UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934 (Amendment No.     )

 

Filed by the Registrant  o

 

Filed by a Party other than the Registrant þ

 

Check the appropriate box:

 

þ  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to § 240.14a-12

 

Target Corporation

(Name of Registrant as Specified In Its Charter)

 

Pershing Square, L.P.
Pershing Square II, L.P.
Pershing Square IV Trade-Co, L.P.
Pershing Square IV-I Trade-Co, L.P.
Pershing Square International, Ltd.
Pershing Square International IV Trade-Co, Ltd.
Pershing Square International IV-I, Ltd.
William A. Ackman
Michael L. Ashner
James L. Donald
Ronald J. Gilson
Richard W. Vague
Ali Namvar
Roy J. Katzovicz

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April   , 2009

 

Dear Fellow Target Shareholder:

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

Credit Cards

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

Shareholder Representation and Corporate Governance

 

 

 

Credit Ratings

 

 

 

Corporate Elections

 

 

 

 

 

 

 

 

 

Sincerely,

 

William A. Ackman

 

 

PRELIMINARY PROXY STATEMENT; SUBJECT TO COMPLETION

 

DATED APRIL  , 2009

 

PERSHING SQUARE FUNDS PROXY STATEMENT
2009 ANNUAL MEETING OF SHAREHOLDERS OF TARGET CORPORATION

 

This proxy statement is being furnished to the shareholders of Target Corporation, a Minnesota corporation, with its principal executive offices at 1000 Nicollet Mall, Minneapolis, Minnesota 55403, which we sometimes refer to as Target or the company, in connection with the solicitation of GOLD proxies by the Pershing Square Funds for use at the 2009 Annual Meeting of Shareholders of Target (including any adjournments, continuations or postponements thereof and any meeting held in lieu thereof), which we refer to as the 2009 Annual Meeting, which is scheduled to be held at the Target Store, 1250 West Sunset Drive, Waukesha, Wisconsin on Thursday, May 28, 2009, at 1:00 p.m. Central Daylight Time.

 

We are soliciting your proxy for the 2009 Annual Meeting regarding the following proposals:

 

 

More information about the Pershing Square Nominees can be found under “PROPOSAL 2A — ELECTION OF FOUR CLASS III DIRECTORS — The Pershing Square Nominees” and “PROPOSAL 2B — ELECTION OF THE FIFTH CLASS III DIRECTOR” beginning on page 5 of this proxy statement. Approximately 7.8% of the outstanding shares of Target common stock are held for the account of the Pershing Square Funds and their affiliates, through a combination of common stock and options. Details of the Target shares held for the account of the Pershing Square Funds can be found under “PARTICIPANTS IN THE SOLICITATION — Certain Information About the Pershing Square Funds” beginning on page 12 of this proxy statement.

 

YOUR VOTE IS EXTREMELY IMPORTANT.  WE URGE YOU TO VOTE AGAINST THE BOARD REDUCTION PROPOSAL AND VOTE FOR THE PERSHING SQUARE NOMINEES BY SIGNING, DATING AND RETURNING THE GOLD PROXY CARD. YOU MAY ALSO VOTE BY TELEPHONE USING THE TOLL-FREE NUMBER ON THE GOLD PROXY CARD OR VIA THE INTERNET USING THE INTERNET ADDRESS ON THE GOLD PROXY CARD.

 

The 2009 Annual Meeting is scheduled to be held on May 28, 2009 and only holders of record as of March 30, 2009 will be entitled to notice of, and be permitted to vote at, the 2009 Annual Meeting. A majority of the outstanding shares of Target common stock must be represented at the 2009 Annual Meeting in person or by proxy in order to satisfy applicable quorum requirements.

This Proxy Statement and the GOLD proxy card are first being furnished to shareholders on or about April   , 2009. We are providing this proxy statement in definitive form to all Target shareholders to whom GOLD proxies are furnished by the Pershing Square Funds, or from whom GOLD proxies are requested by the Pershing Square Funds, no later than the time that GOLD proxies are furnished or such requests are made.

