EXHIBIT 00.xx
AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of the 20th day of
August, 1998 (the "date hereof"), by and between SUNBEAM CORPORATION, a
Delaware corporation (the "Company"), and Xxxxx X. Xxxxxx ("Employee").
RECITALS:
A. The Company and Employee nominally are parties to a certain
Employment Agreement dated as of January 20, 1998, as amended by Amendment No.
1 dated as of March 30, 1998 (collectively the "Employment Agreement"). The
Company takes the position that such Employment Agreement may not be valid,
binding or enforceable against the Company, and Employee takes the position that
such Employment Agreement is valid, binding and fully enforceable in all
respects. The purpose of this Agreement is to resolve all matters between the
Company and Employee without any determination or admission by either party as
to whether the Employment Agreement is, or ever was, valid, binding or
enforceable, and the parties agree that no provision hereof shall be construed
in any manner as evidence of (i) the validity, binding effect or enforceability
of the Employment Agreement or (ii) the lack thereof;
B. The Company and Employee also were, or are, parties to a certain
Employment Agreement dated as of July 29, 1996 (the "1996 Agreement"), and they
also desire to terminate the 1996 Agreement as part of their Agreement
hereunder.
C. The Company and Employee desire an amicable resolution to their
association and to have good relations thereafter and have mutually agreed to
the termination of Employee's employment by the Company, upon the further terms
and conditions hereof;
NOW, THEREFORE, in consideration of the Recitals, which are
incorporated by reference herein, and the mutual promises, agreements and
undertakings set forth below, the Company and Employee, each intending to be
legally bound, agree as follows:
SECTION 1. RESIGNATION AND EFFECTIVE DATE; CONSULTING PERIOD. A.
Employee hereby resigns his employment with the Company, effective as of the
Effective Date (defined in Section 1B below), and the Employment Agreement and
the 1996 Agreement are hereby terminated, effective as of the Effective Date
(without any admission or determination as to whether or not the Employment
Agreement is, or ever was, valid, binding or enforceable), but subject to the
payments to Employee and the performance by the Company of the other obligations
of the Company hereunder which by their terms are to be made and performed at or
prior to the Effective Date. Employee also hereby resigns, effective the date
hereof, any and all elected or appointed offices or directorships (from which he
has not already resigned) held by him with the Company and/or any of its
subsidiaries or any member of the "Sunbeam Group," as defined below, including
without limitation The Xxxxxxx Company, Inc. The Company hereby agrees that
Employee's separation from the Company is a termination by mutual agreement,
without cause. The language of certain provisions of the 1996 Agreement is
incorporated by reference in this Agreement, as provided in Sections 6A, 6B and
7 hereof, as a matter of convenience only.
B. The effective date ("Effective Date") as such term is used in this
Agreement, and the date on which Employee's resignation of his employment and
the termination of the 1996 Agreement and the Employment Agreement shall be
effective, is the date following the day on which Employee's right to revoke
this Agreement as set forth in Section 5D hereof expires. Between the date
hereof and the
Effective Date, Employee shall continue to receive his salary and benefits and
agrees to be available on call for consultation with the Company at all
reasonable times, but he shall no longer be required to devote his full time and
attention to the business of the Company.
SECTION 2. PAYMENTS TO EMPLOYEE. The Company shall pay the following
to Employee:
A. CASH SEVERANCE PAYMENTS. The Company shall pay to Employee cash severance
of $825,000, of which $525,000 shall be paid on the Effective Date and the
balance (without interest) in 18 equal monthly installments of $16,667 each,
beginning on the first day of October 1998 and continuing on the first day of
each month thereafter until paid in full. Such payments shall be subject to
all necessary withholding for taxes but such payments shall not otherwise be
reduced for any reason.
B. VACATION PAY. On the Effective Date, the Company shall pay to
Employee an amount in cash equal to $77,808 for unused vacation days in the
years of 1996, 1997 and 1998. Such payment shall be subject to all necessary
withholding for taxes but such payment shall not otherwise be reduced for any
reason.
