 1, 1997, Participants ceased to be eligible to
\ndefer Earnings into this Plan. For Plan Years beginning prior to January 1,
\n1997, any Employee who is a member of the Senior Management Group of the Company
\nmay enroll in the Plan by filing a completed and fully executed Enrollment
\nAgreement or authorization form with the Committee. Pursuant to said Enrollment
\nAgreement or authorization form, the Employee shall irrevocably designate a
\ndollar amount by which the aggregate Earnings of such Participant would be
\nreduced over one (1) or four (4) Plan Years next following the execution of the
\nEnrollment Agreement (the “Benefit Deferral Period”), provided, however, that:\n<\/p>\n<\/p>\n

(a) Minimum Deferral<\/u>. The reduction for any Plan Year shall
\nnot be less than Five Thousand Dollars ($5,000.00)<\/p>\n<\/p>\n

(b) Reduction in Earnings<\/u>.<\/p>\n<\/p>\n

(i) In General<\/u>. Except as otherwise provided in this
\nSection 4.1, the Earnings of the Participant for each of the Plan Years in the
\nBenefit Deferral Period shall be reduced by the amount specified in the
\nEnrollment Agreement (including any authorization form) applicable to such Plan
\nYear.<\/p>\n<\/p>\n

(ii) Accelerated Reduction<\/u>. A Participant may elect in a
\nwritten notice with the consent of the Committee to increase the amount of the
\nreduction of Earnings otherwise provided for by Section 4.1(b)(i) for any of the
\nPlan Years remaining in the Benefit Deferral Period, provided, however, that any
\nsuch increase in the reduction of Earnings for any remaining Plan Years in the
\nBenefit Deferral Period shall not increase the Cumulative Deferral Amount, but
\nshall act to shorten the length of the Benefit Deferral Period.<\/p>\n<\/p>\n

(c) Maximum Reduction in Earnings<\/u>. A Participant may not
\nelect a Cumulative Deferral Amount or an increase in reduction of Earnings
\npursuant to Section 4.1(b)(ii), or any combination of the two, that would cause
\nthe aggregate total reduction in Earnings in any Plan Year to exceed twenty-five
\npercent (25%) of the base pay and one hundred percent (100%) of the incentive
\npay payable during such Plan Year up to a total of $250,000 per year plus the
\namount of any payout made pursuant to Section 5.4, or such greater percent of
\nbase pay and\/or incentive pay or greater total amount as the Committee may
\npermit in its sole discretion. In the event that a Participant elects a
\nCumulative Deferral Amount or increase in reduction of Earnings that would
\nviolate the limitation described in this paragraph (c), the election shall be
\nvalid except that the Cumulative Deferral Amount or increase in reduction of
\nEarnings so elected shall automatically be reduced to comply with such
\nlimitation, whichever is most appropriate in the sole discretion of the
\nCommittee.<\/p>\n<\/p>\n

4.2 Deferral Accounts<\/u>. The Committee shall establish and
\nmaintain a separate Deferral Account for each Participant. The amount by which a
\nParticipant153s Earnings are reduced pursuant to Section 4.1 shall be credited by
\nthe Employer to the Participant153s Deferral Account on the fifteenth (15th) day
\nof the month in which such Earnings would otherwise have been paid. The
\nParticipant153s Deferral Account shall be credited with the annual SRSP lost
\nMatching Allocation on January 15 following the year of the lost Matching
\nAllocation. Effective for Plan Years beginning on<\/p>\n

\n

5<\/p>\n

\n

<\/p>\n

and after January 1, 1997, Participants ceased to be eligible for the annual
\nSRSP lost Matching Allocation. Such Deferral Account shall be debited by the
\namount of any payments made by the Employer to the Participant or the
\nParticipant153s Beneficiary pursuant to this Plan.<\/p>\n<\/p>\n

(a) Normal and Early Retirement Interest<\/u>. Each Deferral
\nAccount of a Participant who retires as a Normal or Early Retirement shall be
\ndeemed to bear interest, in accordance with Appendix A, Section 1, from the date
\nsuch Deferral Account was established through the date of commencement of
\npayment of the Normal or Early Retirement Benefit at a rate equal to the
\nDeclared Rate which is announced by the Committee for each Plan Year. Following
\nthe date of commencement of payment of the Normal or Early Retirement Benefit, a
\nParticipant153s Deferral Account shall be deemed to bear interest on the balance
\nof such Deferral Account in accordance with Appendix A, Section 2.<\/p>\n<\/p>\n

(b) Other Interest<\/u>. In the case of any Termination of
\nEmployment other than by Normal or Early Retirement or upon the Participant153s
\ntermination of enrollment in this Plan pursuant to Section 5.2(b), the
\nParticipant153s Deferral Account shall be deemed to bear interest from the date
\nsuch Deferral Account was established through the date of the earlier of
\nTermination of Employment or termination of enrollment in this Plan under
\nSection 5.2(c) on the balance in such Deferral Account in accordance with
\nAppendix A, Section 1, except that the interest rate used to calculate interest
\nearned in the Deferral Account shall be ten percent (10%) per annum, provided,
\nhowever, that if more than five (5) years have elapsed since the first day of
\nthe Benefit Deferral Period, the Participant153s Deferral Account shall be deemed
\nto bear interest from the date such Deferral Account was established through the
\ndate of the earlier of Termination of Employment or termination of enrollment in
\nthis Plan on the balance in such Deferral Account at a rate equal to the
\nDeclared Rate which is announced by the Committee for each Plan Year, in
\naccordance with Appendix A, Section 1. Following the earlier of the date of
\ncommencement of payment of the Termination Benefit or the date of termination of
\nenrollment in this Plan, a Participant153s Deferral Account shall be deemed to
\nbear interest on the balance in such Deferral Account in accordance with
\nAppendix A, Section 1, if the Participant is in Active Status with respect to
\nthe Deferral Account or in accordance with Appendix A, Section 2, if the
\nParticipant is in Pay Status with respect to the Deferral Account. However, in
\neither case the interest rate used to calculate interest earned in the Deferral
\nAccount shall be twelve percent (12%) per annum. Notwithstanding anything
\ncontained herein to the contrary, if a Participant has begun receiving benefits
\nunder this Plan and the calculation of future benefits, using the method of
\ncalculation set forth on Appendix A causes a reduction in benefits, the future
\npayments shall be made in accordance with the method used at the time of the
\nParticipant153s initial payment.<\/p>\n<\/p>\n

