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The following is an excerpt from a DEF 14A SEC Filing, filed by TARGET CORP on 4/10/2000.
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TARGET CORP - DEF 14A - 20000410 - EXECUTIVE_COMPENSATION

Executive Compensation

SUMMARY COMPENSATION TABLE

 
   
   
   
  Long-Term Compensation
   
 
 
   
  Annual Compensation
   
 
 
   
  Awards
  Payouts
   
 
Name and Principal Position

  Year
  Salary($)(1)
  Bonus
($)(1)(2)

  Restricted Stock Awards($)(3)
  Securities Underlying Options(#)(4)
  LTIP
Payouts
($)(5)

  All Other Compensation
($)(6)(7)

 
Robert J. Ulrich
Chairman and Chief
Executive Officer of the Corporation and Target Stores
  1999
1998
1997
  1,027,874
1,027,874
1,027,874
  3,500,000
2,314,650
3,257,150
  0
0
0
  0
0
1,000,000
  4,756,597
1,635,121
1,503,635
  515,731
463,901
440,697
(8)
 
 
Gregg W. Steinhafel
President of Target Stores
 
 
 
1999
1998
1997
 
 
 
726,375
648,454
594,073
 
 
 
1,205,143
743,584
825,168
 
 
 
0
0
0
 
 
 
103,394
132,859
101,176
 
 
 
1,697,642
297,135
244,398
 
 
 
208,085
178,114
180,814
 
(9)
 
 
Kenneth B. Woodrow
Vice Chairman of the Corporation
 
 
 
1999
1998
1997
 
 
 
696,375
651,085
613,983
 
 
 
1,081,315
731,896
942,117
 
 
 
0
0
0
 
 
 
51,697
66,430
101,176
 
 
 
2,263,383
415,989
375,909
 
 
 
233,180
216,033
220,839
 
(10)
 
 
John E. Pellegrene
Executive Vice
President, Marketing of the Corporation and Target Stores
 
 
 
1999
1998
1997
 
 
 
549,410
513,115
495,893
 
 
 
686,677
467,791
599,008
 
 
 
0
0
0
 
 
 
29,542
37,960
57,814
 
 
 
2,211,607
237,708
225,647
 
 
 
137,783
126,415
131,668
 
(11)
 
 
Larry V. Gilpin
Executive Vice
President, Team, Guest and Community Relations of the Corporation and Target Stores
 
 
 
1999
1998
1997
 
 
 
538,990
513,115
487,240
 
 
 
675,256
460,404
580,983
 
 
 
0
0
0
 
 
 
29,542
37,960
57,814
 
 
 
2,211,607
237,708
225,647
 
 
 
142,667
134,620
146,835
 
(12)
 

(1)
Significant amounts of salary and bonus for the five named executive officers were not actually received. Receipt of such amounts was deferred through the Target Corporation SMG Executive Deferred Compensation Plan (the "New Plan"). Under the New Plan, participants may elect to defer up to 80% of annual base salary and bonus. The crediting rate alternatives under the New Plan mirror the investment accounts available for the TGT 401(k) Plan. Payout from the New Plan cannot be made until retirement, death or termination. Amounts deferred are subject to the same bankruptcy rules as are the Corporation's general debt obligations. Deferred amounts earn a return, a portion of which is categorized as reportable by the SEC proxy rules. Prior to December 31, 1996, deferrals were made through the Corporation's Deferred Compensation Plan (the "Old Plan"). Under the Old Plan, new deferrals were terminated except for deferrals in amounts equal to amounts automatically paid out eight years after their initial deferral. Earnings on the Old Plan are determined in accordance with a formula set forth in that plan. The Old Plan is otherwise substantially similar to the New Plan. Further information regarding reportable earnings under both plans is provided in the footnotes below.

(2)
The Corporation's executive officers and certain other members of management of the Corporation and its operating companies are eligible for incentive bonuses under the Corporation's Personal

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    Score Plan and the PTOC and EVA components of its Executive Incentive Plan. Information regarding the bonus plans is found in the Report of the Compensation Committee on Executive Compensation.

