|TARGET CORP filed this Form DEF 14A on 04/29/2013|
Potential Payments Upon Termination or Change-in-Control
This section explains the payments and benefits to which the NEOs are entitled in various termination of employment scenarios. Except with respect to Mr. Scovanner, these are hypothetical situations only as all of our other NEOs are currently employed by us. For purposes of this explanation, we have assumed that termination of employment occurred on February 2, 2013, the last day of our 2012 fiscal year, and for the change-in-control analysis, that we incurred a change-in-control at our fiscal year-end closing stock price of $61.15 per share. For Mr. Scovanner, the only scenario provided is Voluntary Termination, which he experienced on November 3, 2012 when he retired from Target.
The intent of this section is to isolate those payments and benefits for which the amount, vesting or time of payment is altered by the termination of employment in the described circumstances. This section does not cover all amounts the NEOs will receive following termination. Specifically, the NEOs are entitled to receive their vested balances under our pension and deferred compensation plans, as disclosed in the preceding tables, and payment of accrued vacation balances under all employment termination scenarios. In addition, unless the termination is for cause, they retain their vested stock option awards, and if they meet specified minimum age and years of service requirements at the time of termination, the unvested portion of stock options, PSUs, restricted stock and RSUs are not forfeited, and vesting will continue according to the original schedule for defined periods. Cause is generally defined as deliberate and serious disloyal or dishonest conduct. A description of these age and years of service requirements, applicable to all executive officers who receive equity awards, is set forth in the notes under the Outstanding Equity Awards at 2012 Fiscal Year-End table.
The paragraphs below explain the payments and benefits for which the amount, vesting or time of payment is altered by each employment termination situation (referred to as Post-Termination Benefits). The age and years of service for each executive officer is located in the Pension Benefits for Fiscal 2012 table. All references to RSUs below include the fiscal 2010 restricted stock award to Mr. Steinhafel, as the terms of that award are, for purposes of this section, identical to RSUs.
If a NEO voluntarily terminates employment, the potential Post-Termination Benefits consist of the potential right to continue to receive above-market interest in our former deferred compensation plan, the ODCP, or receive his account balance as a lump-sum payment. Under the ODCP, the participant will continue to receive interest at the plan's crediting rate (as described in the narrative under the Nonqualified Deferred Compensation for Fiscal 2012 table) over the joint life of the participant and his beneficiary in accordance with the participant's distribution election.