Exhibit 10.49.1
AMENDED
EXHIBIT A
To
EMPLOYMENT AGREEMENT
Entered into as of August 27, 1999 between
FEDERATED CORPORATE SERVICES, INC.
And
JAMES M. ZIMMERMAN
(Amendment as of June 8, 2001)
(All capitalized terms used in this Exhibit are defined as set forth in
Agreement)
ANNUAL BONUS: In respect of fiscal 1999, 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 salary in effect as of the
last day of the performance period based on performance
against the targeted annual goals, as follows:
Payout as Percent
Performance Against Target of Annual Salary
-------------------------- ----------------
(a) CORPORATE EBIT $
----------------
Below 95% of Target 0.0%
95% of Target 24.0%
Target 50.0%
110% of Target 90.0%
(b) CORPORATE SALES $
-----------------
Below Target 0.0%
Target 10.0%
101% of Target 34.0%
(c) CORPORATE ROGI %
-----------------
Below Target 0.0%
Target 10.0%
1.0 ppt above Target 34.0%
For each year during the Term beginning with and including
fiscal 2000, 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
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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 salary in effect as of the
last day of the performance period based on performance
against the targeted annual goals, as follows:
Payout as Percent
Performance Against Target of Annual Salary
-------------------------- ----------------
(a) CORPORATE EBIT $
----------------
Below 95% of Target 0.0%
95% of Target 34.0%
Target 70.0%
110% of Target 126.0%
(b) CORPORATE SALES $
-----------------
Below Target 0.0%
Target 15.0%
101% of Target 51.0%
(c) CORPORATE ROGI %
----------------
Below Target 0.0%
Target 15.0%
1.0 ppt above Target 51.0%
The percent of base salary payable as the annual bonus is the
aggregate of the above designated payout based on performance
achieved under each of the performance components described in
(a), (b) and (c), above, except that if Corporate EBIT $ falls
below 95% of Target, no bonus is payable for any component of
the annual bonus plan, and failure to achieve the annual EBIT
percent to target reduces the bonus otherwise payable in
respect only of the above corporate EBIT $ performance
component per the approved applicable executive compensation
plan description.
Any annual bonus payable hereunder shall be paid in the fiscal
year following the annual performance period in respect of
which the bonus is payable in accordance with Federated's 1992
Incentive Bonus Plan (as such may be amended from time to
time).
By operation of Federated's Supplementary Executive Retirement
Plan, annual bonuses paid to Employee under Federated's 1992
Incentive Bonus Plan are included as eligible compensation
under Federated's Pension Plan.
LONG TERM PLAN: For the 1997 - 1999 three year performance period, the bonus
payable (if any) under the terms of Federated's 1992 Incentive
Bonus Plan (as such may be amended from time to time) will be
based on performance goals established for the senior
executives of Federated in respect of each such three-year
performance period 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 salary (prorated on an
annual basis for any change in Employee's base salary
occurring at any time during any such three-year period and
determined for any such year in the three-year period based on
the annual
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base salary in effect as of the last day of the fiscal year)
based on performance against the targeted three-year goals, as
follows:
Payout as Percent
Performance Against Target of Annual Salary
-------------------------- ----------------
(a) CORPORATE EBIT $
----------------
Below 95% of Target 0.0%
95% of Target 14.0%
Target 30.0%
110% of Target 42.0%
120% of Target 54.0%
(b) PERFORMANCE VS
PEERS RANKING
--------------
#1 Ranking 36%
#2 Ranking 31%
#3 Ranking 25%
#4 Ranking 20%
#5 Ranking 10%
#6 Ranking 0%
The percent of base salary payable as the long term bonus in
respect of the 1997-1999 performance period is the aggregate
of the above designated payout based on performance achieved
in respect of the performance components described in (a) and
(b), above, except that if the three year Corporate EBIT $
falls below 95% of Target, no bonus is payable for any
component of the long-term bonus, and failure to achieve the
EBIT percent to target in year three reduces the bonus
otherwise payable in respect only of the above corporate EBIT
$ performance component per the approved applicable executive
compensation plan description.
For each three year performance period beginning with and
including the 1998 - 2000 performance period, the bonus
payable (if any) under the terms of Federated's 1992 Incentive
Bonus Plan (as such may be amended from time to time) will be
based on performance goals established for the senior
executives of Federated in respect of each such three-year
performance period 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 salary (prorated on an
annual basis for any change in Employee's base salary
occurring at any time during any such three-year period and
determined for any such year in the three-year period based on
the annual base salary in effect as of the last day of the
fiscal year) based on performance against the targeted
three-year goals, as follows:
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Payout as Percent
Performance Against Target of Annual Salary
-------------------------- ----------------
(a) CORPORATE EBIT $
----------------
Below 95% of Target 0.0%
95% of Target 24.0%
Target 34.0%
110% of Target 75.0%
(b) CORPORATE AVG.
ROGI %
----------------
Below Target 0.0%
Target 16.0%
1.0 ppt above Target 37.0%
The percent of base salary payable as the long-term bonus in
respect of each three year performance period beginning and
including the 1998-2000 performance period is the aggregate of
the above designated payout based on performance achieved in
respect of the performance components described in (a) and (b)
above, except that if the three year Corporate EBIT $ falls
below 95% of Target, no bonus is payable for any component of
the long-term bonus, and failure to achieve the EBIT percent
to target in year three reduces the bonus otherwise payable in
respect only of the above corporate EBIT $ performance
component per the approved applicable executive compensation
description.
