Exhibit 10.i(i)
FINGERHUT COMPANIES, INC.
1995 LONG-TERM INCENTIVE AND STOCK OPTION PLAN
Non-Qualified Stock Option Agreement
This Non-Qualified Stock Option Agreement is made and
entered into as of [date] by and between [name] (the
"Optionee") and Fingerhut Companies, Inc., a Minnesota
corporation, with its principal business office located in
Minnetonka, Minnesota (the "Company").
WHEREAS, the Compensation Committee (the "Committee")
of the Board of Directors of the Company (the "Board")
desires to provide Optionee with an option to purchase
shares of common stock of the Company pursuant to the
provisions of the Fingerhut Companies, Inc. 1995 Long-Term
Incentive and Stock Option Plan (the "Plan") and this Non-
Qualified Stock Option Agreement (the "Agreement"), and
Optionee desires to acquire such option.
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein, and for other
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. The Company hereby grants to
Optionee effective as of [date] (the "Date of Grant"), the
option (the "Option") to purchase an aggregate of [number]
([no]) shares (the "Shares") of common stock of the Company
(the "Common Stock"), subject to the terms and conditions
set forth herein and in the Plan.
2. Option Price. The purchase price of the Shares
subject to the Option (the "Option Price") shall be $[price]
per share, subject to adjustment as provided herein.
3. Term of Option; Time of Exercise.
3.1 The term of the Option shall be for a period of
ten (10) years from the Date of Grant. The Option shall be
exercisable with respect to thirty-three and one-third
percent (33-1/3%) of the Shares on [date2] and annually
thereafter, on a cumulative basis, with respect to thirty-
three and one-third percent (33-1/3%) of the Shares.
3.2 This Option shall not under any circumstances be
exercisable after, and this Agreement and Option shall
terminate as to all unexercised Shares at, 5:00 p.m.
(Minnesota time) on the date that is ten (10) years from the
Date of Grant (the "Expiration Date"), unless terminated
prior thereto pursuant to the provisions of Section 5
hereof.
3.3 Notwithstanding the vesting provisions contained
in Section 3.1 hereof, but subject to the other terms and
conditions set forth herein, the Option may be exercised in
full immediately following the date of a "Change in Control"
(as hereinafter defined). For purposes of this Agreement,
the following terms shall have the definitions set forth
below:
(a) "Change in Control" shall mean:
(i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement; or
(ii) the public announcement (which, for purposes of
this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) of the Exchange Act) by the
Company or any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) that such
person has become the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities; provided, however, that
notwithstanding the foregoing, no Change of Control shall be
deemed to have occurred for purposes of this Agreement by
reason of ownership of 30% or more of the total voting
capital stock of the Company then issued and outstanding by
any subsidiary of the Company or any employee benefit plan
of the Company or of any subsidiary of the Company or any
entity holding shares of the Common Stock organized,
appointed or established for, or pursuant to the terms of,
any such plan (any such person or entity described in this
proviso is referred to herein as a "Company Entity"); or
(iii) the announcement of a tender offer by any
person or entity (other than a Company Entity) for 30% or
more of the Company's voting capital stock then issued and
outstanding, which tender offer has not been approved by the
Board, a majority of the members of which are Continuing
Directors (as hereinafter defined), and recommended to the
shareholders of the Company; or
(iv) the Continuing Directors (as hereinafter defined)
cease to constitute a majority of the Company's Board of
Directors; or
(v) the shareholders of the Company approve (x) any
consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant
to which shares of Company stock would be converted into
cash, securities or other property, other than a merger of
the Company in which shareholders immediately prior to the
merger have the same proportionate ownership of stock of the
surviving corporation immediately after the merger; (y) any
sale, lease, 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 (z) any plan of
liquidation or dissolution of the Company.
(b) "Continuing Director" shall mean any person who is
a member of the Board of Directors of the Company, while
such person is a member of the Board of Directors, who is
not an Acquiring Person (as defined below) or an Affiliate
or Associate (as defined below) of an Acquiring Person, or a
representative of an Acquiring Person or of any such
Affiliate or Associate, and who (x) was a member of the
Board of Directors on the date of this Agreement as first
written above or (y) subsequently becomes a member of the
Board of Directors, if such person's initial nomination for
election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing
Directors. For purposes of this subparagraph (ii),
"Acquiring Person" shall mean any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) who or
which, together with all Affiliates and Associates of such
person, is the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly
of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities, but shall not include any Company Entity; and
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.
