Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 39± 167K
2: EX-10 Material Contract 63± 197K
3: EX-10 Material Contract 5± 20K
4: EX-10 Material Contract 25± 94K
5: EX-10 Material Contract 5± 19K
6: EX-11 Statement re: Computation of Earnings Per Share 1 7K
7: EX-13 Annual or Quarterly Report to Security Holders 49± 202K
8: EX-21 Subsidiaries of the Registrant 1 8K
9: EX-23 Consent of Experts or Counsel 1 8K
10: EX-27 Financial Data Schedule (Pre-XBRL) 1 9K
11: EX-27 Financial Data Schedule (Pre-XBRL) 1 11K
12: EX-27 Financial Data Schedule (Pre-XBRL) 1 10K
13: EX-99 Miscellaneous Exhibit 6± 32K
EX-10 — Material Contract
Exhibit 10.k
FINGERHUT COMPANIES, INC. AND SUBSIDIARIES
1997 KEY MANAGEMENT INCENTIVE BONUS PLAN
JANUARY 1997
Participation in this Plan is limited to officers, directors and
managers of Fingerhut Companies, Inc., and subsidiaries
recommended by the Senior Vice President of the functional area,
and approved by the Director of Compensation, Benefits and HRIS,
the Senior Vice President Human Resources and the Chief Executive
Officer. The intent of the Plan is to pay bonus amounts at the
par goal based on: (1) bonus percentages specified on an
Individual Opportunity Statement, (2) Company financial
performance, (which includes performance of the overall Company
and the performance of designated business unit(s)), and (3)
achievement of individual objectives.
For the Chief Executive Officer, 100% of the bonus amount will be
determined by overall Company financial performance. For all
others, the Individual Opportunity Statement specifies the
weighting of Company financial performance allocated between
overall Company performance and performance of designated
business unit(s).
This Plan will be effective for the fiscal year commencing
January 1, 1997, but the Company may change, modify or terminate
the Plan at any time, including adding or deleting business
units.
Eligibility
1. Participation in the Plan is limited to officers, directors
and managers of Fingerhut Companies, Inc. and subsidiaries
who are recommended and approved.
2. Each participant will receive an Individual Opportunity
Statement specifying the par goal percentage payment
opportunity. Maximum performance achievement will pay out
two times this par opportunity, while threshold performance
earns one-half of this par opportunity.
3. No bonus award will be made if a participant leaves the
employ of the Company prior to the last day of the
measurement period. The only exceptions to this will be for
death, retirement, disability, or transfer to an affiliate
company and in these situations a prorated bonus award will
be made.
In the event of a prorated award the participant may be paid
a bonus for the time during the bonus period that he or she
was a participant. In the event of an involuntary
termination, the company will have complete discretion to
pay or not pay a bonus and to adjust the bonus amount in
whatever way the Company deems appropriate.
4. A new participant who becomes eligible to participate in the
Plan during a bonus period may be paid a bonus in proportion
to the time during the bonus period that he or she was a
participant. A participant whose position and bonus
percentage opportunities change during the year shall
receive an adjusted bonus based on performance in each
position held and proportional in amount to the period each
position was held. This adjustment will apply to both
Company and individual performance objectives.
Definition of Salary and Benefits
1. Salary shall be defined as paid base salary earnings during
the fiscal year exclusive of any benefits and other
payments.
2. Bonus amounts paid under the Plan shall be included for
purposes of determining benefits from the Fingerhut
Corporation Pension and Profit Sharing Plans.
Payment Examples
The algorithm yielding the individual bonus payment for all
participants will be as follows:
Paid Base Par Overall Business Individual Bonus
Earnings X Bonus X Company + Unit(s) + Performance = Amount
Percent Performance Performance Factor
Factor
Example - At Par Performance
- A participant earns $100,000 salary
- Par bonus percentage is 50% of paid base salary earnings
- Company performance factor is allocated 10% to overall
Company financial performance and 55% to designated business
unit objectives
- Individual objectives factor weight is 35%
- Overall Company performance factor, business unit and
individual objectives are achieved at par goal
Salary X 50% X (10% + 55% + 35%) = Bonus Amount
$100,000 X 50% X 100% = $ 50,000
Example - Above Par Goal Performance at 75th percentile
- A participant earns $100,000 salary
- Par bonus percentage is 50% of paid base salary earnings
- Company performance factor is allocated 10% to overall
Company financial performance and 55% to business unit
objectives
- Individual objectives factor weight is 35%
- Overall Company performance factor, business unit and
individual objectives are achieved at 150% of goal.
