Target Corporation Issues Open Letter to Shareholders

Following is the text of the letter from Gregg Steinhafel, Target's Chairman, President and Chief Executive Officer, speaking on behalf of Target's Board:

   May 14, 2009
   Dear Fellow Shareholder:
   Target's Annual Meeting on May 28, 2009 is fast approaching. You
   have the opportunity to vote now for Target's independent nominees
   using the WHITE proxy card by telephone or Internet, or by signing,
   dating, and returning the WHITE proxy card in the postage paid
   envelope provided. Please discard any gold proxy cards you receive
   from Pershing Square and vote the WHITE proxy card today.
   TARGET'S NOMINEES ARE PART OF A BOARD AND MANAGEMENT TEAM
   THAT IS SERVING THE BEST INTERESTS OF
   SHAREHOLDERS
   Target's nominees are part of a Board and management team that have
   together devised the strategy that has built Target into one of the
   most successful retailers in the United States. Over the past 10
   years ending January 31, 2009, Target has:
   -- Grown revenues at a compound annual rate of 11%, gaining
   substantial market share;
   -- Translated this top-line growth into increased profitability by
   expanding EBITDA margins by 200 basis points; and
   -- Grown EPS at an average annual rate of 14%.(1)
   This performance has translated into Target stock price
   outperformance in relation to Wal-Mart and the S&P 500 on a
   ten-year(2), five-year(3) and year-to-date(4)
   basis.
   Target's nominees, Mary N. Dillon, Richard M. Kovacevich, George W.
   Tamke, and Solomon D. Trujillo, are an integral part of a successful
   Board and management team. We believe Pershing Square has presented
   no plan or strategy to justify a change in your Board or management
   team. It appears that Pershing Square has launched its proxy contest
   because Target rejected Pershing Square's risky real estate proposal
   after careful evaluation.
   "I think the key to a proxy fight is to really present a
   logical plan, a plan that the mutual funds can understand, a plan
   that, especially in this environment, addresses the income
   statement."*
   -Nelson Peltz, CNBC Squawk Box, 11 May 2009
   "I don't think any of us here can tell you with certainty what
   the right thing to do is on credit cards. What the right thing to
   do is on real estate. What the right thing to do is for the
   retailer."*
   -Bill Ackman, Pershing Square Town Hall, 11 May 2009
   TARGET'S BOARD AND MANAGEMENT HAVE THE RIGHT PLAN TO
   DELIVER SHAREHOLDER VALUE OVER TIME
   This is what analysts have to say:
   "Target is an emerging and compelling free cash flow story."*
   - Michael Exstein, Credit Suisse, 8 May 2009
   "Target Remains a Top Retailer with Solid In-Stocks and SG&A
   Leverage. We maintain that Target is one of the best retailers in
   the American landscape."*
   - Bill Dreher, Deutsche Bank, 8 April 2009
   "We have great appreciation for Target's business model, brand
   and its management team which is trying to steer the retailer
   through an extremely difficult consumer spending and credit
   environment."*
   - Neil Currie, UBS, 25 February 2009
   TARGET'S BOARD AND MANAGEMENT BELIEVE IN MAINTAINING
   OPEN COMMUNICATIONS WITH ALL SHAREHOLDERS
   Target's Board and management believe in maintaining open
   communications with all shareholders and have a long history of
   being responsive to shareholder proposals and issues. In that
   regard, Pershing Square had significant access to senior management
   and the Board. In fact, we worked constructively with Pershing
   Square for 20 months before Pershing Square launched its proxy
   contest.
   "Our working relationship with the company has been extremely
   constructive and we expect it to continue to be so."*
   - Bill Ackman, Letter to Pershing Square Investors, 27 December 2007
   Pershing Square presented a series of real estate proposals to
   Target. Pershing Square asked Target to consider the IPO and
   subsequent spin-off of a separate publicly-traded real estate
   investment trust (REIT) that would own substantially all of the land
   currently owned by Target. It was only when Target, after careful
   review, rejected Pershing Square's risky real estate proposal that
   Pershing Square initiated its proxy contest.
   While Pershing Square claims that the proxy contest is not about
   the real estate transaction, the facts suggest otherwise, after
   all...
   "No one spends $15 million on a monster proxy battle just
   because he thinks that one set of independent directors will be
   marginally better at giving direction to existing management than
   the current set of independent directors."*
   - Felix Salmon, Seeking Alpha, 11 May 2009
   We believe Target has a world-class Board of Directors which
   provides meaningful contributions to the creation of value for
   shareholders. We are confident in our Board nominees and believe
   their qualifications and experience speak for themselves.
   Additional information on Target's nominees for the 2009 Annual
   Meeting can be found below.
   Vote for a Board that has a PLAN
   for continuing to deliver superior results and is committed to
   serving the best interests of ALL
   Target shareholders.
   Vote the WHITE proxy.
   If you vote using a proxy card sent to you by Pershing Square, you
   can subsequently revoke it by using the WHITE proxy card to
   vote by telephone or Internet, or by signing, dating and returning
   the WHITE proxy card in the postage paid envelope provided.
   Remember, only your last dated proxy will count - any proxy may be
   revoked at any time prior to its exercise at the Annual Meeting as
   described in the Proxy Statement.
   If you have any questions, please contact MacKenzie Partners, Inc.
   or Georgeson, which are assisting us in connection with this year's
   Annual Meeting, at 800-322-2885 or at 866-295-8105.
