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.K Bonus Plan
EXHIBIT 10.k
FINGERHUT COMPANIES, INC.
AND SUBSIDIARIES
ANNUAL INCENTIVE BONUS PLAN
FOR DESIGNATED CORPORATE OFFICERS
1. Definitions. When the following terms are used herein
with initial capital letters, they shall have the following
meanings:
1.1. Base Pay - a specific dollar amount identified in
Schedule X.
1.2. Compensation Committee - a committee comprised
solely of two or more "outside directors" of Fingerhut
Companies, Inc. which satisfies the requirements of
Section 162(m) of the Code; provided, however, that
until the first meeting of shareholders of the Company
at which directors are to be elected that occurs after
July 1, 1994, the Compensation Committee may be
composed of two or more disinterested directors within
the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934.
1.2. Code - the Internal Revenue Code of 1986, as it
may be amended from time to time, and any proposed,
temporary or final Treasury Regulations promulgated
thereunder.
1.3. Company - Fingerhut Companies, Inc., a Minnesota
corporation, and any of its affiliates that adopt this
Plan.
1.4. Participant - the Chairman and Chief Executive
Officer, and any of the Executive Vice Presidents or
Senior Vice Presidents of the Company who are
designated by the Compensation Committee prior to the
start of a Performance Period as Participants in this
Plan.
1.5. Performance Period - the twelve consecutive month
period which coincides with the Company's fiscal year.
1.6. Targeted Bonus Percentage - the percentage
identified in Schedule Y.
1.7. Company Performance Factor - a percentage
identified in Schedule Z. The Company Performance
Factor shall be directly and specifically tied to one
or more of the following business criteria: the
Company's consolidated pre-tax earnings, net revenues,
net earnings, operating income, earnings before
interest and taxes, cash flow, return on equity, return
on net assets employed or earnings per share for the
applicable Performance Period, all as computed in
accordance with generally accepted accounting
principles as in effect from time to time and as
applied by the Company in the preparation of its
financial statements and subject to such other special
rules and conditions as the Compensation Committee may
establish at the beginning of the applicable
Performance Period. Such Performance Factors shall
constitute the sole business criteria upon which the
performance goals under this Plan shall be based.
2. Administration.
2.1. Compensation Committee. The Plan shall be
administered by the Compensation Committee.
2.2. Determinations made prior to each Performance
Period. Prior to each Performance Period, or solely in this
case of the Performance Period which begins January 1, 1994,
prior to April 1, 1994, the Compensation Committee shall:
(a) designate Participants for that Performance
Period;
(b) determine each Participant's Base Pay for the
Performance Period by amending (in writing) Schedule X;
(c) establish Targeted Bonus Percentages for the
Performance Period by amending (in writing) Schedule Y;
(d) establish Company Performance Factors for the
Performance Period by amending (in writing) Schedule Z.
2.3. Certification. Following the close of each
Performance Period and prior to payment of any bonus under
the Plan, the Compensation Committee must certify in writing
that the Company Performance Factor and all other factors
upon which a bonus is based have been attained.
2.4. Shareholder Approval. The material terms of this
Plan shall be disclosed to and approved by shareholders of
the Company in accordance with Section 162(m) of the Code.
No bonus shall be paid under this Plan unless such
shareholder approval has been obtained.
3. Bonus Payment.
3.1. Formula. Each Participant shall receive a bonus
payment for each Performance Period in an amount not greater
than:
(a) the Participant's Base Pay for the
Performance Period, multiplied by
(b) the Participant's Targeted Bonus Percentage
for the Performance Period, multiplied by
(c) the Participant's Company Performance Factor
for the Performance Period.
3.2. Limitations.
(a) No payment if Performance Factor not
achieved. In no event shall any Participant receive a bonus
payment hereunder if the Performance Factor and all other
factors on which the bonus payment is based is not achieved
during the Performance Period.
(b) No payment in excess of preestablished
amount. No Participant shall receive a payment under this
Plan for any Performance Period in excess of $1.5 million.
(c) Compensation Committee may reduce bonus
payment. The Compensation Committee retains sole discretion
to reduce the amount of or eliminate any bonus otherwise
payable under this Plan.
