As filed with the Securities and Exchange Commission on June 4, 1997
Registration No. 333-
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
FINGERHUT COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1396490
(State of (I.R.S. Employer
Incorporation) Identification No.)
4400 Baker Road
Minnetonka,
Minnesota 55343
(Address of Principal Executive
Offices)
Fingerhut Companies, Inc. 1994 Employee Stock
Purchase Plan
(Full Title of the Plan)
_______________
Michael P. Sherman, Esq.
Fingerhut Companies, Inc.
4400 Baker Road
Minnetonka, Minnesota 55343
(Name and address of agent for
service
(612) 932-3585
(Telephone Number of Agent for
Service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount to Maximum Maximum Amount
Securities to be be Offering Aggregate of
Registered Registered Price Per Offering Registra
Share (1) Price tion Fee
Common Stock, par
value $.01 per 200,000 $16.75 $3,350,000 $1015.15
share. . . . . . . shares(2)
(1) Estimated solely for the purpose of determining the
registration fee pursuant to Rule 457(h) under the Securities Act
of 1933, and based on the average of the high and low sale prices
as reported on the New York Stock Exchange composite tape on May
29, 1997.
(2) This registration statement also covers such additional
number of shares as may be issuable or saleable by reason of the
operation of the antidilution provisions of the Fingerhut
Companies, Inc. 1994 Employee Stock Purchase Plan.
_________________________________________________________________
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference
in this registration statement:
a. Annual Report on Form 10-K for the fiscal year ended
December 27, 1996;
b. Quarterly Report on Form 10-Q for the quarter ended
March 28, 1997; and
c. The description of the Registrant's Common Stock,
contained in the Company's Registration Statement on Form 8-
A (File No. 1-8668) filed pursuant to Section 12 of the
Securities Exchange Act of 1934 and declared effective on
April 25, 1990.
All documents filed by the Registrant (File No. 1-8668)
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective
amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Michael P. Sherman, General Counsel of the Registrant, has
given his opinion on the legality of the securities being
registered hereunder. Mr. Sherman beneficially owns 22,500
shares of Common Stock of the Registrant, including 22,000 shares
that he has the right to acquire through exercise of stock
options. Mr. Sherman is not eligible to participate in the
Fingerhut Companies, Inc. 1994 Employee Stock Purchase Plan.
Item 6. Indemnification of Directors and Officers.
Section 521 of the Minnesota Business Corporation Act (the
"MBCA") (Minn. Stat. 302A.521) generally provides that unless
its articles or bylaws provide otherwise, a corporation shall
indemnify officers and directors made or threatened to be made a
party to a proceeding by reason of any such person's present or
former official capacity as a director or officer against
judgments, penalties, fines, including, without limitation,
excise taxes assessed against the person with respect to an
employee benefit plan, settlements and reasonable expenses,
including attorneys' fees and disbursements, incurred by the
person in connection with the proceeding, if, with respect to the
acts or omissions of the person complained of in the proceeding,
the person: (1) has not been indemnified by another party for the
same amounts in connection with the proceeding with respect to
the same acts or omissions; (2) acted in good faith; (3) received
no improper personal benefit and the procedures for director
conflicts of interest, if applicable, have been satisfied; (4) in
the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful; and (5) reasonably believed
that the conduct was in the best interests of the corporation.
The MBCA provides that unless a corporation's articles of
incorporation or bylaws provide otherwise, if a person is made or
threatened to be made a party to a proceeding, the person is
entitled, upon written request to the corporation, to payment or
reimbursement by the corporation of reasonable expenses,
including attorneys' fees and disbursements, incurred by the
person in advance of the final disposition of the proceeding (a)
upon receipt by the corporation of a written affirmation by the
person of a good faith belief that the criteria for
indemnification have been satisfied and a written undertaking by
the person to repay all amounts so paid or reimbursed by the
corporation, if it is ultimately determined that the criteria for
indemnification have not been satisfied, and (b) after a
determination that the facts then known to those making the
determination would not preclude indemnification.
The MBCA also permits a corporation to purchase and
maintain insurance on behalf of a person in that person's
official capacity against any liability asserted against and
incurred by the person in or arising from that capacity, whether
or not the corporation would have been required to indemnify the
person against the liability.
The Bylaws of the Registrant provide for indemnification of
its officers and directors to the fullest extent permitted under
the MBCA.