Illustratively, in respect of the fiscal 1997 - 1999
performance period, assuming achievement of the 1997 -1999
goal at the 50% target level (i.e., Corporate EBIT $ achieved
at target and #4 ranking versus peers), the long-term
incentive payout in 2000 in respect of such three-year period
would be $625,000 (50% (30% payout re corporate EBIT $ + 20%
payout re peer performance) x $1,250,000 (the base salary in
effect at the end of 1997 fiscal year).
Employee shall be entitled to a pro rata portion of a
long-term bonus, if any is payable under the terms of
Federated's 1992 Incentive Bonus Plan (as such may be amended
from time to time), for any three-year performance period
commencing on or after fiscal 1997 but which performance
period has not ended as of the end of Term. The pro rata
payment is based on the length of Employee's service of
employment within such three-year performance period.
Illustratively, if the performance period covers the 1999-2001
fiscal years and the employment terminates on the last day of
the 2000 fiscal year, Employee would have been employed for
sixty-seven percent (67%) of the performance period and would
be eligible for sixty-seven percent (67%) of any long-term
bonus payable as provided above if and when any bonus is paid
in respect of that period under the terms of Federated's 1992
Incentive Plan (as may be amended) based upon the performance
goals established for the senior executives of the Employer
for that period by the Board of Directors of Federated or a
Committee thereof.
Any long-term bonus payable hereunder shall be paid in the
fiscal year following the three-year performance period in
respect of which the bonus is payable in accordance with
Federated's 1992 Incentive Bonus Plan. Any long-term bonus
payable for any
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three-year performance period beginning with and including the
1998 - 2000 performance period will be paid 50% in cash and
50% in deferred stock credits in accordance with the approved
applicable executive compensation plan description, subject,
as provided in such plan, to Executive's election to allocate
a portion or all of any cash payout to deferred stock credits.
Any amounts deferred, including the required 50% deferral and
any optional deferral above 50%, will include a 20% premium,
also to be paid in deferred stock credits.
STOCK OPTIONS: Federated shall grant, to Employee, effective August 27, 1999
(the "Grant Date"), options for 450,000 shares, with vesting
of 112,500 shares on May 1, 2000 (the "Option Vesting Date"),
112,500 shares on the first anniversary of the Option Vesting
Date, 112,500 shares on the second anniversary of the Option
Vesting Date, and 112,500 shares on the third anniversary of
the Option Vesting Date, except that 100% vesting shall occur
immediately upon the effective date of the termination of the
employment of Employee (a) by Employer other than for Cause,
(b) by Employee for Good Reason or (c) by Employer and
Employee by mutual consent; the options will be issued at one
hundred percent of the closing market price of Federated's
common stock on the New York Stock Exchange as listed in THE
WALL STREET JOURNAL on the trading day immediately preceding
the Grant Date; the term of the grant shall expire ten years
from the Grant Date; any options that are unvested as of the
time Employee discontinues his employment with Employer shall
continue to vest in accordance with the vesting schedule
described above unless the Employee's employment is terminated
for cause (as defined in the Non-Qualified Stock Option
Agreement), except that if the Employee at any time prior to
the third anniversary of the Option Vesting Date renders
personal services to The May Department Stores Company,
Dillard's, Inc., Saks, Inc., or Nordstrom, Inc., the grant of
options, and all rights of the Employee with regard to any
vested but unexercised options and any unvested options, shall
terminate on the commencement of such engagement; the grant is
subject to the terms of the attached form of Non-Qualified
Stock Option Agreement with Federated.
RESTRICTED STOCK AWARD: Federated shall grant to Employee, effective
August 27, 1999 (the "Grant Date"), 100,000 restricted shares
of Federated's Common Stock, with restrictions as to 25,000
shares lapsing on May 1, 2000 (the "Lapse Date") and as to
25,000 shares on each of the first, second and third
anniversaries of the Lapse Date, except that 100% lapsing
shall occur immediately upon the effective date of the
termination of the employment of Employee (a) by Employer
other than for Cause, (b) the Employee for Good Reason or (c)
by Employer and Employee by mutual consent; the restrictions
on any shares that have not lapsed as of the time the Employee
discontinues his employment with Employer shall continue to
lapse in accordance with the lapsing schedule described above
unless the Employee's employment is terminated for cause (as
defined in the Restricted Stock Agreement), except that if
Employee at any time prior to the third anniversary of the
Lapse Date renders personal services to The May Department
Stores Company, Dillard's, Inc., Saks, Inc., or Nordstrom's,
Inc., all shares of restricted stock on which the restrictions
have not lapsed shall be forfeited on the commencement of such
engagement; the grant is subject to the terms of the attached
form of Restricted Stock Agreement.
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TERM AND ADDITIONAL
RETIREMENT BENEFITS: Notwithstanding anything in the Agreement to the contrary,
the Term of employment shall be extended to February 1, 2004.
In consideration of the foregoing, provided the Employee
remains in the employ of Employer until February 1, 2004, the
Employee's age shall be deemed to be increased by five years
for the purpose of calculating early retirement monthly and
lump sum benefits under the formula used in the Supplementary
Executive Retirement Plan of Federated. The additional
benefits resulting from such age adjustment will be paid from
the Employer's general revenues. The foregoing will also apply
in the event that Employee's employment terminates prior to
the end of the Term for any reason, other than the Employee's
voluntary resignation or termination by the Employer for
Cause.
JAMES M. ZIMMERMAN FEDERATED CORPORATE SERVICES, INC.
/s/ James M. Zimmerman /s/ Dennis J. Broderick
Title: President
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