THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

FTD Group, Inc. (FTD)

10/12/2005 Proxy Information

FTD Group, Inc. (the “Company”) was formed in 2003 by Green Equity Investors IV, L.P. (“Green Equity Investors”), a private investment fund affiliated with Leonard Green & Partners, L.P., solely for the purpose of acquiring majority ownership of FTD, Inc. (“FTD”). Prior to February 24, 2004, FTD was a public company listed on the Nasdaq National Market. On February 24, 2004, the Company completed a going private transaction, in which Nectar Merger Corporation, which was a wholly owned subsidiary of the Company, merged with and into FTD with FTD continuing as the surviving corporation (the “2004 Going Private Transaction”).

The aggregate consideration for the 2004 Going Private Transaction was approximately $422.0 million, with each public FTD stockholder receiving cash for each share of FTD common stock owned. An aggregate of approximately $7.3 million of such consideration was received by then current executive officers of FTD.

The 2004 Going Private Transaction was financed by a $72.2 million investment in the Company’s 14% Senior Redeemable Exchangeable Cumulative Preferred Stock, a $72.2 million investment in the Company’s 12% Junior Redeemable Exchangeable Cumulative Preferred Stock and a $36.6 million investment in the Common Stock, in each case made by Green Equity Investors IV, L.P., and an affiliate of Green Equity Investors IV, L.P.; a $0.5 million investment in the Company’s 14% Senior Redeemable Exchangeable Cumulative Preferred Stock, a $0.5 million investment in the Company’s 12% Junior Redeemable Exchangeable Cumulative Preferred Stock and a $3.4 million investment in the Common Stock, in each case made by certain members of the Company’s management (of which $0.9 million was in the form of an exchange of a portion of management’s ownership in FTD’s common stock); the issuance by FTD of $175.0 million of its 7.75% Senior Subordinated Notes due 2014; and $85.0 million of borrowings under FTD’s senior credit facility.

Prior to the IPO (as defined below), all of the Company’s 14% Senior Redeemable Exchangeable Cumulative Preferred Stock and 12% Junior Redeemable Exchangeable Cumulative Preferred Stock were held by Green Equity Investors IV, L.P. and its affiliate. The Company used the net proceeds of the IPO to repurchase all of the 14% Senior Redeemable Exchangeable Cumulative Preferred Stock and 12% Junior Redeemable Exchangeable Cumulative Preferred Stock at prices of 114% and 112% of the applicable liquidation preference, respectively, for an aggregate payment to Green Equity Investors IV, L.P. and its affiliate of $186.8 million (93% of the total proceeds). The Company repurchased approximately 22,995 shares of the Company’s 14% Senior Redeemable Exchangeable Cumulative Preferred Stock upon the closing of the IPO (for aggregate consideration of $30 million) and the balance of such shares and all of the Company’s 12% Junior Redeemable Exchangeable Cumulative Preferred Stock on February 25, 2005.

Agreements Related to the 2004 Going Private Transaction

The following is a summary description of material terms of certain agreements that were entered into in connection with the 2004 Going Private Transaction.

