UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For The Fiscal Year Ended December 31, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
(NO FEE REQUIRED)
For the transition period from ____________ to ____________.
Commission File Number 0001-000052
SUNBEAM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 25-1638266
(State or other jurisdiction (I.R.S. Employer Identification Number)
incorporation or organization)
2381 Executive Center Drive
Boca Raton, Florida 33431
(Address of principal executive offices) (Zip Code)
(561) 912-4100
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class: Name of exchange on which registered:
Common Stock, $0.01 Par Value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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 / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K/A or any amendment to this Form 10-K/A. /x/
The aggregate market value of all classes of the registrant's voting stock held
by non-affiliates as of June 20, 2000 was approximately $232,380,047.
On June 20, 2000, there were 107,561,151 shares of the registrant's Common Stock
outstanding.
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
ANNUAL REPORT
ON FORM 10-K/A
TABLE OF CONTENTS
Page
----
PART III
ITEM 10. Directors and Officers of the Registrant.......................... 3
ITEM 11. Executive Compensation............................................ 4
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.... 14
ITEM 13. Certain Relationships and Related Transactions.................... 16
2
<PAGE>
Item 10. DIRECTORS AND OFFICERS OF THE REGISTRANT
The names of the nominees, their principal occupations and the year in which
each current Director of the Company initially joined the Board of Directors are
set forth below.
JERRY W. LEVIN, age 56, was appointed Chief Executive Officer, President and a
Director of Sunbeam in June 1998 and was elected as Chairman of the Board of
Directors in March 1999. Mr. Levin has served as Chairman of the Board and Chief
Executive Officer of The Coleman Company, Inc. ("Coleman") since August 1998 and
as Chief Executive Officer of Coleman from June 1998 to August 1998. Mr. Levin
previously held the position of Chairman and Chief Executive Officer of Coleman
from February 1997 until its acquisition by Sunbeam in March 1998. Mr. Levin was
also the Chairman of Coleman from 1989 to 1991. Mr. Levin was Chairman of the
Board of Revlon, Inc. ("Revlon") from November 1995 until June 1998, Chief
Executive Officer of Revlon from 1992 until January 1997, and President of
Revlon from 1991 to 1995. Mr. Levin has been Executive Vice President of
MacAndrews & Forbes Holdings, Inc. ("MacAndrews & Forbes") since March 1989. For
15 years prior to joining MacAndrews & Forbes, Mr. Levin held various senior
executive positions with The Pillsbury Company. Mr. Levin is also a member of
the Boards of Directors of Revlon, Ecolab, Inc., and U.S. Bancorp, Inc. For a
description of certain arrangements entered into by Sunbeam and MacAndrews &
Forbes relating to the services of Mr. Levin as an officer of Sunbeam, see
"Certain Relationships and Related Transactions-Services Provided by MacAndrews
& Forbes." See "Security Ownership of Certain Beneficial Owners".
PHILIP E. BEEKMAN, age 68, has been a Director of Sunbeam since June 1999. Mr.
Beekman is President of Owl Hollow Enterprises Inc., a position he has held
since July 1994. From December 1986 to July 1994, he was Chairman and Chief
Executive Officer of Hook SUPERX, a retail drug store chain. Mr. Beekman also is
a member of the Boards of Directors of General Chemical Group, Inc., Linens 'N
Things, Inc., The Kendle Company and Procure Net Inc.
CHARLES M. ELSON, age 40, has been a Director of Sunbeam since his appointment
to the Board of Directors in September 1996. Mr. Elson was a Director of Coleman
from March 30, 1998 until June 24, 1998. Mr. Elson has been a Professor of Law
at Stetson University College of Law since 1990 and serves as Of Counsel to the
law firm of Holland & Knight since May 1995. Mr. Elson has been appointed Edgar
S. Woolard, Jr. Professor of Corporate Governance and Director, Center for
Corporate Governance at University of Delaware, beginning September 2000. He was
a Visiting Professor at the University of Maryland School of Law from August
1998 to December 1998, and at the Cornell Law School from January 1996 to June
1996. Mr. Elson is also a Member of the American Law Institute and the Advisory
Council and Commissions on Director Compensation, Director Professionalism, CEO
Succession and Audit Committees of the National Association of Corporate
Directors. He is Trustee of Talledega College, a Director of the Investor
Responsibility Research Center and a Salvatori Fellow of the Heritage
Foundation. Mr. Elson is also a director of Nuevo Energy Company.
HOWARD GITTIS, age 66, was appointed to the Board of Directors of Sunbeam in
June 1998. Mr. Gittis has been a Director, Vice Chairman and Chief
Administrative Officer of MacAndrews & Forbes and certain of its affiliates
since 1985. Mr. Gittis also is a member of the Board of Directors of Golden
State Bancorp Inc., Golden State Holdings Inc., Jones Apparel Group, Inc., Loral
Space & Communications Ltd., M & F Worldwide Corp., Panavision Inc., Revlon
Consumer Products Corporation, Revlon, Inc., REV Holdings Inc. and
Rutherford-Moran Oil Corporation.
JOHN H. KLEIN, age 54, was appointed to the Board of Directors in February 1999.
Mr. Klein is Chairman and Chief Executive Officer of Bi-Logix, Inc. and
Strategic Business and Technology Solutions LLC, and is Chairman of CyBear,
positions he has held since mid-1998. From April 1996 to May 1998, he was
Chairman and Chief Executive Officer of MIM Corporation, a provider of pharmacy
benefit services to medical groups. Prior to that he served as President of IVAX
North American Multi-Source Pharmaceutical Group from January 1995 and as
President and Chief Executive Officer of Zenith Laboratories, a generic
pharmaceutical manufacturer from May 1989 to 1995.
