SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
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[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
FINGERHUT COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Items 22(a)(2) of Schedule A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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FINGERHUT LOGO
4400 BAKER ROAD
MINNETONKA, MINNESOTA 55343
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
TO THE SHAREHOLDERS OF FINGERHUT COMPANIES, INC.:
Notice is hereby given that the Annual Meeting of the Shareholders of
Fingerhut Companies, Inc. (the "Company") will be held at 11:00 a.m.
(Minneapolis time) on Wednesday, May 15, 1996, at the Minneapolis Hilton,
1001 Marquette Avenue South, Minneapolis, Minnesota, for the following
purposes:
1. To elect three Class III directors, each to serve for a three-year
term and until his successor is elected and qualified.
2. To vote on the ratification of the appointment of KPMG Peat Marwick
LLP as independent auditors of the Company for the 1996 fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock at the close of business
on March 20, 1996, will be entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John K. Ellingboe
John K. Ellingboe
Secretary
March 28, 1996
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
This proxy statement is provided in connection with the 1996 Annual Meeting
of Shareholders of Fingerhut Companies, Inc. (the "Company"), which will be
held at 11:00 a.m. on Wednesday, May 15, 1996 at the Minneapolis Hilton, 1001
Marquette Avenue South, Minneapolis, Minnesota, and any adjournment thereof.
The accompanying proxy is solicited by the Board of Directors of the Company.
The Company's principal executive offices are located at 4400 Baker Road,
Minnetonka, Minnesota 55343.
The Board of Directors is aware of two items of business to be considered at
the Annual Meeting: (1) the election of three Class III directors and (2)
ratification of the appointment of independent auditors for the 1996 fiscal
year. The Board of Directors knows of no other matters to be presented for
action at the Annual Meeting. However, if any other matters properly come
before the Annual Meeting, the persons named in the proxy will vote on such
other matters and/or for other nominees in accordance with their best
judgment.
The Board of Directors recommends that an affirmative vote be cast in favor
of both of the proposals listed in the proxy (or voting instructions) card.
By completing and returning the accompanying proxy, the shareholder
authorizes Theodore Deikel and John K. Ellingboe, as designated on the face
of the proxy, to vote all shares for the shareholder. All returned proxies
that are properly signed and dated will be voted as the shareholder directs.
If no direction is given, executed proxies will be voted FOR each of the
nominees and the listed proposals. Regardless of the size of your holdings,
you are encouraged to complete and return the proxy or voting instructions
card so that your shares may be voted at the Annual Meeting. A proxy may be
revoked by a shareholder at any time before it is voted at the Annual Meeting
by giving notice of revocation to the Company in writing, by execution of a
later dated proxy or by attending and voting at the Annual Meeting.
Shares voted as abstentions on any matter (or a "withhold vote for" as to
directors) will be counted for purposes of determining the presence of a
quorum at the Annual Meeting and treated as unvoted, although present and
entitled to vote, for purposes of determining the approval of each matter as
to which the shareholder has abstained. If a broker submits a proxy that
indicates the broker does not have discretionary authority as to certain
shares to vote on one or more matters, those shares will be counted for
purposes of determining the presence of a quorum at the meeting, but will not
be considered as present and entitled to vote with respect to such matters.
This proxy statement and the accompanying form of proxy are being sent or
given to shareholders beginning on or about March 28, 1996, along with the
Company's 1995 Annual Report to Shareholders.
Holders of record of the Company's common stock, $.01 par value (the "Common
Stock"), at the close of business on March 20, 1996, will be entitled to vote
on all matters at the Annual Meeting. Each share will be entitled to one
vote. On March 20, 1996, a total of 46,434,994 shares of Common Stock were
outstanding.
All expenses in connection with the solicitation of this proxy will be paid
by the Company. Officers, directors and regular employees of the Company, who
will receive no extra compensation for their services, may solicit proxies by
telephone or electronic transmission.
PROPOSAL 1:
ELECTION OF DIRECTORS
In accordance with the terms of the Company's Amended and Restated Articles
of Incorporation, the Board of Directors is divided into three classes,
designated as Class I, Class II and Class III, respectively, with staggered
three-year terms of office. At each annual meeting, directors who are elected
to succeed the class of directors whose terms expire at that meeting will be
elected for three-year terms. At the Annual Meeting, three Class III
directors will be elected to hold office for three-year terms that will
expire at the annual meeting of shareholders to be held in 1999 and until
their successors are elected and qualified. The Board of Directors has
designated Theodore Deikel, Wendell R. Anderson and Edwin C. Gage as nominees
for reelection to the Board of Directors of the Company. Each of the nominees
has consented to serve as director, if elected. If any of the nominees
becomes unable to accept nomination or election, the enclosed proxy will be
voted for the election of a nominee designated by the Board of Directors,
unless the Board reduces the number of directors on the Board of Directors or
unless the shareholder indicates to the contrary on the proxy. The
affirmative vote of a majority of the shares of Common Stock entitled to vote
and present in person or by proxy at the Annual Meeting is required for
election of each nominee. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES.
Certain biographical information furnished by the Company's directors and
nominees, and the directors' respective terms of office, is presented below.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING:
THEODORE DEIKEL (age 60) has been Chairman of the Board, Chief Executive
Officer and President of the Company since 1989. Mr. Deikel is a Class III
director whose term expires at the Annual Meeting. From 1985 until rejoining
the Company, Mr. Deikel served as Chairman and Chief Executive Officer of CVN
Companies, Inc., a direct marketing company using television and direct mail.