 

As used in this proxy statement, the terms “we”, “us” and “our” refer to Pershing Square, L.P., Pershing Square II, L.P., Pershing Square IV Trade-Co, L.P., Pershing Square IV-I Trade-Co, L.P., Pershing Square International, Ltd., Pershing Square International IV Trade-Co, Ltd. and Pershing Square International IV-I Trade-Co, Ltd. (which we collectively refer to as the Pershing Square Funds or simply Pershing Square), William A. Ackman, Ali Namvar and Roy J. Katzovicz. The Pershing Square Funds are research-intensive, fundamental investors in the public markets which seek to identify investments where market prices exhibit significant valuation discrepancies compared to our assessment of intrinsic value. Additional information about the Pershing Square Funds and the Pershing Square Nominees, who are also participants in this solicitation, can be found below in the section titled “CERTAIN INFORMATION CONCERNING THE PERSHING SQUARE FUNDS AND THE OTHER PARTICIPANTS IN THE SOLICITATION”.

 

THIS SOLICITATION IS BEING MADE BY THE PERSHING SQUARE ENTITIES AND NOT ON BEHALF OF THE BOARD OR THE MANAGEMENT OF TARGET.

 

Voting Methods

 

 

If you hold your shares through a bank, broker or other nominee holder and you do not intend to vote in person at the 2009 Annual Meeting, only that nominee holder can vote your shares, and only after receiving specific voting instructions from you. Please contact your bank, broker or nominee holder and instruct them to vote a GOLD proxy card “AGAINST” the board reduction proposal and “FOR” the Pershing Square Nominees.

 

If the Pershing Square Funds receive GOLD proxies that have no explicit voting instructions, the Pershing Square Funds intend to vote such proxies (i) “AGAINST” the company’s proposal to determine that the number of directors constituting the board is 12, rather than 13, (ii) “FOR” the election of William A. Ackman, Michael L. Ashner, James L. Donald and Richard W. Vague as directors of the company, (iii) “FOR” the election of Ronald J. Gilson as a director of the company, (iv) “FOR” the ratification of the appointment of Ernst & Young LLP and (v) “FOR” the company’s proposal to approve the performance measures available under the Target Corporation Long-Term Incentive Plan, and to “ABSTAIN” from voting such proxies on the shareholder proposal regarding annual advisory vote on executive compensation.

 

If elected, consistent with their fiduciary duties, the Pershing Square Nominees are committed to acting in the best interest of the shareholders of Target. We strongly urge you to vote “AGAINST” the board reduction proposal and vote “FOR” the election of William A. Ackman, Michael L. Ashner, James L. Donald, Richard W. Vague and Ronald J. Gilson.

Revocation of Proxies

 

Shareholders who have executed and delivered a proxy card may revoke it at any time before the proxy is exercised by:

 

 

We strongly urge you not to sign any proxy card sent to you by Target. If you have already voted for the board reduction proposal and/or the company’s nominees, you can change your vote by signing, dating and returning the GOLD proxy card to D.F. King & Co., Inc. at its address set forth below or by making use of the Internet and telephone voting facilities described above. If you hold your shares through a bank, broker or other nominee holder, you will need to contact your bank, broker or nominee and follow their instructions if you want to revoke a proxy or change your vote. Only your latest signed and dated proxy will count at the 2009 Annual Meeting.

 

If you have any questions, require assistance in voting your GOLD proxy card, or need additional copies of our proxy material, please contact our proxy solicitor at:

 

D.F. King & Co., Inc.
48 Wall Street
New York, NY 10005
Toll-free: (800) 290-6427
Banks and brokers: (212) 269-5550

 

BACKGROUND OF THE SOLICITATION

 

In February of 2009, Pershing Square discussed with Mr. Gregg W. Steinhafel, Chairman, President and Chief Executive Officer of Target, the possibility of appointing certain individuals nominated by Pershing Square as directors of the company. In response, Mr. Steinhafel asked us to schedule a meeting with the Nominating Committee of the board, which we did promptly. On March 3, 2009, Mr. William A. Ackman, the founder and managing member of the general partner of Pershing Square Capital Management, L.P., and one other individual suggested by Pershing Square for consideration met with the Nominating Committee at the company’s headquarters in Minneapolis. Subsequent to the March 3rd meeting, Pershing Square proposed three additional individuals for consideration by the Nominating Committee. On March 12, 2009, Target informed us that its board had declined to extend an invitation to any of the individuals identified by us as candidates for board membership.

