Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 21 121K
2: EX-3 Ex-3(A) Articles of Incorporation 12± 48K
3: EX-3 Ex-3(B) Bylaws 24± 58K
4: EX-10 Ex-10.E Incentive Plan 6± 20K
5: EX-10 Ex-10.K Bonus Plan 5± 23K
6: EX-10 Ex-10.M Directors Plan 6± 26K
7: EX-11 Statement re: Computation of Earnings Per Share 2± 9K
8: EX-13 Annual or Quarterly Report to Security Holders 32± 131K
9: EX-22 EX-22 Subsidiaries 1 5K
10: EX-23 EX-23 Consent of Auditors 1 7K
EX-10 — Ex-10.M Directors Plan
EXHIBIT 10.m
FINGERHUT COMPANIES, INC.
DIRECTORS' RETAINER STOCK DEFERRAL PLAN
Section 1. Establishment. Fingerhut Companies, Inc.
hereby establishes the "FINGERHUT COMPANIES INC. DIRECTORS'
RETAINER STOCK DEFERRAL PLAN" for Eligible Directors of the
Company. The purpose of the Plan is to advance the interests of
the Company and its shareholders by increasing the proprietary
interests of non-employee directors in the Company's long-term
success and their identification with the interests of the
Company's shareholders by providing them with the opportunity to
defer and convert all or a portion of their retainer fees for
service as a director into Common Stock for payment upon a
specified future date or event.
Section 2. Effective Date. The Plan shall become
effective immediately upon its approval by the Board of
Directors, subject to approval by the Company's shareholders.
Section 3. Definitions.
(a) Change in Control. "Change in Control" shall mean
the occurrence of any of the following events: (i) any "person"
(together with its "affiliates" and "associates") becoming the
"beneficial owner" (each term as defined in the Securities
Exchange Act of 1934, as amended, or the rules and regulations
promulgated thereunder) of 30% or more of the voting power of all
outstanding securities of the Company entitled to vote for the
election of directors of the Company, unless a majority of the
Board of Directors as constituted prior to that time have
determined in their sole discretion that, for purposes of the
Plan, a Change in Control of the Company has not occurred; (ii)
as a result of or in connection with any cash tender offer,
merger or other business combination, sale of assets or contested
election of directors, or any combination of the foregoing, the
persons who were members of the Board of Directors of the Company
immediately prior to such event shall cease to constitute a
majority of the Company's Board of Directors; or (iii) the Board
of Directors or shareholders of the Company approve an agreement
providing for a transaction in which the Company will cease to be
an independent publicly-owned corporation or the occurrence of a
sale or other disposition of all or substantially all of the
assets of the Company.
(b) Common Stock. "Common Stock" shall mean the
common stock, $.01 par value, of the Company.
(c) Company. "Company" shall mean Fingerhut
Companies, Inc., a Minnesota corporation, and its successors and
assigns.
(d) Deferred Stock Account. "Deferred Stock Account"
shall have the meaning given in Section 6 of the Plan.
(e) Election Agreement. "Election Agreement" shall
have the meaning set forth in Section 5 of the Plan.
(f) Eligible Director. "Eligible Director" shall mean
any present or future member of the Board of Directors of the
Company who is not an employee or officer of the Company or of
any subsidiary of the Company.
(g) Market Price. "Market Price" shall mean the
closing price per share of the Common Stock as reported on the
New York Stock Exchange on the day of the required calculation
or, if there were no Common Stock transactions on the New York
Stock Exchange on such day, on the next preceding day on which
there were Common Stock transactions.
(h) Participant. "Participant" shall mean an Eligible
Director who has executed and delivered an Election Agreement to
the Company.
(i) Payment Date. The term "Payment Date" shall mean
the earliest to occur of the following dates: (i) the date of
the Participant's Retirement; (ii) the date (if any) specified in
the Participant's Election Agreement; (iii) the date of the
Participant's death; or (iv) the date of a Change in Control.
(j) Plan. "Plan" shall mean the Fingerhut Companies,
Inc. Directors' Deferred Retainer Plan, as it may be amended from
time to time.
