EXHIBIT 10.hh
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of October 1, 1998 between Sunbeam
Corporation, a Delaware corporation (the "Company") and Xxxx Xxxx (the
"Executive").
The Company wishes to employ the Executive, and the Executive wishes to
accept such employment, on the terms and conditions set forth in this Agreement.
Accordingly, the Company and the Executive hereby agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1. EMPLOYMENT, DUTIES. The Company hereby employs the Executive for
the Term (as defined in Section 2.1), to render exclusive and full-time services
to the Company as the President, International Operations of Sunbeam Corporation
or in such other executive position as may be mutually agreed upon by the
Company and the Executive, and to perform such other duties consistent with such
position as may be assigned to the Executive by the Board of Directors of the
Company (the "Board").
1.2. ACCEPTANCE. The Executive hereby accepts such employment and
agrees to render the services described above. During the Term, the Executive
agrees to serve the Company faithfully and to the best of the Executive's
ability, to devote the Executive's entire business time, energy and skill to
such employment, and to use the Executive's best efforts, skill and ability to
promote the Company's interests. The Executive further agrees to accept
election, and to serve during all or any part of the Term, as an officer or
director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be. The
Executive hereby represents and warrants that the Executive is not subject to
any other agreement, including without limitation any agreement not to compete
or confidentiality agreement, which would be violated by the Executive's
performance of services hereunder.
1.3. LOCATION. The duties to be performed by the Executive hereunder
shall be performed primarily at the office of the Company in Palm Beach County,
Florida, subject to reasonable travel requirements on behalf of the Company.
2. TERM OF EMPLOYMENT; CERTAIN POST-TERM BENEFITS.
2.1. THE TERM. The term of the Executive's employment under this
Agreement (the "Term") shall commence on October 1, 1998 and shall end on
October 1, 2000.
2.2. SPECIAL CURTAILMENT. The Term shall end earlier than the original
termination date provided in Section 2.1, if sooner terminated pursuant to
Section 4.
3. COMPENSATION; BENEFITS.
3.1. SALARY. As compensation for all services to be rendered pursuant
to this Agreement, the Company agrees to pay the Executive during the Term a
base salary, payable semi-monthly in arrears, at the annual rate of not less
than $400,000 (the "Base Salary"), less such deductions or amounts to be
withheld as required by applicable law and regulations. In the event that the
Company, in its sole discretion, from time to time determines to increase the
Base Salary, such increased amount shall, from and after the effective date of
the increase, constitute "Base Salary" for purposes of this Agreement.
3.2. ANNUAL BONUS. In addition to the amounts to be paid to the
Executive pursuant to Section 3.1, the Executive will be eligible to receive a
performance-based bonus with respect to each year of the Term commencing in
1999, based upon a target bonus opportunity of 60% of Base Salary, payable
within 90 days following the end of the Company's fiscal year. Performance goals
for such bonuses shall be determined by the Compensation Committee of the Board
of Directors. Upon expiration of the Term without renewal, the Executive shall
be eligible to receive a pro rata performance-based bonus for the final bonus
period commencing during the Term based upon performance through October 1,
2000, and payable within 90 days following such expiration of the Term.
3.3. GUARANTEED BONUS. For 1998, the Executive shall receive a
guaranteed bonus equal to $60,000 (the "1998 Bonus"), payable on or before
January 15, 1999.
3.4. BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive
during the Term in the performance of the Executive's services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as the Company customarily may require of its officers
PROVIDED, HOWEVER, that the maximum amount available for such expenses during
any period may be fixed in advance by the Chairman or Vice Chairman of the Board
of Directors or the Board of Directors.
3.5. VACATION. During the Term, the Executive shall be entitled to a
vacation period or periods of four weeks taken in accordance with the vacation
policy of the Company during each year of the Term. Vacation time not used by
the end of a year shall be forfeited.