4.3 Rollover Deferred Compensation Account<\/u>. In its sole
\ndiscretion, the Committee may permit a Participant to make a special rollover
\nelection to transfer any amounts which were previously deferred under the
\nCompany153s existing deferred compensation plans to this Plan. Notwithstanding
\nthe foregoing, no such special rollover elections or transfers to this Plan
\nshall be permitted after December 31, 2008.<\/p>\n<\/p>\n

In such event, the Committee shall establish and maintain a separate Rollover
\nDeferral Account for each Participant who makes a rollover transfer to this
\nPlan. Such Rollover Deferral Account shall be deemed to bear interest at the
\nsame rate and subject to the same conditions as other Deferral Accounts pursuant
\nto Section 4.2. Each Participant who makes a rollover transfer to a Rollover
\nDeferral Account shall be treated for purposes of determining benefits under the
\nPlan as<\/p>\n

\n

6<\/p>\n

\n

<\/p>\n

having a separate Cumulative Deferral Amount and Deferral Account which shall
\ninitially be in the amount of the rollover transfer. A Participant who makes a
\nrollover transfer shall be deemed to waive all rights under the Company153s
\nexisting deferred compensation plans from which rollover transfers are made with
\nrespect to the amounts transferred to this Plan, including the right to make
\nelections regarding the time or manner of payment as permitted thereunder.
\nRollover transfers shall be subject to the minimum deferral amount set forth in
\nSection 4.1(a), but shall not be subject to any maximum deferral limitation.\n<\/p>\n<\/p>\n

4.4 Valuation of Accounts<\/u>. The value of a Deferral Account
\nas of any date shall equal the amounts theretofore credited to such account less
\nany payments debited to such account plus the interest deemed to be earned on
\nsuch account in accordance with Section 4.2. Interest shall be credited in
\naccordance with Appendix A.<\/p>\n<\/p>\n

4.5 Statement of Accounts<\/u>. The Committee shall submit to
\neach Participant, within one hundred twenty (120) days after the close of each
\nPlan Year, a statement in such form as the Committee deems desirable setting
\nforth the balance standing to the credit of each Participant in his Deferral
\nAccount.<\/p>\n<\/p>\n

4.6 No Future Deferrals<\/u>. No Employee or Participant can
\nmake additional deferrals into the Plan.<\/p>\n

\n

7<\/p>\n

\n

<\/p>\n

\n

ARTICLE 5<\/p>\n

BENEFITS<\/p>\n<\/p>\n

5.1 Normal or Early Retirement<\/u>. Upon a Participant153s Normal
\nor Early Retirement, the payment of benefits shall commence on the first day of
\nthe month following such Termination of Employment, or following such later date
\nwhich the Participant elected in his Enrollment Agreement (including any
\nauthorization form). A Participant may elect in his Enrollment Agreement
\n(including any authorization form) to have payments commence from one (1) to ten
\n(10) years following Termination of Employment, but not later than age 65 (or
\nfive (5) years after the first day of the Benefit Deferral Period, if later).\n<\/p>\n<\/p>\n

(a) Single Participant<\/u>. In the case of a Participant who is
\nsingle when payments commence, the Employer shall make periodic payments to the
\nParticipant in an amount in accordance with Appendix A, Section 2.B., for the
\nlife of the Participant, but not less than fifteen (15) years. The payments
\nshall be the actuarial equivalent of the aggregate of the Participant153s Deferral
\nAccount at the time payments commence and the interest that will accrue on the
\nunpaid balance in such Deferral Account during the payment period pursuant to
\nSection 4.2(a). The payment amount will be redetermined annually to reflect the
\nchanges in the Declared Rate.<\/p>\n<\/p>\n

(b) Married Participant<\/u>. In the case of a Participant who
\nis married when payments commence, the Employer shall make actuarially reduced
\npayments in accordance with Appendix A, Section 2.B., to the Participant for his
\nlife and thereafter, if the Participant is survived by a spouse who was married
\nto the Participant when Normal or Early Retirement Benefit payments commenced,
\nshall continue to make payments to the Participant153s spouse for his life, with
\npayments to be made for an aggregate period of not less than fifteen (15)
\nyears. The payments shall be the actuarial equivalent of the payments which
\nwould be made to the Participant pursuant to Section 5.1(a) if he were single.
\nThe monthly amount of payments will be redetermined annually to reflect changes
\nin the Declared Rate.<\/p>\n<\/p>\n

5.2 Termination Benefit<\/u>.<\/p>\n<\/p>\n

(a) Terminations of Employment<\/u>. If a Participant has a
\nTermination of Employment for any reason other than death or Normal or Early
\nRetirement, the Employer shall pay to the Participant in one immediate lump sum
\nan amount (the “Termination Benefit”) equal to the value of the Deferral Account
\nas of the date of payment and such Participant shall be entitled to no further
\nbenefits under this Plan. Upon Termination of Employment (as defined in
\nparagraph (a) of that definition) the Participant shall immediately cease to be
\neligible for any benefits under the Plan other than the Termination Benefit.
\nPayment will be made as soon as practicable but not more than 90 days following
\nthe Participant153s Termination of Employment or at such later time provided in
\nSection 5.3. Except as provided in paragraph (b) below, no other benefit shall
\nbe payable to either the Participant or any Beneficiary of such Participant.\n<\/p>\n<\/p>\n