4. Exercise of Option.
4.1 Subject to the terms and conditions of the Plan
and this Section 4, this Option may be exercised by Optionee
in whole or in part by written notice to the Company at its
principal executive office in Minnetonka, Minnesota
addressed to the attention of its General Counsel. Such
notice shall specify Optionee's election to exercise this
Option and the number of Shares in respect of which it is
being exercised, and shall be signed by Optionee. The
Company shall not, however, be required to sell or issue any
Shares pursuant to this Option if the issuance of such
Shares would constitute a violation by Optionee or the
Company of any applicable law or regulation of any
governmental authority.
4.2 Notice of exercise of the Option by Optionee shall
be accompanied by payment of the full Option Price of the
Shares as to which the Option is to be exercised, together
with payment of the amount determined by the Company to be
necessary to satisfy any applicable federal, state and local
tax withholding requirements arising from the exercise of
the Option. The Company shall issue and deliver a
certificate or certificates representing such Shares as soon
as practicable after such notice and payments are received.
Payment of such Option Price shall be made in cash or check
payable to the order of the Company or, in lieu thereof, if
the Committee in its sole discretion at the time of exercise
so permits, by tendering to the Company shares of common
stock of the Company having a fair market value equal to the
Option Price. Payment by the Optionee of any required
amount of withholding for tax purposes shall be made in cash
or check payable to the order of the Company. The
certificate or certificates for the Shares as to which the
Option shall have been so exercised shall be registered in
the name of Optionee (or Optionee's Representative (as
defined in Section 5)) or at the direction of Optionee or
such Representative and shall be delivered as aforesaid to
or upon the written order of such person or persons. In the
event that the Option shall be exercised by any person or
persons other than Optionee, such notice shall be
accompanied by appropriate proof of the authority and right
of such person or persons to exercise the Option. All
Shares purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.
5. Termination of Option.
(a) This Option shall terminate and may no longer be
exercised if Optionee ceases to be employed by the Company
or one of its subsidiaries (as defined in the Plan) except:
(i) if Optionee's employment shall be terminated for
any reason other than gross and willful misconduct, death,
disability or retirement, Optionee may, at any time before
(x) the expiration of ninety (90) days after such
termination or (y) the Expiration Date, whichever shall
first occur, exercise this Option (A) to the extent that the
Option was exercisable on the date of the termination of
employment in the case of voluntary termination or (B) to
the extent that the Option was or would become exercisable
on or before the expiration of such ninety (90) day period
in the case of involuntary termination; provided, however,
that if, immediately prior to such termination of
employment, Optionee was an "officer" as defined in Rule 16a-
1(f) promulgated under the Exchange Act, the periods of
exercisability referred to in clauses (A) and (B) above (but
not the acceleration of vesting referred to in clause (B))
shall be extended from ninety (90) days to seven (7) months
after the date of such termination;
(ii) if Optionee's employment shall be terminated by
reason of Optionee's gross and willful misconduct during the
course of employment (as may be determined by the Committee
in its sole and absolute discretion), including but not
limited to, wrongful appropriation of funds of the employer
or the commission of a gross misdemeanor or felony, this
Option shall be terminated as of the date of the misconduct
and Optionee shall have no further rights hereunder.
(iii) if Optionee's employment shall be terminated
by reason of Optionee's death, this Option will become fully
exercisable and may be exercised, by the Optionee's
Representative (as defined below) at any time before (a) the
expiration of three (3) years after the date of death, or
(b) the Expiration Date, whichever shall first occur;
(iv) (A) if Optionee's employment shall be terminated
by reason of Optionee's disability (other than Total
Disability), as may be determined by the Committee in its
sole and absolute discretion, this Option may be exercised,
to the extent that the Option was exercisable on the date of
disability, by Optionee or Optionee's guardian or legal
representative, at any time before (x) the expiration of one
(1) year after the date Optionee's employment was terminated
by reason of such disability or (y) the Expiration Date,
whichever shall first occur; or (B) if Optionee's employment
shall be terminated by reason of Optionee's Total
Disability, this Option will become fully exercisable and
may be exercised by Optionee or Optionee's guardian or legal
representative at any time before (x) the expiration of
three (3) years after the date Optionee's employment was
terminated by reason of such disability or (y) the
Expiration Date, whichever shall first occur;
(v) if the Optionee's employment shall be terminated
by the Optionee's Retirement (as defined below), this Option
will become fully exercisable and may be exercised by
Optionee before (x) the expiration of three years after such
date, or (y) the Expiration Date, whichever shall first
occur; or
(vi) if Optionee dies or becomes disabled (as may be
determined by the Committee in its sole and absolute
discretion) during the time of exercisability after
termination of employment provided in clause (i) of this
Section 5(a), this Option may be exercised, to the extent
that the Option was exercisable on the date of death or
disability: (x) in the case of death, by the Optionee's
Representative or (y) in the case of disability, by Optionee
or Optionee's guardian or legal representative, before (A)
the expiration of one year after the date of death or the
onset of such disability, or (B) the Expiration Date,
whichever shall first occur.