The Registrant currently maintains a policy insuring,
subject to certain exceptions, its directors and officers and the
directors and officers of its subsidiaries against liabilities
which may be incurred by such persons acting in such capacities.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
Exhibit Number Description of Exhibit
5 Opinion of Michael P. Sherman, Esq.
10 Amended and Restated Fingerhut
Companies, Inc. 1994 Employee Stock Purchase Plan.
24(a) Consent of KPMG Peat Marwick LLP.
24(b) Consent of Michael P. Sherman, Esq.
(included with Exhibit 5).
25 Powers of Attorney (included on Page 5).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a) (1) (i) and (a) (1) (ii)
do not apply if the registration statement is on Form S-3, Form S-
8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer of controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Minnetonka, State of Minnesota, on June 4, 1997.
FINGERHUT COMPANIES, INC.
By /s/Theodore Deikel
(Chairman of the Board,
Chief Executive Officer
and President)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Theodore Deikel and
Michael P. Sherman and each of them, his or her true and lawful
attorneys-in-fact and agents with full power and substitution and
resubstitution, for such person and in his name, place and stead,
in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration
Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents and
each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes and he
or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/Theodore Deikel Chairman of the Board, June 4, 1997
Chief Executive Officer
and President; and
Director (Principal
Executive Officer)
/s/Peter G. Michielutti Executive Vice June 4, 1997
President, Chief
Operating Officer
(Principal Financial
Officer)
/s/Thomas C. Vogt Corporate Controller June 4, 1997
(Principal Accounting
Officer)
/s/Wendell R. Anderson Director June 4, 1997
/s/Edwin C. Gage Director June 4, 1997
_______________________ Director June __, 1997
Stanley S. Hubbard
/s/Kenneth A. Macke Director June 4, 1997
/s/Dudley C. Mecum Director June 4, 1997
/s/John M. Morrison Director June 4, 1997
/s/Christina L. Steiner Director June 4, 1997
June 4, 1997
Fingerhut Companies, Inc.
4400 Baker Road
Minnetonka, Minnesota 55343
Re: Registration Statement on Form S-8
Gentlemen and Ladies:
As General Counsel of Fingerhut Companies, Inc. (the
"Company") and head of its Legal Department, I am delivering this
opinion in connection with the preparation of a Registration
Statement on Form S-8 (the "Registration Statement"), relating to
the registration of 200,000 shares of the Company's common stock,
$.01 par value per share (the "Common Stock"), issuable pursuant
to the Fingerhut Companies, Inc. 1994 Employee Stock Purchase
Plan (the "Plan").
In that regard, I or attorneys on my staff have examined
originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other
instruments and certificates as we have deemed necessary for
purposes of this opinion, including the following:
(a) The Company's Articles of Incorporation, as amended
through the date hereof;
(b) The Company's Bylaws, as amended through the date
hereof;
(c) Certain corporate resolutions, including resolutions of
the Company's shareholders and/or Board of Directors
pertaining to the Plan;
(d) The Plan; and
(e) The Registration Statement as it is currently proposed
to be filed with the Securities and Exchange
Commission.
Based on the foregoing, I am of the opinion that:
1. The Company was duly incorporated under the laws of the
State of Minnesota and is now a validly organized and
existing corporation under the laws of that State.
2. The shares of Common Stock which are being registered
pursuant to the Registration Statement have been duly
authorized and, when issued pursuant to the terms of
the Plan, will be validly issued, fully paid and
nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Sincerely,
Michael P. Sherman
General Counsel
Exhibit 24(a)
Consent of Independent Certified Public Accountants
The Board of Directors
Fingerhut Companies, Inc.:
We consent to incorporation by reference in the registration
statement on Form S-8 of Fingerhut Companies, Inc. and
subsidiaries of our reports dated January 22, 1997 relating
to the consolidated statements of financial position of
Fingerhut Companies, Inc. as of December 27, 1996 and
December 29, 1995 and the related consolidated statements of
earnings, changes in stockholders' equity and cash flows and
the related financial statement schedule for each of the
years in the three-year period ended December 27, 1996,
which reports appear in or are incorporated by reference in
the December 27, 1996 annual report on Form 10-K of
Fingerhut Companies, Inc.