(b) Certain Terminations of Employment<\/u>. If a Participant
\nhas a Termination of Employment after attaining age 50, but prior to attaining
\nage 55, and the Participant has worked for the Company for at least 10 years,
\nand has received an ICP Contract under the Company153s Income Continuance Policy
\nthat is signed by Participant and<\/p>\n

\n

8<\/p>\n

\n

<\/p>\n

Company and not rescinded, the Participant will be entitled to an additional,
\nimmediate lump sum distribution equal to the difference between:<\/p>\n<\/p>\n

(i) The actuarial equivalent lump sum value of the periodic
\npayments scheduled to be made to the Participant determined in accordance with
\nAppendix A, Section 2.B for the life of the Participant, but not less than
\nfifteen (15) years payments; and<\/p>\n<\/p>\n

(ii) The value of the Participant153s Deferral Account.<\/p>\n<\/p>\n

(c) Termination of Enrollment in Plan<\/u>. With the written
\nconsent of the Committee, a Participant may terminate his enrollment in the Plan
\nby filing with the Committee a written request to terminate enrollment. The
\nCommittee will consent to the termination of a Participant153s enrollment in the
\nPlan in the event of an unforeseeable financial emergency of the Participant.
\nAn unforeseeable financial emergency shall mean an unexpected need for cash
\narising from an illness, casualty loss, sudden financial reversal or other such
\nunforeseeable occurrence, but only if and to the extent such unforeseeable
\nemergency constitutes an “unforeseeable emergency” under Code section 409A.
\nCash needs arising from foreseeable events such as the purchase of a house or
\neducation expenses for children shall not be considered to be the result of an
\nunforeseeable financial emergency. Upon termination of enrollment, no further
\nreductions shall be made in the Participant153s Earnings pursuant to his
\nEnrollment Agreement, and the Participant shall immediately cease to be eligible
\nfor any benefits under the Plan other than the Termination Benefit. No other
\nbenefit shall be payable to either the Participant or any Beneficiary of such
\nParticipant. In its sole discretion, to the extent necessary to relieve the
\nunforeseeable emergency, the Committee may pay such benefit on a date earlier
\nthan the Participant153s Termination of Employment with the Employer. Following
\ntermination of enrollment in the Plan, a Participant153s Deferral Account shall be
\ndeemed to bear interest on the balance in such Deferral Account in accordance
\nwith Appendix A, Section 1, except that the interest rate used to calculate
\ninterest earned in the Deferral Account shall be twelve percent (12%) per annum.\n<\/p>\n<\/p>\n

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

5.4 [Deleted<\/u>]<\/p>\n<\/p>\n

5.5 Survivor Benefits<\/u>. Paragraphs (a) and (b) shall apply
\nto Participants whose death occurs prior to Termination of Employment.
\nParagraph (c) reflects the survivor benefit rules that apply to annuity benefits
\nthat are payable on account of a Participant153s Termination of Employment.<\/p>\n<\/p>\n

(a) If a Participant dies prior to his or her Termination of
\nEmployment prior to attaining age 55, the Employer will pay to the Participant153s
\nBeneficiary an annual benefit for the greater of:<\/p>\n<\/p>\n

(i) ten (10) years, or<\/p>\n

\n

9<\/p>\n

\n

<\/p>\n

(ii) until the Participant would otherwise have attained age 65,\n<\/p>\n<\/p>\n

in an amount equal to fifty percent (50%) of the Cumulative Deferral Amount;
\nprovided, however, if the Committee determines that installment distribution of
\nthe Participant153s Deferral Account (determined below) would produce a greater
\nbenefit, such Deferral Account balance shall be paid to the Participant153s
\nBeneficiary in equal annual installments in accordance with Appendix A,
\nSection 2.C.2, but over the period specified above. Payments will commence
\nimmediately (within 60 days) following the Participant153s death, and will be made
\neach subsequent anniversary of the Participant153s death.<\/p>\n<\/p>\n

(b) If a Participant dies prior to Termination of Employment after
\nattaining age 55, the Employer will pay to the Participant153s Beneficiary the
\nbenefit that such Participant would have received had the Participant retired on
\nthe day prior to such Participant153s death. Payments will commence immediately
\n(within 60 days) following the Participant153s death, and will be made each
\nsubsequent anniversary of the Participant153s death. Additionally, if the present
\nvalue of the benefit described in this Section 5.5(b) is less than the present
\nvalue of the benefit described in Section 5.5(a), using in each case twelve
\npercent (12%) as the discount factor, then the Beneficiary shall receive an
\nimmediate lump sum payment equal to difference of such present values.<\/p>\n<\/p>\n

(c) If a Participant (who was unmarried at the commencement of the
\npayment of any Early or Normal Retirement Benefit, or whose spouse who was
\nmarried to the Participant at the time of commencement of payment of any Early
\nor Normal Retirement Benefit predeceases the Participant) dies after the
\ncommencement of the payment of any Early or Normal Retirement Benefit, the
\nEmployer will pay to the Participant153s Beneficiary the remaining installments of
\nany such benefit for the balance of the fifteen (15) years minimum payment
\nperiod. If a spouse who was married to the Participant at the time of
\ncommencement of payment of the Early or Normal Retirement Benefit survives
\nbeyond such fifteen (15) years minimum payment period, payments shall continue
\nto be made to the spouse until the spouse153s death. If the spouse who was
\nmarried to the Participant at the time of commencement of payment of the Early
\nor Normal Retirement Benefit survives the Participant, but does not survive past
\nthe fifteen (15) years minimum payment period, the Employer will pay to the
\nParticipant153s Beneficiary the remaining installments of any such benefit for the
\nbalance of the fifteen (15) years minimum payment period. In computing any
\nbenefits to be paid following the Participant153s death pursuant to this paragraph
\n(c), the Participant153s Deferral Account shall be deemed to bear interest
\nfollowing the Participant153s death on the balance in such Deferral Account
\nannually in accordance with Appendix A, Section 2.B.<\/p>\n<\/p>\n

