SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for use of the commission
[X ] Definitive Proxy Statement only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
SUNBEAM CORPORATION
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions apply:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
APPENDIX A
AMENDED AND RESTATED
SUNBEAM CORPORATION
STOCK OPTION PLAN
1. Purpose.
The purpose of the Sunbeam Corporation Stock Option Plan is to
provide incentives for selected executives, key employees, Outside
Directors and Designated Others to promote the financial success and
progress of Sunbeam Corporation. Capitalized terms used throughout
this Plan shall have the meanings ascribed to them in Section 16
hereof.
2. Stock Subject to the Plan.
(a) Subject to the provisions of this Section and Section 9, the
maximum number of shares of Stock that may be issued under the
Plan is 16,500,000 shares, to be allocated as follows:
(i) 16,300,000 shares may be issued in connection with the
grant of Options pursuant to Section 3; and
(ii) 200,000 shares may be issued in connection with the grant
of Restricted Stock Awards pursuant to Section 3.
Such shares may be either authorized but unissued shares or
treasury shares.
(b) The number of shares subject to an Option or a Restricted Stock
Award that has been granted under the Plan shall no longer be
charged against the limitation provided in Section 2(a), and
may again be made subject to Options or Restricted Stock
Awards, as the case may be, to the extent that Options expire
unexercised or are terminated, surrendered or canceled before
exercise or Restricted Stock Awards are forfeited, terminated,
surrendered or canceled due to a Participant's termination of
employment or service as an Outside Director or for any other
reason.
3. Grants of Options and Restricted Stock Awards.
(a) Subject to the provisions of the Plan, the Committee may at any
time, or from time to time, grant Options to officers, key
employees, Outside Directors of the Company (or its
subsidiaries) and Designated Others.
(b) Subject to the provisions of the Plan, the Committee may at any
time, or from time to time, grant shares of Stock which are
subject to the Restrictions set forth in Section 4(b)
("Restricted Stock") to officers, key employees and Outside
Directors of the Company (or its subsidiaries) and Designated
Others.
(c) The Committee shall cause shares of Restricted Stock to be
issued to each Outside Director immediately and automatically
upon his or her election, re-election or appointment as a
Director of the Company. If such Outside Director is elected at
an Annual Meeting of the Shareholders of the Company (the
"Annual Meeting"), the number of shares of Restricted Stock to
be issued shall be 1,500. The number of shares of Restricted
Stock to be issued to an Outside Director who is elected or
appointed at any time other than at an Annual Meeting shall be
1,500 multiplied by a fraction, the numerator of which shall be
the number of days after the date of such election to and
including the date of the next Annual Meeting (which for such
purpose shall be assumed to be the next May 15) and the
denominator of which shall be 365; provided, however, (i) that
in the case of an Outside Director elected to the Board for the
first time during the period beginning August 1, 1996 and
ending December 31, 1996, the number of such shares shall not
be prorated, and each such Outside Director shall receive 1,500
shares for the period of his service between the date of his
election and the date of the next Annual Meeting (assumed to be
May 15, 1997); and (ii) that each incumbent Outside Director,
elected prior to August 1, 1996, shall receive that number of
shares of Restricted Stock which results from applying to 1,500
such shares the proration formula provided above, using for
such calculation the period from August 6, 1996 until and
including the date of the next Annual Meeting (assumed to be
May 15, 1997).
(d) Deleted.
(e) Each Option shall be evidenced by a Stock Option Agreement, and
each Restricted Stock Award shall be evidenced by a Restricted
Stock Award Agreement, each in a form approved by the Committee
or by a Company officer designated by the Committee.
(f) Notwithstanding any other provision of the Plan, no person
shall be granted Options for more than 250,000 shares of Stock
or Restricted Stock Awards for more than 25,000 shares of Stock
in any single fiscal year of the Company.
4. Terms and Conditions.
(a) Options.
(i) An Option shall entitle the Participant who holds it to
exercise the Option on and subject to the terms,
conditions and restrictions of the Plan (as the Plan may
be amended from time to time) and such additional terms,
conditions and restrictions as may be imposed by the
Committee at the time of grant.
(ii) Unless otherwise specified by the Committee, the term of
each Option granted prior to May 15, 1996 (herein the
"1996 Amendment Date") and which is In-the-Money as of
the 1996 Amendment Date shall commence on the date of
grant of the Option and shall expire at the close of
business on the earlier of (A) the tenth anniversary of
the date of grant or (B) the 45th day following the
termination of the Participant's employment with, or
service as director of, the Company (or a subsidiary).
Unless otherwise specified by the Committee, the term of
each Option granted on or after the 1996 Amendment Date
and the term of each Option granted prior to the 1996
Amendment Date which is Out- of-the-Money as of the 1996
Amendment Date, shall commence on the Grant Date of the
Option and shall expire at the close of business on the
earliest of (A) the tenth anniversary of the Grant Date;
or (B) the third anniversary of the date of termination
of the Participant's employment with, or service as a
director of, the Company (or a subsidiary), in the case
of retirement or termination by the Company without
Cause; or (C) 90 days after the date of termination of
employment in the case of resignation, voluntary
departure or termination by the Company with Cause; or
(D) in the case of a Designated Other, the date specified
in the Stock Option Agreement. Notwithstanding the
foregoing sentence, Participants who are subject to
Section 16(b) of the Exchange Act shall have until the
earlier of (A) the tenth anniversary of the Grant Date;
or (B) the third anniversary of the date of termination
of their employment with, or service as a director of the
Company, regardless of the cause, within which to
exercise Options which are granted on or after the 1996
Amendment Date and Options which are Out-of-the-Money as
of the 1996 Amendment Date; provided, however, that no
such Option may be exercised by any such person during
the period beginning on the date of termination and
ending on the six month anniversary of the date of
termination.
(iii) All Restrictions shall lapse with respect to the
Restricted Stock subject to a Restricted Stock Award made
to an Outside Director pursuant to Section 3(c) hereof
immediately and automatically upon the Director's
acceptance of election or appointment as a Director of
the Company, as evidenced in such manner as may be
established by the Committee. Unless otherwise specified
by the Committee (which is empowered to provide different
vesting schedules with respect to any grant of Options or
Restricted Stock), all other Options granted under the
Plan (from and after July 18, 1996) shall become
exercisable with respect to one-third of the shares
subject to the Option beginning on the first anniversary
of the Grant Date and as to an additional one-third on
each of the second and third anniversaries of the Grant
Date (each twelve month period ending on an anniversary
of a Grant Date being referred to herein as an "Option
Year"), provided in each case that the Participant shall
have remained an employee or a director of the Company
(or a subsidiary), or in the case of a Designated Other,
shall have remained in the position set forth in the
Stock Option Agreement, continuously since the Grant
Date. Notwithstanding the foregoing, during the remaining
term of any options (if not already so exercisable) : (A)
if a Participant's employment or service as a director,
or in the case of a Designated Other, the period of
service as defined in the Stock Option Agreement,
terminates due to death, all Options held by the
Participant at death shall become immediately exercisable
in full; (B) upon a Change in Control, all Options held
by such Participant who is then an employee or director
of the Company (or a subsidiary) shall become immediately
exercisable in full; and (C) in the event that the
exercisability of an Option accelerates due to a Change
in Control, Participants who are subject to Section 16(b)
of the Exchange Act may not sell the shares acquired upon
such accelerated exercise within six months of the Grant
Date of such Option.
(iv) Except to the extent permitted by Rule 16b-3 or its
successor, Options shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed
of, except by will or the laws of descent and
distribution, pursuant to a qualified domestic relations
order ("QDRO") as defined in the Code or ERISA (or the
rules thereunder) or as otherwise set forth in this
Section 4(a)(iv). Each Option shall be exercisable during
the lifetime of a Participant only by the Participant to
whom it was granted, and after the Participant's death
only by the Participant's estate or legal representative.
To the extent exercisable, an Option may be exercised in
whole at any time, or in part from time to time, during
the term of the Option.
(v) Any Option may be converted, modified, forfeited or
canceled, prospectively or retroactively, in whole or in
part, by the Committee in its sole discretion; provided,
however, that no such action shall adversely affect the
rights of any Participant under any Option granted prior
to such action without his consent. Except as may be
otherwise provided in an Agreement, the Committee may, in
its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate
the vesting of, any Option.
(b) Stock Awards.
(i) Upon the grant of a Restricted Stock Award, a stock
certificate representing a number of shares of Stock
equal to the number of shares of Restricted Stock granted
to a Participant shall be registered in the Participant's
name but shall be held in custody by the Company for the
Participant's account. The Participant shall generally
have the rights and privileges of a stockholder as to
such Restricted Stock, including the right to vote such
Restricted Stock, except that the following restrictions
(the "Restrictions") shall apply: (A) the Participant
shall not be entitled to delivery of the certificate
until the Restricted Period (set forth in paragraph (iii)
below) applicable to such Restricted Stock has expired or
terminated and until any other conditions prescribed by
the Committee are satisfied; (B) none of the Restricted
Stock may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restricted
Period applicable to such Restricted Stock and prior to
the satisfaction of any other conditions prescribed by
the Committee; and (C) shares of Restricted Stock shall
be forfeited and all rights of the Participant to such
Restricted Stock shall terminate without further
obligation on the part of the Company unless the
Participant has (1) remained an employee or a director of
the Company (or a subsidiary) until the expiration or
termination of the Restricted Period applicable to such
Restricted Stock (or in the case of a Designated Other,
the duration specified in the Restricted Stock Award
Agreement) and (2) satisfied any other conditions
prescribed by the Committee applicable to such Restricted
Stock. At the discretion of the Committee, cash and stock
dividends with respect to the Restricted Stock may be
either currently paid or withheld by the Company for the
Participant's account. Cash dividends so withheld by the
Committee shall not be subject to forfeiture. Upon the
forfeiture of any shares of Restricted Stock, such
forfeited Restricted Stock shall be transferred to the
Company without further action by the Participant. The
Participant shall have the same rights and privileges,
and be subject to the Restrictions, with respect to any
shares or other property received pursuant to Section 9.
(ii) Upon the expiration or termination of the Restricted
Period with respect to shares of Restricted Stock and the
satisfaction of any other conditions prescribed by the
Committee, the Restrictions applicable to such Restricted
Stock shall lapse and a stock certificate for the number
of shares of Stock with respect to which the Restricted
Period has lapsed shall be delivered, free of all
restrictions, except any that may be imposed by law, to
the Participant or the Participant's beneficiary or
estate, as the case may be. The Company shall not be
required to deliver any fractional share of Stock but
will pay, in lieu thereof, the Fair Market Value
(determined as of the date the Restricted Period expires
or terminates) of such fractional share to the
Participant or the Participant's beneficiary or estate,
as the case may be. No payment will be required from the
Participant upon the issuance or delivery of any shares
of Stock under this paragraph, except that any amount
necessary to satisfy applicable federal, state or local
tax requirements shall be withheld or paid promptly upon
notification of the amount due and prior to or
concurrently with the issuance or delivery of a
certificate representing such shares.
(iii) Unless otherwise specified by the Committee at the time
of the award and included in the Restricted Stock Award
Agreement, the Restrictions shall also lapse with respect
to one-third of the Restricted Stock subject to all other
Restricted Stock Awards on each of the first through the
third anniversaries of the Grant Date, provided in each
case that the Participant shall have remained an employee
or a director of the Company (or a subsidiary)
continuously since the date of grant (or in the case of a
Designated Other, shall have complied with the terms and
conditions of the Restricted Stock Award Agreement).
Notwithstanding the foregoing: (A) if a Participant's
employment or service as a director, or in the case of a
Designated Other, the period defined in the Restricted
Stock Award Agreement, terminates due to death, the
Restrictions shall lapse with respect to all Restricted
Stock Awards held by the Participant at death (if not
already so lapsed); (B) upon a Change in Control, the
Restrictions shall lapse with respect to all Restricted
Stock Awards held by such Participant who is an employee
or director of the Company (or a subsidiary) (if not
already so lapsed); and (C) in the event of an
accelerated lapse of Restrictions due to a Change in
Control, Participants who are subject to Section 16(b) of
the Exchange Act may not sell the shares of Stock whose
Restrictions have so lapsed within six months of the
Grant Date of the Restricted Stock Award pursuant to
which such Stock was received. The "Restricted Period" as
to any shares constituting part of a Restricted Stock
Award shall be the period of time commencing with the
Grant Date of a Restricted Stock Award and ending with
the date on which the Restrictions lapse with respect to
any such shares, or any portion thereof.
(c) In the event that the acceleration of (i) the exercisability of
an Option or (ii) the lapse of Restrictions relating to
Restricted Stock upon a Change in Control and a Change in
Status results in excise tax pursuant to Section 4999 of the
Code, or any successor or similar provision thereto, or
comparable state or local tax laws, the Company shall pay to
the Participant such additional compensation as is necessary
(after taking into account all Federal, state and local income
and excise taxes payable by the Participant as a result of the
receipt of such compensation ) to place the Participant
in the same after-tax position he would have been in had no
such excise tax (or any interest or penalties thereon) been
paid or incurred. The amount of such payment shall be
determined by the independent accounting firm serving as the
Company's outside auditor immediately prior to the Change in
Control.
5. Exercise of Options.
(a) The Exercise Price of the shares purchasable under an Option
shall be the Fair Market Value per share on the Grant Date of
such Option, subject to subsequent adjustment pursuant to the
provisions of Section 9.
(b) Options shall be considered exercised (herein the "Exercise
Date") on the date written notice, in such form as the
Committee may prescribe, is received by the Option Plan
Administrator of the Company, advising of the exercise of an
Option and either transmitting payment of the total Exercise
Price for the number of shares of Stock involved or electing
one of the alternative payment procedures set forth in Section
5(c) below.
(c) The Exercise Price shall be paid in cash (including cash
obtained through a margin loan on the shares as to which the
Option is being exercised) or (and provided (x) the use of the
following procedure by a Participant would comply with
safeguards established by the Committee designed to avoid
"short-swing" profits to the Participant under Section 16(b) of
the Exchange Act, and (y) does not otherwise violate any
applicable laws) through (i) a broker-assisted cashless
exercise program established by the Committee, based on the
actual proceeds from the sale of share of Stock; or (ii) in
shares of Stock, valued on the basis of the closing market
price of the Stock on the Exercise Date.