C. EBRP ACCOUNT. On the Effective Date, the Company shall pay to Employee an
amount equal to the balance in his Executive Benefit Replacement Plan (otherwise
known as the "SERP") account with the Company, which amount is $127,801.14. For
this purpose, the Company hereby agrees that Employee shall receive the final
approximately four (4) months of service credit for full vesting of Company
matching payments under the SERP plan. Such payment shall be subject to
withholdings for taxes, but such payment otherwise shall not be reduced for any
reason.
D. REIMBURSEMENT OF EXPENSES. The Company shall reimburse Employee for any and
all business expenses for which he is entitled to reimbursement under the
Company's expense reimbursement policies and procedures in effect on the date
hereof. Employee shall submit all expenses for reimbursement within sixty (60)
days from the Effective Date, and the Company shall process such expenses for
payment promptly upon receipt from Employee.
SECTION 3. BENEFIT PLANS. Employee's family health, dental and basic
life insurance coverages shall be continued at the expense of the Company for
18 months, through and including the last day of the calendar month which is 18
months after the month in which the Effective Date occurs, or until Employee
and his family shall be eligible for paid insurance coverages at another place
of employment, whichever shall first occur. In the event any of the Company's
insurance plans do not permit the Company's continued coverage of Employee and
his family, the Company shall reimburse Employee promptly upon request for the
cost of acquiring equivalent insurance coverages on his own during such period;
provided that the Company's payment for life insurance coverage for Employee
shall not exceed $1,200.00 per month. In the event Employee shall not be
eligible for other such insurance coverages at the end of such 18 month period,
he shall be entitled for an additional period of 18 months to continue family
insurance coverages at his own expense under the provisions of COBRA.
SECTION 4. STOCK OPTIONS AND RESTRICTED STOCK.
A. Employee is vested in certain stock options, as set forth on EXHIBIT A
attached hereto and incorporated by reference herein. Since Employee has been
an executive officer of the Company
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within the meaning of Section 16 of the Securities Exchange Act of 1934, and
since the Company's Stock Option Plan provides that Section 16 officers shall
have three (3) years following termination of employment within which to
exercise their options, Employee shall have a period of three (3) years from the
Effective Date in which to exercise such stock options; provided, however, that
Employee shall not exercise any such stock options during the period beginning
on the Effective Date and ending on the sixth month anniversary of the Effective
Date.
B. The option to acquire up to 750,000 shares of the Company's common stock
(both the vested and the unvested portion thereof) granted to Employee on
February 1, 1998 is hereby forfeited and terminated by agreement of the parties
as of the Effective Date and the payment of the amounts payable to Employee on
the Effective Date, pursuant to Section 2A above.
C. Employee holds the number of shares of formerly restricted stock set forth on
EXHIBIT A attached hereto and has heretofore received from the Company all tax
gross-up payments required with respect to such restricted shares. On the
Effective Date and the payment of the amounts payable to Employee on the
Effective Date, pursuant to Section 2A above, Employee shall forfeit all other
rights to restricted shares purportedly granted pursuant to the Employment
Agreement and shall deliver to the Company all documentation in his possession,
if any, representing such forfeited shares.
D. Employee acknowledges that he is hereby forfeiting the aforesaid options and
restricted stock, as set forth in Sections 4B and 4C above, purportedly granted
pursuant to the Employment Agreement (without any admission or determination as
to whether or not the Employment Agreement is, or ever was, valid, binding or
enforceable), and he does so freely and willingly in consideration of the other
compensation and benefits provided to him hereunder.