 

On March 16, 2009, we delivered a notice of nomination to the company in accordance with the procedures set forth in the company’s Restated Articles of Incorporation, proposing to nominate the following five individuals for election as directors at the 2009 Annual Meeting: Messrs. William A. Ackman, Michael L. Ashner, James L. Donald, Ronald J. Gilson and Richard W. Vague.

 

On the same day, Target issued a press release indicating that the board is comprised of 12 directors and that the company is nominating four candidates for election at the 2009 Annual Meeting. We believe that while there are 12 sitting directors, the board consists of 13 seats with five Class III seats up for election at the 2009 Annual Meeting. When Target’s former Chairman and CEO resigned early this year, a vacancy was created, and the board was not subsequently decreased in the manner mandated by the company’s charter — which provides that any decrease of the size of the board to below 13 members requires the affirmative vote of its shareholders.

 

On March 24, 2009, the company filed a preliminary proxy statement with the Securities and Exchange Commission, which we refer to as the SEC, setting forth four specific proposals to be voted on by shareholders of the company at the 2009 Annual Meeting, including the election of four Class III directors.

 

On March 26, 2009, Mr. Ackman sent a letter to Mr. Steinhafel, setting forth the basis for our understanding that the board currently consists of 13 members and that five seats are up for election at the 2009 Annual Meeting. In the letter, Mr. Ackman suggested that Target could resolve this issue through a binding arbitration if it disagrees with our view.

 

On March 30, 2009, the company filed an amended preliminary proxy statement with the SEC, setting forth a new proposal to be voted on by shareholders of the company at the 2009 Annual Meeting. The new proposal would have the effect of reducing the size of the board to 12, resulting in only four seats being up for election at the 2009 Annual Meeting.

 

On April 6, 2009, Pershing Square filed a preliminary form of this proxy statement with the SEC.

 

Proposal 1: Determination of the Size of the Board

 

The company is soliciting proxies to determine that the number of directors constituting the Target board is 12, rather than 13. In our view the proposal appears to be aimed more at preserving the incumbency of existing directors and less at attracting and electing the most qualified directors. We believe that each of the Pershing Square Nominees is highly qualified and should be elected to the board, and we believe that shareholders should have the opportunity to elect each of them.

 

Accordingly, we strongly urge you to vote “AGAINST” Proposal 1 by signing, dating and returning the enclosed GOLD proxy card in the enclosed postage paid envelope. You may also vote by telephone using the toll-free number on the GOLD proxy card or via the Internet using the Internet address on the GOLD proxy card.

 

The company has indicated that if the board reduction proposal is rejected by its shareholders, it will interpret the rejection as the shareholders’ decision to accept our position that the board currently consists of 13 directors and that five seats are up for election at the 2009 Annual Meeting.

 

The accompanying GOLD proxy card will be voted in accordance with your instruction on such card. You may vote for or vote against, or abstain from voting on Proposal 1 described above by marking the proper box on the GOLD proxy card. If you return a signed GOLD proxy card without providing voting instructions, your shares will be voted “AGAINST” the determination that the number of directors constituting the board is 12, rather than 13.

 

Proposal 2A: Election of Four Class III Directors

 

We intend to nominate William A. Ackman, Michael L. Ashner, James L. Donald and Richard W. Vague for election as Class III directors of Target at the 2009 Annual Meeting, regardless of whether the board reduction proposal described above is passed. If the board reduction proposal is rejected by the shareholders and all of the Pershing Square Nominees (including Professor Ronald J. Gilson described in Proposal 2B below) are elected to the board, the Pershing Square Nominees will hold five of 13 seats on the Target board.

 

The Pershing Square Nominees

 

The Pershing Square Nominees named in this Proposal 2A include business leaders of national and international standing. These are highly qualified individuals with extensive experience in key areas of Target’s business, including retail, credit cards and real estate. In contrast to the Pershing Square Nominees, the incumbent non-executive directors of Target do not have comparable executive experience in the company’s main lines of business.

 

We believe that, if elected, these Pershing Square Nominees will bring significant operational experience, new insight and fresh and relevant perspectives to the Target board. If elected, we believe they will substantially improve Target’s ability to navigate through the current economic environment while increasing shareholder value over the long-term.