(d) Subject to the provisions of Section 6 and the other provisions
of the Plan, the Stock Option Agreement and the Option, the
Company shall issue shares of Stock in the Participant's name
as soon as practicable (but in no event later than 30 days)
after the Exercise Date. The Participant shall not be deemed to
be a holder of any shares pursuant to an Option, and shall not
have any rights as a stockholder in connection with such
shares, until the date of transfer of shares of Stock to the
Participant. The Company shall have no liability of any nature
whatsoever to any Participant by reason of any change in the
market price of the Stock during the period of time between the
Exercise Date and the date on which any shares of Stock
resulting from the exercise are issued or sold.
6. Restrictions.
(a) Notwithstanding any other provision of the Plan, an Option or
Restricted Stock Award to the contrary, no Option shall be
exercised, and the Company shall not be obligated to issue or
transfer shares of Stock under any Option or Restricted Stock
Award, until the Company shall have received such assurances as
the Company may reasonably request from its counsel that the
exercise of the Option and the issuance and transfer of shares
pursuant to the Option or Restricted Stock Award will not
violate the Securities Act of 1933, as amended, or any other
applicable Federal or state laws. In connection with any such
issuance or transfer, the Participant shall, if requested by
the Company, give assurances satisfactory to counsel to the
Company, in respect of the Participant's investment intent or
such other matters as counsel to the Company may deem necessary
or desirable to assure compliance with all applicable legal
requirements.
(b) No provisions of the Plan or any Option or Restricted Stock
Award shall be interpreted or construed to obligate the Company
to register any Stock under Federal or state law.
(c) The Company and the Committee reserve the right to investigate
at any time the circumstances surrounding any exercise of
Options, including any investigation regarding whether a
Participant is in compliance with the provisions of Section 13
hereof (or has threatened or is reasonably believed to intend
to violate the provisions of Section 13 hereof), and the
Company and the Committee shall have no liability or
responsibility to any Participant for any alleged damage
sustained by the Participant by reason of any delay in the
implementation of an Option exercise during the pendency of any
such investigation, whether by reason of any change in the
market price of the Stock or otherwise.
(d) Notwithstanding any other provision hereof, the Committee shall
have the right at any time to deny or delay a Participant's
exercise of Options if such Participant is reasonably believed
by the Committee (i) to be engaged in material conduct
adversely affecting the Company or (ii) to be contemplating
such conduct, unless and until the Committee shall have
received reasonable assurance that the Participant is not
engaged in, and is not contemplating, such material conduct
adverse to the interests of the Company.
(e) Participants are and at all times shall remain subject to the
trading window policies adopted by the Company from time to
time throughout the period of time during which they may
exercise Options or sell Restricted Stock granted pursuant to
the Plan. Participants may request at any time a copy of any
calendar of scheduled open windows by contacting the Option
Plan Administrator.
7. Fair Market Value.
(a) During any period that the Company's Stock is Actively Traded,
Fair Market Value shall be equal to the average selling price
of a share of Stock on the exchange or national market system
on which the Stock is traded, on the date of grant of an option
to acquire Stock pursuant to the Plan, or pursuant to such
other method as the Committee may reasonably specify for
determining the Stock's Fair Market Value.
(b) During any period during which the Company's Stock is not
Actively Traded, Fair Market Value shall be determined by the
Committee.
8. Term.
This Amended and Restated Plan shall be effective as of the date set
forth on the first page hereof. No Option or Restricted Stock Award
shall be granted under the Plan after February 12, 2006, but the Plan
shall continue in effect thereafter with respect to any previously
granted Options and Restricted Stock Awards that remain outstanding
and the duration of any such grant or award shall not be affected by
the expiration of the Plan.
9. Adjustments.
In the event that any recapitalization, or reclassification, split-up
or consolidation of shares of Stock shall be effected, or the
outstanding shares of Stock shall, in connection with a merger or
consolidation of the Company or a transaction or series of related
transactions that results in the sale of all or substantially all of
the Company's assets, be exchanged for a different number or class of
shares of stock or other securities or property of the Company or any
other Person, or a record date or dates for determination of holders
of Stock entitled to receive a dividend payable in stock or a
liquidating dividend (or series of dividends) shall occur, equitable
and proportional adjustments aimed at preventing the inequitable
enlargement or dilution of any rights hereunder shall be made to (i)
the number and class of shares or other securities or property that
may be issued or transferred pursuant to the Plan and any outstanding
Options and Restricted Stock Awards and (ii) the Exercise Price to be
paid per share under any outstanding Options; provided, however, that
in the event of a merger or consolidation of the Company, or similar
transaction pursuant to which the outstanding Stock is exchanged for
cash or other property, the unexercised Options shall thereafter be
exercisable for, and the Restricted Stock Awards shall entitle the
Participant to receive, the cash or other property which an Option or
Restricted Stock Award holder, as the case may be, would have been
entitled to receive had the Options been exercised, or the
Restrictions relating to the Restricted Stock Award lapsed,
immediately prior to the record date for such merger, consolidation
or similar transaction except to the extent that provision is made in
writing in connection with such transaction for (1) the assumption of
the Options by, or the substitution for the Options of new options
covering the stock of, a successor acquiring corporation, in each
case providing terms no less favorable to the holder of such Options
than would an assumption or substitution described in Treasury
Regulation ss.1.425- 1(a) that would not constitute a "modification"
for purposes of Code ss.424(a), and (2) the substitution for
Restricted Stock Awards of stock of a successor or acquiring
corporation having terms no less favorable to the holder thereof than
the terms of the Restricted Stock Award in effect before such
transaction.
10. Administration.
(a) The Plan shall be administered by the Committee. The Committee
shall, subject to the provisions of the Plan, have full power
and authority to administer the Plan, to select the
Participants in the Plan, and, except for grants and awards
which are automatically made to Outside Directors as provided
pursuant to Section 3 of the Plan, to determine the number of
shares to be made subject to each Option and Restricted Stock
Award and all terms and conditions of each Option and
Restricted Stock Award. The Committee shall have the power to
interpret the Plan and to adopt such rules for the
administration, interpretation and application of the Plan as
are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding
upon all Participants, the Company and all other interested
persons, absent a determination by a court of competent
jurisdiction that the Committee has acted in bad faith or has
engaged in reckless or willful misconduct.
(b) Members of the Committee and the Board and officers
administering this Plan shall be fully protected in taking
actions under the Plan or in relying upon the advice of counsel
and shall incur no liability except for bad faith, recklessness
or willful misconduct in the performance of their duties.
(c) Except as required by Rule 16b-3 with respect to grants of
Options to individuals who are subject to Section 16 of the
Exchange Act, or as otherwise required for compliance with Rule
16b-3 or other applicable law, the Committee may delegate all
or any part of its authority under the Plan to an employee,
employees or committee of employees.
(d) To the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practices and to
further the purpose of the Plan, the Committee may, without
amending this Plan, establish special rules applicable to
Options granted to Participants who are foreign nationals, are
employed outside the United States, or both, including rules
that differ from those set forth in the Plan, and grant Options
to such Participants in accordance with those rules.
(e) Determinations by the Committee under the Plan relating to the
form, amount and terms and conditions of grants and awards need
not be uniform, and may be made selectively among persons who
receive or are eligible to receive grants and awards under the
Plan, whether or not such persons are similarly situated.
11. General Provisions.
(a) Nothing in this Plan or in any instrument executed pursuant
hereto shall confer upon any Person any right to continue in
the employment or other service of the Company (or any
subsidiary), or shall affect the right of the Company (or any
subsidiary) to terminate the employment or other service of any
person at any time with or without Cause.
(b) The Company may make appropriate provisions for the withholding
of any taxes which the Company determines it is required to
withhold in connection with any Option or Restricted Stock
Award including, at the request of a Participant and provided
that it does not violate any applicable laws, the payment of
such withholding taxes through a broker-assisted sale of a
sufficient number of shares underlying the Option or subject to
the Restricted Stock Award or by delivery to the Company of
shares of Stock previously owned by the Participant, in either
case having an actual sale price equal to the amount of such
taxes. Notwithstanding the foregoing, a Participant whose
transactions in Stock are subject to Section 16(b) of the
Exchange Act may make a share withholding election only if it
complies with safeguards established by the Committee designed
to avoid "short swing" profits to the Participant under Section
16(b) of the Exchange Act. The certificates evidencing a
Restricted Stock Award made to an Outside Director pursuant to
Section 3(c) hereof shall be automatically reduced by 28% to
provide for the estimated Federal income tax payment obligation
of the Outside Director, or by such other higher percentage as
may be required by law to be withheld, with the Company
remitting to the appropriate tax authorities the fair market
value of the Restricted Stock Award for which the certificates
are not so delivered.
(c) By accepting any benefits under the Plan, each Participant, and
each Person claiming under or through the Participant, shall be
conclusively deemed to have indicated acceptance and
ratification of, and consent to, all provisions of the Plan.
Each Participant hereby further agrees that amendments and
modifications to the Plan, which may be adopted from time to
time by the Committee and/or the Board of the Corporation (as
set forth in Section 12 hereof), shall be binding upon such
Participant and upon all Options or Restricted Stock which the
Participant may hold, including (with retroactive effect)
Options or Restricted Stock previously granted to the
Participant, except to the extent set forth in Section 12
hereof.
(d) With respect to Participants subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to
comply with all applicable provisions of Rule 16b-3 or its
successor. To the extent any provision the Plan or action by
the Plan administrators fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed
advisable by the Committee.
(e) A Participant shall have no rights as a stockholder of the
Company with respect to any Shares to be issued upon exercise
of an Option until such Participant has exercised such Option
and becomes a holder of such Shares.
12. Amendments; Modification and Termination.
This Plan may be amended or modified by the Committee, with
ratification by the Board, or terminated by the Board, at any time
and in any respect, except that no amendment shall be made without
the approval of the shareholders of the Company if shareholder
approval would be required by Rule 16b-3 under the Exchange Act or
any other law or rule of any governmental authority, stock exchange
or other self-regulatory organization to which the Company is
subject. No such amendment, modification or termination shall have
effect to reduce the number of shares as to which any Option or
Restricted Stock Award previously has been granted to a Participant;
to extend the vesting schedule with respect to any Option or
Restricted Stock Award or to extend the period of non-competition or
confidentiality as set forth in Section 13 hereof. In the event of
the passage of any law, rule or regulation or a determination by any
regulatory agency or court, requiring an adverse change in the
Company's accounting or tax treatment relating to the Plan, the
Committee shall have the right to modify the terms of outstanding
Options and Restricted Stock Awards to the extent necessary to avoid
the adverse consequences of such change.
13. Confidentiality and Non-Competition; Conduct Not in the Interest of
the Corporation.
By accepting Options or Restricted Stock Awards under the Plan and as
a condition to the exercise of Options and the enjoyment of any of
the benefits of the Plan, each Participant agrees as follows:
(a) Confidentiality -- During the period of each Participant's
employment or service as a director with the Company (or the
Participant's engaging in any other activity with or for the
Company) and for a two year period thereafter, each Participant
shall treat and safeguard as confidential and secret all
Confidential Information received by such Participant at any
time. Without the prior written consent of the Company, except
as required by law, such Participant will not 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 a Participant 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, Participant 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,
Participant is, in the reasonable opinion of his counsel,
compelled to disclose Confidential Information, Participant
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.
(b) Non-Competition -- During the period of employment with the
Company or its subsidiaries of any Participant (other than a
director) compensated at a rate (including bonuses) in excess
of $75,000 per year in cash compensation from his employment
with the Company or any of its subsidiaries (determined as of
the most recently completed fiscal year of the Company), and,
for a two-year period thereafter (the "Non-Compete Period"),
each such Participant shall not, without prior written consent
of the Committee, do, directly or indirectly, any of the
following:
(1) 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 such Participant'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
(2) 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 affected
Participant 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.
(c) Each Participant acknowledges that remedies at law for any
breach by him of this section 13 may be inadequate and that the
damages resulting from any such breach are not readily
susceptible to being measured in monetary terms. Accordingly,
each Participant acknowledges that upon his violation of any
provision of this Section 13, the Company will be entitled to
immediate injunctive relief and may obtain an order restraining
any threatened or future breach. Each Participant further
agrees, subject to the proviso at the end of this sentence,
that if he violates any provision of this Section 13, he shall
immediately forfeit any rights and benefits under this 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 such Participant received upon
exercise of any Option or the lapse of the Restrictions
relating to Restricted Stock Awards granted hereunder, 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 Participant's
employment. Nothing in this Section 13 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 13.
(d) Each Participant agrees to provide written notice of the
provisions of this Section 13 to any future employer of
Participant, and the Company expressly reserves the right to
provide such notice to the Participant's future employer(s).
(e) If any provision or part of any provision of this Section 13 is
held for any reason to be unenforceable, (i) the remainder of
this Section 13 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.
14. Governing Law.
The validity, construction and effect of the Plan and any rules
relating to the Plan shall be determined in accordance with the laws
of the State of Delaware and applicable Federal law.
15. Arbitration.
The Company and each Participant hereby agree that in the event of
any dispute or controversy arising with respect to the Plan, any
Stock Option Agreement, the exercise of any Option (or the
disallowance of any exercise at any time, for any reason) or any
other matter relating to Options or Restricted Stock Awards, then
such dispute or controversy shall be submitted by the parties to
mandatory and binding arbitration before a panel of arbitrators
appointed by the American Arbitration Association ("AAA"), each of
whom shall be knowledgeable in matters of securities in general and,
if possible, the administration of stock option programs similar to
the Plan. The arbitration proceedings shall be conducted in whichever
of the following cities is closest to the work location of the
affected Participant: Delray Beach, Florida; New York, New York;
Kansas City, Missouri; Jackson, Mississippi; or Atlanta, Georgia. The
decision of the Company as to which city is closest to the work
location of the Participant shall be conclusive and binding, except
for manifest error. The decision of the arbitrators shall be rendered
in writing, shall be promptly rendered after a hearing on the matter
and shall be final, conclusive and binding and may be incorporated in
a final judgment rendered by any court of competent jurisdiction.
Notwithstanding the foregoing, nothing contained herein shall
preclude the Company from seeking injunctive or other relief from any
court of competent jurisdiction to enforce the provisions of Section
13 hereof.
16. Definitions.
The following terms, when used in the Plan, shall have the meanings
set forth below:
Actively Traded: Trading of Company Stock on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National
Market System in an average weekly volume that equals at least
0.20% of the then outstanding Company Stock for each of at
least four weeks in a row.
Beneficial Owner: With respect to any securities of the
Company, any Person who is a beneficial owner of such
securities as defined in rule 13d-3 under the Exchange Act. The
Committee may from time to time adopt interpretations or
pronouncements as to who shall be deemed to be Beneficial
Owners of the Company's outstanding voting securities as of a
given date, which interpretation shall be final and binding on
all Participants, the Company and all other interested Persons.