   On behalf of Target's Board of Directors, thank you for your
   continued support and interest in Target.
   Sincerely,
   /s/ Gregg Steinhafel
   Gregg Steinhafel
   Chairman, President and Chief Executive Officer
   *Permission to use quotes neither sought nor obtained
   (1) All figures from continuing operations.
   (2) Ten-year based on May 7, 1999 to May 8, 2009. Stock
   price performance- TGT: +39%, WMT: +12%, S&P 500: -31%
   (3) Five-year based on May 7, 2004 to May 8, 2009. Stock
   price performance- TGT: +1%, WMT: -7%, S&P 500: -15%
   (4) Year-to-date based on December 31, 2008 to May 8,
   2009. Stock price performance- TGT: +27%, WMT: -11%, S&P 500: +3%
   Important Information
   Target, its directors, and certain of its officers and other
   employees are participants in the solicitation of proxies from
   Target's shareholders in connection with Target's 2009 Annual
   Meeting. Important information concerning the identity and interests
   of these persons is available in the proxy statement that Target
   filed with the SEC on April 21, 2009 and the Schedule 14A that
   Target filed with the SEC on May 7, 2009.
   Target has filed a definitive proxy statement in connection with
   its 2009 Annual Meeting. The definitive proxy statement, any other
   relevant documents, and other materials filed with the SEC
   concerning Target are available free of charge at http://www.sec.gov
   and http://investors.target.com.
   Shareholders should read carefully the definitive proxy statement
   and the accompanying WHITE proxy card before making any voting
   decision.
   Additional Information on Target's Nominees
   Mary Dillon
   Mary Dillon currently serves as Executive Vice President and Global
   Chief Marketing Officer of McDonald's Corporation, the leading
   global foodservice retailer. In this role, Ms. Dillon leads the
   company's worldwide marketing efforts and global brand strategy
   across 118 countries. Prior to joining McDonald's, Ms. Dillon was
   President of the Quaker Foods division of PepsiCo Corporation. Under
   Ms. Dillon's leadership at Quaker Foods, net revenue and operating
   profit increased approximately 13 percent from August 2004 to
   September 2005.
   Ms. Dillon brings deep experience in marketing, brand management,
   food retailing and consumer sales - key elements to Target's
   success. Her experience in the food service industry at Quaker Oats
   also benefits Target's shareholders and corporate leadership as the
   Company seeks to grow its portfolio. Additionally, Target's brand
   image is one of its most valuable assets, and Ms. Dillon's insights
   into managing world-class brands are of great value to the Company.
   Richard Kovacevich
   Richard Kovacevich has extensive experience in financial services in
   his role as Chairman of Wells Fargo. He has also previously served
   as CEO of Wells Fargo from 1998 to 2007. Wells Fargo is the largest
   commercial real estate lender and broker in the United States and
   the second largest bank by market capitalization in the United
   States. Mr. Kovacevich's guidance in matters pertaining to the
   credit card business, real estate, and financing markets is of great
   value, particularly during the economic downturn.
   In his role as Chairman of Wells Fargo, Mr. Kovacevich is
   responsible for the seventh largest credit card issuer in the United
   States. Wells Fargo was the third most profitable credit card issuer
   in 2008 (based on outstanding debt for general purpose cards) and
   ranked eighth in the JD Power and Associates 2008 Credit Card
   Satisfaction Survey.
   George Tamke
   George Tamke has a highly regarded track record for driving
   operational improvements at companies acquired by Clayton, Dubilier
   & Rice, Inc., a private equity investment firm, with a focus on the
   consumer and retail sectors, where he serves as an Operating
   Partner. Previously, he served as Vice Chairman and co-CEO of
   Emerson Electric Co. and as interim CEO of Kinko's, Inc. During his
   tenure as COO and President at Emerson Electric from March 1997 to
   May 1999, the company's stock grew 34.2 percent. Today, Mr. Tamke
   serves as a director of three Clayton, Dubilier & Rice portfolio
   companies including Culligan Ltd., Hertz Global Holdings, Inc., and
   ServiceMaster Global Holdings, Inc.
   Solomon Trujillo
   Solomon Trujillo is an experienced executive who, on three
   continents, has led companies with telecommunications, information
   services and media and advertising assets. Mr. Trujillo is CEO and a
   director of Telstra Corporation Limited, Australia's leading
   telecommunications company. He was formerly Chief Executive Officer
   of US West and Orange S.A., a telecommunications company that serves
   millions of customers and operates thousands of retail locations in
   20 countries.
   Mr. Trujillo has particular expertise in business technology and
   communications, which is essential to Target's operations and
   represents a major area of Target's annual capital investment.
   Mr. Trujillo holds a 98 percent attendance record for Board meetings
   for his entire tenure and a perfect attendance for all in-person
   meetings. Further he has been a vocal advisor in Target's growth
   strategy and his experience as CEO of a Fortune 500 company lends
   significant value to the Company.

About Target

Target Corporation's retail segment includes large general merchandise and food discount stores and Target.com, a fully integrated on-line business. In addition, the company operates a credit card segment that offers branded proprietary and Visa credit card products. The company currently operates 1,698 Target stores in 49 states. Target Corporation news releases are available at www.target.com.

SOURCE: Target Corporation

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