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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 MARCH 30, 1997
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 NUMBER 1-52
[GRAPHIC OMITTED]
SUNBEAM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 25-1638266
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1615 SOUTH CONGRESS AVENUE 33445
SUITE 200 (ZIP CODE)
DELRAY BEACH, FLORIDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
(561) 243-2100
(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 May 2, 1997, there were 84,726,432 shares of the registrant's Common
Stock ($.01 par value) outstanding.
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<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT
ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited)
for the three months ended March 31, 1996
and March 30, 1997 ................................................ 2
Condensed Consolidated Balance Sheets
as of December 29, 1996 and March 30, 1997 (Unaudited) ............ 3
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the three months ended March 31, 1996 and March 30, 1997 ...... 4
Notes to Condensed Consolidated Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ................................ 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ........................... 11
SIGNATURES ................................................................... . 12
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 30,
1996 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
Net sales ............................................................ $229,707 $ 253,450
Cost of goods sold ................................................... 181,608 185,669
Selling, general and administrative expense ........................... 32,585 33,008
--------- ---------
Operating earnings ................................................... 15,516 34,743
Interest expense ...................................................... 3,035 1,993
Other expense, net ................................................... 1,337 113
--------- ---------
Earnings from continuing operations before income taxes ............... 11,144 32,637
Income taxes (benefit):
Current ............................................................... 2,396 (1,052)
Deferred ............................................................ 2,128 13,128
--------- ---------
4,524 12,076
--------- ---------
Earnings from continuing operations .................................... 6,620 20,561
Earnings (loss) from discontinued operations ........................... 10,741 (13,713)
--------- ---------
Net earnings ......................................................... $ 17,361 $ 6,848
========= =========
Net earnings per share of common stock from continuing operations ...... $ .08 $ .24
========= =========
Net earnings per share of common stock ................................. $ .21 $ .08
========= =========
Average number of common and common
equivalent shares outstanding ....................................... 82,530 86,978
Dividends declared per share of common stock ........................ $ .01 $ .01
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 29, MARCH 30,
1996 1997
--------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets: .............................................
Cash and cash equivalents .................................... $ 11,526 $ 30,415
Receivables, net .......................................... 213,438 296,716
Inventories ................................................ 162,252 148,011
Net assets of discontinued operations
and other assets held for sale ............................ 102,847 20,655
Deferred income taxes ....................................... 93,689 75,132
Prepaid expenses and other current assets .................. 40,411 38,725
----------- -----------
Total current assets .................................... 624,163 609,654
Property, plant and equipment, net ........................... 220,088 217,453
Trademarks and trade names, net .............................. 200,262 199,028
Other assets ................................................ 28,196 27,020
----------- -----------
$ 1,072,709 $ 1,053,155
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt ...... $ 921 $ 848
Accounts payable .......................................... 107,319 100,648
Restructuring accrual ....................................... 63,834 45,309
Other current liabilities .................................... 99,509 113,349
----------- -----------
Total current liabilities ................................. 271,583 260,154
Long-term debt ............................................. 201,115 175,235
Non-operating and other long-term liabilities ............... 152,451 151,074
Deferred income taxes ....................................... 52,308 53,532
Shareholders' equity:
Common stock (issued 88,441,479 and 89,195,790 shares) ...... 884 892
Other shareholders' equity ................................. 457,756 475,656
Treasury stock, at cost (4,478,814 shares) .................. (63,388) (63,388)
----------- -----------
Total shareholders' equity .............................. 395,252 413,160
----------- -----------
$ 1,072,709 $ 1,053,155
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 30,
1996 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings ................................................... $ 17,361 $ 6,848
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization ................................. 11,376 10,587
Loss on sale of discontinued operations, net of taxes ......... - 13,713
Deferred income taxes .......................................... 2,128 13,128
Decrease in cash from changes in working capital and other ...... (63,799) (66,969)
--------- ---------
Net cash used in operating activities ........................... (32,934) (22,693)
--------- ---------
INVESTING ACTIVITIES:
Capital expenditures, net ....................................... (20,336) (10,821)
Proceeds from sales of divested operations and other assets....... - 70,404
--------- ---------
Net cash provided by (used in) investing activities ............ (20,336) 59,583
--------- ---------
FINANCING ACTIVITIES:
Net borrowing (payments) under revolving credit facility ......... 40,000 (20,000)
Issuance of long-term debt ....................................... 6,500 -
Payments of debt obligations .................................... (642) (6,322)
Proceeds from exercise of stock options ........................ 73 8,866
Other, net ...................................................... (778) (545)
--------- ---------
Net cash provided by (used in) financing activities ............ 45,153 (18,001)
--------- ---------
Net increase (decrease) in cash and cash equivalents ............ (8,117) 18,889
Cash and cash equivalents at beginning of period .................. 28,273 11,526
--------- ---------
Cash and cash equivalents at end of period ........................ $ 20,156 $ 30,415
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. OPERATIONS AND BASIS OF PRESENTATION
Sunbeam Corporation (the "Company") is a leading designer, manufacturer and
marketer of consumer branded products. The Sunbeam- and Oster- 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, catalogs, Company-owned outlet stores, television shopping
channels, hardware stores, home centers, drug and grocery stores, pet supply
retailers, as well as independent distributors and the military. The Company
also sells its products to commercial end-users such as hotels and other
institutions.
In the opinion of management, the unaudited condensed consolidated
financial statements furnished herein include all adjustments (with the
exception of the loss from discontinued operations in the first quarter of 1997)
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. Certain prior year amounts have been
reclassified to reflect discontinued operations as described in Note 4. 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 1996 Annual Report on Form 10-K ("Form 10-K").
2. SUPPLEMENTAL FINANCIAL STATEMENT DATA
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 29, MARCH 30,
1996 1997
--------------- -----------
<S> <C> <C>
Inventories:
Finished goods ................................. $ 85,213 $ 63,045
Work in process ................................. 25,167 32,391
Raw materials and supplies ..................... 52,272 52,575
---------- ----------
$ 162,252 $ 148,011
========== ==========
Property, plant and equipment:
Land .......................................... $ 2,524 $ 2,394
Buildings and improvements ..................... 95,619 93,687
Machinery and equipment ........................ 258,199 236,330
---------- ----------
356,342 332,411
Accumulated depreciation and amortization ...... (136,254) (114,958)
---------- ----------
$ 220,088 $ 217,453
========== ==========
Trademarks and trade names:
Gross .......................................... $ 245,307 $ 229,969
Accumulated amortization ........................ (45,045) (30,941)
---------- ----------
$ 200,262 $ 199,028
========== ==========
</TABLE>
5
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 30,
1996 1997
------------ -----------
<S> <C> <C>
Cash paid during the period for:
Interest ........................... $1,280 $1,103
======= =======
Income taxes (refunds) .............. $2,629 $(11,920)
======= =======
</TABLE>
3. RESTRUCTURING COSTS
During the fourth quarter of 1996, the Company initiated a restructuring
and growth plan. As a result, the Company recorded a pre-tax special charge to
earnings of approximately $337.6 million in the fourth quarter of 1996 of which
approximately 20% was for cash items.