(3)
The Restricted Stock Awards column reflects rights to receive restricted stock of the Corporation under the LTIP. The restricted shares are not issued unless the executive remains employed by the Corporation for four years from the date of award and provides at least one year's notice prior to retiring from the Corporation. Upon expiration of the four-year period, the shares are issued and put into escrow and generally restricted until retirement. The holders of rights to receive restricted stock do not hold voting or dividend rights until after the shares are issued. Further information regarding restricted stock is included in the Report of the Compensation Committee on Executive Compensation. The number and value of restricted stock rights holdings at the end of the 1999 fiscal year (based on the closing price of $63.375 per share at the end of the fiscal year) are as follows:

 
  Number
  Value
Robert J. Ulrich   61,674   $ 3,908,590
Gregg W. Steinhafel   13,680     866,970
Kenneth B. Woodrow   19,044     1,206,914
John E. Pellegrene   15,384     974,961
Larry V. Gilpin   15,384     974,961
(4)
These options to purchase shares of the Corporation's Common Stock were awarded under the LTIP and the Long-Term Incentive Plan of 1999 ("LTIP of 1999"). The Report of the Compensation Committee on Executive Compensation includes further information regarding stock options.

(5)
Amounts reflect earnouts of performance shares under the LTIP. Based on the Corporation's competitive performance over the last four years, 100% of the performance shares granted to Mr. Ulrich in 1995 were earned and issued as restricted stock in 1999. Based on Target Stores' competitive performance over the last four years, 100% of the performance shares granted to the four remaining named executives in 1995 were earned and issued as restricted stock in 1999. Those four named executives were Target Stores employees on the date the award was made. The Report of the Compensation Committee on Executive Compensation includes further information regarding performance shares.

(6)
The Corporation has an Excess Long-Term Disability Program for certain key executives, including those executive officers listed above. The program is integrated with the employee-paid broad-based group disability plan (non-taxable benefit of $82,000 maximum per individual per year). Taxable excess disability benefits are paid according to a schedule based on compensation with the objective of a combined benefit amount replacing total after-tax income of approximately 80% at a compensation level of $170,000 per year, decreasing to approximately 40% at a compensation level of $2,000,000 per year. In order to receive excess benefits, the executive must be participating under the broad-based group disability plan. In the event of a qualifying disability, the actual cost to the Corporation would be the after-tax cost of the disability payments. No claims for benefits have ever been filed by an executive officer under the Excess Long-Term Disability Program. No compensation is assumed for this program since the incremental cost to the Corporation of this benefit cannot be determined actuarially.

(7)
The amounts reported include the following:
Matching contributions to the TGT 401(k) Plan, which all participating employees receive.

Amounts credited to the New Plan for matching contributions that could not be made to the TGT 401(k) Plan because of limitations imposed by the Internal Revenue Code of 1986, as amended (the "Tax Code").

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    Amounts categorized by the SEC as reportable earnings on compensation deferred in current and previous years.

(8)
Includes
$ 6,017   TGT 401(k) Plan matching contribution
$ 158,742   deferred compensation credit for matching contributions which could not be made to the TGT 401(k) Plan
$ 350,972   reportable earnings on deferred compensation

(9)
Includes
$ 7,714   TGT 401(k) Plan matching contribution
$ 65,138   deferred compensation credit for matching contributions which could not be made to the TGT 401(k) Plan
$ 135,233   reportable earnings on deferred compensation

(10)
Includes
$ 6,616   TGT 401(k) Plan matching contribution
$ 63,403   deferred compensation credit for matching contributions which could not be made to the TGT 401(k) Plan
$ 163,161   reportable earnings on deferred compensation

(11)
Includes
$ 6,442   TGT 401(k) Plan matching contribution
$ 43,307   deferred compensation credit for matching contributions which could not be made to the TGT 401(k) Plan
$ 88,034   reportable earnings on deferred compensation

(12)
Includes
$ 6,388   TGT 401(k) Plan matching contribution
$ 42,416   deferred compensation credit for matching contributions which could not be made to the TGT 401(k) Plan
$ 93,863   reportable earnings on deferred compensation

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OPTION GRANTS IN LAST FISCAL YEAR

 
  Individual Grants
  Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Appreciation for
Option Term(3)

 
Name

  Number of
Securities
Underlying
Options
Granted
(#)(1)

  % of Total
Options
Granted to
Employees in
Fiscal Year(%)

  Exercise
or Base
Price
($/SH)

  Expiration
Date

   
 
 
 