3.6. FRINGE BENEFITS. During the Term, the Executive shall be entitled
to all benefits for which the Executive shall be eligible under any qualified
pension plan, 401(k) plan, group insurance or other so-called "fringe" benefit
plan which the Company provides to employees of the Company, together with
executive medical benefits for the Executive, as provided from time to time in
effect for officers of the Company generally. The Executive shall be entitled to
participate in the Company's relocation program in connection with entering into
this Agreement.
3.7. STOCK OPTIONS. The Company shall grant to the Executive on the
date
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hereof, subject to the receipt of shareholder approval to the extent required
under (1) Section 162(m) of the Internal Revenue Code of 1986, as amended, (2)
the terms of the Amended and Restated Sunbeam Corporation Stock Option Plan (the
"Option Plan"), if the grant is to be made under such plan, or (3) the
shareholder approval policy of the New York Stock Exchange, which shareholder
approval shall be requested by the Company when it next solicits proxies from
its shareholders, non-qualified stock options (the "Options") with a scheduled
10-year term to purchase shares of the common stock of the Company, par value
$.01 per share. The Options shall be granted in an amount and at the exercise
price as set forth on Appendix I to this Agreement. The Options shall vest and
become exercisable in full on October 1, 2000 (if the Executive remains employed
pursuant to this Agreement as of such date) or, to the extent the Option is
outstanding, upon a "Change in Control" of the Company. The Options shall be
subject to earlier vesting or forfeiture as set forth in Section 4. The Options
shall be subject to all other terms and conditions as set forth in the Plan or
an Option Agreement, if any, between the Company and the Executive. For purposes
of this Agreement, Change in Control shall have the meaning set forth in the
Option Plan as in effect as of the date of this Agreement.
3.8. ADDITIONAL BENEFITS. During the Term, the Executive shall be
entitled to such additional benefits generally provided to other senior
executives of the Company.
4. TERMINATION.
4.1. DEATH. If the Executive shall die during the Term, the Term shall
terminate and no further amounts or benefits shall be payable hereunder, except
that the Executive's legal representatives shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the longer of 12 months or the end of the Term
(as in effect immediately prior to the Executive's death). The Options shall
become vested and exercisable as of the Executive's death during the Term
(provided, that, to the extent shareholder approval continues to be required
under Section 3.7, such accelerated vesting and exercisability shall occur upon
such approval), and shall remain exercisable for three years following the later
of such death during the Term or the receipt of any required shareholder
approval with respect to such Options, by the beneficiary designated by the
Executive on a form prescribed for such purpose by the Company, or in the
absence of such designation by the Executive's legal representative.
4.2. DISABILITY. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's services hereunder for (i) a
period of six consecutive months or (ii) for shorter periods aggregating six
months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equalled an aggregate of six months, by
written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term and no further amounts or benefits shall be
payable hereunder, except that the Executive shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
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specified in Section 3.1, until the longer of 12 months or the end of the Term
(as in effect immediately prior to such termination). Upon the Executive's
termination for disability, the Options shall, subject to the receipt of any
required shareholder approval under Section 3.7, continue to vest and become
exercisable pursuant to their original vesting schedule, and shall remain
exercisable for three years following vesting. If the Executive shall die before
receiving all payments to be made by the Company in accordance with this Section
4.2, such payments shall be made to the beneficiary designated by the Executive
on a form prescribed for such purpose by the Company, or in the absence of such
designation to the Executive's legal representative.
4.3. CAUSE/VOLUNTARY TERMINATION. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense involving
the property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, a willful breach by the Executive
of Sections 5, 6 or 7 or any other material provision of this Agreement or any
other conduct on the part of the Executive which would make the Executive's
continued employment by the Company materially prejudicial to the best interests
of the Company, the Company may at any time by written notice to the Executive
terminate the Term and, upon such termination, this Agreement shall terminate
and the Executive shall be entitled to receive no further amounts or benefits
hereunder, except any as shall have been earned to the date of such termination
and owed to the Executive. In the event the Executive voluntarily terminates
employment (other than pursuant to Section 4.4 as a result of a breach of this
Agreement by the Company), this Agreement shall terminate and the Executive
shall be entitled to receive no further amounts or benefits hereunder, except
any as shall have been earned by and owned to the Executive as of the date of
such termination. Upon a termination of the Executive's employment under this
Section 4.3, all unvested Options shall be immediately forfeited.