Board: The Board of Directors of the Company.
Cause: Any cause stated in an employment agreement between the
Company and the Participant and/or material violations of
employment agreements or the terms of this Plan, acts of
dishonesty with respect to the Company, insubordination,
divulging confidential information about the Company,
interference with the relationship between the Company and any
supplier, client, customer, similar person, or performance of
any act or omission which the Committee, in its sole
discretion, deems to be sufficiently injurious to the interest
of the Company to constitute cause.
Change in Control: The occurrence of any of the following: (i)
a merger or consolidation to which the Company is a party if
the individuals and entities who were stockholders of the
Company immediately prior to the effective date of such merger
or consolidation are Beneficial Owners of less than 50% of the
total combined voting power for election of directors of the
surviving corporation following the effective date of such
merger or consolidation; or (ii) any Person becomes the
Beneficial Owner in the aggregate of securities of the Company
representing 50% or more of the total combined voting power of
the Company's then issued and outstanding securities unless
such Person (or a Person owned directly or indirectly by such
Person) was the Beneficial Owner, directly or indirectly, as of
the Grant Date applicable to the affected Participant, of more
than 50% of the Company's voting securities outstanding as of
such Grant Date; or (iii) the sale of all or substantially all
of the assets of the Company to any person or entity that is
not a wholly-owned subsidiary of the Company; or (iv) the
stockholders of the Company approve any plan or proposal for
the liquidation of the Company.
Code: Internal Revenue Code of 1986, as amended.
Committee: A committee designated by the Board consisting of
not less than two members of the Board who are "non-employee
directors" as defined in Rule 16b-3 under the Exchange Act, to
administer the Plan.
Company: Sunbeam Corporation (formerly known as
Sunbeam-Oster Company, Inc.)
Confidential Information: 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.
Designated Other: Any consultant, advisor, contractor or agent
of the Company or its subsidiaries, who is not an employee,
officer or Outside Director of the Company and who is granted
Options or a Restricted Stock Award pursuant to this Plan.
Effective Date: January 1, 1991; Amended and Restated as of May
15, 1996.
ERISA: Titles I and IV of the Employee Retirement Income
Security Act of 1974, as amended.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exercise Price: The Exercise Price of shares purchasable upon
exercise of an Option, as determined pursuant to the terms of
Section 5(a).
Fair Market Value: The fair market value of a share of Stock,
as determined pursuant to the terms of Section 7.
Grant Date: The date as of which the Committee (or such other
committee of the Board of Directors of the Company as shall be
empowered to grant Options or to make awards of Restricted
Stock) shall grant Options or Restricted Stock, as the case may
be, to a Participant under the Plan, as so designated by such
Committee.
In-the-Money: Options to acquire Stock are considered to be
"in-the-money" if the exercise price of the Option is less than
the current market price of the Stock.
Next Option Increment: This term shall have the meaning
ascribed to it in Section 4(a)(iii).
Option: An option, granted under the Plan, to purchase shares
of Stock at the Exercise Price. Options granted under the Plan
shall not be incentive stock options pursuant to Section 422 of
the Code.
Option Year: This term shall have the meaning ascribed to it in
Section 4(a)(iii).
Out-of-the-Money: Options to acquire Stock are considered to be
"out-of-the- money" if the exercise price is equal to or
greater than the current market price of the Stock.
Outside Director: A director of the Company who is not either:
(i) an officer or employee of the Company, or (ii) a Beneficial
Owner of, or an officer or employee of any Person which is a
direct or indirect Beneficial Owner of, more than 10% of the
outstanding Stock.
Participant: An officer, employee, Outside Director of the
Company (or a subsidiary of the Company) or Designated Other
who is granted an Option or a Restricted Stock Award under the
Plan by the Committee. Upon the death of a Participant, the
"Participant" shall be deemed to mean the Participant's estate
or legal representative.
Person: Any individual, corporation, partnership, association,
company, trust, joint venture or other organization or entity
or group of associated persons or entities acting in concert.
As used herein, references to the male gender shall include the
female gender or the neuter, as applicable.
Plan: The Sunbeam Corporation Stock Option Plan herein set
forth, as it may be amended from time to time.
Restricted Period: This term shall have the meaning ascribed to
it in Section 4(b)(iii).
Restricted Stock: Shares of Stock granted pursuant to
Section 3(b) or (c) of the Plan.
Restricted Stock Award: The grant of Shares of Restricted Stock
to a Participant pursuant to Section 3(b) or 3(c) of the Plan.
Restricted Stock Award Agreement: The agreement described in
Section 3(e).
Restrictions: The restrictions described in Section 4(b)
relating to Restricted Stock.
"Shares" or "Stock": The Common Stock, $0.01 par value per
share, of the Company, or such other class of securities as may
be applicable pursuant to the provisions of Section 9.
Stock Option Agreement: The agreement described in Section
3(e).
SUNBEAM CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 12, 1998
The undersigned, a holder of shares of common stock, par value $.01
per share (the "Common Stock"), of Sunbeam Corporation (the "Company"),
acting with respect to all shares of Common Stock held by the undersigned,
hereby appoints Gary Mask and Janet E. Kelley, and each of them, as proxies
of the undersigned, with full power of substitution to represent and to
vote such shares of Common Stock, with like effect as if the undersigned
were personally present and voting at the Annual Meeting of Stockholders of
the Company to be held on May 12, 1998, and at any adjournments,
postponements, or rescheduling thereof. Any and all proxies heretofore
given are hereby revoked.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE
FOLLOWING PROPOSALS.
1. To elect the following seven Directors of the Company for a term of one
year: Albert J. Dunlap, Charles M. Elson, Russell A. Kersh, Howard G.
Kristol, Peter A. Langerman, William T. Rutter and Faith Whittlesey
(for terms to expire at the 1999 Annual Meeting) (Proposal No. 1).
_ _
|_| FOR all nominees |_| WITHHOLD AUTHORITY Authority withheld for
for all nominees the following nominee(s)
only:
(Write the name(s) of
such nominee(s) in the
space provided below)
_______________________
2. To approve the grant of stock options to Albert J. Dunlap, the
Company's Chairman and Chief Executive Officer, contained in his
Employment Agreement with the Company (Proposal No. 2).
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
3. To approve the grant of stock options to Russell A. Kersh, the
Company's Vice Chairman and Chief Financial Officer, contained in his
Employment Agreement with the Company (Proposal No. 3).
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
4. To approve the grant of stock options to David C. Fannin, the Company's
Executive Vice President, Secretary and General Counsel, contained in
his Employment Agreement with the Company (Proposal No. 4).
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
5. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the total number of authorized shares of
Common Stock to 500,000,000 shares from 200,000,000 shares (Proposal
No. 5).
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
6. To approve amendments to the Amended and Restated Sunbeam Corporation
Stock Option Plan to increase the number of shares of Common Stock with
respect to which awards may be granted to 16,500,000 shares from
11,500,000 shares (Proposal No. 6).
_ _ _
|_| FOR |_| AGAINST |_| ABSTAIN
7. To transact such other business as may properly come before the meeting
or any adjournment thereof, including matters incident to the conduct
of the Annual Meeting.
WHEN PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO INSTRUCTIONS ARE
SPECIFIED, THE UNDERSIGNED'S VOTE WILL BE CAST "FOR" PROPOSALS 1, 2, 3, 4,
5 AND 6 AND IN THE DISCRETION OF THE PROXIES AS TO SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR AT ANY AND ALL POSTPONEMENTS
OR ADJOURNMENTS THEREOF. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
The undersigned stockholder may revoke this proxy at any time
before it is voted by delivering to the Secretary of Sunbeam either a
written revocation of the proxy or a duly executed proxy bearing a later
date, or by appearing at the Annual Meeting and voting the shares subject
to the proxy by written ballot. IMPORTANT: Please sign exactly as name
appears below. Each joint owner shall sign. Executors, administrators,
trustees, etc. should give full title as such. If signor is a corporation,
please give full corporate name by duly authorized officer. If a
partnership, name by authorized person.
DATED:________________________ , 1998
_____________________________________
(Signature)
_____________________________________
(Signature if Jointly Held)
THE ABOVE-SIGNED ACKNOWLEDGES RECEIPT
OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT
FURNISHED THEREWITH.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
SUNBEAM CORPORATION
SUITE 200, 1615 SOUTH CONGRESS AVE.
DELRAY BEACH, FLORIDA 33445
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998
To The Stockholders of Sunbeam Corporation:
Notice is hereby given to the stockholders of Sunbeam Corporation, a
Delaware corporation (the "Company"), that the 1998 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") will be held at the
Hilton, 100 Fairway Drive, Deerfield Beach, Florida 33441 on Tuesday, May
12, 1998, at 9:00 a.m. (local time), for the following purposes:
1. To elect the following seven (7) Directors of the Company for a
term of one year: Albert J. Dunlap, Charles M. Elson, Russell A. Kersh,
Howard G. Kristol, Peter A. Langerman, William T. Rutter and Faith
Whittlesey (for terms to expire at the 1999 Annual Meeting) (Proposal No.
1); and
2. To approve the grant of stock options to Albert J. Dunlap, the
Company's Chairman and Chief Executive Officer, contained in his Employment
Agreement with the Company (Proposal No. 2); and
3. To approve the grant of stock options to Russell A. Kersh, the
Company's Vice Chairman and Chief Financial Officer, contained in his
Employment Agreement with the Company (Proposal No. 3); and
4. To approve the grant of stock options to David C. Fannin, the
Company's Executive Vice President, Secretary and General Counsel,
contained in his Employment Agreement with the Company (Proposal No. 4);
and
5. To approve an amendment to the Company's Restated Certificate of
Incorporation increasing the total number of authorized shares of Common
Stock to 500,000,000 shares from 200,000,000 shares (Proposal No. 5); and
6. To approve amendments to the Amended and Restated Sunbeam
Corporation Stock Option Plan to increase the number of shares of Common
Stock with respect to which awards may be granted to 16,500,000 shares from
11,500,000 shares (Proposal No. 6).
7. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof, including matters incident to
the conduct of the Annual Meeting.
The close of business on March 30, 1998, has been fixed as the record
date for the determination of the stockholders of the Company entitled to
notice of and to vote at the Annual Meeting, and only stockholders of
record at that time will be entitled to notice of and to vote at the Annual
Meeting and at any postponement or adjournment thereof.
Stockholders who do not expect to attend the Annual Meeting in person
are urged to sign, date and promptly return the proxy card that is enclosed
herewith.
By Order of the Board of Directors.
David C. Fannin
Secretary
April 6, 1998
SUNBEAM CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors and management of Sunbeam
Corporation, a Delaware corporation (the "Company" or "Sunbeam"), of
proxies for use at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting") to be held at the Hilton, 100 Fairway Drive, Deerfield
Beach, Florida 33441 on Tuesday, May 12, 1998, at 9:00 a.m. (local time),
and at any and all postponements or adjournments thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting. This Proxy
Statement, Notice of Annual Meeting and accompanying proxy card are first
being mailed to stockholders on or about April 6, 1998.
VOTING SECURITIES
As of the close of business on March 30, 1998, the date fixed by the
Company's Board of Directors (the "Board of Directors") as the record date
for determining the stockholders of the Company entitled to receive notice
of, and to vote at, the Annual Meeting or any postponements or adjournments
thereof, the Company had outstanding 100,811,194 shares of common stock,
par value $.01 per share (the "Common Stock"). Each share of Common Stock
entitles the holder thereof to one vote on each matter to be considered at
the Annual Meeting. The presence at the Annual Meeting, in person or by
proxy, of a majority of the issued and outstanding shares of Common Stock
entitled to vote will constitute a quorum. All abstentions and broker
non-votes will be counted as shares that are present and entitled to vote
for purposes of determining the presence of a quorum at the Annual Meeting.
The election of Directors of the Company will require the affirmative
vote of a plurality of the votes cast on the proposal. In tabulating the
vote, votes which are withheld with respect to a nominee and broker
non-votes will be disregarded and will have no effect on the outcome of
such vote.
Approval of each of the proposals to approve the grants of stock
options to Albert J. Dunlap, Russell A. Kersh and David C. Fannin contained
in their respective Employment Agreements with the Company will require the
affirmative vote of the holders of a majority of the votes cast on each
such proposal, provided that the total number of votes cast on each such
proposal represents over 50% of the number of votes entitled to be cast on
such proposal. In determining whether each proposal has received the
requisite number of affirmative votes, abstentions and broker non-votes
will be disregarded and will have no effect on the outcome of the vote.
Approval of the proposal to amend the Company's Restated Certificate
of Incorporation to increase the total number of authorized shares of
Common Stock to 500,000,000 from 200,000,000 will require the affirmative
vote of the holders of a majority of the outstanding shares of Common
Stock. In determining whether the proposal has received the requisite
number of affirmative votes, abstentions and broker non-votes will have the
same effect as a vote against the proposal.
Approval of the proposal to amend the Amended and Restated Sunbeam
Corporation Stock Option Plan (the "Option Plan") to increase the number of
shares of Common Stock with respect to which awards may be granted to
16,500,000 shares from 11,500,000 shares will require the affirmative vote
of the holders of a majority of the votes cast on the proposal, provided
that the total number of votes cast on such proposal represents over 50% of
the number of votes entitled to be cast on such proposal. In determining
whether the proposal has received the requisite number of affirmative
votes, abstentions and broker non-votes will be disregarded and will have
no effect on the outcome of the vote.
If the accompanying proxy card is properly signed and returned to the
Company, the shares of Common Stock represented thereby will be voted as
specified therein. If no specification is made, the shares will be voted in
accordance with the recommendations of the Board of Directors. The proxy
may, nevertheless, be revoked prior to its exercise by delivering written
notice of revocation to the Secretary of the Company, by executing a later
dated proxy or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not in itself constitute a revocation
of a proxy.
PROPOSAL 1 -- TO ELECT THE FOLLOWING SEVEN (7) DIRECTORS
OF THE COMPANY FOR A TERM OF ONE YEAR: ALBERT J. DUNLAP,
CHARLES M. ELSON, RUSSELL A. KERSH, HOWARD G. KRISTOL,
PETER A. LANGERMAN, WILLIAM T. RUTTER AND FAITH WHITTLESEY
The Company's By-Laws provide that the Board of Directors will
consist of not less than three nor more than twelve persons as fixed from
time to time by a vote of a majority of the entire Board of Directors. At
its meeting held on February 3, 1998, the Board of Directors established
the number of Directors of the Company for the upcoming year at seven. At
the Annual Meeting, Directors of the Company will be elected to serve one
year terms expiring at the 1999 Annual Meeting or until their successors
are elected and have been qualified. The Board of Directors has no reason
to believe that any of the nominees will not serve if elected, but if any
of them should become unavailable to serve as a Director of the Company,
and if the Board of Directors designates a substitute nominee, the persons
named as proxies will vote for the substitute nominee designated by the
Board of Directors.