5.6 Small Benefit<\/u>. Subject to Section 5.8, in the event
\nthat the vested Deferral Account balance under the Plan of a Participant who has
\ndied or experienced a Termination of Employment is less than the applicable
\ndollar amount under Code section 402(g)(1)(B) for that Plan Year as of the date
\non which the Company makes such determinations, the Company reserves the right
\nto have the Participant153s entire Deferral Account paid in the form of a single
\nlump sum payment provided the Company153s exercise of discretion complies with the
\nrequirements of Treas. Reg. Sec. 1.409A-3(j)(4)(v).<\/p>\n<\/p>\n

5.7 Withholding<\/u>. To the extent required by the law in
\neffect at the time payments are made, the Employer shall withhold from payments
\nmade hereunder the minimum taxes that the<\/p>\n

\n

10<\/p>\n

\n

<\/p>\n

Employer reasonably determines is required to be withheld by the federal or
\nany state or local government.<\/p>\n<\/p>\n

5.8 Delay in Payment Required by Code Section 409A<\/u>.
\nNotwithstanding any other provision in this Article 5, if a Participant is a
\nSpecified Employee at Termination of Employment, then any distributions arising
\non account of the Participant153s Termination of Employment (other than on account
\nof death) shall be suspended and not be made until (6) months have elapsed since
\nsuch Participant153s Termination of Employment (or, if earlier, upon the date of
\nthe Participant153s death). Any payments that were otherwise payable during the
\nsix-month suspension period referred to in the preceding sentence, will be paid
\nwithin 60 days after the end of such six-month suspension period. During the
\nsix-month suspension period, delayed payments will earn interest at the Declared
\nRate.<\/p>\n<\/p>\n

5.9 Acceleration of Distributions<\/u>. The Committee in its
\nsole discretion may exercise discretion to accelerate the distribution of any
\npayment under this Plan to the extent allowed under Code section 409A.<\/p>\n<\/p>\n

5.10 Delay of Distributions<\/u>. The Committee in its sole
\ndiscretion may exercise discretion to delay the distribution of any payment
\nunder this Plan to the extent allowed under Code section 409A, including, but
\nnot limited to, as necessary to maximize the Company153s tax deductions as allowed
\npursuant to Code section 162(m) or to avoid violation of federal securities or
\nother applicable law.<\/p>\n

\n

11<\/p>\n

\n

<\/p>\n

\n

ARTICLE 6<\/p>\n

BENEFICIARY DESIGNATION<\/p>\n<\/p>\n

Each Participant shall have the right, at any time, to designate any person
\nor persons as Beneficiary or Beneficiaries to whom payment under this Plan shall
\nbe made in the event of the Participant153s death prior to complete distribution
\nto the Participant of the benefits due under the Plan. Each Beneficiary
\ndesignation shall become effective only when filed in writing with the Committee
\nduring the Participant153s lifetime on a form prescribed by the Committee.<\/p>\n<\/p>\n

The filing of a new Beneficiary designation form will cancel all Beneficiary
\ndesignations previously filed. Any finalized divorce or marriage (other than a
\ncommon law marriage) of a Participant subsequent to the date of filing of a
\nBeneficiary designation form shall revoke such designation unless in the case of
\ndivorce the previous spouse was not designated as Beneficiary and unless in the
\ncase of marriage the Participant153s new spouse had previously been designated as
\nBeneficiary. The spouse of a married Participant domiciled in a community
\nproperty jurisdiction shall join in any designation of Beneficiary or
\nBeneficiaries other than the spouse.<\/p>\n<\/p>\n

If a Participant fails to designate a Beneficiary as provided above, or if
\nhis Beneficiary designation is revoked by marriage, divorce, or otherwise
\nwithout execution of a new designation, or if all designated Beneficiaries
\npredecease the Participant or die prior to complete distribution of the
\nParticipant153s benefits, then the Committee shall direct the distribution of such
\nbenefits to the Participant153s estate.<\/p>\n

\n

12<\/p>\n

\n

<\/p>\n

\n

ARTICLE 7<\/p>\n

AMENDMENT AND TERMINATION OF PLAN<\/p>\n<\/p>\n

7.1 Amendment<\/u>. The Board of Directors of the Company may at
\nany time amend the Plan, in whole or in part for any reason, including but not
\nlimited to tax, accounting or insurance changes, a result of which may be to
\nterminate the Plan for future deferrals (excluding from such power to terminate
\nfuture deferrals those future deferrals provided for in Section 5.4 Early Payout
\nOption); provided, however, that no amendment shall be effective to decrease the
\nbenefits, nature or timing thereof payable under the Plan to any Participant
\nwith respect to deferrals made (and benefits thereafter accruing) prior to the
\ndate of such amendment. Written notice of any amendment shall be given each
\nParticipant then participating in the Plan. Notwithstanding the above, the
\nBoard authorizes the Committee to amend the Plan to make any other amendments to
\nthis Plan deemed necessary or desirable by the Committee for the operation and
\nadministration of this Plan provided such amendment does not have a material
\nfinancial impact on the Company. Such changes will be considered an Amendment
\nto this Plan and shall be effective without further action by the Board.<\/p>\n<\/p>\n