SECTION 5. RELEASES. A. In consideration of the payments and other
benefits to be provided to Employee hereunder, Employee hereby RELEASES and
FOREVER DISCHARGES the Company and its subsidiaries and their respective
predecessors, officers, directors, shareholders, agents, employees, legal
representatives, successors, trustees, fiduciaries and assigns (individually
and collectively the "Sunbeam Group"), of and from (and does hereby WAIVE), any
and all rights, claims, grievances, arbitrations, or causes of action which
Employee has asserted, could assert, or which could be asserted on his behalf
relating to his hiring, employment with the Company prior to the date of
execution and delivery of this Agreement, his separation from such employment
or post-employment benefits, and under any federal, state or local law,
ordinance, regulation or rule. Employee also WAIVES ANY AND ALL RIGHTS under the
laws of any jurisdictions in the United States that would limit the foregoing
release and waiver. Employee recognizes that, among other things, he is
releasing the Sunbeam Group, of and from any and all claims he might have
against it, or any of them, for pain and suffering, emotional distress,
compensatory and punitive damages and for employment discrimination based on
age (including claims under the federal Age Discrimination in Employment Act of
1967, as amended ("ADEA")or comparable state laws), sex, national origin, race
or color, mental or physical handicap or disability, or religious belief under
both federal and any similar state or local laws. Employee hereby expressly
waives and releases any right to reinstatement by the Sunbeam Group. Employee
also COVENANTS NOT TO XXX the Sunbeam Group, or any of them, for any of the
matters covered by this Section 5.
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B. There is excepted from the scope of this Release and Covenant not to Xxx any
and all claims which Employee may have (i) under this Agreement (including
claims for indemnification from the Company, as provided in Section 6A below)
and (ii) any claim, cross claim or counterclaim which Employee may have against
the Company's former Chairman and CEO, Xxxxxx X. Xxxxxx, or its former Executive
Vice President and CFO, Xxxxxxx X. Xxxxx.
C. Employee acknowledges that neither Sunbeam nor any member of the Sunbeam
Group is releasing Employee hereby from any claim or cause of action; however,
the Company hereby agrees, effective on the Effective Date, that if the Company
or any of its subsidiaries or affiliates asserts in writing any claim for
damages or alleged wrongdoing against Employee for any cause or reason
whatsoever, Employee's release of the Company, as set forth in Section 5A
hereof, shall automatically be void and of no effect, without any requirement
that Employee return to the Company any of the consideration provided to him for
such release.
D. EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS GIVEN HIM ADEQUATE TIME WITHIN
WHICH TO CONSIDER THIS AGREEMENT AND HAS ADVISED HIM IN WRITING TO CONSULT WITH
COUNSEL BEFORE SIGNING THIS AGREEMENT, AND EMPLOYEE HAS CONSULTED WITH COUNSEL.
EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS AND THAT HE HAS ENTERED INTO THIS
AGREEMENT FREELY AND VOLUNTARILY.
THE PARTIES FURTHER ACKNOWLEDGE THAT FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THIS AGREEMENT, I.E. ON OR BEFORE August 27, 1998,
EMPLOYEE MAY REVOKE THIS AGREEMENT. SUCH REVOCATION SHALL BE MADE IN WRITING AND
DELIVERED TO THE GENERAL COUNSEL OF THE COMPANY BY THE CLOSE OF BUSINESS ON SUCH
DATE. IF NOT REVOKED ON OR BEFORE SUCH DATE, THIS AGREEMENT SHALL THEREAFTER BE
IRREVOCABLE.
SECTION 6. INDEMNIFICATION; D&O INSURANCE COVERAGE; CONSULTING.
A. The Company hereby affirms to Employee that the indemnification provisions
in Section 11 of the 1996 Agreement shall continue in effect in perpetuity, and
such provisions are incorporated by reference herein and shall survive the
termination of the 1996 Agreement. The Company further affirms that Employee has
been and will continue to be entitled to indemnification for his service as an
officer, employee and director of any and all subsidiaries and affiliates of the
Company (including without limitation The Xxxxxxx Company, Inc.) to the fullest
extent permitted by Delaware Law, and the Certificate of Incorporation and
Bylaws of the Company, including the right (upon providing the required
undertaking to the Company) to be advanced fees and expenses for the defense of
any proceedings prior to the final disposition of such proceedings as set forth
above.
