EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 22, 1996 (the
"Effective Date"), by and between XXXXXXX X. XXXXX (the "Executive") and SUNBEAM
CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Company desires to employ the Executive and the Executive
desires to furnish services to the Company on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties desire to enter into this agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. EMPLOYMENT PERIOD. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence on the Effective Date
and shall end on July 22, 1999 (or the Date of Termination (as defined in
Section 6 below), if earlier).
3. POSITION AND DUTIES. The Executive shall serve as Executive Vice
President, Finance and Administration, and shall have such responsibilities,
duties and authority as are consistent with such position and such other duties
as may from time to time be assigned to him by the Chief Executive Officer. The
Executive agrees to devote substantially all his working time, attention and
energies to the performance of his duties for the Company. The Company shall
nominate the Executive as a director of the Company and shall use its best
efforts to have the Executive elected and reelected to the Board for the
duration of the Employment Period.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be at the Company's principal executive offices in either
Broward or Palm Beach County, Florida, or such other location as may be agreed
to by the Board. In the event that the Company's principal executive offices are
moved from Broward or Palm Beach County Florida, the Company shall promptly pay,
or reimburse the Executive for, all reasonable expenses incurred by the
Executive relating to any change of the Executive's residence from Broward or
Palm Beach County, Florida, in connection with his employment hereunder,
including, without limitation, reasonable expenses for himself and his family of
travel, moving, storage and suitable lodging and maintenance, and the Company
shall reimburse the Executive on a grossed up basis in the event that any tax is
assessed upon him in relation to any such expenses. The Company shall pay or
reimburse the Executive for all reasonable costs and expenses of residential
relocation incurred by him in connection with each and every additional change,
if any, in the location of
the principal executive offices of the Company, and the Executive shall be
reimbursed by the Company on a grossed up basis in the event that any tax is
assessed upon him in relation to any such costs or expenses.
5. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. As compensation for the performance by the
Executive of his duties hereunder, during the Employment Period the Company
shall pay the Executive a base salary at an annual rate of $425,000 (the "Base
Salary"), which Base Salary shall be payable in substantially equal semi-monthly
installments. It is agreed that there shall be no increase or decrease in the
Base Salary during the Employment Period. The Company also shall pay to the
Executive, within fifteen (15) days from the Effective Date, the sum of One
Hundred and Twenty Five Thousand Dollars ($125,000) as a one time bonus for
agreeing to the terms hereof. The parties agree that the Executive shall not be
entitled to participate in any other bonus or incentive compensation programs of
the Company.
(b) EQUITY AND STOCK OPTION GRANTS.
(i) PURCHASE OF COMMON STOCK. Effective as of the Effective
Date, the Executive shall purchase from the Company for his own
account, and the Company shall sell to the Executive, a total of 40,817
shares of the Company's Common Stock, par value $.01 per share ("Common
Stock"), for the sum of $500,008.25 ($12.25 per share of Common Stock)
(the "Purchased Stock"). The Purchased Stock shall be the sole property
of the Executive, shall be unrestricted (although unregistered at the
time of issuance) and shall be freely tradeable by the Executive,
subject to applicable securities laws and other legal restrictions.
(ii) RESTRICTED SHARES. Effective as of the Effective Date,
the Executive has been granted, without cost to the Executive, 100,000
shares of the Company's Common Stock, on the terms and conditions set
forth herein (the "Restricted Shares"). One-third of such Restricted
Shares shall vest and cease to be restricted in equal installments on
each of the first, second and third anniversaries of the Effective Date
(subject to earlier vesting provisions set forth in Section 7) provided
that the Executive continues to be employed pursuant to this Agreement
upon such anniversary dates. All such shares, once vested, shall be the
sole property of the Executive, shall be unrestricted and shall be
freely tradeable by the Executive, subject to applicable legal
restrictions.
(A) ISSUANCE OF CERTIFICATES. The Restricted Shares shall be
registered in the Executive's name, but the certificates
evidencing the Restricted Shares shall be retained by the
Company until such shares become vested and the restrictions
thereon lapse. The period prior to the time that any
particular Restricted Shares become vested and the
restrictions thereon lapse is hereinafter referred to as the
"Restricted Period" with respect to such shares. The Executive
shall execute a
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stock power, in blank, with respect to such Restricted Shares
and deliver the same to the Company.
