Revised Employment Agreement Exhibit A between Terry J. Lundgren and Federated Department Stores, Inc.
This revised agreement outlines the compensation terms for Terry J. Lundgren's employment with Federated Department Stores, Inc. from March 1, 2003, to February 28, 2007. It sets his annual base salary at $1,400,000 effective April 1, 2006, and details the structure for annual bonuses based on company performance goals. Bonus amounts depend on achieving specific targets for corporate EBIT, sales, and cash flow, with a maximum possible bonus of $7 million. The agreement specifies how performance is measured and how bonuses are calculated.
EXHIBIT 10.1 | |
REVISED | |
EXHIBIT A | |
to | |
EMPLOYMENT AGREEMENT | |
Dated as of March 1, 2003 between | |
TERRY J. LUNDGREN | |
AND | |
FEDERATED CORPORATE SERVICES, INC. | |
Name: | Terry J. Lundgren |
End of Term: | February 28, 2007 |
Revised Annual Base Compensation: | $1,400,000 |
Effective Date of Revision: | April 1, 2006 |
Annual Bonus: | The annual bonus payable (if any) under the terms of the 1992 Incentive Bonus Plan (as such may be amended from time to time) of Federated Department Stores, Inc. ("Federated") will be based on performance goals established for the senior executives of the Employer on an annual basis by the Board of Directors of Federated or a Committee thereof, with the amount of bonus equal to a sliding percent of Employee's annual base compensation in effect as of the last day of the performance period based on performance against the targeted annual goals. |
Such sliding percent, and the targeted annual goals are set out in Schedule 1 hereto. |
TERRY J. LUNDGREN | FEDERATED DEPARTMENT STORES, INC. SUCCESSOR IN INTEREST to FEDERATED CORPORATE SERVICES, INC. |
SCHEDULE 1 TO EXHIBIT A TO EMPLOYMENT AGREEMENT DATED AS OF MARCH 1, 2003
BETWEEN TERRY J. LUNDGREN AND FEDERATED CORPORATE SERVICES, INC.
Component | Threshold | Point at which incremental rate changes | Target | Over Target |
Corporate EBIT $ | 85% of plan 18% of salary | 95% of plan 54% of salary | 100% of plan 90% of salary | Over 100% of plan 9% of salary for each 1% of EBIT over plan plus 90% of salary |
Corporate Sales $ | 0 | 0 | 100% of plan 30% of salary | 101% of plan 60% of salary |
Corporate Cash Flow | $50 million below plan 12% of salary | $25 million below plan
18% of salary | 100% of plan
30% of salary | $150 million above plan
60% of salary |
Total | 30% of salary | 72% of salary | 150% of salary | 300% of salary 300% bonus calculated based on:
Note: Achieving more than 110% of EBIT $ plan will result in a bonus payment in excess of 180% of salary for that component. Total bonus payment may not exceed $7 million. |