Equity Ownership in the Company

As a condition to the 2004 Going Private Transaction, certain members of the then current senior management of FTD, Robert Norton, Jon Burney, Ann Hofferberth, Larry Johnson, George Kanganis, Timothy Meline, Dan Smith, William Van Cleave and Carrie Wolfe (the “initial management investors”) were obligated to invest at least $4.0 million in the aggregate in the equity of the Company. The initial management investors invested approximately $4.4 million in the equity of the Company to satisfy this condition. The investments took the form of an exchange of common stock of FTD for shares of the Common Stock, or a cash investment by such initial management investors for shares of the Common Stock or a combination of the foregoing. On July 12, 2004, Green Equity Investors IV, L.P. purchased all of the equity of the Company owned by Mr. Norton, consisting of 1,004,667 shares of the Common Stock, for a purchase price of $3,014,000, representing a purchase price of $3.00 per share, 493 shares of the Company’s senior preferred stock, for a purchase price of $493,000, representing a purchase price of $1,000 per share, and 493 shares of the Company’s junior preferred stock, for a purchase price of $493,000, representing a purchase price of $1,000 per share, in accordance with the stockholders’ agreement. On July 7, 2004, Green Equity Investors IV, L.P. purchased all of the equity of the Company owned by Ann M. Hofferberth, consisting of 33,334 shares of the Common Stock, and Carrie A. Wolfe, consisting of 33,334 shares of the Common Stock, each for an aggregate purchase price of $100,000, representing a purchase price of $3.00 per share, in accordance with the stockholders’ agreement. On September 30, 2004, the Company sold 275,559 shares of Common Stock to certain members of FTD’s management for cash consideration of $826,667, including 158,334 shares purchased by Michael J. Soenen and 50,000 shares purchased by Carrie A. Wolfe. All of such shares were sold at a price of $3.00 per share, representing the price Green Equity Investors IV, L.P. paid for all of its shares of the Common Stock. In connection with such senior management’s investment, the Company, Green Equity Investors IV, L.P., an affiliate of Green Equity Investors IV, L.P. and such members of senior management entered into an amended and restated stockholders’ agreement that contains provisions substantially similar to the provisions of the stockholders’ agreement described immediately below.

Stockholders’ Agreement

In connection with the initial management investors’ investment in the equity of the Company, Green Equity Investors IV, L.P., the Company and the initial management investors entered into a stockholders’ agreement. All of the Company’s other stockholders as of immediately prior to the IPO subsequently became parties to the stockholders’ agreement in connection with their investments pursuant to an amendment and restatement of the agreement. Pursuant to the stockholders’ agreement, Green Equity Investors IV, L.P. has demand and piggy-back registration rights in certain circumstances. The management investors also have piggy-back registration rights in certain circumstances.

Management Services Agreement

Upon the consummation of the 2004 Going Private Transaction, FTD entered into a management services agreement among FTD, certain of FTD’s subsidiaries and Leonard Green & Partners, L.P., pursuant to which Leonard Green & Partners, L.P. agreed to provide management, consulting and financial planning services on an ongoing basis to FTD and certain of FTD’s subsidiaries, including, without limitation, in connection with major transactions. The management services agreement had a ten-year term that extended automatically on each anniversary of the agreement for one additional year unless either party gave prior notice that the term would not be extended. In addition, the management services agreement provided for the payment to Leonard Green & Partners, L.P. of customary fees for services provided in connection with major transactions, reimbursement of reasonable out-of-pocket expenses and a fee of $7.0 million in connection with the 2004 Going Private Transaction. The $7.0 million fee was paid at the consummation of the 2004 Going Private Transaction. In connection with the IPO (as defined below), the management services agreement with Leonard Green & Partners, L.P. was terminated in consideration of a lump sum payment to Leonard Green & Partners, L.P. of $12.5 million.

Voting Agreements

In connection with the 2004 Going Private Transaction agreement, each of certain parties related to groups of investment funds affiliated with each of Perry Acquisition Partners, L.P., Bain Capital and Fleet Growth Resources, Inc. entered into separate voting agreements with the Company. Under these voting agreements, each of the funds agreed, subject to certain exceptions, to vote the shares of common stock of FTD that they owned or controlled in favor of adoption of the 2004 Going Private Transaction agreement and the transactions contemplated by the 2004 Going Private Transaction agreement, and any actions required in furtherance of the 2004 Going Private Transaction, and against any alternative transaction.

Purchases of Common Stock in the IPO

On November 23, 2004, the Company filed a registration statement with the SEC on Form S-1, relating to an initial public offering of the Common Stock (the “IPO”). The registration statement was declared effective by the SEC on February 8, 2005. In the IPO, Green Equity Investors IV, L.P. and an affiliate purchased an aggregate of 2,307,693 shares of the Common Stock at the initial public offering price of $13.00 per share.

Benefits Received by Michael J. Soenen

In connection with the 2004 Going Private Transaction, FTD’s then President and Chief Operating Officer, Michael J. Soenen, received a bonus of $250,000. Upon his resignation in February 2004, Mr. Soenen received a severance payment of $1,421,875. Mr. Soenen was rehired in May 2004, and currently is paid an annual salary of $500,000 with a potential bonus of 200% of his annual salary, effective for fiscal year 2006. On September 30, 2004, the Company granted a total of 925,001 options to purchase shares of Common Stock to Mr. Soenen.