(b) Notwithstanding the provisions contained in
Section 5(a) above, but subject to the other terms and
conditions set forth herein, in the event that, within one
year following a Change in Control, Optionee's employment is
terminated for any reason other than for gross and willful
misconduct (including Optionee's voluntary termination),
Optionee shall have the right to exercise the Option in
whole or in part at any time before (i) the expiration of
one year after the date of such termination of employment,
or (ii) the Expiration Date, whichever shall first occur.
(c) For purposes of this Agreement, the following
terms shall be defined as follows:
(i) "Retirement" shall mean any termination other than
by death or gross and willful misconduct after the
Optionee's age plus completed years of service equals sixty
(60) or more; provided, however, that if Optionee is less
than age 65 on the date of termination of employment,
Optionee must have completed at least five (5) years of
service. For purposes of this definition, "years of
service" shall be calculated in accordance with the
Fingerhut Corporation Pension Plan as in effect on such
date.
(ii) "Representative" shall mean the person or persons
to whom Optionee's rights under this Agreement shall pass
upon death, whether by will or by the applicable laws of
descent and distribution.
(iii) "Total Disability" shall have the meaning
given to "permanent and total disability" in Section
22(e)(3) of the Code (as defined in the Plan) and shall be
determined by the Committee in its sole and absolute
discretion.
(d) Notwithstanding the foregoing provisions of
Section 5(a), the Committee shall have the authority, on a
case by case basis, in its sole and absolute discretion to
extend for up to a period of two (2) years following the
termination of employment of Optionee the period of vesting
referred to in Section 3.1 and the period of exercisability,
provided such extension does not exceed the Expiration Date.
6. Leave of Absence; Related Employment. A leave of
absence granted in accordance with the Company's usual
procedure which does not operate to interrupt continuous
employment for other benefits granted by the Company shall
not be considered a termination of employment under this
Agreement. A period of related employment during which
Optionee is not employed by the Company nor a subsidiary (as
defined in the Plan) shall not be considered a termination
of employment under this Agreement if (i) such employment is
undertaken by Optionee at the request of the Company or a
subsidiary, (ii) immediately prior to the undertaking of
such employment Optionee was an officer or employee of the
Company or a subsidiary or was engaged in related
employment, and (iii) such employment is recognized by the
Committee, in its sole discretion, as related employment.
The death or disability of Optionee during a period of
related employment shall be treated, for purposes of this
agreement, as if such death or the onset of such disability
had occurred while Optionee was an officer or employee of
the Company.
7. Adjustments for Changes in Common Stock.
7.1 In the event that the outstanding shares of Common
Stock (other than shares held by dissenting shareholders)
shall be changed into, or exchanged for, a different number
or kind of shares of Common Stock or other securities of the
Company, or, if further changes or exchanges of any Common
Stock or other securities into which the Common Stock shall
have been changed, or for which it shall have been
exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock
dividend, reclassification, split-up, combination of shares
or otherwise), then for each Share subject to the Option,
there shall be substituted and exchanged therefor the number
and kind of shares of Common Stock or other securities into
or for which each outstanding share of Common Stock (other
than shares held by dissenting shareholders) shall be so
changed or exchanged. If in the event of any such changes
or exchanges in order to prevent dilution or enlargement of
rights under this Agreement, it is necessary to make an
adjustment in the number, kind, or option exercise price of
the Shares then subject to the Option, such adjustment shall
be made by the Committee and shall be effective and binding
for all purposes of this Agreement.