 
5%($)

   
 
 
 
 
10%($)

 
Robert J. Ulrich   0   0          
 
Gregg W. Steinhafel
 
 
 
103,394
 
(2)
 
5.57
 
 
 
67.7024
 
 
 
01/12/10
 
 
 
4,402,276
 
 
 
11,156,232
 
 
 
Kenneth B. Woodrow
 
 
 
51,697
 
(2)
 
2.78
 
 
 
67.7024
 
 
 
01/12/10
 
 
 
2,201,138
 
 
 
5,578,116
 
 
 
John E. Pellegrene
 
 
 
29,542
 
(2)
 
1.59
 
 
 
67.7024
 
 
 
01/12/10
 
 
 
1,257,830
 
 
 
3,187,587
 
 
 
Larry V. Gilpin
 
 
 
29,542
 
(2)
 
1.59
 
 
 
67.7024
 
 
 
01/12/10
 
 
 
1,257,830
 
 
 
3,187,587
 
 
 
All Shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19.5 billion
 
(4)
 
49.3 billion
 
(4)

(1)
Under the LTIP of 1999 each option was granted at the market value of the underlying Common Stock on the date of grant and has a ten-year term. The options are exercisable 25% on the first anniversary of the date of grant, with an additional 25% becoming exercisable on each of the next three anniversaries of the date of grant, except that Mr. Pellegrene's options are 100% exercisable on the first anniversary of the date of grant. The Report of the Compensation Committee on Executive Compensation includes additional information regarding the LTIP of 1999.

(2)
Granted January 12, 2000.

(3)
SEC rules require the information set forth in the 5% and 10% columns. The actual gains, if any, on stock option exercises depend on the future stock price of the Corporation's Common Stock. Since there is no means of accurately predicting the future price of the Corporation's Common Stock, no accurate determination can be made as to the value of a stock option at the time of the grant.

(4)
Increase in value of shares held by all shareholders based upon 456,868,621 shares outstanding on January 12, 2000, at a price of $67.7024 per share.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

 
   
   
   
   
  Value of Unexercised
In-the-Money Options
at Fiscal Year End
($)

 
   
   
  Number of Securities Underlying Unexercised Options at Fiscal Year End
(#)

Name

  Shares Acquired on Exercise
(#)

  Value Realized
($)

  Exercisable
  Unexercisable
  Exercisable
  Unexercisable
Robert J. Ulrich   65,034   4,049,043   696,312   1,980,268   35,412,402   76,928,804
Gregg W. Steinhafel   0   0   405,910   325,409   18,110,301   6,291,961
Kenneth B. Woodrow   9,906   551,743   456,923   223,890   21,464,655   5,667,626
John E. Pellegrene   32,636   1,854,551   166,075   128,651   7,231,389   3,276,238
Larry V. Gilpin   27,000   1,234,344   151,227   128,651   6,642,253   3,276,238

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Income Continuance Policy

    No officer of the Corporation is a party to an employment contract with the Corporation. As an alternative to the use of such contracts, the Corporation has adopted an Income Continuance Policy (the "ICP") and a Senior Management Group Income Continuance Policy for certain officers of the Corporation (the "SMG ICP").

    Mr. Ulrich, together with others, participates in the ICP. In 1988, the ICP was amended to exclude additional participants. Executives Steinhafel, Woodrow, Pellegrene and Gilpin were not participants under the ICP at the time it was amended. In the event a participant's employment is terminated by the Corporation, the ICP participant's compensation (salary and bonus) continues for a period of 18 to 24 months, depending on his or her length of service. If the participant's service with the Corporation is less than three years, the continuation is for 18 months; over eight years, the continuation is for 24 months; and between three and eight years, an amount determined by a schedule (more than 18 months but less than 24 months).

    Participants under the SMG ICP are members of the Corporation's Senior Management Group who are not participants under the ICP. The policy is similar to the ICP, except its time parameters are based on the participant's salary grade. Compensation may extend from 12 months to 24 months, based on a schedule which provides longer income continuation to those participants with higher grade levels. Executives Steinhafel, Woodrow, Pellegrene and Gilpin participate in the SMG ICP.