Minneapolis, Minnesota
June 4, 1997
FINGERHUT COMPANIES, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED AS OF MAY 13, 1997
ARTICLE I. INTRODUCTION
Section 1.01 Purpose. The purpose of the Fingerhut
Companies, Inc. 1994 Employee Stock Purchase Plan (the "Plan") is
to give employees of Fingerhut Companies, Inc., a Minnesota
corporation (the "Company"), and certain related corporations an
opportunity to share in the ownership of the Company, and a strong
incentive to work for its continued success, by providing them
with a convenient means for regular and systematic purchases of
the Company's common stock, par value $.01 per share.
Section 1.02 Rules of Interpretation. It is intended that
the Plan be an "employee stock purchase plan" as defined in
Section 423(b) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations promulgated thereunder.
Accordingly, the Plan shall be interpreted and administered in a
manner consistent therewith if so approved. All Participants in
the Plan will have the same rights and privileges consistent with
the provisions of the Plan.
Section 1.03 Definitions. For the purposes of the Plan,
the following terms will have the meanings set forth below:
(a) "Acceleration Date" means the earlier of the date of
shareholder approval or approval by the Company's Board of
Directors of (i) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation
or pursuant to which shares of Common Stock would be converted
into cash, securities or other property, other than a merger of
the Company in which shareholders of the Company immediately prior
to the merger have the same proportionate ownership of stock in
the surviving corporation immediately after the merger; (ii) any
sale, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets
of the Company; or (iii) any plan of liquidation or dissolution of
the Company.
(b) "Affiliate" means any subsidiary corporation of the
Company, as defined in Section 424(f) of the Code, whether now or
hereafter acquired or established.
(c) "Broker Account" means an employee stock purchase plan
account maintained by a brokerage firm designated by the Company
in which shares of Common Stock purchased by a Participant under
the Plan will be held.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the Compensation Committee of the
Board of Directors of the Company.
(f) "Common Stock" means the common stock, $.01 par value
per share, of the Company, as such stock may be adjusted for
changes in the stock or the Company as contemplated by Article XI
herein.
(g) "Company" means Fingerhut Companies, Inc., a Minnesota
corporation, and its successors by merger or consolidation as
contemplated by Section 9.03 herein.
(h) "Earnings Per Share" means the amount reported by the
Company as "earnings per share" in its financial statements and
financial releases.
(i) "Eligible Compensation" means base salary, overtime,
shift differential, and/or other regular payments. Eligible
Compensation does not include any bonuses, reimbursement for
expenses, deferred profit-sharing distributions, deferred
compensation, or other non-regular payments.
(j) "Eligible Employee" means employees eligible to
participate in the Plan pursuant to the provisions of Section
2.01.
(k) "Fair Market Value" as of a given date means the closing
price of the Common Stock on the New York Stock Exchange on the
date in question or, if the Common Stock shall not have been
traded on the New York Stock Exchange on such date, such other
amount as may be determined in good faith by the Committee by any
fair and reasonable means.
(l) "Investment Date" means the last business day of each
Purchase Period.
(m) "Participant" means an Eligible Employee who has elected
to participate in the Plan.
(n) "Participating Affiliate" means an Affiliate that has
been designated by the Committee in advance of the Purchase Period
in question as a corporation whose employees may participate in
the Plan.
(o) "Plan" means this Fingerhut Companies, Inc. 1994
Employee Stock Purchase Plan.
(p) "Purchase Period" means a calendar quarter or such
other period no shorter than a calendar quarter as the Committee
may adopt.
(q) "Regular Paycheck" means weekly, bi-weekly or
monthly base salary paychecks.
(r) "Stock Purchase Account" means the account
maintained on the books and records of the Company recording the
amount received from each Participant through payroll deductions
made under the Plan.
ARTICLE II. ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligible Employees. All employees of the
Company or any Participating Affiliate shall be eligible to
participate in the Plan beginning on the first day of the first
Purchase Period to commence after such person becomes an employee;
provided, however, that no such employee who is in a group of key
employees that, pursuant to Section 423(b)(4)(D) of the Code, the
Committee determines to be "highly compensated" and who also is a
vice president or more senior officer of the Company or any
Participating Affiliate with compensation in excess of $75,000
shall be eligible to participate in the Plan. Subject to the
provisions of Article V, each such employee will continue to be
eligible to participate in the Plan so long as he or she remains
an Eligible Employee.
Section 2.02 Election to Participate. An Eligible
Employee may elect to participate in the Plan beginning with a
given Purchase Period by filing with the Company, in accordance
with such terms and conditions as the Committee in its sole
discretion may impose, a form provided by the Company for such
purpose. Such election will authorize regular payroll deductions
from Eligible Compensation beginning with the first payday in that
Purchase Period and continuing until the employee withdraws from
the Plan or ceases to be eligible to participate in the Plan.