The names of the nominees, their principal occupations and the year
in which each Director of the Company initially joined the Board of
Directors are set forth below.
ALBERT J. DUNLAP, age 60, has been Chairman and Chief Executive
Officer of the Company since July 18, 1996. From April 1994 to December
1995, he was Chairman and Chief Executive Officer of Scott Paper Company.
From 1991 to 1993, Mr. Dunlap was the Managing Director and Chief Executive
Officer of Consolidated Press Holdings Limited (an Australian media,
chemicals and agricultural operation).
CHARLES M. ELSON, age 38, has been a Director of the Company since
his appointment to the Board of Directors on September 25, 1996. Mr. Elson
has been a Professor of Law at Stetson University College of Law since 1990
and serves as Of Counsel to the law firm of Holland & Knight (since May
1995). He is also a Member of the American Law Institute and the Advisory
Council and Commission on Director Compensation and Director
Professionalism of the National Association of Corporate Directors. Mr.
Elson is Trustee of Talledega College and a Salvatori Fellow of the
Heritage Foundation. Mr. Elson has served as a Director of Circon
Corporation (a medical manufacturer) since October 1997.
RUSSELL A. KERSH, age 44, has been Vice Chairman and Chief Financial
Officer of the Company since February 1, 1998, and has been a Director of
the Company since his appointment on August 6, 1996. He served as Executive
Vice President, Finance and Administration of the Company from July 22,
1996 to January 1998. From June 1994 to December 1995 he was Executive Vice
President, Finance and Administration of Scott Paper Company. Mr. Kersh
served as Chief Operating Officer of Adidas America from January 1993 to
May 1994.
HOWARD G. KRISTOL, age 60, has been a Director of the Company since
his appointment on August 6, 1996. Mr. Kristol has been a partner in the
law firm of Reboul, MacMurray, Hewitt, Maynard & Kristol since 1976.
PETER A. LANGERMAN, age 42, has been a Director of the Company since
1990 and served as the Chairman of the Board of Directors from May 22, 1996
until July 18, 1996. Since November 1996, Mr. Langerman has been Senior
Vice President and Chief Operating Officer of Franklin Mutual Advisers,
Inc., a registered investment advisor and a wholly owned subsidiary of
Franklin Resources, Inc., a diversified financial services organization.
Mr. Langerman was a Senior Vice President of Heine Securities Corporation,
an investment advisory service company, from 1986 to November 1996, and a
Vice President of Mutual Series Fund from 1988 until its acquisition by
Franklin Resources, Inc. in 1996. He has been a Director of Franklin Mutual
Series Fund, Inc. (previously Mutual Series Fund Inc.) since 1988 and a
Director of Metallurg Inc. (a metals and related materials manufacturer)
since 1997.
WILLIAM T. RUTTER, age 67, has been a Director of the Company since
his appointment on April 8, 1997. Mr. Rutter is Senior Vice
President/Managing Director, Private Banking of First Union National Bank
of Florida, a position he has held since 1986.
FAITH WHITTLESEY, age 59, has been a Director of the Company since
her appointment in December 1996. Mrs. Whittlesey has served as the Chief
Executive Officer of the American Swiss Foundation, a charitable and
educational foundation, since 1991. She is a member of the Board of
Directors of Valassis Communications, Inc. (a publishing and printing
company).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"FOR" THE ELECTION OF SUCH NOMINEES
AS DIRECTORS OF THE COMPANY
DIRECTORS' COMPENSATION
Pursuant to the Option Plan, each Director of the Company who is not
an employee of the Company or an affiliate of the Funds Group (as defined
herein under the caption "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS"), the Company's largest stockholder ("Outside Directors"), is
automatically granted 1,500 shares of restricted stock upon his or her
initial election or appointment to the Board of Directors and upon each
subsequent re-election to the Board of Directors (prorated in case of an
election or appointment at any time other than at an annual meeting of
stockholders). Such restricted stock vests immediately upon the Director's
acceptance of his or her election or appointment.
Outside Directors do not receive any other fees, but are reimbursed
for all ordinary and necessary out-of-pocket expenses incurred by them in
attending meetings of the Board of Directors or its Committees.
Each Outside Director is expected to acquire with his or her own
funds (and may purchase from the Company at fair market value on the date
of purchase), and thereafter to maintain ownership of, a minimum of 2,000
shares of Common Stock. Such purchase is expected to be made as soon as
practicable following each Outside Director's first election or
appointment. In compliance with this requirement, each of the Company's
Outside Directors, Messrs. Elson, Kristol and Rutter and Ms. Whittlesey,
has purchased 6,000, 6,000, 2,000 and 2,390 shares of Common Stock,
respectively.
COMMITTEES OF THE BOARD OF DIRECTORS; BOARD OF DIRECTORS AND COMMITTEE
MEETINGS
During 1997, the Board of Directors held five meetings. As permitted
by the By-Laws of the Company, the Company has several standing committees,
including an Audit Committee, an Executive Committee and a Compensation
Committee. The Executive Committee also serves as the Nominating Committee.
The Executive Committee of the Board of Directors currently consists
of Messrs. Dunlap (Chairman), Langerman, Kristol and Kersh. The Executive
Committee has the authority to act in place of the Board of Directors on
all matters which would otherwise come before the Board of Directors,
except for such matters which are required by law or by the Company's
Restated Certificate of Incorporation or By-Laws to be acted upon
exclusively by the Board of Directors. In 1997, the Executive Committee met
twice (once in its capacity as the Nominating Committee) and acted by
unanimous written consent four times. The Executive Committee, in its
capacity as the Nominating Committee, will not consider recommendations by
stockholders for nominees for election as Directors of the Company, except
for recommendations made by the Funds Group. See "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS."
The Audit Committee of the Board of Directors currently consists of
Messrs. Rutter (Chairman), Elson and Kristol. The Audit Committee's primary
responsibilities are to review the Company's financial statements and
accounting controls, to recommend the appointment of the Company's
independent auditors and to review the overall scope of the audit. The
Audit Committee met twice during 1997.
Compensation issues are the responsibility of the Compensation
Committee, consisting of Directors Langerman (Chairman), Elson and
Whittlesey. The Compensation Committee is responsible for establishing the
general compensation policies of the Company and specific compensation
levels for its executive officers and administering the Option Plan and
incentive compensation plan. In 1997, the Compensation Committee met three
times and acted by unanimous written consent once.
Each of the Company's incumbent Directors attended (either in person
or by telephone) at least 75% of the aggregate number of meetings of the
Board of Directors held during 1997 and at least 75% of the aggregate
number of meetings held during that time period by the respective
Committee(s) of which such Director was a member.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 30, 1998, with
respect to beneficial ownership of the Company's Common Stock by all
persons known by the Company to be the record or beneficial owner of more
than 5% of the outstanding shares of Common Stock. Except as otherwise
noted, all beneficial owners listed below have sole voting and investment
power with respect to the shares owned by them.
AMOUNT AND NATURE OF PERCENTAGE
NAME BENEFICIAL OWNERSHIP OF COMMON STOCK
---- -------------------- ---------------
Franklin Mutual Series Fund Inc., 17,541,398(1) 17.4%
including:
Mutual Shares Fund 11,260,174(1) 11.2%
Mutual Qualified Fund 4,800,554(1) 4.8%
Franklin Mutual Advisers, Inc. 17,541,398(1) 17.4%
Franklin Resources, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr. 17,541,398(1) 17.4%
AXA Assurances I.A.R.D.
Mutuelle 8,598,784(2) 8.5%
including:
AXA Assurances Vie
Mutuelle,
Alpha Assurances Vie
Mutuelle,
AXA Courtage Assurance
Mutuelle,
AXA-UAP and
The Equitable Companies
Incorporated
Albert J. Dunlap 5,241,564(3) 5.0%
Ronald O. Perelman 14,099,749(4) 14.0%
(1) Information reflected in this table and the notes thereto with respect
to Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson,
Jr., Franklin Mutual Advisers, Inc., and Franklin Mutual Series Fund
Inc., Mutual Shares Fund and Mutual Qualified Fund (collectively the
"Funds Group") is derived from the Schedule 13D, dated November 1,
1996, filed by them. The address of the Franklin Mutual Series Fund
Inc. and of Franklin Mutual Advisers, Inc. is 51 John F. Kennedy
Parkway, Short Hills, New Jersey 07078. The address of Franklin
Resources, Inc. and each of Charles B. Johnson and Rupert H. Johnson,
Jr. is 777 Mariners Island Blvd., San Mateo, California 94404. Shares
of Common Stock beneficially owned by Franklin Mutual Series Fund Inc.
include shares owned by Mutual Shares Fund and Mutual Qualified Fund,
series of portfolios of Franklin Mutual Series Fund Inc. The aggregate
number of shares owned by all of the series of Franklin Mutual Series
Fund Inc. is 17,541,398. These same shares are also listed as being
beneficially owned by (i) Franklin Mutual Advisers, Inc., the
investment manager of Franklin Mutual Series Fund Inc., (ii) Franklin
Resources, Inc., the sole stockholder of Franklin Mutual Advisers,
Inc. and (iii) Charles B. Johnson and Rupert H. Johnson, Jr., the
principal stockholders of Franklin Resources, Inc., each of whom owns
in excess of 10% of that corporation's common stock. Franklin Mutual
Advisers, Inc. has sole voting and dispositive power over the listed
shares of Common Stock. Franklin Mutual Advisers, Inc., Franklin
Resources, Inc., Charles B. Johnson and Rupert H. Johnson, Jr. each
disclaim beneficial ownership of these shares.
(2) Information reflected in this table and the notes thereto with respect
to AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle,
Alpha Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle
(collectively, the "Mutuelles AXA Group"), AXA-UAP ("AXA-UAP") and the
Equitable Companies Incorporated ("Equitable") is derived from the
Schedule 13G/A, dated February 17, 1998, filed jointly by the
Mutuelles AXA Group, AXA-UAP and Equitable. In the aggregate,
Mutuelles AXA Group, AXA-UAP and Equitable own 8,598,784 shares of
Common Stock. The members of the Mutuelles AXA Group, AXA-UAP and
Equitable each have sole voting power over 5,670,794 of such shares,
shared voting power over 1,373,600 such shares, sole dispositive power
over 8,591,384 such shares and shared dispositive power over 7,400
such shares. The address of AXA Assurances I.A.R.D. Mutuelle and AXA
Assurances Vie Mutuelle is 21 rue de Chateaudun, 75009 Paris, France.
The address of Alpha Assurances Vie Mutuelle is 100-101 Terrasse
Boieldieu, 92042 Paris La Defense, France. The address of AXA Courtage
Assurance Mutuelle is 26, rue Louis le Grand, 75002 Paris, France. The
address of AXA-UAP is 23, avenue Matignon, 75008 Paris, France. The
address of The Equitable Companies, Inc. is 1290 Avenue of the
Americas, New York, N.Y. 10104.
(3) See "SECURITY OWNERSHIP OF MANAGEMENT."
(4) Represents shares of Common Stock received by Coleman (Parent)
Holdings Inc. ("Parent Holdings") in connection with the merger of
Laser Acquisition Corp., a wholly owned subsidiary of the Company
("LAC"), with and into CLN Holdings Inc., a wholly owned subsidiary of
Parent Holdings ("CLN Holdings"), pursuant to the Agreement and Plan
of Merger, dated as of February 27, 1998, among the Company, LAC, CLN
Holdings and Parent Holdings. The address of Parent Holdings is 2111
E. 37th Street North, Wichita, Kansas 67219. Ronald O. Perelman is the
indirect beneficial owner of all of the outstanding capital stock of
Parent Holdings. Accordingly, Mr. Perelman may be deemed to be the
beneficial owner of all of the shares of Common Stock owned by Parent
Holdings. Mr. Perelman's address is 35 E. 62nd Street, New York, New
York 10021.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership, reported to
the Company as of March 30, 1998, of Common Stock, including shares as to
which a right to acquire ownership exists, of: (1) each Director of the
Company; (2) each of the Named Executives, as defined herein under the
caption "EXECUTIVE COMPENSATION"; and (3) the Directors and current
executive officers of the Company as a group.
AMOUNT AND NATURE OF PERCENTAGE OF
NAME BENEFICIAL OWNERSHIP(1)(2) COMMON STOCK (2)
---- -------------------------- ----------------
DIRECTORS
Albert J. Dunlap 5,241,564 (7) 5.0%
Charles M. Elson 9,000 (4) *
Russell A. Kersh 1,045,400 (3) 1.0%
Howard G. Kristol 9,000 (4)(6) *
Peter A. Langerman 0 (5) 0
William T. Rutter 3,500 (4) *
Faith Whittlesey 5,390 (4) *
NAMED EXECUTIVE OFFICERS
David C. Fannin 371,433 (3) *
Donald R. Uzzi 116,666 *
Lee Griffith 60,543 *
All Directors and
current executive officers 6,801,953 (8) 6.4%
as a group (9 persons)
* Less than one percent.
(1) All Directors and Named Executive Officers have the sole power to
vote and to dispose of the shares of Common Stock listed above except
as follows: (i) Mr. Dunlap holds 1,491,564 of the listed shares
jointly with his wife; (ii) 151,600 shares listed as owned by Mr.
Kersh are held by the Russell A. Kersh Irrevocable Trust as to which
Mr. Kersh is the sole beneficiary (the power to vote and to dispose
of such shares is held by Howard G. Kristol, Trustee of such Trust),
and Mr. Kersh holds 5,000 of the listed shares jointly with his
spouse; (iii) Mr. Fannin holds 20,433 shares of stock jointly with
his wife; and (iv) 5,000 of the shares listed as owned by Mr.
Griffith are owned by Mr. Griffith's wife and minor children.
(2) Includes shares which Directors and Named Executives have the right
to acquire under options which are currently exercisable (including
options which may be exercised within the next sixty days). Includes
3,750,000, 781,250, 328,500, 116,666 and 50,000 shares which may be
acquired by Messrs. Dunlap, Kersh, Fannin, Uzzi and Griffith,
respectively, upon the exercise of options which are currently
exercisable. Options which are not currently exercisable and will not
become exercisable within sixty days are not included in the table.
(3) Includes 112,500 and 22,500 shares of restricted stock held by
Messrs. Kersh and Fannin, respectively.