 

All four of the Pershing Square Nominees named in this Proposal 2A are independent under Target’s board of director independence guidelines, the applicable rules of the New York Stock Exchange, referred to as the NYSE, and the independence standards applicable to Target under paragraph (a)(1) of Item 407 of Regulation S-K under the Securities Exchange Act of 1934, as amended. Furthermore, three of the four candidates — those other than Mr. Ackman — are independent of and unaffiliated with the Pershing Square Funds.

 

Each Pershing Square Nominee named in this Proposal 2A has consented to be named in this proxy statement for the 2009 Annual Meeting and to serve as a director of Target, if elected. If these Pershing Square Nominees are elected, they intend to discharge their duties as directors of the company consistent with all applicable legal requirements, including the general fiduciary obligations imposed upon corporate directors. If elected, each of these Pershing Square Nominees would serve as a Class III director for a three-year term expiring in 2012 and until a successor has been duly elected.

 

 

We strongly urge you to vote “FOR” the election of the Pershing Square Nominees named in this Proposal 2A by signing, dating and returning the enclosed GOLD proxy card in the enclosed postage paid envelope. You may also vote by telephone using the toll-free number on the GOLD proxy card or over the Internet using the Internet address on the GOLD proxy card.

 

Proposal 2B: Election of the Fifth Class III Director

 

We intend to nominate a fifth nominee, Ronald J. Gilson, for election as a Class III director of Target at the 2009 Annual Meeting assuming the board reduction proposal described above is rejected by the shareholders.

 

Ron is a leading scholar in the law of corporate acquisitions, finance and governance. We believe that, if elected, Ron will bring new ideas to the Target board and improve the company’s corporate governance.

 

Ron is independent under Target’s board of director independence guidelines, the applicable rules of the NYSE, and the independence standards applicable to Target under paragraph (a)(1) of Item 407 of Regulation S-K under the Exchange Act. Furthermore, Ron is independent of and unaffiliated with the Pershing Square Funds.

 

Ron has consented to be named in this proxy statement for the 2009 Annual Meeting and to serve as a director of Target, if elected. If Ron is elected, he intends to discharge his duties as a director of the company consistent with

all applicable legal requirements, including the general fiduciary obligations imposed upon corporate directors. If elected, Ron would serve as a Class III director for a three-year term expiring in 2012 and until a successor has been duly elected.

 

 

We strongly urge you to vote “FOR” the election of Ronald J. Gilson by signing, dating and returning the enclosed GOLD proxy card in the enclosed postage paid envelop. You may also vote by telephone using the toll-free number on the GOLD proxy card or via the Internet using the Internet address on the GOLD proxy card.

 

Certain Additional Information Concerning Proposals 2A & 2B

 

Pershing Square does not intend to compensate the Pershing Square Nominees in connection with this proxy solicitation. If elected, the Pershing Square Nominees will be entitled to such compensation from Target as may be determined by the company for non-employee directors, and which is described in company’s proxy statement.

 

Except as disclosed in this proxy statement, (i) no Pershing Square Nominee or any associate of a Pershing Square Nominee is a party adverse to the company or any of its subsidiaries or has a material interest adverse to the company or any of its subsidiaries in any material proceeding and (ii) there is no event that occurred during the past five years with respect to any of the Pershing Square Nominees that is required to be described under Item 401(f) of Regulation S-K. The information in this proxy statement regarding a particular Pershing Square Nominee has been furnished to Pershing Square by such Pershing Square Nominee.

 

We reserve the right to nominate replacement or additional persons as nominees for any reason, including in the event that any of the Pershing Square Nominees is unable to stand for election or to serve for any reason, to the extent permitted by applicable law, including by reason of the taking or announcement of any action by the company that has, or if consummated would have, the effect of disqualifying any such Pershing Square Nominee to serve as a director.

 

Approximately 7.8% of the outstanding shares of Target’s common stock are held for the account of the Pershing Square Funds and their affiliates, through a combination of common stock and options. Details of the

shares held for the account of the Pershing Square Funds can be found under “PARTICIPANTS IN THE SOLICITATION — Certain Information About the Pershing Square Funds” beginning on page 12 of this proxy statement. All of the shares held for the account of the Pershing Square Funds will be voted “FOR” the election of the Pershing Square Nominees. None of the Pershing Square Nominees (other than William A. Ackman) beneficially owns any interest in securities of Target.