4.4. COMPANY BREACH. In the event of the breach of any material
provision of this Agreement by the Company (including without limitation the
failure to obtain shareholder approval of the stock option grant described under
Section 3.7 to the extent such approval is required under such Section 3.7, at
or prior to the Company's first annual meeting of shareholders following the
date of this Agreement), the Executive shall be entitled to terminate the Term
upon 60 days' prior written notice to the Company. Upon such termination, or in
the event the Company terminates the Term or this Agreement other than pursuant
to the provisions of Sections 4.2 or 4.3, the Company shall continue to provide
the Executive (i) payments of Base Salary, in the manner and amount specified in
Section 3.1, (ii) at the time such bonus payments would have otherwise been
paid, the sum of (A) in the event of the Executive's termination prior to
payment of the 1998 Bonus, the 1998 Bonus and (B) an amount equal to the
Executive's target bonus opportunity percentage as in effect as of the date of
termination, multiplied by the Executive's Base Salary as of the date of
termination, payable with respect to each remaining bonus period which would
otherwise have ended during the Term (the "Full Bonus Periods"), and payable on
a pro rata basis for the final bonus period which would have otherwise commenced
during the scheduled Term following the last Full Bonus Period (based upon the
portion of such
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bonus period which would have been completed as of the end of the scheduled
Term), and (iii) medical, dental, life and long-term disability insurance
benefits in the manner and amounts specified in Sections 3.6 (provided that the
Executive shall continue to bear the cost of such benefits required to be paid
by employees) or, for a period of twelve months after the last day of the month
in which termination described in this Section 4.4 occurred, whichever is longer
(the "Damage Period"); PROVIDED, HOWEVER, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employee-provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility. In addition, upon
such termination of employment, each of the Options shall immediately vest and
become exercisable (provided, that, to the extent shareholder approval continues
to be required under Section 3.7, such accelerated vesting and exercisability
shall occur upon receipt of such approval) in an amount equal to (a) the number
of shares subject to such Option, multiplied by (b) (i) the number of full and
partial months during the Term prior to the Executive's termination of
employment, divided by (ii) twenty-four. The vested portion of the Options shall
remain exercisable for three years following the later of the Executive's
termination of employment or the receipt of any required shareholder approval
with respect to such Options, and the remaining portion of the Options shall be
forfeited upon the Executive's termination of employment. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced (except as
provided in this Section 4.4) whether or not the Executive obtains other
employment.
4.5. LITIGATION EXPENSES. Except as provided for in Section 5.7, if the
Company and the Executive become involved in any action, suit or proceeding
relating to the alleged breach of this Agreement by the Company or the
Executive, and if a judgment in such action, suit or proceeding is rendered in
favor of the Executive with respect to a material portion of such action, suit
or proceeding, the Company shall reimburse the Executive for all expenses
(including reasonable attorneys' fees) reasonably incurred by the Executive in
connection with such action, suit or proceeding.
5. PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETITION.
5.1. CONFIDENTIALITY AND NON-COMPETITION. In view of the fact that the
Executive's work for the Company will bring the Executive into close contact
with many confidential affairs of the Company not readily available to the
public, and plans for future developments, the Executive agrees:
5.1.1 During the period of Executive's employment with the Company (or
the Executive's engaging in any other activity with or for the Company) and for
a two year period thereafter, Executive shall treat and safeguard as
confidential and secret all Confidential Information received by him at any
time. Without the prior written consent of the Company, except as required by
law, Executive will not
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disclose or reveal any Confidential Information to any third party whatsoever or
use the same in any manner except in connection with the businesses of the
Company and its subsidiaries. In the event that Executive is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or other process) to disclose
(i) any Confidential Information or (ii) any information relating to his
opinion, judgment or recommendations concerning the Company or its subsidiaries
as developed from the Confidential Information, Executive will provide the
Company with prompt written notice of any such request or requirement so that
the Company may seek an appropriate protective order or waive compliance with
the provisions contained herein. If, failing the entry of a protective order or
the receipt of a waiver hereunder, Executive is, in the reasonable opinion of
his counsel, compelled to disclose Confidential Information, the Executive shall
disclose only that portion of the Confidential Information which his counsel
advises that he is compelled to disclose and will exercise best efforts to
obtain assurances that confidential treatment will be accorded such Confidential
Information. For purposes of this Agreement "Confidential Information" shall
mean and include any information not generally known to the public, including,
without limiting the generality of the foregoing, any customer lists, supplier
lists, trade secrets, invention, formulas, methods or processes, whether or not
patented or patentable, channels of distribution, business plans, pricing
policies and records, financial information of any sort and inventory records of
the Company or any affiliate (and such other information normally understood to
be confidential or otherwise designated as such in writing by the Company or its
subsidiaries). It is not necessary, however, that any information be formally
designated as "confidential" if it falls within any of the foregoing categories
and is not generally known to the public.
5.1.2 During the period of his employment with the Company or its
subsidiaries and, for a two-year period thereafter (the "Non-Compete Period"),
the Executive shall not, without prior written consent of the Company, do,
directly or indirectly, any of the following:
(A) own, manage, control or participate in the ownership, management,
or control of, or be employed or engaged by or otherwise affiliated or
associated with, any other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise engage in any business which
competes with the business of the Company or any of its subsidiaries (as such
business is conducted during the term of the Executive's employment with the
Company or its subsidiaries) in the geographical regions in which such business
is conducted; PROVIDED, HOWEVER, that the ownership of a maximum of one percent
of the outstanding stock of any publicly traded corporation shall not violate
this covenant; or
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(B) employ, solicit for employment or assist in employing or soliciting
for employment any present, former or future employee, officer or agent of the
Company or any of its subsidiaries.
In the event any court of competent jurisdiction should determine that
the foregoing covenant of non-competition is not enforceable because of the
extent of the geographical area or the duration thereof, then the Company and
the Executive hereby petition such court to modify the foregoing covenant to the
extent, but only to the extent, necessary to create a covenant which is
enforceable in the opinion of such court, with the intention of the parties that
the Company shall be afforded the maximum enforceable covenant of
non-competition which may be available under the circumstances and applicable
law. If any provision or part of any provision of this Section 5 is held for any
reason to be unenforceable, (i) the remainder of this Section 5 shall
nevertheless remain in full force and effect and (ii) such provision or part
shall be deemed to be amended in such manner as to render such provision
enforceable.
5.2 REMEDIES. The Executive acknowledges that remedies at law for any
breach of this Section 5 may be inadequate and that the damages resulting from
any such breach are not readily susceptible to being measured in monetary terms.
Accordingly, Executive acknowledges that upon his violation of any provision of
this Section 5, the Company will be entitled to terminate the Executive's
employment (with the consequences set forth in Section 4.3 above) and to
immediate injunctive relief and may obtain an order restraining any threatened
or future breach. Executive further agrees, subject to the proviso at the end of
this sentence, that if he violates any provision of this Section 5, he shall
immediately forfeit any rights and benefits under the Sunbeam Corporation Stock
Option Plan and shall return to the Company any unexercised Options and forfeit
the rights under any Restricted Stock Awards and shall return any shares of
Stock held by the Executive received upon exercise of any Option or the lapse of
the Restrictions relating to Restricted Stock Awards granted thereunder,
together with any proceeds from sales of any shares of Stock received upon
exercise of such Options or the lapse of Restrictions of such Restricted Stock
Awards; PROVIDED, HOWEVER, that upon violation of subsection (b) of this
Section, the forfeiture and return provisions contained in this sentence shall
apply only to Options which have become exercisable, and Restricted Stock, the
Restrictions with respect to which have lapsed, and in any such case the
proceeds of sales therefrom, during the two year period immediately prior to
termination of the Executive's employment. Nothing in this Section 5 will be
deemed to limit, in any way, the remedies at law or in equity of the Company,
for a breach by Participant of any of the provisions of this Section 5.