4. Benefit Payments.
4.1. Time and Form of Payments. Subject to any
deferred compensation election pursuant to any such plans of
the Company, benefits shall be paid to the Participant in
one or more cash payments as soon as determined by the
Compensation Committee after it has certified that the
Company Performance Factor and all other factors upon which
the bonus payment for the Participant is based have been
attained.
4.2. Nontransferability. Participants and
beneficiaries shall not have the right to assign, encumber
or otherwise anticipate the payments to be made under this
Plan, and the benefits provided hereunder shall not be
subject to seizure for payment of any debts or judgments
against any Participant or any beneficiary.
4.3. Tax Withholding. In order to comply with all
applicable federal or state income tax laws or regulations,
the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll,
withholding, income or other taxes, which are the sole and
absolute responsibility of a Participant, are withheld or
collected from such Participant.
5. Amendment and Termination. The Compensation Committee
may amend this Plan prospectively at any time and for any
reason deemed sufficient by it without notice to any person
affected by this Plan and may likewise terminate or curtail
the benefits of this Plan both with regard to persons
expecting to receive benefits hereunder in the future and
persons already receiving benefits at the time of such
action.
6. Miscellaneous.
6.1. Effective Date. January 1, 1994.
6.2. Term of the Plan. Unless the Plan shall have been
discontinued or terminated, the Plan shall terminate on
December 31, 1998. No bonus shall be granted after the
termination of the Plan; provided, however, that a payment
with respect to a Performance Period which begins before
such termination may be made thereafter. In addition, the
authority of the Compensation Committee to amend the Plan,
shall extend beyond the termination of the Plan.
6.3. Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
6.4. Applicability to Successors. This Plan shall be
binding upon and inure to the benefit of the Company and
each Participant, the successors and assigns of the Company,
and the beneficiaries, personal representatives and heirs of
each Participant. If the Company becomes a party to any
merger, consolidation or reorganization, this Plan shall
remain in full force and effect as an obligation of the
Company or its successors in interest.
6.5. Employment Rights and Other Benefit Programs.
The provisions of this Plan shall not give any Participant
any right to be retained in the employment of the Company.
In the absence of any specific agreement to the contrary,
this Plan shall not affect any right of the Company, or of
any affiliate of the Company, to terminate, with or without
cause, the participant's employment at any time. This Plan
shall not replace any contract of employment, whether oral
or written, between the Company and any Participant, but
shall be considered a supplement thereto. This Plan is in
addition to, and not in lieu of, any other employee benefit
plan or program in which any Participant may be or become
eligible to participate by reason of employment with the
Company. Receipt of benefits hereunder shall have such
effect on contributions to and benefits under such other
plans or programs as the provisions of each such other plan
or program may specify.
6.6. No Trust or Fund Created. This Plan shall not
create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company or
any affiliate and a Participant or any other person. To the
extent that any person acquires a right to receive payments
from the Company or any affiliate pursuant to this Plan,
such right shall be no greater than the right of any
unsecured general creditor of the Company or of any
affiliate.
6.7. Governing Law. The validity, construction and
effect of the Plan or any bonus payable under the Plan shall
be determined in accordance with the laws of the State of
Minnesota.
6.8. Severability. If any provision of the Plan is or
becomes or is deemed to be invalid, illegal or unenforceable
in any jurisdiction such provision shall be construed or
deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the
determination of the Compensation Committee, materially
altering the purpose or intent of the Plan, such provision
shall be stricken as to such jurisdiction, and the remainder
of the Plan shall remain in full force and effect.
6.9. Qualified Performance-Based Compensation. All of
the terms and conditions of the Plan shall be interpreted in
such a fashion as to qualify all compensation paid hereunder
as qualified performance-based compensation within the
meaning of Section 162(m) of the Code.
SCHEDULE X
BASE PAY FOR PERFORMANCE PERIOD
BEGINNING ON ___________ AND ENDING ON ___________
Job Title [or name] Base Pay
SCHEDULE Y
TARGETED BONUS PERCENTAGE FOR PERFORMANCE PERIOD
BEGINNING ON ___________ AND ENDING ON ___________
Job Title Targeted Bonus Percentage
SCHEDULE Z
COMPANY PERFORMANCE TARGETS FOR PERFORMANCE PERIOD
BEGINNING ON ___________ AND ENDING ON ___________
Dates Referenced Herein and Documents Incorporated by Reference
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