7.2 Termination of Plan<\/u>. The Plan shall terminate only
\nunder the following circumstances.<\/p>\n<\/p>\n

(a) General Rule<\/u>. To the extent that a Participant153s
\nbenefit under the Plan will be immediately included in the income of the
\nParticipant, as determined by a court of competent jurisdiction or the Internal
\nRevenue Service, to the extent permitted under Code section 409A, the Board may
\nterminate this Plan, in whole or in part, as it relates to the impacted
\nParticipant. Upon any such termination of the Plan, the Employer will pay the
\nrespective Participant the value of the Participant153s Deferral Accounts in an
\nimmediate lump sum, determined as if the Participant had a Termination of
\nEmployment on the date of such termination of the Plan as provided under
\nSection 5.2(a) hereof.<\/p>\n<\/p>\n

(b) Plan Termination and Liquidation on Account of a
\nChange-in-Control<\/u>. Upon a Change-in-Control, as defined in Section 7.3
\nhereof, the Plan will terminate and payment of all amounts under the Plan will
\nbe accelerated if and to the extent provided in this Section 7.2(b) hereof.<\/p>\n<\/p>\n

(i) The Plan will be terminated effective as of the first date on
\nwhich there has occurred both (i) a Change-in-Control under Section 7.3, and
\n(ii) a funding of the trust on account of such Change-in-Control (referred to
\nherein as the “Plan termination effective date”) unless, prior to such Plan
\ntermination effective date, the Board affirmatively determines that the Plan
\nwill not be terminated as of such effective date. The Board will be deemed to
\nhave taken action to irrevocably terminate the Plan as of the Plan termination
\neffective date by its failure to affirmatively determine that the Plan will not
\nterminate as of such date.<\/p>\n<\/p>\n

(ii) The determination by the Board under paragraph
\n(b)(i) constitutes a determination that such termination will satisfy the
\nrequirements of Code section 409A, including an agreement by the Company that it
\nwill take such additional action or refrain from taking such action as may be
\nnecessary to satisfy the requirements necessary to terminate and liquidate the
\nPlan under paragraph (iii) below.<\/p>\n

\n

13<\/p>\n

\n

<\/p>\n

(iii) In the event the Board does not affirmatively determine not to
\nterminate the Plan as provided in paragraph (b)(i), such termination shall be
\nsubject to either (A) or (B), as follows:<\/p>\n<\/p>\n

(A) If the Change-in-Control qualifies as a “change in control
\nevent” for purposes of Code section 409A, payment of all amounts under the Plan
\nwill be accelerated and made in a lump sum as soon a administratively
\npracticable but not more than 90 days following the Plan termination effective
\ndate, provided the requirements of Treasury Regulation Section
\n1.409A-3(j)(4)((ix)(B) have been satisfied.<\/p>\n<\/p>\n

(B) If the Change-in-Control does not qualify as a “change in
\ncontrol event” for purposes of Code section 409A, payment of all amounts under
\nthe Plan will be accelerated and made in a lump sum as soon as administratively
\npracticable but not more than 90 days following the 12 month anniversary of the
\nPlan termination effective date, provided the requirements of Treasury
\nRegulation Section 1.409A-3(j)(4)(ix)(C) have been satisfied.<\/p>\n<\/p>\n

(iv) Any lump sums paid pursuant to this Section 7.2(b) will be
\ncalculated as provided in Appendix B of the Target Corporation Deferred
\nCompensation Trust Agreement.<\/p>\n<\/p>\n

7.3 Change-in-Control Definition<\/u>. “Change-in-Control” means
\none of the following:<\/p>\n<\/p>\n

(a) Individuals who are Continuing Directors cease for any reason
\nto constitute 50% or more of the directors of the Company; or<\/p>\n<\/p>\n

(b) 30% or more of the outstanding voting power of the Voting Stock
\nof the Company is acquired or beneficially owned (within the meaning of
\nRule 13d-3 under the Exchange Act) by any Person, other than an entity resulting
\nfrom a Business Combination in which clauses (x) and (y) of
\nSection 7.3(c) apply; or<\/p>\n<\/p>\n

(c) the consummation of a merger or consolidation of the Company
\nwith or into another entity, a statutory share exchange, a sale or other
\ndisposition (in one transaction or a series of transactions) of all or
\nsubstantially all of the Company153s assets or a similar business combination
\n(each, a “Business Combination”), in each case unless, immediately following
\nsuch Business Combination, (x) all or substantially all of the beneficial owners
\n(within the meaning of Rule 13d-3 under the Exchange Act) of the Company153s
\nVoting Stock immediately prior to such Business Combination beneficially own,
\ndirectly or indirectly, more than 60% of the voting power of the then
\noutstanding shares of voting stock (or comparable voting equity interests) of
\nthe surviving or acquiring entity resulting from such Business Combination
\n(including such beneficial ownership of an entity that, as a result of such
\ntransaction, owns the Company or all or substantially all of the Company153s
\nassets either directly or through one or more subsidiaries), in substantially
\nthe same proportions (as compared to the other beneficial owners of the
\nCompany153s Voting<\/p>\n

\n

14<\/p>\n

\n

<\/p>\n

Stock immediately prior to such Business Combination) as their beneficial
\nownership of the Company153s Voting Stock immediately prior to such Business
\nCombination, and (y) no Person beneficially owns, directly or indirectly, 30% or
\nmore of the voting power of the outstanding voting stock (or comparable equity
\ninterests) of the surviving or acquiring entity (other than a direct or indirect
\nparent entity of the surviving or acquiring entity, that, after giving effect to
\nthe Business Combination, beneficially owns, directly or indirectly, 100% of the
\noutstanding voting stock (or comparable equity interests) of the surviving or
\nacquiring entity); or<\/p>\n<\/p>\n