Salary X 50% X (15% + 82.5%+52.5%) = Bonus Amount
$100,000 X 50% X 150% = $ 75,000
Example - At Threshold Goal Performance
- A participant earns $100,000 salary
- Par bonus percentage is 50% of paid base salary earnings
- Company performance factor is allocated 10% to overall
Company financial performance and 55% to team objectives
- Individual objectives factor weight is 35%
- Overall Company performance factor, business unit and
individual objectives achieved below goal at 50%
Salary X 50% X (5% + 27.5% + 17.5) = Bonus Amount
$100,000 X 50% X 50% = $ 25,000
Other Plan Provisions
1. In the event the minimum Plan threshold for payout for the
Retail performance factor is not attained, no payout will be
made for the Retail factor or the individual MBO.
2. For individual factor awards to earn over 100%, the Retail
Business must meet or exceed its par level financial target.
To earn individual payouts above par level, the performance
level of the objective must be high, and the supervisor must
indicate on the MBO if payment should be made at threshold,
par, 75th percentile or maximum level. This allows for
additional reward incentive on some or all of the individual
MBO's.
3. Payment of bonus awards will be made in cash and will
include required payroll deductions after the actual results
have been reviewed by the Chief Financial Officer and
approved by the Chief Executive Officer. The bonus payments
will occur as soon as practical after the approval date.
4. The Plan is self-funding. Thus, the financial objectives of
the Retail Business must be met after the effect of any
bonus payments.
5. The Chief Executive Officer may make discretionary bonus
payments to participants over and above the defined formula
for (i) extraordinary performance or (ii) in other
cases, upon the recommendation of the Executive Compensation
Committee where determined by the Committee to be warranted.
6. If significant unforeseen results affect the Company's
business positively or negatively during the year, that were
not included in the Company performance goal and/or business
unit(s) goal for the year, the financial performance goal may
be adjusted to reflect the effects of such unplanned events.
Such unplanned situations shall include but are not limited to:
A. Unplanned acquisitions/new business ventures
B. Unplanned divestitures
C. The inclusion or exclusion of new participants under
the Plan as mentioned in items A and B.
The Chief Executive Officer will make a recommendation on
the appropriate adjustment of such an unplanned situation on
this Plan, and the Board Compensation Committee will decide
upon any such adjustment.
Approvals
1. The head of each Department will recommend individual
objectives and the weighting between overall Company
performance and business unit(s) performance at the start of
the measurement period. Each such officer will recommend
and justify the weighting of the company performance factor,
objectives, and performance factors for participating
officers. The decision of the Chief Executive Officer will
be final and conclusive with respect to the establishment of
Company performance factor weightings, objectives, and
performance of the participants.
2. Achievement of objectives ratings of the participants will
be reviewed, recommended and submitted by the appropriate
officer to the next two levels of management for approval.
Final determination and approval of satisfaction of Plan
objectives and bonus amounts will be by the Chief Executive
Officer.
3. The administration of the Key Management Incentive Bonus
Plan is the responsibility of the Compensation, Benefits and
HRIS Department.
FINGERHUT COMPANIES, INC.
AND SUBSIDIARIES
GUIDELINES FOR ESTABLISHING INDIVIDUAL
PERFORMANCE OBJECTIVES
1. Key Management Incentive Bonus Plan (KMIBP) participants
will meet with the appropriate Officer prior to the beginning of
the measurement period to discuss specific results to be achieved
during the year.
2. The participant will then draft and submit to the Officer
goals to be accomplished during the year. These objectives must
be written on the KMIBP MBO form. The participant and Officer will
then recommend achievement rating points to each
objective. Points assigned should reflect the priority of
the objective; i.e. higher priority objectives should carry more
points.
3. Characteristics of Well Developed Objectives - To be
meaningful, individual performance objectives (MBO's) should
be:
Challenging - The objective should present a challenge to
the participant.
Attainable - The objective should be both realistic and
achievable.
Measurable - The objective should be as specific and
quantitative as possible. It should be expressed in
tangible and measurable terms. If it is not quantifiable,
the results of the achievement should be verifiable.
Relevant - There should be a clear and direct relationship
between the objective and the Company's goals.
4. Performance objectives require the approval of the next
level of management. The Chief Executive Officer reserves
the right to add, delete, or change recommended objectives.
5. At the end of each quarter, and at fiscal year end, the
participant and the appropriate Officer will review results
against objectives. The final rating at the end of the
measurement period will determine the bonus amount paid.
Dates Referenced Herein
| This ‘10-K’ Filing | | Date | | Other Filings |
|---|
| |  |
| Filed on: | | 3/25/98 | | None on these Dates |
| For Period End: | | 12/31/97 |
| | 1/1/97 |
| List all Filings |
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