 

Unless otherwise indicated, percentages of the outstanding shares of common stock reported in this proxy statement were computed based upon the           shares of common stock outstanding as of          , as disclosed in the company’s proxy statement for the 2009 Annual Meeting.

 

Agreements with Pershing Square Nominees

 

In connection with the proxy solicitation contemplated hereby, the Pershing Funds have entered into customary indemnification agreements with each Pershing Square Nominee with respect to the nomination of such individual as a director of Target at the 2009 Annual Meeting. Additionally, each Pershing Square Nominee has delivered a consent to Target, consenting to be named as a Pershing Square Nominee and to serve as a director of Target, if elected. The indemnification agreement provides, among other things, that:

 

 

Other Matters To Be Considered At The Annual Meeting

 

According to the company’s proxy statement, Target is soliciting proxies with respect to three proposals other than the board reduction proposal and the election of directors. Please refer to the company’s proxy statement for a detailed discussion of these proposals, including various arguments in favor of and against such proposals. These proposals are outlined below.

 

If you have signed the GOLD proxy card and no marking is made, you will be deemed to have given a direction to vote (i) “FOR” Proposal 3 below all shares represented by your GOLD proxy card, (ii) “FOR” Proposal 4 below all shares represented by your GOLD proxy card, and (iii) vote “FOR” Proposal 5 below all shares presented by your GOLD proxy card. In addition, if you have signed the GOLD proxy card and no marking is made, you will be deemed to have given a direction to the proxy holders named on the enclosed GOLD proxy card to vote all shares represented by your GOLD proxy card on such other matters in accordance with their judgment.

 

Proposal 3: Ratification of Independent Registered Public Accounting Firm

 

The company is soliciting proxies to ratify the company’s independent registered public accounting firm for the 2009 fiscal year. We support the ratification of the company’s Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm.

 

The accompanying GOLD proxy card will be voted in accordance with your instruction on such card. You may vote for or vote against, or abstain from voting on Proposal 3 described above by marking the proper box on the GOLD proxy card. If you return a signed GOLD proxy card without providing voting instructions, your shares will be voted “FOR” the ratification of the Audit Committee’s appointment of Ernst & Young LLP as Target’s independent registered public accounting firm for the fiscal year ending January 30, 2010.

 

Proposal 4: Approval of the Performance Measures Available Under
the Target Corporation Long-Term Incentive Plan

 

As discussed in further detail in the company’s proxy statement, in March 2009 the board approved an amendment to the list of the performance measures for performance-based awards under the Target Corporation Long-Term Incentive Plan, subject to further approval by shareholders. According to the company’s proxy statement, if this proposal is not adopted, the Compensation Committee of the board intends to continue to grant awards under the plan, but certain awards to executive officers would no longer be fully tax deductible by Target.

 

The accompanying GOLD proxy card will be voted in accordance with your instruction on such card. You may vote for or vote against, or abstain from voting on Proposal 4 described above by marking the proper box on the GOLD proxy card. If you return a signed GOLD proxy card without providing voting instructions, your shares will be voted “FOR” the company’s proposal to approve the performance measures available under the Target Corporation Long-Term Incentive Plan.

 

Proposal 5: Shareholder Proposal Regarding
Annual Advisory Vote on Executive Compensation

 

As discussed in further detail in the company’s proxy statement, Allen Edward Hancock, trustee of Allen Edward Hancock Revocable Living Trust, 2244 Alder Street, Eugene, Oregon 97405, has proposed that the shareholders of the company request that the board adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the company’s named executive officers. The vote by the shareholders will be non-binding and would not affect any compensation paid or awarded to any named executive officer.

 

The accompanying GOLD proxy card will be voted in accordance with your instruction on such card. You may vote for or vote against, or abstain from voting on Proposal 5 described above by marking the proper box on the GOLD proxy card. If you return a signed GOLD proxy card without providing voting instructions, the Pershing Square Funds intend to “ABSTAIN” from voting your shares on the shareholder proposal described above.

 

Other Proposals

 

We are not aware of any other business to be presented at the 2009 Annual Meeting. If any other matters should properly come before the 2009 Annual Meeting, it is intended that the proxy holders named on the enclosed GOLD proxy card will vote the proxies on such other matters in accordance with their judgment.