    All executive officers who are members of the Corporation's Senior Management Group are covered by one of these policies. Both policies require that participants must provide the Corporation a release of claims and they include offset provisions for certain other compensation from the Corporation and may include non-disparagement, non-competition and other requirements. Both policies provide that the policies cannot be terminated or amended to reduce future benefits unless two years prior notice is given to the participants in the policies. Both policies also provide that any executive who terminates employment or is terminated within two years of a change in control (as defined in the Corporation's Long-Term Incentive Plans) will be paid the present value of payments owing under the policies immediately after termination.

Amounts Paid Upon Termination

    When an executive's employment with the Corporation terminates, the executive receives payments in accordance with the specific guidelines under each of the Corporation's deferred compensation plan(s), 401(k) Plan and pension plans. Executives may also be entitled to exercise previously granted stock options that are then outstanding and, in certain circumstances, receive previously granted performance shares and restricted stock under the Corporation's Long-Term Incentive Plans that are then outstanding. Further information regarding stock options, performance shares and restricted stock is provided in the Report of the Compensation Committee on Executive Compensation.

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Pension

    All executive officers and other employees of the Corporation and our subsidiaries who have worked over 1,000 hours in a year and are at least 21 years of age are initially covered by the Corporation's pension plans. The following table shows the annual benefits under the Corporation's pension plans at age 65, on a life only basis, given the years of service and compensation levels set forth below:

Pension Plan Table

Average
Compensation

  15 Years
of Service

  20 Years
of Service

  25 Years
of Service

  30 Years
of Service

  35 Years
of Service

$ 100,000   $ 15,600   $ 20,800   $ 26,000   $ 27,250   $ 28,500
  200,000     35,100     46,800     58,500     61,000     63,500
  300,000     54,600     72,800     91,000     94,750     98,500
  400,000     74,100     98,800     123,500     128,500     133,500
  500,000     93,600     124,800     156,000     162,250     168,500
  1,000,000     191,100     254,800     318,500     331,000     343,500
  1,500,000     288,600     384,800     481,000     499,750     518,500
  2,000,000     386,100     514,800     643,500     688,500     693,500
  2,500,000     483,600     644,800     806,000     837,250     868,500
  3,000,000     581,100     774,800     968,500     1,006,000     1,043,500
  3,500,000     678,600     904,800     1,131,000     1,174,750     1,218,500
  4,000,000     776,100     1,034,800     1,293,500     1,343,500     1,393,500
  4,500,000     873,600     1,164,800     1,456,000     1,512,250     1,568,500
  5,000,000     971,100     1,294,800     1,618,500     1,681,000     1,743,500

    Currently under the Employee Retirement Income Security Act, as amended ("ERISA"), the maximum annual amount that can be paid under the Qualified Pension Plans to any individual is $135,000, unless grandfathered under prior limits. Amounts in excess of that maximum are paid under separate plans. In addition, the Corporation has supplemental plans that use the same formula as the Qualified Pension Plans use to pay benefits on compensation that is excluded from the Qualified Pension Plans formula by ERISA. The years of present credited service for benefit purposes of the Corporation's executive officers named in the Summary Compensation Table are as follows: Executives Ulrich, 32 years; Steinhafel, 20 years; Woodrow, 30 years; Pellegrene, 30 years; and Gilpin, 22 years. Average Compensation is the average cash remuneration, including deferred compensation, for the highest five calendar years of credited service in the last ten years. The compensation reflected in the "Salary" and "Bonus" columns of the Summary Compensation Table is cash compensation, including deferred compensation, for the fiscal year. If the employment of a participant is terminated prior to age 55, his or her pension will be less than the amount shown in the table, even if commencement of benefit payments is deferred until age 65. The actual amounts payable from the qualified pension trust are not subject to any deductions for Social Security benefits or other offset amounts. In addition to the qualified and supplemental pension plans, all executive officers who are members of the Senior Management Group participate in a program whereby such person's surviving spouse will receive the equivalent of a joint and 100% surviving spouse option, as calculated under the qualified pension plan, but without reference to compensation limits, payable to the officer's spouse for as long as he or she lives. The Corporation also has a supplemental plan that treats certain of its Senior Management Group as being five years older, but not older than 65, for purposes of the actuarial reduction of pension benefits at early retirement. All supplemental plans pay the lump sum present value of their respective benefits in the year following retirement. The pension table reflects amounts payable under all pension plans, whether qualified or non-qualified.

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