(d) approval by the shareholders of a definitive agreement or plan
\nto liquidate or dissolve the Company.<\/p>\n<\/p>\n

For purposes of this Section 7.3:<\/p>\n<\/p>\n

“Continuing Director” means an individual (A) who is, as of June 8, 2011, a
\ndirector of the Company, or (B) who becomes a director of the Company after
\nJune 8, 2011 and whose initial appointment, or nomination for election by the
\nCompany153s shareholders, was approved by at least a majority of the then
\nContinuing Directors; provided, however, that any individual whose initial
\nassumption of office occurs as a result of either an actual or threatened
\ncontested election by any Person (other than the Board of Directors) seeking the
\nelection of such nominee in which the number of nominees exceeds the number of
\ndirectors to be elected shall not be a Continuing Director;<\/p>\n<\/p>\n

“Person” means any individual, firm, corporation or other entity and shall
\ninclude any group comprised of any person and any other person with whom such
\nperson or any affiliate or associate (as defined in Rule 14a-1(a) of the
\nExchange Act) of such person has any agreement, arrangement or understanding,
\ndirectly or indirectly, for the purpose of acquiring, holding, voting or
\ndisposing of any capital stock of the Company;<\/p>\n<\/p>\n

“Voting Stock” means all then-outstanding capital stock of the Company
\nentitled to vote generally in the election of directors of the Company; and<\/p>\n<\/p>\n

“Exchange Act” means the Securities Exchange Act of 1934, as amended and in
\neffect from time to time, and the regulations promulgated thereunder.<\/p>\n<\/p>\n

ARTICLE 8<\/p>\n

MISCELLANEOUS<\/p>\n

\n

8.1 Unsecured General Creditor<\/u>. Participants and their
\nBeneficiaries, heirs, successors, and assigns shall have no legal or equitable
\nrights, claims, or interests in any specific property or assets of Employer, nor
\nshall they be beneficiaries of, or have any rights, claims, or interests in any
\nlife insurance policies, annuity contracts, or the proceeds therefrom owned or
\nwhich may be acquired by Employer (“Policies”). Such Policies or other assets
\nof Employer shall not be held under any trust for the benefit of Participants,
\ntheir Beneficiaries, heirs, successors, or assigns, or held in any way as
\ncollateral security for the fulfilling of the obligations of Employer under this
\nPlan. Any and all of Employer153s assets and Policies shall be, and remain, the
\ngeneral, unpledged, unrestricted assets of Employer. Employer153s obligation
\nunder the Plan shall be merely that of an unfunded and unsecured promise of
\nEmployer to pay money in the future.<\/p>\n

\n

15<\/p>\n

\n

<\/p>\n

8.2 Nonassignability<\/u>. Neither a Participant nor any other
\nperson shall have any right to commute, sell, assign, transfer, pledge,
\nanticipate, mortgage or otherwise encumber, hypothecate or convey in advance of
\nactual receipt the amounts, if any, payable hereunder, or any part thereof, or
\ninterest therein which are, and all rights to which are, expressly declared to
\nbe unassignable and non-transferable. No part of the amounts payable shall,
\nprior to actual payment, be subject to seizure or sequestration for the payment
\nof any debts, judgments, alimony or separate maintenance owed by a Participant
\nor any other person, nor be transferable by operation of law in the event of a
\nParticipant153s or any other person153s bankruptcy or insolvency.<\/p>\n<\/p>\n

8.3 Compensation Recovery (Recoupment)<\/u>. Notwithstanding any
\nother provision of the Plan, a Participant who engaged in intentional misconduct
\nthat contributed directly or indirectly, in whole or in part, to the need for a
\nrestatement of the Company153s consolidated financial statements and who becomes
\nsubject to the Company153s recoupment policy as adopted by the Compensation
\nCommittee of the Company153s Board of Directors and amended from time to time
\n(“Recoupment Policy”) may have all or a portion of any distributions payable to
\nthe Participant or his or her Beneficiary recovered by the Company. If
\ndistributions to or on behalf of a Participant have commenced and the
\nParticipant is subject to a claim for recovery under the Recoupment Policy, then
\nthe Company may, subject to any limitations under Code section 409A, retain all
\nor any portion of the Participant153s (or his or her Beneficiary153s) taxable
\ndistribution, net of state, federal or foreign tax withholding, to satisfy such
\nclaim.<\/p>\n<\/p>\n

8.4 Employment Not Guaranteed<\/u>. Nothing contained in this
\nPlan nor any action taken hereunder shall be construed as a contract of
\nemployment or as giving any Employee any right to be retained in the employ of
\nthe Employer.<\/p>\n<\/p>\n

8.5 Protective Provisions<\/u>. Each Participant shall cooperate
\nwith the Employer by furnishing any and all information requested by the
\nEmployer in order to facilitate the payment of benefits hereunder, taking such
\nphysical examinations as the Employer may deem necessary and taking such other
\nrelevant action as may be requested by the Employer. If a Participant refuses
\nso to cooperate, the Employer shall have no further obligation to the
\nParticipant under the Plan, other than payment to such Participant of the
\ncumulative reductions in Earnings theretofore made pursuant to this Plan. If a
\nParticipant commits suicide during the two (2) year period beginning on the
\nlater of (a) the date of adoption of this Plan or (b) the first day of the first
\nPlan Year of such Participant153s participation in the Plan, or if the Participant
\nmakes any material misstatement of information or nondisclosure of medical
\nhistory, then no benefits will be payable hereunder to such Participant or his
\nBeneficiary, other than payment to such Participant of the cumulative reductions
\nin Earnings theretofore made pursuant to this Plan, provided, that in the
\nEmployer153s sole discretion, benefits may be payable in an amount reduced to
\ncompensate the Employer for any loss, cost, damage or expense suffered or
\nincurred by the Employer as a result in any way of such misstatement or
\nnondisclosure.<\/p>\n<\/p>\n