From 1979 to 1983, Mr. Deikel was Executive Vice President of American Can
Company (a predecessor of The Travelers Inc.) and Chairman of American Can
Company's specialty retailing division, which included the Company. In
addition, Mr. Deikel was Chief Executive Officer of Fingerhut Corporation
from 1975 to 1983.
WENDELL R. ANDERSON (age 63) has been of counsel to the law firm of Larkin,
Hoffman, Daly and Lindgren, Ltd. since 1991, and was a partner in the firm
for at least five years prior to that time. The law firm provides legal
services to the Company from time to time. Mr. Anderson has been a director
of the Company since 1990. He is a Class III director whose term expires at
the Annual Meeting. He is a former United States Senator and former Governor
of the State of Minnesota, serves on the University of Minnesota Board of
Regents and is also a director of National City Bancorporation, Evans
Environmental Corporation and Turbodyne Technologies, Inc.
EDWIN C. GAGE (age 55) has been a director of the Company since 1992. Mr.
Gage is Chairman and Chief Executive Officer of Gage Marketing Group LLC
(integrated direct marketing and promotional services), which he formed in
January 1992, and Vice Chairman of Carlson Holdings, Inc. (holding company
for hospitality, marketing and travel companies). He was Chief Executive
Officer of Carlson Companies, Inc. from 1989 to 1992. Mr. Gage is a Class III
director whose term expires at the Annual Meeting. Mr. Gage is also a
director of SuperValu Stores, Inc., Carlson Holdings, Inc., Minnesota Council
for Quality, and Minneapolis Institute of Arts; and an advisory board member
for the Kellogg Graduate School of Management at Northwestern University.
CONTINUING DIRECTORS:
STANLEY S. HUBBARD (age 62) has been a director of the Company since 1990.
For more than the past five years he has been Chairman of the Board,
President and Chief Executive Officer of Hubbard Broadcasting, Inc.
(privately held communications company); he is also an executive with several
other entities affiliated with Hubbard Broadcasting, including Conus
Communications, a satellite news gathering company. He is founder and
Chairman of the Board of United States Satellite Broadcasting Company. Mr.
Hubbard is a Class II director whose term expires at the 1998 Annual Meeting.
RICHARD M. KOVACEVICH (age 52) has been a director of the Company since 1993
and is a Class II director whose term expires at the 1998 Annual Meeting. Mr.
Kovacevich has been Chairman of Norwest Corporation (bank holding company)
since 1995 and has been President and Chief Executive Officer of Norwest
Corporation since 1993; from 1989 to 1992, he was President and Chief
Operating Officer of Norwest Corporation. Mr. Kovacevich also serves as a
director of Norwest Corporation, ReliaStar Financial Corp. (formerly The NWNL
Companies, Inc.) and Northern States Power Company. In addition, he also
serves as a director of the Bankers Roundtable; as a director and Vice
President of the Walker Art Center; as a director and member of the Executive
Committee of the Minnesota Business Partnership, Inc.; as Vice Chairman of
the Board of The Greater Minneapolis Metropolitan Housing Corporation; as
Chairman of the American Bankers Council; and as a member of the Federal
Reserve Advisory Council and the Advisory Council of Stanford University
Graduate School of Business.
DUDLEY C. MECUM (age 61) has been a director of the Company since 1990 and
has been a partner in the firm of G.L. Ohrstrom & Co. (merchant banking)
since 1989. He was Chairman of Mecum Associates, Inc. (management consulting)
from 1987 to 1989. Mr. Mecum is a Class I director whose term expires at the
1997 Annual Meeting. Mr. Mecum is also a director of The Travelers Inc.,
Lyondell Petrochemical Corporation, Vicorp Restaurants, Inc., DynCorp, Roper
Industries, Inc. and Harrow Industries, Inc.
Rakesh K. Kaul resigned from the Board of Directors in February 1996. The
Board of Directors has determined not to fill the vacancy resulting from Mr.
Kaul's resignation at this time. At the Annual Meeting, shareholders may only
vote for three individuals to serve as Class III directors.
The Board of Directors has established Executive, Compensation and Audit
Committees. The Company does not have a nominating committee.
The Executive Committee is authorized to exercise the full power of the Board
of Directors in the management and conduct of the business affairs of the
Company during the interim between meetings of the Board. The Executive
Committee may also review and make recommendations to the Board of Directors
with respect to various corporate matters. The current members of the
Executive Committee are Messrs. Anderson and Deikel. During the fiscal year
ended December 29, 1995, the Executive Committee met four times.
The Compensation Committee sets the compensation of all the Company's
officers whose base annual salary exceeds $200,000, approves, adopts and
administers compensation plans, administers and grants stock options under
the Company's stock option plans, reviews administration of the Company's
benefit plans and reviews and makes recommendations to the Board of Directors
on matters relating to compensation of all officers. During the fiscal year
ended December 29, 1995, the Compensation Committee met four times. The
current members of the Compensation Committee are Messrs. Gage, Hubbard and
Kovacevich.
The Audit Committee supervises and reviews the Company's accounting and
financial services, makes recommendations to the Board of Directors as to
nomination of independent auditors, confers with the independent auditors and
internal auditors regarding the scope of their proposed audits and their
audit findings, reports and recommendations, reviews the Company's financial
controls, procedures and practices, approves all nonaudit services by the
independent auditors and reviews transactions between the Company and its
affiliates. The current members of the Audit Committee are Messrs. Gage,
Hubbard and Mecum. The Audit Committee met four times during the fiscal year
ended December 29, 1995.
