REVISED

 

EXHIBIT A

 

to

 

EMPLOYMENT AGREEMENT

 

Dated as of March 1, 2003 between

 

TERRY J. LUNDGREN

 

AND

 

FEDERATED CORPORATE SERVIES, INC.

       

Name:

Terry J. Lundgren

   

End of Term:

February 28, 2007

   

Revised Annual Base Compensation:

$1,255,000

   

Effective Date of Revision:

July 1, 2004

   

Annual Bonus:

Commencing in respect of the 2003 fiscal year, 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 in respect of fiscal 2003,
are set out in Schedule 1 hereto.

 

TERRY J. LUNDGREN

FEDERATED CORPORATE SERVICES, INC.

   

/s/ Terry J. Lundgren

/s/ Dennis J. Broderick

 

Dennis J. Broderick

 

President

 

 

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

Maximum

Over-Maximum

           

Corporate EBIT $

90% of plan

95% of plan

100% of plan

110% of plan

Over 110% of plan

 

36% of salary

54% of salary

90% of salary

180% of salary

9% of salary for each 1% of EBIT over plan

                       

Corporate Sales $

0

0

100% of plan

101% of plan

Over 101% of plan

     

30% of salary

60% of salary

60% of salary

                       

Corporate Cash Flow

$50 million below 2003 plan

$25 million below 2003 plan

100% of 2003 plan

$150 million above 2003 plan

$150 million plus above 2003 plan

 

12% of salary

18% of salary

30% of salary

60% of salary

60% of salary

                       

Total

48% of salary

72% of salary

150% of salary

300% of salary

300% of salary plus no limit on corporate EBIT $ bonus (1)

 

(1)     Total bonus payment may not exceed $7 million.