2/8/2005 S-1/A Information

Prior to February 24, 2004, FTD was a public company listed on the Nasdaq National Market. On February 24, 2004, FTD was acquired in the 2004 Going Private Transaction by, and became a wholly-owned subsidiary of, FTD Group, Inc., which is an affiliate of Green Equity Investors IV, L.P., a private investment fund affiliated with Leonard Green & Partners, L.P.

The aggregate consideration for the 2004 Going Private Transaction was approximately $422.0 million, with each public FTD stockholder receiving cash for each per share of FTD common stock owned. An aggregate of approximately $7.3 million of such consideration was received by current executive officers of FTD.

The 2004 Going Private Transaction was financed by a $72.2 million investment in our 14% Senior Redeemable Exchangeable Cumulative Preferred Stock, a $72.2 million investment in our 12% Junior Redeemable Exchangeable Cumulative Preferred Stock and a $36.6 million investment in our common stock, in each case made by Green Equity Investors IV, L.P., and an affiliate of Green Equity Investors IV, L.P.; a $0.5 million investment in our 14% Senior Redeemable Exchangeable Cumulative Preferred Stock, a $0.5 million investment in our 12% Junior Redeemable Exchangeable Cumulative Preferred Stock and a $3.4 million investment in our common stock, in each case made by certain members of our management (of which $0.9 million was in the form of an exchange of a portion of management's ownership in FTD's common stock); the issuance by FTD of $175.0 million of its 7.75% Senior Subordinated Notes due 2014; and $85.0 million of borrowings under FTD's senior credit facility.

All of our 14% Senior Redeemable Exchangeable Cumulative Preferred Stock and 12% Junior Redeemable Exchangeable Cumulative Preferred Stock is currently held by Green Equity Investors IV, L.P. and its affiliate. We intend to use the net proceeds of this offering to repurchase all of our 14% Senior Redeemable Exchangeable Cumulative Preferred Stock and 12% Junior Redeemable Exchangeable Cumulative Preferred Stock at prices of 114% and 112% of the applicable liquidation preference, respectively, for an aggregate payment to Green Equity Investors IV, L.P. and its affiliate of $186.8 million (93% of the total proceeds). We intend to repurchase approximately 22,995 shares of our 14% Senior Redeemable Exchangeable Cumulative Preferred Stock upon the closing of this offering (for aggregate consideration of $30 million) and the balance of such shares and all of our 12% Junior Redeemable Exchangeable Cumulative Preferred Stock on or about February 25, 2005. Green Equity Investors IV, L.P. and its affiliate have indicated that they will sell such shares to us at the prices indicated above on or after February 25, 2005, if we so request on or after such date. For more information, see "Use of Proceeds."

Agreements Related to the 2004 Going Private Transaction

The following is a summary description of material terms of certain agreements that were entered into in connection with the 2004 Going Private Transaction.

Equity Ownership in FTD Group, Inc.