 

Voting Procedures

 

Record Date; Vote Per Share

 

Target has one class of voting shares outstanding. Only shareholders of record at the close of business on March 30, 2009, the record date, are entitled to receive notice of the 2009 Annual Meeting and to vote the shares of common stock that they held on the record date. Each share of common stock will have one vote on each matter to be voted on.

 

Quorum

 

The presence at the meeting, in person or by proxy, of the holders of a majority of the company’s common stock outstanding on the record date will constitute a quorum, permitting the meeting to conduct its business. According to Target, as of the record date,           shares of the company’s common stock were outstanding. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting for purposes of determining whether there is a quorum.

Vote Required

 

Election of Directors — Because the number of director nominees exceeds the number of directors to be elected at the 2009 Annual Meeting, pursuant to Article VII of the company’s Restated Articles of Incorporation (as amended), directors shall be elected by a plurality of the votes present and entitled to vote on the election of directors at the Annual Meeting. This means that the director nominees who receive the highest number of “FOR” votes will be elected to fill the available seats on the Target board. A properly executed proxy marked “Abstain” with respect to the election of a director nominee will be counted for purposes of determining whether there is a quorum, but will not be considered to have been voted for or against a director nominee.

 

Other Items — For all other proposals described in this proxy statement and any other matters that properly come before the meeting, the affirmative vote of the greater of (i) a majority of the outstanding shares of Target’s common stock entitled to vote on the item and present in person or by proxy at the 2009 Annual Meeting and (ii) a majority of the minimum number of shares entitled to vote that would constitute a quorum for the transaction of business at the 2009 Annual Meeting, will be required for approval provided that a quorum is present in person or by proxy. A properly executed proxy marked “ABSTAIN” with respect to any such matter will be counted for purposes of determining whether there is a quorum and will be considered present in person or by proxy and entitled to vote. Accordingly, an abstention will have the effect of a negative vote.

 

Broker Non-Votes

 

If you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote. In this case, a “broker non-vote” occurs. Shares constituting broker non-votes are not counted or deemed to be present or represented for the purpose of determining whether shareholders have approved a matter, but they are counted as present for the purpose of determining a quorum at the 2009 Annual Meeting.

 

For the 2009 Annual Meeting, because of the solicitation of proxies described in this proxy statement, the election of directors at the 2009 Annual Meeting is a “non-routine matter” and brokers do not have discretionary authority to vote your shares on “non-routine matters.” Therefore, unless you provide specific voting instructions to your broker, they would not have discretionary authority to vote your shares for the election of directors at the 2009 Annual Meeting and your shares would not be voted for any of the nominees. If your shares are held in street name, your broker or nominee has enclosed a voting instruction card with this proxy statement. We strongly encourage you to vote your shares by following the instructions provided on the voting instruction card.

 

Shares Held in the Target 401(k) Plan

 

This proxy statement is being used to solicit voting instructions from participants in the Target 401(k) Plan with respect to shares of Target common stock that are held by the trustee of the plan for the benefit of plan participants. If you are a plan participant and also own shares as a record holder, you will separately receive proxy materials to vote the shares you hold as a record holder. Shares held in the plan that are entitled to vote will be voted by the plan trustee in proportion to participant instructions. If you are a plan participant, you must instruct the plan trustee to vote your shares by utilizing one of the methods described on the voting-instruction form that you receive in connection with your shares held in the plan. If you do not give voting instructions, the trustee will vote the shares allocated to your personal account in proportion to the instructions actually received by the trustee from participants who give voting instructions.

 

SOLICITATION OF PROXIES

 

Pershing Square has retained D.F. King & Co., Inc. to conduct the solicitation, for which D.F. King is to receive a fee not to exceed $     , plus reimbursement for its reasonable out-of-pocket expenses. We have agreed to indemnify D.F. King against certain liabilities and expenses, including certain liabilities under the federal securities laws. Proxies may be solicited by mail, courier services, Internet, advertising, telephone or telecopier or in person. It is anticipated that D.F. King will employ approximately 100 persons to solicit proxies from Target shareholders for

the 2009 Annual Meeting. The total expenditures in furtherance of, or in connection with, the solicitation of proxies is $      to date, and is estimated to be $      in total.

