Exhibit 10(O)
TARGET CORPORATION
DEFERRED COMPENSATION TRUST
AGREEMENT
(As Amended and Restated
Effective January 1, 2009)
This Agreement is made, effective as
of the 1st day of January, 2009, by and between TARGET CORPORATION,
a Minnesota corporation (“Company”) and STATE STREET
BANK AND TRUST COMPANY (“Trustee”);
WHEREAS, Company and certain of its
wholly-owned subsidiaries have adopted the non-qualified deferred
compensation plans and certain other programs listed in
Appendix A (collectively, the “Plans” and
separately, a “Plan”);
WHEREAS, Company, each wholly-owned
subsidiary of Company which participates in a Plan and which has
indicated to the Trustee in writing its acceptance of this Trust
(or may so indicate in the future), and any corporation which
succeeds to the position of an employer hereunder by reason of
merger or consolidation, are referred to collectively herein as
“Employers” and individually as an
“Employer”;
WHEREAS, the Employers have incurred
or expect to incur liability under the terms of the Plans with
respect to the individuals participating in such Plans;
WHEREAS, Company has previously
established a trust (hereinafter called “Trust”) to
enable the Employers to contribute to the Trust assets that shall
be held therein, subject to the claims of each Employer’s
creditors in the event of an Employer’s Insolvency, as herein
defined, until paid to Plan participants and their beneficiaries in
such manner and at such times as specified in the Plans;
WHEREAS, it is the intention of the
parties that this Trust shall constitute an unfunded arrangement
and shall not affect the status of any Plan as an unfunded plan
maintained for the purpose of providing deferred compensation for a
select group of management or highly compensated employees for
purposes of Title I of the Employee Retirement Income Security Act
of 1974 (“ERISA”);
WHEREAS, it is the intention of
Company to make contributions to the Trust and to cause
contributions to be made to the Trust by other Employers to provide
a source of funds to assist in the meeting of the Employers’
liabilities under the Plans;
WHEREAS, Company and Trustee
previously entered into a Trust Agreement effective January 1,
2005;
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WHEREAS, it is the intention of
Company to amend the Trust Agreement to comply with Internal
Revenue Code section 409A;
WHEREAS the parties have agreed to
amend and restate the Trust Agreement in its entirety to read as
set forth herein;
NOW, THEREFORE, the parties do
hereby amend and restate the Trust and agree that the Trust shall
hereafter be comprised, held and disposed of as follows:
Section 1.
Maintenance of Trust .
(a)
Company has previously deposited
with Trustee in trust certain amounts which currently constitute
the principal of the Trust and shall continue to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement along with such additional contributions as may be
deposited with Trustee in the future.
(b)
The Trust hereby established shall
be irrevocable, except to the extent provided in
Section 4.
(c)
The Trust is intended to be a
grantor trust, of which each Employer is the grantor with respect
to the portion attributable to its contributions, within the
meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of
1986, as amended, and shall be construed accordingly. Company
or another Employer shall pay any and all federal, state or local
taxes on the Trust, or any part thereof, and on the income of the
Trust to the extent not paid by the assets of the Trust.
(d)
The principal of the Trust, and any
earnings thereon shall be held separate and apart from other funds
of the Employers and shall be used exclusively for the uses and
purposes of Plan participants and their beneficiaries and general
creditors as herein set forth. Plan participants and their
beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights
created under the Plans and this Trust Agreement shall be unsecured
contractual rights of Plan participants and their beneficiaries
against the Employers. Any assets held by the Trust which are
attributable to the contributions made by a particular Employer
will be subject to the claims of that Employer’s general
creditors under federal and state law in the event of Insolvency,
as defined in Section 3(a) herein.
(e)
Company, in its sole discretion, may
at any time, or from time to time, make (or cause other Employers
to make) additional deposits of cash or other eligible property in
trust with Trustee to augment the principal to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional
deposits. Such deposits to the Trust will be subject to the
following rules:
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(1)
Company, and other Employers, shall
not make deposits of cash or eligible property solely on the basis
of a change in the Company’s (or respective Employer’s)
financial health.
(2)
Company, and other Employers, will
not make deposits of cash or eligible property to the extent
restricted by Internal Revenue Code section 409A(b)(3).
(f)
The following provisions shall apply
in the event of an actual or potential Change of Control as defined
in Section 13(d):
(1)
In the event there is scheduled a
duly called shareholders meeting of Company with respect to which
(i) any person or entity has filed a definitive proxy
statement with the Securities and Exchange Commission soliciting
proxies to effect at such meeting a Change of Control of the nature
described in Section 13(d)(1) (a “Change of Board
Control”) or (ii) Company has included in a definitive
proxy statement of Company filed with the Securities and Exchange
Commission nominees of one or more persons or entities for election
to the Board of Directors whose election is opposed by the Board of
Directors but the election of whom would constitute a Change of
Board Control, each Employer shall make contributions to the Trust,
no sooner than three business days or later than one business day
prior to the scheduled date of the meeting, of cash or other
eligible property which, together with amounts attributable to its
previous contributions to the Trust, have a value equal to the
amount required under paragraph (5), unless the Board of Directors
of Company determines in its sole discretion, not later than three
business days prior to the scheduled date of the meeting, that the
Trust shall not be funded and provides a written notice to the
Employer of that determination prior to the time the Employer makes
the contribution. However, no such contribution shall be made
pursuant to this paragraph (1) if, prior to the time the
Employer makes any such contribution, a written settlement
agreement is entered into with Company or the nominations of
nominees are otherwise withdrawn in such a manner that a Change of
Board Control will not be further pursued or effected at such
meeting.