As a condition to the 2004 Going Private Transaction, certain members of senior management of FTD, Robert Norton, Jon Burney, Ann Hofferberth, Larry Johnson, George Kanganis, Timothy Meline, Dan Smith, William Van Cleave and Carrie Wolfe, sometimes referred to in this prospectus as the "initial management investors," were obligated to invest at least $4.0 million in the aggregate in the equity of FTD Group, Inc. The initial management investors invested approximately $4.4 million in the equity of FTD Group, Inc. to satisfy this condition. The investments took the form of an exchange of common stock of FTD for shares of stock of FTD Group, Inc., or a cash investment by such initial management investors for shares of stock of FTD Group, Inc. or a combination of the foregoing. On July 12, 2004, Green Equity Investors IV, L.P. purchased all of the equity of FTD Group, Inc. owned by Mr. Norton, consisting of 1,004,667 shares of our common stock, for a purchase price of $3,014,000, representing a purchase price of $3.00 per share, 493 shares of our senior preferred stock, for a purchase price of $493,000, representing a purchase price of $1,000 per share, and 493 shares of our junior preferred stock, for a purchase price of $493,000, representing a purchase price of $1,000 per share, in accordance with the stockholders' agreement. On July 7, 2004, Green Equity Investors IV, L.P. purchased all of the equity of FTD Group, Inc. owned by Ann M. Hofferberth, consisting of 33,334 shares of our common stock, and Carrie A. Wolfe, consisting of 33,334 shares of our common stock, each for an aggregate purchase price of $100,000, representing a purchase price of $3.00 per share, in accordance with the stockholders' agreement. On September 30, 2004, FTD Group, Inc. sold 275,559 shares of common stock to certain members of FTD's management for cash consideration of $826,667, including 158,334 shares purchased by Michael J. Soenen and 50,000 shares purchased by Carrie A. Wolfe. All of such shares were sold at a price of $3.00 per share, representing the price Green Equity Investors IV, L.P. paid for all of its shares of our common stock. In connection with such senior management's investment, FTD Group, Inc., Green Equity Investors IV, L.P., an affiliate of Green Equity Investors IV, L.P. and such members of senior management entered into an amended and restated stockholders' agreement which contains provisions substantially similar to the provisions of the stockholders' agreement described immediately below.

Stockholders' Agreement

In connection with the initial management investors' investment in the equity of FTD Group, Inc., Green Equity Investors IV, L.P., FTD Group, Inc. and the initial management investors entered into a stockholders' agreement. All of our other current stockholders have subsequently became parties to the stockholders' agreement in connection with their investments pursuant to an amendment and restatement of the agreement. The stockholders' agreement, as amended and restated, among other things, restricts the ability of the management investors to freely transfer their securities in FTD Group, Inc. and gives Green Equity Investors IV, L.P. and FTD Group, Inc. a right of first refusal if any of the management investors seeks to make specified transfers of his or her securities to a third-party. If any of the management investors ceases to be employed by FTD, Green Equity Investors IV, L.P. and FTD Group, Inc. will be entitled to purchase his or her securities at specified prices. Additionally, Green Equity Investors IV, L.P. has drag-along rights, meaning that, under some circumstances, if Green Equity Investors IV, L.P. desires to sell a portion of its securities to a third-party, the management investors will be required to sell a portion of their shares to the third-party. Also, the management investors have tag-along rights to participate if Green Equity Investors IV, L.P. sells its shares to a third-party, which means that the management investors will be allowed to include a portion of their shares in the sale to the third-party. These transfer restrictions will terminate upon the consummation of this offering. Green Equity Investors IV, L.P. has demand and piggy-back registration rights in certain circumstances. The management investors also have piggy-back registration rights in certain circumstances.

Management Services Agreement

The prior management services agreement with parties related to groups of investment funds affiliated with each of Perry Acquisition Partners, L.P., sometimes referred to in this prospectus as the "Perry Group," Bain Capital, sometimes referred to in this prospectus as the "Bain Group," and Fleet Growth Resources, Inc., sometimes referred to in this prospects as the "Fleet Group," terminated upon the consummation of the 2004 Going Private Transaction and was replaced with a management services agreement among FTD, certain of FTD's subsidiaries and Leonard Green & Partners, L.P., pursuant to which Leonard Green & Partners, L.P. has agreed to provide management, consulting and financial planning services on an ongoing basis to FTD and certain of FTD's subsidiaries, including, without limitation, in connection with any major transactions FTD may engage in. In consideration of these services, FTD and certain of its subsidiaries are obligated to pay Leonard Green & Partners, L.P. an annual management fee of $2.0 million payable in equal monthly installments beginning in the first month after the closing of the 2004 Going Private Transaction. However, in the event of a payment default under the new senior credit agreement or the indenture governing FTD's outstanding senior subordinate notes, or a bankruptcy, liquidation or winding-up of FTD, the payment of all accrued and unpaid management fees is subordinated to the prior payment in full of all amounts due and owing under FTD's senior credit facility and the indenture governing FTD's outstanding senior subordinated notes. In addition, payment of the management fees on any monthly payment date is contingent on FTD having had Consolidated EBITDA (as defined in the indenture governing FTD's outstanding senior subordinated notes) equal to or greater than $46.8 million for any consecutive twelve-month period ended not more than twelve months prior to that payment date. In the event any portion of the management fee is not so paid, such amount will accrue and become due and payable in the next month when payment is permitted.