(4) Includes shares of restricted stock granted to each of Directors
Elson, Kristol, Rutter and Whittlesey upon their respective
elections, appointments and subsequent reelections to the
Board of Directors, all of which shares were immediately vested.
See "Directors' Compensation" above.
(5) Does not include shares owned by the Funds Group as to which Mr.
Langerman disclaims beneficial ownership. See "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS."
(6) Does not include shares owned by the Russell A. Kersh Irrevocable
Trust (of which Mr. Kristol serves as Trustee) as to which Mr.
Kristol disclaims beneficial ownership.
(7) See "EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS" and "REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION -- Compensation of the Chief Executive
Officer."
(8) Includes shares which all current executive officers and Directors of
the Company have the right to acquire under options which are
currently exercisable (including options which may be exercised
within the next sixty days) and shares which are subject to
restrictions.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for the fiscal years ended December
28, 1997, December 29, 1996 and December 31, 1995, the compensation for
services rendered to the Company in all capacities of those persons who,
during 1997, (i) served as chief executive officer (the "CEO") of the
Company and (ii) were the four most highly compensated executive officers
of the Company, other than the CEO, as of the Company's fiscal year end
(collectively with the CEO, the "Named Executives"). Each of Messrs.
Dunlap, Kersh, Uzzi and Griffith joined the Company during 1996. As of
February 1, 1998, the Company entered into new three-year Employment
Agreements with each of Messrs. Dunlap, Kersh and Fannin. See "EMPLOYMENT
CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS." Mr. Uzzi's position as an officer and an employee of the
Company was terminated effective April 1, 1998. On April 3, 1998, Mr.
Griffith was named President of the Company's Household Products Division.
Long Term Compensation
Annual Compensation Awards
-------------------------------------- -------------------------
Securities
Underlying
Name and Other Annual Restricted Options/ All Other
principal position Year Salary ($) Bonus ($) Compensation Stock($)(1) SARs Awards Compensation($)(2)
- ------------------ ---- ---------- --------- ------------ ----------- ------------ ------------------
Albert J. Dunlap, 1997 1,115,385(3) 0 282,888(4) 0 0 4,750
CEO and Chairman 1996 507,054(3) 0 63,850(4) 12,500,000 2,500,000 4,750
Russell Kersh, 1997 425,000 0 35,681(6) 0 0 4,750
Vice Chairman and 1996 190,384 125,000(5) 240,598(6) 1,812,500 500,000 2,098
Chief Financial
Officer
David C. Fannin, 1997 313,233 0 4,730(7) 0 0 4,750
EVP, General 1996 272,112 0 0 191,250 75,000 4,749
Counsel 1995 222,917 51,271 0 0 65,000 13,536
Donald Uzzi, 1997 400,000 0 54,787(8) 0 100,000 4,750
EVP,Consumer 1996 94,904 0 100,456(8) 0 250,000 4,750
Products
Worldwide
Lee Griffith, 1997 251,353 0 10,008(9) 0 0 4,687
Vice President 1996 82,372 0 50,000(9) 0 150,000 4,750
Sales
(1) Represents the value of restricted stock awards to Messrs. Dunlap,
Kersh and Fannin of 1,000,000, 100,000 and 10,000 shares, respectively
(based on the closing market price of $ 12 1/2, $18 1/8 and $19 1/8
per share as of the respective grant dates of July 18, 22 and 29,
1996). With respect to Mr. Dunlap's shares of restricted stock,
one-third of such shares vested as of the grant date and an additional
one-third vested on the first anniversary of the grant date; of the
remaining 333,334 shares of restricted stock, 133,334 were cancelled
as of February 20, 1998 and the remaining 200,000 shares of restricted
stock vested as of February 20, 1998. The shares of restricted stock
held by Messrs. Kersh and Fannin have vested with respect to one-third
of the shares of restricted stock on the first anniversary of the
grant date; of the remaining shares of restricted stock, 40% were
cancelled as of February 20, 1998 (i.e., 26,664 shares and 2,666
shares, respectively) and the remaining shares of restricted stock
vested as of February 20, 1998. At December 26, 1997, the value of the
shares of restricted stock held by each of Messrs. Dunlap, Kersh and
Fannin was $14,187,528, $2,837,514, and $283,764, respectively (based
on the market price of $42 9/16 per share on December 26, 1997).
Dividends are paid on all such shares of restricted stock.
(2) The Company adopted an Executive Benefit Replacement Plan (the
"Replacement Plan") in 1994 to restore the amount of benefits payable
to certain highly compensated employees of the Company who would
otherwise be subject to certain limitations on the amount of benefits
payable under the Company's 401(k) Savings and Profit Sharing Plan
(the "401(k) Plan"). Amounts of All Other Compensation represent the
amounts accrued for all Named Executives in 1997 under the Company's
Executive Benefit Replacement Plan (including the Company's profit
sharing allocation).
(3) Includes $115,385 and $51,923 paid in 1997 and 1996, respectively, in
lieu of vacation in accordance with Mr. Dunlap's Employment Agreement.
(4) Includes $14,355 and $17,250 for the value of a Company provided
automobile in 1997 and 1996, respectively, $115,665 and $27,345 as
reimbursement for taxes paid on the value of such automobile and other
Company provided benefits (including reimbursement for financial
planning services, health and dental care premiums and reimbursement
for membership in a country club) in 1997 and 1996, respectively, and
$41,348 as reimbursement for financial planning services in 1997.
(5) One time bonus payable pursuant to Mr. Kersh's prior Employment
Agreement.
(6) For 1997, includes $14,628 as reimbursement for taxes paid on the
value of Company provided benefits and other Company provided
benefits, including $18,921 reimbursement for financial planning
services. For 1996, includes a discount on the purchase of stock from
the Company in the amount of $239,800.
(7) For 1997, includes $1,922 as reimbursement for taxes paid on the value
of Company provided benefits, as well as other Company provided
benefits.
(8) For 1997, includes $50,000 with respect to sale of Mr. Uzzi's home and
$3,419 as reimbursement (on a grossed-up basis) for tax preparation
services, as well as other Company provided benefits. For 1996,
includes $100,000 paid in a lump sum in lieu of reimbursement for
moving expenses, as well as other Company provided benefits.
(9) For 1997, includes $4,108 as reimbursement for taxes paid on the value
of Company provided benefits and $5,900 reimbursement for financial
planning services, as well as other Company provided benefits. For
1996, represents reimbursement of relocation services.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options to
purchase shares of Common Stock granted to Donald R. Uzzi during 1997
pursuant to the Option Plan. No other Named Executive received a grant of
options in 1997.
Potential Realizable
% of Total Value at Assumed Annual
Number of Options/ Rates of Stock Price
Securities SARs Appreciation for Option
Underlying Granted to Term(2)
Options/ Employees Exercise or
SARs in Fiscal Base Price Expiration
Name Granted Year ($/Sh) Date 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------
Donald R. Uzzi 100,000(1) 3.22% $25.54 1/1/2007 1,606,197 4,070,418
(1) These options had a term of ten years and were scheduled to become
exercisable over three years in equal annual increments commencing on
the first anniversary of the grant date. In accordance with the terms
of the Option Plan, upon Mr. Uzzi's termination as an officer and an
employee of the Company effective April 1, 1998, all then unvested
stock options held by Mr. Uzzi were forfeited and expired.
(2) The dollar amounts are the result of calculations at the 5% and 10%
growth rates set by the Securities and Exchange Commission; the rates
are not intended to be a forecast of future stock price appreciation. A
zero stock price growth will result in zero gain.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth information with respect to option
exercises occurring during 1997 and the number of options held by the Named
Executives at the Company's fiscal year end.
No. of Securities Underlying Value of Unexercised
Unexercised Options Held at In-the-Money Options at
Shares December 28, 1997 December 28, 1997(1)
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable($) Unexercisable($)
- ------------------------------------------------------------------------------------------------------------------
Albert J. Dunlap, 0 0 1,666,667 833,333 50,520,813 26,260,436
CEO
Russell A. Kersh 0 0 166,666 333,334 4,717,064 9,434,184
David C. Fannin 0 0 87,000 113,000 2,169,618 2,960,683
Donald R. Uzzi 0 0 83,333 266,667(2) 1,615,203 4,932,672
Lee Griffith 0 0 50,000 100,000 1,101,625 2,203,250
(1) Based on the difference between the exercise price of the options and
the closing price on the New York Stock Exchange of the Common Stock
on December 26, 1997 ($42 9/16).
(2) Pursuant to the terms of the Option Plan, upon Mr. Uzzi's termination
as an officer and an employee of the Company effective April 1, 1998,
233,334 of these options were forfeited and expired.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENT WITH MR. DUNLAP
As of February 1, 1998, the Company entered into an Employment
Agreement with Mr. Dunlap (the "Dunlap Agreement") pursuant to which the
Company has agreed to continue to employ Mr. Dunlap as Chairman of the
Board of Directors and Chief Executive Officer, and Mr. Dunlap has agreed
to serve in such capacities, for a period of three years ending January 31,
2001, and for successive one-year renewal periods unless advance notice of
termination is given by either party by no later than August 1 of the
immediately preceding year. The Dunlap Agreement is not renewable beyond
January 31, 2003. This Dunlap Agreement replaces and supersedes Mr.
Dunlap's prior Employment Agreement.
Compensation
Under the Dunlap Agreement, Mr. Dunlap will be paid a base salary at
an annual rate of $2,000,000. The Company may increase Mr. Dunlap's base
salary, but may not reduce it after any such increase. Mr. Dunlap is
eligible to participate in the other benefit plans available generally to
employees or other senior executives of the Company. However, he is not
eligible to participate in any incentive plan of the Company. The Company
also provides Mr. Dunlap with various perquisites on a grossed-up basis.
Prior Equity Grants
Under the Dunlap Agreement, all of Mr. Dunlap's then outstanding
options, which were granted under Mr. Dunlap's prior Employment Agreement,
vested as of February 20, 1998; 40% of Mr. Dunlap's shares of restricted
stock were cancelled as of such date, and all of Mr. Dunlap's remaining
shares of restricted stock vested as of such date. The Company will
reimburse Mr. Dunlap on a grossed-up basis with respect to any income tax
assessed in connection with the vesting of such shares of restricted stock.
Certain Equity Grants
Mr. Dunlap received a grant as of February 1, 1998 of 300,000 shares
of Common Stock. Mr. Dunlap also received a grant effective as of February
1, 1998 of options to purchase 3,750,000 shares of Common Stock at a price
of $36.85 per share (the "Dunlap Options"), which grant is subject to
approval of the Company's stockholders at the Annual Meeting. See "PROPOSAL
2." The term of the Dunlap Options is ten years, and they will vest with
respect to one-third of the shares subject thereto on the grant date and an
additional one-third on each of the first and second anniversaries of the
grant date. Upon the occurrence of a Change in Control of the Company (as
defined below), the Dunlap Options will vest in full.
Termination and Change in Control Provisions
The Company may terminate Mr. Dunlap's employment under the Dunlap
Agreement at any time, or due to his disability, or for Cause. As defined
in the Dunlap Agreement, "Cause" means (i) willful failure substantially to
perform Mr. Dunlap's duties under the Dunlap Agreement, except if such
failure results from disability, or (ii) his conviction for a felony (or a
plea of guilty or nolo contendere thereto). Mr. Dunlap may terminate his
employment under the Dunlap Agreement at any time. In addition, he may
terminate his employment for Good Reason by notifying the Company within 90
days after any of the following events occurring without his consent,
unless remedied by the Company within 30 days after receiving such notice:
(i) any change in Mr. Dunlap's title as Chairman of the Board of
Directors and Chief Executive Officer or his removal from, or the failure
to re-elect him to, such positions;
(ii) any assignment of duties materially inconsistent with his
positions or any material limitation of his powers as contemplated by the
Dunlap Agreement;
(iii) any requirement that Mr. Dunlap be based without his consent
anywhere other than at the Company's principal executive office in Palm
Beach or Broward County, Florida;
(iv) any reduction in Mr. Dunlap's base salary;
(v) any failure to continue in effect any fringe benefit plan in
effect at the date of the Dunlap Agreement or to provide Mr. Dunlap
equivalent benefits;
(vi) the failure of the Company to maintain Mr. Dunlap's status as a
Director of the Company while he serves as Chief Executive Officer;
(vii) the failure of the Company to have three individuals (or their
successors) designated by Mr. Dunlap elected and reelected as Directors of
the Company;
(viii) a Change in Control of the Company; or
(ix) any other material breach of the agreement by the Company.
As defined in the Dunlap Agreement, a "Change in Control" means 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 (the "Act"), becomes a
"beneficial owner," as such term is used in Rule 13d-3 promulgated under
that Act, of 25% or more of the voting stock of the Company;
(ii) the majority of the Board of Directors consists of individuals
other than Incumbent Directors (which term means the members of the Board
of Directors on the date of the Dunlap Agreement and any individuals
designated by Mr. Dunlap; provided that any person becoming a Director of
the Company subsequent to such date whose election or nomination for
election was supported by two-thirds of the Directors of the Company who
then comprised the Incumbent Directors is considered to be an Incumbent
Director);
(iii) the Company, without Mr. Dunlap'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 persons who were stockholders 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).
The Dunlap Agreement provides that, if the Company terminates Mr.
Dunlap's employment other than for Cause and not due to his disability, or
if he terminates his employment for Good Reason, (i) he will receive as
liquidated damages a lump sum payment in an amount equal to the base salary
that would have been payable through the period ending January 31, 2001, or
any then applicable renewal period, (ii) the Dunlap Options will become
fully vested, and he will be entitled to exercise the Dunlap Options (as
well as previously granted options) for the balance of their original
ten-year term, and (iii) he will be entitled to continue participating in
the employee benefit plans in which he had been entitled to participate
before termination, for three years after termination, or to receive
substantially equivalent benefits.
The Dunlap Agreement provides that, if the Company terminates Mr.
Dunlap's employment for Cause or if he terminates his employment other than
for Good Reason, all obligations (other than accrued obligations) of the
Company will cease, except that Mr. Dunlap will be able to exercise the
Dunlap Options (as well as previously granted options) which are
exercisable on the date of termination within 90 days, if the termination
is for Cause, and within one year, if it is by Mr. Dunlap without Good
Reason.
The Dunlap Agreement provides that, if Mr. Dunlap's employment is
terminated due to his death, his estate or legal representative will be
entitled to exercise within one year after the date of death the Dunlap
Options (as well as previously granted options) which are then exercisable
or which would have become exercisable within one year after the date of
death. If his employment is terminated due to disability, Mr. Dunlap will
be entitled to exercise within three years all Dunlap Options (as well as
previously granted options) which are then exercisable or which would have
become exercisable within one year after the date of termination.