Section 2.03 Limits on Stock Purchase. No employee shall be
granted any right to purchase Common Stock hereunder if such
employee, immediately after such a right to purchase is granted,
would own, directly or indirectly, within the meaning of Section
423(b)(3) and Section 424(d) of the Code, Common Stock possessing
5% or more of the total combined voting power or value of all the
classes of the capital stock of the Company.
Section 2.04 Voluntary Participation. Participation in the
Plan on the part of a Participant is voluntary and such
participation is not a condition of employment nor does
participation in the Plan entitle a Participant to be retained as
an employee.
ARTICLE III. PAYROLL DEDUCTIONS AND STOCK PURCHASE ACCOUNT
Section 3.01 Payroll Deductions. The form described in
Section 2.02 will permit a Participant to authorize payroll
deductions from Eligible Compensation of a whole dollar amount
from each Regular Paycheck, subject to such terms and conditions
as the Committee in its sole discretion may authorize. A
Participant may increase or decrease his or her payroll deductions
by filing the required form with the Company, in accordance with
such terms and conditions as the Committee in its sole discretion
may impose. A Participant may cease making payroll deductions at
any time, as provided in Section 5.01.
Section 3.02 Credit to Account. Payroll deductions will be
credited to the Participant's Stock Purchase Account on each
payday.
Section 3.03 Interest. No interest will be paid upon
payroll deductions or on any amount credited to a Participant's
Stock Purchase Account.
Section 3.04 Nature of Account. The Stock Purchase Account
is established solely for accounting purposes, and all amounts
credited to the Stock Purchase Account will remain part of the
general assets of the Company.
Section 3.05 No Additional Contributions. A Participant may
not make any payment into his or her Stock Purchase Account other
than the payroll deductions made pursuant to the Plan.
ARTICLE IV. RIGHT TO PURCHASE SHARES
Section 4.01 Purchase of Stock. On each Investment Date,
each Participant shall be offered the right to purchase, and shall
be deemed, without any further action, to have purchased, the
number of whole and fractional shares of Common Stock determined
by dividing the amount of his or her payroll deductions not
theretofore invested by the purchase price as determined in
Section 4.02. (subject to the limitations of Section 4.03), unless
the Participant has notified the Company in writing, in advance of
that date and subject to such terms and conditions as the
Committee in its sole discretion may impose, of his or her request
for the distribution of the entire credit balance in cash.
Section 4.02 Purchase Price. The purchase price for shares
of Common Stock on any Investment Date shall be the lesser of (a)
90% of the Fair Market Value of the Common Stock on the first
business day of the Purchase Period to which the Investment Date
relates or (b) 90% of the Fair Market Value of the Common Stock on
the last business day of such Purchase Period, in each case
rounded up to the next higher full cent; provided, however, that
if the Company's Earnings Per Share for the fiscal quarter that
ended immediately preceding the Investment Date is greater than
the Company's Earnings Per Share for the comparable fiscal quarter
in the prior year, the purchase price for each share of Common
Stock shall be the lesser of (x) 85% of the Fair Market Value of
the Common Stock on the first business day of the Purchase Period
to which the Investment Date relates or (y) 85% of the Fair Market
Value of the Common Stock on the last business day of such
Purchase Period, in each case rounded up to the next higher full
cent.
Section 4.03 Limitation on the Number of Shares. In
addition to such other limitations as the Committee may impose in
its sole discretion, each Participant's right to purchase Common
Stock on each Investment Date is subject to the limitations that
(a) no more than 1,000 shares of Common Stock may be purchased
under the Plan by any one Participant for a given Purchase Period
and (b) in accordance with Section 423(b)(8) of the Code, no more
than $25,000 in Fair Market Value (determined at the beginning of
each Purchase Period) of Common Stock and other stock may be
purchased under the Plan and all other employee stock purchase
plans (if any) of the Company and the Affiliates by any one
Participant for any calendar year. If the purchases for all
Participants would otherwise cause the aggregate number of shares
of Common Stock to be sold under the Plan to exceed the number
specified in Section 9.03, each Participant shall be allocated a
pro rata portion of the Common Stock to be sold.
Section 4.04 Notice of Acceleration Date. The Company shall
use its best efforts to notify each Participant in writing at
least ten days prior to any Acceleration Date that the then
current Purchase Period will end on such Acceleration Date.