During the fiscal year ended December 29, 1995, the Board of Directors met
four times. All incumbent directors attended at least 75% of all the meetings
of the Board of Directors and committees that were held while they were
serving on the Board of Directors or on such committee. The Company's Board
of Directors and committees also act from time to time by written consent in
lieu of meetings.
Compensation of Directors. Members of the Board of Directors who are not
employees of the Company receive an annual retainer of $20,000 for membership
on the Board of Directors, including service on committees of the Board. The
directors designated and serving as the chairperson of the Audit Committee
and of the Compensation Committee also receive an annual retainer of $4,000
for service as chairperson of such committee. In addition, non-employee
directors receive an attendance fee of $2,500 for each regular or special
meeting attended of the Board of Directors. Directors employed by the Company
receive no directors' fees. In addition, the Company reimburses reasonable
travel, lodging and other incidental expenses incurred by directors in
attending meetings of the Board of Directors and committees. Wendell
Anderson, a member of the Company's Board of Directors, provides certain
governmental and regulatory affairs consulting services to the Company, for
which he was paid $144,000 plus reimbursement of expenses in 1995.
During 1995, the Board of Directors adopted the Fingerhut Companies, Inc.
Non-Employee Directors Stock Option Plan. On March 1, 1996, the non-employee
directors were each granted the option to purchase 5,000 shares of Common Stock
at the exercise price of $13.875. These options are fully vested and terminate
on the earlier of March 1, 2001 or seven months following a director's
resignation.
Under the Fingerhut Companies, Inc. Directors' Retainer Stock Deferral Plan,
non-employee directors may elect to have all or a portion of the annual retainer
for service on the Board of Directors paid in the form of shares of Common
Stock. The payment may be deferred, in which case directors who elect to defer
their retainer will have their deferred stock accounts credited with the number
of shares equal to the deferred retainer amount divided by the market price of
the Common Stock on the date the retainer was otherwise payable. Mr. Hubbard has
elected to have 100% of his annual retainer paid in the form of Common Stock.
TOTAL SHAREHOLDER RETURN INDEX
The following graph compares the cumulative total shareholder return on the
Company's Common Stock ("FHT") since December 31, 1990, with the cumulative
total return for the Standard & Poor's 500 Stock Index ("SP500") and the Dow
Jones Retailers Broadline Index ("DJRTB") over the same period, assuming the
investment of $100 on December 31, 1990 and reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
FHT $100 $181 $194 $363 $202 $182
SP500 $100 $130 $140 $155 $157 $215
DJRTB $100 $166 $192 $184 $156 $176
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of independent directors who qualify as disinterested
persons for purposes of Rule 16b-3 under the Securities Exchange Act of 1934.
COMPENSATION POLICIES. The Company's current executive compensation policies are
intended to achieve three basic goals: (i) allow the Company to attract and
retain the highest caliber executives; (ii) provide compensation programs that
reward individual and corporate performance and motivate executives to achieve
strategic corporate goals for both short-term and long-term financial results;
and (iii) align the interests of executives with the interests of the Company's
long-term shareholders through stock options and other stock-based awards.
The Compensation Committee believes that the most effective executive
compensation program is one that provides incentives to achieve both current
and longer-term strategic goals, with the ultimate objective of enhancing
shareholder value. Accordingly, the Compensation Committee believes executive
compensation should be comprised of both short-term cash-based programs that
reward achievement of individual and Company-specific goals and long-term
equity-based incentives that reward executives only to the extent that the
Company's Common Stock price increases for all shareholders.
The Company's annual compensation mix provides for base salaries, as well as
the opportunity to receive annual bonuses that are linked directly to
financial performance of the Company and, to varying extents, to individual
performance. This permits the Company to attract and retain talented
executives but makes a substantial portion of an executive officer's annual
compensation dependent on the Company's performance.
The Company provides long-term equity-based compensation generally through
participation in the Fingerhut Companies, Inc. Stock Option Plan (the "Stock
Option Plan) and the Fingerhut Companies, Inc. 1995 Long-Term Incentive and
Stock Option Plan (the "1995 Stock Option Plan"). This assures that key
employees have a meaningful stake in the Company, the ultimate value of which
is dependent on the Company's long-term stock price appreciation, and that
the interests of employees are aligned with those of the shareholders. In
limited cases, the Compensation Committee has granted equity incentives in
subsidiaries.
POLICY ON DEDUCTIBILITY OF COMPENSATION. Section 162(m) of the Internal Revenue
Code limits the tax deduction to $1 million per year for compensation paid to
the executive officers named in the "Summary Compensation Table" unless certain
requirements are met. The Compensation Committee has carefully considered these
requirements and the regulations and has structured its programs so that bonus
compensation and gains from exercises of Company stock options will be exempt
from the deduction limitations. The Compensation Committee's present intention
is to structure compensation to be tax deductible; however, it retains the right
to authorize compensation that does not qualify for income tax deductibility.
SALARIES. Executive officer base salaries are not based on the Company's
performance. Salaries generally are intended to be competitive with the average
base salaries paid by corporations similar in size to the Company, as indicated
in independent salary surveys. The Company competes for talented executives with
a wide variety of corporations, which are not necessarily the same as those
referenced in the performance graph. Recently recruited executive officers' base
salaries reflect their positions and experience, as well as the compensation
package required to attract them to the Company in light of market factors.
Annual merit increases are based on a subjective evaluation of an officer's
performance. As part of the annual budget process, the Company sets company-wide
guidelines for merit salary increases. These guidelines provided for 3.6%
average increases for exempt employees' salary reviews effective during 1995,
with a 14-month salary review period. A majority of the executive officers
received salary increases in excess of the guidelines, reflecting increased
responsibilities, internal parity and retention considerations. The Compensation
Committee increased the Chief Executive Officer's 1995 salary to $600,000 from
$540,050 in 1994.