In addition, the Dunlap Agreement provides that Mr. Dunlap will be
entitled to receive a gross-up with respect to any excise tax applicable
under the Internal Revenue Code of 1986, as amended (the "Code"), to
"excess parachute payments."
EMPLOYMENT AGREEMENTS WITH MESSRS. KERSH AND FANNIN
The Company entered into Employment Agreements with each of Messrs.
Kersh and Fannin as of February 1, 1998. Messrs. Kersh and Fannin are
referred to herein as the "Executives." The Employment Agreements with
Messrs. Kersh and Fannin have a term ending on January 31, 2001. The
Employment Agreements with Messrs. Kersh and Fannin replace and supersede
their respective prior Employment Agreements with the Company.
Compensation
Under their respective Employment Agreements, Messrs. Kersh and
Fannin will each be paid a base salary at annual rates of $875,000 and
$595,000, respectively. These base salaries will not be increased during
the terms of the Agreements. The Executives will also be eligible to
participate in those benefit plans available generally to employees or
other senior executives of the Company. However, the Executives will not be
eligible to participate in any cash incentive (i.e., bonus) plan of the
Company.
Prior Equity Grants
Under their respective Employment Agreements, all of Mr. Kersh's then
outstanding options, which were granted under Mr. Kersh's prior Employment
Agreement, and all of Mr. Fannin's then outstanding options vested as of
February 20, 1998; 40% of each of Mr. Kersh's and Mr. Fannin's shares of
restricted stock were cancelled as of such date, and all of Mr. Kersh's and
Mr. Fannin's remaining shares of restricted stock vested as of such date.
The Company will reimburse Messrs. Kersh and Fannin on a grossed-up basis
with respect to any income tax assessed in connection with the vesting of
such shares of restricted stock.
Certain Equity Grants
Under their respective Employment Agreements, as of February 1,
1998, Messrs. Kersh and Fannin each received a grant of 150,000 and 30,000
shares of restricted stock (the "Executive Restricted Shares"),
respectively. Such Executive Restricted Shares will vest in four equal
installments on each of February 20, 1998 and the first, second and third
anniversaries of February 1, 1998. Messrs. Kersh and Fannin also received
grants, effective as of February 1, 1998, of options to purchase 1,125,000
and 750,000 shares of Common Stock, respectively, at a price of $36.85 per
share, subject to approval by the Company's stockholders at the Annual
Meeting. These options will vest in four equal installments on the grant
date and the first, second and third anniversaries of February 1, 1998. See
"PROPOSAL 3" and "PROPOSAL 4."
Termination and Change in Control Provisions
The Company may terminate an Executive's employment under his
Employment Agreement at any time, or due to the Executive's disability, or
for Cause (as defined above). Each Executive may terminate his employment
under his respective Employment Agreement at any time. In addition, he may
terminate his employment for Good Reason (as defined above) by notifying
the Company within 90 days after any of the following events occurring
without his consent, unless remedied by the Company within 30 days after
receiving such notice:
(i) any assignment of duties materially inconsistent with his
positions or any material limitation of his powers as contemplated by such
Executive's Employment Agreement;
(ii) any removal of the Executive from, or any failure to reelect the
Executive to, the executive officer position specified in such Executive's
Employment Agreement; or
(iii) any other material breach of such Executive's Employment
Agreement by the Company.
Each Executive's Employment Agreement provides that, if the Company
terminates the Executive's employment other than for Cause and not due to
his disability, or if the Executive terminates his employment for Good
Reason or following a Change in Control (as defined above), (i) such
Executive will receive as liquidated damages a lump sum payment in an
amount equal to the base salary that would have been payable to him through
the end of the employment term, (ii) the options (and Executive Restricted
Shares, in the case of Messrs. Kersh and Fannin) granted to such Executive
will become fully vested, and the Executive will be entitled to exercise
his options (including previously granted options) for the balance of their
original ten-year term, and (iii) the Executive will be entitled to
continue participating in the employee benefit plans in which he had been
entitled to participate before termination, through the end of the
employment term, or to receive substantially equivalent benefits.
Each Executive's Employment Agreement provides that if the Company
terminates the Executive's employment for Cause or if the Executive
terminates his employment other than for Good Reason or following a Change
in Control, all obligations (other than accrued obligations) of the Company
will cease, except that such Executive will be able to exercise any options
(including previously granted options) granted to him which are exercisable
on the date of termination or within 90 days thereof, if the termination is
for Cause, and within one year thereof, if the termination is by the
Executive other than for Good Reason or following a Change in Control.
Each Executive's Employment Agreement provides that, if such
Executive's employment is terminated due to his death, his estate or legal
representative will be entitled to exercise within one year after the date
of death any options granted to such Executive which are then exercisable
or which would have become exercisable within one year after the date of
death and, further, the portion of then unvested Executive Restricted
Shares, if any, held by such Executive equal to the total number of such
unvested Executive Restricted Shares multiplied by a fraction, the
numerator of which is 36 minus the number of months remaining in the three
years of the Executive's employment term and the denominator of which is
36, will become vested as of the date of death. If an Executive's
employment is terminated due to disability, he will be entitled to exercise
within three years all options granted to him (including previously granted
options) which are then exercisable or which would have become exercisable
within one year after the date of termination and a portion of the
Executive Restricted Shares, if any, held by such Executive, determined in
accordance with the procedure described in the immediately preceding
sentence, will become vested as of the Executive's date of termination.
In addition, each Executive's Employment Agreement provides that the
Executive will be entitled to receive a gross-up with respect to any excise
tax applicable under the Code to "excess parachute payments."
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
The Company's executive compensation policy and administration of its
various compensation plans are the responsibility of the Compensation
Committee of the Board of Directors. The Compensation Committee is
responsible for establishing the general compensation policies of the
Company and administering the Option Plan. The Compensation Committee
reviews and/or approves specific compensation levels for the Company's
senior officers and other key operating and corporate management personnel
(collectively the "executive officers" or singularly an "executive
officer").
EXECUTIVE OFFICER COMPENSATION
Philosophy
It is the philosophy of the Company that executive compensation be
directly linked to the interests of the Company's stockholders and
therefore to financial objectives that the Company believes are primary
determinants of long-term stockholder value. The Compensation Committee's
objectives in administering the Company's executive compensation plans are
to ensure that pay levels and incentive compensation are: (1) properly
linked to stockholder value, (2) are competitive in attracting, retaining
and motivating the best personnel and (3) are simple in design and easily
understood. The compensation plan for the Company's executive officers
emphasizes the importance of stock options as providing a direct
correlation between executive compensation and stockholder interests. In
addition to an emphasis on stock options, the Company pays competitive base
salaries, bonuses linked directly to overall Company performance and
periodic additional grants of stock options pursuant to the Option Plan.
The stock option element of compensation, together with the Company's stock
purchase plan (described below) and its use of Common Stock as matching
contributions and profit sharing contributions to the 401(k) Plan are all
intended to encourage ownership and retention of Company stock by all
employees, and especially executive officers. This provides executive
officers and other employees with the opportunity to build, through the
achievement of financial goals that benefit all stockholders, a meaningful
ownership stake in the Company.
The Company's most senior officers, including the Operating Committee
consisting of Messrs. Dunlap, Kersh and Fannin, are excluded from the
Company's programs of base compensation increases and bonuses. Their sole
incentive beyond base salary is based upon substantial grants of stock
options, ownership of stock and increases in stockholder value. These
persons are heavily dependent upon an increase in the share price of the
Common Stock to realize the potential of their compensation packages.
Financial Criteria
For other officers of the Company, the most substantial motivator
also is increasing stockholder value, as all officers are heavily dependent
upon significant option grants for ultimate realization of their
compensation goals. In addition, however, each officer (other than the
Company's most senior officers, including the Operating Committee, who are
ineligible to participate in the Bonus Plan) also is a participant in the
Sunbeam Bonus Plan (the "Bonus Plan"). Under the Bonus Plan, certain
employees and officers are eligible to receive bonuses based upon two
factors: (1) Company performance as measured by earnings per share ("EPS")
and (2) individual performance against quantifiable measurement criteria
established with each such officer. Company performance must reach targeted
levels or no bonuses will be paid to any officer. If Company performance is
achieved, then individual achievement of measurement criteria will
determine the amount of any bonus payable to an officer for 1998.
Overall, the Company's compensation philosophy de-emphasizes base
salary and increases in base salary, and places a greater emphasis upon
incentive compensation in the form of stock appreciation and incentive
performance bonus compensation. This places a greater percentage of
compensation "at risk" and in line with the Company's stockholders. Base
salaries for the Company's executives, many of whom were hired in 1996
after the employment of Mr. Dunlap, were established based in large part
upon their salaries at prior positions. The Company does not attempt to
match executive compensation to the compensation levels at those companies
which are included in the Company's self-constructed stockholder return
peer group. See "STOCKHOLDER RETURN PERFORMANCE PRESENTATION" for a
description of the Company's stockholder return peer group.
For 1997/98, the Company awarded substantial salary increases only in
connection with changes in responsibility; minor salary increases were made
in a very small number of cases.
The Compensation Committee adopted the Bonus Plan in 1997 in order to
motivate the Company's key employees to increase stockholder wealth by
maximizing earnings per share of the Common Stock, which the Compensation
Committee believes is the key driver in determining share value. In
addition to officers (other than the Company's most senior officers,
including the Operating Committee, who are ineligible to participate in the
Bonus Plan) all salaried employees of the Company are eligible to
participate in the Bonus Plan.
The Bonus Plan's design provides that during each fiscal year, the
Operating Committee of the Company will recommend to the Compensation
Committee a minimum level of performance (measured by EPS of the Common
Stock for such year), below which no Bonus Plan participant shall receive
any bonus. At the minimum level of acceptable Company EPS performance,
Bonus Plan participants will be eligible to receive up to 75% of their
individual bonus target (a percentage of base salary in the case of
management and professional employees and a flat dollar amount in the case
of administrative employees). At another, higher level of EPS performance,
participants will be entitled to receive up to 100% of their individual
bonus target. At even higher levels of EPS performance ("stretch targets"),
participants may receive up to 200% of their individual bonus target. The
Bonus Plan also provides for percentage gradations between these key
milestones, so that a bonus recipient may receive varying percentages of
his or her bonus targets between 75% and 200%.
While the Company must achieve the prescribed EPS performance levels
before any Bonus Plan participant is eligible to receive any bonus, this
does not guarantee that a participant necessarily will receive a bonus. In
order to receive a bonus, a participant must achieve at least four
individual performance goals established with the concurrence of his or her
supervisor. These performance goals are oriented towards quantitative
objectives, such as cost savings or earnings enhancement.
The Compensation Committee believes that this combination of
requiring a minimum overall Company performance, measured by EPS
performance requirements before any bonuses are paid, coupled with
individual goals which are quantitative in nature and calculated to
increase productivity, reduce costs or otherwise enhance profitability of
the Company, assures that the Company's compensation system, especially the
performance bonus program, aligns the interests of the Company's officers
and other employees with the interests of its stockholders.
For the Company's fiscal year ended December 28, 1997, the Company
paid a total of $2,242,615 to employees under the Bonus Plan.
Extension of Options to all Company Employees; Stock Ownership Plan;
401(k) Plan Changes
Since the Company's change in senior management in July 1996, the
Company's compensation philosophy for all employees, not just officers, has
broadened to include greater participation by Company employees at all
levels in the stock option and stock ownership programs of the Company.
Effective January 1, 1997, the Company broadened the Option Plan to provide
for the grant of options to all levels of Company employees, including
factory workers in the Company's U. S. facilities, U.S. clerical personnel
and others who had not previously been participants in the Option Plan.
In addition, on January 1, 1997, the Company instituted a stock
purchase program for all U.S. employees of the Company. This plan permits
employees to designate a portion of each paycheck for deposit into a stock
purchase account. Once each month, the administrator of the plan uses funds
in the stock purchase account to purchase shares of Common Stock in the
open market. Participants in this plan do not pay any commissions to the
plan administrator with respect to the purchase of these shares.
Participants otherwise receive no discount or other incentive for
participation in the plan.
The Company also, as of January 1, 1997, instituted changes in the
401(k) Plan to provide that all Company matching contributions are to be
made in shares of Common Stock and that any profit sharing contributions
also are to be made in shares of Common Stock. For the fiscal year ended
December 28, 1997, the Company made a profit sharing contribution under the
401(k) Plan for hourly employees only in the amount of approximately
$600,000.
Discussion of Amendments to the Option Plan
During 1997, the Board of Directors approved amendments to the Option
Plan at meetings held in April and October. In April, the Board approved
amendments to delete the requirement that a "Change in Status" occur in
connection with a "Change in Control", as respectively defined in the
Option Plan, in order to accelerate the vesting of a participant's options
and to change the default vesting schedule for all options from five years
to three years. In October 1997, the Board of Directors amended the Option
Plan to change the name of the Option Plan to the Amended and Restated
Sunbeam Corporation Stock Option Plan and to provide that the "Fair Market
Value" for all option grants will be the average selling price of a share
of Common Stock on the exchange or national market system on which the
Common Stock is traded, on the date of grant of an option to acquire Common
Stock pursuant to the Option Plan.
In 1998, the Board of Directors approved, subject to approval of the
Company's stockholders at the Annual Meeting, a further amendment to the
Option Plan to increase the number of shares of Common Stock which may be
issued under the Option Plan to 16,500,000 shares from 11,500,000 shares.
See "PROPOSAL 6."
Compliance with Certain Tax Laws
Section 162(m) of the Internal Revenue Code limits to $1,000,000 the
Company's federal income tax deduction for compensation paid in any year to
its CEO and each of its four highest paid executive officers, to the extent
that such compensation is not "performance based" compensation within the
meaning of Section 162(m). Mr. Dunlap's base compensation has been
increased to $2,000,000 per year under the Dunlap Agreement. See
"EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND, CHANGE IN CONTROL
ARRANGEMENTS Employment Agreement with Mr. Dunlap." The Company will not be
able to deduct such base compensation paid in excess of $1,000,000. The
Company does not anticipate that bonus payments will be made to Mr. Dunlap
(the sole executive officer whose compensation is anticipated to exceed
$1,000,000). The Company's award of options (both pursuant to the Option
Plan and as approved by the stockholders) is expected to qualify as
"performance based" compensation pursuant to Section 162(m). The vesting of
the respective awards of shares of restricted stock to Messrs. Dunlap and
Kersh is expected to exceed the $1,000,000 compensation level (together
with their base salaries) and will not be deductible by the Company to the
extent in excess of $1,000,000.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
As of February 1, 1998, the Company entered into the Dunlap Agreement
with Albert J. Dunlap, the Company's Chairman and Chief Executive Officer.