(B) RIGHTS AS A STOCKHOLDER. Except as provided herein, during
the Restricted Period, the Executive shall have all the rights
of a stockholder with respect to Restricted Shares, including
the right to receive dividends or other distributions and the
right to vote such shares; provided that, in the discretion of
the Company any such dividends or other distributions may be
retained by the Company unless and until the Restricted Shares
in respect of which such dividends or other distributions were
paid shall vest.
(C) NON-TRANSFERABILITY. During the Restricted Period, the
Executive may not sell, transfer, pledge, or otherwise
encumber or dispose of the Restricted Shares, and any
attempted sale, transfer, pledge or other encumbrance or
disposition (whether voluntary or involuntary) in violation of
this Section 5(b)(ii)(C) shall be null and void.
(D) DELIVERY OF SHARE CERTIFICATES. Upon the vesting of any
Restricted Shares, the certificates evidencing such Restricted
Shares, together with any dividends or other distributions
retained by the Company pursuant to Section 5(b)(ii)(B), shall
be delivered promptly to the Executive. In the case of
Executive's death, such certificates, dividends and
distributions will be delivered to the beneficiary designated
in writing by the Executive pursuant to a form of designation
provided by the Company, to the Executive's legatee or
legatees, or to his personal representatives or distributees,
as the case may be.
(iii) STOCK OPTIONS. The Executive shall be granted the
following stock options (collectively, the "Option Award"):
(A) Effective as of the Effective Date, by action of the
Executive Development and Compensation Committee of the Board
of Directors, the Executive has been granted a stock option
(the "Plan Option") to purchase 250,000 shares of Common Stock
pursuant to the Company's Amended and Restated Equity Team
Plan (the "Option Plan") (a copy of which Option Plan is
attached hereto as SCHEDULE A and incorporated herein by
reference), which options are granted upon the terms and
conditions as set forth in the Option Plan (at an exercise
price of $14.26/share), except that such option shall vest in
equal increments on the first, second and third anniversaries
of the grant date and shall be subject to and modified by all
other terms and provisions of this Agreement, as expressly set
forth herein. In the event of any conflict between any terms
of the Option Plan and the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall
take precedence and shall be controlling as between such
documents.
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(B) Effective as of the Effective Date, and subject to
shareholder approval by the Company's shareholders at a
special meeting to be held for that purpose (the "Special
Meeting"), which Special Meeting the Company agrees to convene
as soon as practicable after the Effective Date hereof, by
action of the Executive Development and Compensation
Committee, the Executive has been granted a non-qualified
stock option (the "Non-Qualified Option") to purchase 250,000
shares of Common Stock. The Non-Qualified Option shall be upon
the same terms and conditions as are set forth in Section
5(b)(iii)(A) above, including the exercise price of
$14.26/share and the three year vesting schedule. In the event
that Company's shareholders fail to approve the grant of the
Non-Qualified Option at the Special Meeting, the Company and
the Executive shall negotiate in good faith a mutually
acceptable alternative compensation arrangement; provided,
however, that the Executive, in his sole discretion, may elect
to terminate this Agreement, and the Executive shall be
entitled to receive the compensation, rights and benefits
provided in Section 7(b) hereof (other than in respect of the
Non-Qualified Option).
(iv) REGISTRATION RIGHTS. Within six months after the
Effective Date, the Company shall cause the Purchased Stock, the
Restricted Shares and all shares of stock subject to the Option Award
to be registered or qualified for resale under the Securities Act of
1933 and applicable state laws. Unless and until registered under the
Securities Act of 1933, as amended, certificates evidencing the
Purchased Stock, the Restricted Shares and shares acquired pursuant to
the exercise of the Non-Qualified Option shall bear the following
legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY,
SUCH REGISTRATION IS NOT REQUIRED.
(c) EXPENSES. During the Employment Period, the Company shall
reimburse the Executive for all reasonable business expenses in accordance with
applicable policies and procedures then in force.
