Exhibit 6
February 10, 1999
Xx. Xxxxxx X. Xxxxxxx
Senior Vice President of Market Development
Fingerhut Companies, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Andy:
Federated Department Stores, Inc. ("Federated") and you have discussed
entering into an employment contract providing you with the economics set forth
in the attached term sheet. You have told Federated that you intend to remain
with Fingerhut after its acquisition. You and we have agreed that the economic
terms of the attached term sheet are those under which you would, subject to the
balance of this letter, enter into an employment agreement with Federated. This
letter is intended to be a NON-BINDING letter of intent setting forth your
confirmation that you have agreed to negotiate, in good faith, an employment
agreement with Federated consistent with the economic terms outlined in the
attached term sheet. Your entering into the employment agreement remains subject
to you, with advice of your legal, tax and financial advisors, agreeing to all
of the terms and conditions therein.
Please sign and return the enclosed acknowledgement copy confirming
your agreement.
Sincerely,
Federated Department Stores, Inc.
By: /S/ XXX XXXXX
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Confirmed and acknowledged
this 11th day of February, 1999:
/S/ XXXXXX X. XXXXXXX
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XXXX XXXXXXX
Current title: SVP, Marketing
New title: Same
Current salary: $285,000
New salary: $325,000 effective upon closing
Current annual bonus: Target of 100%, maximum of 134%
New annual bonus: Same
Option award: 50,000 options granted effective on merger closing
date at closing price of FDS Common Stock on
February 10, 1999. 10 year term with 4 year
vesting, 25% on each of first, second, third and
fourth anniversaries of the grant. In the event
that the Company terminates the executive without
cause, Management will request Board approval to
permit continued vesting of options following
termination of employment.
Restricted stock: 5,000 shares granted effective on merger closing
date.
Additional Investment
(Optional): 65,000 Fingerhut options will be exchanged into
FDS options with the exercise price to be
determined in relation to the closing price of FDS
Common Stock on February 10, 1999. (See Exhibit
A.) These new options will retain the original
vesting schedule.
Employment contract: Three year contract
Benefits: Additional benefits:
40% discount at all Federated divisions with
gross-up (currently 47%).
Eligible to participate in Federated Matching Aid
Program.
EXHIBIT A - XXXXXXX
OPTIONS
Assume $44 FDS Common Stock closing price on February 10, 1999.
65,000 shares divided by $44/$25 = 36,932
Exercise price: $8.52 x $44/$25 = $15
New options: 36,932 FDS shares, vesting on original schedule