5.3 NOTICE. Executive agrees to provide written notice of the
provisions of this Section 5 to any future employer of Executive, and the
Company expressly reserves the right to provide such notice to the Executive's
future employer(s).
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5.4 DELIVERY UPON TERMINATION. Executive agrees to deliver promptly to
the Company on termination of the Executive's employment by the Company, or at
any time the Company may so request, all memoranda, notes, records, reports,
manuals, drawings, blueprints and other documents (and all copies thereof)
relating to the Company's business and all property associated therewith, which
the Executive may then possess or have under the Executive's control.
5.5. REMEDIES SEVERAL. Each of the rights and remedies enumerated above
shall be independent of the other, and shall be severally enforceable, and all
of such rights and remedies shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity.
5.6. JURISDICTION. The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Section 5.1 upon the courts
of any state within the geographical scope of such covenants. In the event that
the courts of any one or more of such states shall hold such covenants wholly
unenforceable by reason of the breadth of such covenants or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Company's right to the relief provided above in the courts of any
other states within the geographical scope of such covenants as to breaches of
such covenants in such other respective jurisdictions, the above covenants as
they relate to each state being for this purpose severable into diverse and
independent covenants.
5.7. ATTORNEYS' FEES. In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the covenants contained in
Section 5.1 or to obtain money damages for the breach thereof, and such action
results in the award of a judgment for money damages or in the granting of any
injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.
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6. INVENTIONS AND PATENTS.
6.1. The Executive agrees that all processes, technologies and
inventions (collectively, "Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
provided that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are conceived or made on the Company's time or with the use of
the Company's facilities or materials. The Executive shall further: (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the Executive's
inventorship.
6.2. If any Invention is described in a patent application or is
disclosed to third parties, directly or indirectly, by the Executive within two
years after the termination of the Executive's employment by the Company, it is
to be presumed that the Invention was conceived or made during the Term.
6.3. The Executive agrees that the Executive will not assert any rights
to any Invention as having been made or acquired by the Executive prior to the
date of this Agreement, except for Inventions, if any, disclosed to the Company
in writing prior to the date hereof.
7. INTELLECTUAL PROPERTY.
The Company shall be the sole owner of all the products and proceeds of
the Executive's services hereunder, including, but not limited to, all
materials, ideas, concepts, formats, suggestions, developments, arrangements,
packages, programs and other intellectual properties that the Executive may
acquire, obtain, develop or create in connection with and during the Term, free
and clear of any claims by the Executive (or anyone claiming under the
Executive) of any kind or character whatsoever (other than the Executive's right
to receive payments hereunder). The Executive shall, at the request of the
Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or
interest in or to any such properties.
8. INDEMNIFICATION.
The Company will indemnify the Executive, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which the Executive may be made a party by reason of the Executive being an
officer, director or employee of the Company or of any subsidiary or affiliate
of the Company.
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9. NOTICES.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by overnight courier or mailed
first class, postage prepaid, by registered or certified mail (notices mailed
shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):
If to the Company, to:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
If to the Executive, to:
Xxxx Xxxx
_____________________________
_____________________________
10. GENERAL.
10.1. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely in Delaware.
10.2. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
10.3. This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
10.4. This Agreement, and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder (i) to any affiliate or (ii) to
third parties in connection with any sale, transfer or other disposition of all
or substantially all of its business or assets; in any event the
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obligations of the Company hereunder shall be binding on its successors or
assigns, whether by merger, consolidation or acquisition of all or substantially
all of its business or assets.
10.5. This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
11. SUBSIDIARIES AND AFFILIATES.
11.1. As used herein, the term "subsidiary" shall mean any corporation
or other business entity controlled directly or indirectly by the corporation or
other business entity in question, and the term "affiliate" shall mean and
include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SUNBEAM CORPORATION
By: __________________________________
Title: ________________________________
_________________________________
XXXX XXXX
APPENDIX I
STOCK OPTIONS.
The Executive's Options shall be granted for 400,000 shares of Common
Stock, at an exercise price of $7.00 per share.
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