(2)
In the event a Change of Control
that does not constitute a Change of Board Control, or any offer or
written agreement of the nature hereinafter described in clause
(i) that, if completed or consummated, would constitute a
Change of Control, occurs prior to any Change of Board Control,
each Employer, as promptly as practicable, but not sooner than 20
days (subject to extension as hereinafter provided) and not later
than 30 days (subject to extension as hereinafter provided) after a
public announcement of (i) any offer to acquire beneficial
ownership of Voting Stock (as defined in Article IV of the
Restated Articles of Incorporation, as amended, of Company) or of
any written agreement that would result in a Change of Control
pursuant to Section 13(d)(2) or (3) if the offer is
completed or the agreement is consummated or (ii) the
occurrence of any Change of Control other than a Change of Board
Control (the “Contribution
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Period”),
shall make contributions to the Trust of cash or other eligible
property which, together with amounts attributable to its previous
contributions to the Trust, have a value equal to the amount
required under paragraph (5), unless the Board of Directors
determines, in its sole discretion, that funding of the Trust shall
not occur and provides a written notice to the Employer of that
determination prior to the earlier of (X) the time the
Employer makes the contribution or (Y) a Change of Board
Control. At any time prior to the commencement of the
Contribution Period (or any extension of such commencement date
made in accordance with this sentence), the Board of Directors (if
no Change of Board Control shall have occurred), in its sole
discretion, may extend the commencement date and/or the duration of
the Contribution Period (or any previous extension of either
thereof) by written notice to the Employers. However, no such
contribution shall be made pursuant to this paragraph (2) if,
prior to the time the Employer makes any such contribution, no
Change of Control has occurred and the offer or agreement that, if
completed or consummated, would result in a Change of Control is
terminated.
(3)
Any written notice from the Board of
Directors relating to a contribution pursuant to paragraph
(1) or (2) may be modified or withdrawn by a later dated
written notice of the Board of Directors delivered at any time or
from time to time prior to the earlier of (i) the time such
contribution is made or (ii) the end of the last day on which
the original notice could have been given in accordance with the
provisions of paragraph (1) or (2).
(4)
Neither Trustee nor any Plan
participant or beneficiary shall have any right to compel any
contributions under this subsection (f) or to compel any
Employer or the Board of Directors to take any action under this
subsection. In deciding whether or not to take any action
authorized under this subsection (f), the Board of Directors shall
have no fiduciary or other duty to participants and
beneficiaries.
(5)
If the Trust is to be funded
pursuant to paragraph (1) or (2), the amount of each
Employer’s contribution shall be 120% of the amount
determined by the General Counsel and the Chief Financial Officer
of Company, in their sole discretion, to be sufficient to pay the
present value of the Employer’s total projected liability
under the Plans with respect to participants employed or formerly
employed by that Employer or their beneficiaries, plus two percent
of such amount as a reserve for payment of Trustee fees and
expenses of the Trust. The determination of an
Employer’s “total projected liability” under a
Plan for purposes of this paragraph shall be made utilizing the
definition specified in Appendix B applicable to the Plan, if any,
and otherwise by utilizing the assumptions prescribed in
Section 13(e).
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(6)
On or before the date of a
contribution made pursuant to this subsection (f), each Employer
shall deliver to the Trustee a schedule showing its best estimate
of the aggregate amount of benefits payable by it under each
Plan.
(g)
In the event of a final and
unappealable determination by a court of competent jurisdiction or
the U. S. Department of Labor that one or more Plans do not
satisfy the requirements for being maintained primarily for the
purpose of providing deferred compensation for a select group of
management or highly compensated employees for purposes of
Title I of ERISA, Trustee shall immediately segregate the
assets attributable to such Plan or Plans into a separate
Trust. Said separate Trust shall continue to be held and
administered by Trustee in accordance with this Agreement until the
provisions applicable to the separate Trust are amended pursuant to
Section 12.
(h)
For purposes of this Trust,
“eligible property” means property in one or more of
the following categories:
(1)
Cash.
(2)
Treasury or other government agency
securities not exceeding one year in maturity.
(3)
Money market securities.
(4)
An ownership interest in the Target
Corporation Credit Card Master Trust, which may be evidenced by,
among other things, a participation or certificates.