7.2 All adjustments made pursuant to the provision of
this Section 7 shall be made by the Committee, whose
determination as to which adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive.
8. Non-transferability of Option.
(a) Except as provided in subsection 8(b) below, the
Option granted under this Agreement shall not be
transferable by Optionee, either voluntarily or
involuntarily, except by will or the laws of descent and
distribution. This Option may not be transferred, assigned,
pledged or hypothecated, whether by operation of law or
otherwise, or be subject to attachment, execution or similar
process. Any attempt to do so shall void this Option.
During the lifetime of Optionee, this Option may be
exercised only by the Optionee (or by Optionee's guardian or
legal representative in the case of disability) or by a
permitted transferee pursuant to a transfer as described
below.
(b) To the extent such transfers are permitted under
the Plan and are not restricted by Rule 16b-3 promulgated
under the Exchange Act, the Committee, in its sole
discretion, may establish, as permitted by applicable law,
rules and conditions under which an Optionee may transfer
this Option to any member of Optionee's "immediate family"
(as such term is defined in Rule 16a-1(e) promulgated under
the Exchange Act), to a trust whose beneficiaries are
members of Optionee's "immediate family" or to or for the
benefit of an organization exempt from federal income tax
pursuant to Section 501 of the Code.
9. Rights as a Shareholder. No rights of a
shareholder of the Company shall attach to Optionee with
respect to any of the Shares until this Option shall be duly
exercised as to such Shares and Optionee shall have become
the holder of record of such Shares. No adjustments shall
be made for cash dividends or other distributions or rights
as to which there is a record date preceding the date that
Optionee becomes the holder of record of such Shares.
10. Securities Law Compliance. The exercise of all or
any portion of this Option shall only be effective at such
time that the sale of Common Stock issued pursuant to such
exercise will not violate any state or federal securities or
other laws. The Company is under no obligation to effect
any registration of the stock subject to the Option under
the Securities Act of 1933 or to effect any state
registration or qualification of such Common Stock. The
Company may, in its sole discretion, defer the effectiveness
of any full or partial exercise of the Option in order to
ensure that the issuance of stock upon exercise will be in
compliance with federal or state securities laws and the
rules of the New York Stock Exchange or any other exchange
upon which the Company's Common Stock is traded.
11. Limitation of Liability. Nothing in this
Agreement shall be construed to:
(a) limit in any way the right of the Company or a
subsidiary to terminate the employment of Optionee; or
(b) be evidence of any agreement or understanding,
express or implied, that the Company or a subsidiary shall
employ Optionee in any particular position at any particular
rate of compensation or for any particular period of time.
12. Severability. It is intended that each provision
of this Agreement shall be viewed as separate and divisible.
In the event that any provision hereof shall be held to be
invalid or unenforceable, the remaining provisions of this
Agreement shall continue to be in full force and effect.
13. Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of
Minnesota.
14. Further Assurances. Upon the exercise of the
option by Optionee or at such subsequent date as either the
Company or Optionee may reasonably request, each party
hereto agrees to execute and deliver such further
instruments and to take such other action as shall be
reasonably required to carry out the intent and purposes of
this Agreement.
15. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same document.
16. Notices. All notices that are required or may be
given pursuant to the terms of this Agreement shall be in
writing and delivered personally or by registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows and shall be deemed to have been given
upon delivery to the addressee:
To the Company:
Fingerhut Companies, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
To Optionee:
At Optionee's residence address listed in the
Company's personnel records.
Notice of a change in address of one of the parties hereto
shall be given in writing to the other party as provided
above, but shall be effective only upon actual receipt.
17. Amendment. This Agreement may not be amended or
modified by the parties hereto in any manner, except by a
written instrument signed by both parties hereto.
18. Binding Effect: Assignment. This Agreement shall
be binding upon the heirs, successors and assigns of the
parties hereto. This Agreement shall not be assigned by
either party hereto without the express written consent of
the other party.
19. Entire Agreement. The Plan, the rules adopted by
the Committee from time to time and this Agreement
constitute, except as to any written agreement between the
parties hereto which specifically references this Section
19, the entire understanding between the parties hereto with
respect to the matters covered herein and supersede all
previous written, oral or implied understandings between the
parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company and Optionee have
executed this Agreement as of the day and year first above
written.
FINGERHUT COMPANIES, INC.
By___________________________
OPTIONEE SIGNATURE
_____________________________
Social Security #:
Date:
