UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended September 29, 1996
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from ___________ to ___________.
Commission File No. 1-52
SUNBEAM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 25-1638266
- -------------------------------- ---------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
2100 NEW RIVER CENTER
200 EAST LAS OLAS BOULEVARD 33301
FORT LAUDERDALE, FLORIDA ----------
- --------------------------------------- (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(954) 767-2100
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
-----------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
On October 21, 1996, there were 84,011,835 shares of the registrant's
Common Stock ($.01 par value) outstanding.
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SUNBEAM CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT
ON FORM 10-Q
TABLE OF CONTENTS
PAGE
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited) for the
three and nine months ended October 1, 1995 and September 29, 1996... 3
Condensed Consolidated Balance Sheets
as of December 31, 1995 and September 29, 1996 (Unaudited)........... 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the nine months ended October 1, 1995 and September 29, 1996..... 5
Notes to Condensed Consolidated Financial Statements (Unaudited)....... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 8
PART II.OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................. 11
Item 6. Exhibits and Reports on Form 8-K.................................... 12
SIGNATURES........................................................................... 13
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2
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PART I. FINANCIAL INFORMATION
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SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
1995 1996 1995 1996
--------- --------- --------- --------
(Unaudited) (Unaudited)
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Net sales ...................................................... $ 250,724 $ 244,867 $ 899,002 $930,675
Cost of goods sold ............................................. 197,551 216,097 702,750 766,793
Selling, general and administrative expense .................... 35,610 53,079 106,359 140,301
--------- --------- --------- --------
Operating earnings (loss) ...................................... 17,563 (24,309) 89,893 23,581
Interest expense ............................................... 2,274 3,455 7,208 9,901
Other (income) expense, net .................................... 274 947 (1,399) 3,401
--------- --------- --------- --------
Earnings (loss) before income taxes ............................ 15,015 (28,711) 84,084 10,279
Income taxes:
Current ...................................................... (2,341) (8,999) 14,707 555
Deferred ..................................................... 8,349 (1,624) 18,927 3,246
--------- --------- --------- --------
6,008 (10,623) 33,634 3,801
--------- --------- --------- --------
Net earnings (loss) ............................................ $ 9,007 $ (18,088) $ 50,450 $ 6,478
========= ========= ========= ========
Net earnings (loss) per share of common stock .................. $ .11 $ (.22) $ .61 $ .08
========= ========= ========= ========
Average number of common and common
equivalent shares outstanding ................................ 82,278 83,578 82,957 83,793
Dividends declared per share of common stock ................... $ .01 $ .01 $ .03 $ .03
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
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SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
DECEMBER 31, SEPTEMBER 29,
1995 1996
----------- -----------
(Unaudited)
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ASSETS
Current assets:
Cash and cash equivalents .................................................... $ 28,273 $ 24,638
Receivables, net ............................................................. 216,195 194,559
Inventories .................................................................. 266,706 330,213
Deferred income taxes ........................................................ 26,333 23,543
Prepaid expenses and other current assets .................................... 19,543 13,059
----------- -----------
Total current assets ................................................ 557,050 586,012
Property, plant and equipment, net ............................................ 331,112 348,170
Trademarks and trade names, net ............................................... 214,006 209,399
Other assets .................................................................. 56,516 52,752
----------- -----------
$ 1,158,684 $ 1,196,333
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................................ $ 94,191 $ 70,072
Other current liabilities ................................................... 95,140 83,259
----------- -----------
Total current liabilities ........................................... 189,331 153,331
Long-term debt ................................................................ 161,133 226,372
Non-operating and other long-term liabilities ................................. 130,255 117,514
Deferred income taxes ......................................................... 76,932 77,387
Shareholders' equity:
Common stock (issued 87,802,667 and 88,679,723 shares) ...................... 878 886
Other shareholders' equity .................................................. 683,604 682,966
Treasury stock, at cost (5,905,600 and 4,371,814 shares) .................... (83,449) (62,123)
----------- -----------
Total shareholders' equity .......................................... 601,033 621,729
----------- -----------
$ 1,158,684 $ 1,196,333
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
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SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29,
1995 1996
--------- --------
(Unaudited)
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OPERATING ACTIVITIES:
Net earnings ................................................................... $ 50,450 $ 6,478
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization .............................................. 32,188 42,967
Deferred income taxes ...................................................... 18,927 3,245
--------- --------
101,565 52,690
Decrease in cash from changes in working capital ............................... (37,888) (69,582)
Other .......................................................................... (14,778) (1,876)
--------- --------
Net cash provided by (used in) operating activities ........................ 48,899 (18,768)
--------- --------
INVESTING ACTIVITIES:
Capital expenditures, net ...................................................... (110,592) (54,985)
Reduction in investments restricted for plant construction ..................... 37,483 --
--------- --------
Net cash used in investing activities ..................................... (73,109) (54,985)
--------- --------
FINANCING ACTIVITIES:
Net borrowing under revolving credit facility .................................. 35,000 55,000
Issuance of long-term debt ..................................................... -- 11,500
Purchase of shares for treasury ................................................ (13,091) --
Sale of treasury stock ......................................................... -- 4,437
Proceeds from exercise of stock options and warrants ........................... 9,827 3,286
Other .......................................................................... (8,542) (4,105)
--------- --------
Net cash provided by financing activities ................................ 23,194 70,118
--------- --------
Net decrease in cash and cash equivalents ...................................... (1,016) (3,635)
Cash and cash equivalents at beginning of period ............................... 26,330 28,273
--------- --------
Cash and cash equivalents at end of period ..................................... $ 25,314 $ 24,638
========= ========
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See Notes to Condensed Consolidated Financial Statements.
5
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SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. OPERATIONS AND BASIS OF PRESENTATION
Sunbeam Corporation (the "Company") is a leading consumer products company
that designs, manufactures and markets a diverse portfolio of outdoor, household
and specialty brand name products. The Sunbeam/registered mark/ and
Oster/registered mark/ brands have been household names for generations, and the
Company is a market share leader in many of its product categories.
The Company markets its products through virtually every category of retailer
including mass merchandisers, catalog showrooms, warehouse clubs, department
stores, hardware stores, home centers, drug and grocery stores, pet supply
retailers, as well as independent distributors and the military.
In the opinion of management, the unaudited condensed consolidated
financial statements furnished herein include all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
results of operations for the interim periods presented. These interim results
of operations are not necessarily indicative of results for the entire year. The
condensed consolidated financial statements contained herein should be read in
conjunction with the consolidated financial statements and related notes
contained in the Company's 1995 Annual Report on Form 10-K ("Form 10-K").
2. SUPPLEMENTAL FINANCIAL STATEMENT DATA
(In thousands)
DECEMBER 31, SEPTEMBER 29,
1995 1996
--------- ------------
Inventories:
Finished goods.......................... $ 155,511 $210,404
Work in process................... 31,161 49,589
Raw materials and supplies.............. 80,034 70,220
--------- ---------
$ 266,706 $330,213
========= ========
Property, plant and equipment:
Land.................................... $ 3,562 $ 3,548
Buildings and improvements.............. 106,592 129,121
Machinery and equipment................. 338,667 371,644
-------- -------
448,821 504,313
Accumulated depreciation and amortization.. (117,709) (156,143)
-------- --------
$331,112 $348,170
======== ========
Trademarks and trade names:
Gross................................... $ 245,307 $ 245,307
Accumulated amortization................ (31,301) (35,908)
---------- ----------
$ 214,006 $ 209,399
========= =========
6
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SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. SUPPLEMENTAL FINANCIAL STATEMENT DATA--(CONTINUED)
(In thousands)
NINE MONTHS ENDED
-------------------------------
OCTOBER 1, SEPTEMBER 29,
1995 1996
---------- -------------
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Cash paid during the period for:
Interest, net of $2,566 and $350 interest capitalized
in 1995 and 1996, respectively........................ $ 5,491 $ 8,249
=========== =============
Income taxes, net of refunds.......................... $ 18,797 $ (540)
=========== =============
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Non-Cash Transaction:
In connection with a warehouse expansion related to the bedding
business, the Company entered into a $5 million capital lease obligation
in 1996.
3. CAPITAL STOCK
During the third quarter of 1996, the Company sold 321,786 shares of
common stock for total proceeds of approximately $4.4 million, granted 333,333
shares of unrestricted stock and granted 886,667 shares of restricted stock in
connection with the employment of a new Chairman and Chief Executive Officer and
certain other officers of the Company. Compensation expense attributable to the
unrestricted stock award was recognized in the third quarter of 1996 and
compensation expense related to the restricted stock awards is being amortized
to expense beginning in the third quarter of 1996 over the periods in which the
restrictions lapse (which in the case of 666,667 shares is equally over the two
years from the date of grant and in the case of the remaining restricted shares
is equally over three years from the dates of grant).
4. CREDIT FACILITIES AND LONG-TERM DEBT
In September 1996, the Company entered into a five year, $500 million
unsecured revolving credit facility with a syndicate of banks to replace its
previously existing credit facility (the "Credit Agreement"). Under the Credit
Agreement, the Company can borrow under a competitive bid option, or at a spread
above LIBOR or at a bank base rate. In addition, the Company pays an annual
facility fee. The Credit Agreement contains certain financial covenants. At
September 29, 1996, $130 million was outstanding under the Credit Agreement.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying condensed consolidated financial statements for the three and nine
months ended October 1, 1995 and September 29, 1996 and the 1995 Form 10-K.
RESULTS OF OPERATIONS
The table below sets forth selected operating data of the Company for the
three and nine months ended October 1, 1995 and September 29, 1996:
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THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- --------------------------
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
1995 1996 1995 1996
------ ------ ------ ------
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Net sales ............................................. 100.0% 100.0% 100.0% 100.0%
Cost of goods sold .................................... 78.8 88.2 78.2 82.4
------ ------ ------ ------
Gross margin .......................................... 21.2 11.8 21.8 17.6
Selling, general and administrative
expense .............................................. 14.2 21.7 11.8 15.1
------ ------ ------ ------
Operating earnings (loss) ............................. 7.0% (9.9)% 10.0% 2.5%
====== ====== ====== ======
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NET SALES
Net sales for the Company for the three and nine months ended September
29, 1996 were $244.9 million and $930.7 million, respectively, a decrease of
$5.8 million (2.3%) and an increase of $31.7 million (3.5%) over comparable
periods in the prior year.
Domestic sales were flat for the quarter but increased 4.0% for the nine
months ended September 29, 1996. The Company's sales growth for the first nine
months of 1996 is primarily attributable to new product introductions and sales
related to the acquisition of certain Samsonite(R) furniture assets completed in
November 1995. However, sales for both the three month and nine month periods
ended September 29, 1996 were negatively impacted by lower shipments of electric
blankets resulting from delayed seasonal orders compared to the prior year.
The Company's international sales decreased 17.5% and 4.1% for the three
and nine months ended September 29, 1996, respectively. Third quarter 1996 sales
in Latin America suffered due to political and/or economic instability in
several countries including Ecuador, Peru and Colombia while sales in Venezuela
continue to suffer from the currency devaluation in April 1996. The sales
decrease for the nine month period ended September 29, 1996 was primarily
attributable to the bankruptcy filing of the Company's biggest customer in
Canada coupled with the poor sales in Latin America; however, the total decrease
was minimized by an increase in sales in Mexico resulting from a more stable
economic environment in comparison to 1995.
GROSS PROFIT
Gross profit was $28.8 million and $163.9 million for the three and nine
months ended September 29, 1996, respectively. As a percentage of sales, the
gross margin for the three and nine months ended September 29, 1996 was 11.8%
and 17.6%, respectively, compared to 21.2% and 21.8% in 1995, respectively.
While the Company experienced a slight reduction in raw material costs in 1996,
gross margin continues to suffer from underabsorption of higher manufacturing
costs. This underabsorption relates to the significant capital spending and
capacity additions that have occurred since 1994 in anticipation of a higher
sales volume than the Company is currently experiencing. The Company expects its
gross margin for the remainder of 1996 to continue to be adversely impacted by
costs associated with excess capacity and the failure to realize much of the
previously anticipated cost savings expected from increased utilization of the
Hattiesburg manufacturing and distribution center in 1996.
8
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The Company has initiated an intensive review of its cost structure and
product lines to correct the current imbalance between production capacity,
operating costs and sales. Specific actions to be taken by the Company, when
such review is completed later this year, will include, among other actions, the
consolidation of administrative office locations, the closure of additional
manufacturing and warehousing facilities, and the elimination of low margin
and/or unprofitable products. Such actions will result in the Company recording
a special charge in the fourth quarter of 1996.
OPERATING EARNINGS
The Company experienced an operating loss for the three months ended
September 29, 1996 of $24.3 million, a decrease of $41.9 million. As a
percentage of sales, operating earnings decreased from 7.0% in 1995 to a loss
of 9.9% in 1996. This decline was attributable to a 9.4 percentage point
reduction in gross margin described above as well as a 7.5 percentage point
increase in selling, general and administrative expenses ("SG&A") as a percent
of sales, to 21.7%. For the nine months ended September 29, 1996, operating
earnings were $23.6 million, a decrease of $66.3 million. As a percentage of
sales, operating earnings decreased from 10.0% in 1995 to 2.5% in 1996. This
decline was attributable to a 4.2 percentage point reduction in gross margin as
well as a 3.3 percentage point increase in SG&A as a percent of sales, to 15.1%.
The SG&A increases for the three and nine months ended September 29, 1996
were primarily the result of (1) SG&A costs associated with the acquisition of
certain Samsonite/registered mark/ furniture assets, (2) increased marketing,
media advertising and sales promotion costs in support of new product
introductions, (3) higher depreciation associated with new systems and
warehousing, (4) higher distribution and warehousing expenses and (5) bad debts
of $3.2 million associated with the bankruptcy filings of certain of the
Company's retail customers in the third quarter of 1996. In addition, the
Company incurred one-time compensation charges of $7.4 million (mostly non-cash
in nature) during the third quarter relating to restricted stock awards and
other costs related to the employment of a new senior management team.
INTEREST EXPENSE
Interest expense for both the three and nine months ended September 29,
1996 increased $1.2 million and $2.7 million, respectively, as a result of
increased indebtedness of the Company for working capital requirements and
non-recurring capitalized interest in 1995 related to the construction of the
Hattiesburg facility.
OTHER (INCOME) EXPENSE, NET
Other (income) expense, net changed from expense of $0.3 million and
income of $1.4 million in the quarter and nine months ended October 1, 1995,
respectively, to expense of $0.9 million and $3.4 million in 1996, respectively.
This change is primarily attributable to higher foreign exchange losses in 1996
associated with the April 1996 Venezuelan currency devaluation and non-recurring
interest income in 1995 related to investments restricted for the Hattiesburg
facility construction.
INCOME TAXES
The effective income tax rate for both the three and nine months ended
September 29, 1996 decreased 3.0 percentage points from 1995 percentages,
respectively. The decrease reflects lower foreign taxes from the utilization of
foreign tax credits and loss carryforwards and lower state income taxes.
NET EARNINGS AND NET EARNINGS PER SHARE
For the three months ended September 29, 1996, the Company experienced a
net loss of $18.1 million, a decrease of $27.1 million below net earnings of
$9.0 million in 1995. Net earnings per share for the three months ended
September 29, 1996 decreased from $.11 in 1995 to a loss of $.22 in 1996.
For the nine months ended September 29, 1996, net earnings were $6.5
million, a decrease of $44.0 million below net earnings of $50.5 million in
1995. Net earnings per share for the nine months ended September 29, 1996
decreased from $.61 in 1995 to $.08 in 1996.
9
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LIQUIDITY AND CAPITAL RESOURCES
At September 29, 1996, the Company had cash and cash equivalents of $24.6
million and total debt of $227.5 million. Cash used in operating activities for
the nine months ended September 29, 1996 was $18.8 million compared to cash
provided by operating activities of $48.9 million for the comparable period of
1995. This decrease is primarily attributable to the reduction in earnings
before non-cash charges and increased inventory levels. Inventory balances at
September 29, 1996 reflect increases associated with the acquisition of certain
Samsonite/registered mark/ furniture assets, inventory growth related to bedding
products as a result of delayed seasonal blanket orders in 1996 and overall
increases to support anticipated, but generally unrealized, sales growth in the
second half of 1996. Cash flow from operating activities also benefited in 1996
from a change in the timing of income tax payments.
Capital spending, inclusive of a $5 million warehouse expansion financed
with a capital lease, totaled $55.7 million for the nine months ended September
29, 1996 and was primarily attributable to new product development, cost
reduction initiatives and warehouse expansions. Capital spending in 1995
reflected approximately $52.0 million associated with the Hattiesburg project.
During the first nine months of 1996, the net increase in the Company's
borrowings under its revolving credit facility was $55.0 million, primarily to
finance working capital investments.
The Company believes that its cash flow from operations, existing cash and
cash equivalent balances as well as its revolving credit facility will be
sufficient to finance its requirements to support working capital needs, capital
expenditures, restructuring expenditures and debt service in the foreseeable
future.
CAUTIONARY STATEMENTS
Certain of the information contained herein may contain "forward looking"
information, as such term is defined by the Private Securities Litigation Reform
Act of 1995 and in releases made by the Securities and Exchange Commission
("SEC" ). Actual results could differ materially from those projected in the
forward- looking statements as a result of various factors, including those set
forth in Exhibit 99.1 to the Company's report on Form 8-K filed with the SEC on
January 30, 1996, which is incorporated herein by reference.
10
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
A Special Meeting of the Shareholders of the Company was held on September
27, 1996 for the purpose of considering and voting on the following: (i)
Proposal No. 1 - Consideration of Option Plan for Albert J. Dunlap; (ii)
Proposal No. 2 - Consideration of Option Plan for Russell A. Kersh; and (iii)
Proposal No. 3 - Consideration of Option Plan for P. Newton White, all as fully
described in the Company's Proxy Statement for such Special Meeting. The Option
Plans for each of these officers of the Company were approved by the following
vote; there were no broker non-votes on any of the Proposals:
PROPOSAL NO. 1 - CONSIDERATION OF OPTION PLAN FOR ALBERT J. DUNLAP
VOTE TO APPROVE THE OPTION PLAN NUMBER OF SHARES
------------------------------- ----------------
For.................... 71,674,334
Against................ 2,573,452
Abstain................ 189,971
PROPOSAL NO. 2 - CONSIDERATION OF OPTION PLAN FOR RUSSELL A. KERSH
VOTE TO APPROVE THE OPTION PLAN NUMBER OF SHARES
------------------------------- ----------------
For.................... 71,646,172
Against................ 2,594,244
Abstain................ 197,341
PROPOSAL NO. 3 - CONSIDERATION OF OPTION PLAN FOR P. NEWTON WHITE
VOTE TO APPROVE THE OPTION PLAN NUMBER OF SHARES
------------------------------- ----------------
For.................... 71,676,152
Against................ 2,571,023
Abstain................ 190,582
ITEM 5. OTHER INFORMATION
The Company has issued press releases regarding certain management changes
and other matters, all of which are attached hereto and incorporated herein by
reference.
11
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3a. By-Laws of the Company, as amended.
10a. Employment Agreement dated as of July 22, 1996, between the Company and
Russell A. Kersh.
10b. Employment Agreement dated as of July 26, 1996, between the Company and P.
Newton White.
10c. Employment Agreement dated as of July 29, 1996, between the Company and
David C. Fannin.
10d. Credit Agreement dated September 16, 1996, among the Company, The Chase
Manhattan Bank and the Lenders named therein.
10e. Amended and Restated Sunbeam Corporation Equity Team Plan.
10f. Agreement and Release between Paul M. O'Hara and the Company dated August
7, 1996.
10g. Agreement and Release between Richard Boynton and the Company dated August
7, 1996.
10h. Agreement and Release between Spencer J. Volk and the Company dated
October 1, 1996.
11a. Calculation of Primary Earnings Per Share of Common Stock.
11b. Calculation of Fully Diluted Earnings Per Share of Common Stock.
27. Financial Data Schedule, submitted electronically to the Securities and
Exchange Commission for information only and not filed.
99.1 Press Release dated August 7, 1996, regarding changes in Directors and
Director compensation.
99.2 Press Release dated August 8, 1996, regarding additional management
changes.
99.3 Press Release dated August 19, 1996, regarding additional management
changes.
99.4 Press Release dated August 21, 1996, regarding the purchase of the
Company's stock by Directors.
99.5 Press Release dated August 29, 1996, regarding the employment of Richard
K. Brenner, Vice President, Worldwide Business Planning.
99.6 Press Release dated September 3, 1996, regarding the employment of Ronald
L. Newcomb, Vice President, Manufacturing.
99.7 Press Release dated September 3, 1996, regarding organizational changes.
99.8 Press Release dated September 16, 1996, announcing the employment of two
new executives.
99.9 Press Release dated September 17, 1996, announcing new $500 million credit
facility.
99.10 Press Release dated September 18 1996, commenting on the Steinhardt Funds
distribution of the Company's stock.
99.11 Press Release dated September 18, 1996, naming new marketing executive.
99.12 Press Release dated September 26, 1996, announcing the election of Charles
M. Elson to the Board of Directors.
99.13 Press Release dated October 7, 1996, announcing three marketing
executives.
99.14 Press Release dated October 8, 1996, announcing the selection of the
Company's new advertising agency.
99.15 Press Release dated October 16, 1996, announcing the location of the
Company's consolidated corporate headquarters.
99.16 Press Release dated October 23, 1996, reporting third quarter 1996
results.
(b) Reports on Form 8-K
The Company has previously reported the filing of reports on Form 8-K on July 19
and July 24, 1996. The Company has not filed any further reports on Form 8-K
during the third quarter of 1996.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUNBEAM CORPORATION
Date: October 24, 1996 BY: /S/ ROBERT J. GLUCK
------------------------
Robert J. Gluck
Vice President, Controller
(Principal Financial Officer
and duly authorized to sign
on behalf of the Registrant)
13
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EXHIBIT INDEX
NO. DESCRIPTION
3a. By-Laws of the Company, as amended.
10a. Employment Agreement dated as of July 22, 1996, between the Company and
Russell A. Kersh.
10b. Employment Agreement dated as of July 26, 1996, between the Company and
P. Newton White.
10c. Employment Agreement dated as of July 29, 1996, between the Company and
David C. Fannin.
10d. Credit Agreement dated September 16, 1996, among the Company, The Chase
Manhattan Bank and the Lenders named therein.
10e. Amended and Restated Sunbeam Corporation Equity Team Plan.
10f. Agreement and Release between Paul M. O'Hara and the Company dated
August 7, 1996.
10g. Agreement and Release between Richard Boynton and the Company dated
August 7, 1996.
10h. Agreement and Release between Spencer J. Volk and the Company dated
October 1, 1996.
11a. Calculation of Primary Earnings Per Share of Common Stock.
11b. Calculation of Fully Diluted Earnings Per Share of Common Stock.
27. Financial Data Schedule, submitted electronically to the Securities and
Exchange Commission for information only and not filed.
99.1 Press Release dated August 7, 1996, regarding changes in Directors and
Director compensation.
99.2 Press Release dated August 8, 1996, regarding additional management
changes.
99.3 Press Release dated August 19, 1996, regarding additional management
changes.
99.4 Press Release dated August 21, 1996, regarding the purchase of the
Company's stock by Directors.
99.5 Press Release dated August 29, 1996, regarding the employment of Richard
K. Brenner, Vice President, Worldwide Business Planning.
99.6 Press Release dated September 3, 1996, regarding the employment of
Ronald L. Newcomb, Vice President, Manufacturing.
99.7 Press Release dated September 3, 1996, regarding organizational changes.
99.8 Press Release dated September 16, 1996, announcing the employment of two
new executives.
99.9 Press Release dated September 17, 1996, announcing new $500 million
credit facility.
99.10 Press Release dated September 18 1996, commenting on the Steinhardt
Funds distribution of the Company's stock.
99.11 Press Release dated September 18, 1996, naming new marketing executive.
99.12 Press Release dated September 26, 1996, announcing the election of
Charles M. Elson to the Board of Directors.
99.13 Press Release dated October 7, 1996, announcing three marketing
executives.
99.14 Press Release dated October 8, 1996, announcing the selection of the
Company's new advertising agency.
99.15 Press Release dated October 16, 1996, announcing the location of the
Company's consolidated corporate headquarters.
99.16 Press Release dated October 23, 1996, reporting third quarter 1996
results.
14
BY-LAWS
OF
SUNBEAM CORPORATION
---------------------
ARTICLE I
OFFICES
Section 1.1 REGISTERED OFFICE. The registered office of the Corporation
within the State of Delaware shall be located at the principal place of business
in said State of such corporation or individual acting as the Corporation's
registered agent in Delaware.
Section 1.2 OTHER OFFICES. The Corporation may also have offices and
places of business at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1 PLACE OF MEETINGS. All meetings of stockholders shall be
held at the principal office of the Corporation, or at such other place within
or without the State of Delaware as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2.2 ANNUAL MEETINGS. The annual meeting of stockholders for the
election of directors shall be held at such time on such day, other than a legal
holiday, as the Board of Directors in each such year determines. At the annual
meeting, the stockholders entitled to vote for the election of directors shall
elect, by a plurality vote, a Board of Directors and transact such other
business as may properly come before the meeting.
Section 2.3 SPECIAL MEETINGS. Special meetings of stockholders, for any
purpose or purposes, may be called by the Chairman of the Board of Directors.
Any such request shall state the purpose or purposes of the proposed meeting. At
any special meeting of stockholders, only such business may be transacted as is
related to the purpose or purposes set forth in the notice of such meeting.
Section 2.4 NOTICE OF MEETINGS. Written notice of every meeting of
stockholders, stating the place, date and hour thereof and, in the case of a
special meeting of stockholders, the purpose or purposes thereof and the person
or persons by whom or at whose direction such meeting has been called and such
notice is being issued, shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
or at
<PAGE>
the direction of the Chairman of the Board, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the stock transfer books of the
Corporation. Nothing herein contained shall preclude the stockholders from
waiving notice as provided in Section 4.1 hereof.
Section 2.5 QUORUM. The holders of a majority of the issued and
outstanding shares of stock of the Corporation entitled to vote, represented in
person or by proxy, shall be necessary to and shall constitute a quorum for the
transaction of business at any meeting of stockholders. If, however, such quorum
shall not be present or represented at any meeting of stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At any such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. Notwithstanding the foregoing, if after any
such adjournment the Board of Directors shall fix a new record date for the
adjourned meeting, or if the adjournment is for more than thirty (30) days, a
notice of such adjourned meeting shall be given as provided in Section 2.4
hereof, but such notice may be waived as provided in Section 4.1 hereof.
Section 2.6 VOTING. At each meeting of stockholders, each holder of
record of shares of stock entitled to vote shall be entitled to vote in person
or by proxy, and each such holder shall be entitled to one vote for every share
standing in his name on the books of the Corporation as of the record date fixed
by the Board of Directors or prescribed by law and, if a quorum is present, a
majority of the shares of such stock present or represented at any meeting of
stockholders shall be the vote of the stockholders with respect to any item of
business, unless otherwise provided by any applicable provision of law, by these
By-Laws or by the Certificate of Incorporation.
Section 2.7 PROXIES. Every stockholder entitled to vote at a meeting or
by consent without a meeting may authorize another person or persons to act for
him by proxy. Each proxy shall be in writing executed by the stockholder giving
the proxy or by his duly authorized attorney. No proxy shall be valid after the
expiration of three (3) years from its date, unless a longer period is provided
for in the proxy. Unless and until voted, every proxy shall be revocable at the
pleasure of the person who executed it, or his legal representatives or assigns
except in those cases where an irrevocable proxy permitted by statute has been
given.
Section 2.8 CONSENTS. Whenever a vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provision of statute, the Certificate of Incorporation or these
By-Laws, the meeting, prior notice thereof and vote of stockholders may be
dispensed with if the holders of shares having not less than the minimum number
of votes that would have been necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted
shall consent in writing to the taking of such action. Where corporate action is
taken in such matter by less than unanimous written consent, prompt written
notice of the taking of such action shall be given thereto.
<PAGE>
Section 2.9 STOCK RECORDS. The Secretary or agent having charge of the
stock transfer books shall make, at least ten (10) days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order and showing
the address of and the number and class and series, if any, of shares held by
each. For a period of ten (10) days prior to such meeting, such list shall be
kept at the principal place of business of the Corporation or at the office of
the transfer agent or registrar of the Corporation and such other places as
required by statute and shall be subject to inspection by any stockholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any stockholder at any time during the meeting.
ARTICLE III
DIRECTORS
Section 3.1 NUMBER. The number of directors of the Corporation which
shall constitute the entire Board of Directors shall not be less than three nor
more than twelve as fixed from time to time by a vote of a majority of the
entire Board, provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the time in office.
Section 3.2 RESIGNATION AND REMOVAL. Any director may resign at any
time upon notice of resignation to the Corporation. Any director may be removed
at any time by vote of the stockholders then entitled to vote for the election
of directors at a special meeting called for that purpose, either with or
without cause.
Section 3.3 NEWLY CREATED DIRECTORSHIP AND VACANCIES. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason whatsoever shall be
filled by vote of the Board. If the number of directors then in office is less
than a quorum, such newly created directorships and vacancies may be filled by a
vote of a majority of the directors then in office. Any director elected to fill
a vacancy shall be elected until the next meeting of stockholders at which the
election of directors is in the regular course of business, and until his
successor has been elected and qualified.
Section 3.4 POWERS AND DUTIES. Subject to the applicable provisions of
law, these By-Laws or the Certificate of Incorporation, but in furtherance and
not in limitation of any rights therein conferred, the Board of Directors shall
have the control and management of the business and affairs of the Corporation
and shall exercise all such powers of the Corporation and do all such lawful
acts and things as may be exercised by the Corporation.
Section 3.5 PLACE OF MEETINGS. All meetings of the Board of Directors
may be held either within or without the State of Delaware.
Section 3.6 ANNUAL MEETINGS. An annual meeting of each newly elected
Board of Directors shall be held immediately following the annual meeting of
stockholders, and no notice of such meeting to the newly elected directors shall
be necessary in order to legally constitute the
<PAGE>
meeting, provided a quorum shall be present, or the newly elected directors may
act by the written consent of all of such directors.
Section 3.7 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice, and at such time and at such place as
shall from time to time be fixed, in advance, by resolution of the Board.
Section 3.8 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board. Written notice of each
special meeting of directors stating the time and place of the meeting shall be
given to each director at least twenty-four (24) hours before such meeting,
provided that neither the business to be transacted at, nor the purpose of, any
special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
Section 3.9 NOTICE OF MEETINGS. Notice of each special meeting of the
Board shall be given by the Secretary or an Assistant Secretary and shall state
the place, date and time of the meeting. Notice of each such meeting shall be
given orally or shall be mailed to each director at his residence or usual place
of business. If notice of less than three (3) days is given, it shall be oral,
whether by telephone or in person, or sent by special delivery mail, facsimile
or telegraph. If mailed, the notice shall be given when deposited in the United
States mail, postage prepaid. Notice of any adjourned meeting, including the
place, date and time of the new meeting, shall be given to all directors not
present at the time of the adjournment, as well as to the other directors unless
the place, date and time of the new meeting is announced at the adjourned
meeting. Nothing herein contained shall preclude the directors from waiving
notice as provided in Section 4.1 hereof.
Section 3.10 QUORUM AND VOTING. At all meetings of the Board of
Directors, a majority of the entire Board shall be necessary to and shall
constitute a quorum for the transaction of business, unless otherwise provided
by any applicable provision of law, by these By-Laws, or by the Certificate of
Incorporation. The act of a majority of the directors present at the time of the
vote, if a quorum is present at such time, shall be the act of the Board of
Directors, unless otherwise provided by an applicable provision of law, by these
By-Laws or by the Certificate of Incorporation. If a quorum shall not be present
at any meeting of the Board of Directors, the directors present thereat may
adjourn the meeting from time to time, until a quorum shall be present.
Section 3.11 COMPENSATION. The salaries and other compensation of
directors for services to the Corporation as directors, officers or otherwise
shall be fixed by, or in the manner prescribed by, the Board of Directors,
irrespective of any personal interest of any of its members.
Section 3.12 BOOKS AND RECORDS. The directors may keep the books of the
Corporation, except such as are required by law to be kept within the state,
outside of the State of Delaware, at such place or places as they may from time
to time determine.
Section 3.13 ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the Board, or by a committee of the Board, may be taken without a
meeting if all members
<PAGE>
of the Board or the committee, as the case may be, consent in writing to the
adoption of a resolution authorizing the action. Any such resolution and the
written consents thereto by the members of the Board or committee shall be filed
with the minutes of the proceedings of the Board or committee.
Section 3.14 TELEPHONE PARTICIPATION. Any one or more members of the
Board, or any committee of the Board, may participate in a meeting of the Board
or committee by means of a conference telephone call or similar communications
equipment allowing all persons participating in the meeting to hear each other
at the same time. Participation by such means shall constitute presence in
person at a meeting.
Section 3.15 EXECUTIVE COMMITTEE. The Board of Directors may, by
resolution adopted by the Board, appoint an Executive Committee consisting of
not less than three (3) directors, at least one of whom is not a beneficial
owner, or the representative of a beneficial owner, of 10% or more of the
Corporation's outstanding common stock. The Executive Committee shall keep
minutes of its meetings and report the same to the Board. The Executive
Committee, subject to the last sentence of Section 3.16 of these Bylaws, shall
have and may exercise all of the powers of the Board.
Section 3.16 OTHER COMMITTEES OF THE BOARD. The Board, by resolution
adopted by a majority of the entire Board, may designate such other committees,
each consisting of one or more directors and having such title as the Board may
consider to be a proper description of its function. The Board may designate one
or more directors as alternate members of any such other committee. Such
alternate members may replace any absent member or members at any meeting of
such other committee. Each other committee (including the members thereof) shall
serve at the pleasure of the Board and shall keep minutes of its meetings and
report the same to the Board. Except as otherwise provided by law, each such
committee, to the extent provided in the resolution establishing it, shall have
and may exercise all the authority of the Board with respect to all matters.
However, no such other committee shall have power or authority to:
A. amend the Certificate of Incorporation;
B. adopt an agreement of merger or consolidation;
C. recommend to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets;
D. recommend to the stockholders a dissolution of the
Corporation or a revocation of a dissolution;
E. amend these By-Laws; and
F. unless expressly so provided by resolution of the
Board, (i) declare a dividend; or (ii) authorize the issuance of shares of the
Corporation of any class.
<PAGE>
Section 3.17 MANDATORY RETIREMENT. No nominee for election as a
director shall be sixty-five (65) years or older on the date of election. A
diretor who attains the age of sixty-five (65) during his or her term of office
shall complete his or her term but shall not be eligible to stand for
re-election thereafter.
ARTICLE IV
WAIVER
Section 4.1 WAIVER. Whenever a notice is required to be given by any
provision of law, by these By-Laws, or by the Certificate of Incorporation, a
written waiver, signed by the person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to such notice. Attendance
of a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
Section 5.1 EXECUTIVE OFFICERS. The officers of the Corporation shall
be the Chairman of the Board, a Treasurer and Secretary. Any person may hold two
or more of such offices. The officers of the Corporation shall be elected
annually (and from time to time by the Board of Directors, as vacancies occur),
at the annual meeting of the Board of Directors following the meeting of
stockholders at which the Board of Directors was elected.
Section 5.2 OTHER OFFICERS. The Board of Directors may appoint such
other officers and agents, including a Chief Executive Officer, President, Chief
Financial Officer, Vice President, Assistant Vice Presidents, Secretaries,
Assistant Secretaries and Assistant Treasurers, as it shall at any time or from
time to time deem necessary or advisable.
Section 5.3 AUTHORITIES AND DUTIES. All officers, as between themselves
and the Corporation, shall have such authority and perform such duties in the
management of business and affairs of the Corporation as may be provided in
these By-Laws, or, to the extent not so provided, as may be prescribed by the
Board of Directors.
Section 5.4 TENURE AND REMOVAL. The officers of the Corporation shall
be elected or appointed to hold office until their respective successors are
elected or appointed. All officers shall hold office at the pleasure of the
Board of Directors, and any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors for cause or
without cause at any regular or special meeting.
<PAGE>
Section 5.5 VACANCIES. Any vacancy occurring in any office of the
Corporation, whether because of death, resignation or removal, with or without
cause, or any other reason, shall be filled by the Board of Directors.
Section 5.6 COMPENSATION. The salaries and other compensation of all
officers and agents of the Corporation shall be fixed by or in the manner
prescribed by the Board of Directors.
Section 5.7 CHAIRMAN OF THE BOARD. The Chairman of the Board shall have
the general charge of the business and affairs of the Corporation and shall
preside at all meetings of the stockholders and the directors. The Chairman
shall see to it that all resolutions and orders of the Board are carried into
effect, and, in connection therewith, shall be authorized to delegate the other
executive officers such of his powers and duties as Chairman of the Board at
such times and in such manner as he may deem advisable. In the event that the
Corporation shall at any time or from time to time own or have power to vote any
securities of any other issuer, such securities shall be voted by the Chairman
of the Board. The Chairman of the Board shall perform such other duties as are
properly required of him by the Board of Directors.
Section 5.8 PRESIDENT. The President, if and when appointed or elected,
shall assist the Chairman of the Board in the management of the business of the
Corporation and, in the absence of the Chairman, he shall preside at all
meetings of the stockholders and the directors and exercise the other powers and
perform the other duties of the Chairman or designate the executive officers of
the Corporation by whom such other powers shall be exercised and other duties
performed; and he shall have such other powers and duties as the Board of
Directors or Chairman of the Board may from time to time prescribe. Except where
by law or by order of the Board of Directors the signature of the Chairman of
the Board is required, the President shall have the same power as the Chairman
of the Board to execute instruments on behalf of the Corporation.
Section 5.9 SECRETARY. The Secretary shall attend all meetings of the
stockholders and all meetings of the Board of Directors and shall record all
proceedings taken at such meetings in a book to be kept for that purpose; he
shall see that all notices of meetings of stockholders and meetings of the Board
of Directors are duly given in accordance with the provisions of these By-Laws
or as required by law; he shall be the custodian of the records and of the
corporate seal or seals of the Corporation; he shall have authority to affix the
corporate seal or seals to all documents, the execution of which, on behalf of
the Corporation, under its seal, is duly authorized, and when so affixed it may
be attested by his signature; and in general, he shall perform all duties
incident to the office of the Secretary of a corporation, and such other duties
as the Board of Directors may from time to time prescribe.
Section 5.10 TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit, or cause to be deposited, in the name and to the
credit of the Corporation, all moneys and valuable effects in such banks, trust
companies, or other depositories as shall from time to time be selected by the
Board of Directors. He shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation; he shall render to the
Chairman of the Board and to each member of the Board of Directors, whenever
requested, an account of all of his transactions as Treasurer and of the
financial condition of the Corporation; and in general, he shall perform all
<PAGE>
of the duties incident to the office of the Treasurer of a corporation, and such
other duties as the Board of Directors may from time to time prescribe.
Section 5.11 OTHER OFFICERS. The Board of Directors may also elect or
may delegate to the Chairman of the Board the power to appoint such other
officers as it may at any time or from time to time deem advisable, and any
officers so elected or appointed shall have such authority and perform such
duties as the Board of Directors or the Chairman of the Board, if he shall have
appointed them, may from time to time prescribe.
ARTICLE VI
PROVISIONS RELATING TO STOCK CERTIFICATES AND STOCKHOLDERS
Section 6.1 FORM AND SIGNATURE. The shares of the Corporation shall be
represented by a certificate signed by the Chairman of the Board or the
President or any Vice President and by the Secretary or any Assistant Secretary
or the Treasurer, or any Assistant Treasurer, and shall bear the seal of the
Corporation or a facsimile thereof. Each certificate representing shares shall
state upon its face (a) that the Corporation is formed under the laws of the
State of Delaware, (b) the name of the person or persons to whom it is issued,
(c) the number of shares which such certificate represents and (d) the par
value, if any, of each share represented by such certificate.
Section 6.2 REGISTERED STOCKHOLDERS. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares of stock to receive dividends or other distributions, and to
vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of stock, and shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part
of any other person.
Section 6.3 TRANSFER OF STOCK. Upon surrender to the Corporation or the
appropriate transfer agent, if any, of the Corporation, of a certificate
representing shares of stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, and, in the event that the
certificate refers to any agreement restricting transfer of the shares which it
represents, proper evidence of compliance with such agreement, a new certificate
shall be issued to the person entitled thereto, and the old certificate
cancelled and the transaction recorded upon the books of the Corporation.
Section 6.4 LOST CERTIFICATES, ETC. The Corporation may issue a new
certificate for shares in place of any certificate theretofore issued by it,
alleged to have been lost, mutilated, stolen or destroyed, and the Board may
require the owner of such lost, mutilated, stolen or destroyed certificate, or
his legal representatives, to make an affidavit of the fact and/or to give
the Corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the Corporation on account of the alleged loss,
mutilation, theft or destruction of any such certificate or the issuance of any
such new certificate.
Section 6.5 RECORD DATE. For the purpose of determining the
stockholders entitled to notice of, or to vote at, any meeting of stockholders
or any adjournment thereof, or to express
<PAGE>
written consent to any corporate action without a meeting, or for the purpose of
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board may fix, in advance, a record date. Such date
shall not be more than sixty (60) nor less than ten (10) days before the date of
any such meeting, nor more than sixty (60) days prior to any other action.
Section 6.6 REGULATIONS. Except as otherwise provided by law, the Board
may make such additional rules and regulations, not inconsistent with these
By-Laws, as it may deem expedient, concerning the issue, transfer and
registration of certificates for the securities of the Corporation. The Board
may appoint, or authorize any officer of officers to appoint, one or more
transfer agents and one or more registrars and may require all certificates for
shares of capital stock to bear the signature or signatures of any of them.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 DIVIDENDS AND DISTRIBUTIONS. Dividends and other
distributions upon or with respect to outstanding shares of stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, bonds, property, or in stock of the
Corporation. The Board shall have full power and discretion, subject to the
provisions of the Certificate of Incorporation or the terms of any other
corporate document or instrument to determine what, if any, dividends or
distributions shall be declared and paid or made.
Section 7.2 CHECKS, ETC. All checks or demands for money and notes or
other instruments evidencing indebtedness or obligations of the Corporation
shall be signed by such officer or officers or other person or persons as may
from time to time be designated by the Board of Directors.
Section 7.3 SEAL. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its incorporation and the words "Corporate
Seal Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
Section 7.4 FISCAL YEAR. The fiscal year of the Corporation shall end
on the Sunday closest to December 31 each year.
Section 7.5 GENERAL AND SPECIAL BANK ACCOUNTS. The Board may authorize
from time to time the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may
designate or as may be designated by any officer or officers of the Corporation
to whom such power of designation may be delegated by the Board from time to
time. The Board may make such special rules and regulations with respect to such
bank accounts, not inconsistent with the provisions of these By-Laws, as it may
deem expedient.
<PAGE>
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
Section 8.1 INDEMNIFICATION BY CORPORATION. To the extent permitted by
law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) the Corporation shall indemnify
any person against any and all judgments, fines, amounts paid in settling or
otherwise disposing of threatened, pending or completed actions, suits or
proceedings, whether civil, criminal, administrative or investigative and
expenses in connection therewith, incurred by reason of the fact that he, his
testator or intestate is or was a director or officer of, or a plan fiduciary or
plan administrator of any employee benefit plan sponsored by, the Corporation or
of any other corporation of any type or kind, domestic or foreign, which he
served in any capacity at the request of the Corporation. To the extent
permitted by law, expenses so incurred by any such person in defending a civil
or criminal action or proceeding shall at his request be paid by the Corporation
in advance of the final disposition of such action or proceeding. The foregoing
right of indemnification shall in no way be exclusive of any other rights or
indemnification to which any such person may be entitled, under any By-law,
agreement, vote of shareholders or disinterested directors or otherwise, and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
ARTICLE IX
ADOPTION AND AMENDMENTS
Section 9.1 POWER TO AMEND. These By-Laws may be amended or repealed
and any new By-Laws may be adopted by the Board of Directors; provided that
these By-Laws and any other By-Laws amended or adopted by the Board of Directors
may be amended, may be reinstated, and new By-Laws may be adopted, by the
stockholders of the Corporation entitled to vote at the time for the election of
directors.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 22, 1996 (the
"Effective Date"), by and between RUSSELL A. KERSH (the "Executive") and SUNBEAM
CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Company desires to employ the Executive and the Executive
desires to furnish services to the Company on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties desire to enter into this agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. EMPLOYMENT PERIOD. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence on the Effective Date
and shall end on July 22, 1999 (or the Date of Termination (as defined in
Section 6 below), if earlier).
3. POSITION AND DUTIES. The Executive shall serve as Executive Vice
President, Finance and Administration, and shall have such responsibilities,
duties and authority as are consistent with such position and such other duties
as may from time to time be assigned to him by the Chief Executive Officer. The
Executive agrees to devote substantially all his working time, attention and
energies to the performance of his duties for the Company. The Company shall
nominate the Executive as a director of the Company and shall use its best
efforts to have the Executive elected and reelected to the Board for the
duration of the Employment Period.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be at the Company's principal executive offices in either
Broward or Palm Beach County, Florida, or such other location as may be agreed
to by the Board. In the event that the Company's principal executive offices are
moved from Broward or Palm Beach County Florida, the Company shall promptly pay,
or reimburse the Executive for, all reasonable expenses incurred by the
Executive relating to any change of the Executive's residence from Broward or
Palm Beach County, Florida, in connection with his employment hereunder,
including, without limitation, reasonable expenses for himself and his family of
travel, moving, storage and suitable lodging and maintenance, and the Company
shall reimburse the Executive on a grossed up basis in the event that any tax is
assessed upon him in relation to any such expenses. The Company shall pay or
reimburse the Executive for all reasonable costs and expenses of residential
relocation incurred by him in connection with each and every additional change,
if any, in the location of
<PAGE>
the principal executive offices of the Company, and the Executive shall be
reimbursed by the Company on a grossed up basis in the event that any tax is
assessed upon him in relation to any such costs or expenses.
5. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. As compensation for the performance by the
Executive of his duties hereunder, during the Employment Period the Company
shall pay the Executive a base salary at an annual rate of $425,000 (the "Base
Salary"), which Base Salary shall be payable in substantially equal semi-monthly
installments. It is agreed that there shall be no increase or decrease in the
Base Salary during the Employment Period. The Company also shall pay to the
Executive, within fifteen (15) days from the Effective Date, the sum of One
Hundred and Twenty Five Thousand Dollars ($125,000) as a one time bonus for
agreeing to the terms hereof. The parties agree that the Executive shall not be
entitled to participate in any other bonus or incentive compensation programs of
the Company.
(b) EQUITY AND STOCK OPTION GRANTS.
(i) PURCHASE OF COMMON STOCK. Effective as of the Effective
Date, the Executive shall purchase from the Company for his own
account, and the Company shall sell to the Executive, a total of 40,817
shares of the Company's Common Stock, par value $.01 per share ("Common
Stock"), for the sum of $500,008.25 ($12.25 per share of Common Stock)
(the "Purchased Stock"). The Purchased Stock shall be the sole property
of the Executive, shall be unrestricted (although unregistered at the
time of issuance) and shall be freely tradeable by the Executive,
subject to applicable securities laws and other legal restrictions.
(ii) RESTRICTED SHARES. Effective as of the Effective Date,
the Executive has been granted, without cost to the Executive, 100,000
shares of the Company's Common Stock, on the terms and conditions set
forth herein (the "Restricted Shares"). One-third of such Restricted
Shares shall vest and cease to be restricted in equal installments on
each of the first, second and third anniversaries of the Effective Date
(subject to earlier vesting provisions set forth in Section 7) provided
that the Executive continues to be employed pursuant to this Agreement
upon such anniversary dates. All such shares, once vested, shall be the
sole property of the Executive, shall be unrestricted and shall be
freely tradeable by the Executive, subject to applicable legal
restrictions.
(A) ISSUANCE OF CERTIFICATES. The Restricted Shares shall be
registered in the Executive's name, but the certificates
evidencing the Restricted Shares shall be retained by the
Company until such shares become vested and the restrictions
thereon lapse. The period prior to the time that any
particular Restricted Shares become vested and the
restrictions thereon lapse is hereinafter referred to as the
"Restricted Period" with respect to such shares. The Executive
shall execute a
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stock power, in blank, with respect to such Restricted Shares
and deliver the same to the Company.
(B) RIGHTS AS A STOCKHOLDER. Except as provided herein, during
the Restricted Period, the Executive shall have all the rights
of a stockholder with respect to Restricted Shares, including
the right to receive dividends or other distributions and the
right to vote such shares; provided that, in the discretion of
the Company any such dividends or other distributions may be
retained by the Company unless and until the Restricted Shares
in respect of which such dividends or other distributions were
paid shall vest.
(C) NON-TRANSFERABILITY. During the Restricted Period, the
Executive may not sell, transfer, pledge, or otherwise
encumber or dispose of the Restricted Shares, and any
attempted sale, transfer, pledge or other encumbrance or
disposition (whether voluntary or involuntary) in violation of
this Section 5(b)(ii)(C) shall be null and void.
(D) DELIVERY OF SHARE CERTIFICATES. Upon the vesting of any
Restricted Shares, the certificates evidencing such Restricted
Shares, together with any dividends or other distributions
retained by the Company pursuant to Section 5(b)(ii)(B), shall
be delivered promptly to the Executive. In the case of
Executive's death, such certificates, dividends and
distributions will be delivered to the beneficiary designated
in writing by the Executive pursuant to a form of designation
provided by the Company, to the Executive's legatee or
legatees, or to his personal representatives or distributees,
as the case may be.
(iii) STOCK OPTIONS. The Executive shall be granted the
following stock options (collectively, the "Option Award"):
(A) Effective as of the Effective Date, by action of the
Executive Development and Compensation Committee of the Board
of Directors, the Executive has been granted a stock option
(the "Plan Option") to purchase 250,000 shares of Common Stock
pursuant to the Company's Amended and Restated Equity Team
Plan (the "Option Plan") (a copy of which Option Plan is
attached hereto as SCHEDULE A and incorporated herein by
reference), which options are granted upon the terms and
conditions as set forth in the Option Plan (at an exercise
price of $14.26/share), except that such option shall vest in
equal increments on the first, second and third anniversaries
of the grant date and shall be subject to and modified by all
other terms and provisions of this Agreement, as expressly set
forth herein. In the event of any conflict between any terms
of the Option Plan and the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall
take precedence and shall be controlling as between such
documents.
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(B) Effective as of the Effective Date, and subject to
shareholder approval by the Company's shareholders at a
special meeting to be held for that purpose (the "Special
Meeting"), which Special Meeting the Company agrees to convene
as soon as practicable after the Effective Date hereof, by
action of the Executive Development and Compensation
Committee, the Executive has been granted a non-qualified
stock option (the "Non-Qualified Option") to purchase 250,000
shares of Common Stock. The Non-Qualified Option shall be upon
the same terms and conditions as are set forth in Section
5(b)(iii)(A) above, including the exercise price of
$14.26/share and the three year vesting schedule. In the event
that Company's shareholders fail to approve the grant of the
Non-Qualified Option at the Special Meeting, the Company and
the Executive shall negotiate in good faith a mutually
acceptable alternative compensation arrangement; provided,
however, that the Executive, in his sole discretion, may elect
to terminate this Agreement, and the Executive shall be
entitled to receive the compensation, rights and benefits
provided in Section 7(b) hereof (other than in respect of the
Non-Qualified Option).
(iv) REGISTRATION RIGHTS. Within six months after the
Effective Date, the Company shall cause the Purchased Stock, the
Restricted Shares and all shares of stock subject to the Option Award
to be registered or qualified for resale under the Securities Act of
1933 and applicable state laws. Unless and until registered under the
Securities Act of 1933, as amended, certificates evidencing the
Purchased Stock, the Restricted Shares and shares acquired pursuant to
the exercise of the Non-Qualified Option shall bear the following
legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY,
SUCH REGISTRATION IS NOT REQUIRED.
(c) EXPENSES. During the Employment Period, the Company shall
reimburse the Executive for all reasonable business expenses in accordance with
applicable policies and procedures then in force.
(d) VACATION AND OTHER ABSENCES. The Executive shall be
entitled to paid vacation and other paid absences, whether for holidays,
illness, personal time or any similar purposes, during the Employment Period in
accordance with policies applicable generally to senior executives of the
Company; provided, however, that the Executive shall always be entitled to at
least six weeks of paid vacation in each calendar year and pro rata for part of
a year. Up to four weeks per year of unused vacation may be maintained by the
Executive on a cumulative basis and may be subsequently used in any year or if
not so used, the Executive shall be compensated for any unused vacation days
upon the termination of this Agreement for any reason.
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(e) TAX PLANNING SERVICES. During the Employment Period, the
Company shall provide the Executive with tax-related advice and services without
cost or expense to him and shall reimburse the Executive on a grossed up basis
in the event that any tax is assessed upon him in relation to such services.
(f) OTHER BENEFITS. During the Employment Period, the
Executive shall be eligible to participate at no cost or expense to him in
welfare plans and programs (including any tax-deferred savings plan, group life
insurance plan, medical and dental insurance plan, and accident and disability
insurance plan) ("Benefit Plans") applicable generally to employees and/or
senior executives of the Company. The Company will waive, or obtain the waiver
of, any waiting periods for eligibility under the Benefit Plans or will provide
comparable benefits to the Executive without cost to him during the waiting
period.
6. TERMINATION. The Executive's employment hereunder, as the case may
be, may be terminated as follows:
(a) DEATH. The Executive's employment shall terminate upon his
death, and the date of his death shall be the Date of Termination.
(b) DISABILITY. If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for one hundred and twenty (120)
consecutive days and, within thirty (30) days after written Notice of
Termination (as defined in Section 6(g) hereof), shall not have returned to the
performance of his duties hereunder on a full-time basis ("Disability"), the
Company may terminate the Executive's employment hereunder. In this event, the
Date of Termination shall be thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period).
(c) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder:
(i) upon the Executive's conviction for the commission of a
felony (or a plea of nolo contendere thereto); or
(ii) willful failure by the Executive substantially to perform
his duties hereunder (other than any such failure resulting from the
Executive's incapacity due to Disability).
For purposes hereof, no act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be
done by him not in good faith or without reasonable belief that his
action or omission was in the best interests of the
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Company or contrary to written instructions of the Chief Executive
Officer or the Board of Directors. The Date of Termination shall be the
date specified in the Notice of Termination; provided, however, that,
in the case of a termination for Cause under clause (ii) above, the
Date of Termination shall not be earlier than 30 days after delivery of
the Notice of Termination. Anything herein to the contrary
notwithstanding, if, following a termination of the Executive's
employment by the Company for Cause based upon the conviction of the
Executive for a felony, such conviction is overturned in a final
determination on appeal, the Executive shall be entitled to the
payments and the economic equivalent of the benefits the Executive
would have received if his employment had been terminated by the
Company without Cause.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment hereunder for Good Reason, provided that
the Executive shall have delivered a Notice of Termination (as defined in
Section 6(g) hereof) within ninety (90) days after the occurrence of the event
of Good Reason giving rise to such termination. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of one or more of the following
circumstances, without the Executive's express written consent, which are not
remedied by the Company within thirty (30) days of receipt of the Executive's
Notice of Termination:
(i) an assignment to the Executive of any duties materially
inconsistent with his positions, duties, responsibilities and status
with the Company or any material limitation of the powers of the
Executive not consistent with the powers of the Executive contemplated
by Section 3 hereof; or
(ii) any removal of the Executive from, or any failure to
re-elect the Executive to, the executive officer position specified in
Section 3 of this Agreement, or, without the Executive's consent,
failure to re-elect the Executive as a Director of the Company; or
(iii) any other material breach by the Company of this
Agreement.
In the event of a termination for Good Reason, the Date of
Termination shall be the date specified in the Notice of Termination, which
shall be no more than thirty (30) days after the Notice of Termination.
(e) OTHER TERMINATIONS. The Company may terminate the
Executive's employment hereunder at any time, subject to the provisions of
Section 7(e) hereof. The Executive may terminate his employment at any time,
subject to the provisions of Section 7(d) hereof. If the Executive's employment
is terminated hereunder for any reason other than as set forth in Sections 6(a)
through 6(d) hereof, the date on which a Notice of Termination is given or any
later date (within 30 days) set forth in such Notice of Termination shall be the
Date of Termination.
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(f) TERMINATION BY THE EXECUTIVE UPON CHANGE IN CONTROL. Upon
a Change in Control (as defined below), the Executive shall have the right, upon
delivery to the Company of a Notice of Termination (which shall specify a Date
of Termination not less than 30 days after such Notice of Termination), to
terminate his employment under this Agreement and to receive the payments
provided pursuant to Section 7(f) below. If the Executive shall elect to
terminate his employment with the Company other than upon a Change in Control,
he shall receive only the compensation referred to in Section 7(d) below. For
purposes of this Agreement, a Change in Control shall mean the occurrence of any
one of the following events:
(i) any "person" as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, as amended, becomes a
"beneficial owner," as such term is used in Rule 3d-3 promulgated under
that Act, of 25% or more of the voting stock of the Company (other than
a person that is currently the beneficial owner of such percentage of
the Company's voting stock);
(ii) the majority of the Board consists of individuals other
than Incumbent Directors, which term means the members of the Board on
the date of this Agreement, the Executive and the individuals
designated as directors by the Chief Executive Officer of the Company;
provided that any person becoming a director subsequent to such date
whose election or nomination for election was supported by two-thirds
of the directors who then comprised the Incumbent Directors shall be
considered to be an Incumbent Director;
(iii) the Company, without the Executive's consent, adopts
any plan of liquidation providing for the distribution of all or
substantially all of its assets; or
(iv) all or substantially all of the assets or business of
the Company are disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Company immediately
prior to such merger, consolidation or other transaction beneficially
own, directly or indirectly, in substantially the same proportion as
they owned the voting stock of the Company, all of the voting stock or
other ownership interests of the entity or entities, if any, that
succeed to the business of the Company).
(g) NOTICE OF TERMINATION. Any termination of the Executive's
employment hereunder by the Company or by the Executive (other than termination
pursuant to Section 6(a) hereof) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 13 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. If any dispute concerning a Notice of Termination of the
Executive's employment under Section 6(b), 6(c) or 6(d) hereof results in a
determination that a proper basis for such
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termination did not exist under such section, the Executive's employment under
this Agreement shall be treated, with respect to a Notice of Termination
pursuant to Section 6(b) or 6(c) hereof, as having been terminated pursuant to
Section 6(e) hereof or, with respect to a Notice of Termination pursuant to
Section 6(d) hereof, as having not been terminated.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DISABILITY PERIOD. During any period during the
Employment Period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness ("Disability Period"),
the Executive shall continue to (i) receive his full Base Salary and (ii)
participate in the Benefit Plans. Such payments made to the Executive during the
Disability Period shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security disability insurance
program, and which amounts were not previously applied to reduce any such
payment.
(b) DEATH. If the Executive's employment hereunder is
terminated as a result of death, then:
(i) the Company shall pay the Executive's estate or
designated beneficiary, as soon as practicable after the Date of
Termination, any Base Salary installments due in the month of death and
any reimbursable expenses, accrued or owing the Executive hereunder as
of the Date of Termination;
(ii) the Options granted to the Executive pursuant to the
Plan Option and the Options granted to the Executive pursuant to the
Non-Qualified Option (if such Non-Qualified Option has been approved by
the shareholders as provided in Section 5(b)(iii)(B)) shall become
vested and exercisable, as of the Date of Termination, to the extent
such Option Award would have otherwise become vested on or before the
first anniversary of the Date of Termination, and all vested Options
shall remain exercisable for a period of one year following such Date
of Termination and shall thereafter be completely forfeited and
cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares that have not
vested as the Date of Termination equal to the number of such unvested
Restricted Shares multiplied by a fraction, the numerator of which is
36 minus the number of full months remaining in the Employment Period
(disregarding the earlier termination thereof) after the Date of
Termination and denominator of which is 36, shall become vested as of
the Date of Termination and the restrictions imposed thereon shall
lapse. The balance of such unvested Restricted Shares shall be
forfeited to the Company (without further action on
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the part of the Company or the Executive) as of the Date of
Termination, and the Executive shall have no further rights with
respect to such balance.
(c) DISABILITY. If the Executive's employment hereunder is
terminated as a result of Disability, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Options granted to the Executive pursuant to the
Plan Option and the Options granted to the Executive pursuant to the
Non-Qualified Option (if such Non-Qualified Option has been approved by
the shareholders as provided in Section 5(b)(iii)(B)) shall become
vested and exercisable, as of the Date of Termination, to the extent
such Option Award would have otherwise become vested on or before the
first anniversary of the Date of Termination, and all vested Options
shall remain exercisable for a period of three years following such
Date of Termination and shall thereafter be completely forfeited and
cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares that have not
vested as the Date of Termination equal to the number of such unvested
Restricted Shares multiplied by a fraction, the numerator of which is
36 minus the number of full months remaining in the Employment Period
(disregarding the earlier termination thereof) after the Date of
Termination and denominator of which is 36, shall become vested, and
the restrictions imposed thereon shall lapse. The balance of such
unvested Restricted Shares shall be forfeited to the Company (without
further action on the part of the Company or the Executive) as of the
Date of Termination, and the Executive shall have no further rights
with respect to such balance.
(d) CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON. If the
Executive's employment hereunder is terminated by the Company for Cause or by
the Executive other than for Good Reason, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses accrued or owing the Executive hereunder for
services as of the Date of Termination; and
(ii) the Executive shall immediately forfeit any unvested
Restricted Shares and any unvested portion of the Option Award. In the
event of termination by the Company for Cause, the Executive shall have
the right to exercise the vested unexercised portion of the Option
Award for a period of ninety (90) days after the
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Date of Termination, and the unexercised portion of such Option Award
shall be forfeited thereafter. In the event of termination by the
Executive other than for Good Reason the Executive shall have the right
to exercise the vested unexercised portion of the Option Award for a
period of one year following the Date of Termination and the
unexercised portion of such Option Award shall be forfeited thereafter.
(e) TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE
WITH GOOD REASON. If the Executive's employment hereunder is terminated by the
Company (other than for Cause or Disability) or by the Executive for Good
Reason, then:
(i) the Company shall pay the Executive, as soon as
practicable after the Date of Termination, any Base Salary and any
reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Company shall immediately pay to the Executive as
liquidated damages and not as a penalty a lump sum amount equal to the
total Base Salary that would have otherwise been payable to the
Executive with respect to the period commencing immediately following
the Date of Termination and ending on July 22, 1999, at the annualized
rate in effect at the time Notice of Termination is given;
(iii) the Options granted to the Executive pursuant to the
Option Award shall become fully vested and exercisable, and the
Restricted Shares shall become fully vested, as of the Date of
Termination. The Option Award shall remain exercisable for the balance
of its original 10-year term; and
(iv) the Executive shall continue to participate in all
employee benefit plans and programs in which the Executive was entitled
to participate immediately prior to the Date of Termination, in
accordance with the terms of such plans and programs as in effect from
time to time, through July 22, 1999; provided that the Executive's
continued participation is permitted under the general terms and
provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program is barred, the
Company shall arrange to provide the Executive and his dependents with
benefits substantially the same as those which the Executive and his
dependents would otherwise have been entitled to receive under such
plans and programs from which their continued participation is barred
or provide their economic equivalent.
(f) TERMINATION UPON CHANGE IN CONTROL. If the Executive
shall elect to terminate his employment under this Agreement upon a Change in
Control, the Company shall pay to the Executive the payments described in
Sections 7(e)(i), (ii), (iii) and (iv) above.
8. GROSS-UP FOR EXCISE TAX. In the event that the Executive receives
any payment or benefit (including but not limited to the payments or benefits
pursuant to Section 7 of this Agreement) (a "Payment") that is subject to the
excise tax (the "Excise Tax") under Sec-
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tion 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Company shall pay to the Executive, as soon thereafter as practicable, an
additional amount (a "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax imposed upon the Payment and
any federal, state and local income tax and Excise Tax imposed upon the Gross-Up
Payment shall be equal to the Payment. The determination of whether an Excise
Tax is due in respect of any payment or benefit, the amount of the Excise Tax
and the amount of the Gross-Up Payment shall be made by an independent auditor
(the "Auditor") jointly selected by the Company and the Executive and paid by
the Company. If the Executive and the Company cannot agree on the firm to serve
as the Auditor, then the Executive and the Company shall each select one
nationally recognized accounting firm and those two firms shall jointly select
the nationally recognized accounting firm to serve as the Auditor.
Notwithstanding the foregoing, for purposes of determining the Gross-Up Payment
in respect of any Payment, (i) any other payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person affiliated with
the Company or such person) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of Section 280G of the Code shall be treated as subject to
the Excise Tax, unless in the opinion of tax counsel selected by the Auditor,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or are otherwise not subject to the Excise Tax, and (ii) the
Executive shall be deemed to pay federal income tax at the highest marginal rate
applicable in the calendar year in which the Gross-Up Payment is made, and state
and local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. In the event the actual Excise Tax or such income
tax is more or less than the amount used to calculate the Gross-Up Payment, the
Executive or the Company, as the case may be, shall pay to the other an amount
reflecting the actual Excise Tax or such income tax, plus interest on the amount
of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
9. MITIGATION. The Executive shall not be required to mitigate amounts
payable pursuant to Section 7 hereof by seeking other employment or otherwise,
nor shall there be any offset against such payments on account of (a) any
remuneration attributable to any subsequent employment that he may obtain or (b)
any claims the Company may have against the Executive.
10. CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS, NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company and its subsidiaries (the
"Sunbeam Entities") all trade secrets, confidential information, and knowledge
or data relating to the Sunbeam Entities and the businesses and investments of
the Sunbeam Entities, which shall have been obtained by the Executive during the
Executive's employment by the Company, including such information with
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respect to any products, improvements, formulas, designs or styles, processes,
services, customers, suppliers, marketing techniques, methods, future plans or
operating practices ("Confidential Information"); PROVIDED, HOWEVER, that
Confidential Information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the Executive)
or any specific information or type of information generally not considered
confidential by persons engaged in the same business as the Company, or
information disclosed by the Company or any officer thereof to a third party
without restrictions on the disclosure of such information. Except as may be
required or appropriate in connection with his carrying out his duties under
this Agreement, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate
or divulge any such Confidential Information to anyone other than the Company
and those designated by the Company.
(b) REMOVAL OF DOCUMENTS. All records, files, drawings,
documents, models, and the like relating to the business of the Sunbeam
Entities, which the Executive prepares, uses or comes into contact with and
which contain Confidential Information shall not be removed by the Executive
from the premises of any Sunbeam Entity (without the written consent of the
Company) during or after the Employment Period unless such removal shall be
required or appropriate in connection with his carrying out his duties under
this Agreement, and, if so removed by the Executive, shall be returned to such
Sunbeam Entity immediately upon termination of the Executive's employment
hereunder.
(c) NON-COMPETITION. During (i) the Executive's employment
with the Company and (ii) the two (2) year period immediately following the
Executive's Date of Termination, the Executive (A) shall not engage, anywhere
within the geographical areas in which any Sunbeam Entity is then conducting its
business operations, directly or indirectly, alone, in association with or as a
shareholder, principal, agent, partner, officer, director, employee or
consultant of any other organization, in any business (a "Competitive Business")
which competes with any business then being conducted by such Sunbeam Entity;
(B) shall not solicit or encourage any officer, employee or consultant of any of
the Sunbeam Entities to leave the employ of any of the Sunbeam Entities for
employment by or with any Competitive Business; and (C) shall not solicit,
divert or take away, or attempt to divert or to take away, the business or
patronage of any of the customers or accounts, or prospective customers or
accounts, of any Sunbeam Entity, which were contacted, solicited or served by
the Executive while employed by the Company; provided, however, that nothing
herein shall prohibit the Executive from owning a maximum of two percent (2%) of
the outstanding stock of any publicly traded corporation. Following the Date of
Termination, ownership by the Executive of not more than five percent (5%) of
any publicly traded corporation shall not constitute a violation hereof. If, at
any time, the provisions of this Section 10(c) shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 10(c) shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Executive agrees that
this Section 10(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not
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been included herein. For purposes of this Section 10(c), the design,
manufacture and marketing of outdoor barbecue grills, casual outdoor and indoor
furniture and small kitchen appliances shall be construed to be a Competitive
Business; provided, however, that the gross revenues derived from sales of such
products by such competitor are greater than the lesser of (i) 10% of its total
revenues and (ii) $500,000,000.
(d) REMEDIES. In the event of a breach or threatened breach
of this Section 10, the Executive agrees that the Company shall be entitled to
apply for injunctive relief in a court of appropriate jurisdiction to remedy any
such breach or threatened breach, the Executive acknowledging that damages would
be inadequate and insufficient.
(e) CONTINUING OPERATION. Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing operation
of this Section 10.
11. INDEMNIFICATION. The Company shall indemnify the Executive to the
full extent permitted by law and the By-laws of the Company for all expenses,
costs, liabilities and legal fees which the Executive may incur in the discharge
of all his duties hereunder, including, without limitation, the right to be paid
in advance by the Company for his expenses in defending a civil or criminal
action, proceeding or investigation prior to the final disposition thereof. The
Executive shall be insured under the Company's Directors' and Officers'
Liability Insurance Policy as in effect from time to time. Notwithstanding any
other provision of this Agreement to the contrary, any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 11.
12. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the business and/or
assets of the Company, provided that the assignee or transferee is the successor
to all or substantially all of the business and/or assets of the Company and
such assignee or transferee assumes the liabilities, obligations and duties of
the Company, as contained in this Agreement, either contractually or as a matter
of law. The Company will require any such successor to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. As used in this Agreement (except in the definition of Change in
Control), "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 12 or which otherwise becomes bound
by all the terms and provisions of this Agreement or by operation of law.
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(b) EXECUTIVE'S SUCCESSORS. This Agreement shall not be
assignable by the Executive. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. Upon the Executive's death, all amounts to
which he is entitled hereunder, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
13. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Russell A. Kersh
3609 NW 62nd Street
Boca Raton, Florida 33496
If to the Company:
Sunbeam Corporation
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attn: Chairman of the Compensation Committee
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. MISCELLANEOUS. No provisions of this Agreement may be modified
unless such modification is agreed to in writing signed by the Executive and an
authorized officer of the Company. Any waiver or discharge must be in writing
and signed by the Executive or such an authorized officer of the Company, as the
case may be. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware without
regard to its conflicts of law principles.
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15. WITHHOLDING. Any payments provided for in this Agreement shall be
paid net of any applicable withholding of taxes required under federal, state or
local law.
16. ARBITRATION.
(a) Except as otherwise provided herein, all controversies,
claims or disputes arising out of or related to this Agreement shall be settled
under the rules of the American Arbitration Association then in effect in the
State of Florida, as the sole and exclusive remedy of either party, and judgment
upon such award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction. The costs of the arbitration shall be borne as
determined by the arbitrators PROVIDED, HOWEVER, that if the Company's position
is not substantially upheld, as determined by the arbitrators, the expenses of
the Executive (including, without limitation, fees and expenses payable to the
AAA and the arbitrators, fees and expenses payable to witnesses, including
expert witnesses, fees and expenses payable to attorneys and other
professionals, expenses of the Executive in attending the hearings, costs in
connection with obtaining and presenting evidence and costs of transcription of
the proceedings), as determined by the arbitrators, shall be reimbursed to him
by the Company.
(b) Notwithstanding the provisions of Section 16(a) above,
the parties agree that nothing contained herein shall preclude the Company from
bringing an action in a court of competent jurisdiction (whether prior to or
during any arbitration proceeding) seeking to specifically enforce the
provisions of Section 10 hereof by means of seeking an injunction or other
equitable relief.
17. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the terms of the
Option Plan set forth the entire agreement of the parties hereto in respect of
the subject matter contained herein, supersede all prior agreements, promises,
covenants, arrangements, communica- tions, representations or warranties,
whether oral or written, by any officer, employee or representative of any party
hereto; and any prior agreement of the parties hereto or thereto in re- spect of
the subject matter contained herein or therein is hereby terminated and
cancelled. This Agreement may be signed in counterparts.
18. CONFLICT WITH OPTION PLAN. To the extent, if any, of any
inconsistency or conflict between the terms and provisions of this Agreement and
the Option Plan, this Agreement shall control in all matters.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
August 7, 1996 to be effective as of the Effective Date.
SUNBEAM CORPORATION
By: /s/ALBERT J. DUNLAP
-------------------
Name: ALBERT J. DUNLAP
Title: CHAIRMAN & CEO
/s/ RUSSELL A. KERSH
-----------------
RUSSELL A. KERSH
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EXHIBIT A
Exhibit A, the Amended and Restated Sunbeam Corporation Equity Team
Plan (Amended and Restated as of May 15, 1996) is incorporated herein by
reference to Exhibit 10b to the Company's Report of Form 10-Q for the fiscal
quarter ended June 30, 1996.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 26, 1996 (the
"Effective Date"), by and between P. NEWTON WHITE (the "Executive") and SUNBEAM
CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Company desires to employ the Executive and the Executive
desires to furnish services to the Company on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties desire to enter into this agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. EMPLOYMENT PERIOD. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence on the Effective Date
and shall end on July 26, 1999 (or the Date of Termination (as defined in
Section 6 below), if earlier).
3. POSITION AND DUTIES. The Executive shall serve as Executive Vice
President, Consumer Products Worldwide, and shall have such responsibilities,
duties and authority as are consistent with such position and such other duties
as may from time to time be assigned to him by the Chief Executive Officer. The
Executive agrees to devote substantially all his working time, attention and
energies to the performance of his duties for the Company.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be at the Company's principal executive offices in Broward or
Palm Beach County, Florida, or such other location as may be agreed to by the
Board. In the event that the Company's principal executive offices are moved
from Broward or Palm Beach County, Florida, the Company shall promptly pay, or
reimburse the Executive for, all reasonable expenses incurred by the Executive
relating to any change of the Executive's residence from Broward or Palm Beach
County, Florida, in connection with his employment hereunder, including, without
limitation, reasonable expenses for himself and his family of travel, moving,
storage and suitable lodging and maintenance, and the Company shall reimburse
the Executive on a grossed up basis in the event that any tax is assessed upon
him in relation to any such expenses. The Company shall pay or reimburse the
Executive for all reasonable costs and expenses of residential relocation
incurred by him in connection with each and every additional change, if any, in
the location of the principal executive offices of the Company, and the
Executive shall be reimbursed by the Company
<PAGE>
on a grossed up basis in the event that any tax is assessed upon him in relation
to any such costs or expenses.
5. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. As compensation for the performance by the
Executive of his duties hereunder, during the Employment Period the Company
shall pay the Executive a base salary at an annual rate of $425,000 (the "Base
Salary"), which Base Salary shall be payable in substantially equal semi-monthly
installments. It is agreed that there shall be no increase or decrease in the
Base Salary during the Employment Period. The Company also shall pay to the
Executive, within fifteen (15) days from the Effective Date, the sum of One
Hundred and Twenty Five Thousand Dollars ($125,000) as a one time bonus for
agreeing to the terms hereof. The parties agree that the Executive shall not be
entitled to participate in any other bonus or incentive compensation programs of
the Company.
(b) EQUITY AND STOCK OPTION GRANTS.
(i) PURCHASE OF COMMON STOCK. Effective as of the Effective
Date, the Executive shall purchase from the Company for his own
account, and the Company shall sell to the Executive, a total of 25,807
shares of the Company's Common Stock, par value $.01 per share ("Common
Stock"), for the sum of $500,010.62 ($19.375 per share of Common Stock)
(the "Purchased Stock"). The Purchased Stock shall be the sole property
of the Executive, shall be unrestricted (although unregistered at the
time of issuance) and shall be freely tradeable by the Executive,
subject to applicable securities laws and other legal restrictions.
(ii) RESTRICTED SHARES. Effective as of the Effective Date,
the Executive has been granted, without cost to the Executive, 100,000
shares of the Company's Common Stock, on the terms and conditions set
forth herein (the "Restricted Shares"). One-third of such Restricted
Shares shall vest and cease to be restricted in equal installments on
each of the first, second and third anniversaries of the Effective Date
(subject to earlier vesting provisions set forth in Section 7) provided
that the Executive continues to be employed pursuant to this Agreement
upon such anniversary dates. All such shares, once vested, shall be the
sole property of the Executive, shall be unrestricted and shall be
freely tradeable by the Executive, subject to applicable legal
restrictions.
(A) ISSUANCE OF CERTIFICATES. The Restricted Shares shall be
registered in the Executive's name, but the certificates
evidencing the Restricted Shares shall be retained by the
Company until such shares become vested and the restrictions
thereon lapse. The period prior to the time that any
particular Restricted Shares become vested and the
restrictions thereon lapse is hereinafter referred to as the
"Restricted Period" with respect to such shares. The Executive
shall execute a
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stock power, in blank, with respect to such Restricted Shares
and deliver the same to the Company.
(B) RIGHTS AS A STOCKHOLDER. Except as provided herein, during
the Restricted Period, the Executive shall have all the rights
of a stockholder with respect to Restricted Shares, including
the right to receive dividends or other distributions and the
right to vote such shares; provided that, in the discretion of
the Company any such dividends or other distributions may be
retained by the Company unless and until the Restricted Shares
in respect of which such dividends or other distributions were
paid shall vest.
(C) NON-TRANSFERABILITY. During the Restricted Period, the
Executive may not sell, transfer, pledge, or otherwise
encumber or dispose of the Restricted Shares, and any
attempted sale, transfer, pledge or other encumbrance or
disposition (whether voluntary or involuntary) in violation of
this Section 5(b)(ii)(C) shall be null and void.
(D) DELIVERY OF SHARE CERTIFICATES. Upon the vesting of any
Restricted Shares, the certificates evidencing such Restricted
Shares, together with any dividends or other distributions
retained by the Company pursuant to Section 5(b)(ii)(B), shall
be delivered promptly to the Executive. In the case of
Executive's death, such certificates, dividends and
distributions will be delivered to the beneficiary designated
in writing by the Executive pursuant to a form of designation
provided by the Company, to the Executive's legatee or
legatees, or to his personal representatives or distributees,
as the case may be.
(iii) STOCK OPTIONS. The Executive shall be granted the
following stock options (collectively, the "Option Award"):
(A) Effective as of the Effective Date, by action of the
Executive Development and Compensation Committee of the Board
of Directors, the Executive has been granted a stock option
(the "Plan Option") to purchase 250,000 shares of Common Stock
pursuant to the Company's Amended and Restated Equity Team
Plan (the "Option Plan") (a copy of which Option Plan is
attached hereto as SCHEDULE A and incorporated herein by
reference), which options are granted upon the terms and
conditions as set forth in the Option Plan (at an exercise
price of $15.07/share), except that such option shall vest in
equal increments on the first, second and third anniversaries
of the grant date and shall be subject to and modified by all
other terms and provisions of this Agreement, as expressly set
forth herein. In the event of any conflict between any terms
of the Option Plan and the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall
take precedence and shall be controlling as between such
documents.
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(B) Effective as of the Effective Date, and subject to
shareholder approval by the Company's shareholders at a
special meeting to be held for that purpose (the "Special
Meeting"), which Special Meeting the Company agrees to convene
as soon as practicable after the Effective Date hereof, by
action of the Executive Development and Compensation
Committee, the Executive has been granted a non-qualified
stock option (the "Non-Qualified Option") to purchase 250,000
shares of Common Stock. The Non-Qualified Option shall be upon
the same terms and conditions as are set forth in Section
5(b)(iii)(A) above, including the exercise price of
$15.07/share and the three year vesting schedule. In the event
that the Company's shareholders fail to approve the grant of
the Non-Qualified Option at the Special Meeting, the Company
and the Executive shall negotiate in good faith a mutually
acceptable alternative compensation arrangement; provided,
however, that the Executive, in his sole discretion, may elect
to terminate this Agreement, and the Executive shall be
entitled to receive the compensation, rights and benefits
provided in Section 7(b) hereof (other than in respect of the
Non-Qualified Option).
(iv) REGISTRATION RIGHTS. Within six months after the
Effective Date, the Company shall cause the Purchased Stock, the
Restricted Shares and all shares of stock subject to the Option Award
to be registered or qualified for resale under the Securities Act of
1933 and applicable state laws. Unless and until registered under the
Securities Act of 1933, as amended, certificates evidencing the
Purchased Stock, the Restricted Shares and shares acquired pursuant to
the exercise of the Non-Qualified Option shall bear the following
legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY,
SUCH REGISTRATION IS NOT REQUIRED.
(c) EXPENSES. During the Employment Period, the Company shall
reimburse the Executive for all reasonable business expenses in accordance with
applicable policies and procedures then in force.
(d) VACATION AND OTHER ABSENCES. The Executive shall be
entitled to paid vacation and other paid absences, whether for holidays,
illness, personal time or any similar purposes, during the Employment Period in
accordance with policies applicable generally to senior executives of the
Company; provided, however, that the Executive shall always be entitled to at
least six weeks of paid vacation in each calendar year and pro rata for part of
a year. Up to four weeks per year of unused vacation may be maintained by the
Executive on a cumulative basis and may be subsequently used in any year or if
not so used, the Executive shall be
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compensated for any unused vacation days upon the termination of this Agreement
for any reason.
(e) TAX PLANNING SERVICES. During the Employment Period, the
Company shall provide the Executive with tax-related advice and services without
cost or expense to him and shall reimburse the Executive on a grossed up basis
in the event that any tax is assessed upon him in relation to such services.
(f) TRAVEL BENEFITS. During the initial year of the Employment
Period, the Company shall reimburse the Executive on a grossed up basis (in the
event that any tax is assessed upon him in relation to such travel
reimbursement) for one round trip airline fare per month to and from Santa Fe,
New Mexico and the location at which the Executive may be working for the
Company at the time.
(g) OTHER BENEFITS. During the Employment Period, the
Executive shall be eligible to participate at no cost or expense to him in
welfare plans and programs (including any tax-deferred savings plan, group life
insurance plan, medical and dental insurance plan, and accident and disability
insurance plan) ("Benefit Plans") applicable generally to employees and/or
senior executives of the Company. The Company will waive, or obtain the waiver
of, any waiting periods for eligibility under the Benefit Plans or will provide
comparable benefits to the Executive without cost to him during the waiting
period.
6. TERMINATION. The Executive's employment hereunder, as the
case may be, may be terminated as follows:
(a) DEATH. The Executive's employment shall terminate
upon his death, and the date of his death shall be the Date of Termination.
(b) DISABILITY. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties hereunder on a full-time basis for one hundred and twenty
(120) consecutive days and, within thirty (30) days after written Notice of
Termination (as defined in Section 6(g) hereof), shall not have returned to the
performance of his duties hereunder on a full-time basis ("Disability"), the
Company may terminate the Executive's employment hereunder. In this event, the
Date of Termination shall be thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period).
(c) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder:
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(i) upon the Executive's conviction for the
commission of a felony (or a plea of nolo contendere thereto); or
(ii) willful failure by the Executive
substantially to perform his duties hereunder (other than any such
failure resulting from the Executive's incapacity due to Disability).
For purposes hereof, no act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be
done by him not in good faith or without reasonable belief that his
action or omission was in the best interests of the Company or contrary
to written instructions of the Chief Executive Officer or the Board of
Directors. The Date of Termination shall be the date specified in the
Notice of Termination; provided, however, that, in the case of a
termination for Cause under clause (ii) above, the Date of Termination
shall not be earlier than 30 days after delivery of the Notice of
Termination. Anything herein to the contrary notwithstanding, if,
following a termination of the Executive's employment by the Company
for Cause based upon the conviction of the Executive for a felony, such
conviction is overturned in a final determination on appeal, the
Executive shall be entitled to the payments and the economic equivalent
of the benefits the Executive would have received if his employment had
been terminated by the Company without Cause.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment hereunder for Good Reason, provided that
the Executive shall have delivered a Notice of Termination (as defined in
Section 6(g) hereof) within ninety (90) days after the occurrence of the event
of Good Reason giving rise to such termination. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of one or more of the following
circumstances, without the Executive's express written consent, which are not
remedied by the Company within thirty (30) days of receipt of the Executive's
Notice of Termination:
(i) an assignment to the Executive of any
duties materially inconsistent with his positions, duties,
responsibilities and status with the Company or any material limitation
of the powers of the Executive not consistent with the powers of the
Executive contemplated by Section 3 hereof; or
(ii) any removal of the Executive from, or
any failure to re-elect the Executive to, the executive officer
position specified in Section 3 of this Agreement; or
(iii) any other material breach by the
Company of this Agreement.
In the event of a termination for Good Reason, the Date of
Termination shall be the date specified in the Notice of Termination, which
shall be no more than thirty (30) days after the Notice of Termination.
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(e) OTHER TERMINATIONS. The Company may terminate the
Executive's employment hereunder at any time, subject to the provisions of
Section 7(e) hereof. The Executive may terminate his employment at any time,
subject to the provisions of Section 7(d) hereof. If the Executive's employment
is terminated hereunder for any reason other than as set forth in Sections 6(a)
through 6(d) hereof, the date on which a Notice of Termination is given or any
later date (within 30 days) set forth in such Notice of Termination shall be the
Date of Termination.
(f) TERMINATION BY THE EXECUTIVE UPON CHANGE IN
CONTROL. Upon a Change in Control (as defined below), the Executive shall have
the right, upon delivery to the Company of a Notice of Termination (which shall
specify a Date of Termination not less than 30 days after such Notice of
Termination), to terminate his employment under this Agreement and to receive
the payments provided pursuant to Section 7(f) below. If the Executive shall
elect to terminate his employment with the Company other than upon a Change in
Control, he shall receive only the compensation referred to in Section 7(d)
below. For purposes of this Agreement, a Change in Control shall mean the
occurrence of any one of the following events:
(i) any "person" as such term is used in
Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, as
amended, becomes a "beneficial owner," as such term is used in Rule
3d-3 promulgated under that Act, of 25% or more of the voting stock of
the Company (other than a person that is currently the beneficial owner
of such percentage of the Company's voting stock);
(ii) the majority of the Board consists of
individuals other than Incumbent Directors, which term means the
members of the Board on the date of this Agreement and the individuals
designated as directors by the Chief Executive Officer of the Company;
provided that any person becoming a director subsequent to such date
whose election or nomination for election was supported by two-thirds
of the directors who then comprised the Incumbent Directors shall be
considered to be an Incumbent Director;
(iii) the Company, without the Executive's
consent, adopts any plan of liquidation providing for the distribution
of all or substantially all of its assets; or
(iv) all or substantially all of the assets
or business of the Company are disposed of pursuant to a merger,
consolidation or other transaction (unless the shareholders of the
Company immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the voting stock of the Company, all
of the voting stock or other ownership interests of the entity or
entities, if any, that succeed to the business of the Company).
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(g) NOTICE OF TERMINATION. Any termination of the
Executive's employment hereunder by the Company or by the Executive (other than
termination pursuant to Section 6(a) hereof) shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 13
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. If any dispute concerning a Notice of Termination of
the Executive's employment under Section 6(b), 6(c) or 6(d) hereof results in a
determination that a proper basis for such termination did not exist under such
section, the Executive's employment under this Agreement shall be treated, with
respect to a Notice of Termination pursuant to Section 6(b) or 6(c) hereof, as
having been terminated pursuant to Section 6(e) hereof or, with respect to a
Notice of Termination pursuant to Section 6(d) hereof, as having not been
terminated.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DISABILITY PERIOD. During any period during the
Employment Period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness ("Disability Period"),
the Executive shall continue to (i) receive his full Base Salary and (ii)
participate in the Benefit Plans. Such payments made to the Executive during the
Disability Period shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security disability insurance
program, and which amounts were not previously applied to reduce any such
payment.
(b) DEATH. If the Executive's employment hereunder is
terminated as a result of death, then:
(i) the Company shall pay the Executive's
estate or designated beneficiary, as soon as practicable after the Date
of Termination, any Base Salary installments due in the month of death
and any reimbursable expenses, accrued or owing the Executive hereunder
as of the Date of Termination;
(ii) the Options granted to the Executive
pursuant to the Plan Option and the Options granted to the Executive
pursuant to the Non-Qualified Option (if such Non-Qualified Option has
been approved by the shareholders as provided in Section 5(b)(iii)(B))
shall become vested and exercisable, as of the Date of Termination, to
the extent such Option Award would have otherwise become vested on or
before the first anniversary of the Date of Termination, and all vested
Options shall remain exercisable for a period of one year following
such Date of Termination and shall thereafter be completely forfeited
and cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
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(iii) the portion of the Restricted Shares
that have not vested as of the Date of Termination equal to the number
of such unvested Restricted Shares multiplied by a fraction, the
numerator of which is 36 minus the number of full months remaining in
the Employment Period (disregarding the earlier termination thereof)
after the Date of Termination and denominator of which is 36, shall
become vested as of the Date of Termination and the restrictions
imposed thereon shall lapse. The balance of such unvested Restricted
Shares shall be forfeited to the Company (without further action on the
part of the Company or the Executive) as of the Date of Termination,
and the Executive shall have no further rights with respect to such
balance.
(c) DISABILITY. If the Executive's employment
hereunder is terminated as a result of Disability, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Options granted to the Executive
pursuant to the Plan Option and the Options granted to the Executive
pursuant to the Non-Qualified Option (if such Non-Qualified Option has
been approved by the shareholders as provided in Section 5(b)(iii)(B))
shall become vested and exercisable, as of the Date of Termination, to
the extent such Option Award would have otherwise become vested on or
before the first anniversary of the Date of Termination, and all vested
Options shall remain exercisable for a period of three years following
such Date of Termination and shall thereafter be completely forfeited
and cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares
that have not vested as of the Date of Termination equal to the number
of such unvested Restricted Shares multiplied by a fraction, the
numerator of which is 36 minus the number of full months remaining in
the Employment Period (disregarding the earlier termination thereof)
after the Date of Termination and denominator of which is 36, shall
become vested, and the restrictions imposed thereon shall lapse. The
balance of such unvested Restricted Shares shall be forfeited to the
Company (without further action on the part of the Company or the
Executive) as of the Date of Termination, and the Executive shall have
no further rights with respect to such balance.
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(d) CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON.
If the Executive's employment hereunder is terminated by the Company for Cause
or by the Executive other than for Good Reason, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses accrued or owing the Executive hereunder for
services as of the Date of Termination; and
(ii) the Executive shall immediately forfeit
any unvested Restricted Shares and any unvested portion of the Option
Award. In the event of termination by the Company for Cause, the
Executive shall have the right to exercise the vested unexercised
portion of the Option Award for a period of ninety (90) days after the
Date of Termination, and the unexercised portion of such Option Award
shall be forfeited thereafter. In the event of termination by the
Executive other than for Good Reason the Executive shall have the right
to exercise the vested unexercised portion of the Option Award for a
period of one year following the Date of Termination and the
unexercised portion of such Option Award shall be forfeited thereafter.
(e) TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE
EXECUTIVE WITH GOOD REASON. If the Executive's employment hereunder is
terminated by the Company (other than for Cause or Disability) or by the
Executive for Good Reason, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Company shall immediately pay to
the Executive as liquidated damages and not as a penalty a lump sum
amount equal to the total Base Salary that would have otherwise been
payable to the Executive with respect to the period commencing
immediately following the Date of Termination and ending on July 26,
1999, at the annualized rate in effect at the time Notice of
Termination is given;
(iii) the Options granted to the Executive
pursuant to the Option Award shall become fully vested and exercisable,
and the Restricted Shares shall become fully vested, as of the Date of
Termination. The Option Award shall remain exercisable for the balance
of its original 10-year term; and
(iv) the Executive shall continue to
participate in all employee benefit plans and programs in which the
Executive was entitled to participate immediately prior to the Date of
Termination, in accordance with the terms of such plans and programs as
in effect from time to time, through July 26, 1999; provided that the
Executive's continued participation is permitted under the general
terms and provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program
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is barred, the Company shall arrange to provide the Executive and his
dependents with benefits substantially the same as those which the
Executive and his dependents would otherwise have been entitled to
receive under such plans and programs from which their continued
participation is barred or provide their economic equivalent.
(f) TERMINATION UPON CHANGE IN CONTROL. If the
Executive shall elect to terminate his employment under this Agreement upon a
Change in Control, the Company shall pay to the Executive the payments described
in Sections 7(e)(i), (ii), (iii) and (iv) above.
8. GROSS-UP FOR EXCISE TAX. In the event that the Executive
receives any payment or benefit (including but not limited to the payments or
benefits pursuant to Section 7 of this Agreement) (a "Payment") that is subject
to the excise tax (the "Excise Tax") under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall pay to the Executive,
as soon thereafter as practicable, an additional amount (a "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any
Excise Tax imposed upon the Payment and any federal, state and local income tax
and Excise Tax imposed upon the Gross-Up Payment shall be equal to the Payment.
The determination of whether an Excise Tax is due in respect of any payment or
benefit, the amount of the Excise Tax and the amount of the Gross-Up Payment
shall be made by an independent auditor (the "Auditor") jointly selected by the
Company and the Executive and paid by the Company. If the Executive and the
Company cannot agree on the firm to serve as the Auditor, then the Executive and
the Company shall each select one nationally recognized accounting firm and
those two firms shall jointly select the nationally recognized accounting firm
to serve as the Auditor. Notwithstanding the foregoing, for purposes of
determining the Gross-Up Payment in respect of any Payment, (i) any other
payments or benefits received or to be received by the Executive in connection
with a Change in Control or the Executive's termination of employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of Section 280G of
the Code shall be treated as subject to the Excise Tax, unless in the opinion of
tax counsel selected by the Auditor, such other payments or benefits (in whole
or in part) do not constitute parachute payments, or are otherwise not subject
to the Excise Tax, and (ii) the Executive shall be deemed to pay federal income
tax at the highest marginal rate applicable in the calendar year in which the
Gross-Up Payment is made, and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's residence
on the Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event the actual Excise Tax or such income tax is more or less than the amount
used to calculate the Gross-Up Payment, the Executive or the Company, as the
case may be, shall pay to the other an amount reflecting the actual Excise Tax
or such income tax, plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code.
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9. MITIGATION. The Executive shall not be required to mitigate
amounts payable pursuant to Section 7 hereof by seeking other employment or
otherwise, nor shall there be any offset against such payments on account of (a)
any remuneration attributable to any subsequent employment that he may obtain or
(b) any claims the Company may have against the Executive.
10. CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS,
NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. The Executive shall
hold in a fiduciary capacity for the benefit of the Company and its subsidiaries
(the "Sunbeam Entities") all trade secrets, confidential information, and
knowledge or data relating to the Sunbeam Entities and the businesses and
investments of the Sunbeam Entities, which shall have been obtained by the
Executive during the Executive's employment by the Company, including such
information with respect to any products, improvements, formulas, designs or
styles, processes, services, customers, suppliers, marketing techniques,
methods, future plans or operating practices ("Confidential Information");
PROVIDED, HOWEVER, that Confidential Information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Executive) or any specific information or type of
information generally not considered confidential by persons engaged in the same
business as the Company, or information disclosed by the Company or any officer
thereof to a third party without restrictions on the disclosure of such
information. Except as may be required or appropriate in connection with his
carrying out his duties under this Agreement, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such Confidential Information to
anyone other than the Company and those designated by the Company.
(b) REMOVAL OF DOCUMENTS. All records, files,
drawings, documents, models, and the like relating to the business of the
Sunbeam Entities, which the Executive prepares, uses or comes into contact with
and which contain Confidential Information shall not be removed by the Executive
from the premises of any Sunbeam Entity (without the written consent of the
Company) during or after the Employment Period unless such removal shall be
required or appropriate in connection with his carrying out his duties under
this Agreement, and, if so removed by the Executive, shall be returned to such
Sunbeam Entity immediately upon termination of the Executive's employment
hereunder.
(c) NON-COMPETITION. During (i) the Executive's
employment with the Company and (ii) the two (2) year period immediately
following the Executive's Date of Termination, the Executive (A) shall not
engage, anywhere within the geographical areas in which any Sunbeam Entity is
then conducting its business operations, directly or indirectly, alone, in
association with or as a shareholder, principal, agent, partner, officer,
director, employee or consultant of any other organization, in any business (a
"Competitive Business") which competes with any business then being conducted by
such Sunbeam Entity; (B) shall not solicit or encourage any officer, employee or
consultant of any of the Sunbeam Entities to leave the employ of any of the
Sunbeam Entities for employment by or with any Competitive Business; and (C)
shall not solicit,
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divert or take away, or attempt to divert or to take away, the business or
patronage of any of the customers or accounts, or prospective customers or
accounts, of any Sunbeam Entity, which were contacted, solicited or served by
the Executive while employed by the Company; provided, however, that nothing
herein shall prohibit the Executive from owning a maximum of two percent (2%) of
the outstanding stock of any publicly traded corporation. Following the Date of
Termination, ownership by the Executive of not more than five percent (5%) of
any publicly traded corporation shall not constitute a violation hereof. If, at
any time, the provisions of this Section 10(c) shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 10(c) shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Executive agrees that
this Section 10(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein. For purposes of
this Section 10(c), the design, manufacture and marketing of outdoor barbecue
grills, casual outdoor and indoor furniture and small kitchen appliances shall
be construed to be a Competitive Business; provided, however, that the gross
revenues derived from sales of such products by such competitor are greater than
the lesser of (i) 10% of its total revenues and (ii) $500,000,000.
(d) REMEDIES. In the event of a breach or threatened
breach of this Section 10, the Executive agrees that the Company shall be
entitled to apply for injunctive relief in a court of appropriate jurisdiction
to remedy any such breach or threatened breach, the Executive acknowledging that
damages would be inadequate and insufficient.
(e) CONTINUING OPERATION. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 10.
11. INDEMNIFICATION. The Company shall indemnify the Executive
to the full extent permitted by law and the By-laws of the Company for all
expenses, costs, liabilities and legal fees which the Executive may incur in the
discharge of all his duties hereunder, including, without limitation, the right
to be paid in advance by the Company for his expenses in defending a civil or
criminal action, proceeding or investigation prior to the final disposition
thereof. The Executive shall be insured under the Company's Directors' and
Officers' Liability Insurance Policy as in effect from time to time.
Notwithstanding any other provision of this Agreement to the contrary, any
termination of the Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 11.
12. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the
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Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the business and/or assets of the Company, provided that
the assignee or transferee is the successor to all or substantially all of the
business and/or assets of the Company and such assignee or transferee assumes
the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company will require
any such successor to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement
(except in the definition of Change in Control), "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this
Section 12 or which otherwise becomes bound by all the terms and provisions of
this Agreement or by operation of law.
(b) EXECUTIVE'S SUCCESSORS. This Agreement shall not
be assignable by the Executive. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. Upon the Executive's death, all amounts to
which he is entitled hereunder, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
13. NOTICE. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
P. Newton White
------------------
Boca Raton, Florida
If to the Company:
Sunbeam Corporation
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attn: Chairman of the Compensation Committee
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or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. MISCELLANEOUS. No provisions of this Agreement may be
modified unless such modification is agreed to in writing signed by the
Executive and an authorized officer of the Company. Any waiver or discharge must
be in writing and signed by the Executive or such an authorized officer of the
Company, as the case may be. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware without regard to its conflicts of law principles.
15. WITHHOLDING. Any payments provided for in this Agreement
shall be paid net of any applicable withholding of taxes required under federal,
state or local law.
16. ARBITRATION.
(a) Except as otherwise provided herein, all
controversies, claims or disputes arising out of or related to this Agreement
shall be settled under the rules of the American Arbitration Association then in
effect in the State of Florida, as the sole and exclusive remedy of either
party, and judgment upon such award rendered by the arbitrator(s) may be entered
in any court of competent jurisdiction. The costs of the arbitration shall be
borne as determined by the arbitrators PROVIDED, HOWEVER, that if the Company's
position is not substantially upheld, as determined by the arbitrators, the
expenses of the Executive (including, without limitation, fees and expenses
payable to the AAA and the arbitrators, fees and expenses payable to witnesses,
including expert witnesses, fees and expenses payable to attorneys and other
professionals, expenses of the Executive in attending the hearings, costs in
connection with obtaining and presenting evidence and costs of transcription of
the proceedings), as determined by the arbitrators, shall be reimbursed to him
by the Company.
(b) Notwithstanding the provisions of Section 16(a)
above, the parties agree that nothing contained herein shall preclude the
Company from bringing an action in a court of competent jurisdiction (whether
prior to or during any arbitration proceeding) seeking to specifically enforce
the provisions of Section 10 hereof by means of seeking an injunction or other
equitable relief.
17. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the
terms of the Option Plan set forth the entire agreement of the parties hereto in
respect of the subject matter contained herein, supersede all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto; and any prior agreement of the parties hereto or thereto in
re-
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spect of the subject matter contained herein or therein is hereby terminated and
cancelled. This Agreement may be signed in counterparts.
18. CONFLICT WITH OPTION PLAN. To the extent, if any, of any
inconsistency or conflict between the terms and provisions of this Agreement and
the Option Plan, this Agreement shall control in all matters.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on August 7, 1996 to be effective as of the Effective Date.
SUNBEAM CORPORATION
By: /s/ALBERT J. DUNLAP
-------------------
Name: ALBERT J. DUNLAP
Title: CHAIRMAN & CEO
/s/ P. NEWTON WHITE
-------------------
P. NEWTON WHITE
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EXHIBIT A
Exhibit A, the Amended and Restated Sunbeam Corporation Equity Team Plan
(Amended and Restated as of May 15, 1996) is incorporated herein by reference to
Exhibit 10b to the Company's Report of Form 10-Q for the fiscal quarter ended
June 30, 1996.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 29, 1996 (the
"Effective Date"), by and between DAVID C. FANNIN (the "Executive") and SUNBEAM
CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Executive is currently employed by the Company pursuant to
that certain Employment Agreement dated January 1, 1995; and
WHEREAS, Company desires to retain the Executive and the Executive
desires to furnish services to the Company on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties desire to enter into this agreement setting forth
the revised terms and conditions of the employment relationship of the Executive
with the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. EMPLOYMENT PERIOD. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence on the Effective Date
and shall end on July 29, 1999 (or the Date of Termination (as defined in
Section 6 below), if earlier).
3. POSITION AND DUTIES. The Executive shall serve as Executive Vice
President, General Counsel and Corporate Secretary, and shall have such
responsibilities, duties and authority as are consistent with such position and
such other duties as may from time to time be assigned to him by the Chief
Executive Officer. The Executive agrees to devote substantially all his working
time, attention and energies to the performance of his duties for the Company.
4. PLACE OF PERFORMANCE. The principal place of employment of the
Executive shall be at the Company's principal executive offices in Broward or
Palm Beach County, Florida, or such other location as may be agreed to by the
Board. In the event that the Company's principal executive offices are moved
from Broward or Palm Beach County, Florida, the Company shall promptly pay, or
reimburse the Executive for, all reasonable expenses incurred by the Executive
relating to any change of the Executive's residence from Broward or Palm Beach
County, Florida, in connection with his employment hereunder, including, without
limitation, reasonable expenses for himself and his family of travel, moving,
storage and suitable lodging and maintenance, and the Company shall reimburse
the Executive on a grossed up basis in the event that any tax is assessed upon
him in relation to any such expenses. The Company shall pay or
<PAGE>
reimburse the Executive for all reasonable costs and expenses of residential
relocation incurred by him in connection with each and every additional change,
if any, in the location of the principal executive offices of the Company, and
the Executive shall be reimbursed by the Company on a grossed up basis in the
event that any tax is assessed upon him in relation to any such costs or
expenses.
5. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. As compensation for the performance by the
Executive of his duties hereunder, during the Employment Period the Company
shall pay the Executive a base salary at an annual rate of $300,000 (the "Base
Salary"), which Base Salary shall be payable in substantially equal semi-monthly
installments. It is agreed that there shall be no increase or decrease in the
Base Salary during the Employment Period. The parties agree that the Executive
shall not be entitled to participate in any other bonus or incentive
compensation programs of the Company.
(b) EQUITY AND STOCK OPTION GRANTS.
(i) PURCHASE OF COMMON STOCK. Effective as of the Effective
Date, the Executive agrees that he shall purchase $100,000 worth of the
Company's Common Stock, par value $.01 per share ("Common Stock"), on
the open market (the "Purchased Stock").
(ii) RESTRICTED SHARES. Effective as of the Effective Date, by
action of the Executive Development and Compensation Committee of the
Board of Directors and pursuant to the Company's Amended and Restated
Equity Team Plan (the "Option Plan") (a copy of which Option Plan is
attached hereto as SCHEDULE A and incorporated herein by reference),
the Executive has been granted without cost to the Executive, 10,000
shares of Restricted Stock (as defined in the Option Plan)(herein
referred to as the "Restricted Shares"). The Restricted Shares are
granted upon the terms and conditions as set forth in the Option Plan,
except that one-third of such Restricted Shares shall vest and cease to
be restricted in equal installments on each of the first, second and
third anniversaries of the Effective Date (subject to earlier vesting
provisions set forth in Section 7) provided that the Executive
continues to be employed pursuant to this Agreement upon such
anniversary dates and shall be subject to and modified by all other
terms and provisions of this Agreement, as expressly set forth herein.
All such Restricted Shares, once vested, shall be the sole property of
the Executive, shall be unrestricted and shall be freely tradeable by
the Executive, subject to applicable legal restrictions. In the event
of any conflict between any terms of the Option Plan and the terms and
provisions of this Agreement, the terms and provisions of this
Agreement shall take precedence and shall be controlling as between
such documents.
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(A) ISSUANCE OF CERTIFICATES. The Restricted Shares shall be
registered in the Executive's name, but the certificates
evidencing the Restricted Shares shall be retained by the
Company until such shares become vested and the restrictions
thereon lapse. The period prior to the time that any
particular Restricted Shares become vested and the
restrictions thereon lapse is hereinafter referred to as the
"Restricted Period" with respect to such shares. The Executive
shall execute a stock power, in blank, with respect to such
Restricted Shares and deliver the same to the Company.
(B) RIGHTS AS A STOCKHOLDER. Except as provided herein, during
the Restricted Period, the Executive shall have all the rights
of a stockholder with respect to Restricted Shares, including
the right to receive dividends or other distributions and the
right to vote such shares; provided that, in the discretion of
the Company any such dividends or other distributions may be
retained by the Company unless and until the Restricted Shares
in respect of which such dividends or other distributions were
paid shall vest.
(C) NON-TRANSFERABILITY. During the Restricted Period, the
Executive may not sell, transfer, pledge, or otherwise
encumber or dispose of the Restricted Shares, and any
attempted sale, transfer, pledge or other encumbrance or
disposition (whether voluntary or involuntary) in violation of
this Section 5(b)(ii)(C) shall be null and void.
(D) DELIVERY OF SHARE CERTIFICATES. Upon the vesting of any
Restricted Shares, the certificates evidencing such Restricted
Shares, together with any dividends or other distributions
retained by the Company pursuant to Section 5(b)(ii)(B), shall
be delivered promptly to the Executive. In the case of
Executive's death, such certificates, dividends and
distributions will be delivered to the beneficiary designated
in writing by the Executive pursuant to a form of designation
provided by the Company, to the Executive's legatee or
legatees, or to his personal representatives or distributees,
as the case may be.
(iii) STOCK OPTIONS. Effective as of the Effective Date, by
action of the Executive Development and Compensation Committee of the
Board of Directors, the Executive has been granted a stock option (the
"Option Award") to purchase 75,000 shares of Common Stock pursuant to
the Option Plan, which options are granted upon the terms and
conditions as set forth in the Option Plan (at an exercise price of
$15.32/share), except that such option shall vest in equal increments
on the first, second and third anniversaries of the grant date and
shall be subject to and modified by all other terms and provisions of
this Agreement, as expressly set forth herein. In the event of any
conflict between any terms of the Option Plan and the terms and
provisions of this Agreement, the terms and provisions of this
Agreement shall take precedence and shall be controlling as between
such documents.
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(iv) REGISTRATION RIGHTS. Within six months after the
Effective Date, the Company shall cause the Purchased Stock, the
Restricted Shares and all shares of stock subject to the Option Award
to be registered or qualified for resale under the Securities Act of
1933 and applicable state laws.
(c) EXPENSES. During the Employment Period, the Company shall
reimburse the Executive for all reasonable business expenses in accordance with
applicable policies and procedures then in force.
(d) VACATION AND OTHER ABSENCES. The Executive shall be
entitled to paid vacation and other paid absences, whether for holidays,
illness, personal time or any similar purposes, during the Employment Period in
accordance with policies applicable generally to senior executives of the
Company; provided, however, that the Executive shall always be entitled to at
least six weeks of paid vacation in each calendar year and pro rata for part of
a year. Up to four weeks per year of unused vacation may be maintained by the
Executive on a cumulative basis and may be subsequently used in any year or if
not so used, the Executive shall be compensated for any unused vacation days
upon the termination of this Agreement for any reason.
(e) TAX PLANNING SERVICES. During the Employment Period, the
Company shall provide the Executive with tax-related advice and services without
cost or expense to him and shall reimburse the Executive on a grossed up basis
in the event that any tax is assessed upon him in relation to such services.
(f) OTHER BENEFITS. During the Employment Period, the
Executive shall be eligible to participate at no cost or expense to him in
welfare plans and programs (including any tax-deferred savings plan, group life
insurance plan, medical and dental insurance plan, and accident and disability
insurance plan) ("Benefit Plans") applicable generally to employees and/or
senior executives of the Company. The Company will waive, or obtain the waiver
of, any waiting periods for eligibility under the Benefit Plans or will provide
comparable benefits to the Executive without cost to him during the waiting
period.
6. TERMINATION. The Executive's employment hereunder, as the
case may be, may be terminated as follows:
(a) DEATH. The Executive's employment shall terminate
upon his death, and the date of his death shall be the Date of Termination.
(b) DISABILITY. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties hereunder on a full-time basis for one hundred and twenty
(120) consecutive days and, within thirty (30) days after written Notice of
Termination (as defined in Section 6(g) hereof), shall not have returned
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to the performance of his duties hereunder on a full-time basis ("Disability"),
the Company may terminate the Executive's employment hereunder. In this event,
the Date of Termination shall be thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period).
(c) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder:
(i) upon the Executive's conviction for the
commission of a felony (or a plea of nolo contendere thereto); or
(ii) willful failure by the Executive
substantially to perform his duties hereunder (other than any such
failure resulting from the Executive's incapacity due to Disability).
For purposes hereof, no act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be
done by him not in good faith or without reasonable belief that his
action or omission was in the best interests of the Company or contrary
to written instructions of the Chief Executive Officer or the Board of
Directors. The Date of Termination shall be the date specified in the
Notice of Termination; provided, however, that, in the case of a
termination for Cause under clause (ii) above, the Date of Termination
shall not be earlier than 30 days after delivery of the Notice of
Termination. Anything herein to the contrary notwithstanding, if,
following a termination of the Executive's employment by the Company
for Cause based upon the conviction of the Executive for a felony, such
conviction is overturned in a final determination on appeal, the
Executive shall be entitled to the payments and the economic equivalent
of the benefits the Executive would have received if his employment had
been terminated by the Company without Cause.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment hereunder for Good Reason, provided that
the Executive shall have delivered a Notice of Termination (as defined in
Section 6(g) hereof) within ninety (90) days after the occurrence of the event
of Good Reason giving rise to such termination. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of one or more of the following
circumstances, without the Executive's express written consent, which are not
remedied by the Company within thirty (30) days of receipt of the Executive's
Notice of Termination:
(i) an assignment to the Executive of any
duties materially inconsistent with his positions, duties,
responsibilities and status with the Company or any material limitation
of the powers of the Executive not consistent with the powers of the
Executive contemplated by Section 3 hereof; or
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(ii) any removal of the Executive from, or
any failure to re-elect the Executive to, the executive officer
position specified in Section 3 of this Agreement; or
(iii) any other material breach by the
Company of this Agreement.
In the event of a termination for Good Reason, the Date of
Termination shall be the date specified in the Notice of Termination, which
shall be no more than thirty (30) days after the Notice of Termination.
(e) OTHER TERMINATIONS. The Company may terminate the
Executive's employment hereunder at any time, subject to the provisions of
Section 7(e) hereof. The Executive may terminate his employment at any time
subject to the provisions of Section 7(d) hereof. If the Executive's employment
is terminated hereunder for any reason other than as set forth in Sections 6(a)
through 6(d) hereof, the date on which a Notice of Termination is given or any
later date (within 30 days) set forth in such Notice of Termination shall be the
Date of Termination.
(f) TERMINATION BY THE EXECUTIVE UPON CHANGE IN
CONTROL. Upon a Change in Control (as defined below), the Executive shall have
the right, upon delivery to the Company of a Notice of Termination (which shall
specify a Date of Termination not less than 30 days after such Notice of
Termination), to terminate his employment under this Agreement and to receive
the payments provided pursuant to Section 7(f) below. If the Executive shall
elect to terminate his employment with the Company other than upon a Change in
Control, he shall receive only the compensation referred to in Section 7(d)
below. For purposes of this Agreement, a Change in Control shall mean the
occurrence of any one of the following events:
(i) any "person" as such term is used in
Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, as
amended, becomes a "beneficial owner," as such term is used in Rule
3d-3 promulgated under that Act, of 25% or more of the voting stock of
the Company (other than a person that is currently the beneficial owner
of such percentage of the Company's voting stock);
(ii) the majority of the Board consists of
individuals other than Incumbent Directors, which term means the
members of the Board on the date of this Agreement and the individuals
designated as directors by the Chief Executive Officer of the Company;
provided that any person becoming a director subsequent to such date
whose election or nomination for election was supported by two-thirds
of the directors who then comprised the Incumbent Directors shall be
considered to be an Incumbent Director;
(iii) the Company, without the Executive's
consent, adopts any plan of liquidation providing for the distribution
of all or substantially all of its assets; or
6
<PAGE>
(iv) all or substantially all of the assets
or business of the Company are disposed of pursuant to a merger,
consolidation or other transaction (unless the shareholders of the
Company immediately prior to such merger, consolidation or other
transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the voting stock of the Company, all
of the voting stock or other ownership interests of the entity or
entities, if any, that succeed to the business of the Company).
(g) NOTICE OF TERMINATION. Any termination of the
Executive's employment hereunder by the Company or by the Executive (other than
termination pursuant to Section 6(a) hereof) shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 13
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. If any dispute concerning a Notice of Termination of
the Executive's employment under Section 6(b), 6(c) or 6(d) hereof results in a
determination that a proper basis for such termination did not exist under such
section, the Executive's employment under this Agreement shall be treated, with
respect to a Notice of Termination pursuant to Section 6(b) or 6(c) hereof, as
having been terminated pursuant to Section 6(e) hereof or, with respect to a
Notice of Termination pursuant to Section 6(d) hereof, as having not been
terminated.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DISABILITY PERIOD. During any period during the
Employment Period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness ("Disability Period"),
the Executive shall continue to (i) receive his full Base Salary and (ii)
participate in the Benefit Plans. Such payments made to the Executive during the
Disability Period shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company or under the Social Security disability insurance
program, and which amounts were not previously applied to reduce any such
payment.
(b) DEATH. If the Executive's employment hereunder is
terminated as a result of death, then:
(i) the Company shall pay the Executive's
estate or designated beneficiary, as soon as practicable after the Date
of Termination, any Base Salary installments due in the month of death
and any reimbursable expenses, accrued or owing the Executive hereunder
as of the Date of Termination;
(ii) the Options granted to the Executive
pursuant to the Option Award shall become vested and exercisable, as of
the Date of Termination, to the extent
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<PAGE>
such Option Award would have otherwise become vested on or before the
first anniversary of the Date of Termination, and all vested Options
shall remain exercisable for a period of one year following such Date
of Termination and shall thereafter be completely forfeited and
cancelled; any Options that would not have become vested and
exercisable on or before the first anniversary of the Date of
Termination shall terminate and be forfeited as of the Date of
Termination; and
(iii) the portion of the Restricted Shares
that have not vested as of the Date of Termination equal to the number
of such unvested Restricted Shares multiplied by a fraction, the
numerator of which is 36 minus the number of full months remaining in
the Employment Period (disregarding the earlier termination thereof)
after the Date of Termination and denominator of which is 36, shall
become vested as of the Date of Termination and the restrictions
imposed thereon shall lapse. The balance of such unvested Restricted
Shares shall be forfeited to the Company (without further action on the
part of the Company or the Executive) as of the Date of Termination,
and the Executive shall have no further rights with respect to such
balance.
(c) DISABILITY. If the Executive's employment
hereunder is terminated as a result of Disability, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Options granted to the Executive
pursuant to the Option Award shall become vested and exercisable, as of
the Date of Termination, to the extent such Option Award would have
otherwise become vested on or before the first anniversary of the Date
of Termination, and all vested Options shall remain exercisable for a
period of three years following such Date of Termination and shall
thereafter be completely forfeited and cancelled; any Options that
would not have become vested and exercisable on or before the first
anniversary of the Date of Termination shall terminate and be forfeited
as of the Date of Termination; and
(iii) the portion of the Restricted Shares
that have not vested as of the Date of Termination equal to the number
of such unvested Restricted Shares multiplied by a fraction, the
numerator of which is 36 minus the number of full months remaining in
the Employment Period (disregarding the earlier termination thereof)
after the Date of Termination and denominator of which is 36, shall
become vested, and the restrictions imposed thereon shall lapse. The
balance of such unvested Restricted Shares shall be forfeited to the
Company (without further action on the part of the Company or the
Executive) as of the Date of Termination, and the Executive shall have
no further rights with respect to such balance.
8
<PAGE>
(d) CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON.
If the Executive's employment hereunder is terminated by the Company for Cause
or by the Executive other than for Good Reason, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses accrued or owing the Executive hereunder for
services as of the Date of Termination; and
(ii) the Executive shall immediately forfeit
any unvested Restricted Shares and any unvested portion of the Option
Award. In the event of termination by the Company for Cause, the
Executive shall have the right to exercise the vested unexercised
portion of the Option Award for a period of ninety (90) days after the
Date of Termination, and the unexercised portion of such Option Award
shall be forfeited thereafter. In the event of termination by the
Executive other than for Good Reason the Executive shall have the right
to exercise the vested unexercised portion of the Option Award for a
period of one year following the Date of Termination and the
unexercised portion of such Option Award shall be forfeited thereafter.
(e) TERMINATION BY COMPANY WITHOUT CAUSE OR BY THE
EXECUTIVE WITH GOOD REASON. If the Executive's employment hereunder is
terminated by the Company (other than for Cause or Disability) or by the
Executive for Good Reason, then:
(i) the Company shall pay the Executive, as
soon as practicable after the Date of Termination, any Base Salary and
any reimbursable expenses, accrued or owing the Executive hereunder for
services as of the Date of Termination;
(ii) the Company shall immediately pay to
the Executive as liquidated damages and not as a penalty a lump sum
amount equal to the total Base Salary that would have otherwise been
payable to the Executive with respect to the period commencing
immediately following the Date of Termination and ending on July 29,
1999, at the annualized rate in effect at the time Notice of
Termination is given;
(iii) the Options granted to the Executive
pursuant to the Option Award shall become fully vested and exercisable,
and the Restricted Shares shall become fully vested, as of the Date of
Termination. The Option Award shall remain exercisable for the balance
of its original 10-year term; and
(iv) the Executive shall continue to
participate in all employee benefit plans and programs in which the
Executive was entitled to participate immediately prior to the Date of
Termination, in accordance with the terms of such plans and programs as
in effect from time to time, through July 29, 1999; provided that the
Executive's continued participation is permitted under the general
terms and provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program
9
<PAGE>
is barred, the Company shall arrange to provide the Executive and his
dependents with benefits substantially the same as those which the
Executive and his dependents would otherwise have been entitled to
receive under such plans and programs from which their continued
participation is barred or provide their economic equivalent.
(f) TERMINATION UPON CHANGE IN CONTROL. If the
Executive shall elect to terminate his employment under this Agreement upon a
Change in Control, the Company shall pay to the Executive the payments described
in Sections 7(e)(i), (ii), (iii) and (iv) above.
8. GROSS-UP FOR EXCISE TAX. In the event that the Executive
receives any payment or benefit (including but not limited to the payments or
benefits pursuant to Section 7 of this Agreement) (a "Payment") that is subject
to the excise tax (the "Excise Tax") under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall pay to the Executive,
as soon thereafter as practicable, an additional amount (a "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any
Excise Tax imposed upon the Payment and any federal, state and local income tax
and Excise Tax imposed upon the Gross-Up Payment shall be equal to the Payment.
The determination of whether an Excise Tax is due in respect of any payment or
benefit, the amount of the Excise Tax and the amount of the Gross-Up Payment
shall be made by an independent auditor (the "Auditor") jointly selected by the
Company and the Executive and paid by the Company. If the Executive and the
Company cannot agree on the firm to serve as the Auditor, then the Executive and
the Company shall each select one nationally recognized accounting firm and
those two firms shall jointly select the nationally recognized accounting firm
to serve as the Auditor. Notwithstanding the foregoing, for purposes of
determining the Gross-Up Payment in respect of any Payment, (i) any other
payments or benefits received or to be received by the Executive in connection
with a Change in Control or the Executive's termination of employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of Section 280G of
the Code shall be treated as subject to the Excise Tax, unless in the opinion of
tax counsel selected by the Auditor, such other payments or benefits (in whole
or in part) do not constitute parachute payments, or are otherwise not subject
to the Excise Tax, and (ii) the Executive shall be deemed to pay federal income
tax at the highest marginal rate applicable in the calendar year in which the
Gross-Up Payment is made, and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's residence
on the Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event the actual Excise Tax or such income tax is more or less than the amount
used to calculate the Gross-Up Payment, the Executive or the Company, as the
case may be, shall pay to the other an amount reflecting the actual Excise Tax
or such income tax, plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code.
10
<PAGE>
9. MITIGATION. The Executive shall not be required to mitigate
amounts payable pursuant to Section 7 hereof by seeking other employment or
otherwise, nor shall there be any offset against such payments on account of (a)
any remuneration attributable to any subsequent employment that he may obtain or
(b) any claims the Company may have against the Executive.
10. CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS,
NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. The Executive shall
hold in a fiduciary capacity for the benefit of the Company and its subsidiaries
(the "Sunbeam Entities") all trade secrets, confidential information, and
knowledge or data relating to the Sunbeam Entities and the businesses and
investments of the Sunbeam Entities, which shall have been obtained by the
Executive during the Executive's employment by the Company, including such
information with respect to any products, improvements, formulas, designs or
styles, processes, services, customers, suppliers, marketing techniques,
methods, future plans or operating practices ("Confidential Information");
PROVIDED, HOWEVER, that Confidential Information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Executive) or any specific information or type of
information generally not considered confidential by persons engaged in the same
business as the Company, or information disclosed by the Company or any officer
thereof to a third party without restrictions on the disclosure of such
information. Except as may be required or appropriate in connection with his
carrying out his duties under this Agreement, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such Confidential Information to
anyone other than the Company and those designated by the Company.
(b) REMOVAL OF DOCUMENTS. All records, files,
drawings, documents, models, and the like relating to the business of the
Sunbeam Entities, which the Executive prepares, uses or comes into contact with
and which contain Confidential Information shall not be removed by the Executive
from the premises of any Sunbeam Entity (without the written consent of the
Company) during or after the Employment Period unless such removal shall be
required or appropriate in connection with his carrying out his duties under
this Agreement, and, if so removed by the Executive, shall be returned to such
Sunbeam Entity immediately upon termination of the Executive's employment
hereunder.
(c) NON-COMPETITION. During (i) the Executive's
employment with the Company and (ii) the two (2) year period immediately
following the Executive's Date of Termination, the Executive (A) shall not
engage, anywhere within the geographical areas in which any Sunbeam Entity is
then conducting its business operations, directly or indirectly, alone, in
association with or as a shareholder, principal, agent, partner, officer,
director, employee or consultant of any other organization, in any business (a
"Competitive Business") which competes with any business then being conducted by
such Sunbeam Entity; (B) shall not solicit or encourage any officer, employee or
consultant of any of the Sunbeam Entities to leave the employ of any of the
Sunbeam Entities for employment by or with any Competitive Business; and (C)
shall not solicit,
11
<PAGE>
divert or take away, or attempt to divert or to take away, the business or
patronage of any of the customers or accounts, or prospective customers or
accounts, of any Sunbeam Entity, which were contacted, solicited or served by
the Executive while employed by the Company; provided, however, that nothing
herein shall prohibit the Executive from owning a maximum of two percent (2%) of
the outstanding stock of any publicly traded corporation. Following the Date of
Termination, ownership by the Executive of not more than five percent (5%) of
any publicly traded corporation shall not constitute a violation hereof. If, at
any time, the provisions of this Section 10(c) shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 10(c) shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Executive agrees that
this Section 10(c) as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein. For purposes of
this Section 10(c), the design, manufacture and marketing of outdoor barbecue
grills, casual outdoor and indoor furniture and small kitchen appliances shall
be construed to be a Competitive Business; provided, however, that the gross
revenues derived from sales of such products by such competitor are greater than
the lesser of (i) 10% of its total revenues and (ii) $500,000,000.
(d) REMEDIES. In the event of a breach or threatened
breach of this Section 10, the Executive agrees that the Company shall be
entitled to apply for injunctive relief in a court of appropriate jurisdiction
to remedy any such breach or threatened breach, the Executive acknowledging that
damages would be inadequate and insufficient.
(e) CONTINUING OPERATION. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 10.
11. INDEMNIFICATION. The Company shall indemnify the Executive
to the full extent permitted by law and the By-laws of the Company for all
expenses, costs, liabilities and legal fees which the Executive may incur in the
discharge of all his duties hereunder, including, without limitation, the right
to be paid in advance by the Company for his expenses in defending a civil or
criminal action, proceeding or investigation prior to the final disposition
thereof. The Executive shall be insured under the Company's Directors' and
Officers' Liability Insurance Policy as in effect from time to time.
Notwithstanding any other provision of this Agreement to the contrary, any
termination of the Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 11.
12. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the
12
<PAGE>
Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the business and/or assets of the Company, provided that
the assignee or transferee is the successor to all or substantially all of the
business and/or assets of the Company and such assignee or transferee assumes
the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company will require
any such successor to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement
(except in the definition of Change in Control), "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this
Section 12 or which otherwise becomes bound by all the terms and provisions of
this Agreement or by operation of law.
(b) EXECUTIVE'S SUCCESSORS. This Agreement shall not
be assignable by the Executive. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. Upon the Executive's death, all amounts to
which he is entitled hereunder, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
13. NOTICE. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
David C. Fannin
3900 Galt Ocean Drive
Apartment 1601
Playa del Mar
Fort Lauderdale, FL 33308
If to the Company:
Sunbeam Corporation
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attn: Chairman of the Compensation Committee
13
<PAGE>
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. MISCELLANEOUS. No provisions of this Agreement may be
modified unless such modification is agreed to in writing signed by the
Executive and an authorized officer of the Company. Any waiver or discharge must
be in writing and signed by the Executive or such an authorized officer of the
Company, as the case may be. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware without regard to its conflicts of law principles.
15. WITHHOLDING. Any payments provided for in this Agreement
shall be paid net of any applicable withholding of taxes required under federal,
state or local law.
16. ARBITRATION.
(a) Except as otherwise provided herein, all
controversies, claims or disputes arising out of or related to this Agreement
shall be settled under the rules of the American Arbitration Association then in
effect in the State of Florida, as the sole and exclusive remedy of either
party, and judgment upon such award rendered by the arbitrator(s) may be entered
in any court of competent jurisdiction. The costs of the arbitration shall be
borne as determined by the arbitrators PROVIDED, HOWEVER, that if the Company's
position is not substantially upheld, as determined by the arbitrators, the
expenses of the Executive (including, without limitation, fees and expenses
payable to the AAA and the arbitrators, fees and expenses payable to witnesses,
including expert witnesses, fees and expenses payable to attorneys and other
professionals, expenses of the Executive in attending the hearings, costs in
connection with obtaining and presenting evidence and costs of transcription of
the proceedings), as determined by the arbitrators, shall be reimbursed to him
by the Company.
(b) Notwithstanding the provisions of Section 16(a)
above, the parties agree that nothing contained herein shall preclude the
Company from bringing an action in a court of competent jurisdiction (whether
prior to or during any arbitration proceeding) seeking to specifically enforce
the provisions of Section 10 hereof by means of seeking an injunction or other
equitable relief.
17. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the
terms of the Option Plan set forth the entire agreement of the parties hereto in
respect of the subject matter contained herein, supersede all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto; and any prior agreement of the parties hereto or thereto in
re-
14
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spect of the subject matter contained herein or therein, including but not
limited to that certain Employment Agreement between the Company and the
Executive dated January 1, 1995, is hereby terminated and cancelled. This
Agreement may be signed in counterparts.
18. CONFLICT WITH OPTION PLAN. To the extent, if any, of any
inconsistency or conflict between the terms and provisions of this Agreement and
the Option Plan, this Agreement shall control in all matters.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on August 7, 1996 to be effective as of the Effective Date.
SUNBEAM CORPORATION
By: /s/ALBERT J. DUNLAP
-------------------
Name: ALBERT J. DUNLAP
Title: CHAIRMAN & CEO
/s/ DAVID C. FANNIN
-------------------
DAVID C. FANNIN
15
<PAGE>
EXHIBIT A
Exhibit A, the Amended and Restated Sunbeam Corporation Equity Team
Plan (Amended and Restated as of May 15, 1996) is incorporated herein by
reference to Exhibit 10b to the Company's Report of Form 10-Q for the fiscal
quarter ended June 30,1996.
EXHIBIT 10.d
===============================================================================
CREDIT AGREEMENT
dated as of
September 16, 1996,
among
Sunbeam Corporation
The Borrowing Subsidiaries Party Hereto
The Lenders Party Hereto
and
The Chase Manhattan Bank,
as Administrative Agent
$500,000,000 REVOLVING CREDIT AND
COMPETITIVE ADVANCE FACILITY
===============================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms............................................. 1
SECTION 1.02. Classification of Loans and Borrowings.................... 16
SECTION 1.03. Terms Generally .......................................... 16
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments............................................... 17
SECTION 2.02. Loans and Borrowings...................................... 17
SECTION 2.03. Requests for Revolving Borrowings......................... 18
SECTION 2.04. Competitive Bid Procedure................................. 19
SECTION 2.05. Funding of Borrowings..................................... 21
SECTION 2.06. Interest Elections........................................ 21
SECTION 2.07. Termination and Reduction of Commitments.................. 23
SECTION 2.08. Repayment of Loans; Evidence of Debt...................... 23
SECTION 2.09. Prepayment of Loans....................................... 24
SECTION 2.10. Fees...................................................... 25
SECTION 2.11. Interest.................................................. 25
SECTION 2.12. Alternate Rate of Interest................................ 26
SECTION 2.13. Increased Costs........................................... 27
SECTION 2.14. Break Funding Payments.................................... 28
SECTION 2.15. Taxes..................................................... 28
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs 29
SECTION 2.17. Mitigation Obligations; Replacement of Lenders............ 30
SECTION 2.18 Borrowing Subsidiaries.................................... 31
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers...................................... 31
SECTION 3.02. Authorization; Enforceability............................. 32
SECTION 3.03. Governmental Approvals; No Conflicts...................... 32
SECTION 3.04. Financial Condition; No Material Adverse Change........... 32
<PAGE>
2
SECTION 3.05. Properties................................................ 32
SECTION 3.06. Litigation and Environmental Matters...................... 33
SECTION 3.07. Compliance with Laws and Agreements....................... 33
SECTION 3.08. Certain Legal Matters..................................... 33
SECTION 3.09. Taxes..................................................... 34
SECTION 3.10. ERISA..................................................... 34
SECTION 3.11. Disclosure................................................ 34
SECTION 3.12. Material Agreements....................................... 34
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date............................................ 34
SECTION 4.02. Each Credit Event......................................... 35
SECTION 4.03. Initial Borrowing by Each Borrowing Subsidiary............ 36
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information................ 37
SECTION 5.02. Notices of Material Events................................ 38
SECTION 5.03. Existence; Conduct of Business............................ 38
SECTION 5.04 Payment of Obligations.................................... 38
SECTION 5.05. Maintenance of Properties; Insurance...................... 38
SECTION 5.06. Books and Records; Inspection Rights...................... 39
SECTION 5.07. Compliance with Laws...................................... 39
SECTION 5.08. Use of Proceeds........................................... 39
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Subsidiary Indebtedness................................... 39
SECTION 6.02. Liens..................................................... 39
SECTION 6.03. Fundamental Changes....................................... 40
SECTION 6.04. Transactions with Affiliates.............................. 41
SECTION 6.05. Financial Covenants....................................... 41
SECTION 6.06. Calculation of Amounts.................................... 41
<PAGE>
3
ARTICLE VII
EVENTS OF DEFAULT................................ 41
ARTICLE VIII
THE ADMINISTRATIVE AGENT......................... 44
ARTICLE IX
GUARANTEE........................................ 46
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices................................................... 48
SECTION 10.02. Waivers; Amendments....................................... 48
SECTION 10.03. Expenses; Indemnity; Damage Waiver........................ 49
SECTION 10.04. Successors and Assigns.................................... 50
SECTION 10.05. Survival.................................................. 52
SECTION 10.06. Counterparts; Integration; Effectiveness.................. 53
SECTION 10.07. Severability.............................................. 53
SECTION 10.08. Right of Set-off.......................................... 53
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process 53
SECTION 10.10. Waiver of Jury Trial...................................... 54
SECTION 10.11. Headings.................................................. 54
SECTION 10.12. Confidentiality........................................... 54
SECTION 10.13. Interest Rate Limitation.................................. 55
SECTION 10.14 Conversion of Currencies.................................. 55
<PAGE>
4
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Borrowing Subsidiary Agreement
Exhibit C Form of Borrowing Subsidiary Termination
Exhibit D Forms of Opinion
Exhibit E Forms of Competitive Advance Notices
SCHEDULES
Schedule 2.01 Commitments
Schedule 3.06 Disclosed Matters
Schedule 3.12 Material Agreements
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
<PAGE>
CREDIT AGREEMENT dated as of September 16, 1996 (as
the same may hereafter be amended, supplemented, restated
or otherwise modified from time to time, this
"Agreement"), among SUNBEAM CORPORATION (the "Company"),
the BORROWING SUBSIDIARIES (as defined herein), the
LENDERS (as defined herein), and THE CHASE MANHATTAN BANK,
as Administrative Agent.
The Borrowers (such term and each other capitalized term used but
not otherwise defined herein having the meaning assigned to it in Article I)
have requested the Lenders to extend credit in order to enable them to borrow on
a revolving credit basis on and after the date hereof and at any time and from
time to time prior to the Maturity Date a principal amount not to exceed
$500,000,000. The proceeds of such borrowings are to be used for general
corporate purposes, including acquisitions. The Borrowers have also requested
the Lenders to provide a procedure pursuant to which the Lenders may be invited
to bid on an uncommitted basis on short-term borrowings by the Borrower. The
Lenders are willing to extend such credit to the Borrowers on the terms and
subject to the conditions herein set forth.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any LIBOR Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, a national
banking association, as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on
<PAGE>
2
such day, and (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"ALTERNATIVE CURRENCY" shall mean at any time any of Belgian
Francs, French Francs, Deutsche Marks, Pounds Sterling, Japanese Yen and any
other currency (other than Dollars) that is readily available, freely traded and
convertible into Dollars in the London market and as to which a Dollar
Equivalent can be calculated.
"APPLICABLE MARGIN" shall mean, with respect to any LIBOR
Revolving Loan, or with respect to the Facility Fees, as the case may be, the
applicable percentage set forth in the appropriate table below under the caption
"LIBOR Spread" or "Facility Fee Percentage", as the case may be, based upon (a)
the ratings by Moody's and S&P, respectively, applicable on such date to the
Index Debt, if at least one such rating agency shall have such a rating in
effect, or (b) if no such rating agency shall have such a rating in effect, the
ratio of Consolidated EBIT to Consolidated Interest Expense for the period of
four fiscal quarters ending with the most recent fiscal quarter for which
financial statements of the Company are required to have been delivered under
Section 5.01(a) or (b), whether or not financial statements in respect of any
subsequent period shall have been delivered:
===============================================================================
INDEX DEBT LIBOR FACILITY FEE
RATINGS SPREAD PERCENTAGE
- -------------------------------------------------------------------------------
CATEGORY 1
A1 or higher by Moody's .175% .075%
A+ or higher by S&P
- -------------------------------------------------------------------------------
CATEGORY 2
Lower than A1 and at least A3 by Moody's .185% .090%
Lower than A+ and at least A- by S&P
- -------------------------------------------------------------------------------
CATEGORY 3
Baa1 by Moody's
BBB+ by S&P .200% .100%
- -------------------------------------------------------------------------------
CATEGORY 4
Lower than Baa1 and at least Baa3 by Moody's
Lower than BBB+ and at least BBB- by S&P .275% .150%
- -------------------------------------------------------------------------------
CATEGORY 5
Ba1 or lower by Moody's
BB+ or lower by S&P .500% .250%
===============================================================================
===================================================================
RATIO OF CONSOLIDATED EBIT TO LIBOR FACILITY FEE
CONSOLIDATED INTEREST EXPENSE SPREAD PERCENTAGE
- -------------------------------------------------------------------
CATEGORY 1
Greater than or equal to 11 to 1 .175% .075%
- -------------------------------------------------------------------
<PAGE>
3
CATEGORY 2
Less than 11 and greater than or .185% .090%
equal to 9 to 1
- -------------------------------------------------------------------
CATEGORY 3
Less than 9 and greater than or .200% .100%
equal to 7 to 1
- -------------------------------------------------------------------
CATEGORY 4
Less than 7 and greater than or .275% .150%
equal to 4 to 1
- -------------------------------------------------------------------
CATEGORY 5
Less than 4 to 1 .500% .250%
===================================================================
For purposes of the foregoing, (i) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall fall
within different Categories, the Applicable Margin shall be based on the higher
of the two ratings, PROVIDED that if one of the two ratings is two or more
Categories lower than the other of such ratings, the Applicable Margin shall be
based upon the Category next below that of the higher rating; (ii) if a rating
shall not be available from one rating agency, such rating agency shall be
deemed to have assigned a rating in Category 5; and (iii) if the ratings
established or deemed to have been established by Moody's and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the date on which it is
first announced by the applicable rating agency. If the rating system of Moody's
or S&P shall change, the Borrowers and the Lenders shall negotiate in good faith
to amend this definition to reflect such changed rating system and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the ratings most recently in effect prior to such change (or, if
no such amendment shall have become effective within 90 days, by reference to
the ratios set forth in the immediately preceding table). Each change in the
Applicable Margin shall apply to LIBOR Revolving Loans outstanding and Facility
Fees accruing during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"ASSESSMENT RATE" means, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well- capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
(or any successor thereto) for insurance by such Corporation (or such successor)
of time deposits made in Dollars at the offices of such member in the United
States; PROVIDED that if, as a result of any change in any law, rule or
regulation, it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be
<PAGE>
4
determined by the Administrative Agent to be representative of the cost to the
banks of such insurance.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent
and the Borrower, in the form of Exhibit A or any other form approved by the
Administrative Agent and the Borrower.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER" means the Company or any Borrowing Subsidiary.
"BORROWING" means (a) a group of Revolving Loans of the same Type
and, in the case of LIBOR Loans, as to which a single Interest Period is in
effect, or (b) a Competitive Loan or group of Competitive Loans of the same Type
made on the same date as to which a single Interest Period is in effect.
"BORROWING REQUEST" means a request by a Borrower for a Revolving
Borrowing in accordance with Section 2.03.
"BORROWING SUBSIDIARY" means any Wholly Owned Subsidiary of the
Company designated as a Borrowing Subsidiary by the Company pursuant to Section
2.18.
"BORROWING SUBSIDIARY AGREEMENT" shall mean a Borrowing
Subsidiary Agreement substantially in the form of Exhibit B.
"BORROWING SUBSIDIARY TERMINATION" shall mean a Borrowing
Subsidiary Termination substantially in the form of Exhibit C.
"BORROWING SUBSIDIARY OBLIGATIONS" means the due and punctual
payment of (i) the principal of and interest on any loans made by the Lenders to
the Borrowing Subsidiaries pursuant to this Agreement, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities (including, without limitation, the obligations
described in Section 2.15 of the Borrowing Subsidiaries to the Lenders under the
Agreement and the other Loan Documents).
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED that, when used in connection with a LIBOR
Loan, the term "BUSINESS DAY" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
<PAGE>
5
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
A "CHANGE IN CONTROL" shall be deemed to have occurred if (a)
during any period of 25 consecutive calendar months, a majority of the Board of
Directors of the Company shall no longer be composed of individuals (i) who were
members of said Board on the first day of such period, (ii) whose election or
nomination to said Board was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a
majority of said Board or (iii) whose election or nomination to said Board was
approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of said Board; or
(b) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")), other than
the Steinhardt Group or the Funds Group (collectively, the "Groups"), or any
Persons who were, as of the date hereof, in control of either or both of the
Groups (the "GROUP CONTROL PERSONS") or any Person wholly owned, directly or
indirectly, by the Group Control Persons, shall be or become the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 of the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire without condition, other than the passage
of time, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of shares representing 30% or more of the
ordinary voting power of the capital stock of the Company (on a fully diluted
basis), unless the Groups and/or the Group Control Persons collectively own
shares representing a greater percentage of such voting power than the shares
owned by such person.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance in good faith by
any Lender (or, for purposes of Section 2.13(b), by any lending office of such
Lender or by such Lender's holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans or Competitive Loans.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT" means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.07
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04. The initial amount of each Lender's
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
<PAGE>
"COMPETITIVE BID" means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.
"COMPETITIVE BID RATE" means, with respect to any Competitive
Bid, the Fixed Rate offered by the Lender making such Competitive Bid.
"COMPETITIVE BID REQUEST" means a request by a Borrower for
Competitive Bids in accordance with Section 2.04.
"COMPETITIVE LOAN" means a Loan made pursuant to Section 2.04.
"COMPETITIVE LOAN EXPOSURE" means, with respect to any Lender at
any time, the sum of (a) the aggregate principal amount of the outstanding
Competitive Loans of such Lender denominated in Dollars and (b) the Dollar
Equivalent of the aggregate principal amount of the outstanding Competitive
Loans of such Lender denominated in an Alternative Currency.
"CONSOLIDATED EBIT" means, for any period, the aggregate net
sales of the Company and its Subsidiaries for such period LESS, to the extent
not already deducted in determining net sales and without duplication, (i) cost
of goods sold, (ii) selling, administrative and general expense, and (iii)
depreciation, depletion and amortization expense, determined on a consolidated
basis in accordance with GAAP consistently applied but excluding the effect of
extraordinary and unusual items.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of the last day
of any fiscal quarter, for the four fiscal quarters then ended, the ratio of (a)
Consolidated EBIT to (b) Consolidated Interest Expense, in each case for such
period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum
for the Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of (a) all interest in respect of
Indebtedness (including, without limitation, the interest component of any
payments in respect of Capital Lease Obligations) accrued or capitalized during
such period (whether or not actually paid during such period) PLUS (b) the net
amount payable (or MINUS the net amount receivable) under interest rate
protection agreements and other interest rate hedging arrangements during such
period (whether or not actually paid or received during such period).
"CONSOLIDATED LEVERAGE RATIO" means, at any date, the ratio of
Consolidated Total Debt at such date to Consolidated Total Capital at such date;
provided, however, that on any date that is not the last day of a fiscal
quarter, Consolidated Total Capital shall be computed for purposes of
determining the Consolidated Leverage Ratio, without taking into account the
Company's earnings or losses for the current quarter.
"CONSOLIDATED TOTAL CAPITAL" means, at any date, the sum of (a)
Consolidated Total Debt, and (b) the Consolidated Total Shareholders' Equity of
the Company, determined in accordance with GAAP consistently applied.
<PAGE>
7
"CONSOLIDATED TOTAL DEBT" means, at any date, all Indebtedness of
the Company and its Subsidiaries on such date, determined on a consolidated
basis in accordance with GAAP consistently applied.
"CONSOLIDATED TOTAL SHAREHOLDERS' EQUITY" means, at any date, the
total shareholders' equity of the Company and its Subsidiaries on such date,
determined on a consolidated basis in accordance with GAAP consistently applied.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CURRENCY" means Dollars or any Alternative Currency.
"DEFAULT" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"DOLLAR EQUIVALENT" means, with respect to any principal amount
of any Competitive Loan denominated in an Alternative Currency on any date of
determination, the equivalent in Dollars of such amount, determined by the
Administrative Agent using the Exchange Rate with respect to the applicable
Alternative Currency (i) for purposes of determining the Competitive Loan
Exposures pursuant to Section 2.04(a), at or about 11:00 a.m. London time on the
date two Business Days prior to the making of such Loan and (ii) for all other
purposes, at or about 11:00 a.m. London time on the last Business Day of the
month preceding such date of determination.
"EFFECTIVE DATE" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 10.02.)
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating to the environment, preservation or reclamation of natural resources,
the management, release or threatened release of any Hazardous Material.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or
<PAGE>
8
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder (other than an event
for which the 30-day notice period is waived), with respect to a Plan; (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Company or any of its ERISA
affiliates of any notice, or the receipt by any Multiemployer Plan from the
Company or any of its ERISA Affiliates of any notice concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCHANGE RATE" means, with respect to any Alternative Currency
on a particular date, the rate at which such Alternative Currency may be
exchanged into Dollars, as set forth on such date on the applicable Reuters
currency page with respect to such Alternative Currency. In the event that such
rate does not appear on the applicable Reuters currency page, the Exchange Rate
with respect to such Alternative Currency shall be determined by reference to
such other publicly available service for displaying exchange rates as may be
agreed upon by the Administrative Agent and the Company or, in the absence of
such agreement, such Exchange Rate shall instead be the Administrative Agent's
spot rate of exchange in the London interbank market or other market where the
Administrative Agent's foreign currency exchange operations in respect of such
Alternative Currency are then being conducted, at or about 11:00 A.M., local
time, at such date for the purchase of Dollars with such Alternative Currency
for delivery two Business Days later; PROVIDED, HOWEVER, that if at the time of
any such determination, for any reason, no such spot rate is being quoted, the
Administrative Agent may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be conclusive absent manifest
error.
<PAGE>
9
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the jurisdiction under the laws of which
it is organized, or the jurisdiction in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which any Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by any Borrower under Section 2.17(b)), any withholding tax that is
attributable to such Foreign Lender's failure or inability to comply with
Section 2.15(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
any Borrower with respect to such withholding tax pursuant to Section 2.15(a).
"EXISTING CREDIT AGREEMENT" means the credit agreement dated as
of September 19, 1994, as amended on June 26, 1995, among the Company; each of
the lenders that are signatories thereto; The Chase Manhattan Bank, the First
National Bank of Boston, Bank of America Illinois and Nationsbank Florida, N.A.,
each in its capacity as an issuing bank for letters of credit; and The Chase
Manhattan Bank, as agent for the lenders thereto.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for the day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"FIXED RATE" means, with respect to any Competitive Loan bearing
interest at a fixed rate, the fixed rate of interest per annum specified by the
Lender making such Competitive Loan in its related Competitive Bid.
"FIXED RATE LOAN" means a Competitive Loan bearing interest at a
Fixed Rate.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the applicable Borrower is
located. For purposes hereof, the United States of America, each State thereof,
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FUNDS GROUP" means, collectively, Mutual Shares Fund, Mutual
Beacon Fund, Mutual Qualified Fund and Mutual Series Fund Inc.
"GAAP" means generally accepted accounting principles in the
United States of America.
<PAGE>
10
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing any
Indebtedness or other obligation of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof or (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation;
PROVIDED, that the term Guarantee shall not include (x) endorsements for
collection or deposit in the ordinary course of business or (y) those Guarantees
listed on Schedule 6.01 under the heading "Contingent Guarantees".
"GUARANTOR" means the Company in its capacity as the guarantor
under Article IX hereof.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, and
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit, letters of guaranty and bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any
<PAGE>
11
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEX DEBT" means the senior unsecured, non-credit-enhanced
long-term debt of the Company.
"INTEREST ELECTION REQUEST" means a request by a Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.06.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan,
the last day of each March, June, September and December, (b) with respect to
any LIBOR Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a LIBOR Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period, (c) with respect to any Fixed Rate
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Fixed Rate Borrowing with an Interest
Period of more than 90 days' duration (unless otherwise specified in the
applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first
day of such Interest Period, and any other dates that are specified in the
applicable Competitive Bid Request as Interest Payment Dates with respect to
such Borrowing.
"INTEREST PERIOD" means (a) with respect to any LIBOR Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the applicable Borrower may elect, (b) with respect to
any Fixed Rate Borrowing, the period (which shall not be less than seven days
nor more than 180 days) commencing on the date of such Borrowing and ending on
the date specified in the applicable Competitive Bid Request; PROVIDED, that (i)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a LIBOR Borrowing only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a LIBOR
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
<PAGE>
12
"LIBO RATE" means, with respect to any LIBOR Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
so available at such time for any reason, then the "LIBO RATE" with respect to
such LIBOR Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIBOR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"LIEN" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOANS" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"LOAN DOCUMENTS" means this Agreement, each Borrowing Subsidiary
Agreement, each Borrowing Subsidiary Termination and each promissory note held
by a Lender pursuant to Section 2.08(e).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the business, assets, operations or condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole or (b) the ability of the
Borrowers to perform any of their obligations under this Agreement.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Company and the Subsidiaries in an aggregate principal amount
exceeding $10,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Company or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (after netting, to the extent that netting arrangements are enforceable
under applicable law) that the Company or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.
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13
"MATERIAL SUBSIDIARY" shall mean (a) any Borrowing Subsidiary,
(b) as of any date, any other Subsidiary that meets, or that would, had it then
been a Subsidiary, have met the definition of a "significant subsidiary"
contained as of the date hereof in Regulation S-X of the Securities and Exchange
Commission as of the last day of the fiscal year of the Company ending on, or
most recently ended prior to, such date; PROVIDED that for purposes of this
definition of "Material Subsidiary" all references in said Regulation S-X to "10
percent" shall be deemed to be references to "5 percent", (c) any other
Subsidiary of the Company from time to time designated by the Company as a
"Material Subsidiary" and (d) any Subsidiary that directly or indirectly owns
the common stock of a Material Subsidiary. Notwithstanding the foregoing, if the
combined assets of all Subsidiaries that are not Material Subsidiaries in
accordance with the preceding sentence equals or exceeds 15% of the consolidated
total assets of the Company and its Subsidiaries, then one or more of such non-
Material Subsidiaries designated by the Company (or, if the Company shall make
no designation, one or more of such subsidiaries in descending order based on
their respective contributions to consolidated total assets), shall be deemed
for all purposes to be Material Subsidiaries to the extent necessary to
eliminate such excess.
"MATURITY DATE" means September 17, 2001.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or delivery
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by
more than 30 days, or contingent obligations, or obligations that are
being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business; and
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14
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary;
PROVIDED that "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any of its ERISA Affiliates is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank, as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"REGISTER" has the meaning set forth in Section 10.04(c).
"REQUIRED LENDERS" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
the total Revolving Credit Exposures and unused Commitments at such time;
PROVIDED that, for purposes of declaring the Loans to be due and payable
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans shall be included in the Revolving Credit
Exposures in determining the Required Lenders.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at
any time, the sum of the outstanding principal amount of such Lender's Revolving
Loans.
"REVOLVING LOAN" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's Rating Services, a division of the
McGraw- Hill Companies, Inc.
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed
to constitute a eurocurrency
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15
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"STEINHARDT GROUP" means, collectively, I. P. Management Company,
Inc., Institutional Partners, L.P., Steinhardt Management Company, Inc., SP
International S.A., a subsidiary of Steinhardt Management Company, Inc., and
Steinhardt Partners, L.P.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned, controlled or held.
"SUBSIDIARY" means any subsidiary of the Company.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TRANSACTIONS" means the execution, delivery and performance by
the Borrowers of this Agreement and the borrowing of Loans hereunder.
"TYPE", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate or, in the case of a Competitive Loan or Borrowing, the Fixed Rate.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which all of
the equity securities or other ownership interests (other than, in the case of a
corporation or other similar legal entity, directors' qualifying shares or
shares held by residents of the jurisdiction in which such corporation or other
similar legal entity is organized as required by the law of such jurisdiction)
are directly or indirectly owned or controlled by the Company or one or more
Wholly Owned Subsidiaries or by the Company and one or more Wholly Owned
Subsidiaries of the Company.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(E.G., a "Revolving Loan") or by Type (E.G., a "LIBOR Loan") or by Class and
Type (E.G., a "LIBOR Revolving Loan"). Borrowings also may be classified and
referred to by Class (E.G., a "Revolving Borrowing") or by
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16
Type (E.G., a "LIBOR Borrowing") or by Class and Type (E.G., a "LIBOR Revolving
Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; PROVIDED that, if the Company notifies the
Administrative Agent that the Company requests an amendment to any provision
hereof to eliminate the effect of any change in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Company that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof
(provided such change in GAAP or in the application thereof occurs after the
date hereof), then such provision shall be interpreted on the basis of GAAP as
in effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Company from
time to time during the Availability Period in Dollars in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment or (b) the sum of the total Revolving Credit
Exposures plus the total Competitive Loan Exposures exceeding the total
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Company may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Revolving Loan shall
be made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. Each Competitive Loan
shall be made in
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17
accordance with the procedures set forth in Section 2.04. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; PROVIDED that the Commitments and
Competitive Bids of the Lenders are several and no Lender shall be responsible
for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, (i) each Revolving Borrowing shall
be comprised entirely of ABR Loans or LIBOR Loans as the Company may request in
accordance herewith, and (ii) each Competitive Borrowing shall be comprised
entirely of Fixed Rate Loans as each Borrower may request in accordance
herewith. Each Lender at its option may make any LIBOR Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
PROVIDED that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any LIBOR
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $5,000,000;
PROVIDED that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments. Each Competitive
Borrowing denominated in Dollars shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000, and each
Competitive Borrowing denominated in an Alternative Currency shall be in an
aggregate principal amount that is not less than the Dollar Equivalent of
$5,000,000. Borrowings of more than one Type and Class may be outstanding at the
same time; PROVIDED that there shall not at any time be more than a total of ten
LIBOR Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, a
Borrower shall not be entitled to request, or elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. REQUESTS FOR REVOLVING BORROWINGS. In order to
request a Revolving Borrowing, the Company (on its own behalf and on behalf of
any other Borrower) shall notify the Administrative Agent of such request by
telephone (a) in the case of a LIBOR Borrowing, not later than 12:00 noon, New
York City time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City
time, one Business Day before the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Company. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be an ABR Borrowing or a LIBOR
Borrowing;
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18
(iv) in the case of a LIBOR Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested LIBOR Revolving Borrowing, then the
Company shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. COMPETITIVE BID PROCEDURE. (a) Subject to the terms
and conditions set forth herein, from time to time during the Availability
Period the Company (on its own behalf and on behalf of any other Borrower) may
request Competitive Bids and the Company (on its own behalf and on behalf of any
other Borrower) may (but shall not have any obligation to) accept Competitive
Bids and borrow Competitive Loans; PROVIDED that the sum of the total Revolving
Credit Exposures plus the total Competitive Loan Exposures at any time shall not
exceed the total Commitments. In order to request Competitive Bids, the Company
shall notify the Administrative Agent of such request by telephone, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; PROVIDED that such Borrower may submit up to (but not more
than) three Competitive Bid Requests on the same day, but a Competitive Bid
Request shall not be made within five Business Days (or such lesser number of
days as the Administrative Agent may agree) after the date of any previous
Competitive Bid Request, unless any and all such previous Competitive Bid
Requests shall have been withdrawn or all Competitive Bids received in response
thereto rejected. Each such telephonic Competitive Bid Request shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Competitive Bid Request in a form approved by the Administrative Agent
and signed by the Company. Each such telephonic and written Competitive Bid
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the Currency of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
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19
If no election as to the Currency of Borrowing is specified in any Competitive
Bid Request, then the applicable Borrower shall be deemed to have requested a
Borrowing in Dollars. Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Administrative Agent shall notify the Lenders
of the details thereof by telecopy, inviting the Lenders to submit Competitive
Bids.
(b) Each Lender may (but shall not have any obligation to) make
one or more Competitive Bids to such Borrower responsive to a Competitive Bid
Request. Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, not later than 10:00 a.m., New York City time, on the proposed date of
such Competitive Borrowing. Competitive Bids that do not conform substantially
to the form approved by the Administrative Agent may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the applicable
Lender as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount of the Competitive Loan or Loans that the Lender is willing to
make (which, in the case of a Competitive Borrowing denominated in Dollars,
shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and, in
the case of a Competitive Borrowing denominated in an Alternative Currency,
shall be a minimum principal amount the Dollar Equivalent of which is equal to
$5,000,000, and which may equal the entire principal amount of the Competitive
Borrowing requested by such Borrower), (ii) the Competitive Bid Rate or Rates at
which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The Administrative Agent shall promptly notify such Borrower
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph (d), such
Borrower may accept or reject any Competitive Bid. Such Borrower shall notify
the Administrative Agent by telephone, confirmed by telecopy in a form approved
by the Administrative Agent, whether and to what extent it has decided to accept
or reject each Competitive Bid, not later than 11:00 a.m., New York City time,
on the proposed date of the Competitive Borrowing; PROVIDED, that (i) the
failure of such Borrower to give such notice shall be deemed to be a rejection
of each Competitive Bid, (ii) such Borrower shall not accept a Competitive Bid
made at a particular Competitive Bid Rate if such Borrower rejects a Competitive
Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by such Borrower shall not exceed the aggregate amount
of the requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above, such
Borrower may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is, in
the case of a Competitive Borrowing denominated in Dollars, in a minimum
principal amount of $5,000,000 and an integral multiple of $1,000,000 and, in
the case of a Competitive Borrowing denominated in an Alternative Currency, in a
minimum principal amount the Dollar Equivalent of which is $5,000,000; PROVIDED
FURTHER that if a Competitive Loan
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20
must be in an amount less than $5,000,000 or an amount in an Alternative
Currency of which the Dollar Equivalent is $5,000,000 because of the provisions
of clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000
or an amount in an Alternative Currency of which the Dollar Equivalent is
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded in a manner determined by such Borrower. A notice given by such Borrower
pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to such Borrower at least one quarter of an hour earlier than the
time by which the other Lenders are required to submit their Competitive Bids to
the Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. FUNDING OF BORROWINGS. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds in Dollars or in the applicable
Alternative Currency, as the case may be, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders,
by 12:00 noon, New York City time (or, in the case of any Competitive Loan with
respect to which the Borrower shall have requested funding in another
jurisdiction, to such account in such jurisdiction as the Administrative Agent
shall designate for such purpose by notice to the applicable Lenders, by 12:00
noon, local time). The Administrative Agent will make such Loans available to
the Borrower by promptly crediting the amounts so received, in like funds, to an
account of such Borrower maintained with the Administrative Agent in New York
City (or, in the case of any Competitive Loan with respect to which the Borrower
shall have requested funding in another jurisdiction, to such account in such
jurisdiction as the Borrower shall have designated in the applicable Competitive
Bid Request).
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to such Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and such Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the
case of such Borrower, the interest rate on the applicable Borrowing. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
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SECTION 2.06. INTEREST ELECTIONS. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a LIBOR Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the applicable
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a LIBOR Revolving Borrowing, may elect new
Interest Periods therefor, all as provided in this Section. The applicable
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Competitive Borrowings, which may not be converted or
continued.
(b) In order to make an election pursuant to this Section, the
applicable Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section
2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a LIBOR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Company shall be deemed to have selected an
Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
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22
(e) If a Borrower fails to deliver a timely Interest Election
Request with respect to a LIBOR Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Company, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each
LIBOR Revolving Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date; PROVIDED that the Commitments shall terminate at 3:00 p.m., New York City
time, on October 15, 1996, if the Effective Date has not occurred prior to such
time.
(b) Subject to Section 2.09(d), the Company may at any time
terminate, or from time to time reduce, the Commitments; PROVIDED that (i) each
reduction of the Commitments shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Company shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans, the sum of the Revolving Credit Exposures plus the
Competitive Loan Exposures would exceed the total Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; PROVIDED that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) Each
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Maturity Date and (ii) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Competitive Loan
on the last day of the Interest Period applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
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23
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by
a promissory note for its Competitive Loans and a promissory note for its
Revolving Loans. In such event, the Borrower shall prepare, execute and deliver
to such Lender promissory notes payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company. Thereafter, the Loans
evidenced by such promissory notes and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.09. PREPAYMENT OF LOANS. (a) Subject to Section
2.09(d), the applicable Borrower shall have the right at any time and from time
to time to prepay any Borrowing, in whole or in part.
(b) In the event of any termination of the Commitments, the
Borrowers shall prepay all outstanding Borrowings on the date of such
termination. In the event of any reduction of the Commitments, the Borrowers
shall prepay outstanding Borrowings to the extent, if any, necessary so that, on
the date of and after giving effect to such reduction, the sum of the Revolving
Credit Exposures and the Competitive Loan Exposures does not exceed the total
Commitments.
(c) The applicable Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a LIBOR Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; PROVIDED
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.07, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same
<PAGE>
24
Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.11.
(d) Borrowers shall not have the right to prepay any Competitive
Loan without the prior consent of the Lender thereof and shall not terminate or
reduce the Commitments if such termination or reduction would require prepayment
of any Competitive Loan and such consent has not been obtained.
SECTION 2.10. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the rate equal to the Applicable Margin per annum in effect from time
to time, in such case on the daily amount of the Commitment of such Lender
(whether used or unused) during the period from and including the date of this
Agreement to but excluding the date on which such Commitment terminates;
PROVIDED that, if such Lender continues to have any Revolving Credit Exposure
after its Commitment terminates, then such facility fee shall continue to accrue
on the daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Exposure. Accrued
facility fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof;
PROVIDED that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand. All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(b) Each Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between such Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.11. INTEREST. (a) The Loans comprising each ABR
Borrowing shall bear interest at a rate per annum equal to the Alternate Base
Rate.
(b) The Loans comprising each LIBOR Borrowing shall bear interest
at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin in effect from time to
time.
(c) Each Fixed Rate Loan shall bear interest at a rate per annum
equal to the Fixed Rate applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by any Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any
<PAGE>
25
Loan, the rate otherwise applicable to such Loan as provided above plus 2%
or (ii) in the case of any other amount, the rate applicable to ABR Loans as
provided above plus 2%.
(e) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; PROVIDED that (i) interest accrued
pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any LIBOR
Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a LIBOR Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period or that a Change in Law makes it unlawful for any one
or more of the Lenders to make a LIBOR Loan; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) comprising such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a LIBOR Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a LIBOR Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing; PROVIDED that if
the circumstances giving rise to such notice do not affect all the Lenders, then
requests by the Borrowers for LIBOR Competitive Borrowings may be made to
Lenders that are not affected thereby.
SECTION 2.13. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by,
<PAGE>
26
any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or LIBOR Loans or Fixed Rate Loans
made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan or Fixed Rate Loan or to reduce
the amount of any sum received or receivable by such Lender (whether of
principal, interest or otherwise) by an amount deemed by such Lender in good
faith to be material, then the applicable Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender, to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time the Company will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section and setting forth and
explaining in reasonable detail the manner in which such amount or amounts shall
have been determined shall be delivered to the applicable Borrower and shall be
prima facie evidence of such amount or amounts (it being agreed that no Borrower
shall have access in connection with this Section 2.13 to the internal records
of the Administrative Agent or any Lender underlying any such certificate). The
applicable Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; PROVIDED that the Borrowers shall
not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies such Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; PROVIDED FURTHER that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
(e) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.
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27
SECTION 2.14. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any LIBOR Loan or Fixed Rate Loan other than on the
last day of an Interest Period applicable thereto, (b) the conversion of any
LIBOR Loan other than on the last day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Revolving Loan on the
date specified in any notice delivered pursuant hereto (regardless of whether
such notice is permitted to be revocable and is revoked in accordance herewith),
(d) the failure to borrow any Competitive Loan after accepting the Competitive
Bid to make such Loan, or (e) the assignment of any LIBOR Loan or Fixed Rate
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by any Borrower pursuant to Section 2.17, then, in any such
event, the applicable Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event by payment to such Lender of an amount
determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal to the principal
amount of the applicable Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate in effect (or that would have been
in effect) for such Interest Period, over (ii) the amount of interest that such
Lender would earn on such principal amount for such period if such Lender were
to invest such principal amount for such period at the interest rate that would
be bid by such Lender (or an affiliate of such Lender) for dollar deposits at
other banks in the London interbank market at the commencement of such period. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section and setting forth and explaining
in reasonable detail the manner in which such amount or amounts shall have been
determined shall be delivered to the applicable Borrower and shall be prima
facie evidence of such amount or amounts (it being agreed that no Borrower shall
have access in connection with this Section 2.14 to the internal records of the
Administrative Agent or any Lender underlying any such certificate). Such
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.15. TAXES. (a) Any and all payments by or on account of
any obligation of any Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if
such Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with
<PAGE>
28
respect to any payment by or on account of any obligation of the Borrowers
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability and setting forth and explaining in
reasonable detail the manner in which such amount shall have been determined
delivered to a Borrower by a Lender, or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be prima facie evidence of such amount or
amounts (it being agreed that no Borrower shall have access in connection with
this Section 2.15 to the internal records of the Administrative Agent or any
Lender underlying any such certificate).
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the tax return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, properly completed and executed forms prescribed by applicable law
(together with such other documentation or certification as such Borrower may
reasonably request) that will permit such Borrower to make such payments without
withholding or at a reduced rate.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or otherwise) prior to 12:00
noon, local time at the place of payment, on the date when due, in immediately
available funds. Each such payment shall be made to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York (or, in the case of any
payment in respect of a Competitive Loan with respect to which the Borrower
shall have requested funding in another jurisdiction, to an account in such
jurisdiction designated by the Administrative Agent), without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. The
Administrative Agent shall distribute any such payments received for the account
of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to fully pay all amounts then due
hereunder, such funds shall be applied to the amounts then due hereunder in such
order and priority as the Administrative Agent may elect; PROVIDED that any
funds that the Administrative Agent elects to apply to principal, interest or
fees
<PAGE>
29
then due shall be applied ratably to all amounts of principal, interest or
fees (as the case may be) then due.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans; PROVIDED that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant other than the Company or any Subsidiary or Affiliate thereof.
Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a)
If any Lender requests compensation under Section 2.13, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense that such Lender determines in good faith to be material and would not
otherwise be materially disadvantageous to such Lender in its good faith
judgment. Each Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if
any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
applicable Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.04, except that the Borrower shall pay the processing and
recordation fee required by Section 10.04(b)(iv)), all its interests, rights and
obligations under this Agreement (other than any outstanding Competitive Loans
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); PROVIDED that (i)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans (other than
<PAGE>
30
Competitive Loans) and accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or such Borrower (in the
case of all other amounts) and (ii) in the case of any such assignment resulting
from a claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling such Borrower to require such
assignment and delegation cease to apply.
SECTION 2.18. BORROWING SUBSIDIARIES. The Company may designate
any Wholly Owned Subsidiary as a Borrowing Subsidiary, PROVIDED that there shall
not be more than ten Borrowing Subsidiaries at any one time. Upon the receipt by
the Agent of a Borrowing Subsidiary Agreement in the form of Exhibit B executed
by a Wholly Owned Subsidiary and the Company, such Wholly Owned Subsidiary shall
be a Borrowing Subsidiary and a party to this Agreement. A Wholly Owned
Subsidiary shall cease to be a Borrowing Subsidiary hereunder at such time as no
Loans shall be outstanding to such Subsidiary and such Subsidiary and the
Company shall have executed and delivered to the Administrative Agent a
Borrowing Subsidiary Termination in the form of Exhibit C.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of the Company and its
Material Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within each Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement (or a
Borrowing Subsidiary Agreement, in the case of any Borrowing Subsidiary) has
been duly executed and delivered by each Borrower and this Agreement constitutes
a legal, valid and binding obligation of each Borrower, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority applicable to
the Company and its Material Subsidiaries, except such as have been obtained or
made and are in full force and effect, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of the
<PAGE>
31
Company or any Material Subsidiary or any order of any Governmental Authority
applicable to the Company and its Material Subsidiaries, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Company or any Material Subsidiary or its assets, or give rise to a
right thereunder to require any payment to be made by the Company or any
Material Subsidiary, and (d) will not result in the creation or imposition of
any Lien on any asset of the Company or any Material Subsidiary.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Company has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders' equity and cash flows (i) as of
and for the fiscal year ended December 31, 1995 reported on by Arthur Andersen,
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended June 30, 1996, as included in the
Company's filing on form 10-Q with the Securities and Exchange Commission for
the fiscal quarter then ended and signed by its principal accounting officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.
(b) As of the date hereof, there has been no material adverse
change since June 30, 1996 in the business, assets, operations, prospects or
condition, financial or otherwise, of the Company and its Subsidiaries, taken as
a whole.
SECTION 3.05. PROPERTIES. (a) Each of the Company and its
Material Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Company and the Material Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Company and its Material Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) As of the
date hereof, there are not any actions, suits or proceedings by or before any
arbitrator or Governmental Authority now pending against or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary (i)
that could reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that
involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, as of the date hereof, neither
the Company nor any Subsidiary (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
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32
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) As of the date hereof, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Company and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. CERTAIN LEGAL MATTERS. (a) Neither the Company nor
any Subsidiary is (i) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (ii) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
(b) Neither the Company nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying margin stock, within the meaning of
Regulation U of the Board. Margin stock will at all times constitute less than
25% of the assets (of the Borrower individually and of the Borrower and the
Subsidiaries on a consolidated basis) that are subject to the restrictions of
Section 6.02 and 6.03.
SECTION 3.09. TAXES. Each of the Company and its Subsidiaries has
filed or caused to be filed, on a timely basis, all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.10. ERISA. As of the date hereof, each Plan, and, to
the knowledge of the Company, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code and any other
Federal or State law, and no event or condition has occurred and is continuing
as to which the Company would be under an obligation to furnish notice to the
Administrative Agent and each Lender under Section 5.01(c) of this Agreement.
SECTION 3.11. DISCLOSURE. As of the date hereof, the Company has
disclosed to the Lenders all agreements, instruments and corporate restrictions
to which it or any of its Subsidiaries is subject, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. None
of the reports, financial statements, certificates or other information
furnished by or on behalf of the Company to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the
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33
circumstances under which they were made, misleading; PROVIDED that, with
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 3.12. MATERIAL AGREEMENTS. Schedule 3.12 hereto is a
complete and correct list, as of the date hereof, of each material contract (as
defined in Regulation S-K of the Securities and Exchange Commission) of the
Company or any of its Subsidiaries.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to
make Loans hereunder shall not become effective until the date on which each of
the following conditions is satisfied (or waived in accordance with Section
10.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement
properly executed by each such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has properly executed a counterpart of this Agreement.
(b) The Administrative Agent shall have received (i) a favorable
written opinion of David C. Fannin, General Counsel of the Company,
substantially in the form of Exhibit D-1 and (ii) a favorable written
opinion of Skadden, Arps, Slate, Meagher & Flom, special counsel to the
Company, substantially in the form of Exhibit D-2, each covering such
other matters relating to this Agreement and the Transactions as the
Required Lenders shall reasonably request. Such opinions shall be
addressed to the Administrative Agent and the Lenders and shall be
dated the Effective Date. The Company hereby requests such counsel to
deliver such opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of the Company, the authorization of the Transactions and any
other legal matters relating to this Agreement or the Transactions, all
in form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President
or a Financial Officer of the Company, confirming compliance with the
conditions set forth in paragraphs (b) and (c) of Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by any
Borrower hereunder.
<PAGE>
34
(f) The Existing Credit Agreement shall have been terminated and
all amounts outstanding or owed to the lenders or the agent thereunder
shall have been paid in full.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived) on or prior to October 15, 1996. The Administrative Agent
shall notify the Company and the Lenders of the Effective Date, and such notice
shall be conclusive and binding.
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:
(a) In the case of a Borrowing of Revolving Loans, the
Administrative Agent shall have received a Borrowing Request for such
Borrowing in accordance with Section 2.03; or, in the case of a
Borrowing of Competitive Loans, the applicable Borrower shall have
accepted the Competitive Bid or Bids in respect of such Loans in
accordance with Section 2.04.
(b) The representations and warranties of the Company set forth
in this Agreement shall be true and correct on and as of the date of
such Borrowing (unless any such representation and warranty speaks as
of an earlier date, in which case such representation and warranty
shall be true as of such earlier date).
(c) At the time of and immediately after giving effect to such
Borrowing no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Company and the applicable Borrower on the date thereof as to the matters
specified in paragraphs (b) and (c) of this Section.
SECTION 4.03. INITIAL BORROWING BY EACH BORROWING SUBSIDIARY. The
obligation of each Lender to make a Loan on the occasion of the first Borrowing
by each Borrowing Subsidiary is subject to the satisfaction of the following
conditions:
(a) The Administrative Agent (or its counsel) shall have received
a Borrowing Subsidiary Agreement properly executed by such Borrowing
Subsidiary and the Company.
(b) The Administrative Agent shall have received a favorable
written opinion of counsel for the Company substantially in the form of
Exhibits D-1 and D-2 (with appropriate additions in the case of a
Borrowing Subsidiary organized in a jurisdiction outside the United
States) and covering such other matters relating to such Borrowing
Subsidiary, this Agreement and the Transactions as the Administrative
Agent (or its counsel) may reasonably request;
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of such Borrowing Subsidiary, the
<PAGE>
35
authorization of the Transactions and any other legal matters relating
to this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Company will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Company, its audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows as of the end of and
for such year, all reported on by Arthur Andersen, LLP or other
independent public accountants of recognized national standing (without
any qualification or exception as to the scope of such audit resulting
from circumstances within the control of the Company) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, its consolidated
balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, all certified by one of
its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Company and
its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, provided that, so long as the
Company is subject to the reporting requirements of Section 12 of the
Exchange Act, the Company can satisfy such obligation by delivering its
report on form 10-Q containing such statements;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Company (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto and (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Sections 6.01, 6.02 and 6.05;
(d) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Company or any Subsidiary with the Securities and Exchange
Commission, or any Governmental
<PAGE>
36
Authority succeeding to any or all of the functions of said Commission,
or with any national securities exchange, or distributed by the Company
to its shareholders generally, as the case may be; and
(e) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Company will
furnish to the Administrative Agent and each Lender written notice of the
following promptly upon becoming aware thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Company or any Affiliate thereof that could reasonably be
expected to result in a Material Adverse Effect; and
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS. The Company will,
and will cause each Material Subsidiary to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; PROVIDED that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04. PAYMENT OF OBLIGATIONS. The Company will, and will
cause each Subsidiary to, pay its Taxes, that, if not paid, could result in a
Material Adverse Effect or a Lien upon any of its assets before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Company or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Company
will, and will cause (a) each Material Subsidiary to keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) each Subsidiary to maintain,
with financially sound and reputable insurance companies or
<PAGE>
37
through programs of self-insurance (including levels of self-insured retention),
insurance in such amounts and against such risks, and in the case of
self-insurance, at such levels and in such amounts, as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Company
will, and will cause each Material Subsidiary to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Company will, and
will cause each Subsidiary to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
SECTION 5.07. COMPLIANCE WITH LAWS. The Company will, and will
cause each Subsidiary to, comply with all laws, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08. USE OF PROCEEDS. The proceeds of the Loans will be
used only for the purposes set forth in the preamble to this Agreement. No part
of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board,
including Regulations G, U and X.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, the Company covenants and agrees with the Lenders that:
SECTION 6.01. SUBSIDIARY INDEBTEDNESS. The Company will not
permit any Subsidiary to create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness outstanding on the date hereof and set forth on
Schedule 6.01 hereto;
(b) Indebtedness created hereunder;
(c) Indebtedness owed to the Company or any other Subsidiary; and
(d) other Indebtedness in an aggregate principal amount at any
time outstanding not greater than 20% of Consolidated Total
Shareholders' Equity.
<PAGE>
38
SECTION 6.02. LIENS. The Company will not, and will not permit
any Material Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Material Subsidiary existing on the date hereof and set forth in
Schedule 6.02; PROVIDED that such Lien shall secure only those
obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Material Subsidiary or
existing on any property or asset of any Person that becomes a Material
Subsidiary after the date hereof prior to the time such Person becomes
a Material Subsidiary; PROVIDED that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Material Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Company or any
Material Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the
date such Person becomes a Material Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(d) Sales of accounts receivable (i) in the ordinary course of
business for collection purposes or as part of a sale of a subsidiary,
division or other business unit permitted under Section 6.03 or (ii) in
connection with the bankruptcy of the account obligor; and
(e) additional Liens upon real and/or personal property created
after the date hereof, provided that the aggregate Indebtedness secured
thereby shall not exceed 20% of Consolidated Total Shareholders'
Equity.
SECTION 6.03. FUNDAMENTAL CHANGES. (a) The Company will not, and
will not permit any Material Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) assets with a net book value at the time or times of
disposition (increased by the amount of any special charges allocable to such
assets) representing more than 25% of the total assets of the Company and its
Subsidiaries on a consolidated basis as of June 30, 1996, or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except that the
Company or any Subsidiary may sell, transfer, lease or otherwise dispose of (i)
obsolete or worn-out tools, equipment or other property no longer used or useful
in its business and (ii) any inventory or other property sold in the ordinary
course of business and on ordinary terms, and except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (w) any Person may merge into the Company in a
transaction in which the Company is the surviving corporation, (x) any Person
may merge into any Subsidiary in a transaction in which the surviving entity is
a Subsidiary, (y) any Subsidiary may sell, transfer, lease or
<PAGE>
39
otherwise dispose of its assets to the Company or to another Subsidiary and
(z) any Subsidiary other than a Borrowing Subsidiary may liquidate or dissolve
if the Company determines in good faith that such liquidation or dissolution is
in the best interests of the Company and is not materially disadvantageous to
the Lenders.
(b) The Company will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto or to
the sale and distribution of consumer products.
SECTION 6.04. TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) at prices and on terms and conditions not less
favorable to the Company or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties and (b) transactions between or
among the Company and its Wholly Owned Subsidiaries not involving any other
Affiliate.
SECTION 6.05. FINANCIAL COVENANTS. (a) The Consolidated Leverage
Ratio will not at any time exceed .60 to 1.0.
(b) The Consolidated Interest Coverage Ratio for any period of
four consecutive fiscal quarters of the Company, commencing with the period
ending on September 29, 1996, will not be less than 2.0 to 1.0.
SECTION 6.06. CALCULATION OF AMOUNTS. Compliance with the
covenants set forth in this Article VI will be determined excluding the effects
of any special charges, not to exceed $250,000,000, incurred in the quarter
during which the Effective Date occurs or any quarter thereafter ending on or
before September 28, 1997, including, without limitation, expenses for cost
realignment, consolidation of facilities, provisions for severance, writedowns
of long-term assets and capitalized costs, and increases in reserves for excess
or obsolete inventory, warranty costs and doubtful accounts receivable.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any representation or warranty made or deemed made by or on
behalf of the Company or any Subsidiary in or in connection with this
Agreement, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement,
shall prove to have been incorrect in any material respect when so made
or deemed made;
<PAGE>
40
(b) any Borrower (i) shall fail to pay when and as the same shall
become due and payable any principal of any Loan, or (ii) shall fail to
pay within 5 days after the date the same shall become due and payable
any interest on any Loan or any fee or any other amount payable under
this Agreement, whether any such amount shall become payable at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(c) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), Section 5.03 (with
respect to any Borrower's existence), Section 5.08 or in Article VI;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (b) or (c) above) and such failure shall continue
unremedied for a period of 30 days (or, if such failure is not curable
within such initial 30 day period and the Company is diligently
proceeding to cure such failure, 60 days) after notice thereof from the
Administrative Agent or any Lender (through the Administrative Agent)
to the Company;
(e) the Company or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and
payable after giving effect to any applicable grace period;
(f) any event or condition (other than a voluntary notice of
prepayment or redemption) occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf after giving effect to
any applicable grace period to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Company or any
Material Subsidiary or its debts, or of a substantial part of the
property or assets of the Company or a Material Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Company or any Material Subsidiary or for a substantial part of the
property or assets of the Company or any Material Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Company or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (g)
above, (iii) apply for or consent to the appointment of a
<PAGE>
41
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company or any Material Subsidiary or for a
substantial part of the property or assets of the Company or any
Material Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(i) the Company or any Material Subsidiary shall become unable,
admit in writing or fail generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in excess of
$2,500,000 individually or $5,000,000 in the aggregate (exclusive of
judgment amounts fully covered by insurance where the insurer has
admitted liability in respect of such judgment) or in an aggregate
amount in excess of $20,000,000 (regardless of insurance coverage)
shall be rendered against the Company, any Material Subsidiary or any
combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
attach or levy upon any property or assets of the Company or any
Material Subsidiary to enforce any such judgment;
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect; or
(l) a Change in Control shall occur;
then, and in every such event (other than an event with respect
to any Borrower described in clause (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice
to the Company, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon
the Commitments shall terminate immediately, and (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the
Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other liabilities of each Borrower accrued
hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Borrower; and in any event with respect to
any Borrower described in clause (g) or (h) above, the Commitments
shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and
other liabilities of each Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
each Borrower.
<PAGE>
42
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, and (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers permitted hereunder
unless requested to do so in writing by the Required Lenders. The Administrative
Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders or in the absence of its own
gross negligence or wilful misconduct. In addition, the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Company), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through Affiliates or its or its Affiliates' employees. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent, to the
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43
Affiliates of the Administrative Agent and any such sub-agent and to the
directors, officers and employees of the Administrative Agent, any such
sub-agent and their respective Affiliates.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Company. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor who shall be
reasonably acceptable to the Company. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, having a combined capital and surplus of at least
$250,000,000 or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.03 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
Each Lender agrees (a) to reimburse the Administrative Agent, on
demand, in the amount of its pro rata share at the time reimbursement is sought
(based on its Commitment hereunder or, if the Commitments shall have expired or
terminated, based on its portion of the total Revolving Credit Exposures and
outstanding Competitive Loans) of any expenses incurred for the benefit of the
Lenders by the Administrative Agent, including reasonable counsel fees and
compensation of agents paid for services rendered on behalf of the Lenders, that
shall not have been reimbursed by the Borrowers and (b) to indemnify and hold
harmless the Administrative Agent and any of its directors, officers, employees
or agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any action taken or omitted by it or any of
them under this Agreement, to the extent the same shall not have been reimbursed
by the Borrowers, PROVIDED that no Lender shall be liable to the Administrative
Agent or any such other indemnified person for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of the Administrative Agent or any of its
directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
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44
ARTICLE IX
GUARANTEE
In order to induce the Lenders to extend credit hereunder, the
Guarantor hereby unconditionally guarantees, as a primary obligor and not merely
as a surety, the Borrowing Subsidiary Obligations. The Guarantor further agrees
that the Borrowing Subsidiary Obligations may be extended or renewed, in whole
or in part, without notice to or further assent from it, and that it will remain
bound upon its Guarantee hereunder notwithstanding any such extension or renewal
of any Borrowing Subsidiary Obligation.
The Guarantor waives presentment to, demand of payment from and
protest to any Borrowing Subsidiary of any of the Borrowing Subsidiary
Obligations, and also waives notice of acceptance of its obligations and notice
of protest for nonpayment. The obligations of the Guarantor hereunder shall not
be affected by (a) the failure of any Lender or the Administrative Agent to
assert any claim or demand or to enforce any right or remedy against any
Borrowing Subsidiary under the provisions of this Agreement or any of the other
Loan Documents or otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Agreement, any of the
other Loan Documents or any other agreement; or (c) the failure of any Lender to
exercise any right or remedy against any Borrowing Subsidiary.
The Guarantor further agrees that its agreement hereunder
constitutes a promise of payment when due and not merely of collection, and
waives any right to require that any resort be had by any Lender to any balance
of any deposit account or credit on the books of any Lender or in favor of any
Borrowing Subsidiary or any other person.
The obligations of the Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason, and
shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Borrowing Subsidiary Obligations, any impossibility in
the performance of the Borrowing Subsidiary Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of the Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent or any Lender to assert any claim or demand
or to enforce any remedy under this Agreement or under any other Loan Document
or any other agreement, by any waiver or modification in respect of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
Borrowing Subsidiary Obligations, or by any other act or omission which may or
might in any manner or to any extent vary the risk of the Guarantor or otherwise
operate as a discharge of the Guarantor as a matter of law or equity.
The Guarantor further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Borrowing
Subsidiary Obligation is rescinded or must otherwise be restored by the
Administrative Agent or any Lender upon the bankruptcy or reorganization of any
Borrowing Subsidiary or otherwise.
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45
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or in
equity against the Guarantor by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Borrowing Subsidiary Obligation when and as the same shall
become due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, the Guarantor hereby promises to and will, upon receipt of written
demand by the Administrative Agent, forthwith pay, or cause to be paid, in cash
the amount of such unpaid Borrowing Subsidiary Obligation. In the event that, by
reason of the bankruptcy of any Borrowing Subsidiary, (i) acceleration of Loans
made to such Borrowing Subsidiary is prevented and (ii) the Guarantor shall not
have prepaid the outstanding Loans and other amounts due hereunder owed by such
Borrowing Subsidiary, the Guarantor will forthwith purchase such Loans at a
price equal to the principal amount thereof plus accrued interest thereon and
any other amounts due hereunder with respect thereto. The Guarantor further
agrees that if payment in respect of any Borrowing Subsidiary Obligation shall
be due in a currency other than Dollars and/or at a place of payment other than
New York and if, by reason of any Change in Law, disruption of currency or
foreign exchange markets, war or civil disturbance or similar event, payment of
such Borrowing Subsidiary Obligation in such currency or such place of payment
shall be impossible or, in the judgment of any applicable Lender, not consistent
with the protection of its rights or interests, then, at the election of any
applicable Lender, the Guarantor shall make payment of such Borrowing Subsidiary
Obligation in Dollars (based upon the applicable Exchange Rate in effect on the
date of payment) and/or in New York, and shall indemnify such Lender against any
losses or expenses that it shall sustain as a result of such alternative
payment.
Upon payment by the Guarantor of any Borrowing Subsidiary
Obligations, each Lender shall, in a reasonable manner, assign the amount of the
Borrowing Subsidiary Obligations owed to it and so paid by the Guarantor, such
assignment to be PRO TANTO to the extent to which the Borrowing Subsidiary
Obligations in question were discharged by the Guarantor, or make such
disposition thereof as the Guarantor shall direct (all without recourse to any
Lender and without any representation or warranty by any Lender).
Upon payment by any Guarantor of any sums as provided above, all
rights of the Guarantor against any Borrowing Subsidiary arising as a result
thereof by way of right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior indefeasible payment in
full of all the Borrowing Subsidiary Obligations to the Lenders.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or reputable overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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46
(a) if to a Borrower, to it at Sunbeam Corporation, 2100 New
River Center, 200 East Las Olas Boulevard, Fort Lauderdale, FL 33301,
Attention of Treasurer (Telecopy No. (954) 767-2027), with a copy to
its General Counsel at the above address (Telecopy No. (954) 767-2191);
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
Agent Bank Services Group, Four New York Plaza, New York, New York
10081, Attention of Ms. Chris Gould (Telecopy No. (718) 242-6909), with
a copy to The Chase Manhattan Bank, at 270 Park Avenue, New York, New
York 10017, Attention of Mr. Robert Kallas (Telecopy No. (212)
270-6041); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Company and the Required Lenders or by the Company
and the Administrative Agent with the consent of the Required Lenders; PROVIDED
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
release the obligations of the Guarantor under Article IX without the written
consent of each Lender or (vi) change any of the provisions of this Section or
the definition of "Required Lenders" or any other provision hereof specifying
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47
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; PROVIDED FURTHER that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Company agrees to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of Cravath, Swaine & Moore, counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any
Lender, including the reasonable fees, charges and disbursements of any counsel
for the Administrative Agent or any Lender, in connection with the enforcement
or protection of its rights in connection with this Agreement or the Loans
hereunder.
(b) The Company agrees to indemnify the Administrative Agent and
each Lender, each Affiliate of any of the foregoing Persons and each of their
respective directors, officers, employees and agents (each such Person being
called an "INDEMNITEE") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender's Applicable Percentage (determined as of the time that applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
PROVIDED that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent.
(d) To the extent permitted by applicable law, each Borrower
agrees not to assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages)
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48
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by a Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto and their respective
successors and assigns permitted hereby) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent must give their prior written
consent to such assignment, which consent, in the case of the Company, shall be
in the Company's sole and absolute discretion, (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000, (iii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement,
except that this clause shall not apply to rights in respect of outstanding
Competitive Loans, (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,000, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph (b)
shall be treated for the purposes of this Agreement as a sale by such Lender of
a participation in such rights and obligations in accordance with paragraph (e)
below.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each
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49
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrowers and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and any written consent to such assignment required by paragraph (b)
above, the Administrative Agent shall (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders. No assignment shall be effective unless it
has been recorded in the Register as provided in this paragraph (d).
(e) Any Lender may without the consent of the Borrowers or the
Administrative Agent sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); PROVIDED that (i) such Lender shall give notice thereof to the
Administrative Agent and the Company, (ii) such Lender's obligations under this
Agreement shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iv) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (f) below, the Borrowers agree
that each Participant shall be entitled to the benefits of Sections 2.13, 2.14
and 2.15 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
applicable Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.15 unless such Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of such Borrower, to
comply with Section 2.15(e) as though it were a Lender.
(g) Any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank to secure extensions of
credit by such Federal Reserve Bank to such Lender; PROVIDED that no such
assignment shall release a Lender from any of its
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50
obligations hereunder or substitute any such Federal Reserve Bank for such
Lender as a party hereto.
SECTION 10.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Company and its Subsidiaries herein
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon
by the Lenders and shall survive the execution and delivery of this Agreement
and the making of any Loans, regardless of any investigation made by the Lenders
or on their behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid so long as the Commitments have not expired
or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 10.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any other provisions hereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SET-OFF. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of any Borrower against any of and all the
obligations of such Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under
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51
this Section are in addition to other rights and remedies (including other
rights of set-off) which such Lender may have.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against the Borrower or its properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
<PAGE>
52
SECTION 10.12. CONFIDENTIALITY. Each of the Administrative Agent
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent otherwise
required by applicable laws and regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or the enforcement of rights hereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than the Company. For the purposes of this Section,
"INFORMATION" means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company; PROVIDED that, in the case of information received
from the Company after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.13. INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 10.14. CONVERSION OF CURRENCIES. (a) If, for the purpose
of obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
<PAGE>
53
(b) The obligations of each Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"APPLICABLE CREDITOR") shall, notwithstanding any judgment in a currency (the
"JUDGMENT CURRENCY") other than the currency in which such sum is stated to be
due hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.14 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
SUNBEAM CORPORATION,
by
/s/ EDWIN T. DERECHO
-------------------------
Name: Edwin T. Derecho
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by
/s/ DEBORAH DAVEY
-------------------------
Name: Deborah Davey
Title: Attorney-in-fact
<PAGE>
54
BANK OF AMERICA ILLINOIS,
by
/s/ LAURENS F. SCHAAD, JR.
-------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
THE BANK OF NEW YORK,
by
/s/ DAVID C. SIEGEL
-------------------------
Name: David C. Siegel
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ W. J. BROWN
-------------------------
Name: W. J. Brown
Title: Vice President
NORTHERN TRUST COMPANY,
by
/s/ JOHN J. CONWAY
-------------------------
Name: John J. Conway
Title: Vice President
<PAGE>
55
PNC BANK, KENTUCKY, INC.,
by
/s/ TOBY B. RAU
-------------------------
Name: Toby B. Rau
Title: Assistant Vice President
THE FUJI BANK LIMITED,
by
/s/ MASANOBU KOBAYASHI
-------------------------
Name: Masanobu Kobayashi
Title: Vice President and Manager
CREDIT SUISSE,
by
/s/ GEOFFREY M. CRAIG
-------------------------
Name: Geoffrey M. Craig
Title: Member of Senior Management
by
/s/ KRISTINN R. KRISTINSSON
-------------------------
Name: Kristinn R. Kristinsson
Title: Associate
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ JACQUES-YVES MULLIEZ
-------------------------
Name: Jacques-Yves Mulliez
Title: Senior Vice President
<PAGE>
NATIONSBANK,
by
/s/ ANDREW M. AIRHEART
-------------------------
Name: Andrew M. Airheart
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
by
/s/ ROBERT H. WOLOHAN
-------------------------
Name: Robert H. Wolohan
Title: Corporate Banking Officer
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ PATRICK A. PHELAN
-----------------------
Name: Patrick A. Phelan
Title: Assistant Vice President
FIRST UNION NATIONAL BANK OF FLORIDA,
by /s/ JEFFREY E. NOBLE
-------------------------
Name: Jeffrey E. Noble
Title: Vice President
<PAGE>
57
THE BANK OF TOKYO-MITSUBISHI
TRUST LTD.,
by
/s/ RANDY L. GLASS
-------------------------
Name: Randy L. Glass
Title: Vice President
SAKURA BANK, LIMITED,
by
/s/ HIROYASU IMANISHI
-------------------------
Name: Hiroyasu Imanishi
Title: Vice President and Senior
Manager
<PAGE>
EXHIBIT A
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated:____________, 19___
Reference is made to the $500,000,000 Competitive Advance and Revolving
Credit Facility Agreement dated as of September 16, 1996 (as it may hereafter be
amended, modified, extended or restated from time to time, the "Agreement"),
among Sunbeam Corporation (the "Company"), the Borrowing Subsidiaries party
thereto, the Lenders party thereto (the "Lenders") and The Chase Manhattan Bank,
as Administrative Agent for the Lenders. Terms defined in the Agreement are used
herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the effective date of assignment set forth below
(the "Assignment Date"), the interests set forth on the reverse hereof (the
"Assigned Interest") in the Assignor's rights and obligations under the
Agreement, including, without limitation, the interests set forth on the reverse
hereof in the Commitment of the Assignor on the Assignment Date and the
Competitive Loans owing to the Assignor which are outstanding on the Assignment
Date, together with unpaid interest accrued on the assigned Loans to the
Assignment Date and the amount, if any, set forth on the reverse hereof of the
Fees accrued to the Assignment Date for the account of the Assignor. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 10.04 of the
Agreement, a copy of which has been received by each such party. From and after
the Assignment Date, (i) the Assignee shall be a party to and be bound by the
provisions of the Agreement and, to the extent of the interests assigned by this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the interests assigned
by this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms referenced in
Section 2.15(e) of the Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Agreement, an
Administrative Questionnaire in a form supplied by the Administrative Agent and
(iii) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment: ____________________________________________________
Legal Name of Assignor: ________________________________________________
Legal Name of Assignee: ________________________________________________
Assignee's Address for Notices: ________________________________________
Assignee's Domestic Lending Office Address:_____________________________
________________________________________________________________________
<PAGE>
2
Assignee's Eurocurrency Lending Office Address:_________________________
________________________________________________________________________
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment): ___________________________________
===============================================================================
Percentage Assigned of
Principal Amount Facility/Commitment (set
Assigned (and forth, to at least 8
identifying decimals, as a percentage of
information as to the Facility and the
individual aggregate Commitments of all
FACILITY COMPETITIVE LOANS) LENDERS THEREUNDER)
- ------------------------------------------------------------------------------
Standby Loans: $__________ _________ %
- ------------------------------------------------------------------------------
Competitive Loans: $__________ _________ %
- ------------------------------------------------------------------------------
Fees Assigned (if any): $__________ _________ %
===============================================================================
The terms set forth and on the Accepted:
reverse side hereof are herby SUNBEAM CORPORATION,
agreed to:
________________________________, by: ___________________________
as Assignor, Name:
Title:
by: ____________________________
Name:
Title:
________________________________,
as Assignee,
by: ____________________________
Name:
Title:
<PAGE>
EXHIBIT B
[FORM OF]
BORROWING SUBSIDIARY AGREEMENT
The Chase Manhattan Bank, as Administrative Agent
Agent Bank Services Group
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: __________
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: _____________
[Date]
Ladies and Gentlemen:
The undersigned, Sunbeam Corporation (the "Company"), refers to the
$500,000,000 Competitive Advance and Revolving Credit Facility Agreement dated
as of September 16, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Agreement"), among the Company, the Borrowing
Subsidiaries party thereto, the Lenders party thereto and The Chase Manhattan
Bank, as Administrative Agent. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement.
The Company and _______________ (the "Designated Borrowing Subsidiary")
(i) confirm that the Designated Borrowing Subsidiary is a Wholly Owned
Subsidiary and (ii) make, on and as of the date hereof, the representations and
warranties as to the Designated Borrowing Subsidiary contained in Article III of
the Credit Agreement. The Designated Borrowing Subsidiary hereby agrees to be
bound in all respects by the terms of the Agreement, including without
limitation, Article IV thereof, and to perform all of the obligations of a
Borrowing Subsidiary thereunder. Each reference to a Borrowing Subsidiary in the
Agreement shall be deemed to include the Designated Borrowing Subsidiary.
The Company hereby ratifies and confirms the provisions of Article IX of
the Agreement with respect to all Loans made by any Lender to the Designated
Borrowing Subsidiary.
The address to which communications to the Designated Borrowing
Subsidiary under the Agreement should be directed
is:____________________________________________
___________________________________________________________
___________________________________________________________
This instrument shall be construed in accordance with and governed by
the laws of the State of New York. Loan proceeds should be deposited as provided
in the Agreement.
Upon the execution of this Borrowing Subsidiary Agreement by the Company
and the Designated Borrowing Subsidiary, and acceptance hereof by the
Administrative Agent, the Designated Borrowing Subsidiary shall become a
Borrowing Subsidiary under the Agreement as though it were an
<PAGE>
2
original party thereto and shall be entitled to borrow under the Agreement upon
the satisfaction of the conditions precedent set forth in Section 4.02 of the
Agreement.
Very truly yours,
SUNBEAM CORPORATION,
by
-----------------------
Name:
Title:
[DESIGNATED BORROWING SUBSIDIARY],
by
-----------------------
Name:
Title:
Accepted as of the date first above written.
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by
------------------------
Name:
Title:
<PAGE>
EXHIBIT C
[FORM OF]
BORROWING SUBSIDIARY TERMINATION
The Chase Manhattan Bank, as Administrative Agent
Agent Bank Services Group
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: __________
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: _____________
[Date]
Ladies and Gentlemen:
The undersigned, Sunbeam Corporation (the "Company"), refers to the
$500,000,000 Competitive Advance and Revolving Credit Facility Agreement dated
as of ______, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Agreement"), among the Company, the Borrowing
Subsidiaries party thereto, the Lenders party thereto and The Chase Manhattan
Bank, as Administrative Agent. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement.
The Company hereby elects to terminate the status of (the "Terminated
Borrowing Subsidiary") as a Borrowing Subsidiary for purposes of the Agreement.
The Company represents and warrants that no Loans made to the Terminated
Borrowing Subsidiary are outstanding as of the date hereof and that all
principal and interest on all amounts payable by the Terminated Borrowing
Subsidiary pursuant to the Agreement have been paid in full on or prior to the
date hereof.
This instrument shall be construed in accordance with and governed by
the laws of the State of New York.
Very truly yours,
SUNBEAM CORPORATION,
by
- ------------------------
Name:
Title:
<PAGE>
EXHIBIT D-1
[FORM OF]
OPINION OF GENERAL COUNSEL FOR THE COMPANY
[Effective Date]
To the Lenders and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
I have acted as counsel for Sunbeam Corporation (the "Company") in
connection with the Credit Agreement (the "Credit Agreement") dated as of
September 16, 1996 among the Company, the Borrowing Subsidiaries party thereto,
the Lenders party thereto and The Chase Manhattan Bank, as Administrative Agent.
This opinion is being rendered to you pursuant to Section 4.01(b) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of Delaware, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
2. The execution, delivery and performance by the Company of the Credit
Agreement are within the Company's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Company or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Company
or result in the creation or imposition of any Lien on any asset of the Company
or any of its subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of the
Company enforceable in accordance with its terms except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
4. There is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an adverse decision
which could materially adversely
<PAGE>
2
affect the business, consolidated financial position or consolidated results of
operations of the Company and its Consolidated Subsidiaries, considered as a
whole or which in any manner draws into question the validity of the Credit
Agreement.
5. Each of the Borrowing Subsidiaries that has been designated as such
as of the date hereof is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
Very truly yours,
<PAGE>
EXHIBIT D-2
[FORM OF]
OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM
COUNSEL FOR SUNBEAM CORPORATION (1)
1. The execution, delivery and performance by Sunbeam Corporation (the
"Company") of the Agreement and the borrowings thereunder (collectively, the
"Transactions") have been duly authorized by all requisite corporate action and
will not violate any provision of law, statute, rule or regulation (including
without limitation, the Margin Regulations).
2. The Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company enforceable
against it in accordance with its terms, subject as to the enforceability of
rights and remedies to any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws of general application relating to or affecting
the enforcement of creditors' rights from time to time in effect.
3. No action, consent or approval of, registration or filing with, or
any other action by, any government authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
4. Neither the Company nor any of its subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 (the "1940 Act") or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
-----------------------
(1)Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the $500,000,000 Competitive
Advance and Revolving Credit Facility Agreement (the "Agreement") dated
as of September 16, 1996, among Sunbeam Corporation, the Borrowing
Subsidiaries party thereto, the Lenders party thereto, and The Chase
Manhattan Bank, as Administrate Agent.
<PAGE>
EXHIBIT E-1
[FORM OF]
COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as Administrative Agent
Agent Bank Services Group
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: __________
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: _____________
[Date]
Ladies and Gentlemen:
The undersigned, Sunbeam Corporation (the "Company"), refers to the
$500,000,000 Competitive Advance and Revolving Credit Facility Agreement dated
as of September 16, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Agreement"), among the Company, the Borrowing
Subsidiaries party thereto, the Lenders party thereto and The Chase Manhattan
Bank, as Administrative Agent. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement.
The Company hereby gives you notice pursuant to Section 2.04(a) of the
Agreement that it requests a Competitive Borrowing under the Agreement, and in
that connection sets forth below the terms on which such Competitive Borrowing
is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) -------------------
(B) Principal amount of
Competitive Borrowing (1) -------------------
(C) Currency -------------------
(D) Interest Period and the
last day thereof (2) -------------------
- --------
(1) Not less than $5,000,000 (and in integral multiples of $1,000,000) in the
case of a Competitive Borrowing denominated in Dollars, and not less than the
Dollar Equivalent of $5,000,000 in the case of a Competitive Borrowing
denominated in an Alternative Currency, and not greater than the Total
Commitment then available.
(2) Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
<PAGE>
2
Upon acceptance of any or all of the Loans offered by the Lenders in
response to this request, the Company shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.02(b) and (c) of
the Agreement have been satisfied. Any amounts borrowed shall be deposited in
The Chase Manhattan Bank account number [ ].
Very truly yours,
SUNBEAM CORPORATION,
by
--------------------------
Name:
Title: [Financial Officer]
<PAGE>
EXHIBIT E-2
[FORM OF]
NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
[Date]
Attention: [ ]
Ladies and Gentlemen:
Reference is made to the $500,000,000 Competitive Advance and Revolving
Credit Facility Agreement dated as of September 16, 1996 (as it may hereafter be
amended, modified, extended or restated from time to time, the "Agreement"),
among Sunbeam Corporation (the "Company"), the Borrowing Subsidiaries party
thereto, the Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
A Borrower made a Competitive Bid Request on ___________ , 19[ ],
pursuant to Section 2.04(a) of the Agreement, and in that connection you are
invited to submit a Competitive Bid by [Date]/[Time].(1) Your Competitive Bid
must comply with Section 2.04(b) of the Agreement and the terms set forth below
on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing -------------------
(B) Principal amount of
Competitive Borrowing -------------------
(C) Currency -------------------
(D) Interest Period and the
last day thereof -------------------
Very truly yours,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
by
----------------------------
Name:
Title:
- --------
(1) The Competitive Bid must be received by the Agent not later than 10:00 a.m.,
New York City time, on the Business Day of a proposed Competitive Borrowing.
<PAGE>
[FORM OF]
COMPETITIVE BID
The Chase Manhattan Bank, as Administrative Agent
Agent Bank Services Group
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: __________
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: _____________
[Date]
Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the $500,000,000
Competitive Advance and Revolving Credit Facility Agreement dated as of
September 16, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Agreement"), among Sunbeam Corporation (the
"Company"), the Borrowing Subsidiaries party thereto, the Lenders party thereto
and The Chase Manhattan Bank, as Administrative Agent. Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such terms
in the Agreement.
The undersigned hereby makes a Competitive Bid pursuant to Section
2.04(b) of the Agreement, in response to the Competitive Bid Request made by the
Company on _____________ , 19[ ], and in that connection sets forth below the
terms on which such Competitive Bid is made:
(A) Principal Amount1 -------------------
(B) Competitive Bid Rate -------------------
(C) Interest Period and last
day thereof -------------------
- -------- 1/Not less than $5,000,000 and in integral multiples of $1,000,000 in
the case of a Competitive Borrowing denominated in Dollars, and not less than
the Dollar Equivalent of $5,000,000 in the case of a Competitive Borrowing
denominated in an Alternative Currency, and not greater than the requested
Competitive Borrowing. Multiple bids will be accepted by the Agent.
<PAGE>
2
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Agreement, to extend credit to the Borrower upon
acceptance by such Borrower of this bid in accordance with Section 2.04(d) of
the Agreement.
Very truly yours,
[NAME OF LENDER],
by
-------------------
Name:
Title:
<PAGE>
EXHIBIT E-4
[FORM OF]
COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Chase Manhattan Bank, as Administrative Agent
Agent Bank Services Group
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: __________
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: _____________
Ladies and Gentlemen:
The undersigned, Sunbeam Corporation (the "Company"), refers to the
$500,000,000 Competitive Advance and Revolving Credit Facility Agreement dated
as of September 16, 1996 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Agreement"), among the Company, the Borrowing
Subsidiaries party thereto, the Lenders party thereto and The Chase Manhattan
Bank, as Administrative Agent. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement.
In accordance with Section 2.04(c) of the Agreement, we have received a
summary of bids in connection with our Competitive Bid Request dated
______________ , 19[ ], and in accordance with Section 2.04(d) of the Agreement,
we hereby accept the following bids for maturity on [date]:
PRINCIPAL AMOUNT FIXED RATE LENDER
$ %
$
We hereby reject the following bids:
PRINCIPAL AMOUNT FIXED RATE LENDER
$ %
$
<PAGE>
2
The $ ___________ should be deposited in The Chase Manhattan Bank
account number [ ] on [date].
Very truly yours,
SUNBEAM CORPORATION,
by
------------------------
Name:
Title:
<PAGE>
SCHEDULE 2.01
REVOLVING CREDIT FACILITY ALLOCATIONS
- -------------------------------------------------------------------------------
CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
- -------------------------------------------------------------------------------
ADMINISTRATIVE AGENT
- -------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK Chris Gould $60,000,000
270 Park Avenue
New York, NY 10017 Tel. #(718) 242-7969
Fax #(718) 242-6909
Domestic Lending Office:
As above
Eurocurrency Lending Office:
As above
- -------------------------------------------------------------------------------
CO-AGENTS
- -------------------------------------------------------------------------------
BANK OF AMERICA ILLINOIS Joycelyn Gay $35,000,000
231 South LaSalle
Chicago, IL 60697 Tel. #(312) 828-3801
Fax #(312) 974-9626
Domestic Lending Office:
231 South LaSalle
Chicago, IL 60697
Eurocurrency Lending Office:
231 South LaSalle
Chicago, IL 60697
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<PAGE>
2
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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THE BANK OF NEW YORK David Siegel $35,000,000
One Wall Street
New York, NY 10286 Tel. #(212) 635-1489
Fax #(212) 635-6434
Domestic Lending Office:
101 Barclay Street
New York, NY 10007
Eurocurrency Lending Office:
101 Barclay Street
New York, NY 10007
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THE BANK OF NOVA SCOTIA Cleve Bushey $35,000,000
600 Peachtree Street, N.E.
Suite 2700 Tel. #(404) 877-1555
Atlanta, GA 30308 Fax #(404) 888-8998
Domestic Lending Office:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Eurocurrency Lending Office:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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CREDIT LYONNAIS, NEW YORK Pascal Seris $35,000,000
BRANCH
303 Peachtree Street, N.E. Tel. #(404) 524-3700
Suite 4400 Fax #(404) 584-5249
Atlanta, GA 30308
Domestic Lending Office:
1301 Avenue of the Americas
New York, NY 10019
Eurocurrency Lending Office:
1301 Avenue of the Americas
New York, NY 10019
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THE FIRST NATIONAL BANK OF Yvette Thompkins $35,000,000
CHICAGO
One First National Plaza Tel. #(312) 732-1395
Chicago, IL 60670 Fax #(312) 732-4840
Domestic Lending Office:
One First National Plaza
10th Floor, Suite 0634
Chicago, IL 60670
Eurocurrency Lending Office:
One First National Plaza
10th Floor, Suite 0634
Chicago, IL 60670
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4
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TLECOPY NUMBERS COMMITMENT
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FIRST UNION NATIONAL BANK OF M. Walker Duvall $35,000,000
FLORIDA
200 East Broward Boulevard Tel. #(954) 467-5392
9th Floor Fax # (954)467-4155
Fort Lauderdale, FL 33301
Domestic Lending Office:
200 East Broward Boulevard
9th Floor
Fort Lauderdale, FL 33301
Eurocurrency Lending Office:
200 East Broward Boulevard
9th Floor
Fort Lauderdale, FL 33301
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NATIONSBANK, N.A. (SOUTH) Barbara Pollock $35,000,000
100 Southeast 2nd Street
14th Floor Tel. #(704) 388-1112
Miami, FL 33131 Fax #(704) 386-8694
Domestic Lending Office:
Independence Center
15th Floor
101 North Tryon Street
Charlotte, NC 28255
Eurocurrency Lending Office:
Independence Center
15th Floor
101 North Tryon Street
Charlotte, NC 28255
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<PAGE>
5
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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THE NORTHERN TRUST COMPANY Linda Honda $35,000,000
50 South LaSalle Street
Chicago, IL 60675 Tel. #(312) 444-3532
Fax #(312) 630-1566
Domestic Lending Office:
50 South LaSalle Street
Chicago, IL 60675
Eurocurrency Lending Office:
50 South LaSalle Street
Chicago, IL 60675
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WACHOVIA BANK OF GEORGIA, Margie Mote $35,000,000
N.A. (Mail Code-GA3940)
191 Peachtree Street, N.E.
Atlanta, GA 30303 Tel. #(404) 332-5319
Fax #(404) 332-5016
Domestic Lending Office:
191 Peachtree Street, N.E.
Atlanta, GA 30303
Eurocurrency Lending Office:
191 Peachtree Street, N.E.
Atlanta, GA 30303
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PARTICIPANTS
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<PAGE>
6
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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BANK OF TOKYO--MITSUBISHI, Sharon Durham $25,000,000
LTD.
Georgia-Pacific Center Tel. #(404) 577-2960
Suite 4970 Fax #(404) 577-1155
133 Peachtree Street, N.E.
Atlanta, GA 30303
Domestic Lending Office:
Georgia-Pacific Center
Suite 4970
133 Peachtree Street, N.E.
Atlanta, GA 30303
Eurocurrency Lending Office:
Georgia-Pacific Center
Suite 4970
133 Peachtree Street, N.E.
Atlanta, GA 30303
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CREDIT SUISSE Hazel Leslie $25,000,000
19 East 49th Street
New York, NY 10017 Tel. #(212) 238-5218
Fax #(212) 238 5246/47
Domestic Lending Office:
with a copy of notifications
19 East 49th Street to:
New York, NY 10017
Pamela Myers
Eurocurrency Lending Office: Credit Suisse
191 Peachtree Street, NE
19 East 49th Street Suite 3500
New York, NY 10017 Atlanta, GA 30303-1757
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<PAGE>
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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THE FUJI BANK, LIMITED Masanobu Kobayashi $25,000,000
Two World Trade Center
New York, NY 10048 Tel. #(212) 898-2080
Fax #(212) 912-0516
Domestic Lending Office:
Two World Trade Center
New York, NY 10048
Eurocurrency Lending Office:
Two World Trade Center
New York, NY 10048
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PNC BANK, KENTUCKY, INC. Karen Carter $25,000,000
500 West Jefferson Street
Louisville, KY 40202 Tel. #(502) 581-3248
Fax #(502) 581-2302
Domestic Lending Office:
500 West Jefferson Street
Louisville, KY 40202
Eurocurrency Lending Office:
500 West Jefferson Street
Louisville, KY 40202
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<PAGE>
8
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CONTACT PERSON U.S. DOLLAR
AND TELEPHONE EQUIVALENT
NAME AND ADDRESS OF LENDER AND TELECOPY NUMBERS COMMITMENT
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SAKURA BANK, LIMITED Christy Joel $25,000,000
245 Peachtree Center Avenue
Suite #2703 Tel. #(404) 521-3111
Atlanta, GA 30303 Fax #(404) 521-1133
Domestic Lending Office:
245 Peachtree Center Avenue
Suite #2703
Atlanta, GA 30303
Eurocurrency Lending Office:
245 Peachtree Center Avenue
Suite #2703
Atlanta, GA 30303
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AMENDED AND RESTATED
SUNBEAM CORPORATION
EQUITY TEAM PLAN
(Amended and Restated as of August 15, 1996)
1. PURPOSE.
The purpose of the Sunbeam Corporation Equity Team 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 11,500,000 shares, to be allocated as follows:
(i) 11,300,000 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
<PAGE>
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
2
<PAGE>
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 shall become
exercisable with respect to 20% of the shares subject
to the Option beginning on the first anniversary of
the Grant Date and as to an additional 20% on each of
the second, third, fourth and fifth 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,
coupled with a Change in Status of a Participant, 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; (C) in
the event that the exercisability of an Option
accelerates due to a Change in Control and a Change
in Status, 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; and (D) upon
the termination during an Option Year of employment
of an officer of the Company elected by the Board,
the portion of shares subject to any Option held by
such officer which was scheduled to become
exercisable on the next anniversary of the Grant Date
immediately following such termination (the "Next
Option Increment") shall be prorated on the basis of
the number of full calendar months worked in such
Option Year to permit partial exercisability of the
Next Option Increment.
(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
3
<PAGE>
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
4
<PAGE>
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-fifth of the Restricted
Stock subject to all other Restricted Stock Awards on
each of the first through the fifth 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, coupled with a Change in
Status of a Participant, 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 and a
Change in Status, 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.
5
<PAGE>
(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
6
<PAGE>
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 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 equal the arithmetic average of the closing prices
of a share of Stock on the exchange or national market system on which
the Stock is traded, for the last twenty market trading days prior to
the date of determination of Fair Market Value, 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
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<PAGE>
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.
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<PAGE>
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-
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<PAGE>
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
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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.
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<PAGE>
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: Fort Lauderdale, Florida;
Chicago, Illinois; New York, New York; Kansas City, Missouri; Jackson,
Mississippi; Nashville, Tennessee 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
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<PAGE>
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.
CHANGE IN STATUS: The occurrence with respect to a
Participant, of any of the following (but only if such event
occurs within two (2) years following a Change in Control):
(i) any reduction in the aggregate annual compensation paid or
payable to a Participant, or any material reduction in the
aggregate benefit coverages provided to such Participant under
the Company's standard benefit package for all employees; (ii)
the assignment to the Participant of any duties inconsistent
in any material respect with the Participant's position
(including status, offices, titles and reporting
responsibilities), authorities, duties or responsibilities as
in effect immediately prior to the date of the Change in
Control; (iii) the Company's requiring the Participant to be
based at any office, facility or location other than the
office, facility or location at which the Participant was
based immediately prior to the date of the Change in Control;
(iv) if the Participant is a party to any employment agreement
with the Company, any material breach by the Company of such
agreement, or any purported termination by the Company of the
Participant's employment otherwise than as permitted by such
employment agreement; or (v) in the case of a director, the
removal of a director or the failure to nominate the director
for reelection.
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 "disinterested
persons," 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.
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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 Equity Team 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).
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<PAGE>
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).
15
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE (the "Agreement") is entered into as of the
7th day of August, 1996 (the "date hereof"), by and between SUNBEAM CORPORATION,
a Delaware corporation (the "Company"), and Paul M. O'Hara ("Employee").
RECITALS:
A. The Company and Employee are parties to a certain Employment
Agreement dated as of January 1, 1995 (the "Employment Agreement");
B. The Company has notified Employee that it has terminated the
Employment Agreement pursuant to Section 5(b) thereof;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1. TERMINATION OF EMPLOYMENT PURSUANT TO THE EMPLOYMENT
AGREEMENT. Employee acknowledges that his employment has been terminated,
effective as of the date hereof. Employee hereby resigns, effective immediately,
all elected or appointed offices or directorships held by him with the Company
and/or any of its subsidiaries or any member of the "Sunbeam Group," as defined
below.
SECTION 2. PAYMENTS TO EMPLOYEE. A. PAYMENT TO EMPLOYEE - In
consideration of the execution and delivery of this Agreement by Employee, and
of the releases and covenant not to sue provided for hereunder, seven (7) days
after execution by Employee of this Agreement (provided that he has not revoked
this Agreement pursuant to the provisions of Section 5 hereof), Employee shall
be entitled to receive an amount equal to one year's base salary at Employee's
current rate of pay (the "Severance Payment"), less all amounts required by law
to be withheld.
B. EBRP ACCOUNT - Employee shall receive the balance of his vested
Executive Benefit Replacement Plan (otherwise known as the "SERP") account with
the Company, less applicable withholdings.
C. ACKNOWLEDGMENTS - Employee acknowledges that he is not vested in any
bonus or other incentive plan and that nothing is due and owing to him under any
such arrangement. Employee hereby acknowledges that upon the making of the
payments provided for herein, Employee will have received payment in full of all
amounts due and owing to him under the Employment Agreement, except for
reimbursement of expenses in the ordinary course (which the Company will process
promptly upon receipt from Employee).
SECTION 3. STOCK OPTIONS. Employee is vested in certain stock options
as set forth on EXHIBIT A attached hereto and incorporated by reference herein.
Such options are governed by the terms of the Company's Equity Team Plan, as in
effect on the date hereof, and may be exercised in accordance with such Plan.
SECTION 4. BENEFIT PLANS. Employee's insurance coverages shall extend
through the end of the month of August, 1996, and he shall have the right to
continue certain insurance coverages under the provisions of COBRA for the
period of time prescribed by law.
<PAGE>
SECTION 5. RELEASE AND COVENANT NOT TO SUE. In consideration of the
Severance Payment payable to (and the benefits provided to) Employee as set
forth above, Employee hereby RELEASES and FOREVER DISCHARGES the Company and any
parent, subsidiary, affiliated or related company or trust, including, but not
limited to, its or their respective predecessors, past and present officers,
directors, shareholders, agents, employees, legal representatives, successors,
trustees, fiduciaries and assigns (individually and collectively the "Sunbeam
Group"), of and from (and does hereby WAIVE), any and all rights, contracts,
claims (including claims sounding in tort), damages, actions, causes of action,
attorney fees, future employment or reinstatement and suits, whether or not
presently known, suspected or claimed, which Employee ever had, now has or
claims, or might hereafter have or claim against the Sunbeam Group (and any of
them), relating to, directly or indirectly, any matter or thing occurring, in
whole or in part, at any time, including, without limitation, any and all
rights, claims, grievances, arbitrations, or causes of action which Employee has
asserted, could assert, or which could be asserted on his behalf relating to his
hiring, employment with the Company prior to the date of execution and delivery
of this Agreement, his separation from such employment or post-employment
benefits, and under any federal, state or local law, ordinance, regulation or
rule, all of the foregoing as heretofore or hereafter amended, or under any
court decree, heretofore or hereafter promulgated. Employee also WAIVES ANY AND
ALL RIGHTS under the laws of any jurisdictions in the United States that would
limit the foregoing release and waiver. Employee recognizes that, among other
things, he is releasing the Sunbeam Group, of and from any and all claims he
might have against it, or any of them, for pain and suffering, emotional
distress, compensatory and punitive damages and for employment discrimination
based on age (including claims under the federal Age Discrimination in
Employment Act of 1967, as amended ("ADEA") or comparable state laws), sex,
national origin, race or color, mental or physical handicap or disability, or
religious belief under both federal and any similar state or local laws.
Employee hereby expressly waives and releases any right to reinstatement by the
Sunbeam Group and any right to the recovery of attorney's fees in any proceeding
between Employee and any member of the Sunbeam Group relating to the subject
matter hereof. Employee also COVENANTS NOT TO SUE the Sunbeam Group, or any of
them, for any of the matters covered by this Section 5.
There is expressly excluded from the scope of the above release
Employee's right to receive the benefits of this Agreement. There also is
excepted from the scope of this Release and Covenant not to Sue, any and all
claims which Employee may have for indemnification from the Company by reason of
his service as a director or officer of the Company or any of its subsidiaries,
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation and Bylaws of the Company; provided that Employee shall cooperate
fully with the Company in the defense of any and all such claims for which
indemnification is provided to Employee by the Company.
EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS GIVEN HIM ADEQUATE TIME (UP
TO 21 DAYS IF EMPLOYEE DESIRES) WITHIN WHICH TO CONSIDER THIS AGREEMENT AND HAS
ADVISED HIM IN WRITING TO CONSULT WITH COUNSEL BEFORE SIGNING THIS AGREEMENT.
EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS AND THAT HE HAS ENTERED INTO THIS
AGREEMENT FREELY AND VOLUNTARILY.
THE PARTIES FURTHER ACKNOWLEDGE THAT FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THIS AGREEMENT, EMPLOYEE MAY REVOKE THIS AGREEMENT.
SUCH REVOCATION SHALL BE MADE IN WRITING AND DELIVERED TO THE GENERAL COUNSEL OF
THE COMPANY BY THE CLOSE OF BUSINESS ON THE SEVENTH DAY FOLLOWING THE EXECUTION
HEREOF BY EMPLOYEE. IF NOT REVOKED WITHIN SUCH SEVEN DAY PERIOD, THIS AGREEMENT
SHALL THEREAFTER BE IRREVOCABLE.
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SECTION 6. COVENANTS OF CONFIDENTIALITY AND NON-COMPETITION. The
parties hereby incorporate by reference the Confidentiality and Noncompetition
provisions of the Company's Equity Team Plan, as in effect on the date hereof
and the provisions of Section 7 of the Employment Agreement, and Employee
expressly acknowledges his obligations of Confidentiality and Noncompetition
thereunder.
SECTION 7. MISCELLANEOUS.
a. Except as otherwise provided in this Agreement, all notices
required or permitted hereunder or process relating hereto
shall be in writing and signed by the party giving notice, and
shall be deemed to have been given when hand-delivered by
personal delivery, by Federal Express or similar courier
service, when sent and confirmed by facsimile, or three (3)
days after being deposited in the United States mail,
registered or certified, with postage prepaid, return receipt
requested, addressed as follows:
If to the Company: SUNBEAM CORPORATION
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, FL 33301
Attention: General Counsel
Facsimile: (954) 767-2105
If to the Employee: Paul M. O'Hara
430 Coral Way
Fort Lauderdale, FL 33301
or to such other address as either party may designate for
himself or itself by notice given to the other party from time
to time in accordance with the provisions hereof.
b. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legatees,
devisees, personal representatives, successors and assigns.
c. No delay on the part of either party in the exercise of any
right or remedy shall operate as a waiver thereof, and no
single or partial exercise by a party of any right or remedy
shall preclude other or further exercise thereof or the
exercise of any other right or remedy. The waiver of any
breach or condition of this Agreement by either party shall
not constitute a precedent in the future enforcement of any of
the terms and conditions of this Agreement.
d. Any uncertainty or ambiguity shall not be construed for or
against either party as an attribution of drafting to either
party.
e. Whenever possible, each provision of this Agreement shall be
construed and interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement or the application thereof to any party or
circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the
extent of such prohibition without invalidating the remainder
of such provision or any other provision of this Agreement or
the application of such provision to other parties or
3
<PAGE>
circumstances.
f. All discussions, correspondence, understandings and agreements
heretofore made between the parties are superseded by and
merged into this Agreement, which alone fully and completely
expresses the agreement between the parties with respect to
the subject matter hereof (except for provisions of the
Employment Agreement and of the Equity Team Plan which are
specifically referred to or incorporated by reference herein),
and the same is entered into with neither party relying upon
any statement or representation made by or on behalf of any
party not embodied in this Agreement. Any modification of this
Agreement may be made only by a written agreement signed by
both of the parties to this Agreement.
g. This Agreement shall be governed in all respects by the
internal laws of the State of Florida (which is the law
governing the Employment Agreement), without regard to
principles of conflicts of laws.
h. No third party shall be deemed to be or shall be, or become, a
beneficiary of any provision of this Agreement. By entering
into this Agreement, the Company has not agreed to grant
similar benefits to any other employee, whether or not
similarly situated, and no precedent, practice, policy or
usage shall be established by the entry of the Company into
this Agreement.
j. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, and each of which,
when taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below and as of the date and year first above written.
EMPLOYEE SUNBEAM CORPORATION
/s/PAUL M. O'HARA /s/DAVID C. FANNIN
- --------------------------------- -------------------------------
Paul M. O'Hara
By: David C. Fannin
Its: EVP & General Counsel
Date: August 12, 1996 Date: August 12, 1996
4
<PAGE>
EXHIBIT A
NAME ORIGINAL OPTION GRANTS SHARES REMAINING
DATE PRICE SHARES TOTAL VESTED
---- ----- ------ ----- ------
Paul O'Hara 3/1/94 $20.79 162,500 162,500 101,563
11/1/95 $14.39 110,000 110,000 183,33
11/21/95 $14.94 52,500 52,500 7,875
5
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE (the "Agreement") is entered into as of the
7th day of August, 1996 (the "date hereof"), by and between SUNBEAM CORPORATION,
a Delaware corporation (the "Company"), and Richard L. Boynton ("Employee").
RECITALS:
A. The Company and Employee are parties to a certain Employment
Agreement dated as of January 1, 1995 (the "Employment Agreement");
B. The Company has notified Employee that it has terminated the
Employment Agreement pursuant to Section 5(b) thereof;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1. TERMINATION OF EMPLOYMENT PURSUANT TO THE EMPLOYMENT
AGREEMENT. Employee acknowledges that his employment has been terminated,
effective as of the date hereof. Employee hereby resigns, effective immediately,
all elected or appointed offices or directorships held by him with the Company
and/or any of its subsidiaries or any member of the "Sunbeam Group," as defined
below.
SECTION 2. PAYMENTS TO EMPLOYEE. A. PAYMENT TO EMPLOYEE - In
consideration of the execution and delivery of this Agreement by Employee, and
of the releases and covenant not to sue provided for hereunder, seven (7) days
after execution by Employee of this Agreement (provided that he has not revoked
this Agreement pursuant to the provisions of Section 5 hereof), Employee shall
be entitled to receive an amount equal to one year's base salary at Employee's
current rate of pay (the "Severance Payment"), less all amounts required by law
to be withheld.
B. EBRP ACCOUNT - Employee shall receive the balance of his vested
Executive Benefit Replacement Plan (otherwise known as the "SERP") account with
the Company, less applicable withholdings.
C. 401(K) ACCOUNT - Employee also shall receive the balance of his
vested 401(k) account, if any, and shall have rights with respect thereto
provided by law.
D. ACKNOWLEDGMENTS - Employee acknowledges that he is not vested in any
bonus or other incentive plan and that nothing is due and owing to him under any
such arrangement. Employee hereby acknowledges that upon the making of the
payments provided for herein, Employee will have received payment in full of all
amounts due and owing to him under the Employment Agreement, except for
reimbursement of expenses in the ordinary course (which the Company will process
promptly upon receipt from Employee).
SECTION 3. STOCK OPTIONS. Employee is vested in certain stock options
as set forth on EXHIBIT A attached hereto and incorporated by reference herein.
Such options are governed by the terms of the Company's Equity Team Plan, as in
effect on the date hereof, and may be exercised in accordance with such Plan.
SECTION 4. BENEFIT PLANS. Employee's insurance coverages shall extend
through the end of the month of August, 1996, and he shall have the right to
continue certain insurance coverages under the
<PAGE>
provisions of COBRA for the period of time prescribed by law.
SECTION 5. RELEASE AND COVENANT NOT TO SUE. In consideration of the
Severance Payment payable to (and the benefits provided to) Employee as set
forth above, Employee hereby RELEASES and FOREVER DISCHARGES the Company and any
parent, subsidiary, affiliated or related company or trust, including, but not
limited to, its or their respective predecessors, past and present officers,
directors, shareholders, agents, employees, legal representatives, successors,
trustees, fiduciaries and assigns (individually and collectively the "Sunbeam
Group"), of and from (and does hereby WAIVE), any and all rights, contracts,
claims (including claims sounding in tort), damages, actions, causes of action,
attorney fees, future employment or reinstatement and suits, whether or not
presently known, suspected or claimed, which Employee ever had, now has or
claims, or might hereafter have or claim against the Sunbeam Group (and any of
them), relating to, directly or indirectly, any matter or thing occurring, in
whole or in part, at any time, including, without limitation, any and all
rights, claims, grievances, arbitrations, or causes of action which Employee has
asserted, could assert, or which could be asserted on his behalf relating to his
hiring, employment with the Company prior to the date of execution and delivery
of this Agreement, his separation from such employment or post-employment
benefits, and under any federal, state or local law, ordinance, regulation or
rule, all of the foregoing as heretofore or hereafter amended, or under any
court decree, heretofore or hereafter promulgated. Employee also WAIVES ANY AND
ALL RIGHTS under the laws of any jurisdictions in the United States that would
limit the foregoing release and waiver. Employee recognizes that, among other
things, he is releasing the Sunbeam Group, of and from any and all claims he
might have against it, or any of them, for pain and suffering, emotional
distress, compensatory and punitive damages and for employment discrimination
based on age (including claims under the federal Age Discrimination in
Employment Act of 1967, as amended ("ADEA") or comparable state laws), sex,
national origin, race or color, mental or physical handicap or disability, or
religious belief under both federal and any similar state or local laws.
Employee hereby expressly waives and releases any right to reinstatement by the
Sunbeam Group and any right to the recovery of attorney's fees in any proceeding
between Employee and any member of the Sunbeam Group relating to the subject
matter hereof. Employee also COVENANTS NOT TO SUE the Sunbeam Group, or any of
them, for any of the matters covered by this Section 5.
There is expressly excluded from the scope of the above release
Employee's right to receive the benefits of this Agreement. There also is
excepted from the scope of this Release and Covenant not to Sue, any and all
claims which Employee may have for indemnification from the Company by reason of
his service as a director or officer of the Company or any of its subsidiaries,
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation and Bylaws of the Company; provided that Employee shall cooperate
fully with the Company in the defense of any and all such claims for which
indemnification is provided to Employee by the Company.
EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS GIVEN HIM ADEQUATE TIME (UP
TO 21 DAYS IF EMPLOYEE DESIRES) WITHIN WHICH TO CONSIDER THIS AGREEMENT AND HAS
ADVISED HIM IN WRITING TO CONSULT WITH COUNSEL BEFORE SIGNING THIS AGREEMENT.
EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS AND THAT HE HAS ENTERED INTO THIS
AGREEMENT FREELY AND VOLUNTARILY.
THE PARTIES FURTHER ACKNOWLEDGE THAT FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THIS AGREEMENT, EMPLOYEE MAY REVOKE THIS AGREEMENT.
SUCH REVOCATION SHALL BE MADE IN WRITING AND DELIVERED TO THE GENERAL COUNSEL OF
THE COMPANY BY THE CLOSE OF BUSINESS ON THE SEVENTH
2
<PAGE>
DAY FOLLOWING THE EXECUTION HEREOF BY EMPLOYEE. IF NOT REVOKED WITHIN
SUCH SEVEN DAY PERIOD, THIS AGREEMENT SHALL THEREAFTER BE IRREVOCABLE.
SECTION 6. COVENANTS OF CONFIDENTIALITY AND NON-COMPETITION. The
parties hereby incorporate by reference the Confidentiality and Noncompetition
provisions of the Company's Equity Team Plan, as in effect on the date hereof
and the provisions of Section 7 of the Employment Agreement, and Employee
expressly acknowledges his obligations of Confidentiality and Noncompetition
thereunder.
SECTION 7. MISCELLANEOUS.
a. Except as otherwise provided in this Agreement, all notices
required or permitted hereunder or process relating hereto
shall be in writing and signed by the party giving notice, and
shall be deemed to have been given when hand-delivered by
personal delivery, by Federal Express or similar courier
service, when sent and confirmed by facsimile, or three (3)
days after being deposited in the United States mail,
registered or certified, with postage prepaid, return receipt
requested, addressed as follows:
If to the Company: SUNBEAM CORPORATION
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, FL 33301
Attention: General Counsel
Facsimile: (954) 767-2105
If to the Employee: Richard L. Boynton
1605 Mulberry Drive
Libertyville, IL 60048
or to such other address as either party may designate for
himself or itself by notice given to the other party from time
to time in accordance with the provisions hereof.
b. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legatees,
devisees, personal representatives, successors and assigns.
c. No delay on the part of either party in the exercise of any
right or remedy shall operate as a waiver thereof, and no
single or partial exercise by a party of any right or remedy
shall preclude other or further exercise thereof or the
exercise of any other right or remedy. The waiver of any
breach or condition of this Agreement by either party shall
not constitute a precedent in the future enforcement of any of
the terms and conditions of this Agreement.
d. Any uncertainty or ambiguity shall not be construed for or
against either party as an attribution of drafting to either
party.
e. Whenever possible, each provision of this Agreement shall be
construed and interpreted in such manner as to be effective
and valid under applicable law, but if any provision of
3
<PAGE>
this Agreement or the application thereof to any party or
circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the
extent of such prohibition without invalidating the remainder
of such provision or any other provision of this Agreement or
the application of such provision to other parties or
circumstances.
f. All discussions, correspondence, understandings and agreements
heretofore made between the parties are superseded by and
merged into this Agreement, which alone fully and completely
expresses the agreement between the parties with respect to
the subject matter hereof (except for provisions of the
Employment Agreement and of the Equity Team Plan which are
specifically referred to or incorporated by reference herein),
and the same is entered into with neither party relying upon
any statement or representation made by or on behalf of any
party not embodied in this Agreement. Any modification of this
Agreement may be made only by a written agreement signed by
both of the parties to this Agreement.
g. This Agreement shall be governed in all respects by the
internal laws of the State of Florida (which is the law
governing the Employment Agreement), without regard to
principles of conflicts of laws.
h. No third party shall be deemed to be or shall be, or become, a
beneficiary of any provision of this Agreement. By entering
into this Agreement, the Company has not agreed to grant
similar benefits to any other employee, whether or not
similarly situated, and no precedent, practice, policy or
usage shall be established by the entry of the Company into
this Agreement.
j. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, and each of which,
when taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below and as of the date and year first above written.
EMPLOYEE SUNBEAM CORPORATION
/s/ RICHARD L.BOYNTON /s/DAVID C. FANNIN
- --------------------------------- ------------------------------
Richard L. Boynton
By: David C. Fannin
Its: EVP & General Counsel
Date: August 9, 1996 Date: August 12, 1996
4
<PAGE>
EXHIBIT A
NAME ORIGINAL OPTION GRANTS SHARES REMAINING
DATE PRICE SHARES TOTAL VESTED
---- ----- ------ ----- ------
Rich Boynton 1/1/91 $5.00 51,993 25,993 25,993
7/22/93 $16.70 30,000 30,000 27,000
2/1/94 $21.46 50,000 50,000 25,833
11/17/94 $24.79 50,000 50,000 17,500
11/1/95 $14.39 50,000 50,000 8,333
5
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE (the "Agreement") is entered into as of the
1st day of October, 1996 (the "date hereof"), by and between SUNBEAM
CORPORATION, a Delaware corporation (the "Company"), and Spencer J. Volk
("Employee").
RECITALS:
A. The Company and Employee are parties to a certain Employment
Agreement dated as of January 1, 1994 (the "Employment Agreement");
B. The Company and Employee agree that the Employment Agreement will be
terminated, effective as of October 31, 1996, pursuant to Section 5(b) thereof;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1. TERMINATION OF EMPLOYMENT PURSUANT TO THE EMPLOYMENT
AGREEMENT. Employee acknowledges that his employment is being terminated,
effective as of October 31, 1996. Employee hereby resigns, effective as of
October 31, 1996, all elected or appointed offices or directorships held by him
with the Company and/or any of its subsidiaries or any member of the "Sunbeam
Group," as defined below.
SECTION 2. PAYMENTS TO EMPLOYEE. A. SALARY CONTINUATION AND OTHER
PAYMENTS -
(1) SALARY CONTINUATION - During the period from the date hereof
through and including October 31, 1996, Employee shall continue to
receive compensation in the form of his base salary, payable in the
same manner as heretofore paid to Employee and subject to all amounts
required by law to be withheld;
(2) CONTRACTUAL SEVERANCE PAYMENT - In consideration of the execution
and delivery of this Agreement by Employee, the execution and delivery
of the Reaffirmation of this Agreement as set forth below, and of the
releases and covenant not to sue provided for hereunder, seven (7) days
after execution and delivery by Employee of the Reaffirmation Agreement
set forth below (provided that he has not revoked such Agreement
pursuant to the provisions of Section 5 hereof during such seven day
period), Employee shall be entitled to receive an amount equal to one
year's base salary at Employee's current rate of pay, payable in a lump
sum (the "Severance Payment"), less all amounts required by law to be
withheld. He also shall receive payment for any accrued but unpaid or
unused vacation;
(3) ADDITIONAL COMPENSATION - In addition to the foregoing payments,
and in recognition of his cooperation in the transition of management
of the Company, at the same time as the payment provided pursuant to
Section 2(A)(2) above is made, the Company also shall pay to Employee,
as additional compensation, the sum of $50,000, less all amounts
required by law to be withheld.
B. EBRP ACCOUNT - Employee shall receive the balance of his vested
Executive Benefit Replacement Plan (otherwise known as the "SERP") account with
the Company, less applicable withholdings.
<PAGE>
C. ACKNOWLEDGMENTS - Employee acknowledges that he is not vested in any
bonus or other incentive plan and that nothing is due and owing to him under any
such arrangement. Employee hereby acknowledges that upon the making of the
payments provided for herein, Employee will have received payment in full of all
amounts due and owing to him under the Employment Agreement, except for
reimbursement of expenses in the ordinary course (which the Company will process
promptly upon receipt from Employee).
SECTION 3. STOCK OPTIONS. Employee is vested in certain stock options
as of October 31, 1996, as set forth on EXHIBIT A attached hereto and
incorporated by reference herein. Such options are governed by the terms of the
Company's Equity Team Plan, as in effect on the date hereof, and may be
exercised in accordance with such Plan.
SECTION 4. BENEFIT PLANS. Employee shall continue to participate in the
Company's benefit plans in which he currently participates (including insurance
coverages) through and including October 31, 1996. Beginning November 1, 1996,
Employee shall have the right to continue medical and dental insurance coverages
under the provisions of COBRA for the period of time prescribed by law;
provided, however, that as long as Employee is not in default of any provision
of this Agreement, and as long as Employee elects to continue coverage under
COBRA and also continues to pay Employee's portion of the cost of medical and
dental insurance coverages, the Company shall continue to pay the Company's
portion of the cost of such coverages through and including October 31, 1997.
Beginning November 1, 1997, Employee shall be entitled to continue coverage
under COBRA at his own expense for the balance of the period prescribed by law.
SECTION 5. RELEASE AND COVENANT NOT TO SUE. In consideration of the
Severance Payment payable to (and the benefits provided to) Employee as set
forth above, Employee hereby RELEASES and FOREVER DISCHARGES the Company and any
parent, subsidiary, affiliated or related company or trust, including, but not
limited to, its or their respective predecessors, past and present officers,
directors, shareholders, agents, employees, legal representatives, successors,
trustees, fiduciaries and assigns (individually and collectively the "Sunbeam
Group"), of and from (and does hereby WAIVE), any and all rights, contracts,
claims (including claims sounding in tort), damages, actions, causes of action,
attorney fees, future employment or reinstatement and suits, whether or not
presently known, suspected or claimed, which Employee ever had, now has or
claims, or might hereafter have or claim against the Sunbeam Group (and any of
them), relating to, directly or indirectly, any matter or thing occurring, in
whole or in part, at any time, including, without limitation, any and all
rights, claims, grievances, arbitrations, or causes of action which Employee has
asserted, could assert, or which could be asserted on his behalf relating to his
hiring, employment with the Company prior to the date of execution and delivery
of this Agreement, his separation from such employment or post-employment
benefits, and under any federal, state or local law, ordinance, regulation or
rule, all of the foregoing as heretofore or hereafter amended, or under any
court decree, heretofore or hereafter promulgated. Employee also WAIVES ANY AND
ALL RIGHTS under the laws of any jurisdictions in the United States that would
limit the foregoing release and waiver. Employee recognizes that, among other
things, he is releasing the Sunbeam Group, of and from any and all claims he
might have against it, or any of them, for pain and suffering, emotional
distress, compensatory and punitive damages and for employment discrimination
based on age (including claims under the federal Age Discrimination in
Employment Act of 1967, as amended ("ADEA") or comparable state laws), sex,
national origin, race or color, mental or physical handicap or disability, or
religious belief under both federal and any similar state or local laws.
Employee hereby expressly waives and releases any right to reinstatement by the
Sunbeam Group and any right to the recovery of attorney's fees in any proceeding
between Employee and any member
2
<PAGE>
of the Sunbeam Group relating to the subject matter hereof. Employee also
COVENANTS NOT TO SUE the Sunbeam Group, or any of them, for any of the matters
covered by this Section 5.
There is expressly excluded from the scope of the above release
Employee's right to receive the benefits of this Agreement. There also is
excepted from the scope of this Release and Covenant not to Sue, any and all
claims which Employee may have for indemnification from the Company by reason of
his service as a director or officer of the Company or any of its subsidiaries,
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation and Bylaws of the Company; provided that Employee shall cooperate
fully with the Company in the defense of any and all such claims for which
indemnification is provided to Employee by the Company.
EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS GIVEN HIM ADEQUATE TIME (UP
TO 45 DAYS FROM THE DATE HEREOF AND FROM THE DATE OF HIS EXECUTION OF THE
REAFFIRMATION AGREEMENT SET FORTH BELOW, IF EMPLOYEE DESIRES) WITHIN WHICH TO
CONSIDER THIS AGREEMENT AND HAS ADVISED HIM IN WRITING TO CONSULT WITH COUNSEL
BEFORE SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS AND
THAT HE HAS ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY.
THE PARTIES FURTHER ACKNOWLEDGE THAT FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THIS AGREEMENT AND FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THE REAFFIRMATION AGREEMENT SET FORTH BELOW, EMPLOYEE
MAY REVOKE THIS AGREEMENT. SUCH REVOCATION SHALL BE MADE IN WRITING AND
DELIVERED TO THE GENERAL COUNSEL OF THE COMPANY BY THE CLOSE OF BUSINESS ON THE
SEVENTH DAY FOLLOWING THE EXECUTION HEREOF BY EMPLOYEE. IF NOT REVOKED WITHIN
SUCH SEVEN DAY PERIOD, THIS AGREEMENT SHALL THEREAFTER BE IRREVOCABLE.
SECTION 6. COOPERATION; COVENANTS OF CONFIDENTIALITY AND
NON-COMPETITION.
A. Employee hereby agrees to cooperate with the Company in
transitioning management of the Company's International Group and also to assist
in writing a marketing plan for the International Group through and including
October 31, 1996. He further agrees to cooperate with the Company in providing
information regarding any matters on which he may be working at the time of his
separation from employment by the Company, including providing such cooperation
following the termination of such employment (provided, however, that he shall
not be obligated to incur any unreimbursed expense in so doing nor shall it
interfere with his seeking other employment or performing the duties of such
other employment).
B. The parties hereby incorporate by reference the Confidentiality and
Noncompetition provisions of the Company's Equity Team Plan, as in effect on the
date hereof and the provisions of Section 7 of the Employment Agreement, and
Employee expressly acknowledges his obligations of Confidentiality and
Noncompetition thereunder.
SECTION 7. MISCELLANEOUS.
a. Except as otherwise provided in this Agreement, all notices
required or permitted hereunder or process relating hereto
shall be in writing and signed by the party giving
3
<PAGE>
notice, and shall be deemed to have been given when
hand-delivered by personal delivery, by Federal Express or
similar courier service, when sent and confirmed by facsimile,
or three (3) days after being deposited in the United States
mail, registered or certified, with postage prepaid, return
receipt requested, addressed as follows:
If to the Company: SUNBEAM CORPORATION
2100 New River Center
200 East Las Olas Boulevard
Fort Lauderdale, FL 33301
Attention: General Counsel
Facsimile: (954) 767-2105
If to the Employee: Spencer J. Volk
1335 North Astor Street, Unit C
Chicago, IL 60610
or to such other address as either party may designate for
himself or itself by notice given to the other party from time
to time in accordance with the provisions hereof.
b. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legatees,
devisees, personal representatives, successors and assigns.
c. No delay on the part of either party in the exercise of any
right or remedy shall operate as a waiver thereof, and no
single or partial exercise by a party of any right or remedy
shall preclude other or further exercise thereof or the
exercise of any other right or remedy. The waiver of any
breach or condition of this Agreement by either party shall
not constitute a precedent in the future enforcement of any of
the terms and conditions of this Agreement.
d. Any uncertainty or ambiguity shall not be construed for or
against either party as an attribution of drafting to either
party.
e. Whenever possible, each provision of this Agreement shall be
construed and interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement or the application thereof to any party or
circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the
extent of such prohibition without invalidating the remainder
of such provision or any other provision of this Agreement or
the application of such provision to other parties or
circumstances.
f. All discussions, correspondence, understandings and agreements
heretofore made between the parties are superseded by and
merged into this Agreement, which alone fully and completely
expresses the agreement between the parties with respect to
the subject matter hereof (except for provisions of the
Employment Agreement and of the Equity Team Plan which are
specifically referred to or incorporated by reference herein),
and the same is entered into with neither party relying upon
any statement or representation made by or on behalf of any
party not embodied in this Agreement. Any modification of this
Agreement may be made only by a written agreement signed by
both of the parties to this
4
<PAGE>
Agreement.
g. This Agreement shall be governed in all respects by the
internal laws of the State of Florida (which is the law
governing the Employment Agreement), without regard to
principles of conflicts of laws.
h. No third party shall be deemed to be or shall be, or become, a
beneficiary of any provision of this Agreement. By entering
into this Agreement, the Company has not agreed to grant
similar benefits to any other employee, whether or not
similarly situated, and no precedent, practice, policy or
usage shall be established by the entry of the Company into
this Agreement.
j. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, and each of which,
when taken together, shall constitute one and the same
instrument.
SECTION 8. RETURN OF COMPANY PROPERTY. Employee shall return to the
Company any property belonging to the Company as soon as practicable following
the date hereof, and in any event no later than October 31, 1996, to include any
credit cards, telephone credit cards, cellular phones, computers, records of
whatever type or kind, or any other property of the Company whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below and as of the date and year first above written.
EMPLOYEE SUNBEAM CORPORATION
/s/SPENCER J. VOLK /s/ DAVID C. FANNIN
- -------------------------------- ------------------------------
Spencer J. Volk
By: David C. Fannin
Its: EVP & General Counsel
Date: October 1, 1996 Date: October 21, 1996
REAFFIRMATION AGREEMENT
Employee, Spencer J. Volk, as of the final date of his employment by
the Company (October 31, 1996) hereby reaffirms, restates and ratifies each and
every provision of the foregoing Agreement, with the same effect as if first
entered into on the date hereof. Such reaffirmation, restatement and
ratification includes without limitation the Release and Covenant Not to Sue set
forth in Section 5 hereof, including the provisions thereof which afford the
following rights to Employee:
1. EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS GIVEN HIM ADEQUATE
TIME (UP TO 45 DAYS FROM THE DATE OF THIS REAFFIRMATION AGREEMENT, IF EMPLOYEE
DESIRES), WITHIN WHICH TO CONSIDER THIS
5
<PAGE>
AGREEMENT AND HAS ADVISED HIM IN WRITING TO CONSULT WITH COUNSEL BEFORE SIGNING
THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS AND THAT HE HAS
ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY.
2. THAT FOR A PERIOD OF SEVEN (7) DAYS FOLLOWING THE EXECUTION OF THIS
REAFFIRMATION AGREEMENT, EMPLOYEE MAY REVOKE THIS AGREEMENT. SUCH REVOCATION
SHALL BE MADE IN WRITING AND DELIVERED TO THE GENERAL COUNSEL OF THE COMPANY BY
THE CLOSE OF BUSINESS ON THE SEVENTH DAY FOLLOWING THE EXECUTION HEREOF BY
EMPLOYEE. IF NOT REVOKED WITHIN SUCH SEVEN (7) DAY PERIOD, THIS AGREEMENT SHALL
THEREAFTER BE IRREVOCABLE.
Employee Sunbeam Corporation
- ---------------------------- ------------------------------
Spencer J. Volk By____________________________
Its___________________________
Date_______________________ Date__________________________
6
<PAGE>
EXHIBIT A
NAME ORIGINAL OPTION GRANTS SHARES REMAINING
DATE PRICE SHARES TOTAL VESTED
---- ----- ------ ----- ------
Spencer Volk 1/3/94 $21.42 220,000 220,000 127,900
11/1/95 $14.39 70,000 70,000 14,000
7
EXHIBIT 11.a
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CALCULATIONS OF PRIMARY EARNINGS
PER SHARE OF COMMON STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
-------------------------- ---------------------------
1995 1996 1995 1996
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net earnings (loss) applicable to common
shareholders ............................................. $ 9,007 $(18,088) $50,450 $ 6,478
========== ======== ======= =======
Weighted average number of common
shares outstanding ....................................... 81,374 83,578 81,517 82,543
Add:
Common shares issuable for exercise of
warrants and options, net of shares
assumed to have been acquired with
proceeds therefrom ....................................... 904 -- 1,440 685
---------- -------- ------- -------
Number of shares applicable to primary
earnings (loss) per share calculation .................... 82,278 83,578 82,957 83,228
========== ======== ======= =======
Primary earnings (loss) per share of
common stock ............................................. $ .11 $ (.22) $ .61 $ .08
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 11B.
SUNBEAM CORPORATION AND SUBSIDIARIES
CALCULATIONS OF FULLY DILUTED EARNINGS
PER SHARE OF COMMON STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- --------------------------
OCTOBER 1, SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29,
1995 1996 1995 1996
--------- ----------- ---------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net earnings (loss) applicable to common
shareholders .......................................... $ 9,007 $(18,088) $50,450 $ 6,478
========= ========= ======== ========
Weighted average number of common
shares outstanding .................................... 81,374 83,578 81,517 82,543
Add:
Common shares issuable for exercise of
warrants and options, net of shares
assumed to have been acquired with
proceeds therefrom .................................... 904 -- 1,440 1,250
--------- -------- ------- -------
Number of shares applicable to fully diluted
earnings (loss) per share calculation ................. 82,278 83,578 82,957 83,793
========= ======== ======= =======
Fully diluted earnings (loss) per share of
common stock .......................................... $ .11 $ (.22) $ .61 $ .08
</TABLE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION ANNOUNCES CHANGES IN DIRECTORS;
DIRECTOR COMPENSATION
FORT LAUDERDALE, FL - August 7, 1996 - Sunbeam Corporation (NYSE: SOC) announced
today that its Board has elected Russell A. Kersh and Howard G. Kristol to serve
on the Company's Board of Directors. Mr. Kersh was recently appointed as the
Company's Executive Vice President, Finance and Administration. Mr. Kristol, a
partner of the New York law firm Reboul, MacMurray, Hewitt, Maynard & Kristol,
served as a Director of Scott Paper Company with Al Dunlap, Sunbeam's newly
appointed Chairman and Chief Executive Officer. Mr. Kersh and Mr. Kristol join
current board members Al Dunlap, Charles Thayer, Peter Langerman, Shimon Topor
and Richard Ravitch.
Sunbeam also announced that its Board has unanimously approved a
significant change in the compensation of its outside directors. All outside
directors will now be compensated exclusively in shares of the Company's stock.
This stock-only compensation replaces prior director payment arrangements,
including annual retainers, meeting fees and stock option and restricted stock
awards. Under this new plan each outside director will receive 1,500 shares of
the Company's stock annually. Further, each outside director has committed to
purchase additional shares of Sunbeam stock with his own funds.
Mr. Dunlap was a pioneer in the concept of stock-only compensation for
company directors. "This is an important step in aligning our directors with our
shareholders." said Mr. Dunlap. "The executives and directors of Sunbeam are now
shareholders in the Company and will have an increased commitment to improving
shareholder value."
The Company's new management team has already aligned itself with the
shareholders. Mr. Dunlap invested $3 million of his own money in the Company's
stock when he joined Sunbeam. Subsequently, all of his new executives have also
made significant investments of their own funds.
Charles Elson, professor of law at Stetson University and an expert on
board compensation, commented, "This is a move that will be applauded by the
shareholders of Sunbeam and the American investment community in general."
<PAGE>
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
SUNBEAM ANNOUNCES ADDITIONAL MANAGEMENT CHANGES
Fort Lauderdale, FL, (August 8, 1996) -- Sunbeam Corporation (NYSE:SOC)
announced today, in connection with the continuing rapid reorganization of the
Company's management, that Richard L. Boynton, President of the Company's
Household Products Group, and Paul M. O'Hara, Chief Financial Officer of
Sunbeam, are no longer with the Company. In addition, Michael R. Beauregard,
Vice President of Strategic Planning in the North American Group Office, also is
no longer with the Company.
Russell A. Kersh, named on July 22 as Executive Vice President, Finance
and Administration, will take on additional duties as the Company's Chief
Financial Officer. Spencer Volk, head of International operations for Sunbeam,
will serve as temporary head of the Household Products Group, which is in the
process of reorganization under P. Newton White, Sunbeam's recently named
Executive Vice President of Consumer Products Worldwide.
Albert J. Dunlap, Sunbeam's Chairman and Chief Executive Officer,
stated, "We are moving as quickly as possible to build a highly focused
management team to turn around a business which has substantially
under-performed over the past 18 months."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
# # #
Contact: John DeSimone Pete Judice
Manager, Investor Relations Burson-Marsteller
SUNBEAM CORPORATION New York
(954) 767-2100 (212) 614-4506
EXHIBIT 99.3
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION ANNOUNCES ADDITIONAL MANAGEMENT CHANGES
FORT LAUDERDALE, FL - August 19, 1996 - Sunbeam Corporation (NYSE:SOC)
announced today the latest in a series of senior management changes. Rob
Johnson, President of the Company's Outdoor Products Group, and Dan Lewis, Vice
President of Manufacturing for Sunbeam's Household Products Group, are no longer
with the Company. Sunbeam continues its swift reorganization of management which
began when Albert J. Dunlap was named Chairman and Chief Executive Officer only
one month ago.
Mr. Dunlap stated, "We are continuing to rapidly create a highly
competent and focused management team to rebuild Sunbeam."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.4
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION ANNOUNCES DIRECTORS PURCHASE
COMPANY STOCK WITH THEIR OWN FUNDS
FORT LAUDERDALE, FL - August 21, 1996 - Sunbeam Corporation (NYSE:SOC)
announced today that all of its Outside Directors have purchased, with their own
funds, shares of the Company's common stock. Charles J. Thayer and Howard G.
Kristol each purchased 5,000 shares of stock, and Richard Ravitch purchased
2,000 shares. These investments made by the Outside Directors follow significant
personal investments made in Sunbeam by each member of the Company's senior
management. Albert J. Dunlap, the Company's Chairman and Chief Executive Officer
stated, "This significant commitment by the Outside Directors represents the
high level of confidence they have in the Company."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.5
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION NAMES RICHARD K. BRENNER
VICE PRESIDENT, WORLDWIDE BUSINESS PLANNING
FORT LAUDERDALE, FL - August 29, 1996 - Sunbeam Corporation (NYSE:SOC)
announced today, in connection with its rapid assembly of a new, highly focused
management team, that it has named Richard K. Brenner to the position of Vice
President, Worldwide Business Planning responsible for the Company's strategic
planning. Richard will report to Newt White, Sunbeam's Executive Vice President,
Consumer Products Worldwide.
Richard is a highly successful and experienced marketing, advertising
and planning professional. His prior experience includes serving as Marketing
Director and Product Manager for Procter and Gamble for such popular brands as
Secret, Sure and Noxzema. He was responsible for developing the pricing,
marketing and advertising strategies for these products which reversed declining
market share trends and led to dramatically improved profitability. Prior to
Procter and Gamble, Richard developed the marketing strategies for numerous
clients while working for the Leo Burnett ad agency in Chicago.
Mr. Dunlap, the Company's Chairman and Chief Executive Officer, stated,
"Rick is an extremely talented professional and we are fortunate to have him on
our team. His experience and consumer marketing knowledge will be instrumental
in helping to shape the future of Sunbeam."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.6
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION NAMES RONALD L. NEWCOMB
VICE PRESIDENT, MANUFACTURING
FORT LAUDERDALE, FL - September 3, 1996 - Sunbeam Corporation
(NYSE:SOC) announced today that it has named Ronald L. Newcomb to the position
of Vice President, Manufacturing, a move which centralizes the autonomous
manufacturing environment that previously existed at the Company. Ron will be
responsible for all manufacturing operations within Sunbeam and will report to
Newt White, Sunbeam's Executive Vice President, Consumer Products Worldwide.
Ron joins Sunbeam from Black & Decker where he served as Vice
President, Operations for that company's Worldwide Household Group. His
accomplishments include dramatic improvements in manufacturing productivity and
quality as well as dramatic decreases in inventory. Ron was also a leader in the
closings and consolidations of numerous plants within that company. Prior to
working at Black & Decker, Ron served as Vice President of Operations and
Manufacturing for Textron Lycoming where he managed the manufacturing of
precision turbine engines. He also managed various turbine engine manufacturing
operations for Teledyne, CAE and General Electric Aircraft Engine Business
Group.
Albert J. Dunlap, the Company's Chairman and Chief Executive Officer,
stated, "Ron is a world class leader in manufacturing. His exceptional
experience in productivity, quality, inventory management and plant
consolidations addresses specific areas in which Sunbeam had previously
underperformed." Mr. Dunlap added, "We are continuing to assemble a highly
focused management team and will be filling the Company's remaining needs with
leaders like Ron."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.7
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION ANNOUNCES ORGANIZATIONAL CHANGE
FORT LAUDERDALE, FL - September 3, 1996 - Sunbeam Corporation
(NYSE:SOC) announced today another organizational change. David G. Sargent,
formerly Vice President and Associate General Counsel of Sunbeam, is no longer
with the Company. Chairman and Chief Executive Officer Albert J. Dunlap
continues the rapid pace of change in order to build a highly focused management
team to carry out the restructuring of the Company.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Pete Judice John DeSimone
Burson-Marsteller, New York Manager, Investor Relations
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.8
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION NAMES TWO NEW EXECUTIVES
FORT LAUDERDALE, FL - September 16, 1996 - Sunbeam Corporation
(NYSE:SOC) announced today, in conjunction with its rapid assembly of a highly
focused management team, that it has named Lee Griffith to the position of Vice
President, Sales, and R. Dixon Thayer to the position of Vice President,
International. Both men will report to Newt White, Sunbeam's Executive Vice
President, Consumer Products Worldwide.
Mr. Griffith, who will be responsible for Sunbeam's newly centralized
sales organization, joins the Company from Scott Paper Limited of Canada, where
he served as President and Chief Executive Officer since January, 1995. During
his tenure, he more than doubled shareholder value at that Company while
achieving record sales and earnings results. Lee had previously worked for Scott
Paper Company as Vice President, Consumer Sales for North America where he also
achieved record sales results. Prior to that position, he was responsible for
Scott Paper's Consumer Product Sales in the United States.
Mr. Thayer will be responsible for all International operations and
will lead the new global expansion effort at Sunbeam. Prior to joining Sunbeam,
Dixon was Vice President, Global Research, Development Engineering and Global
Growth for Kimberly Clark (and Scott Paper Company pre-merger) for that
Company's multi-billion dollar worldwide commercial business. He was a leader in
geographic expansion initiatives into South America, Asia Pacific, South Africa
and Eastern Europe and has also lived in various cities in Europe and Mexico.
Dixon has previously held numerous executive positions at Scott Paper, including
Vice President responsible for that Company's European Commercial business and
Vice President, Worldwide Business Strategy and Integration.
Albert J. Dunlap, the Company's Chairman and Chief Executive Officer,
stated, "Both Lee and Dixon have worked closely with me in the past and are
proven, highly successful leaders" Mr. Dunlap added, "With the additions of
these men, the assembly of Sunbeam's new, highly focused senior management team
is close to completion."
<PAGE>
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Media: Investor Relations:
Pete Judice John DeSimone
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.9
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION ANNOUNCES NEW $500 MILLION CREDIT FACILITY
FORT LAUDERDALE, FL - September 17, 1996 - Sunbeam Corporation
(NYSE:SOC) announced today that it has successfully closed on a new five year,
$500 million credit facility with 15 participating banks. This new facility,
agented by Chase Manhattan Bank, provides Sunbeam with the flexibility required
to restructure and grow the business.
Albert J. Dunlap, Chairman and Chief Executive Officer of Sunbeam
stated, "We feel this facility, which was significantly over-subscribed,
demonstrates the participating banks' strong support of the Company and its new
management team." Mr. Dunlap added, "We are continuing to rapidly restructure
every aspect of the Company and develop a solid growth strategy which this
credit facility will support."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Media: Investor Relations:
Pete Judice John DeSimone
(212) 614 - 4506 Sunbeam Corporation
(954)767-2100
EXHIBIT 99.10
FOR IMMEDIATE RELEASE
SUNBEAM CORPORATION COMMENTS ON DISTRIBUTION
OF SHARES BY STEINHARDT
Fort Lauderdale, FL, (September 18, 1996) -- Sunbeam Corporation
(NYSE:SOC) commented on today's announcement by the Steinhardt funds that they
are distributing to their investors the shares of Sunbeam common stock formerly
held by the funds. Sunbeam noted that the distribution is pursuant to
Steinhardt's plans, announced in October, 1995, to wind down all its funds and
to distribute substantially all of the assets in the funds to the investors by
the end of 1996.
Albert Dunlap, Sunbeam's Chairman and CEO, stated: "We welcome to the
Sunbeam shareholder family the individual and institutional investors who
previously were 'indirect' investors in Sunbeam through the Steinhardt funds. We
look forward to these investors continuing to share in the revitalization of
Sunbeam as we work to increase shareholder value."
Sunbeam also announced that, in light of the
distribution-in-kind of the shares by Steinhardt, Shimon Topor, who has served
as Steinhardt's representative on Sunbeam's Board of Directors, has resigned
from the Board. A replacement for Mr. Topor will be named shortly.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
Contact: Media: Investor Relations:
Pete Judice John DeSimone
New York SUNBEAM CORPORATION
(212) 614-4506 (954) 767-2100
[SUNBEAM LOGO]
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION NAMES NEW MARKETING EXECUTIVE
FORT LAUDERDALE, FL - September 18, 1996 - Sunbeam Corporation
(NYSE:SOC) announced today that it has named Donald R. Uzzi to the position of
Vice President, Marketing. Mr. Uzzi will be responsible for global marketing
activities for Sunbeam and will report to Newt White, Sunbeam's Executive Vice
President, Consumer Products Worldwide.
Mr. Uzzi most recently was president of Quaker Oats North American
Beverages Division where he lead the development of a marketing strategy that
allowed Gatorade to thrive in the face of new major competition from Coke and
Pepsi while increasing Gatorade's profitability by 25%. Prior to that position,
he held several senior executive positions in his 6 year tenure at Pepsi-Cola
where he was responsible for various activities such as brand management and
regional sales and marketing. Mr. Uzzi also spent 11 years at Procter and
Gamble, serving in various sales and marketing capacities.
Albert J. Dunlap, the Company's Chairman and Chief Executive Officer,
stated, "Donald has proven himself a very successful marketing professional
having developed marketing strategies for such well known brands as
Gatorade/Registered trademark/, Pepsi/Registered trademark/, Crest/Registered
trademark/ and Scope/Registered trademark/. His experience in managing
multi-hundred million dollar marketing programs will be a valuable asset as we
move forward in turning around Sunbeam."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's
Sunbeam/Registered trademark/ and Oster/Registered trademark/ brands have been
household names for generations, both domestically and abroad, and the Company
is a market leader in many of its product categories.
****************
Contact: Media: Investor Relations:
Pete Judice John DeSimone
(212)614-4506 Sunbeam Corporation
(954)767-2100
[SUNBEAM LOGO]
FOR IMMEDIATE RELEASE
SUNBEAM NAMES SHAREHOLDER ADVOCATE
CHARLES ELSON TO BOARD
Fort Lauderdale, FL, (September 26, 1996) -- Sunbeam Corporation
(NYSE:SOC) announced today that its Board of Directors has elected Charles M.
Elson as a Director. Elson, 36, is one of the nation's leading experts in the
field of corporate governance and advocacy of shareholder rights. He is
Professor of Law at Stetson University College of Law, St. Petersburg, Florida
and is Of Counsel to the law firm of Holland & Knight.
A nationally recognized specialist in corporate board matters, Elson
has published widely on the subjects of director accountability, compensation
and oversight in both the academic and popular financial media, including the
WALL STREET JOURNAL and the NEW YORK TIMES. He is considered one of the
country's foremost advocates of shareholder responsive boards. He served as a
member of the National Association of Corporate Directors' commissions on
director compensation and professionalism, which called for the radical overhaul
of traditional board structure. He has lectured frequently calling for more
shareholder responsive corporate boards of directors. Elson was an early
advocate of stock-based compensation for directors.
In naming Elson to its Board, Sunbeam has taken a leading position in
appointing a nationally recognized shareholder advocate to serve as a director
of a major public corporation. Sunbeam Chairman and CEO, Albert Dunlap, stated,
"By adding to our Board a leading advocate of shareholder rights in the person
of Charles Elson, we are sending a clear signal to our shareholders that we are
placing their interests first. Not only does he bring a strong financial and
legal
<PAGE>
background to our Board, but his advocacy of shareholder rights and alignment of
Director interests with those of the shareholders, reaffirms our commitment to
management accountability and productivity."
John Nash, President of the National Association of Corporate
Directors, praised the move by Sunbeam, stating "Because of his corporate
governance background and interest in shareholder value, Charles Elson will be a
proactive director at Sunbeam and make a significant contribution in looking out
for the shareholders' interests."
Elson, together with Sunbeam's other outside Directors, will be
compensated solely in shares of Sunbeam stock. He also has made an investment in
the Company through the purchase of Sunbeam stock with his personal funds.
Prior to entering the academic law field, Professor Elson practiced as
a corporate finance attorney with the New York firm of Sullivan & Cromwell. In
addition to his teaching duties at Stetson and an extensive list of
publications, Elson has taught at the University of Illinois College of Law and
the Cornell Law School.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's
Sunbeam/Registered trademark/ and Oster/Registered trademark/ brands have been
household names for generations, both domestically and abroad, and the Company
is a market leader in many of its product categories.
Contact: Media: Investor Relations:
Pete Judice John DeSimone
New York SUNBEAM CORPORATION
(212) 614-4506 (954) 767-2100
[SUNBEAM LOGO]
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION NAMES THREE MARKETING EXECUTIVES
FORT LAUDERDALE, FL - October 7, 1996 - Sunbeam Corporation (NYSE:SOC)
announced today, in connection with its rapid restructuring, that it has named
Cynthia A. Vahlkamp to the position of Vice President, Marketing Outdoor
Cooking, and Marc Haberman to the position of Vice President, Marketing
Household Appliances. Additionally, Paula Etchison, formerly Marketing Director,
Household Appliances, has been appointed to the newly created position Director,
New Business where she will focus on strategic growth opportunities. All three
positions will report to Donald Uzzi, Vice President, Worldwide Marketing and
Product Development.
Albert J. Dunlap, Sunbeam's Chairman and Chief Executive Officer
stated, "Assembling a strong category marketing team is an essential element in
the rebuilding of the Company. The additions of Cynthia and Marc, combined with
our current high quality category marketing leaders such as Paula, will provide
improved focus and effectiveness in the marketing of all our major product
lines."
Ms. Vahlkamp comes to Sunbeam with a track record of business and brand
revitalization, both domestically and internationally, that spans a broad range
of product categories. As General Manager of the Pritikin health food and
services business, Ms. Vahlkamp led a comprehensive relaunch that resulted in a
near tripling of sales while returning that business to profitability.
Previously, in a key international marketing role with Quaker Oats, Ms. Vahlkamp
led a venture team that developed and launched a new product line in record
time, setting category distribution and share records.
Mr. Haberman joins Sunbeam from McKinsey & Company, the renowned
consulting firm, where he worked with several major companies developing
marketing strategies and improving advertising spending for their largest
brands. Prior to that position, Mr. Haberman was at Procter & Gamble, where as
Brand Manager of Bounce fabric softener, he guided that business to record
profitability with an emphasis on product improvement and world class
advertising.
Ms. Etchison has a long demonstrated track record of new business
success at Sunbeam. She has led the development and introductions of winning new
products like the Sunbeam Toast-Logic toaster and
<PAGE>
the widely successful Sunbeam Rotisserie. These experiences make her uniquely
qualified to identify new revenue streams for our Company's future growth.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's
Sunbeam/Registered trademark/ and Oster/Registered trademark/ brands have been
household names for generations, both domestically and abroad, and the Company
is a market leader in many of its product categories.
****************
Contact: Media: Investor Relations:
Pete Judice John DeSimone
(212)614-4506 (954)767-2100
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION SELECTS NEW ADVERTISING AGENCY
FORT LAUDERDALE, FL - October 8, 1996 - Sunbeam Corporation (NYSE:SOC)
announced today that it has selected Ogilvy & Mather to assist its new marketing
team in the development and execution of a global marketing strategy to
re-energize the Sunbeam brand. Ogilvy, renowned for its unique "Brand
Stewardship" approach, will help Sunbeam reposition and build its brand, both
nationally and internationally, using advertising and other integrated marketing
components. Ogilvy has a proven track record for success with such current
clients as IBM, Sears, Roebuck and Co. and Kimberly-Clark.
Albert J. Dunlap, Sunbeam's Chairman and Chief Executive Officer,
stated, "Sunbeam has been severely under-investing in the advertising support of
its products and its brand. We will immediately create a cohesive global
marketing program designed to revitalize Sunbeam and make it more relevant to
today's consumer." Mr. Dunlap added, "This marketing program will enhance global
consumer awareness and trial through focusing on current innovations and new
product introductions. As such it will be one of the fundamental drivers in the
growth of Sunbeam."
The Chairman and Chief Executive Officer of Ogilvy's Chicago office,
Tom Hall, commented, "The Sunbeam brand has an awesome amount of equity. The
opportunity to reunite Sunbeam with its core customers is very exciting to us
from a branding perspective." He continued, "Al Dunlap has proven in the past
that he knows the power of brands and he understands their value. We couldn't be
more delighted to work with him and with Sunbeam."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's
Sunbeam(R) and Oster(R) brands have been household names for generations, both
domestically and abroad, and the Company is a market leader in many of its
product categories.
****************
Contact: Media (Sunbeam): Investor Relations: Ogilvy & Mather Chicago
Pete Judice John DeSimone Marilyn Dickert
(212)614-4506 (954)767-2100 (312)856-8366
[SUNBEAM LOGO]
FOR IMMEDIATE RELEASE
SUNBEAM ANNOUNCES LOCATION OF
CONSOLIDATED CORPORATE HEADQUARTERS
Fort Lauderdale, FL, (October 16, 1996) -- Sunbeam Corporation
(NYSE:SOC) announced today that it has entered into a lease to locate its
worldwide corporate headquarters in Delray Beach, Florida. The new location is
approximately 25 miles north of the Company's current corporate headquarters in
Fort Lauderdale. The move was necessitated by the Company's intention to
consolidate its domestic regional headquarters locations into a single
headquarters in South Florida. While the details of the consolidation have not
been completed, Sunbeam has determined that it will require more space than is
available in its current location in Fort Lauderdale.
Albert J. Dunlap, Chairman and CEO of Sunbeam stated, "We expect to
consolidate most of our senior administrative functions into our new location,
thereby creating a much more efficient and effective organization." Mr. Dunlap
added, "We worked very hard to remain at our current location in Fort
Lauderdale, but the building we are in currently is quite full. Adequate space
simply was not available here. However, we wanted to stay in the South Florida
area and are extremely excited with our new location in Delray Beach. Sunbeam
will bring numerous professional jobs to the area and will be a real asset to
Delray Beach and Palm Beach County."
Mr. Dunlap added further, "We neither sought nor received any
assistance from the Business Development Board of Palm Beach County or any
governmental agencies in making this decision. We made our decision solely on
the adequacy and quality of space available at this
<PAGE>
location and commitments made by the landlord, the Crocker Realty organization,
with regard to Sunbeam's anticipated time requirements."
Sunbeam's new corporate headquarters will be located at 1615 South
Congress Avenue in Delray Beach. The Company expects to occupy the space by year
end and to have its new headquarters fully operational by January 1, 1997.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
Contact: Media: Investor Relations:
Pete Judice John DeSimone
Burson-Marsteller Manager, Investor Relations
New York SUNBEAM CORPORATION
(212)614-4506 (954)767-2100
[SUNBEAM LOGO]
FOR IMMEDIATE RELEASE:
SUNBEAM CORPORATION REPORTS THIRD QUARTER 1996 RESULTS
FORT LAUDERDALE, FL - October 23, 1996 - Sunbeam Corporation (NYSE:
SOC) announced third quarter sales of $244.9 million, 2% below third quarter
1995 sales of $250.7 million. Net loss per share for the quarter was ($.22),
compared to earnings of $.11 per share reported for the same period last year.
For the first nine months of 1996, sales increased approximately 4% over 1995,
from $899.0 million to $930.7 million, and earnings per share of $.08 for the
first nine months of 1996 decreased 87% from $.61 per share reported for the
same period of 1995.
Albert J. Dunlap, Chairman and Chief Executive Officer, stated, "The
results for the quarter, as expected, continue to reflect the inflated cost
structure and the lack of an appropriate growth strategy that have plagued the
Company for the past two years. The financial performance over this period
highlights why my new management team and I recently joined Sunbeam - to
implement a rapid and massive restructuring."
Mr. Dunlap continued, "We are focusing all of our energies on
restructuring Sunbeam and creating a dramatically different Company going
forward. The restructuring plan, which is nearly complete, will be the
culmination of an intensive review of every aspect and process of the business.
We expect to announce this restructuring plan, in detail, during the week of
November 11th, after approval of the plan by our Board of Directors. At that
time we will hold a conference call for investors and analysts."
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of outdoor and household brand name products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both domestically
and abroad, and the Company is a market leader in many of its product
categories.
****************
Contact: Media: Investor Relations
Pete Judice John DeSimone
(212)614-4506 (954)767-2100
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
NINE MONTHS ENDED THREE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 29, OCTOBER 1, SEPTEMBER 29, OCTOBER 1,
1996 1995 1996 1995
------------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
Net sales $930.7 $899.0 $244.9 $250.7
Cost of goods sold 766.8 702.7 216.1 197.5
------------- ----------- ------------- ----------
Gross profit 163.9 196.3 28.8 53.2
% of sales 17.6% 21.8% 11.8% 21.2%
Selling, general & administrative expense 140.3 106.4 53.1 35.6
------------- ----------- ------------- ----------
Operating earnings (loss) 23.6 89.9 (24.3) 17.6
% of sales 2.5% 10.0% -9.9% 7.0%
Interest expense 9.9 7.2 3.5 2.3
Other (income) expense, net 3.4 (1.4) 0.9 0.3
------------- ----------- ------------- ----------
Earnings (loss) before income taxes 10.3 84.1 (28.7) 15.0
Income taxes 3.8 33.6 (10.6) 6.0
------------- ----------- ------------- ----------
Net earnings (loss) $6.5 $50.5 ($18.1) $9.0
============= =========== ============= ==========
Earnings (loss) per share $0.08 $0.61 ($0.22) $0.11
============= =========== ============= ==========
Average number of common shares outstanding 83.8 83.0 83.6 82.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in millions)
NINE MONTHS ENDED
--------------------------------
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $6.5 $50.5
Depreciation and amortization 43.0 32.1
Deferred income taxes 3.2 18.9
------------- ----------
52.7 101.5
Decrease in cash from changes in working capital (69.6) (37.9)
Other (1.9) (14.7)
------------- ----------
(18.8) 48.9
INVESTING ACTIVITIES
Capital expenditures (55.7) (110.6)
Reduction in investments restricted for plant construction -- 37.5
Other 0.7 --
------------- ----------
(55.0) (73.1)
FINANCING ACTIVITIES
Net borrowings under revolving credit facility 55.0 35.0
Issuance of long-term debt 11.5 --
Purchase of shares for treasury -- (13.1)
Sale of treasury stock 4.4 --
Payment of debt obligations (1.4) (0.5)
Proceeds from exercise of warrants and options 3.3 9.8
Other (2.7) (8.0)
------------- ----------
70.1 23.2
------------- ----------
Net decrease in cash and cash equivalents (3.7) (1.0)
Cash and cash equivalents, beginning of period 28.3 26.3
------------- ----------
Cash and cash equivalents, end of period $24.6 $25.3
============= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
SEPTEMBER 29, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $24.6 $28.3
Receivables, net 194.6 216.2
Inventories 330.2 266.7
Deferred income taxes 23.5 26.3
Prepaid expenses and other current assets 13.1 19.6
------------- ------------
Total current assets 586.0 557.1
Property, plant and equipment, net 348.2 331.1
Trademarks and trade names, net 209.4 214.0
Other assets 52.7 56.5
------------- ------------
$1,196.3 $1,158.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $70.1 $94.2
Other current liabilities 83.2 95.2
------------- ------------
Total current liabilities 153.3 189.4
Long-term debt 226.4 161.1
Deferred income taxes 77.4 76.9
Non-operating and other long-term liabilities 117.5 130.3
Shareholders' equity 621.7 601.0
------------- ------------
$1,196.3 $1,158.7
============= ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 24,638
<SECURITIES> 0
<RECEIVABLES> 194,559
<ALLOWANCES> 0
<INVENTORY> 330,213
<CURRENT-ASSETS> 586,012
<PP&E> 504,313
<DEPRECIATION> 156,143
<TOTAL-ASSETS> 1,196,333
<CURRENT-LIABILITIES> 153,331
<BONDS> 226,372
0
0
<COMMON> 886
<OTHER-SE> 620,843
<TOTAL-LIABILITY-AND-EQUITY> 1,196,333
<SALES> 930,675
<TOTAL-REVENUES> 930,675
<CGS> 766,793
<TOTAL-COSTS> 766,793
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,901
<INCOME-PRETAX> 10,279
<INCOME-TAX> 3,801
<INCOME-CONTINUING> 6,478
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,478
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