(d) VACATION AND OTHER ABSENCES. The Executive shall be
entitled to paid vacation and other paid absences, whether for holidays,
illness, personal time or any similar purposes, during the Employment Period in
accordance with policies applicable generally to senior executives of the
Company; provided, however, that the Executive shall always be entitled to at
least six weeks of paid vacation in each calendar year and pro rata for part of
a year. Up to four weeks per year of unused vacation may be maintained by the
Executive on a cumulative basis and may be subsequently used in any year or if
not so used, the Executive shall be compensated for any unused vacation days
upon the termination of this Agreement for any reason.
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(e) TAX PLANNING SERVICES. During the Employment Period, the
Company shall provide the Executive with tax-related advice and services without
cost or expense to him and shall reimburse the Executive on a grossed up basis
in the event that any tax is assessed upon him in relation to such services.
(f) OTHER BENEFITS. During the Employment Period, the
Executive shall be eligible to participate at no cost or expense to him in
welfare plans and programs (including any tax-deferred savings plan, group life
insurance plan, medical and dental insurance plan, and accident and disability
insurance plan) ("Benefit Plans") applicable generally to employees and/or
senior executives of the Company. The Company will waive, or obtain the waiver
of, any waiting periods for eligibility under the Benefit Plans or will provide
comparable benefits to the Executive without cost to him during the waiting
period.
6. TERMINATION. The Executive's employment hereunder, as the case may
be, may be terminated as follows:
(a) DEATH. The Executive's employment shall terminate upon his
death, and the date of his death shall be the Date of Termination.
(b) DISABILITY. If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for one hundred and twenty (120)
consecutive days and, within thirty (30) days after written Notice of
Termination (as defined in Section 6(g) hereof), shall not have returned to the
performance of his duties hereunder on a full-time basis ("Disability"), the
Company may terminate the Executive's employment hereunder. In this event, the
Date of Termination shall be thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period).
(c) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder:
(i) upon the Executive's conviction for the commission of a
felony (or a plea of nolo contendere thereto); or
(ii) willful failure by the Executive substantially to perform
his duties hereunder (other than any such failure resulting from the
Executive's incapacity due to Disability).
For purposes hereof, no act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be
done by him not in good faith or without reasonable belief that his
action or omission was in the best interests of the
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Company or contrary to written instructions of the Chief Executive
Officer or the Board of Directors. The Date of Termination shall be the
date specified in the Notice of Termination; provided, however, that,
in the case of a termination for Cause under clause (ii) above, the
Date of Termination shall not be earlier than 30 days after delivery of
the Notice of Termination. Anything herein to the contrary
notwithstanding, if, following a termination of the Executive's
employment by the Company for Cause based upon the conviction of the
Executive for a felony, such conviction is overturned in a final
determination on appeal, the Executive shall be entitled to the
payments and the economic equivalent of the benefits the Executive
would have received if his employment had been terminated by the
Company without Cause.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment hereunder for Good Reason, provided that
the Executive shall have delivered a Notice of Termination (as defined in
Section 6(g) hereof) within ninety (90) days after the occurrence of the event
of Good Reason giving rise to such termination. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of one or more of the following
circumstances, without the Executive's express written consent, which are not
remedied by the Company within thirty (30) days of receipt of the Executive's
Notice of Termination:
(i) an assignment to the Executive of any duties materially
inconsistent with his positions, duties, responsibilities and status
with the Company or any material limitation of the powers of the
Executive not consistent with the powers of the Executive contemplated
by Section 3 hereof; or
(ii) any removal of the Executive from, or any failure to
re-elect the Executive to, the executive officer position specified in
Section 3 of this Agreement, or, without the Executive's consent,
failure to re-elect the Executive as a Director of the Company; or
(iii) any other material breach by the Company of this
Agreement.
In the event of a termination for Good Reason, the Date of
Termination shall be the date specified in the Notice of Termination, which
shall be no more than thirty (30) days after the Notice of Termination.
(e) OTHER TERMINATIONS. The Company may terminate the
Executive's employment hereunder at any time, subject to the provisions of
Section 7(e) hereof. The Executive may terminate his employment at any time,
subject to the provisions of Section 7(d) hereof. If the Executive's employment
is terminated hereunder for any reason other than as set forth in Sections 6(a)
through 6(d) hereof, the date on which a Notice of Termination is given or any
later date (within 30 days) set forth in such Notice of Termination shall be the
Date of Termination.