8.6 Gender, Singular and Plural<\/u>. All pronouns and any
\nvariations thereof shall be deemed to refer to the masculine or feminine as the
\nidentity of the person or persons may require. As the context may require, the
\nsingular may be read as the plural and the plural as the singular.<\/p>\n<\/p>\n

8.7 Captions<\/u>. The captions of the articles, sections, and
\nparagraphs of this Plan are for convenience only and shall not control or affect
\nthe meaning or construction of any of its provisions.<\/p>\n

\n

16<\/p>\n

\n

<\/p>\n

8.8 Validity<\/u>. In the event any provision of this Plan is
\nheld invalid, void, or unenforceable, the same shall not affect, in any respect
\nwhatsoever, the validity of any other provision of this Plan.<\/p>\n<\/p>\n

8.9 Notice<\/u>. Any notice or filing required or permitted to
\nbe given to the Committee under the Plan shall be sufficient if in writing and
\nhand delivered, or sent by registered or certified mail, to the principal office
\nof the Employer, directed to the attention of the President of the Employer.
\nSuch notice shall be deemed given as of the date of delivery or, if delivery is
\nmade by mail, as of the date shown on the postmark on the receipt for
\nregistration or certification.<\/p>\n<\/p>\n

8.10 Applicable Law<\/u>. This Plan shall be governed and
\nconstrued in accordance with the laws of the State of Minnesota as applied to
\ncontracts executed and to be wholly performed in such state.<\/p>\n

\n

17<\/p>\n

\n

<\/p>\n

APPENDIX A<\/strong><\/p>\n

\n

Section 1<\/p>\n

\n

Participant Deferral Account Interest Crediting While
\nin Active Status Assuming No Further Deferrals<\/strong><\/p>\n

\n

A. A Participant shall receive interest credited monthly equal to the
\nParticipant153s beginning-of-year (BOY) Deferral Account balance times the
\nDeclared Rate divided by twelve:<\/p>\n<\/p>\n

Interest crediting occurs up to the day the Participant begins to receive
\nannuity payments from the Plan.<\/p>\n<\/p>\n

Example of interest credited calculation<\/u><\/p>\n<\/p>\n\n\n\n\n\n\n
\n

BOY Deferral Account balance at 1\/1\/99<\/p>\n<\/td>\n

\n

= $500,000.00<\/p>\n<\/td>\n<\/tr>\n

\n

Declared Rate<\/p>\n<\/td>\n

\n

= 13.7%<\/p>\n<\/td>\n<\/tr>\n

\n

Declared Rate divided by 12 = 13.7%\/12<\/p>\n<\/td>\n

\n

= 1.1417%<\/p>\n<\/td>\n<\/tr>\n

\n

Credited interest for each month of 1999<\/p>\n<\/td>\n

\n

= $500,000 x .011417 = $5,708.50<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

B. A participant153s Deferral Account balance shall be increased each month
\nby taking the beginning-of-month (BOM) balance plus interest credited for the
\nmonth to equal the end-of-month (EOM) balance.<\/p>\n<\/p>\n

BOM balance + monthly interest credited = EOM balance<\/p>\n<\/p>\n

Example of monthly account growth<\/u><\/p>\n<\/p>\n\n\n\n\n\n\n
\n

BOM balance at 1\/1\/99<\/p>\n<\/td>\n

\n

= $500,000.00<\/p>\n<\/td>\n<\/tr>\n

\n

Monthly crediting dollars for 1998<\/p>\n<\/td>\n

\n

= $5,708.50<\/p>\n<\/td>\n<\/tr>\n

\n

EOM at 1\/31\/99<\/p>\n<\/td>\n

\n

= $500,000.00 + 5,708.50 = $505,708.50<\/p>\n<\/td>\n<\/tr>\n

\n

EOM at 2\/28\/99<\/p>\n<\/td>\n

\n

= $505,708.500 + 5,708.50 = $511,417.00<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

Appendix-1<\/p>\n

\n

<\/p>\n

\n

Section 2:
\nInterest Crediting, Deferral Account Balances, and Payments While in Pay
\nStatus<\/strong><\/p>\n

\n

A. Definition of Variables for Participant Payment Calculation<\/p>\n<\/p>\n

1. “n” = number of payments expected to be made to a Participant and
\nspouse. The number of expected payments shall be determined by: (1) The ages of
\nthe Participant and spouse at the time annuity payments first begin. (2) The
\nnumber of years that the Participant and spouse are expected to live, as
\ndetermined by an actuarially-based mortality table selected by the Committee.
\n(3) The frequency of payments made to the Participant. This frequency shall be
\ndetermined by the payroll procedures of the Company153s operating division
\nresponsible for administering the Participant153s payments.<\/p>\n<\/p>\n

Example of number of expected payments (assuming payments to begin on
\n10\/1\/99)<\/u><\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n
\n