During the first quarter of 1997, the restructuring reserve was reduced by
$18.5 million as a result of cash and non-cash charges. The following table sets
forth the details and the cumulative activity in the restructuring account as of
March 30, 1997 (in millions):
<TABLE>
<CAPTION>
RESERVE BALANCE CASH NON-CASH RESERVE BALANCE
AT DECEMBER 29, 1996 REDUCTIONS REDUCTIONS AT MARCH 30, 1997
----------------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
Severance and other employee costs . $36.9 $ (8.4) $ (5.5) $23.0
Closure and consolidation of facilities
and related exit costs ............... 26.9 (4.6) - 22.3
------- -------- -------- -------
Total .............................. $63.8 $ (13.0) $ (5.5) $45.3
======= ======== ======== =======
</TABLE>
4. DISCONTINUED OPERATIONS AND OTHER ASSETS HELD FOR SALE
On February 10, 1997, the Company entered into an agreement to sell its
furniture business (by a sale of assets) to a subsidiary of U.S. Industries,
Inc., which was completed on March 17, 1997. The Company initially recorded a
provision for estimated losses to be incurred on the sale of the furniture
business of $32.4 million, net of applicable income tax benefits, for the fiscal
year ended December 29, 1996.
During the first quarter of 1997, upon the completion of the sale, the
Company provided for additional losses on disposal of the furniture business in
the amount of $13.7 million, net of applicable income tax benefits as a result
of lower than anticipated sales proceeds.
6
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
5. EARNINGS PER SHARE
During the first quarter of 1997, the Financial Accounting Standards Board
("FASB") issued Statement No. 128, EARNINGS PER SHARE, which supersedes
Accounting Principles Board ("APB") Opinion No. 15, EARNINGS PER SHARE. SFAS No.
128 is effective for financial statements for both interim and annual periods
after December 15, 1997. Early application is prohibited; although, footnote
disclosure of pro forma earnings per share ("EPS") amounts computed under SFAS
No. 128 is permitted, as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 30,
1996 1997
------------ -----------
<S> <C> <C>
Primary EPS as reported ............ $ .21 $ .08
Effect of SFAS No. 128 ............... - -
------- -------
Basic EPS as restated ............... $.21 $.08
======= =======
Fully diluted EPS as reported ...... $ .21 $ .08
Effect of SFAS No. 128 ............... - -
------- -------
Diluted EPS as restated ............ $.21 $.08
======= =======
</TABLE>
7
<PAGE>
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 months
ended March 31, 1996 and March 30, 1997 and the 1996 Form 10-K.
RESULTS OF OPERATIONS
The table below sets forth selected operating data of the Company for the
three months ended March 31, 1996 and March 30, 1997:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 30,
1996 1997
------------ -----------
<S> <C> <C>
Net sales .......................................... 100.0% 100.0%
Cost of goods sold ................................. 79.1 73.3
-------- --------
Gross margin ....................................... 20.9 26.7
Selling, general and administrative expense ...... 14.2 13.0
-------- --------
Operating earnings ................................. 6.7% 13.7%
======== ========
</TABLE>
NET SALES
Net sales from continuing operations for the Company for the three months
ended March 30, 1997 were $253.5 million, an increase of $23.7 million (10.3%)
over the comparable period of the prior year.
Domestic sales from ongoing operations, which represents approximately 80%
of total Company sales, increased by 12.5% for the three months ended March 30,
1997. The Company experienced sales growth in each of its five product
categories- Appliances, Health Care, Personal Care and Comfort, Outdoor Cooking
and Away From Home. This growth was achieved through a combination of factors
including enhanced channels of distribution, modest price increases, new product
introductions and the results of the Company's $12.0 million advertising
campaign launched in the fourth quarter of 1996. The Company also realized $1.1
million in revenues during the first quarter of 1997 from its new retail outlet
stores which have opened over the last five months.
The Company's international sales increased 14.7% for the three months
ended March 30, 1997. Essentially every international region in which Sunbeam
operates, including Canada, Mexico, Latin America, and the Far East, experienced
substantial sales growth over the comparable period of the prior year, except
for Venezuela which had inflated sales activity in the first quarter of 1996 due
to the April 1996 devaluation of the bolivar. The current quarter's sales growth
internationally was spurred by the introduction of 42 new 220 volt products and
the signing of 15 new distribution and licensing agreements giving the Company
access to fast-growing markets in Asia and Latin America.
GROSS MARGIN
The gross margin percentage for the three months ended March 30, 1997
increased 5.8 percentage points, to 26.7%. This increase reflects the successful
implementation of the Company's restructuring and growth initiatives announced
on November 12, 1996. Specifically, the Company has now reduced its number of
manufacturing facilities from 26 to 9 and warehouses from 61 to 18 and has taken
other actions contributing to the margin improvement, including the elimination
of low margin and/or unprofitable products/stock keeping units (SKU's) and the
consolidation of the Company's purchasing activities resulting in procurement
savings for raw materials.
OPERATING EARNINGS
Operating earnings for the quarter ended March 30, 1997 increased $19.2
million over the prior year, or 123.9%, to $34.7 million. As a percentage of
sales, operating earnings increased from 6.7% in
8
<PAGE>
1996 to 13.7% in 1997. This increase is primarily attributable to the gross
margin improvement described above as well as a 1.2 percentage point decrease in
selling, general and administrative expenses ("SG&A") as a percent of sales, to
13.0%.
The SG&A decrease, as a percentage of sales, for the three months ended
March 30, 1997 was also indicative of the Company's successful implementation of
its cost cutting initiatives associated with the restructuring plan announced in
the fourth quarter of 1996. The reduction in SG&A from these initiatives,
including the consolidation of six divisional and regional headquarters into one
worldwide headquarters and the outsourcing of certain back-office functions,
were partially offset by the Company's renewed commitment to marketing, media
advertising and sales promotion in support of new product introductions and
efforts to increase brand relevance.
INTEREST EXPENSE
Interest expense for the three months ended March 30, 1997 decreased $1.0
million from the comparable period of the prior year due to lower borrowing
levels.
OTHER EXPENSE, NET
Other expense, net decreased from $1.3 million for the first quarter of
1996 to $0.1 million for the first quarter of 1997. This change is primarily
attributable to the recognition by the Company of approximately $1.0 million in
foreign exchange losses in the first quarter of 1996 associated with the April
1996 Venezuelan currency devaluation.
INCOME TAXES
The Company's effective income tax rate for both the three months ended
March 31, 1996 and March 30, 1997 was 37.0%.
EARNINGS FROM CONTINUING OPERATIONS AND EARNINGS PER SHARE FROM CONTINUING
OPERATIONS
For the three months ended March 30, 1997, the Company's earnings from
continuing operations were $20.5 million, an increase of $13.9 million over
earnings from continuing operations of $6.6 million in 1996. Earnings per share
from continuing operations for the three months ended March 30, 1997 were $.24,
an increase of $.16 from $.08 in 1996.
NET EARNINGS AND NET EARNINGS PER SHARE
The Company's discontinued furniture operations broke-even for the three
months ended March 30, 1997 on revenues of $51.6 million compared to earnings of
$10.7 million in 1996 on revenues of $110.2 million. In addition, the Company
provided for additional losses on disposal of the furniture business in the
amount of $13.7 million, net of applicable income tax benefits, in the first
quarter of 1997. The additional provision was required primarily due to lower
than anticipated sales proceeds.
As a result of the additional loss provision from discontinued operations,
the Company's net earnings for the three months ended March 30, 1997 were $6.9
million, a decrease of $10.5 million below net earnings of $17.4 million in
1996. Net earnings per share for the three months ended March 30, 1997 were
$.08, a decrease of $.13 from $.21 in 1996.
LIQUIDITY AND CAPITAL RESOURCES
At March 30, 1997, the Company had cash and cash equivalents of $30.4
million and total debt of $176.1 million. Cash used in operating activities for
the three months ended March 30, 1997 was $22.7 million compared to $32.9
million for the comparable period of 1996. This decrease is primarily
attributable to an increase in earnings before non-cash charges.
9
<PAGE>
Capital spending totaled $10.8 million for the first quarter of 1997 and
was primarily attributable to new product development and cost reduction
initiatives. Cash provided by investing activities for the first quarter of 1997
also included $70.4 million from the divestiture of product categories and
businesses determined to be non-core to Sunbeam operations in conjunction with
the Company's fourth quarter 1996 restructuring and growth plan.
During the first three months of 1997, the Company repaid $20.0 million
under its revolving credit facility in comparison to net borrowings of $40.0
million during the first quarter of 1996.
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 Part 1, Item 1 under the heading "Cautionary Statements" in the 1996
Form 10-K, which cautionary statements are incorporated herein by reference.
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
<TABLE>
<S> <C>
3a. By-Laws of the Company, as amended.
10a. Amended and Restated Sunbeam Corporation Equity Team Plan.
11a. Calculation of 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.a Press Release dated April 23, 1997, reporting first quarter 1997
results.
</TABLE>
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the first quarter
of 1997.
11
<PAGE>
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: May 14, 1997 By: /s/ Russell A. Kersh
-----------------------------------
Russell A. Kersh
Executive Vice President,
Finance and Administration
(Principal Financial Officer
and duly authorized to sign
on behalf of the Registrant)
12
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.a By-Laws of the Company, as amended
10.a Amended and Restated Sunbeam Corporation Equity Team Plan
11.a Calculation of 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.a Press Release dated April 23, 1997, reporting first quarter
1997 results
EXHIBIT 3.a
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.
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Section 3.17 MANDATORY RETIREMENT. No nominee for election as a
director shall be seventy (70) years or older on the date of election. A
director who attains the age of seventy (70) during his or her term of office
shall complete his or her term but shall not be eligible to stand for reelection
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.
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.
<PAGE>
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 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.
<PAGE>
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 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
<PAGE>
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 by reason of the fact that he, his testator or intestate
representative, 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
(or by) any other corporation of any type or kind, domestic or foreign, which he
served in any capacity at the request of the Corporation. Expenses so incurred
by any such person in defending or investigating a threatened or pending 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 upon receipt of
an undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized by this Article VIII. 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
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.
EXHIBIT 10.a
AMENDED AND RESTATED
SUNBEAM CORPORATION
EQUITY TEAM PLAN
(Amended as of April 15, 1997)
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
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<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 (from and
after July 18, 1996) shall become exercisable with
respect to one-third of the shares subject to the
Option beginning on the first anniversary of the
Grant Date and as to an additional one-third on each
of the second and third anniversaries of the Grant
Date (each twelve month period ending on an
anniversary of a Grant Date being referred to herein
as an "Option Year"), provided in each case that the
Participant shall have remained an employee or a
director of the Company (or a subsidiary), or in the
case of a Designated Other, shall have remained in
the position set forth in the Stock Option Agreement,
continuously since the Grant Date. Notwithstanding
the foregoing, during the remaining term of any
options (if not already so exercisable) : (A) if a
Participant's employment or service as a director, or
in the case of a Designated Other, the period of
service as defined in the Stock Option Agreement,
terminates due to death, all Options held by the
Participant at death shall become immediately
exercisable in full; (B) upon a Change in Control,
all Options held by such Participant who is then an
employee or director of the Company (or a subsidiary)
shall become immediately exercisable in full; and (C)
in the event that the exercisability of an Option
accelerates due to a Change in Control, Participants
who are subject to Section 16(b) of the Exchange Act
may not sell the shares acquired upon such
accelerated exercise within six months of the Grant
Date of such Option.
(iv) Except to the extent permitted by Rule 16b-3 or its
successor, Options shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise
disposed of, except by will or the laws of descent
and distribution, pursuant to a qualified domestic
relations order ("QDRO") as defined in the Code or
ERISA (or the rules thereunder) or as otherwise set
forth in this Section 4(a)(iv). Each Option shall be
exercisable during the lifetime of a Participant only
by the Participant to whom it was granted, and after
the Participant's death only by the Participant's
estate or legal representative. To the extent
exercisable, an Option may be exercised in whole at
any time, or in part from time to time, during the
term of the Option.
(v) Any Option may be converted, modified, forfeited or
canceled, prospectively or retroactively, in whole or
in part, by the Committee in its sole discretion;
provided,
3
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however, that no such action shall adversely affect
the rights of any Participant under any Option
granted prior to such action without his consent.
Except as may be otherwise provided in an Agreement,
the Committee may, in its sole discretion, in whole
or in part, waive any restrictions or conditions
applicable to, or accelerate the vesting of, any
Option.
(b) STOCK AWARDS.
(i) Upon the grant of a Restricted Stock Award, a stock
certificate representing a number of shares of Stock
equal to the number of shares of Restricted Stock
granted to a Participant shall be registered in the
Participant's name but shall be held in custody by
the Company for the Participant's account. The
Participant shall generally have the rights and
privileges of a stockholder as to such Restricted
Stock, including the right to vote such Restricted
Stock, except that the following restrictions (the
"Restrictions") shall apply: (A) the Participant
shall not be entitled to delivery of the certificate
until the Restricted Period (set forth in paragraph
(iii) below) applicable to such Restricted Stock has
expired or terminated and until any other conditions
prescribed by the Committee are satisfied; (B) none
of the Restricted Stock may be sold, transferred,
assigned, pledged, or otherwise encumbered or
disposed of during the Restricted Period applicable
to such Restricted Stock and prior to the
satisfaction of any other conditions prescribed by
the Committee; and (C) shares of Restricted Stock
shall be forfeited and all rights of the Participant
to such Restricted Stock shall terminate without
further obligation on the part of the Company unless
the Participant has (1) remained an employee or a
director of the Company (or a subsidiary) until the
expiration or termination of the Restricted Period
applicable to such Restricted Stock (or in the case
of a Designated Other, the duration specified in the
Restricted Stock Award Agreement) and (2) satisfied
any other conditions prescribed by the Committee
applicable to such Restricted Stock. At the
discretion of the Committee, cash and stock dividends
with respect to the Restricted Stock may be either
currently paid or withheld by the Company for the
Participant's account. Cash dividends so withheld by
the Committee shall not be subject to forfeiture.
Upon the forfeiture of any shares of Restricted
Stock, such forfeited Restricted Stock shall be
transferred to the Company without further action by
the Participant. The Participant shall have the same
rights and privileges, and be subject to the
Restrictions, with respect to any shares or other
property received pursuant to Section 9.
(ii) Upon the expiration or termination of the Restricted
Period with respect to shares of Restricted Stock and
the satisfaction of any other conditions prescribed
by the Committee, the Restrictions applicable to such
Restricted Stock shall lapse and a stock certificate
for the number of shares of Stock with respect to
which the Restricted Period has lapsed shall be
delivered, free of all restrictions, except any that
may be imposed by law, to the Participant or the
Participant's beneficiary or estate, as the case may
be. The Company shall not be required to deliver any
fractional share of Stock but will pay, in lieu
thereof, the Fair Market Value (determined as of the
date the Restricted Period expires or terminates) of
such fractional share to the Participant or the
Participant's beneficiary or estate, as the case may
be. No payment will be required from the Participant
upon the issuance or delivery of any shares of Stock
under this paragraph, except that any amount
necessary to satisfy applicable federal, state or
local tax requirements shall be withheld or paid
promptly upon notification of the amount due and
prior to or concurrently with the issuance or
delivery of a certificate representing such shares.
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(iii) Unless otherwise specified by the Committee at the
time of the award and included in the Restricted
Stock Award Agreement, the Restrictions shall also
lapse with respect to one- third of the Restricted
Stock subject to all other Restricted Stock Awards on
each of the first through the third anniversaries of
the Grant Date, provided in each case that the
Participant shall have remained an employee or a
director of the Company (or a subsidiary)
continuously since the date of grant (or in the case
of a Designated Other, shall have complied with the
terms and conditions of the Restricted Stock Award
Agreement). Notwithstanding the foregoing: (A) if a
Participant's employment or service as a director, or
in the case of a Designated Other, the period defined
in the Restricted Stock Award Agreement, terminates
due to death, the Restrictions shall lapse with
respect to all Restricted Stock Awards held by the
Participant at death (if not already so lapsed); (B)
upon a Change in Control, the Restrictions shall
lapse with respect to all Restricted Stock Awards
held by such Participant who is an employee or
director of the Company (or a subsidiary) (if not
already so lapsed); and (C) in the event of an
accelerated lapse of Restrictions due to a Change in
Control, Participants who are subject to Section
16(b) of the Exchange Act may not sell the shares of
Stock whose Restrictions have so lapsed within six
months of the Grant Date of the Restricted Stock
Award pursuant to which such Stock was received. The
"Restricted Period" as to any shares constituting
part of a Restricted Stock Award shall be the period
of time commencing with the Grant Date of a
Restricted Stock Award and ending with the date on
which the Restrictions lapse with respect to any such
shares, or any portion thereof.
(c) In the event that the acceleration of (i) the exercisability
of an Option or (ii) the lapse of Restrictions relating to
Restricted Stock upon a Change in Control and a Change in
Status results in excise tax pursuant to Section 4999 of the
Code, or any successor or similar provision thereto, or
comparable state or local tax laws, the Company shall pay to
the Participant such additional compensation as is necessary
(after taking into account all Federal, state and local income
and excise taxes payable by the Participant as a result of the
receipt of such compensation ) to place the Participant in the
same after-tax position he would have been in had no such
excise tax (or any interest or penalties thereon) been paid or
incurred. The amount of such payment shall be determined by
the independent accounting firm serving as the Company's
outside auditor immediately prior to the Change in Control.
5. EXERCISE OF OPTIONS.
(a) The Exercise Price of the shares purchasable under an Option
shall be the Fair Market Value per share on the Grant Date of
such Option, subject to subsequent adjustment pursuant to the
provisions of Section 9.
(b) Options shall be considered exercised (herein the "Exercise
Date") on the date written notice, in such form as the
Committee may prescribe, is received by the Option Plan
Administrator of the Company, advising of the exercise of an
Option and either transmitting payment of the total Exercise
Price for the number of shares of Stock involved or electing
one of the alternative payment procedures set forth in Section
5(c) below.
(c) The Exercise Price shall be paid in cash (including cash
obtained through a margin loan on the shares as to which the
Option is being exercised) or (and provided (x) the use of the
following
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procedure by a Participant would comply with safeguards
established by the Committee designed to avoid "short-swing"
profits to the Participant under Section 16(b) of the Exchange
Act, and (y) does not otherwise violate any applicable laws)
through (i) a broker-assisted cashless exercise program
established by the Committee, based on the actual proceeds
from the sale of share of Stock; or (ii) in shares of Stock,
valued on the basis of the closing market price of the Stock
on the Exercise Date.
(d) Subject to the provisions of Section 6 and the other
provisions of the Plan, the Stock Option Agreement and the
Option, the Company shall issue shares of Stock in the
Participant's name as soon as practicable (but in no event
later than 30 days) after the Exercise Date. The Participant
shall not be deemed to be a holder of any shares pursuant to
an Option, and shall not have any rights as a stockholder in
connection with such shares, until the date of transfer of
shares of Stock to the Participant. The Company shall have no
liability of any nature whatsoever to any Participant by
reason of any change in the market price of the Stock during
the period of time between the Exercise Date and the date on
which any shares of Stock resulting from the exercise are
issued or sold.
6. RESTRICTIONS.
(a) Notwithstanding any other provision of the Plan, an Option or
Restricted Stock Award to the contrary, no Option shall be
exercised, and the Company shall not be obligated to issue or
transfer shares of Stock under any Option or Restricted Stock
Award, until the Company shall have received such assurances
as the Company may reasonably request from its counsel that
the exercise of the Option and the issuance and transfer of
shares pursuant to the Option or Restricted Stock Award will
not violate the Securities Act of 1933, as amended, or any
other applicable Federal or state laws. In connection with any
such issuance or transfer, the Participant shall, if requested
by the Company, give assurances satisfactory to counsel to the
Company, in respect of the Participant's investment intent or
such other matters as counsel to the Company may deem
necessary or desirable to assure compliance with all
applicable legal requirements.
(b) No provisions of the Plan or any Option or Restricted Stock
Award shall be interpreted or construed to obligate the
Company to register any Stock under Federal or state law.
(c) The Company and the Committee reserve the right to investigate
at any time the circumstances surrounding any exercise of
Options, including any investigation regarding whether a
Participant is in compliance with the provisions of Section 13
hereof (or has threatened or is reasonably believed to intend
to violate the provisions of Section 13 hereof), and the
Company and the Committee shall have no liability or
responsibility to any Participant for any alleged damage
sustained by the Participant by reason of any delay in the
implementation of an Option exercise during the pendency of
any such investigation, whether by reason of any change in the
market price of the Stock or otherwise.
(d) Notwithstanding any other provision hereof, the Committee
shall have the right at any time to deny or delay a
Participant's exercise of Options if such Participant is
reasonably believed by the Committee (i) to be engaged in
material conduct adversely affecting the Company or (ii) to be
contemplating such conduct, unless and until the Committee
shall have received reasonable assurance that the Participant
is not engaged in, and is not contemplating, such material
conduct adverse to the interests of the Company.
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(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
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 Section 1.425-1(a) that
would not constitute a "modification" for purposes of Code Section
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
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<PAGE>
of the Restricted Stock Award in effect before such transaction.
10. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The Committee
shall, subject to the provisions of the Plan, have full power
and authority to administer the Plan, to select the
Participants in the Plan, and, except for grants and awards
which are automatically made to Outside Directors as provided
pursuant to Section 3 of the Plan, to determine the number of
shares to be made subject to each Option and Restricted Stock
Award and all terms and conditions of each Option and
Restricted Stock Award. The Committee shall have the power to
interpret the Plan and to adopt such rules for the
administration, interpretation and application of the Plan as
are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and
binding upon all Participants, the Company and all other
interested persons, absent a determination by a court of
competent jurisdiction that the Committee has acted in bad
faith or has engaged in reckless or willful misconduct.
(b) Members of the Committee and the Board and officers
administering this Plan shall be fully protected in taking
actions under the Plan or in relying upon the advice of
counsel and shall incur no liability except for bad faith,
recklessness or willful misconduct in the performance of their
duties.
(c) Except as required by Rule 16b-3 with respect to grants of
Options to individuals who are subject to Section 16 of the
Exchange Act, or as otherwise required for compliance with
Rule 16b-3 or other applicable law, the Committee may delegate
all or any part of its authority under the Plan to an
employee, employees or committee of employees.
(d) To the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practices and to
further the purpose of the Plan, the Committee may, without
amending this Plan, establish special rules applicable to
Options granted to Participants who are foreign nationals, are
employed outside the United States, or both, including rules
that differ from those set forth in the Plan, and grant
Options to such Participants in accordance with those rules.
(e) Determinations by the Committee under the Plan relating to the
form, amount and terms and conditions of grants and awards
need not be uniform, and may be made selectively among persons
who receive or are eligible to receive grants and awards under
the Plan, whether or not such persons are similarly situated.
11. GENERAL PROVISIONS.
(a) Nothing in this Plan or in any instrument executed pursuant
hereto shall confer upon any Person any right to continue in
the employment or other service of the Company (or any
subsidiary), or shall affect the right of the Company (or any
subsidiary) to terminate the employment or other service of
any person at any time with or without Cause.
(b) The Company may make appropriate provisions for the
withholding of any taxes which the Company determines it is
required to withhold in connection with any Option or
Restricted Stock Award including, at the request of a
Participant and provided that it does not violate any
applicable
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<PAGE>
laws, the payment of such withholding taxes through a
broker-assisted sale of a sufficient number of shares
underlying the Option or subject to the Restricted Stock Award
or by delivery to the Company of shares of Stock previously
owned by the Participant, in either case having an actual sale
price equal to the amount of such taxes. Notwithstanding the
foregoing, a Participant whose transactions in Stock are
subject to Section 16(b) of the Exchange Act may make a share
withholding election only if it complies with safeguards
established by the Committee designed to avoid "short swing"
profits to the Participant under Section 16(b) of the Exchange
Act. The certificates evidencing a Restricted Stock Award made
to an Outside Director pursuant to Section 3(c) hereof shall
be automatically reduced by 28% to provide for the estimated
Federal income tax payment obligation of the Outside Director,
or by such other higher percentage as may be required by law
to be withheld, with the Company remitting to the appropriate
tax authorities the fair market value of the Restricted Stock
Award for which the certificates are not so delivered.
(c) By accepting any benefits under the Plan, each Participant,
and each Person claiming under or through the Participant,
shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, all provisions of the Plan.
Each Participant hereby further agrees that amendments and
modifications to the Plan, which may be adopted from time to
time by the Committee and/or the Board of the Corporation (as
set forth in Section 12 hereof), shall be binding upon such
Participant and upon all Options or Restricted Stock which the
Participant may hold, including (with retroactive effect)
Options or Restricted Stock previously granted to the
Participant, except to the extent set forth in Section 12
hereof.
(d) With respect to Participants subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to
comply with all applicable provisions of Rule 16b-3 or its
successor. To the extent any provision the Plan or action by
the Plan administrators fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed
advisable by the Committee.
(e) A Participant shall have no rights as a stockholder of the
Company with respect to any Shares to be issued upon exercise
of an Option until such Participant has exercised such Option
and becomes a holder of such Shares.
12. AMENDMENTS; MODIFICATION AND TERMINATION.
This Plan may be amended or modified by the Committee, with
ratification by the Board, or terminated by the Board, at any time and
in any respect, except that no amendment shall be made without the
approval of the shareholders of the Company if shareholder approval
would be required by Rule 16b-3 under the Exchange Act or any other law
or rule of any governmental authority, stock exchange or other
self-regulatory organization to which the Company is subject. No such
amendment, modification or termination shall have effect to reduce the
number of shares as to which any Option or Restricted Stock Award
previously has been granted to a Participant; to extend the vesting
schedule with respect to any Option or Restricted Stock Award or to
extend the period of non-competition or confidentiality as set forth in
Section 13 hereof. In the event of the passage of any law, rule or
regulation or a determination by any regulatory agency or court,
requiring an adverse change in the Company's accounting or tax
treatment relating to the Plan, the Committee shall have the right to
modify the terms of outstanding Options and Restricted Stock Awards to
the extent necessary to avoid the adverse consequences of such change.
13. CONFIDENTIALITY AND NON-COMPETITION; CONDUCT NOT IN THE INTEREST OF THE
CORPORATION.
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<PAGE>
By accepting Options or Restricted Stock Awards under the Plan and as a
condition to the exercise of Options and the enjoyment of any of the
benefits of the Plan, each Participant agrees as follows:
(a) CONFIDENTIALITY -- During the period of each Participant's
employment or service as a director with the Company (or the
Participant's engaging in any other activity with or for the
Company) and for a two year period thereafter, each
Participant shall treat and safeguard as confidential and
secret all Confidential Information received by such
Participant at any time. Without the prior written consent of
the Company, except as required by law, such Participant will
not disclose or reveal any Confidential Information to any
third party whatsoever or use the same in any manner except in
connection with the businesses of the Company and its
subsidiaries. In the event that a Participant is requested or
required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand
or other process) to disclose (i) any Confidential Information
or (ii) any information relating to his opinion, judgment or
recommendations concerning the Company or its subsidiaries as
developed from the Confidential Information, Participant will
provide the Company with prompt written notice of any such
request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the
provisions contained herein. If, failing the entry of a
protective order or the receipt of a waiver hereunder,
Participant is, in the reasonable opinion of his counsel,
compelled to disclose Confidential Information, Participant
shall disclose only that portion of the Confidential
Information which his counsel advises that he is compelled to
disclose and will exercise best efforts to obtain assurances
that confidential treatment will be accorded such Confidential
Information.
(b) NON-COMPETITION -- During the period of employment with the
Company or its subsidiaries of any Participant (other than a
director) compensated at a rate (including bonuses) in excess
of $75,000 per year in cash compensation from his employment
with the Company or any of its subsidiaries (determined as of
the most recently completed fiscal year of the Company), and,
for a two-year period thereafter (the "Non-Compete Period"),
each such Participant shall not, without prior written consent
of the Committee, do, directly or indirectly, any of the
following:
(1) own, manage, control or participate in the ownership,
management, or control of, or be employed or engaged
by or otherwise affiliated or associated with, any
other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise
engage in any business which competes with the
business of the Company or any of its subsidiaries
(as such business is conducted during the term of
such Participant's employment with the Company or its
subsidiaries) in the geographical regions in which
such business is conducted; PROVIDED, HOWEVER, that
the ownership of a maximum of one percent of the
outstanding stock of any publicly traded corporation
shall not violate this covenant; or
(2) employ, solicit for employment or assist in employing
or soliciting for employment any present, former or
future employee, officer or agent of the Company or
any of its subsidiaries.
In the event any court of competent jurisdiction should
determine that the foregoing covenant of non-competition is
not enforceable because of the extent of the geographical area
or the duration thereof, then the Company and the affected
Participant hereby petition such court to modify the
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foregoing covenant to the extent, but only to the extent,
necessary to create a covenant which is enforceable in the
opinion of such court, with the intention of the parties that
the Company shall be afforded the maximum enforceable covenant
of non-competition which may be available under the
circumstances and applicable law.
(c) Each Participant acknowledges that remedies at law for any
breach by him of this section 13 may be inadequate and that
the damages resulting from any such breach are not readily
susceptible to being measured in monetary terms. Accordingly,
each Participant acknowledges that upon his violation of any
provision of this Section 13, the Company will be entitled to
immediate injunctive relief and may obtain an order
restraining any threatened or future breach. Each Participant
further agrees, subject to the proviso at the end of this
sentence, that if he violates any provision of this Section
13, he shall immediately forfeit any rights and benefits under
this Plan and shall return to the Company any unexercised
Options and forfeit the rights under any Restricted Stock
Awards and shall return any shares of Stock held by such
Participant received upon exercise of any Option or the lapse
of the Restrictions relating to Restricted Stock Awards
granted hereunder, together with any proceeds from sales of
any shares of Stock received upon exercise of such Options or
the lapse of Restrictions of such Restricted Stock Awards;
PROVIDED, HOWEVER, that upon violation of subsection (b) of
this Section, the forfeiture and return provisions contained
in this sentence shall apply only to Options which have become
exercisable, and Restricted Stock, the Restrictions with
respect to which have lapsed, and in any such case the
proceeds of sales therefrom, during the two year period
immediately prior to termination of the Participant's
employment. Nothing in this Section 13 will be deemed to
limit, in any way, the remedies at law or in equity of the
Company, for a breach by Participant of any of the provisions
of this Section 13.
(d) Each Participant agrees to provide written notice of the
provisions of this Section 13 to any future employer of
Participant, and the Company expressly reserves the right to
provide such notice to the Participant's future employer(s).
(e) If any provision or part of any provision of this Section 13
is held for any reason to be unenforceable, (i) the remainder
of this Section 13 shall nevertheless remain in full force and
effect and (ii) such provision or part shall be deemed to be
amended in such manner as to render such provision
enforceable.
14. GOVERNING LAW.
The validity, construction and effect of the Plan and any rules
relating to the Plan shall be determined in accordance with the laws of
the State of Delaware and applicable Federal law.
15. ARBITRATION.
The Company and each Participant hereby agree that in the event of any
dispute or controversy arising with respect to the Plan, any Stock
Option Agreement, the exercise of any Option (or the disallowance of
any exercise at any time, for any reason) or any other matter relating
to Options or Restricted Stock Awards, then such dispute or controversy
shall be submitted by the parties to mandatory and binding arbitration
before a panel of arbitrators appointed by the American Arbitration
Association ("AAA"), each of whom shall be knowledgeable in matters of
securities in general and, if possible, the administration of stock
option programs similar to the Plan. The arbitration proceedings shall
be conducted in whichever of the following
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cities is closest to the work location of the affected Participant:
Delray Beach, Florida; New York, New York; Kansas City, Missouri;
Jackson, Mississippi; or Atlanta, Georgia. The decision of the Company
as to which city is closest to the work location of the Participant
shall be conclusive and binding, except for manifest error. The
decision of the arbitrators shall be rendered in writing, shall be
promptly rendered after a hearing on the matter and shall be final,
conclusive and binding and may be incorporated in a final judgment
rendered by any court of competent jurisdiction.
Notwithstanding the foregoing, nothing contained herein shall preclude
the Company from seeking injunctive or other relief from any court of
competent jurisdiction to enforce the provisions of Section 13 hereof.
16. DEFINITIONS.
The following terms, when used in the Plan, shall have the meanings set
forth below:
ACTIVELY TRADED: Trading of Company Stock on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ
National Market System in an average weekly volume that equals
at least 0.20% of the then outstanding Company Stock for each
of at least four weeks in a row.
BENEFICIAL OWNER: With respect to any securities of the
Company, any Person who is a beneficial owner of such
securities as defined in rule 13d-3 under the Exchange Act.
The Committee may from time to time adopt interpretations or
pronouncements as to who shall be deemed to be Beneficial
Owners of the Company's outstanding voting securities as of a
given date, which interpretation shall be final and binding on
all Participants, the Company and all other interested
Persons.
BOARD: The Board of Directors of the Company.
CAUSE: Any cause stated in an employment agreement between the
Company and the Participant and/or material violations of
employment agreements or the terms of this Plan, acts of
dishonesty with respect to the Company, insubordination,
divulging confidential information about the Company,
interference with the relationship between the Company and any
supplier, client, customer, similar person, or performance of
any act or omission which the Committee, in its sole
discretion, deems to be sufficiently injurious to the interest
of the Company to constitute cause.
CHANGE IN CONTROL: The occurrence of any of the following: (i)
a merger or consolidation to which the Company is a party if
the individuals and entities who were stockholders of the
Company immediately prior to the effective date of such merger
or consolidation are Beneficial Owners of less than 50% of the
total combined voting power for election of directors of the
surviving corporation following the effective date of such
merger or consolidation; or (ii) any Person becomes the
Beneficial Owner in the aggregate of securities of the Company
representing 50% or more of the total combined voting power of
the Company's then issued and outstanding securities unless
such Person (or a Person owned directly or indirectly by such
Person) was the Beneficial Owner, directly or indirectly, as
of the Grant Date applicable to the affected Participant, of
more than 50% of the Company's voting securities outstanding
as of such Grant Date; or (iii) the sale of all or
substantially all of the assets of the Company to any person
or entity that is not a wholly-owned subsidiary of the
Company; or (iv) the stockholders of the Company approve any
plan or proposal for the liquidation of the Company.
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CODE: Internal Revenue Code of 1986, as amended.
COMMITTEE: A committee designated by the Board consisting of
not less than two members of the Board who are "non-employee
directors" as defined in Rule 16b-3 under the Exchange Act, to
administer the Plan.
COMPANY: Sunbeam Corporation (formerly known as Sunbeam-Oster
Company, Inc.)
CONFIDENTIAL INFORMATION: Any information not generally known
to the public, including, without limiting the generality of
the foregoing, any customer lists, supplier lists, trade
secrets, invention, formulas, methods or processes, whether or
not patented or patentable, channels of distribution, business
plans, pricing policies and records, financial information of
any sort and inventory records of the Company or any affiliate
(and such other information normally understood to be
confidential or otherwise designated as such in writing by the
Company or its subsidiaries). It is not necessary, however,
that any information be formally designated as "confidential"
if it falls within any of the foregoing categories and is not
generally known to the public.
DESIGNATED OTHER: Any consultant, advisor, contractor or agent
of the Company or its subsidiaries, who is not an employee,
officer or Outside Director of the Company and who is granted
Options or a Restricted Stock Award pursuant to this Plan.
EFFECTIVE DATE: January 1, 1991; Amended and Restated as of
May 15, 1996.
ERISA: Titles I and IV of the Employee Retirement Income
Security Act of 1974, as amended.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXERCISE PRICE: The Exercise Price of shares purchasable upon
exercise of an Option, as determined pursuant to the terms of
Section 5(a).
FAIR MARKET VALUE: The fair market value of a share of Stock,
as determined pursuant to the terms of Section 7.
GRANT DATE: The date as of which the Committee (or such other
committee of the Board of Directors of the Company as shall be
empowered to grant Options or to make awards of Restricted
Stock) shall grant Options or Restricted Stock, as the case
may be, to a Participant under the Plan, as so designated by
such Committee.
IN-THE-MONEY: Options to acquire Stock are considered to be
"in-the-money" if the exercise price of the Option is less
than the current market price of the Stock.
NEXT OPTION INCREMENT: This term shall have the meaning
ascribed to it in Section 4(a)(iii).
OPTION: An option, granted under the Plan, to purchase shares
of Stock at the Exercise Price. Options granted under the Plan
shall not be incentive stock options pursuant to Section 422
of the Code.
13
<PAGE>
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).
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).
14
EXHIBIT 11.a.
SUNBEAM CORPORATION AND SUBSIDIARIES
CALCULATIONS OF EARNINGS
PER SHARE OF COMMON STOCK
(In thousands, except per share amounts)
THREE MONTHS ENDED
-----------------------------
MARCH 31, MARCH 30,
1996 1997
--------- ---------
Net earnings applicable to common
shareholders........................... $ 17,361 $ 6,848
======== ========
Weighted average number of common
shares outstanding..................... 81,982 84,278
Add:
Common shares issuable for exercise of
warrants and options, net of shares
assumed to have been acquired with
proceeds therefrom..................... 548 2,700
-------- --------
Number of shares applicable to
earnings per share calculation......... 82,530 86,978
======== ========
Earnings per share of common
stock ................................. $ .21 $ .08
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 30,415
<SECURITIES> 0
<RECEIVABLES> 296,716
<ALLOWANCES> 0
<INVENTORY> 148,011
<CURRENT-ASSETS> 609,654
<PP&E> 332,411
<DEPRECIATION> 114,958
<TOTAL-ASSETS> 1,053,155
<CURRENT-LIABILITIES> 260,154
<BONDS> 175,235
0
0
<COMMON> 892
<OTHER-SE> 412,268
<TOTAL-LIABILITY-AND-EQUITY> 1,053,155
<SALES> 253,450
<TOTAL-REVENUES> 253,450
<CGS> 185,669
<TOTAL-COSTS> 185,669
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,993
<INCOME-PRETAX> 32,637
<INCOME-TAX> 12,076
<INCOME-CONTINUING> 20,561
<DISCONTINUED> (13,713)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,848
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
FOR IMMEDIATE RELEASE:
SUNBEAM'S FIRST QUARTER SALES UP 13%, EARNINGS PER SHARE UP
200% FROM ONGOING OPERATIONS
Delray Beach, FL - April 23, 1997 - Sunbeam Corporation (NYSE: SOC)
announced today its first quarter 1997 results. Sales for the quarter were
$253.5 million and increased 13% over the prior year period on a comparable
basis (excluding discontinued businesses and divested product lines), while
Earnings Per Share from continuing operations of $.24 were triple the $.08
earned during the same period last year.
"The impressive growth in both revenue and earnings is proof that the
revitalization of Sunbeam is working. In fact, the sales growth in the first
quarter is the highest level achieved without acquisitions since Sunbeam became
public in 1992." said Albert J. Dunlap, Sunbeam's Chairman and Chief Executive
Officer.
On a reported basis, sales were up 10%, which includes certain divested
businesses not classified as discontinued operations - time & temperature
products, decorative bedding and Counselor and Borg branded scales.
For the quarter, domestic sales from ongoing operations increased
12.5%, with growth achieved in every product category - Appliances, Outdoor
Cooking, Health at Home, Personal Care & Comfort and Away From Home.
International revenues increased 14.7% for the quarter, led by an increase of
almost 400% in the Far East, a 90% increase in Canada and a 30% increase in
Latin America (excluding Venezuela) and Mexico.
Mr. Dunlap stated, "I am excited by the positive developments in all
our product categories and many regions of the world. I expect the tremendous
number of growth initiatives instituted to drive further benefits throughout
1997." Dunlap added, "In just the last 6 months, we have implemented a major new
advertising program which increased our brand relevance by 25% in the fourth
quarter of 1996 and by another 9 percentage points in the first quarter of 1997.
What's more, we have just launched our new Grillmaster(R) barbecue grill
advertising campaign, and we expect to introduce our redesigned packaging in the
second quarter. We signed 15 new distribution and licensing agreements giving
the Company access to fast-growing markets such as Asia and Latin America and
introduced 42 new international 220 volt products, a key component in the
globalization of Sunbeam. We entered new channels of distribution including
opening 10 factory outlet stores, and we shortened our new product development
cycle to six months to introduce 30 new products a year."
Mr. Dunlap continued, "The substantially higher earnings in the quarter
from ongoing operations were due to the increased sales coupled with the
successful implementation of our restructuring efforts. We have cut our
employment in half, reduced the number of factories from 26 to 8 and decreased
the number of warehouses utilized from 61 to 18. During the quarter, we closed
on the sale of our furniture business and our time & temperature product line,
and we signed a contract to sell our Biddeford textile facility."
In the first quarter, the Company recorded a one-time loss of $.16 per
share on discontinued operations in conjunction with the disposal of its
furniture business. Mr. Dunlap commented, "We are delighted the first quarter
brought to a conclusion the sale of our furniture business. The furniture
business did not fit into our strategic plans and, in fact, it inhibited the
Company's ability to implement its strategy. With all divestitures essentially
complete, our management team is now completely focused on growing our core
business and increasing shareholder value."
<PAGE>
Gross margins for the quarter of 27% were 6 percentage points above the
first quarter of 1996, while operating margins of 14% were double last year's
level. Mr. Dunlap commented, "The margins attained in the quarter are the
highest achieved by Sunbeam in two years. I believe we are well on our way to
achieving our goal of 20% operating margins."
Mr. Dunlap concluded, "The results for our ongoing operations are the
beginning of the new Sunbeam. The turnaround is going strong. We are focused on
building the business and I believe the best is yet to come."
CAUTIONARY STATEMENT -- Statements contained in this press release,
including statements relating to the Company's expectations regarding
anticipated performance in the future, are "forward looking statements," as such
term is defined in the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from the Company's statements in this release
regarding its expectations, goals or projected results, due to various factors,
including those set forth in the Company's Cautionary Statements contained in
its Form 10-K, filed with the Securities and Exchange Commission on March 31,
1997.
Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and internationally, a diverse
portfolio of 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: Investors:
Helen Sanders John DeSimone
(202)783-4600 (561)243-2100
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except EPS)
THREE MONTHS ENDED
-------------------------------
MARCH 30, MARCH 31,
1997 1996
------- -------
<S> <C> <C>
Net sales $ 253.5 $ 229.7
Cost of goods sold 185.7 181.6
--------- ---------
Gross profit 67.8 48.1
% of sales 26.7% 20.9%
Selling, general & administrative expense 33.0 32.6
--------- ---------
Operating earnings 34.8 15.5
% of sales 13.7% 6.7%
Inerest expense 2.0 3.0
Other (income) expense, net 0.1 1.3
--------- ---------
Earnings from continuing operations before
income taxes 32.7 11.2
Income taxes 12.1 4.5
--------- ---------
EARNINGS FROM CONTINUING OPERATIONS 20.6 6.7
========= =========
Earnings (loss) from discontinued operations, net of tax (13.7) 10.7
Net earnings, including discontinued operations $ 6.9 $ 17.4
EARNINGS PER SHARE, FROM CONTINUING OPERATIONS $ 0.24 $ 0.08
========= =========
Earnings per share, including discountinued operatins $ 0.08 $ 0.21
Average number of common shares outstanding 87.0 82.5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
MARCH 30, DECEMBER 29,
1997 1996
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 30.4 $ 11.5
Receivables, net 296.7 213.4
Inventories 148.0 162.3
Net assets of discontinued operations and other assets
held for sale 20.7 102.8
Deferred income taxes 75.1 93.7
Prepaid expenses and other current assets 38.7 40.4
--------- --------
Total current assets 609.6 624.1
Property, plant and equipment, net 217.5 220.1
Trademarks and trade names, net 199.0 200.3
Other assets 27.0 28.2
--------- --------
$1,053.1 $1,072.7
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt and current oirtion of long-term, debt $ 0.8 $ 0.9
Accounts payable 100.7 107.3
Restructuring accrual 45.3 63.8
Other current liabilities 113.3 99.5
--------- --------
Totzl current liabilities 260.1 271.5
Long-term debt 175.3 201.1
Deferred income taxes 53.5 52.3
Non-operating and other long-term liabilities 151.1 152.5
Shareholders' equity 413.1 395.3
--------- --------
$1,053.1 $1,072.7
========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
THREE MONTHS ENDED
-------------------------------
MARCH 30, MARCH 31,
1997 1996
------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings, including discontinued operations $ 6.9 $ 17.4
Depreciation and amortization 10.6 11.3
Deferred income taxes 13.1 2.1
Loss on sale of discontinued operations 13.7 -
Decrease from changes in working capital and other (67.0) (63.7)
------- -------
(22.7) (32.9)
INVESTING ACTIVITIES
Capital expenditures (10.8) (20.3)
Proceeds from sale of divested operations 70.4 -
------- -------
59.6 (20.3)
FINANCING ACTIVITIES
Net borrowings (payments) under revolving credit facility (20.0) 40.0
Issuance of long-term debt - 6.5
Payment of debt obligations (6.3) (0.6)
Proceeds from exercise of stock options 8.9 -
Other (0.6) (0.8)
------- -------
(18.0) 45.1
------- -------
Net increase (decrease) in case and cash equivalents 18.9 (8.1)
Cash and cash equivalents, beginning of period 11.5 28.3
------- -------
Cazh and cash equivalents, end of period $ 30.4 $ 20.2
======= =======
</TABLE>