B. The Company shall continue to provide Employee with directors and
officers (D&O) insurance coverage comparable in all respects to that provided
from time to time to the Company's directors and officers for such period of
time as will cover any applicable statute of limitation on actions which could
be brought against Employee, arising out of his service as an employee, officer
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and director of the Company or any affiliate of the Company or of the Sunbeam
Group.
C. The Company believes that it will need to consult with Employee from
time to time, and will need Employee's full cooperation in connection with
legal matters (including litigation, proceedings, claims, investigations and
inquiries) involving or relating to the Company and the members of the Sunbeam
Group and to events or circumstances occurring or existing during Employee's
employment with the Company. Employee hereby agrees to consult from time to
time and to fully cooperate with the Company and to provide to the Company any
and all documents and information in his possession as requested by the Company
from time to time and related to such matters; provided that such consultation,
cooperation and providing of documents and information shall not unreasonably
interfere with any other occupation in which Employee is engaged, and provided
further that (1) Employee shall be promptly reimbursed by the Company the amount
of out of pocket expenses reasonably incurred by him in providing such
cooperation, consulting, providing of documents and information and (2) Employee
shall have access to the files and records of the Company as reasonably required
for him to provide such consulting services. In consideration of Employee's
agreement, the Company shall pay to Employee $250,000, payable in 18 monthly
installments (without interest) of $13,889 each, beginning on the first day of
October 1998 and continuing on the first day of each calendar month thereafter
until paid in full. Such payments shall be subject to all necessary withholding
for taxes, but such payments otherwise shall not be reduced for any reason.
SECTION 7. AGREEMENT AS TO SECTION 280G; OTHER PROVISIONS OF THE
EMPLOYMENT AGREEMENT INCORPORATED HEREIN. The parties believe that Section 280G
of the Internal Revenue Code is not applicable to the payments and benefits
provided to Employee pursuant to this Agreement, and each party shall file its
or his tax returns consistent with this understanding. In the event, however,
that the Internal Revenue Service should take a contrary position, the Company
hereby agrees that the gross -up provisions of Section 8 of the 1996 Agreement
are incorporated by reference herein and shall be applicable to such situation,
but without prejudice to the Company's right to challenge such position of the
Internal Revenue Service. In addition, the Non-Mitigation provisions of Section
9 of the 1996 Agreement are incorporated by reference as if set forth at length
herein and shall survive the termination of the 1996 Agreement. The parties also
hereby incorporate by reference the Confidentiality and Noncompetition
provisions of Section 10 of the 1996 Agreement, and Employee expressly
acknowledges his obligations of Confidentiality and Noncompetition thereunder
from and after the date hereof. In consideration of Employee's agreement to be
bound by the provisions of Section 10 of the 1996 Agreement for a total period
of three (3) years from the Effective Date, the Company shall pay to Employee
$50,000, payable in 18 monthly installments (without interest) of $2,778 each,
beginning on the first day of October 1998 and continuing on the first day of
each calendar month thereafter until paid in full. Such payments shall be
subject to all necessary withholding for taxes but such payments otherwise shall
not be reduced for any reason.
SECTION 8. MISCELLANEOUS.
a. This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, legatees, devisees, personal
representatives, successors and assigns. No rights or obligations of the Company
under this Agreement may be assigned or transferred by the Company except that
such rights or obligations may be assigned or transferred pursuant to a merger
or consolidation in which the Company is not the continuing entity, or the sale
or liquidation of all or
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substantially all of the business and/or assets of the Company, provided that
the assignee or transferee is the successor to all or substantially all of the
business and/or assets of the Company and such assignee or transferee assumes
the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company shall require
any such successor to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement, the
term "Company" shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 8(a) or which otherwise becomes bound by
all the terms and provisions of this Agreement or by operation of law.
b. Any uncertainty or ambiguity shall not be construed for or against either
party as an attribution of drafting to either party.
c. Whenever possible, each provision of this Agreement shall be construed and
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement or the application thereof to any party
or circumstance shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition without
invalidating the remainder of such provision or any other provision of this
Agreement or the application of such provision to other parties or
circumstances.