Frequency of payments<\/p>\n<\/td>\n

\n

= monthly<\/p>\n<\/td>\n<\/tr>\n

\n

Participant age on 10\/1\/99<\/p>\n<\/td>\n

\n

= 50 yrs. old<\/p>\n<\/td>\n<\/tr>\n

\n

Spouse age on 10\/1\/99<\/p>\n<\/td>\n

\n

= 48 yrs. old<\/p>\n<\/td>\n<\/tr>\n

\n

Participant153s and spouse153s joint expected remaining lives<\/p>\n<\/td>\n

\n

= 476 months<\/p>\n<\/td>\n<\/tr>\n

\n

“n” for 10\/1\/99<\/p>\n<\/td>\n

\n

= 476<\/p>\n<\/td>\n<\/tr>\n

\n

“n” for 1\/1\/00<\/p>\n<\/td>\n

\n

= 473<\/p>\n<\/td>\n<\/tr>\n

\n

“n” for 1\/1\/01<\/p>\n<\/td>\n

\n

= 461<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2. “i” = interest rate per payment period such that when compounded over
\nthe entire year equals the Declared Rate.<\/p>\n<\/p>\n

“i” shall be expressed either as a weekly or monthly interest rate, depending
\non the frequency of annuity payments made by the operating division
\nadministering the Participant153s payments. If weekly, “i” is the interest rate
\nthat, when compounded over 52 periods, will equal the Declared Rate. If monthly,
\n“i” is the interest rate that, when compounded over 12 periods, will equal the
\nDeclared Rate.<\/p>\n<\/p>\n

Example of weekly and monthly interest rates<\/u><\/p>\n<\/p>\n

Declared Rate = 13.7%<\/p>\n

Weekly “i” = (1.137)1\/52 = .002472 or .2472%<\/p>\n

Monthly “i” = (1.137)1\/12 = .010757 or 1.0757%<\/p>\n<\/p>\n

3. The beginning-of-period balance (BOP balance) is the Participant153s
\nDeferral Account balance at any time before credited interest has been added for
\nthe period and payments have been subtracted for the period.<\/p>\n<\/p>\n

End-of-period balance (EOP balance) is the Participant153s Deferral Account
\nbalance at any point in time after credited interest has been added for the
\nperiod and payments have been subtracted for the period.<\/p>\n<\/p>\n

Example of EOP balance calculation<\/u><\/p>\n<\/p>\n

EOP balance = BOP balance + interest crediting : payment<\/p>\n

\n

Appendix-2<\/p>\n

\n

<\/p>\n

\n

B. Payments<\/p>\n<\/p>\n

1. Calculation of payments<\/p>\n<\/p>\n

At the beginning of each year (or at the beginning of a month when a
\nParticipant153s Deferral Account is first transferred from active status to
\npayment status), a payment shall be calculated for each Participant who has a
\nDeferral Account that is in the payment status. The periodicity of payments
\nshall depend on the payroll procedures of the operating division administering
\nthe Participant153s payments. The amount of the payment shall be effective for
\nthat calendar year (or portion of the calendar year).<\/p>\n<\/p>\n

The calculation of the payment amount is based on the present value of an
\nannuity formula. Specifically, the payment is given by:<\/p>\n<\/p>\n

\n\n<\/p>\n<\/p>\n

Example of a calculation with monthly payments<\/u><\/p>\n<\/p>\n

n = 476 months<\/p>\n

Monthly i = 1.0757%<\/p>\n

BOP balance = $500,000.00<\/p>\n

Payment = $5,411.73<\/p>\n<\/p>\n

Example of a calculation with weekly payments<\/u><\/p>\n<\/p>\n

n = 2,070 weeks<\/p>\n

Weekly i = 0.2472%<\/p>\n

BOP balance = $500,000.00<\/p>\n

Payment = $1,243.50<\/p>\n<\/p>\n

2. Interest Crediting for Payments<\/p>\n<\/p>\n

Interest crediting shall be calculated every payment period, with the
\ninterest amount equal to the beginning-of-period Deferral Account balance times
\nthe periodic interest rate<\/p>\n<\/p>\n

Example of interest crediting calculation (assuming monthly payments and a
\n13.7% Declared Rate)<\/u><\/p>\n<\/p>\n

BOP balance = $500,000.00<\/p>\n

Monthly i = 1.0757%<\/p>\n

Interest crediting = $500,000.00 x .010757 = $5,378.50<\/p>\n

\n

Appendix-3<\/p>\n

\n

<\/p>\n

3. Amortization of Participant Deferral Account Balances<\/p>\n

\n

Participant Deferral Account balances shall be amortized over the remaining
\nnumber of expected payment periods by adding to the beginning-of-period balance
\nthe interest credits earned during the period less the payment made for the
\nperiod to produce an end-of-period Deferral Account balance.<\/p>\n<\/p>\n

Example of Deferral Account balance amortization (assuming monthly
\npayments and a 13.7% Declared Rate)<\/u><\/p>\n<\/p>\n

BOP balance = $500,000.00<\/p>\n

Monthly i = 1.0757%<\/p>\n

Interest crediting = $5,378.50<\/p>\n

Payment = $5,411.73<\/p>\n

EOP balance = $500,000.00 + $5,378.50 : $5,411.73 = $499,966.77<\/p>\n<\/p>\n

C. Installment Termination Payments<\/p>\n<\/p>\n

1. [Intentionally left blank.]<\/p>\n<\/p>\n

2. The four equal annual installment payments are determined by using the
\npresent value of an annuity formula referenced in Section 2.B.1. of this
\nAppendix. The interest rate used in calculating the four payments shall be 12%.\n<\/p>\n<\/p>\n

Example of a four-year annual installment payout of a Deferral Account
\nbalance<\/u><\/p>\n<\/p>\n

n = 4<\/p>\n

Annual i = 12%<\/p>\n

BOP balance = $500,000.00<\/p>\n

Annual installment payments = $164,617.22<\/p>\n

\n

Appendix-4<\/p>\n

\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9007],"corporate_contracts_industries":[9495],"corporate_contracts_types":[9539,9542],"class_list":["post-40220","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-target-corp","corporate_contracts_industries-retail__department","corporate_contracts_types-compensation","corporate_contracts_types-compensation__deferred"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40220"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40220"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40220"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}