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(f) TERMINATION BY THE EXECUTIVE UPON CHANGE IN CONTROL. Upon
a Change in Control (as defined below), the Executive shall have the right, upon
delivery to the Company of a Notice of Termination (which shall specify a Date
of Termination not less than 30 days after such Notice of Termination), to
terminate his employment under this Agreement and to receive the payments
provided pursuant to Section 7(f) below. If the Executive shall elect to
terminate his employment with the Company other than upon a Change in Control,
he shall receive only the compensation referred to in Section 7(d) below. For
purposes of this Agreement, a Change in Control shall mean the occurrence of any
one of the following events:
(i) any "person" as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, as amended, becomes a
"beneficial owner," as such term is used in Rule 3d-3 promulgated under
that Act, of 25% or more of the voting stock of the Company (other than
a person that is currently the beneficial owner of such percentage of
the Company's voting stock);
(ii) the majority of the Board consists of individuals other
than Incumbent Directors, which term means the members of the Board on
the date of this Agreement, the Executive and the individuals
designated as directors by the Chief Executive Officer of the Company;
provided that any person becoming a director subsequent to such date
whose election or nomination for election was supported by two-thirds
of the directors who then comprised the Incumbent Directors shall be
considered to be an Incumbent Director;
(iii) the Company, without the Executive's consent, adopts
any plan of liquidation providing for the distribution of all or
substantially all of its assets; or
(iv) all or substantially all of the assets or business of
the Company are disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Company immediately
prior to such merger, consolidation or other transaction beneficially
own, directly or indirectly, in substantially the same proportion as
they owned the voting stock of the Company, all of the voting stock or
other ownership interests of the entity or entities, if any, that
succeed to the business of the Company).
(g) NOTICE OF TERMINATION. Any termination of the Executive's
employment hereunder by the Company or by the Executive (other than termination
pursuant to Section 6(a) hereof) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 13 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. If any dispute concerning a Notice of Termination of the
Executive's employment under Section 6(b), 6(c) or 6(d) hereof results in a
determination that a proper basis for such
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termination did not exist under such section, the Executive's employment under
this Agreement shall be treated, with respect to a Notice of Termination
pursuant to Section 6(b) or 6(c) hereof, as having been terminated pursuant to
Section 6(e) hereof or, with respect to a Notice of Termination pursuant to
Section 6(d) hereof, as having not been terminated.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DISABILITY PERIOD. During any period during the
Employment Period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness ("Disability Period"),
the Executive shall continue to (i) receive his full Base Salary and (ii)
participate in the Benefit Plans. Such payments made to the Executive during the
Disability Period shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security disability insurance
program, and which amounts were not previously applied to reduce any such
payment.
(b) DEATH. If the Executive's employment hereunder is
terminated as a result of death, then:
(i) the Company shall pay the Executive's estate or
designated beneficiary, as soon as practicable after the Date of
Termination, any Base Salary installments due in the month of death and
any reimbursable expenses, accrued or owing the Executive hereunder as
of the Date of Termination;
(ii) the Options granted to the Executive pursuant to the
Plan Option and the Options granted to the Executive pursuant to the
Non-Qualified Option (if such Non-Qualified Option has been approved by
the shareholders as provided in Section 5(b)(iii)(B)) shall become
vested and exercisable, as of the Date of Termination, to the extent
such Option Award would have otherwise become vested on or before the
first anniversary of the Date of Termination, and all vested Options
shall remain exercisable for a period of one year following such Date
of Termination and shall thereafter be completely forfeited and
cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares that have not
vested as the Date of Termination equal to the number of such unvested
Restricted Shares multiplied by a fraction, the numerator of which is
36 minus the number of full months remaining in the Employment Period
(disregarding the earlier termination thereof) after the Date of
Termination and denominator of which is 36, shall become vested as of
the Date of Termination and the restrictions imposed thereon shall
lapse. The balance of such unvested Restricted Shares shall be
forfeited to the Company (without further action on
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the part of the Company or the Executive) as of the Date of
Termination, and the Executive shall have no further rights with
respect to such balance.
(c) DISABILITY. If the Executive's employment hereunder is
terminated as a result of Disability, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Options granted to the Executive pursuant to the
Plan Option and the Options granted to the Executive pursuant to the
Non-Qualified Option (if such Non-Qualified Option has been approved by
the shareholders as provided in Section 5(b)(iii)(B)) shall become
vested and exercisable, as of the Date of Termination, to the extent
such Option Award would have otherwise become vested on or before the
first anniversary of the Date of Termination, and all vested Options
shall remain exercisable for a period of three years following such
Date of Termination and shall thereafter be completely forfeited and
cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares that have not
vested as the Date of Termination equal to the number of such unvested
Restricted Shares multiplied by a fraction, the numerator of which is
36 minus the number of full months remaining in the Employment Period
(disregarding the earlier termination thereof) after the Date of
Termination and denominator of which is 36, shall become vested, and
the restrictions imposed thereon shall lapse. The balance of such
unvested Restricted Shares shall be forfeited to the Company (without
further action on the part of the Company or the Executive) as of the
Date of Termination, and the Executive shall have no further rights
with respect to such balance.
(d) CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON. If the
Executive's employment hereunder is terminated by the Company for Cause or by
the Executive other than for Good Reason, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses accrued or owing the Executive hereunder for
services as of the Date of Termination; and
(ii) the Executive shall immediately forfeit any unvested
Restricted Shares and any unvested portion of the Option Award. In the
event of termination by the Company for Cause, the Executive shall have
the right to exercise the vested unexercised portion of the Option
Award for a period of ninety (90) days after the
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Date of Termination, and the unexercised portion of such Option Award
shall be forfeited thereafter. In the event of termination by the
Executive other than for Good Reason the Executive shall have the right
to exercise the vested unexercised portion of the Option Award for a
period of one year following the Date of Termination and the
unexercised portion of such Option Award shall be forfeited thereafter.
(e) TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE
WITH GOOD REASON. If the Executive's employment hereunder is terminated by the
Company (other than for Cause or Disability) or by the Executive for Good
Reason, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Company shall immediately pay to the Executive as
liquidated damages and not as a penalty a lump sum amount equal to the
total Base Salary that would have otherwise been payable to the
Executive with respect to the period commencing immediately following
the Date of Termination and ending on July 22, 1999, at the annualized
rate in effect at the time Notice of Termination is given;
(iii) the Options granted to the Executive pursuant to the
Option Award shall become fully vested and exercisable, and the
Restricted Shares shall become fully vested, as of the Date of
Termination. The Option Award shall remain exercisable for the balance
of its original 10-year term; and
(iv) the Executive shall continue to participate in all
employee benefit plans and programs in which the Executive was entitled
to participate immediately prior to the Date of Termination, in
accordance with the terms of such plans and programs as in effect from
time to time, through July 22, 1999; provided that the Executive's
continued participation is permitted under the general terms and
provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program is barred, the
Company shall arrange to provide the Executive and his dependents with
benefits substantially the same as those which the Executive and his
dependents would otherwise have been entitled to receive under such
plans and programs from which their continued participation is barred
or provide their economic equivalent.
(f) TERMINATION UPON CHANGE IN CONTROL. If the Executive
shall elect to terminate his employment under this Agreement upon a Change in
Control, the Company shall pay to the Executive the payments described in
Sections 7(e)(i), (ii), (iii) and (iv) above.
8. GROSS-UP FOR EXCISE TAX. In the event that the Executive receives
any payment or benefit (including but not limited to the payments or benefits
pursuant to Section 7 of this Agreement) (a "Payment") that is subject to the
excise tax (the "Excise Tax") under Sec-
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tion 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Company shall pay to the Executive, as soon thereafter as practicable, an
additional amount (a "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax imposed upon the Payment and
any federal, state and local income tax and Excise Tax imposed upon the Gross-Up
Payment shall be equal to the Payment. The determination of whether an Excise
Tax is due in respect of any payment or benefit, the amount of the Excise Tax
and the amount of the Gross-Up Payment shall be made by an independent auditor
(the "Auditor") jointly selected by the Company and the Executive and paid by
the Company. If the Executive and the Company cannot agree on the firm to serve
as the Auditor, then the Executive and the Company shall each select one
nationally recognized accounting firm and those two firms shall jointly select
the nationally recognized accounting firm to serve as the Auditor.
Notwithstanding the foregoing, for purposes of determining the Gross-Up Payment
in respect of any Payment, (i) any other payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person affiliated with
the Company or such person) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of Section 280G of the Code shall be treated as subject to
the Excise Tax, unless in the opinion of tax counsel selected by the Auditor,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or are otherwise not subject to the Excise Tax, and (ii) the
Executive shall be deemed to pay federal income tax at the highest marginal rate
applicable in the calendar year in which the Gross-Up Payment is made, and state
and local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. In the event the actual Excise Tax or such income
tax is more or less than the amount used to calculate the Gross-Up Payment, the
Executive or the Company, as the case may be, shall pay to the other an amount
reflecting the actual Excise Tax or such income tax, plus interest on the amount
of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
9. MITIGATION. The Executive shall not be required to mitigate amounts
payable pursuant to Section 7 hereof by seeking other employment or otherwise,
nor shall there be any offset against such payments on account of (a) any
remuneration attributable to any subsequent employment that he may obtain or (b)
any claims the Company may have against the Executive.
10. CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS, NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company and its subsidiaries (the
"Sunbeam Entities") all trade secrets, confidential information, and knowledge
or data relating to the Sunbeam Entities and the businesses and investments of
the Sunbeam Entities, which shall have been obtained by the Executive during the
Executive's employment by the Company, including such information with
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respect to any products, improvements, formulas, designs or styles, processes,
services, customers, suppliers, marketing techniques, methods, future plans or
operating practices ("Confidential Information"); PROVIDED, HOWEVER, that
Confidential Information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the Executive)
or any specific information or type of information generally not considered
confidential by persons engaged in the same business as the Company, or
information disclosed by the Company or any officer thereof to a third party
without restrictions on the disclosure of such information. Except as may be
required or appropriate in connection with his carrying out his duties under
this Agreement, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate
or divulge any such Confidential Information to anyone other than the Company
and those designated by the Company.
(b) REMOVAL OF DOCUMENTS. All records, files, drawings,
documents, models, and the like relating to the business of the Sunbeam
Entities, which the Executive prepares, uses or comes into contact with and
which contain Confidential Information shall not be removed by the Executive
from the premises of any Sunbeam Entity (without the written consent of the
Company) during or after the Employment Period unless such removal shall be
required or appropriate in connection with his carrying out his duties under
this Agreement, and, if so removed by the Executive, shall be returned to such
Sunbeam Entity immediately upon termination of the Executive's employment
hereunder.
(c) NON-COMPETITION. During (i) the Executive's employment
with the Company and (ii) the two (2) year period immediately following the
Executive's Date of Termination, the Executive (A) shall not engage, anywhere
within the geographical areas in which any Sunbeam Entity is then conducting its
business operations, directly or indirectly, alone, in association with or as a
shareholder, principal, agent, partner, officer, director, employee or
consultant of any other organization, in any business (a "Competitive Business")
which competes with any business then being conducted by such Sunbeam Entity;
(B) shall not solicit or encourage any officer, employee or consultant of any of
the Sunbeam Entities to leave the employ of any of the Sunbeam Entities for
employment by or with any Competitive Business; and (C) shall not solicit,
divert or take away, or attempt to divert or to take away, the business or
patronage of any of the customers or accounts, or prospective customers or
accounts, of any Sunbeam Entity, which were contacted, solicited or served by
the Executive while employed by the Company; provided, however, that nothing
herein shall prohibit the Executive from owning a maximum of two percent (2%) of
the outstanding stock of any publicly traded corporation. Following the Date of
Termination, ownership by the Executive of not more than five percent (5%) of
any publicly traded corporation shall not constitute a violation hereof. If, at
any time, the provisions of this Section 10(c) shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 10(c) shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Executive agrees that
this Section 10(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not
12
been included herein. For purposes of this Section 10(c), the design,
manufacture and marketing of outdoor barbecue grills, casual outdoor and indoor
furniture and small kitchen appliances shall be construed to be a Competitive
Business; provided, however, that the gross revenues derived from sales of such
products by such competitor are greater than the lesser of (i) 10% of its total
revenues and (ii) $500,000,000.