The terms of the Dunlap Agreement were negotiated with and approved by the
Compensation Committee and the Board of Directors. See "EMPLOYMENT
CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
- - Employment Agreement with Mr. Dunlap." At Mr. Dunlap's request, Mr.
Dunlap's compensation package is heavily oriented towards stock based
compensation. Mr. Dunlap will receive a base salary of $2,000,000 per year
for each year of the employment agreement but is not eligible for any bonus
payment. Mr. Dunlap's potential increases in compensation will result from
increases in the value of his stock investment in the Company. Mr. Dunlap
holds 1,166,666 shares of Common Stock which were granted to him by the
Company and options to acquire up to 6,250,000 shares of Common Stock (of
which 3,750,000 are vested, and the remaining 2,500,000 will vest in equal
increments on each of the first and second anniversary dates of the
effective date of the Dunlap Agreement).
The foregoing report is furnished by the Compensation Committee of the
Board of Directors and the members of the Committee.
COMPENSATION COMMITTEE
Peter Langerman, Chairman
Charles Elson
Faith Whittlesey
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph compares the cumulative total stockholder return
on the Company's Common Stock for the period from December 31, 1992 through
December 28, 1997, with the cumulative total return of the Standard and
Poors Composite-500 Stock Index and a Company constructed index of peer
companies. The graph also presents the value of the Common Stock on the
date of Mr. Dunlap's employment with the Company. Included in the Company
constructed peer group index are Rubbermaid Incorporated, Newell Co. and
The Gillette Company, Inc. all of which are engaged in retail sales of
consumer goods. The graph assumes that the value of the investment in
Common Stock was $100 on December 31, 1992, and that all dividends were
reinvested quarterly.
COMPARISON OF TOTAL RETURN SINCE DECEMBER 31, 1992 OF SUNBEAM
CORPORATION COMMON STOCK, S&P 500, AND PEER GROUP COMPANIES
[GRAPH APPEARS HERE]
Measurement Period Sunbeam Peer S&P
(Fiscal Year Covered) Corporation Group 500
- --------------------- ----------- ----- ---
12/31/92 $100 $100 $100
12/31/93 $126 $106 $110
12/30/94 $148 $121 $112
12/29/95 $88 $155 $154
7/18/96 $72 $180 $162
12/31/96 $147 $214 $189
12/31/97 $244 $277 $252
PROPOSAL 2 -- APPROVAL OF STOCK OPTION GRANT TO ALBERT J. DUNLAP,
THE COMPANY'S CHAIRMAN AND CHIEF EXECUTIVE OFFICER, CONTAINED
IN HIS EMPLOYMENT AGREEMENT WITH THE COMPANY
As of February 1, 1998, the Company entered into the Dunlap
Agreement, which provides for, among other things, a new three-year term of
employment for Mr. Dunlap, the Company's Chairman and Chief Executive
Officer. The Board of Directors is requesting stockholder approval of the
provisions of the Dunlap Agreement which provide for a grant of stock
options to Mr. Dunlap. See "EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS."
The Dunlap Agreement provides that, subject to approval by the
Company's stockholders at the Annual Meeting, Mr. Dunlap received a grant
effective as of February 1, 1998 of options to purchase 3,750,000 shares of
Common Stock at a price of $36.85 per share (the "Dunlap Options"). The
term of the Dunlap Options is ten years, and they will vest with respect to
one-third of the shares subject thereto on the grant date and with respect
to an additional one-third on each of the first and second anniversaries of
the grant date.
The Dunlap Agreement further provides that (i) upon the occurrence of
a Change in Control, the Dunlap Options will become fully vested and Mr.
Dunlap will be entitled to exercise the Dunlap Options for the balance of
the original ten-year term, (ii) if the Company terminates Mr. Dunlap's
employment other than for Cause and not due to his disability, or if he
terminates his employment for Good Reason, the Dunlap Options will become
fully vested and he will be entitled to exercise the Dunlap Options for the
balance of the original ten-year term, (iii) if the Company terminates Mr.
Dunlap's employment for Cause, he will be able to exercise the Dunlap
Options which are exercisable on the date of termination within 90 days of
the date of termination and if he terminates his employment other than for
Good Reason, he will be able to exercise the Dunlap Options which are
exercisable on the date of termination within one year of the date of
termination, (iv) if Mr. Dunlap's employment is terminated due to his
death, his estate or legal representative will be entitled to exercise
within one year after the date of death the Dunlap Options which are then
exercisable or which would have become exercisable within one year after
the date of death, and (v) if his employment is terminated due to
disability, he will be entitled to exercise within three years all Dunlap
Options which are then exercisable or which would have become exercisable
within one year after the date of termination. See "EMPLOYMENT CONTRACTS
AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS" for
definitions of all capitalized terms not otherwise defined herein.
If the stockholders of the Company do not approve the grant of the
Dunlap Options to Mr. Dunlap, the Company and Mr. Dunlap have agreed to
negotiate in good faith mutually acceptable alternative compensation
arrangements. The terms and conditions of any such alternative compensation
arrangements have not been determined. Failure to approve the grant of the
Dunlap Options to Mr. Dunlap will not affect any other provisions of the
Dunlap Agreement. However, if the stockholders of the Company do not
approve the grant of the Dunlap Options to Mr. Dunlap, Mr. Dunlap may elect
to terminate his employment for Good Reason.
Approval of this proposal to approve the grant of the Dunlap Options
to Mr. Dunlap contained in his Employment Agreement with the Company will
require the affirmative vote of the holders of a majority of the votes cast
on the proposal, provided that the total number of votes cast represents
over 50% of the number of votes entitled to be cast on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE STOCK OPTION GRANT TO ALBERT J. DUNLAP
PROPOSAL 3 -- APPROVAL OF STOCK OPTION GRANT TO RUSSELL A. KERSH,
THE COMPANY'S VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER,
CONTAINED IN HIS EMPLOYMENT AGREEMENT WITH THE COMPANY
As of February 1, 1998, the Company entered into a new three-year
Employment Agreement (the "Kersh Agreement") with Russell A. Kersh. The
Board of Directors is requesting stockholder approval of the provisions of
the Kersh Agreement which provide for a grant of stock options to Mr.
Kersh. See "EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE
IN CONTROL ARRANGEMENTS."
The Kersh Agreement provides that, subject to approval by the
Company's stockholders at the Annual Meeting, Mr. Kersh received a grant
effective as of February 1, 1998 of options to purchase 1,125,000 shares of
Common Stock at a price of $36.85 per share (the "Kersh Options"). The term
of the Kersh Options is ten years, and they will vest with respect to
one-fourth of the shares subject thereto on the grant date and with respect
to an additional one-fourth on each of the first, second and third
anniversaries of the grant date.
The Kersh Agreement further provides that (i) upon the occurrence of
a Change in Control, the Kersh Options will become fully vested and Mr.
Kersh will be entitled to exercise the Kersh Options for the balance of the
original ten-year term, (ii) if the Company terminates Mr. Kersh's
employment other than for Cause and not due to his disability, or if he
terminates his employment for Good Reason, the Kersh Options will become
fully vested and he will be entitled to exercise the Kersh Options for the
balance of the original ten-year term, (iii) if the Company terminates Mr.
Kersh's employment for Cause, he will be able to exercise the Kersh Options
which are exercisable on the date of termination within 90 days of the date
of termination and if he terminates his employment other than for Good
Reason, he will be able to exercise the Kersh Options which are exercisable
on the date of termination within one year of the date of termination, (iv)
if Mr. Kersh's employment is terminated due to his death, his estate or
legal representative will be entitled to exercise within one year after the
date of death the Kersh Options which are then exercisable or which would
have become exercisable within one year after the date of death, and (v) if
his employment is terminated due to disability, he will be entitled to
exercise within three years all Kersh Options which are then exercisable or
which would have become exercisable within one year after the date of
termination. See "EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS" for definitions of all capitalized terms
not otherwise defined herein.
If the stockholders of the Company do not approve the grant of the
Kersh Options to Mr. Kersh, the Company and Mr. Kersh have agreed to
negotiate in good faith mutually acceptable alternative compensation
arrangements. The terms and conditions of any such alternative compensation
arrangements have not been determined. Failure to approve the grant of the
Kersh Options to Mr. Kersh will not affect any other provisions of the
Kersh Agreement. However, if the stockholders of the Company do not approve
the grant of the Kersh Options to Mr. Kersh, Mr. Kersh may elect to
terminate his employment for Good Reason.
Approval of this proposal to approve the grant of the Kersh
Options to Mr. Kersh contained in his Employment Agreement with the Company
will require the affirmative vote of the holders of a majority of the votes
cast on the proposal, provided that the total number of votes cast
represents over 50% of the number of votes entitled to be cast on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE STOCK OPTION GRANT TO RUSSELL A. KERSH
PROPOSAL 4 -- APPROVAL OF STOCK OPTION GRANT TO DAVID C. FANNIN,
THE COMPANY'S EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL
COUNSEL, CONTAINED IN HIS EMPLOYMENT AGREEMENT
WITH THE COMPANY
As of February 1, 1998, the Company entered into a new three-year
Employment Agreement (the "Fannin Agreement") with David C. Fannin. The
Board of Directors is requesting stockholder approval of the provisions of
the Fannin Agreement which provide for a grant of stock options to Mr.
Fannin. See "EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE
IN CONTROL ARRANGEMENTS."
The Fannin Agreement provides that, subject to approval by the
Company's stockholders at the Annual Meeting, Mr. Fannin received a grant
effective as of Februrary 1, 1998 of options to purchase 750,000 shares of
Common Stock at a price of $36.85 per share (the "Fannin Options"). The
term of the Fannin Options is ten years, and they will vest with respect to
one-fourth of the shares subject thereto on the grant date and an
additional one-fourth on each of the first, second and third anniversaries
of the grant date.
The Fannin Agreement further provides that (i) upon the occurrence of
a Change in Control, the Fannin Options will become fully vested and Mr.
Fannin will be entitled to exercise the Fannin Options for the balance of
the original ten-year term, (ii) if the Company terminates Mr. Fannin's
employment other than for Cause and not due to his disability, or if he
terminates his employment for Good Reason, the Fannin Options will become
fully vested and he will be entitled to exercise the Fannin Options for the
balance of the original ten-year term, (iii) if the Company terminates Mr.
Fannin's employment for Cause, he will be able to exercise the Fannin
Options which are exercisable on the date of termination within 90 days of
the date of termination and if he terminates his employment other than for
Good Reason, he will be able to exercise the Fannin Options which are
exercisable on the date of termination within one year of the date of
termination, (iv) if Mr. Fannin's employment is terminated due to his
death, his estate or legal representative will be entitled to exercise
within one year after the date of death the Fannin Options which are then
exercisable or which would have become exercisable within one year after
the date of death, and (v) if his employment is terminated due to
disability, he will be entitled to exercise within three years all Fannin
Options which are then exercisable or which would have become exercisable
within one year after the date of termination. See "EMPLOYMENT CONTRACTS
AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS" for
definitions of all capitalized terms not otherwise defined herein.
If the stockholders of the Company do not approve the grant of the
Fannin Options to Mr. Fannin, the Company and Mr. Fannin have agreed to
negotiate in good faith mutually acceptable alternative compensation
arrangements. The terms and conditions of any such alternative compensation
arrangements have not been determined. Failure to approve the grant of the
Fannin Options to Mr. Fannin will not affect any other provisions of the
Fannin Agreement. However, if the stockholders of the Company do not
approve the grant of the Fannin Options to Mr. Fannin, Mr. Fannin may elect
to terminate his employment for Good Reason.
Approval of this proposal to approve the grant of the Fannin
Options to Mr. Fannin contained in his Employment Agreement with the
Company will require the affirmative vote of the holders of a majority of
the votes cast on the proposal, provided that the total number of votes
cast represents over 50% of the number of votes entitled to be cast on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE STOCK OPTION GRANT TO DAVID C. FANNIN
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
No income will result to Messrs. Dunlap, Kersh or Fannin upon the
grants of stock options discussed above. Upon the exercise of such a stock
option, the amount by which the fair market value of the shares on the date
of exercise exceeds the option price would be taxed to the individual
exercising such stock option as ordinary compensation income.
Section 162(m) of the Code disallows a publicly-held company's
deductions for compensation exceeding $1,000,000 per year for certain
executives. However, compensation which constitutes "performance based
compensation" approved by the Company's stockholders is excluded from the
above limitation. The stock option grants have been designed to enable the
stock options described above to qualify as performance based compensation
if the stock option grants are approved by the Company's stockholders.
Accordingly, upon the exercise of a stock option, the Company will be
entitled to a deduction in the amount equal to the compensation income to
the employee.
The preceding discussion is based upon the Code as presently in
effect, which is subject to change, and does not purport to be a complete
description of the federal income tax aspects of stock options.
PROPOSAL 5 -- AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE
OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK TO 500,000,000 FROM 200,000,000
The Company's Board of Directors has approved an amendment to the
Company's Restated Certificate of Incorporation to increase the authorized
number of shares of Common Stock to 500,000,000 from 200,000,000. As of
March 30, 1998, there were 100,811,194 shares of Common Stock outstanding
and no shares of Common Stock were held in the Company's treasury. As of
March 30, 1998, an aggregate of 14,591,250 shares of Common Stock were
issuable upon the exercise of outstanding stock options, and an aggregate
of 5,625,000 shares of Common Stock were issuable upon the exercise of
stock options granted to Messrs. Dunlap, Kersh and Fannin pursuant to their
respective Employment Agreements with the Company. On March 2, 1998, the
Company publicly announced that it had agreed to acquire The Coleman
Company, Inc. ("Coleman"), the world's leading manufacturer and marketer of
outdoor recreational products. In connection with such acquisition, the
Company has issued 14,099,749 shares of Common Stock (including all of the
Company's treasury shares), and will be required to issue up to an
additional 7,211,823 shares of Common Stock. In addition, the Company
recently completed an offering of $2,014 million principal amount of Zero
Coupon Convertible Senior Subordinated Debentures due 2018 which are
currently convertible into an aggregate of 15,228,358 shares of Common
Stock. After giving effect to such issuances, as well as to the issuance of
shares of Common Stock pursuant to the exercise of (i) currently
outstanding options to acquire shares of Common Stock under the Option
Plan, (ii) options to acquire shares of Common Stock granted to Messrs.