ARTICLE V. WITHDRAWAL FROM PLAN; SALE OF STOCK
Section 5.01 Voluntary Withdrawal. A Participant may, in
accordance with such terms and conditions as the Committee in its
sole discretion may impose, withdraw from the Plan and cease
making payroll deductions by filing with the Company a form
provided for this purpose. The withdrawal will be effective as
soon as practicable, whereupon no further payroll deductions shall
be made. Thereafter, on the next Investment Date and in accordance
with Section 4.01, the entire credit balance in such Participant's
Stock Purchase Account will be used to purchase Common Stock,
unless such Participant has filed with the Company, in advance of
that day and subject to such terms and conditions as the Committee
in its sole discretion may impose, a request to have the entire
credit balance in such Participant's Stock Purchase Account
distributed in cash within 30 days after that Investment Date or
at such earlier time as the Committee in its sole discretion may
decide. A Participant who withdraws from the Plan may elect to
participate in a subsequent Purchase Period, if then eligible,
subject to such terms and conditions as the Committee may provide.
Section 5.02 Death. Subject to such terms and
conditions as the Committee in its sole discretion may impose,
upon the death of a Participant, no further amounts shall be
credited to the Participant's Stock Purchase Account. Thereafter,
on the next Investment Date following the Participant's death and
in accordance with Section 4.01, the entire credit balance in such
Participant's Stock Purchase Account will be used to purchase
Common Stock, unless such Participant's estate has filed with the
Company, in advance of that day and subject to such terms and
conditions as the Committee in its sole discretion may impose, a
request to have the entire credit balance of such Participant's
Stock Purchase Account distributed in cash within 30 days after
that Investment Date or at such earlier time as the Committee in
its sole discretion may decide. Each Participant, however, may
designate one or more beneficiaries who, upon the Participant's
death, are to receive the amount that otherwise would have been
distributed or paid to the Participant's estate and may change or
revoke any such designation from time to time. No such
designation, change or revocation will be effective unless made by
the Participant in writing and filed with the Company during the
Participant's lifetime. Unless the Participant has otherwise
specified the beneficiary designation, the beneficiary or
beneficiaries so designated will become fixed as of the date of
the death of the Participant so that, if a beneficiary survives
the Participant but dies before the receipt of the payment due
such beneficiary, the payment will be made to such beneficiary's
estate.
Section 5.03 Termination of Employment. In the event of any
termination of employment (other than death) with the Company or a
Participating Affiliate, participation in the Plan will cease on
the date the Participant ceases to be an Eligible Employee.
Thereafter, on the next Investment Date and in accordance with
Section 4.01, the entire credit balance in such Participant's
Stock Purchase Account will be used to purchase Common Stock,
unless such Participant has filed with the Company, in advance of
that day and subject to such terms and conditions as the Committee
in its sole discretion may impose, a request to have the entire
credit balance in such Participant's Stock Purchase Account
distributed in cash within 30 days after that Investment Date or
at such earlier time as the Committee in its sole discretion may
decide. For purposes of this Section 5.03, a transfer of
employment to any Affiliate, or a leave of absence which has been
approved by the Committee, will not be deemed a termination of
employment.
ARTICLE VI. STOCK CERTIFICATES
Section 6.01. Delivery. Promptly after each Investment Date
and subject to such terms and conditions as the Committee in its
sole discretion may impose, the Company will cause to be delivered
to its designated broker a certificate representing the aggregate
number of whole shares of Common Stock purchased on such
Investment Date, along with a statement showing the number of
shares to be credited to each Participant's Broker Account or
information as to the credit balance in each Participant's Stock
Purchase Account.
Section 6.02 Securities Laws. The Company shall not be
required to issue or deliver any certificate representing Common
Stock prior to registration under the Securities Act of 1933, as
amended, or registration or qualification under any state law if
such registration is required. The Company shall use its best
efforts to accomplish such registration (if and to the extent
required) not later than the effective date of the Plan, and
delivery of certificates may be deferred until such registration
is accomplished.
Section 6.03 Rights of a Stockholder. At the time funds
from a Participant's payroll deductions account are used to
purchase the Common Stock, he or she shall have all of the rights
and privileges of a stockholder of the Company with respect to
whole shares purchased under the Plan whether or not certificates
representing full shares have been issued. All such shares shall
be maintained in a separate Broker Account for each Participant.