The management services agreement has a ten-year term which extends automatically on each anniversary of the agreement for one additional year unless either party gives prior notice that the term will not be extended. In the event of a change of control of FTD or an initial public offering, the management services agreement will terminate and all amounts payable during the term of the management services agreement, as extended from time to time, discounted to present value, will become immediately due and payable. In addition, the management services agreement provides for the payment to Leonard Green & Partners, L.P. of customary fees for services provided in connection with major transactions, reimbursement of reasonable out-of-pocket expenses and a fee of $7.0 million in connection with the 2004 Going Private Transaction. The $7.0 million fee was paid at the consummation of the 2004 Going Private Transaction. In connection with this offering, the management services agreement with Leonard Green & Partners, L.P. will be terminated in consideration of a lump sum payment by us to Leonard Green & Partners, L.P. of $12.5 million in accordance with our management services agreement.

Voting Agreements

In connection with the 2004 Going Private Transaction agreement, each of the Perry Group, the Bain Group and the Fleet Group entered into separate voting agreements with FTD Group, Inc. Under these voting agreements, each of the funds agreed, subject to certain exceptions, to vote the shares of common stock of FTD that they own or control in favor of adoption of the 2004 Going Private Transaction agreement and the transactions contemplated by the 2004 Going Private Transaction agreement, and any actions required in furtherance of the 2004 Going Private Transaction, and against any alternative transaction.

Other Agreements

Prior Management Consulting Services Agreement

Parties related to the Perry Group, the Bain Group and the Fleet Group entered into an agreement for management consulting services with FTD pursuant to which they were required to provide financial and other corporate advisory services to management. Subject to certain limitations contained in FTD's prior credit agreement, for each fiscal year of FTD, FTD was obligated to pay dividends to FTD, Inc. sufficient to allow FTD, Inc. to pay the Perry Group, the Bain Group and the Fleet Group an annual fee of $2.0 million. Subject to certain conditions, this annual fee was to be shared by the Perry Group, the Bain Group and the Fleet Group in proportion to their relative ownership interests in FTD. The management consulting services agreement had a term running through July 1, 2005. The management consulting services agreement terminated upon the consummation of the 2004 Going Private Transaction.

Certain former directors received indirectly a portion of the annual fee as a result of their ownership interest in or other relationship with the entities providing services to FTD. Richard C. Perry, a former director of FTD designated by the Perry Group, has an interest in Perry Investors, LLC. Stephen G. Pagliuca, a former director of FTD designated by the Bain Group, is a managing director of Bain Capital Partners, LLC. Habib Y. Gorgi, a former director of FTD designated by the Fleet Group, is the president of certain entities, which owned shares, directly or indirectly, through general partnership interests. Parties related to each of the Perry Group, the Bain Group and the Fleet Group were entitled to 64.99%, 23.80% and 11.21%, respectively, of the fees paid by us under the management consulting services agreement. The portion of these fees each of these directors were to receive, if any, was discretionary.

Purchases of Common Stock in this Offering

Green Equity Investors IV, L.P. and an affiliate will purchase an aggregate of 2,307,693 shares of our common stock in this offering at the initial public offering price. These shares will be subject to a lock-up agreement. For more information, see "Shares Eligible for Future Sale—Lock-Up Agreements."

Benefits Received by Michael J. Soenen

In connection with the 2004 Going Private Transaction, FTD's President and Chief Operating Officer, Michael J. Soenen, received a bonus of $250,000. Upon his resignation in February 2004, Mr. Soenen received a severance payment of $1,421,875. Mr. Soenen was rehired in May 2004, and currently is paid an annual salary of $500,000 with a potential maximum bonus of 150% of his annual salary. On September 30, 2004, we granted a total of 925,001 options to purchase shares of our common stock to Mr. Soenen.