ANNUAL INCENTIVE COMPENSATION. A significant portion of the executive officers'
compensation is at risk each year in the form of variable annual incentive
bonuses under the Fingerhut Companies, Inc. and Subsidiaries Key Management
Incentive Bonus Plan for Designated Corporate Officers (the "Bonus Plan") or the
Fingerhut Companies, Inc. Annual Incentive Bonus Plan (the "Annual Incentive
Bonus Plan").
Bonus Plan. The Bonus Plan is approved annually by the Compensation Committee
and is intended to provide incentives to management to achieve or exceed the
Company's financial goals for that year. All executive officers other than
the Chief Executive Officer, as well as all vice presidents and other
management level employees, participated in the 1995 Bonus Plan. The 1995
Bonus Plan formula had four components: paid base salary, targeted bonus
percentage (based on job level), Company performance factor and individual
performance objectives. The proportion of the targeted bonus based on the
Company's financial performance ranged from 50% for vice presidents to 65%
for senior executive officers other than the Chief Executive Officer. The
1995 Bonus Plan established target and maximum bonuses of 75% and 97.5%,
respectively, of paid base salary for vice presidents and 125% and 162.5%,
respectively, of paid base salary for senior executives. The Company
performance factor was based on one or more of the following factors,
depending on the individual's area of responsibility:1995 earnings per share,
Fingerhut Corporation pre-tax earnings or Fingerhut Financial Services
pre-tax earnings. The Company's 1995 earnings per share resulted in Company
performance factors of 63% of target for senior executives and 52% of target
for vice presidents. In addition, the 1995 Bonus Plan also provided for
special President's Awards for extraordinary service. Four executive officers
received a President's Award in 1995, including three named executives.
Annual Incentive Bonus Plan. The Company wishes to ensure that bonuses paid
to executive officers satisfy the requirements for deductibility under
Section 162(m) of the Internal Revenue Code of 1986, as amended. Therefore,
the Compensation Committee adopted the Annual Incentive Bonus Plan, which was
approved by the shareholders in 1994. The Chief Executive Officer was the
only 1995 participant. As with the Bonus Plan, the Annual Incentive Plan used
a Company performance schedule based on the Company's 1995 earnings per
share. It provided for a target bonus of 125% of paid base salary and a
maximum bonus of 162.5% of paid base salary, calculated solely on the
Company's 1995 earnings per share. Under this plan, the Chief Executive
Officer received a bonus of $519,132, which was 72% of his target bonus.
LONG-TERM INCENTIVE COMPENSATION. The Company's stock-based incentive plans
are designed to align a significant portion of the executive compensation
program with long-term shareholder interests. Options granted under these
plans only have value to the extent the Common Stock appreciates from the
date the options are granted.
1995 Stock Option Plan. The 1995 Stock Option Plan permits a variety of
stock-based grants and awards and gives the Committee flexibility in
tailoring its long-term compensation programs. During 1995, the Compensation
Committee granted a total of 1,401,800 nonqualified stock options under the
1995 Stock Option Plan, of which 943,000 were awarded to thirteen executive
officers. These options had exercise prices at fair market value on the grant
date, vest over a three-year period and expire after ten years. The number of
shares covered by the grants were based on the recommendations of outside
compensation consultants, the level of job responsibility and the
recommendations of the Chief Executive Officer.
Stock Option Plan. The Stock Option Plan permits grants of incentive stock
options and non-qualified stock options, although the Compensation Committee
has granted only non-qualified options. These options are granted with an
exercise price at the fair market value on the grant date, vest over a
five-year period and expire after ten years. The number of shares covered by
a grant reflect the level of job responsibility and, in some cases,
subjective factors based on recommendations of the Chief Executive Officer.
During 1995, the Compensation Committee granted options under the Stock
Option Plan to purchase a total of 3,000 shares of Common Stock to one
executive officer as a result of a promotion. Following the adoption of the
1995 Stock Option Plan, the Compensation Committee generally suspended the
use of new grants under the Stock Option Plan.
Peip Plan. Under the PEIP Plan, employees were offered the opportunity to
purchase option units, each consisting of four non-qualified seven-year
options to purchase Common Stock, with exercise prices of 110%, 120%, 130%
and 140%, respectively, of the fair market value of Common Stock on the grant
date. If an option expires unexercised, or upon termination of employment,
the optionee will be entitled to the return of all or a portion of the
purchase price initially paid to acquire the option, depending on the market
value of the Common Stock on the expiration or termination date. During 1995,
one executive officer was granted the right to purchase options under the
PEIP Plan for an aggregate of 4,000 shares of Common Stock, as a result of a
promotion. In 1995, the Compensation Committee determined that the PEIP Plan
was not succeeding in its goals of attracting, motivating and retaining key
employees. Because most corporations offer standard stock option
arrangements, the Company was forced to provide additional compensation to
offset the unattractive perception of the PEIP Plan by prospective employees.
In addition, the financial incentive to terminate employment to recover the
purchase price undermined the goal of employee retention. As a result of
these factors and a determination that the then outstanding PEIP options had
a Black-Scholes value at least equal to the original purchase price, the
Compensation Committee decided to stop granting new PEIP options and to allow
employees to sell their PEIP options to the Company at the original purchase
price. Employees elected to sell over 80% of the then outstanding PEIP
options back to the Company. The available shares underlying ungranted PEIP
options and repurchased PEIP options were cancelled and not re-issued. At
December 29, 1995, 342,244 PEIP options remained outstanding. The
Compensation Committee did not reprice any PEIP options that employees
elected to retain.