Dividends paid with respect to such shares shall be automatically
reinvested by the brokerage firm that administers the Broker
Accounts in whole and fractional shares of the Common Stock at the
market price.
Section 6.04 Broker Accounts. Each Broker Account may be in
the name of the Participant or, if he or she so indicates on the
appropriate form, in his or her name jointly with another person,
with right of survivorship.
ARTICLE VII. NONTRANSFERABILITY
Section 7.01 Nontransferable Right to Purchase. The right
to purchase Common Stock hereunder may not be assigned,
transferred, pledged or hypothecated (whether by operation of law
or otherwise), except by will or the laws of descent and
distribution, and will not be subject to execution, attachment of
similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition or levy of attachment or
similar process upon the right to purchase will be null and void
and without effect.
Section 7.02 Nontransferable Account. Except as provided in
Section 5.02, the amounts credited to a Stock Purchase Account may
not be assigned, transferred, pledged or hypothecated in any way,
and any attempted assignment, transfer, pledge, hypothecation or
other disposition of such amounts will be null and void and
without effect.
ARTICLE VIII. EFFECTIVE DATE, AMENDMENT AND
TERMINATION OF PLAN
Section 8.01. Effective Date. The Plan was approved by the
Committee on March 23, 1994 and shall be approved by the
stockholders of the Company within twelve (12) months thereafter.
Section 8.02. Plan Commencement. The initial Purchase
Period under the Plan will commence on July 1, 1994. Thereafter,
each succeeding Purchase Period will commence and terminate in
accordance with Section 1.03(p).
Section 8.03. Amendment; Termination. The Committee may
amend or terminate the Plan at any time. No amendment or
termination of the Plan, however, shall be effective without
stockholder approval that would (i) cause rights issued under it
to fail to meet the requirements for employee stock purchase plans
as defined in Section 423 of the Code; (ii) require stockholder
approval under rules or regulations of the National Association of
Securities Dealers, Inc. or any securities exchange that are
applicable to the Company, or (iii) permit the issuance of Common
Stock before payment therefor in full.
Section 8.04. Automatic Termination. The Plan shall
automatically terminate when all of the shares of Common Stock
provided for in Section 9.03 have been sold.
ARTICLE IX. ADMINISTRATION
Section 9.01. The Committee. The Plan shall be administered
by the Committee, which may delegate authority to administer the
Plan to the Fingerhut Corporation Executive Compensation Committee
or any officer or employee of Fingerhut Corporation.
Section 9.02. Powers of Committee. Subject to the
provisions of the Plan, the Committee shall have full authority to
administer the Plan, including authority to interpret and construe
any provision of the Plan, to establish deadlines by which the
various administrative forms must be received in order to be
effective, and to adopt such other rules and regulations for
administering the Plan as it may deem appropriate. The Committee
shall have full and complete authority to determine whether all or
any part of the Common Stock acquired pursuant to the Plan shall
be subject to restrictions on the transferability thereof or any
other restrictions affecting in any manner a Participant's rights
with respect thereto but any such restrictions shall be contained
in the form by which a Participant elects to participate in the
Plan pursuant to Section 2.02. Decisions of the Committee will be
final and binding on all parties who have an interest in the Plan.
Section 9.03. Stock to be Sold. The Common Stock to be
issued and sold under the Plan may be authorized but unissued
shares, or the Company may purchase Common Stock in the market for
sale under the Plan. The aggregate number of shares of Common
Stock to be sold under the Plan will not exceed 450,000 shares.
If outstanding shares of Common Stock are increased or decreased
as a result of a stock dividend, stock split, or reverse stock
split thereon, the number of shares reserved or authorized to be
reserved under this Plan shall be increased proportionately, and
such other adjustment shall be made as may be deemed necessary or
equitable by the Board of Directors. In the event of any other
change affecting the Common Stock, including by merger or
consolidation, such adjustment shall be made as may be deemed
equitable by the Board of Directors to give proper effect to such
event, subject to the limitations of Section 424 of the Code.
Section 9.04. Notices. Notices to the Committee should be
addressed as follows;
Fingerhut Companies, Inc.
4400 Baker Road
Minnetonka, MN 55343
Attn: Compensation Committee
c/o Human Resources Department
ARTICLE X. APPLICABLE LAW
Rights to purchase Common Stock granted under the Plan shall
be construed and shall take effect in accordance with the laws of
the State of Minnesota.