 

In addition, the Pershing Square Funds, certain members and employees of the Pershing Square Funds and the Pershing Square Nominees may solicit the GOLD proxies by mail, telephone, telecopier, the Internet and personal solicitation. For example, it is expected that Ali Namvar and/or Roy J. Katzovicz and/or one or more of the Pershing Square Nominees may attend in-person meetings with institutional shareholders and other significant shareholders. Any members or employees of the Pershing Square Funds and their affiliates who solicit GOLD proxies on behalf of the Pershing Square Funds will do so for no additional compensation, and none of the Pershing Square Nominees will receive any special compensation in connection with the solicitation. Banks, brokerage houses and other custodians, nominees and fiduciaries will be requested to forward the Pershing Square Funds’ solicitation materials to customers for whom such persons hold shares of Target common stock, and the Pershing Square Funds will reimburse them for their reasonable out-of-pocket expenses for doing so.

 

The entire expense of preparing, assembling, printing and mailing this proxy statement and related materials and soliciting GOLD proxies for the proposals endorsed by the Pershing Square Funds will be borne by the Pershing Square Funds. Although no precise estimate can be made at the present time, the Pershing Square Funds currently estimate such expenses to be $     (including professional fees and expenses, but excluding any costs represented by salaries and wages of regular employees of the Pershing Square Funds and its affiliates). The total expenditures incurred to date by the Pershing Square Funds have been approximately $     . To the extent legally permissible, the Pershing Square Funds retain the right to seek reimbursement of their expenses from Target if any of the Pershing Square Nominees is elected. The Pershing Square Funds do not currently intend to submit the question of such reimbursement to a vote of the shareholders.

 

PARTICIPANTS IN THE SOLICITATION

 

The participants in this solicitation of proxies from Target shareholders include the following: (i) Pershing Square, L.P., Pershing Square II, L.P., Pershing Square IV Trade-Co, L.P., Pershing Square IV-I Trade-Co, L.P., Pershing Square International, Ltd., Pershing Square International IV Trade-Co, Ltd. and Pershing Square International IV-I Trade-Co, Ltd., which we refer to, collectively, as the Pershing Square Funds or simply Pershing Square, (ii) William A. Ackman, Ali Namvar and Roy J. Katzovicz, as members or employees of certain of the Pershing Square Funds and (iii) William A. Ackman, Michael L. Ashner, James L. Donald, Ronald J. Gilson and Richard W. Vague, as director nominees, which we collectively refer to as the Pershing Square Nominees.

 

The business address of the Pershing Square Funds and Messrs. Ackman, Namvar and Katzovicz is 888 Seventh Avenue, 42nd Floor, New York, NY 10019, and the business addresses of the Pershing Square Nominees are as follows: Ashner — c/o Winthrop Realty Partners, L.P., Two Jericho Plaza Wing A, Suite 111, Jericho, NY 11753; Donald — 4315 NE 33rd St, Seattle, WA 98105; Gilson — Stanford Law School, 559 Nathan Abbott Way, Stanford, CA 94305 and Vague — 3711 Market St, 9th Floor, Philadelphia, PA 19104.

 

Certain Information About the Pershing Square Funds

 

Each of Pershing Square, L.P., Pershing Square II, L.P., Pershing Square IV Trade-Co, L.P. and Pershing Square IV-I Trade-Co, L.P. is a Delaware limited partnership principally engaged in the business of investing in securities. Each of Pershing Square International, Ltd., Pershing Square International IV Trade-Co, Ltd. and Pershing Square International IV-I Trade-Co, Ltd is a Cayman Islands exempted company principally engaged in the business of investing in securities.

The Pershing Square Funds have been shareholders of the company since April 17, 2007. As of March 31, 2009, approximately 7.8% of the outstanding shares of Target common stock were held for the account of the Pershing Square Funds and its affiliates, through a combination of common stock and options, as follows:

 

 

 

 

Pershing Square Capital Management, L.P., a Delaware limited partnership, serves as investment advisor to the Pershing Square Funds with respect to 58,391,235 shares of Target common stock (including shares of Target common stock and shares subject to certain stock-settled American-style call options) held for the accounts of the Pershing Square Funds. PS Management GP, LLC, a Delaware limited liability company, serves as the general partner of Pershing Square Capital Management, L.P. Pershing Square GP, LLC, a Delaware limited liability company, serves as the general partner of each of Pershing Square, L.P. and Pershing Square II, L.P. Pershing Square Holdings GP, LLC, a Delaware limited liability company, serves as the general partner of each of Pershing Square IV Trade-Co, L.P. and Pershing Square IV-I Trade-Co, L.P.