Supplemental Executive Retirement Plan. The Company adopted the Fingerhut
Supplemental Executive Retirement Plan ("SERP") on February 14, 1996, the
details of which are described in the "Executive Compensation -- Supplemental
Executive Retirement Plan" section of this proxy statement. The Board of the
Company adopted the SERP as a method for the Company to supplement benefits
for its executives lost due to the limitations on qualified plans, such as
the Company's Pension Plan, and to provide additional retirement benefits
that will aid in the retention of the Company's key executives.
RICHARD M. KOVACEVICH EDWIN C. GAGE STANLEY S. HUBBARD
Chairman Member Member
Compensation Committee Compensation Committee Compensation Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Edwin C. Gage, Stanley S.
Hubbard and Richard M. Kovacevich. The Company leases telemarketing and
warehouse space from Carlson Real Estate Company, a partnership owned by
various members of the immediate family of Edwin C. Gage, including Mr. Gage.
Rental expense for 1995 under these leases was approximately $1,882,000. The
Company believes the terms of the leases are at least as favorable to the
Company as it could have received from an unrelated third party. The annual
rental amount is not material to either the Company or Carlson Real Estate
Company.
For a number of years, the Company has had regular banking relationships with
Norwest Bank Minnesota, N.A. ("Norwest Bank"), a subsidiary of Norwest
Corporation. Richard M. Kovacevich is President and Chief Executive Officer
of Norwest Corporation. Norwest Bank is one of the lending banks and is a
letter of credit issuing bank under the Company's revolving credit and letter
of credit facility and is also the registrar and transfer agent with respect
to the Common Stock. In addition, the Company and its subsidiaries maintain a
number of depository and checking accounts with Norwest Bank and its
affiliates. The Company paid Norwest Bank approximately $2,281,000 with
respect to these services and relationships for 1995. The Company believes
the terms of the various banking relationships, and the fees paid, are at
least as favorable to the Company as it could have received from an unrelated
third party. The amount paid is not material to either the Company or Norwest
Corporation.
EXECUTIVE COMPENSATION
The following table sets forth cash and noncash compensation for each of the
last three fiscal years to the Chief Executive Officer and each of the four
other most highly compensated executive officers who were serving as
executive officers at December 29, 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION AWARDS
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($)(a) OPTIONS(#)(b) ($)(c)
<S> <C> <C> <C> <C> <C> <C>
Theodore Deikel 1995 $576,814 $519,132 $530,143 250,000 $ 16,500
Chief Executive Officer 1994 $542,971 $ 0 $433,873 0 $ 15,900
1993 $536,756 $789,702 $327,996 400,000 $ 30,000
Rakesh K. Kaul (d) 1995 $432,429 $389,186 $ 72,238 225,000 $ 16,500
Chief Operating Officer 1994 $342,689 $ 87,244 $ 52,494 50,000 $ 15,900
1993 $294,231 $414,314 $ 53,515 250,000 $ 94,858
Ronald N. Zebeck (e) 1995 $358,481 $478,348 $ 55,008 105,000 $ 16,500
President, Fingerhut 1994 $275,962 $211,735 $ 53,060 75,000 $790,500
Financial Services 1993 -- -- -- -- --
Corporation
James B. Moran 1995 $290,882 $261,793 $ 56,790 50,000 $ 16,500
Senior Vice President, 1994 $284,000 $ 72,303 $ 52,427 0 $ 15,900
Operations 1993 $294,750 $415,045 $ 34,649 100,000 $ 30,000
Andrew V Johnson 1995 $227,067 $163,489 $ 47,938 50,000 $ 16,500
Senior Vice President, 1994 $204,269 $ 40,854 $ 43,612 0 $ 15,900
Marketing 1993 $165,942 $188,884 $ 22,667 100,000 $ 30,000
</TABLE>
(a) Amounts reported under "Other Annual Compensation" represent perquisites or
other personal benefits, cash payments designated as an auto allowance, tax
reimbursement payments and, for 1994 and 1995 only, $9,099 cash payments to
Messrs. Deikel, Johnson, Kaul and Moran under the Fingerhut Corporation
Profit Sharing Excess Plan. In accordance with rules of the Securities and
Exchange Commission, perquisites and other personal benefits totalling less
than $50,000 or 10% of a named executive officer's salary and bonus have
been omitted. The auto allowance payments were: Mr. Deikel, $19,500 for
1995 and 1994 and $17,100 for 1993; Messrs. Kaul and Moran, $16,524 for
1995 and 1994 and $14,484 for 1993; Mr. Zebeck, $16,524 for 1995 and
$12,737 for 1994; and Mr. Johnson, $13,688 for 1995 and 1994 and $11,047
for 1993. The perquisites or other personal benefits that exceed 25% of the
amounts listed in this column for any named executive officer are: $416,019
for 1995, $327,482 for 1994 and $244,661 for 1993 for interest paid by the
Company on Mr. Deikel's personal loan to pay the income tax liability on
his 1992 stock exercise.
(b) Adjusted for the Company's 1993 two-for-one stock split. The amounts listed
for 1993 for Messrs. Deikel, Moran and Johnson and for 1994 for Mr. Zebeck
represent PEIP options that were repurchased by the Company in 1995. The
Company did not grant any restricted stock during 1993-1995.
(c) Amounts disclosed in this column, except as to Mr. Kaul with respect to
1993 and Mr. Zebeck with respect to 1994, represent only amounts
contributed under the Fingerhut Corporation Profit Sharing Plan. The 1993
amount listed for Mr. Kaul included $64,858 in relocation expenses. The
1994 amount for Mr. Zebeck consisted only of the amount paid to Mr. Zebeck
to cover expenses incurred in connection with his relocation to Minnesota.