(5)
Corporate owned life insurance
policies
(6)
In the event that the total of the
property available under paragraphs (1) through (4) is
not sufficient to provide the entire contribution to be made by an
Employer under subsection (f), “eligible property”
shall also include unencumbered real property owned by the Employer
with a fair market value that is at least equal to the additional
amount necessary to provide the entire contribution that is to be
made.
The fair market value of the
property to be contributed under paragraphs (2) through
(6) of this subsection shall be determined by the General
Counsel and the Chief Financial Officer of Company in their sole
discretion, taking into account any reduction in that value that
could result from the lack of an orderly liquidation of a
particular item or items of property.
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Section 2. Payments
to Plan Participants and Their Beneficiaries .
(a)
(1)
As soon as reasonably possible after
a Change of Control occurs that results in funding of the Trust
under Section 1(f) (provided that the funding has not
been returned to the Employers pursuant to Section 4),
Company’s Director of Executive Compensation (or his or her
successor) shall deliver to Trustee a Payment Schedule showing the
amount payable to each Plan participant or beneficiary under each
Plan.
(i)
The Payment Schedule will provide
the amount payable, determined as of the date of the Change of
Control, as well as the method and rate to credit earnings on such
amounts, if any, until amounts are paid to the Plan participant,
and the date on which the amounts are payable.
(ii)
The Payment Schedule shall, with
respect to any amounts subject to Internal Revenue Code section
409A, only provide for payments under an allowable distribution
event under Code section 409A. The Payment Schedule shall
reflect the time and form of distribution as provided under the
respective Plan.
(2)
Except as otherwise provided in
subsection (c), Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such
Payment Schedule, and may rely conclusively on such Payment
Schedule in making payments.
(3)
Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that
may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plans and shall pay amounts
withheld to the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by the
Employers. Trustee may rely on instructions from Company as
to any required withholding and shall be fully protected hereunder
in relying on such instructions. For purposes of the
preceding sentence, a failure by Company to provide any
instructions as to required withholding may be deemed by Trustee to
be an instruction by Company that no withholding is
required.
(b)
Prior to a Change of Control
described in subsection (a), the entitlement of a Plan participant
or his or her beneficiaries to benefits under the Plans shall be
determined by Company or such party as it shall designate under the
Plans, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plans. Company
shall make (or cause other Employers to make) payment of benefits
directly to Plan participants or their beneficiaries as they become
due under the terms of the Plans,
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and Trustee shall have no obligation
to make such payments prior to such Change of Control.
(c)
In the event of a dispute over a
payment under subsection (a) following a Change of Control, a
participant or beneficiary who claims to be entitled to a larger
payment from the Plans than shown in the Payment Schedule may
submit a written claim for payment to Trustee within 90 days from
the date the payment was otherwise scheduled to be made. The
claim shall be processed as follows:
(1)
Trustee shall give notice of the
claim to Company. If Trustee receives no notice of response
from Company within 30 days after the date Company is given the
notice of claim, Trustee shall pay the participant or beneficiary
the amount claimed from the assets in the Trust held on behalf of
such participant. If a notice of response is received within
such 30 days, Trustee shall consider the claim, including
Company’s response. If the merits of the claim depend
on compensation, service or other data in the possession of Company
and such information is not provided to Trustee by Company, Trustee
may rely upon information provided by the participant or
beneficiary.
(2)
Trustee shall give notice to the
participant or beneficiary and Company of its decision on the
claim, which shall be made within any period applicable to the
particular Plan. The participant or beneficiary shall then
pursue the appeals procedure for the Plan, if any, if he or she
wishes to contest Trustee’s decision. Either the
participant or beneficiary (after any applicable claims procedure
has been exhausted) or Company may challenge Trustee’s
decision by filing suit in a court of competent jurisdiction.
If no such suit is filed within 60 days after notice of
Trustee’s decision (and exhaustion of any applicable appeals
procedure provided for a Plan), the decision shall become final and
binding on all parties. If the decision is to grant the
claim, Trustee shall make payment to the participant or beneficiary
of the appropriate amount; provided, however, that the amount of
any distribution from the Trust shall not exceed the total amount
of assets held in the Trust on behalf of such
participant.
(3)
Trustee may decline to decide a
claim and may file suit to have the matter resolved by a court of
competent jurisdiction. All of Trustee’s expenses in
the court proceeding, including attorneys’ fees, shall be
allowed as administrative expenses of the Trust.
(4)
In the event of a dispute to be
resolved under this subsection (c), Trustee may retain a third
party to review the calculations and the payment amounts and advise
Trustee as to the correct amount to be paid. All expenses of
such a third party shall be allowed as administrative expenses of
the Trust.
(d)
If payment is made to a participant
or beneficiary under this Section 2, the obligation of the
Employers under the terms of the applicable Plan or Plans shall be
extinguished to
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the extent of the amount paid.
Trustee has no obligation to make payments to a participant or
beneficiary from the Trust under this Section 2 except to the
extent amounts have been contributed to the Trust with respect to
such person.
Section 3. Trustee
Responsibility Regarding Payments When Employer is Insolvent
.
(a)
Trustee shall cease
payment
