EXHIBIT 10.b
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of February 1, 1998 (the
"Effective Date"), and executed on February 20, 1998 (the "Execution Date")
by and between XXXXXXX X. XXXXX (the "Executive") and SUNBEAM CORPORATION, a
Delaware corporation (the "Company").
RECITALS
WHEREAS, the Executive is a party to the Employment Agreement with the
Company dated as of July 22, 1996 (the "Prior Agreement"):
WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to furnish services to the Company on the terms
and conditions hereinafter set forth;
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; and
WHEREAS, the parties desire to provide for the termination of the Prior
Agreement, effective upon the Effective Date;
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 as of the Effective Date and
shall end on January 31, 2001 (or the Date of Termination (as defined in Section
10 below), if earlier). All options awards granted pursuant to the Prior
Agreement shall vest and become exercisable in full as of the Execution Date. In
addition, 40% of the restricted stock granted pursuant to the Prior Agreement
which is subject to restrictions immediately prior to the Execution Date shall
be forfeited as of the Execution Date, and the remaining shares of such
restricted stock shall become vested in full as of the Execution Date and the
Company shall reimburse the
Executive on a grossed up basis for any federal income tax assessed upon him
upon the vesting of such restricted stock.
3. POSITION AND DUTIES. The Executive shall serve as Vice Chairman of the
Company and 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 $875,000, which rate shall be
retroactive to the Effective Date (the "Base Salary"). Except for the adjustment
necessary to implement the retroactive increase in Base Salary described in the
immediately preceding sentence, the 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
parties agree that the Executive shall not be entitled to participate in any
other bonus or incentive compensation programs of the Company.
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(b) EQUITY AND STOCK OPTION GRANTS.
(i) RESTRICTED SHARES. Effective as of the Effective Date, the
Executive has been granted, without cost to the Executive, 150,000
shares of Restricted Stock (as defined in the Company's Stock Option
Plan) (herein referred to as the "Restricted Shares"). The Restricted
Shares are granted upon the terms and conditions as set forth in the
Option Plan, except that twenty-five percent of such Restricted Shares
shall be vested and unrestricted as of the Execution Date, and an
additional twenty-five percent of such Restricted Shares shall vest and
cease to be restricted on each of the first, second and third
anniversaries of the Effective Date (subject to earlier vesting
provisions set forth in Section 11) provided that the Executive
continues to be employed pursuant to this Agreement upon such
anniversary dates and shall be subject to and modified by all other
terms and provisions of this Agreement, as expressly set forth herein.
All such Restricted 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. The Company
shall reimburse the Executive on a grossed up basis with respect to any
tax assessed upon him in connection with the vesting of any such
Restricted Shares.
(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 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
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disposition (whether voluntary or involuntary) in violation of
this Section 5(b)(i)(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)(i)(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.
(ii) STOCK OPTION. Effective as of the Effective Date, subject to
shareholder approval by the Company's shareholders at the annual meeting
to be held on May 12, 1998 (or on such other date on which such meeting
will be held) (the "Annual Meeting"), the Executive has been granted a
stock option (the "Option") to purchase 1,125,000 shares of Common Stock
(the "Option Award"). The Option is subject to the following conditions:
(i) the exercise price per share of Common Stock shall be $36.85, which
is the average of the high and low selling price per share on the NYSE
on January 30, 1998; (ii) the Option Award shall be vested and
exercisable with respect to twenty-five percent of the shares subject
thereto as of the Effective Date and shall become vested and exercisable
with respect to an additional twenty-five percent of the shares subject
thereto on each of the first, second and third anniversaries of the
Effective Date; and (iii) the Option Award shall expire on the tenth
anniversary of the Effective Date, subject to earlier termination as
provided herein.
In the event that Company's shareholders fail to approve the
grant of the Option Award at the Annual 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, in which event it shall be deemed to have been terminated
pursuant to Section 10(d) hereof, and the Executive shall be entitled to
receive the compensation, rights and benefits provided in Section 11(e)
hereof (other than in respect of the stock options).
(iii) REGISTRATION RIGHTS. Within six months after the Effective
Date, the Company shall cause 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,
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as amended, certificates evidencing the Restricted Shares and shares
acquired pursuant to the exercise of the 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. TERMINATION. The Executive's employment hereunder, as the case may be, may
be terminated as follows:
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(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 10(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 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 10(g)
hereof) within ninety (90) days after the
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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 circum stances, 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 11(e)
hereof. The Executive may terminate his employment at any time, subject to the
provisions of Section 11(d) hereof. If the Executive's employment is terminated
hereunder for any reason other than as set forth in Sections 10(a) through 10(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.
(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 11(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 11(d) below. For
purposes of this Agreement, a Change in Control shall mean the occurrence of any
one of the following events:
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(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 10(a) hereof) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 17 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 10(b), 10(c) or 10(d) hereof results in a
determination that a proper basis for such 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 10(b) or 10(c) hereof, as
having been terminated pursuant to Section 10(e) hereof or, with respect to a
Notice of Termination pursuant to Section 10(d) hereof, as having not been
terminated.
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11. 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
designat- ed 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
Option Award (if such Option Award has been approved by the shareholders
as provided in Section 5(b)(ii)) 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, as well as all stock options
granted pursuant to the Prior Agreement ("Prior Agreement 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 of 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 the part of the Company or the
Executive) as of the Date of
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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
practica ble 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 Option granted to the Executive pursuant to the
Option Award (if such Option Award has been approved by the shareholders
as provided in Section 5(b)(ii)) 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, including the Prior Agreement
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
employ ment 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
practica ble 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
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(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 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
practica ble 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 January 31, 2001, at the
annualized rate in effect at the time Notice of Termination is given;
(iii) the Option 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, as well as each Prior Agreement Option,
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 January 31, 2001; 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
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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 11(e)(i),
(ii), (iii) and (iv) above.
12. 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 11 of this Agreement) (a "Payment") that is subject to the
excise tax (the "Excise Tax") under Section 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.
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13. MITIGATION. The Executive shall not be required to mitigate amounts payable
pursuant to Section 11 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.
14. 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 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
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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 14(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 14(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 14(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein. For purposes of
this Section 14(c), the design, manufacture and marketing of outdoor barbecue
grills 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 14, 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 14.
15. 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 15.
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16. 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 16 or which otherwise becomes bound by all the terms and provisions
of this Agreement or by operation of law.
(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.
17. 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
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If to the Company:
Sunbeam Corporation
0000 X. Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx, 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.
18. 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.
19. 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.
20. 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.
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(b) Notwithstanding the provisions of Section 20(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 14 hereof by means of seeking an injunction or other equitable relief.
21. 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, communications, 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 respect of the
subject matter contained herein or therein, including but not limited to the
Prior Agreement, is hereby terminated and cancelled. This Agreement may be
signed in counterparts.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
February 20, 1998, to be effective as of the Effective Date.
SUNBEAM CORPORATION
By: /s/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chairman, Executive Development
and Compensation Committee
XXXXXXX X. XXXXX
/s/ XXXXXXX X. XXXXX
--------------------
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