(d) Mr. Kaul resigned effective February 23, 1996.
(e) Mr. Zebeck commenced employment with Fingerhut Financial Services
Corporation, a wholly owned subsidiary of the Company, in March 1994.
Pension Plan. Fingerhut Corporation maintains a noncontributory defined
benefit plan (the "Pension Plan") for substantially all of its nonunion
employees (and the nonunion employees of certain of the Company's other
subsidiaries) who have completed at least one year of service. Under the
Pension Plan, the current service pension credit of a participant for each
year is equal to the sum of .82% of his or her certified earnings not in
excess of Social Security covered compensation for that plan year and 1.40%
of the balance of his or her certified earnings for that year. Retirement
benefits under the Pension Plan are the sum of the pension credits for each
year of service. Participants are 100% vested after completion of at least
five years of service or if they are at least age 65 upon termination of
employment. The Pension Plan also provides reduced early retirement benefits
for participants who have attained age 55 and have at least five years of
service. In addition, the Company adopted a nonqualified supplemental pension
plan to provide certain officers the benefits that would be payable under the
Pension Plan but for the reduction in the limitation on compensation imposed
by Internal Revenue Code section 401(a)(17) and based on the $115,641
limitation in effect for 1993 under Code section 415(b)(1)(A). The estimated
combined annual benefit payable at age 65 for the named executives under the
qualified plan and the nonqualified plan is: Mr. Deikel, $66,481; Mr. Kaul,
$0; Mr. Zebeck, $43,702; Mr. Moran, $52,196; and Mr. Johnson, $89,397. Mr.
Kaul's estimated benefit is zero because his employment ended before he was
vested under the Pension Plan.
Supplemental Executive Retirement Plan. The Compensation Committee adopted on
February 14, 1996, a Supplemental Executive Retirement Plan (the "SERP") that
covers officers or other senior management employees of the Company selected
for participation by the Compensation Committee. Under the SERP, the Company
will pay a benefit to a participant whose employment relationship with the
Company is completely severed either (a) at or after age 65 with five years
of service or (b) at or after age 55, if the participant has five years of
service and the sum of the participant's age and years of service equals at
least 70. Service includes service to the Company and its affiliates, and any
other service the Compensation Committee in its discretion recognizes. The
annual retirement benefit payable under the SERP equals 60% of the average of
the participant's highest three salary and bonus years with the Company or
its affiliates, multiplied by a fraction (not greater than one) equal to (x)
the participant's years of service over (y) 30, and subtracting the offset.
The offset is the sum of (i) the participant's Social Security benefit, (ii)
the amount of the participant's benefit from the Fingerhut Corporation
Pension Plan and the Fingerhut Corporation Pension Excess Plan, (iii) 75% of
the participant's balance in the Fingerhut Corporation Profit Sharing Plan,
(iv) the dollars credited or paid to the participant under the Fingerhut
Corporation Profit Sharing Excess Plan and (v) 15% of the dollar amount by
which the value of capital stock of the Company that the participant has
received under the Company's compensation programs, and owns on or after
January 1, 1996, exceeds 200% of such stock's value at the time of its
acquisition by the participant, but disregarding the value of such stock in
excess of 300% of its acquisition value, and excluding stock that the
participant acquires and disposes of substantially simultaneously for the
purpose of exercising options. Upon a change in control of the Company a
termination of the participant's employment would be deemed to have occurred
and, for purposes of determining eligibility for benefits, a participant that
is at least 65 years old would be deemed to have completed five years of
service. If a participant dies before the participant's employment
terminates, the death will be treated as a termination of employment and the
participant will be deemed to have completed five years of service. Payments
under the SERP will be in the form of a single lump sum that is the actuarial
equivalent of annual benefits payable, to be made as soon as practicable
after the end of the year in which employment ends. The estimated annual
benefits payable under the Plan upon retirement at age 65 for the Chief
Executive Officer and each of the other four named executive officers, are as
follows: Mr. Deikel, $276,000; Mr. Kaul, $0; Mr. Zebeck, $148,000; Mr. Moran,
$0; and Mr. Johnson, $0. One actuarial assumption underlying these estimates
is that these officers will remain participants in the SERP. Mr. Zebeck, as
head of the Fingerhut Financial Services division, will no longer be a
participant eligible for benefits if the Company completes its previously
announced spinoff of this division. Mr. Kaul's estimated lump sum benefit is
zero because his employment with the Company ended in February 1996. The
estimates are also based on the assumptions that current salaries remain
unchanged and that the Company will continue to grant stock options to its
executives in a manner consistent with its historical practice.
The following table shows information concerning stock options granted during
the fiscal year ended December 29, 1995 for the named executives.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK PRICE
SECURITIES OPTIONS GRANTED APPRECIATION FOR OPTION
UNDERLYING TO TERM
OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION
NAME GRANTED (#)(a) IN 1995 ($/SHARE) DATE 5% ($)(b) 10% ($)(b)
<S> <C> <C> <C> <C> <C> <C>
Theodore Deikel 250,000 17.1% $15.00 6/16/05 $2,357,500 $5,977,500
Rakesh K. Kaul (c) 225,000 15.4% $15.00 6/16/05 -- --
Ronald N. Zebeck 105,000 7.2% $15.00 6/16/05 $ 990,150 $2,510,550
James B. Moran 50,000 3.4% $15.00 6/16/05 $ 471,500 $1,195,500
Andrew V Johnson 50,000 3.4% $15.00 6/16/05 $ 471,500 $1,195,500
</TABLE>
(a) These options were granted under the 1995 Stock Option Plan as described in
the Compensation Committee Report on Executive Compensation. The options
vest 33-1/3% on the anniversary of the grant date and 33-1/3% annually
thereafter. The shares listed for Mr. Zebeck include options for 55,000
shares granted in tandem with an option relating to the equity of Fingerhut
Financial Services. These options vest 25% per year commencing March 21,
1994 and expire on the earlier of (i) exercise of the Fingerhut Financial
Services option or (ii) March 21, 2001.
