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.E Incentive Plan
Page 7
EXHIBIT 10.e
FINGERHUT COMPANIES, INC.
AND SUBSIDIARIES
1994 KEY MANAGEMENT INCENTIVE BONUS PLAN
Participation in this Plan is limited to officers of Fingerhut
Companies, Inc. and subsidiaries recommended by the Executive
Compensation Committee and approved by the Chief Executive
Officer. The intent of the Plan is to pay bonus amounts at goal
ranging from 75% to 125% of base salary. The bonus amounts are
based on: (1) targeted bonus, (2) Company financial performance,
and (3) achievement of individual objectives. For members of the
Management Committee and Senior Vice Presidents at goal, 80% of
targeted bonus amount will be determined by Company financial
performance and 20% will be determined by achievement of
individual objectives. For Vice Presidents, 50% of the targeted
bonus amount will be determined by Company financial performance
and 50% will be determined by achievement of individual
objectives. In the event of above goal Company performance, the
Company performance factor will be increased in accordance with
Schedules B or C, as applicable.
This Plan will be effective for fiscal years commencing January
1, 1994 and later but the Company may change, modify or terminate
the Plan at any time. Schedules B and C of the Plan will be
revised each fiscal year to reflect the Company's fiscal year
goals. Prior to the start of each fiscal year the Executive
Compensation Committee will review the Plan and the revised
Schedules B and C.
Eligibility
1. Participation in the Plan is limited to officers of Fingerhut
Companies, Inc. and subsidiaries who are recommended by the
Executive Compensation Committee and approved by the Chief
Executive Officer and who are not participants in the Annual
Incentive Bonus Plan.
2. 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 Executive Compensation Committee will have
complete discretion to pay or not pay a bonus and to adjust
the bonus amount in whatever way the Committee deems
appropriate.
3. 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 targeted bonus
percentage changes 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
1. Salary shall be defined as paid base wages 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
1. The formula yielding the individual bonus payment for all other
participants will be as follows:
Paid Base Targeted (Company Individual) Bonus
Wages X Bonus* X (Performance + Performance)
= Amount
(Factor ** Factor***)
*See Schedule A **See Schedule B or C ***See Schedule D
Example - At Goal Performance
- Executive Vice President earns $280,000 salary
- Targeted bonus is 125%
- Company performance factor is achieved at goal (i.e. 80%)
- Individual performance rating is 15
Salary X 125% X (80% + 15%) = Bonus
$280,000 $350,000 95% = $332,500
Example - Above Goal Performance
- Executive Vice President earns $280,000 salary
- Targeted bonus is 125%
- Company performance factor is achieved above goal at 95%
- Individual performance rating is 15.
Salary X 125% X (95% + 15%) = Bonus
$280,000 $350,000 110% = $385,000
Example - Below Goal Performance
- Executive Vice President earns $280,000 salary
- Targeted bonus is 125%
- Company performance factor is achieved below goal at
70%
- Individual performance rating is 15
Salary x 125% x (70% + 15%)= Bonus
$280,000 $350,000 85% = $297,500
2. In the event the minimum Plan threshold is not attained, a
special Discretionary Fund will be established in an amount equal
to 10% of the annualized salaries of all Plan participants. This
fund may or may not be paid out, as determined at the discretion
of the Executive Compensation Committee and approved by the Chief
Executive Officer.
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 payment will occur as soon as
possible after the approval date.
4. The Plan is self-funding. Thus, the financial objectives of the
Company 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 (1)
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 effect the Company's business
positively or negatively during the year, that were not included
in the Company performance 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 Executive Compensation Committee will make a recommendation
on the appropriate adjustment of such unplanned situation on this
Plan, which will be decided by the Chief Executive Officer.
Approvals
1. The head of each Department will recommend individual objectives
at the start of the measurement period. Each Officer will
recommend and justify to the Executive Compensation Committee
objectives and performance factors for participating officers.
The Executive Compensation Committee will review the objectives
and performance factors, approve them, and forward to the Chief
Executive Officer. The decision of the Chief Executive Officer
will be final, conclusive and binding with respect to
establishment of 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 Executive Compensation Committee. 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 Executive Compensation Committee.
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 form (see attached). 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. Achievement rating points assigned must total 20 for
Management Committee members and Senior Vice Presidents and total
50 for the Vice Presidents.
3. Characteristics of Well Developed Objectives - To be meaningful,
individual performance objectives 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 Executive
Compensation Committee and the Chief Executive Officer prior to
formal communication to the participants. 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 appropriate Officer will review results against
objectives. The final rating at the end of the measurement
period will determine the bonus amount paid.
Schedule A
FINGERHUT COMPANIES, INC.
AND SUBSIDIARIES
1994 KEY MANAGEMENT INCENTIVE BONUS PLAN
Job Level
Targeted Bonus Schedule
Job Level Targeted Bonus Percentage
Executive Vice Presidents 125% of Paid Base
Wages
Senior Vice Presidents 100% of Paid Base Wages
Vice Presidents 75% of Paid Base Wages
SCHEDULE D
FINGERHUT COMPANIES, INC.
AND SUBSIDIARIES
1994 KEY MANAGEMENT INCENTIVE BONUS PLAN
INDIVIDUAL OBJECTIVES
PERFORMANCE FACTOR - EXECUTIVE VICE PRESIDENTS
AND SENIOR VICE PRESIDENTS
1 to 20 Points
Maximum Performance
Factor Possible - 20 Points
PERFORMANCE FACTOR - VICE PRESIDENTS
1 to 50 Points
Maximum Performance
Factor Possible - 50 Points
No payout may occur for Individual Objectives unless the Company
performance minimum pre-tax consolidated earnings amount of
$xxx.xxx million is achieved.
(ltr/94bonus1)
Dates Referenced Herein and Documents Incorporated by Reference
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