(k) Plan Year. "Plan Year" shall mean the year
commencing on the date of the annual meeting of the shareholders
of the Company and ending on the day before the next succeeding
annual meeting of shareholders.
(l) Retainer Fee. "Retainer Fee" shall mean the
annual retainer fixed by the Board of Directors from time to time
for service on the Board of Directors of the Company. The term
"Retainer Fee" does not include any amounts payable with respect
to service as chairperson of any committee of the Board of
Directors or attendance at any meeting of the Board of Directors
or any committee.
(m) Retirement. "Retirement" shall mean the date on
which a Participant ceases to be a member of the Board of
Directors of the Company for any reason other than death.
Section 4. Deferral of Retainer. Subject to the
availability of shares of Common Stock under the Plan, an
Eligible Director may elect to defer, in the form of shares of
Common Stock, all or a portion of his Retainer Fee payable
following the effectiveness of such election made pursuant to
Section 5.
Section 5. Election to Participate. An Eligible
Director becomes a Participant in the Plan by filing a written
election ("the Election Agreement") with the Company before the
beginning of the Plan Year to which the election relates. Any
person who becomes an Eligible Director during a Plan Year, and
who was not an Eligible Director prior to the beginning of such
Plan Year, may file an Election Agreement to participate in the
Plan for such Plan Year before his or her term begins. The
Election Agreement shall specify the amount to be deferred,
expressed as a percent of the Retainer Fee, and the Payment Date
with respect to the deferred amounts. The Election Agreement
shall continue until the Participant terminates or modifies such
election by filing a new Election Agreement with the Company. An
Election Agreement, once made by the Participant, shall be
irrevocable with respect to all Retainer Fees otherwise payable
in cash while such Election Agreement is in effect. No Election
Agreement, or any modification or termination thereof, shall
apply to any portion of the Retainer Fee otherwise payable within
six months of the date of such Election Agreement, modification
or termination.
Section 6. Deferred Stock Account.
(a) Establishment of Account. The Company shall
establish and maintain a Deferred Stock Account for each
Participant, which shall reflect all entries required to be made
pursuant to the terms and conditions of the Plan and the
Participant's Election Agreement. Credits made pursuant to this
Section 6 shall be reflected on the books and records of the
Company as an obligation to issue and deliver a number of shares
of Common Stock on the specified Payment Date. No stock
certificate shall be created or registered until the Payment Date
and the Participant generally shall not have any of the rights
and privileges of a stockholder with respect to such share
credits, except as provided in Section 6(c) and Section 6(d)
below.
(b) Deferred Stock Credits. As of each date that all
or any portion of the Retainer Fee would otherwise be payable to
a Participant, the Company shall credit to such Participant's
Deferred Stock Account a number of shares (rounded to the nearest
one-hundredth of a share) equal to the deferred amount of the
Participant's Retainer Fee, as specified in his or her then
effective Election Agreement, divided by the Market Price on such
day.
(c) Dividend Credits. Each time a cash dividend is
paid on the Common Stock, the Company shall credit to each
Participant's Deferred Stock Account that number of shares
(rounded to the nearest one-hundredth of a share) determined by
multiplying the dividend amount per share by the total number of
shares credited to the Participant's Deferred Stock Account as of
the record date for such dividend and dividing the product by the
Market Price on the dividend payment date.
(d) Adjustments for Certain Changes in Capitalization.
If the Company shall at any time change the rights and privileges
of its outstanding shares of Common Stock or increase or decrease
the number of such shares by means of the payment of a stock
dividend or any other distribution upon such shares payable in
stock or through a stock split, subdivision, consolidation, combination,
reclassification, or recapitalization involving the Common Stock,
then the numbers, rights and privileges of the shares issuable
under the Plan shall be increased, decreased or changed in like
manner as if such shares had been issued and outstanding, fully
paid and nonassessable at the time of such occurrence.
(e) Account Statement. The Company shall provide each
Participant with an annual statement indicating the number of
shares credited to his or her Deferred Stock Account as of the
end of the preceding Plan Year.
(f) No Forfeiture. Shares credited to a Participant's
Deferred Stock Account shall not be subject to forfeiture for any
reason.
Section 7. Payment of Deferred Stock Account.