(b) These dollar amounts are the result of calculations at the 5% and 10% rates
required by the Securities and Exchange Commission from the market price on
the date of grant and are not intended to forecast possible future
appreciation of the Common Stock price. The gains to all shareholders as of
December 29, 1995 over the period used in this chart would be $433,305,878
and $1,098,657,853, respectively, at the assumed 5% and 10% rates of stock
price appreciation. All options reported in this chart were out of the
money at December 29, 1995 and at the date of this proxy statement. The
actual gains, if any, on stock option exercises will depend on the future
performance of the Common Stock.
(c) Mr. Kaul's options were forfeited upon his termination of employment in
1996.
The following table indicates for each of the named executives information
concerning stock options exercised during 1995 and the number and value of
exercisable and unexercisable in-the-money options as of December 29, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/29/95(#) 12/29/95($)(a)
SHARES
ACQUIRED
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Theodore Deikel -- -- 4,144,202 $30,487,304
250,000 0
Rakesh K. Kaul -- -- 134,500 0
460,500 0
Ronald N. Zebeck -- -- 13,750 0
91,250 0
James B. Moran -- -- 68,800 $ 43,000
67,200 $ 10,750
Andrew V Johnson -- -- 57,500 $ 484,150
50,000 0
</TABLE>
(a) The value of unexercised in-the-money options represents the aggregate
difference between the market value on December 29, 1995, based on the
closing price of the Common Stock as reported on the New York Stock
Exchange, and the applicable exercise or in-the-money prices.
Arrangements with Management. In consideration of Mr. Deikel's agreement to
exercise stock options in December 1992, the Company agreed to pay Mr. Deikel
additional compensation in an amount equal to the interest incurred on the
personal loan taken out by him to fund the income tax liability incurred as a
result of his exercise of the stock options, although not to pay a "tax gross
up" on the amount of the additional compensation. The Company will pay such
compensation until December 21, 1999, whether or not Mr. Deikel is an
officer, director or employee of the Company. The proceeds of any sales of
the shares acquired in the option exercise will be deemed to repay the loan
and reduce the Company's obligation.
The Company granted Mr. Zebeck a tandem option, which vests over four years
beginning March 1994, for either (a) 55,000 shares of the Company's common stock
at an exercise price of $15 per share or (b) a 3.3% equity interest in the
Financial Services Segment ("FFS") at an exercise price equal to two times the
fair value of that interest at March 1994, adjusted for additional capital
contributions to FFS since the initial value date. The exercise of either option
terminates the other option. If Mr. Zebeck terminates his employment prior to
FFS becoming a publicly held company, the FFS option would be settled in cash.
In the event Mr. Zebeck voluntarily resigns his employment within three years,
he is obligated to repay the Company $490,500 (adjusted for taxes) reduced by an
amount equal to 1/36 of the adjusted $490,500 for each completed month of
employment with Fingerhut Financial Services Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following information concerning ownership of the Company's Common Stock
is furnished as of March 20, 1996 (except as otherwise indicated) with
respect to (i) all persons known by the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock; (ii) each of the current
directors and nominees for director of the Company; (iii) each of the named
executives and (iv) all directors and executive officers as a group.
Beneficial ownership has been determined for this purpose in accordance with
Rule 13d-3 of the Securities and Exchange Commission, under which a person is
deemed to be the beneficial owner of securities if he or she has or shares
voting power or investment power in respect of such securities or has the
right to acquire beneficial ownership within 60 days.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME BENEFICIALLY OWNED PERCENT OF CLASS
<S> <C> <C>
FMR Corp.
82 Devonshire Street
Boston, MA 02109 6,705,300 (1) 14.4%
Manning & Napier Advisors, Inc.
1100 Chase Square
Rochester, NY 14604 4,982,298 (2) 10.7%
The Equitable Companies Incorporated
787 Seventh Avenue
New York, NY 10019 4,766,250 (3) 10.3%
Theodore Deikel 5,593,918 (4) 11.1%
Wendell R. Anderson 5,000 (5) (6)
Edwin C. Gage 41,900 (7) (6)
Stanley S. Hubbard 5,000 (5) (6)
Richard M. Kovacevich 35,000 (5) (6)
Dudley C. Mecum 6,000 (5) (6)
Andrew V Johnson 71,062 (8) (6)
Rakesh K. Kaul -- --
James B. Moran 85,918 (8) (6)
Ronald N. Zebeck 49,597 (8) (6)
All directors and executive officers
as a group (16 persons) 6,175,620 (9) 12.1%
</TABLE>
(1) Based on a Schedule 13G dated February 14, 1996 prepared by FMR Corp.
indicating that these shares are beneficially owned by two of its
subsidiaries, Fidelity Management & Research Company, an investment adviser
(6,468,200 shares) and Fidelity Management Trust Company (237,100 shares).
(2) Based on a Schedule 13G dated February 29, 1996 prepared by Manning &
Napier Advisors, Inc.