Dunlap, Kersh and Fannin pursuant to their respective Employment Agreements
(if approved by the Company's stockholders at the Annual Meeting) and (iii)
future options available to be granted as a result of the proposed
amendments to the Option Plan (if approved by the Company's stockholders at
the Annual Meeting), the Company would have 51,532,375 shares of Common
Stock available for future issuances, or less than the total number of
shares that would be outstanding after giving effect to all such issuances.
The Board of Directors believes that the number of shares of the
Company's authorized Common Stock should be increased in order to maintain
shares which are available from time to time as needed for corporate
purposes approved by the Board of Directors. Such corporate purposes could
include the acquisition by the Company of other companies or assets, the
raising of additional capital through public offerings, the declaration of
stock splits or stock dividends and the issuance of stock under the Option
Plan and other employee benefit plans. Except as set forth above, the
Company has not entered into any agreement or plan, and has no present
plans, for the issuance of the additional shares of Common Stock, but
desires to have such shares available for future issuances as the need may
arise without the delay which would be incident to approval of any such
issuance in the future for any specific transaction.
If the proposed amendment is approved, the additional shares could be
issued by the Board of Directors without further vote or approval of the
stockholders. The Company's stockholders do not and will not have
pre-emptive rights to acquire any additional shares of Common Stock that
may be approved for issuance.
The adoption of this proposal for the increase in the number of
authorized shares of Common Stock might have the effect of discouraging an
attempt to remove incumbent management or gain control of the Company, even
if such activities were perceived by stockholders of the Company to be
favorable to them. The additional authorized shares could be used to dilute
the stock ownership of persons seeking to obtain control of the Company.
The proposed increase in authorized capital is not designed to have an
anti-takeover effect, to dilute the stock ownership of any person seeking
to obtain control of the Company nor are there any plans to privately place
any of the shares to be added to the authorized capital by the proposed
amendments.
Approval of this proposal to amend the Company's Restated Certificate
of Incorporation to increase the total number of authorized shares of
Common Stock to 500,000,000 from 200,000,000 will require the affirmative
vote of the holders of a majority of the outstanding shares of Common
Stock, abstentions and broker non-votes will be counted and have the same
effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
PROPOSAL 6 -- AMENDMENTS TO THE AMENDED AND RESTATED
SUNBEAM CORPORATION STOCK OPTION PLAN TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK WITH RESPECT
TO WHICH AWARDS MAY BE GRANTED TO 16,500,000 SHARES
FROM 11,500,000 SHARES
The Company currently maintains the Option Plan, which originally
became effective on January 1, 1991, and which has since been amended by
the Board of Directors and by action of the stockholders of the Company.
The Board of Directors proposes to further amend the Option Plan to
increase the number of shares of Common Stock which may be issued under the
Option Plan to 16,500,000 shares from 11,500,000 shares (the "1998
Amendment"). A copy of the Option Plan, as proposed to be amended, is
attached hereto as Appendix A and reference is made to the Appendix for a
complete statement of the Option Plan.
THE OPTION PLAN
The Option Plan is used by the Company to attract, retain and
motivate executive, management and other employees by providing them with
an ownership interest in the Company. Under the Option Plan, participants
selected by the Committee, are eligible for grants of options to acquire
shares of Common Stock and awards of shares of restricted Common Stock
which, when granted, are subject to forfeiture and may not be transferred
by the participants. No person may be granted options under the Option Plan
for more than 250,000 shares of Common Stock, or more than 25,000 shares of
restricted stock, in any fiscal year of the Company.
The Option Plan is administered by the Compensation Committee,
consisting of Directors Langerman, Elson and Whittlesey. The Compensation
Committee has authority, subject to the terms of the Option Plan, to
determine: (i) when and to whom to make grants under the Option Plan (but
no option or stock award may be granted later than December 31, 2006); (ii)
the number of shares of Common Stock to be covered by such grants; (iii)
the types and terms of options; and (iv) the exercise price of the shares
of Common Stock covered by options. The Compensation Committee also has the
authority to prescribe, amend and rescind rules and regulations governing
the Option Plan. In determining grants under the Option Plan, the
Compensation Committee considers, among other things, the number of shares
available for grant and the performance of individual candidates. Directors
of the Company, executive officers, members of management, other key
employees and all full time employees are eligible to participate. The
Option Plan may generally be amended by the Board of Directors, except as
described below with respect to certain matters which must be submitted to
a vote of the stockholders.
Options granted under the terms of the Option Plan are non-qualified
stock options. The term of each option commences on the date of grant and
expires at the close of business on the earlier of the (i) the tenth
anniversary of the date of grant or (ii) the 45th day following the
termination of the optionee's employment with the Company. If an optionee's
employment terminates due to death, all options held by the participant at
death become immediately exercisable in full, and upon a "Change in
Control" of the Company (as defined in the Option Plan), all options held
by optionees who are then employed by the Company become immediately
exercisable in full. The exercise price of, and the number of shares
covered by, each option is subject to adjustment to reflect stock
dividends, stock splits, other recapitalizations, reclassifications or
other changes affecting the number or kind of outstanding shares.
The exercise price of an option may be paid in cash or, with the
consent of the Committee, in shares of stock based on the fair market value
on the date of exercise and on terms and conditions to be determined by the
Company. This "cashless exercise" may be effectuated in one of two ways.
First, the Option Plan permits the Compensation Committee to allow an
Option Plan participant to pay the exercise price in shares of stock of the
Company. Second, the Option Plan permits a "cashless exercise" of an option
and payment of withholding taxes through a broker-assisted transaction. In
a broker-assisted exercise, a broker advances the funds necessary for the
optionee to exercise the option and then immediately sells a sufficient
number of shares acquired upon the exercise to fund the exercise price,
broker fees and, if the participant elects, the optionee's income tax
withholding liability.
The Option Plan also permits grants of restricted stock to the
participants. The Option Plan provides that, subject to the Compensation
Committee's discretion to provide otherwise, the forfeiture and restrictive
provisions lapse with respect to one-seventh of the shares of restricted
stock granted on each of the first through the seventh anniversaries of the
date of grant provided that such provisions would also lapse upon a Change
in Control, if the participant is an employee or Director of the Company at
the time of such a Change in Control.
Options are not transferable. Each option is exercisable during the
lifetime of an optionee only by the optionee to whom it was granted, and
after the optionee's death only by the optionee's estate or legal
representative.
Inasmuch as the Compensation Committee determines, in its discretion
(subject to the limitation described above), the employees to whom options
and shares of restricted stock will be granted and the number of shares
subject to such options and the number of such shares of restricted stock,
future grants to be made under the Option Plan are not determinable. The
number of stock options granted under the Option Plan in the aggregate
during the 1997 fiscal year were as follows: all then current executive
officers as a group (consisting of 12 persons), 287,500 shares; all
nonemployee Directors as a group, none; and all employees as a group
(consisting of 3,738 persons), 3,109,463 shares.
FEDERAL INCOME TAX CONSEQUENCES OF THE OPTION PLAN
The tax consequences of non-qualified options and restricted stock
awards are complex. The description of tax consequences set forth below is
necessarily general in nature and does not purport to be complete.
Moreover, statutory provisions are subject to change, as are their
interpretations, and their application may vary in individual
circumstances. Finally, the tax consequences under applicable state and
local income tax laws may not be the same as under the federal income tax
laws.
Non-Qualified Stock Options ("NQSOs")
There will be no federal income tax consequences to the participants
or the Company on the grant of a NQSO. On the exercise of a NQSO, the
participant will have taxable ordinary income equal to the excess of the
fair market value of the shares of Common Stock received on the exercise
date over the option price of the shares. Generally, the Company will be
entitled to a federal income tax deduction in an amount equal to such
excess. Any ordinary income realized by a participant upon exercise of a
NQSO will increase his tax basis in the Common Stock acquired by exercise
of the NQSO. Upon the sale of Common Stock acquired by exercise of a NQSO,
participants realize long-term or short-term capital gain or loss depending
upon their holding period for such stock.
A participant who surrenders shares of Common Stock in payment of the
exercise price of a NQSO will not recognize gain or loss on his surrender
of such shares. The number of shares received equal to the number of shares
surrendered will have the same tax basis and capital gains holding period
as the shares surrendered. The balance of the shares received will have a
tax basis equal to their fair market value on the date of exercise
(representing the amount of recognized ordinary income to the recipient),
and the capital gains holding period will begin on the date of exercise.
Restricted Stock
Under the Code, a participant normally will not realize taxable
income and the Company will not be entitled to a deduction upon the grant
of shares of restricted stock. When the shares are no longer subject to a
substantial risk of forfeiture (as defined in the Code) or become
transferrable, the participant will realize taxable ordinary income
generally in an amount equal to the fair market value of such number of
shares of Common Stock at that time, and the Company will be entitled to a
deduction in the same amount. However, if a participant makes an election
under Section 83(b) of the Code, the participant will recognize ordinary
income in the year the shares of restricted stock are awarded in an amount
equal to the fair market value of the shares of restricted stock at the
date of grant, determined without regard to the restrictions. Generally, in
that event, the Company will be entitled to a tax deduction in such year in
the same amount, and any gain or loss realized by the participant upon the
subsequent disposition of Common Stock will be capital gain or loss and
will not result in any further deduction to the Company.
Parachute Payments
The exercise of any portion of an option or the lapse of restrictions
relating to shares of restricted stock that is accelerated, as a result of
a Change in Control or a similar event, may cause payments with respect to
such accelerated options or accelerated lapse of restrictions to be treated
as "parachute payments" as defined in the Code. Any such parachute payments
may be non-deductible to the Company in whole or in part for federal income
tax purposes and may subject the employee to a non-deductible 20% federal
excise tax on all or a portion of such payment in addition to other taxes
ordinarily payable. In the event that the acceleration of the
exercisability of options or the lapse of restrictions relating to shares
of restricted stock results in an excise tax, the Option Plan currently
provides that the Company will pay the participant additional compensation
necessary to place the participant in the same after-tax position he would
have been in had no such excise tax been paid or incurred. Such additional
compensation would be non-deductible to the Company for federal income tax
purposes.
REASONS FOR THE 1998 AMENDMENT TO THE OPTION PLAN; RECOMMENDATION OF THE
BOARD OF DIRECTORS
The Board of Directors has given due consideration to the Option Plan
and has determined that adoption of the 1998 Amendment is in the best
interest of the Company. The Company in recent years has used the Option
Plan as a means of retaining and compensating employees. The Company
believes that the ability to use the Option Plan to attract and retain key
personnel has been essential to the growth of the Company. The purpose of
the 1998 Amendment is to expand the ability of the Company to reward the
services of experienced key personnel, including Directors of the Company,
by the provision of economic incentives in the form of stock options and
restricted stock and to ensure that the federal income tax deduction
otherwise available to the Company with respect to the Option Plan will
continue.
On March 30, 1998, the Company acquired an 82.4% interest in Coleman.
In addition, on April 3, 1998, the Company acquired a controlling interest
in each of First Alert, Inc. ("First Alert"), a leading manufacturer of
smoke and carbon monoxide detectors, and Signature Brands USA, Inc.
("Signature Brands"), a leading manufacturer of consumer and professional
products pursuant to cash tender offers for each company's outstanding
shares. The Company plans to complete its acquisitions of the remaining
publicly held shares of each of Coleman, First Alert and Signature Brands
pursuant to merger transactions expected to be completed in the second
quarter. In light of these transactions, the Company's need to provide
appropriate incentives to its employees is even more pronounced. The
integration of the operations of Coleman, First Alert and Signature Brands
will be dependent upon the retention of certain key management. The Option
Plan, as amended, will allow the Company sufficient flexibility to attract
and retain key personnel and will facilitate the smooth and efficient
integration of the newly acquired businesses.
Approval of the 1998 Amendment to the Option Plan will require the
affirmative vote of the holders of a majority of the votes cast on the
proposal, provided that the total number of votes cast on such proposal
represents over 50% of the number of votes entitled to be cast on such
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE 1998 AMENDMENT TO THE SUNBEAM CORPORATION
AMENDED AND RESTATED STOCK OPTION PLAN
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1997, the Company employed the law firm of Reboul, MacMurray,
Hewitt, Maynard and Kristol, of which Director Kristol is a partner. The
fees paid by the Company to Reboul, MacMurray, Hewitt, Maynard and Kristol
during 1997 did not exceed 5% of the firm's gross revenues for the last
full fiscal year.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows
of no business that will be presented for consideration at the Annual
Meeting other than that which has been referred to above. Proxies in the
enclosed form will be voted in respect of any other business that is
properly brought before the Annual Meeting in accordance with the judgment
of the person or persons voting the proxies.
The Company is not aware of any substantial interest, direct or
indirect, by holders of Common Stock or otherwise, of any officer,
Director, Director nominee or associate of the foregoing persons in any
matter to be acted on, as described herein, other than elections to
offices.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors, executive officers and persons who own
more than 10% of a registered class of the Company's equity securities to
file certain reports regarding ownership of the Company's Common Stock with
the SEC and the New York Stock Exchange. These insiders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on a review of the
copies of the Section 16(a) forms furnished to the Company during fiscal
1997, or written representations from certain reporting persons that no
Forms 5 were required for those persons, all Section 16(a) filing
requirements applicable to the Company's officers, Directors and beneficial
owners of more than 10% of the outstanding shares of Common Stock were
filed on a timely basis.
INDEPENDENT AUDITORS
The firm of Arthur Andersen, LLP has been retained by the Company as
independent auditors to audit the financial statements of the Company.
Representatives of Arthur Andersen, LLP will be present at the Annual
Meeting and will be afforded the opportunity to make a statement if they
desire to do so and to respond to appropriate questions.
COST OF SOLICITATION
This solicitation is made on behalf of the Company. The cost of
soliciting proxies has been or will be borne by the Company. Solicitation
will be made by mail, and may be made personally or by telephone by
officers and other employees of the Company who will not receive additional
compensation for such solicitation. In addition, arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to
send proxies and proxy materials to their principals, and the Company may
reimburse them for any attendant expenses.
1999 STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented for consideration
at the 1999 Annual Meeting of Stockholders and to be included in the
Company's Proxy Statement for that meeting must be received by the
Secretary at the Company's corporate office, 1615 South Congress Avenue,
Suite 200, Delray Beach, Florida 33445, on or before January 12, 1999.
COPIES OF FORM 10-K
The Company will provide a copy of the Company's Annual Report on
Form 10-K, including the financial statements and financial statement
schedules contained therein, to any stockholder upon request. Requests
should be sent to the Vice President, Investor Relations, for the Company,
at 1615 South Congress Avenue, Suite 200, Delray Beach, Florida 33445 -
Telephone: (561) 243-2100.