(a) General. Credits to a Participant's Deferred
Stock Account shall be payable in whole shares of Common Stock on
or promptly after the applicable Payment Date. Any fractional
share amounts will be paid in cash equal to the Market Value on
the Payment Date multiplied by the fractional share amount.
(b) Death. If the Payment Date is the result of the
Participant's death, the shares of Common Stock required to be
delivered under the Plan shall be promptly issued in the name of,
and be delivered to, the executor or administrator of the
Participant's estate.
(c) Change of Control. If the Payment Date is the
result of a Change of Control, the credits to a Participant's
Deferred Stock Account as of the day immediately prior to the
effective date of the event constituting the Change of Control
shall be paid in full in whole shares of Common Stock (together
with cash in lieu of a fractional share) on such date.
Section 8. Administration. The Plan shall be
administered by the Compensation Committee of the Board of
Directors of the Company (the "Committee"). The Committee shall
have the full power and authority to prescribe, amend and rescind
rules and regulations relating to the Plan, establish procedures
deemed appropriate for its administration, and make any and all
other determinations that may be necessary or advisable for its
effective administration. All questions of interpretation of the
Plan shall be determined by the Committee, and such determination
shall be final and binding upon all persons having an interest in
the Plan. The Committee, however, shall have no power to
determine the number, timing or value of shares to be credited to
any Participant's Deferred Stock Account.
Section 9. "Top Hat" Plan. The Plan is intended to be,
for purposes of Titles I and IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), an unfunded plan for
the benefit of a selected group of non-employee management
persons.
Section 10. Status of Account. Credits made to a
Participant's Deferred Stock Account, shall not give the
Participant or his or her beneficiary any right, title or
interest in and to any specific assets of the Company. A
Participant shall not have any voting rights or any other rights
as a shareholder (except as expressly set forth in Section 6)
until the shares credited to his or her Deferred Stock Account
are distributed in Common Stock. The Deferred Stock Account is
not intended to be a trust account or escrow account for the
benefit of a Participant or any other person or an asset
segregation for the benefit of a Participant or any other person.
The Company shall not be required to reserve or otherwise set
aside funds or shares of Common Stock for the payment of its
obligation hereunder. Benefits payable under the Plan shall be
an unsecured obligation of the Company.
Section 11. Amendment or Termination. The Committee may,
at any time and from time to time, terminate the Plan or make
such amendments as it deems advisable; provided, however, that no
such termination or amendment shall adversely affect or impair
the rights of a Participant with respect to share credits in his
or her Deferred Stock Account unless such Participant shall
consent in writing to such termination or amendment.
Notwithstanding the foregoing, no such amendment shall be
effective without the approval of the Company's shareholders if
such approval is then required pursuant to Rule 16b-3 under the
Securities Exchange Act of 1934 (the "1934 Act") or the
applicable rules of any securities exchange.
Section 12. Stock Subject to Plan. The maximum number of
shares of Common Stock that may be issued under the Plan shall be
50,000 shares, subject to adjustment upon changes in the
capitalization of the Company as provided in Section 6(d) of the
Plan.
Section 13. Non-Plan Deferral Arrangements. The Company
does not intend that this Plan preclude it from implementing
additional deferred compensation arrangements.
Section 14. Future Director Terms. Nothing in this Plan
or in any Election Agreement shall obligate a director to
continue as such or to accept any nomination for a future term as
a director of the Company or require the Company to nominate or
cause the nomination of the director for a future term as a
director of the Company.
Section 15. No Alienation. The right of a Participant to
receive shares of Common Stock or any other amounts under the
Plan shall not be transferable or assignable, other than by will
or the laws of descent and distribution, and no part of such
amount shall be subject to attachment or other legal process.
Section 16. Withholding. The Company is entitled to
withhold and deduct from any amounts due to a Participant all
legally required amounts necessary to satisfy any federal, state
or local withholding and employment-related taxes arising
directly or indirectly in connection with the Plan or any
Election Agreement, and the Company may require the Participant
to remit promptly to the Company the amount of such taxes before
taking any future actions with respect to the Participant's
Deferred Stock Account or Election Agreement.
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