EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 26, 1996 (the
"Effective Date"), by and between P. NEWTON WHITE (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 26, 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, Consumer Products Worldwide, 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.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be at the Company's principal executive offices in 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 25,807
shares of the Company's Common Stock, par value $.01 per share ("Common
Stock"), for the sum of $500,010.62 ($19.375 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 $15.07/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
$15.07/share and the three year vesting schedule. In the event
that the 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
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compensated for any unused vacation days upon the termination of this Agreement
for any reason.
(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) TRAVEL BENEFITS. During the initial year of the Employment
Period, the Company shall reimburse the Executive on a grossed up basis (in the
event that any tax is assessed upon him in relation to such travel
reimbursement) for one round trip airline fare per month to and from Santa Fe,
New Mexico and the location at which the Executive may be working for the
Company at the time.
(g) 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:
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(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 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
(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.
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(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.
(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 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).
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(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 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
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(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 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 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, 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.
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(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
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 26,
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 26, 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
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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 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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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 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,
12
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 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
13
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.
(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:
P. Newton White
------------------
Boca Raton, Florida
If to the Company:
Sunbeam Corporation
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attn: Chairman of the Compensation Committee
14
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.
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, 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
re-
15
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.
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/ALBERT J. DUNLAP
-------------------
Name: ALBERT J. DUNLAP
Title: CHAIRMAN & CEO
/s/ P. NEWTON WHITE
-------------------
P. NEWTON WHITE
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.