d. All discussions, correspondence, understandings and agreements heretofore
made between the parties are superseded by and merged into this Agreement,
which alone fully and completely expresses the agreement between the parties
with respect to the subject matter hereof (except for provisions of the 1996
Agreement which are specifically referred to or incorporated by reference
herein), and the same is entered into with neither party relying upon any
statement or representation made by or on behalf of any party not embodied in
this Agreement. Any modification of this Agreement may be made only by a
written agreement signed by both of the parties to this Agreement.
e. This Agreement shall be governed in all respects by the internal laws of the
State of Delaware, without regard to principles of conflicts of laws.
f. This Agreement may be signed in counterparts, each of which shall constitute
an original hereof.
g. Nothing contained herein shall inure to the benefit of any third party, and
nothing contained herein shall serve as an admission by the Company as to the
enforceability of the Employment Agreement or any similar employment agreement
entered into with any other employee of the Company. Rather, this Agreement
constitutes the settlement and compromise of certain claims, with each party
voluntarily surrendering certain rights and incurring certain obligations in
compromise of other rights and obligations.
h. Any press release or press statement regarding Employee's separation from
employment by the Company shall reflect the amicable nature of Employee's
separation and that Employee is leaving the Company voluntarily or by mutual
agreement.
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i. Except as otherwise provided herein, all controversies, claims or disputes
arising out of or related to this Agreement shall be settled in the State of
Florida under the rules of the American Arbitration Association ("AAA") as the
sole and exclusive remedy of either party, and judgment upon the award rendered
by the arbitrator(s) may be entered in any court of competent jurisdiction in
the State of Florida or elsewhere. The costs of the arbitration shall be borne
as determined by the arbitrator(s); PROVIDED, HOWEVER, that if the Company's
position is not substantially upheld, as determined by the arbitrator(s), the
expenses of Employee (including without limitation, fees and expenses payable
to the AAA and the arbitrator(s), fees and expenses payable to witnesses,
including expert witnesses, fees and expenses payable to attorneys and other
professionals, expenses of Employee in attending the hearings, costs in
connection with obtaining and presenting evidence and costs of transcribing the
proceedings), as determined by the arbitrator(s), shall be reimbursed to him by
the Company. Notwithstanding the foregoing, the parties agree that nothing
contained herein shall preclude the Company from bringing an action in a court
of competent jurisdiction (whether prior to or during any arbitration
proceedings) seeking to enforce specifically Employee's obligations of
confidentiality and noncompetition by means of seeking an injunction or other
equitable relief.
j. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, or by recognized courier service (such as UPS, FedEx or similar
service) with signature required, addressed as follows:
If to Employee:
Xxxxx X. Xxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx #0000
Playa del Mar
Xxxx Xxxxxxxxxx, XX 00000
If to the Company:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Chairman of the Board
or to such other address as either party may have furnished to the other in
writing in accordance with the notice provisions hereof. Notices of change of
address shall be effective only upon actual receipt.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below and as of the date and year first above written.
EMPLOYEE SUNBEAM CORPORATION
/s/ XXXXX X. XXXXXX /s/ SUNBEAM CORPORATION
----------------------- -------------------------
XXXXX X. XXXXXX By: /s/ XXXXX XXXXXXXXX
-------------------------
Its: Chairman of the Board
Date: August 20, 1998 Date: August , 1998
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EXHIBIT A
Employee is fully vested in the following stock options, at the
exercise prices noted:
OPTIONS TO ACQUIRE EXERCISE PRICE GRANT DATE
------------------ -------------- ----------
60,000 shares $21.42 Jan. 1, 1994
75,000 shares 15.32 July 29, 1996
42,000 shares 14.39 Nov. 1, 1995
23,000 shares 14.94 Nov. 21, 1995
STOCK
Employee holds the following shares of stock, formerly restricted, and
currently subject to no restriction (other than any restrictions which may be
imposed by applicable securities laws):
14,833 shares
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