Target Corporation Supplemental Pension Plan II

 

 

TARGET CORPORATION

SPP II

(2009 Plan Statement)

 

TABLE OF CONTENTS

 

SECTION 1 INTRODUCTION; DEFINITIONS	1
1.1 History	1
1.2 Definitions	1
1.2.1 Actuarial Equivalent	1
1.2.2 Affiliate	1
1.2.3 Beneficiary	1
1.2.4 Board	1
1.2.5 Change-in-Control	1
1.2.6 Code	2
1.2.7 Committee	2
1.2.8 Company	3
1.2.9 Officer	3
1.2.10 Officer EDCP	3
1.2.11 Participant	3
1.2.12 Participating Employer	3
1.2.13 Pension Plan	3
1.2.14 Plan	3
1.2.15 Plan Administrator	3
1.2.16 Plan Rules	3
1.2.17 Plan Statement	3
1.2.18 SPP V	3
1.2.19 Termination of Employment	3
1.2.20 Trust	4
SECTION 2 PARTICIPATION	5
2.1 Eligibility	5
2.2 Termination of Participation	5
2.3 Rehire	5
2.4 Effect on Employment	5
SECTION 3 BENEFIT – TRADITIONAL FINAL AVERAGE PAY FORMULA	7
3.1 Amount of Pension	7
3.2 Rehire	8
SECTION 4 BENEFIT – PERSONAL PENSION ACCOUNT	9
4.1 Amount of Pension	9
4.2 Rehire	10
SECTION 5 VESTING	11
5.1 General Rule	11
5.2 Rehire	11
5.3 Transfers to Officer EDCP	11

 

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SECTION 6 TRANSFERS	12
6.1 Benefit Distributions	12
6.2 Transfers to Officer EDCP	12
SECTION 7 NATURE OF INTEREST	13
7.1 Unfunded Obligation	13
7.2 Spendthrift Provision	13
SECTION 8 ADOPTION, AMENDMENT AND TERMINATION	14
8.1 Adoption	14
8.2 Amendment	14
8.3 Termination	14
SECTION 9 CLAIM PROCEDURES	16
9.1 Claim Procedures	16
9.2 Rules and Regulations	18
9.3 Limitations and Exhaustion	18
SECTION 10 PLAN ADMINISTRATION	20
10.1 Plan Administration	20
10.2 Conflict of Interest	20
10.3 Committee Membership and Authority	21
10.4 Service of Process	21
10.5 Choice of Law	21
10.6 Responsibility for Delegate	21
10.7 Expenses	21
10.8 Errors in Computations	21
10.9 Indemnification	21
10.10 Notice	22
SECTION 11 CONSTRUCTION	23
11.1 ERISA Status	23
11.2 IRC Status	23
11.3 Rules of Document Construction	23
11.4 References to Laws	23
11.5 Appendices	23

 

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SECTION 1

INTRODUCTION; DEFINITIONS

 

1.1                                History.   The Company originally established this Plan (formerly known as the Target Corporation Supplemental Pension Plan II) effective as of January 1, 1995.  The Plan is a non-qualified, unfunded plan intended to replace certain pension benefits for a select group of management or highly compensated employees who are officers that cannot be provided under the Pension Plan due to certain limitations imposed by the Code.  The Plan provides retirement benefits not provided under the Pension Plan as a result of deferrals into the Officer EDCP.  The Plan is intended to be a “top hat plan” as defined under the Employee Retirement Income Security Act of 1974, as amended from time to time.  Since the effective date of this Plan, upon a Participant becoming an Officer of the Company, the benefit due under the Target Corporation SPP V is transferred to this Plan.  Effective April 30, 2002, for all Officers who were vested in the benefit under this Plan, the Company transferred the present value of the vested benefit due under this Plan to the Officer EDCP.  After such transfer, no benefits were due or payable from this Plan. Further, after the transfer, the individuals would no longer participate in this Plan or be eligible for further accruals under this Plan.   Effective January 1, 2005 (and other effective dates as specifically provided), this Plan was operated in compliance with Code section 409A.  This Plan Statement, which is intended to comply with Code section 409A, is effective January 1, 2009.

 

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

 

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

 

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

 

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

 

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

 

1.2.5                      Change-in-Control.

 

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

 

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

 

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

 

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

 

(ii)                                 30% or more of the outstanding voting power of the Voting Stock of the Company is acquired or beneficially owned (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company) by any person (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company) other than an entity resulting from a Business Combination in which clauses (x) and (y) of subparagraph (iii) apply, or

 

(iii)                              the consummation of a merger or consolidation of the Company with or into another entity, a statutory share exchange, a sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets or a similar business combination (each, a “Business Combination”), in each case unless, immediately following such Business Combination, (x) all or substantially all of the beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the voting power of the then outstanding shares of voting stock (or comparable voting equity interests) of the surviving or acquiring entity resulting from such Business Combination (including such beneficial ownership of an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions (as compared to the other beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination) as their beneficial ownership of the Company’s Voting Stock immediately prior to such Business Combination, and (y) no person (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company) beneficially owns, directly or indirectly, 30% or more of the voting power of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity (other than a direct or indirect parent entity of the surviving or acquiring entity, that, after giving effect to the Business Combination, beneficially owns, directly or indirectly, 100% of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity), or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.2.11               Participant.   A “Participant” is an Employee who becomes a Participant in this Plan in accordance with the provisions of Section 2.  An Employee who has become a Participant shall be considered to continue as a Participant in this Plan until the date of the Participant’s death or, if earlier, the date when the Participant is no longer eligible and upon which the Participant no longer has a benefit due under this Plan (that is, a transfer of the benefit has been made pursuant to Section 6, or the Participant’s benefit under this Plan wears away, or the Participant’s benefit under this Plan has been forfeited as hereinafter provided).

 

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

 

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

 

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

 

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

 

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

 

1.2.17               Plan Statement.   “Plan Statement” means this document entitled “Target Corporation SPP II (2009 Plan Statement),” as adopted by the Company, effective as of January 1, 2009, as the same may be amended from time to time.

 

1.2.18               SPP V.   “SPP V” means the Target Corporation SPP V.

 

1.2.19               Termination of Employment.

 

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

 

(b)                                 For purposes of determining when a distribution will be made under the Plan, a “Termination of Employment” will be deemed to occur if, based on the relevant facts and circumstances to the Participant, the Participating Employer, all Affiliates and Participant reasonably anticipate that the level of bona fide future

 

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services to be performed by the Participant for the Participating Employer and all Affiliates will permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36-month period.

 

(c)                                   A bona fide leave of absence that is six months or less, or during which an individual retains a reemployment right, will not cause a Termination of Employment.  In the case of a leave of absence without a right of reemployment that exceeds the time periods described in this paragraph, a Termination of Employment will be deemed to occur once the leave of absence exceeds six months.

 

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

 

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

 

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SECTION 2

PARTICIPATION

 

2.1                                Eligibility.

 

2.1.1                      General Requirements.   An Employee is eligible to participate in this Plan on and after the date he or she:

 

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

 

(b)                                  is an Officer.

 

2.1.2                      Applicable Benefit Formula.   A Participant’s benefit under this Plan will be determined based on the applicable benefit formula under the Pension Plan.

 

(a)                                   A Participant with a Pension Plan benefit determined solely by the traditional final average pay formula will have his or her benefit under this Plan determined pursuant to Section 3.

 

(b)                                  A Participant with a Pension Plan benefit determined solely by the personal pension account formula will have his or her benefit under this Plan determined pursuant to Section 4.

 

(c)                                   A Participant with a Pension Plan benefit determined in part by the traditional final average pay formula and in part by the personal pension account formula will have his or her benefit under this Plan determined pursuant to Section 3 with respect to the period earning a traditional final average pay benefit under the Pension Plan, and Section 4 with respect to the period earning a personal pension account benefit under the Pension Plan.

 

2.2                                Termination of Participation.   Except as otherwise specifically provided in this Plan or by the Committee, an Employee who ceases to satisfy the requirements of Section 2.1.1 or whose benefit is transferred to the Officer EDCP pursuant to Section 6.2 is not eligible to continue to participate in this Plan, and will not accrue any additional benefits under this Plan.  The Participant’s benefit under this Plan will continue to be governed by the terms of this Plan until such time as the Participant’s benefit is transferred, wears away, or is forfeited in accordance with the terms of this Plan.  A Participant or Beneficiary will cease to be such as of the date on which his or her entire benefit under this Plan has been transferred, wears away, or forfeited.

 

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

 

2.4                                Effect on Employment.

 

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

 

2.4.2                      Not an Employment Contract.   The Plan is not and shall not be deemed to constitute a contract of employment between any Participating Employer and any Employee or

 

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other person, nor shall anything herein contained be deemed to give any Employee or other person any right to be retained in any Participating Employer’s employ or in any way limit or restrict any Participating Employer’s right or power to discharge any Employee or other person at any time and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant in this Plan.

 

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3.1.2       Death Benefit.  If a Participant dies prior to receiving a transfer of his or her benefit determined under this Section 3, the death benefit to be transferred pursuant to Section 6 will be calculated in the same manner as the Participant’s benefit under this Section 3, and for purposes of Section 3.1.1, as if the Participant were alive and entitled to a benefit under the Pension Plan, the SPP V, and the SPP I as of his or her date of death.

 

3.2          Rehire.   If a Participant or former Participant is rehired and eligible to participate in this Plan, then a Participant’s service prior to reemployment will be considered for benefit purposes only to the extent such service would be recognized for benefit purposes under the traditional final average pay formula of the Pension Plan.

 

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SECTION 4

BENEFIT – PERSONAL PENSION ACCOUNT

 

4.1         Amount of Pension.

 

4.1.1                      General Rule.        A Participant of this Plan whose benefit under the Pension Plan is determined all or in part by the personal pension account formula, shall be entitled to a pension benefit under this Plan that is the Actuarial Equivalent of the sum of:

 

(a)                                   The pension benefit of the Participant transferred to this Plan as determined under Section 4 of SPP V, and

 

(b)                                  the excess, if any, of:

 

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

 

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

 

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

 

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

 

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(ii)                                   The sum of:

 

(A)                               The amount of the credits actually made to the Participant’s personal pension accou