(3) Based on a Schedule 13G dated February 9, 1996 prepared by The Equitable
Companies Incorporated indicating that these shares are held by two of its
subsidiaries, Alliance Capital Management L.P., an investment adviser
(4,596,250 shares), and The Equitable Life Assurance Society of the United
States (170,000 shares).
(4) Includes 4,144,202 shares that Mr. Deikel has the right to acquire within
60 days of March 20, 1996 through the exercise of stock options. Share
ownership shown does not include 2,325 shares held by Mr. Deikel's son, as
to which he disclaims beneficial ownership.
(5) The numbers of shares beneficially owned by each of Messrs. Anderson, Gage,
Hubbard, Kovacevich and Mecum include 5,000 shares that such directors have
the right to acquire within 60 days of March 20, 1996 through the exercise
of stock options.
(6) Less than 1% of the outstanding Common Stock.
(7) Share ownership shown does not include 6,900 shares held by Mr. Gage's
wife, as to which he disclaims beneficial ownership.
(8) The numbers of shares beneficially owned by each of Messrs. Johnson, Moran
and Zebeck include 57,500, 68,800 and 27,500 shares, respectively, that
such officers have the rights to acquire within 60 days of March 20, 1996
through the exercise of stock options.
(9) Includes 4,503,702 shares that the executive officers have the right to
acquire within 60 days of March 20, 1996 through the exercise of stock
options.
Compliance with Section 16. The Company believes that during 1995, all filing
requirements under Section 16(a) of the Exchange Act applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with.
ARRANGEMENTS AND TRANSACTIONS WITH RELATED PARTIES
Wendell Anderson, a member of the Company's Board of Directors, provides
certain governmental and regulatory affairs consulting services to the
Company, for which he was paid $144,000 in 1995.
The Company leases office space for one of its telemarketing centers and
warehouse space from Carlson Real Estate Company, a partnership owned by
various members of the immediate family of Edwin C. Gage, including Mr. Gage.
Rental expense for 1995 under these leases was approximately $1,882,000. The
Company believes the terms of the leases are at least as favorable to the
Company as it could have received from an unrelated third party. The annual
rental amount is not material to either the Company or Carlson Real Estate
Company.
For a number of years, the Company has had regular banking relationships with
Norwest Bank Minnesota, N.A. ("Norwest Bank"), a subsidiary of Norwest
Corporation. Richard M. Kovacevich is President and Chief Executive Officer
of Norwest Corporation. Norwest Bank is one of the lending banks and is a
letter of credit issuing bank under the Company's revolving credit and letter
of credit facility and is also the registrar and transfer agent with respect
to the Company's common stock. The Company and its subsidiaries also maintain
a number of depository and checking accounts with Norwest Bank or its
affiliates.
The Company paid Norwest Bank approximately $2,281,000 with respect to these
services and relationships for the 1995. The Company believes the terms of
the various banking relationships, and the fees paid, are at least as
favorable to the Company as it could have received from an unrelated third
party. The amount paid is not material to either the Company or Norwest
Corporation.
PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF AUDITORS
At the Annual Meeting a vote will be taken on the proposal ratifying the
appointment by the Board of Directors of KPMG Peat Marwick LLP as independent
auditors of the Company and its subsidiaries for the fiscal year ending
December 27, 1996.
KPMG Peat Marwick LLP have served as the Company's independent auditors since
1989. Representatives of KPMG Peat Marwick LLP are expected to be present at
the Annual Meeting and will be given an opportunity to make a statement and
answer appropriate shareholder questions. Shareholders may submit questions
concerning the financial statements of the Company either orally at the
Annual Meeting or in writing before the Annual Meeting.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next annual meeting
of shareholders must be received in the Company's principal executive offices
no later than November 28, 1996 for inclusion in the Company's proxy
materials. Proposals should be mailed to Fingerhut Companies, Inc., 4400
Baker Road, Minnetonka, Minnesota 55343, Attention: Secretary.
PLEASE SIGN AND DATE THE ENCLOSED PROXY (OR VOTING INSTRUCTIONS CARD) AND
RETURN IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED FOR THAT PURPOSE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John K. Ellingboe
John K. Ellingboe
Secretary
March 28, 1996
Printed On
Recycled Paper With
Post-Consumer Content
PROXY
FINGERHUT COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints THEODORE DEIKEL and JOHN K. ELLINGBOE as
Proxies each with the power to appoint his substitute, and hereby authorizes
them to vote all of the shares of Common Stock of Fingerhut Companies, Inc.
the undersigned is entitled to vote at the Annual Meeting of Shareholders to
be held on May 15, 1996, or any adjournment thereof, as specified below on
the following matters which are further described in the Proxy Statement
related hereto:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below
(except as marked to the contrary)
[ ] WITHHOLD AUTHORITY
to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH HIS NAME IN THE LIST BELOW:
THEODORE DEIKEL WENDELL R. ANDERSON EDWIN C. GAGE
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING.
(over)
(continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MATTER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE NOMINEES NAMED IN ITEM 1 AND FOR PROPOSAL 2. Please
sign exactly as name appears below. When shares are held by joint tenants,
both should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by the president or other authorized officer. If a
partnership, please sign in partnership name by partner or other authorized
person.
Dated: ______________________, 1996
___________________________________
Signature
___________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY IN THE
ENCLOSED ENVELOPE.
PROXY CARD STUB:
FINGERHUT COMPANIES, INC.
1996 ANNUAL MEETING
Minneapolis Hilton
1001 Marquette Avenue South
Minneapolis, Minnesota
MAY 15, 1996
11:00 A.M. CENTRAL TIME