(d) REMEDIES. In the event of a breach or threatened breach
of this Section 10, the Executive agrees that the Company shall be entitled to
apply for injunctive relief in a court of appropriate jurisdiction to remedy any
such breach or threatened breach, the Executive acknowledging that damages would
be inadequate and insufficient.
(e) CONTINUING OPERATION. Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing operation
of this Section 10.
11. INDEMNIFICATION. The Company shall indemnify the Executive to the
full extent permitted by law and the By-laws of the Company for all expenses,
costs, liabilities and legal fees which the Executive may incur in the discharge
of all his duties hereunder, including, without limitation, the right to be paid
in advance by the Company for his expenses in defending a civil or criminal
action, proceeding or investigation prior to the final disposition thereof. The
Executive shall be insured under the Company's Directors' and Officers'
Liability Insurance Policy as in effect from time to time. Notwithstanding any
other provision of this Agreement to the contrary, any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 11.
12. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. 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 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 will 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 (except in the definition of Change in
Control), "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 12 or which otherwise becomes bound
by all the terms and provisions of this Agreement or by operation of law.
13
(b) EXECUTIVE'S SUCCESSORS. This Agreement shall not be
assignable by the Executive. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. Upon the Executive's death, all amounts to
which he is entitled hereunder, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
13. NOTICE. 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, addressed as follows:
If to the Executive:
Xxxxxxx X. Xxxxx
0000 XX 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
If to the Company:
Sunbeam Corporation
2100 New River Center
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Compensation Committee
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. MISCELLANEOUS. No provisions of this Agreement may be modified
unless such modification is agreed to in writing signed by the Executive and an
authorized officer of the Company. Any waiver or discharge must be in writing
and signed by the Executive or such an authorized officer of the Company, as the
case may be. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware without
regard to its conflicts of law principles.
14
15. WITHHOLDING. Any payments provided for in this Agreement shall be
paid net of any applicable withholding of taxes required under federal, state or
local law.
16. ARBITRATION.
(a) Except as otherwise provided herein, all controversies,
claims or disputes arising out of or related to this Agreement shall be settled
under the rules of the American Arbitration Association then in effect in the
State of Florida, as the sole and exclusive remedy of either party, and judgment
upon such award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction. The costs of the arbitration shall be borne as
determined by the arbitrators PROVIDED, HOWEVER, that if the Company's position
is not substantially upheld, as determined by the arbitrators, the expenses of
the Executive (including, without limitation, fees and expenses payable to the
AAA and the arbitrators, fees and expenses payable to witnesses, including
expert witnesses, fees and expenses payable to attorneys and other
professionals, expenses of the Executive in attending the hearings, costs in
connection with obtaining and presenting evidence and costs of transcription of
the proceedings), as determined by the arbitrators, shall be reimbursed to him
by the Company.
(b) Notwithstanding the provisions of Section 16(a) above,
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 proceeding) seeking to specifically enforce the
provisions of Section 10 hereof by means of seeking an injunction or other
equitable relief.
17. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the terms of the
Option Plan set forth the entire agreement of the parties hereto in respect of
the subject matter contained herein, supersede all prior agreements, promises,
covenants, arrangements, communica- tions, representations or warranties,
whether oral or written, by any officer, employee or representative of any party
hereto; and any prior agreement of the parties hereto or thereto in re- spect of
the subject matter contained herein or therein is hereby terminated and
cancelled. This Agreement may be signed in counterparts.
18. CONFLICT WITH OPTION PLAN. To the extent, if any, of any
inconsistency or conflict between the terms and provisions of this Agreement and
the Option Plan, this Agreement shall control in all matters.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
August 7, 1996 to be effective as of the Effective Date.
SUNBEAM CORPORATION
By: /s/XXXXXX X. XXXXXX
-------------------
Name: XXXXXX X. XXXXXX
Title: CHAIRMAN & CEO
/s/ XXXXXXX X. XXXXX
-----------------
XXXXXXX X. XXXXX
16
EXHIBIT A
Exhibit A, the Amended and Restated Sunbeam Corporation Equity Team
Plan (Amended and Restated as of May 15, 1996) is incorporated herein by
reference to Exhibit 10b to the Company's Report of Form 10-Q for the fiscal
quarter ended June 30, 1996.