 

William A. Ackman, Ali Namvar and Roy J. Katzovicz are employees of Pershing Square Capital Management, L.P. who may also participate in the solicitation of proxies described in this proxy statement. Mr. Ackman is also the managing member of each of PS Management GP, LLC, Pershing Square GP, LLC and Pershing Square Holdings GP, LLC. Messrs. Namvar and Katzovicz do not own beneficially any interest in securities of Target and will not receive any compensation in connection with the solicitation of proxies. In light of his managing member role in the controlling affiliates of Pershing Square Capital Management, L.P., investment advisor to the Pershing Square Funds, Mr. Ackman may be deemed to be the beneficial owner of the shares of Common Stock held for the accounts of the Pershing Square Funds. Mr. Ackman will not receive any compensation in connection with the solicitation of proxies.

 

Additional Information Concerning the Participants

 

Each participant in the solicitation of proxies described in this proxy statement has an interest in the election of directors and the adoption of additional proposal(s) at the 2009 Annual Meeting (i) indirectly through the beneficial ownership (if any) of Target common stock and options and (ii) pursuant to the indemnification agreement described under “Agreements with Pershing Square Nominees” beginning on page 9 of this proxy statement.

 

Other than as disclosed in this proxy statement, there are no arrangements or understandings between any Pershing Square Fund and any Pershing Square Nominee or any other person or persons with respect to the nomination of the Pershing Square Nominees.

Other than as disclosed in this proxy statement:

 

 

For the purposes of the foregoing, the term “associates” shall have the meaning as that term is defined in Rule 14a-1 of Regulation 14A under the Exchange Act.

 

Additional information regarding the participants, including transactions in the securities of Target effected during the past two years, is set forth on Appendix A.

 

ADDITIONAL INFORMATION

 

The company is subject to the periodic reporting requirements of the Exchange Act and, in accordance therewith, is required to file reports, proxy statements and other information with the SEC. Reports, registration statements, proxy statements and other information filed by the company with the SEC may be inspected at, and copies may be obtained from, the public reference facilities maintained at the SEC at 100 F Street, N.E., Washington, DC 20549. Copies of such material can also be obtained upon written request addressed to the SEC, Public Reference Section, 100 F Street, N.E., Washington, DC 20549, at prescribed rates. You may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC at (800) SEC-0330. The SEC also maintains a web site on the Internet (http://www.sec.gov) where reports, proxy and information statements and other information regarding issuers and others that file electronically with the SEC may be obtained free of charge.

 

Pershing Square has omitted from this proxy statement certain disclosure required by applicable law to be included in the company’s proxy statement. Such disclosure includes, among other things, information regarding securities of Target beneficially owned by Target’s director’s, nominees and management; certain shareholder’s beneficial ownership of more than 5% of Target’s voting securities; information concerning executive compensation; and information concerning the procedures for submitting shareholder proposals and director nominations intended for consideration at the 2010 annual meeting of shareholders of Target and for consideration for inclusion in the proxy materials for that meeting. Please refer to the company’s proxy statement for such information. Pershing Square takes no responsibility for the accuracy or completeness of information contained in the company’s proxy statement.

If you would like additional copies of the Pershing Square Funds’ proxy materials, or if you would like assistance in completing and returning a GOLD proxy, please contact D.F. King at:

 

D.F. King & Co., Inc.
48 Wall Street
New York, NY 10005
Toll-free: (800) 290-6427
Banks and brokers: (212) 269-5550

 

Dated: April   , 2009

 

Sincerely,
The Pershing Square Funds

 

APPENDIX A

 

ADDITIONAL INFORMATION OF THE PARTICIPANTS

 

The following is a summary of all transactions in Target common stock over the last two years by the Pershing Square Funds.

 

Common Stock