DAVID J. PECKER, age 48, a nominee for election as a Director, has been
President, Chief Executive Officer and Chief Operating Officer of American
Media, Inc. since May 1999. From 1991 to 1999, Mr. Pecker was President, and
from 1992 to 1999, was Chief Executive Officer of Hachette Filipacchi Magazines
("Hachette"). From 1990 to 1992, Mr. Pecker was Executive Vice President, Chief
Operating Officer and Chief Financial Officer of Hachette, and during 1999, was
also Executive Vice President/Publishing for Hachette. Prior to 1990, Mr. Pecker
held various financial positions with Diamandis Communications Inc., a
predecessor of Hachette, and with CBS, Inc. Prior to joining CBS, he was Senior
Auditor at PricewaterhouseCoopers. Mr. Pecker is a Director of Next Generation
Network.
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JAMES D. ROBINSON III, age 64, is a nominee for election as a Director. Mr.
Robinson co-founded RRE Investors, LLC and has served as its Chairman and Chief
Executive Officer since 1994. Mr. Robinson has also served as Chairman of Violy,
Bijorum & Partners Holdings since 1996, and served as Chairman and Chief
Executive Officer of American Express Company from 1977 to 1993, after serving
in various executive positions at American Express Company. Mr. Robinson serves
on the Boards of Directors of Coca-Cola Corporation, Bristol-Myers Squibb
Company, FirstData Corporation, Cambridge Technology Partners and Concur
Technologies, Inc.
FAITH WHITTLESEY, age 61, has been a Director of Sunbeam since her appointment
to the Board of Directors in December 1996. Mrs. Whittlesey has served as the
Chief Executive Officer of the American Swiss Foundation, an educational
foundation, since 1991. She is also a member of the Board of Directors of
Valassis Communications, Inc.
Section 16(a) of the Exchange Act, as amended, requires the Company's Directors,
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities to file certain reports regarding ownership of
the Company's Common Stock with the SEC and the New York Stock Exchange. These
insiders are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on a
review of the copies of the Section 16(a) forms furnished to the Company during
fiscal 1999, or written representations from certain reporting persons that no
Forms 5 were required for those persons, all Section 16(a) filing requirements
applicable to the Company's officers, Directors and beneficial owners of more
than 10% of the outstanding shares of Common Stock were filed on a timely basis.
Information regarding executive officers of the Company is included under a
separate caption in Part I hereof.
Item 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for the years ended December 31, 1999, December
31, 1998, and December 28, 1997, the compensation for services rendered to the
Company in all capacities of those persons who, during 1999, (i) served as chief
executive officer ("CEO") of the Company, and (ii) were among the four most
highly compensated executive officers of the Company, other than the CEO, as of
the Company's fiscal year end, (the individuals referred to in clauses (i) and
(ii) being collectively referred to as the "Named Executives"). Each of the
Named Executives joined the Company during 1998.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Awards Compensation Awards
------------------------------------------- ------------------------------
Securities
Underlying
Name and Other Annual Restricted Options/SARs All Other
Principal Position Year Salary Bonus Compensation Stock Award Compensation
------------------- ------- ----------- ----------- --------------- ---------- ------------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry W. Levin 1999 $1,112,500 $1,500,000 (1) $ 88,231 (2) 0 250,000 $ 780 (3)
Chairman, Chief 1998 541,667 541,667 123,952 (2) 0 2,750,000 980 (3)
Executive Officer
and President
Paul E. Shapiro 1999 712,500 584,100 -- (4) 0 0 5,084 (5)
Executive Vice 1998 327,273 243,750 -- (4) 0 600,000 588 (3)
President and Chief
Administrative
Officer
Bobby G. Jenkins 1999 410,000 325,000 (1) -- (4) 0 100,000 5,042 (6)
Executive Vice 1998 238,986 (7) 239,102 (8) 55,540 (9) 0 450,000 19,120 (10)
President and Chief
Financial Officer
Jack D. Hall 1999 400,000 266,600 -- (4) 0 0 5,024 (11)
Former President, 1998 100,000 60,000 54,933 (13) 0 400,000 60 (3)
International(12)
Ronald H. Dunbar 1999 445,000 243,200 -- (4) 0 275,000 5,084 (4)
Senior Vice President, 1998 148,333 74,167 54,574 (14) 0 150,000 89 (3)
Human Resources
</TABLE>
4
<PAGE>
(1) Bonus earned in 1999 includes discretionary awards of $284,000 and $56,100
for Messrs. Levin and Jenkins, respectively.
(2) For 1999, includes $44,822 for personal use of aircraft, the value of a
Company provided automobile, relocation expenses of $25,511, reimbursement
of country club fees and taxes paid by the Company on the value of such
automobile. For 1998, includes $82,616 for reimbursement of country club
fees, the value of a Company-provided automobile, relocation expenses of
$37,560 and taxes paid by the Company on the value of such relocation
expenses.
(3) Represents Company-paid premiums for term life insurance.
(4) Amounts do not equal the lesser of (i) $50,000 and (ii) 10% of
compensation.
(5) Includes $4,304 for the Company's 401(k) matching contribution and $780
for Company-paid premiums for term life insurance.
(6) Includes $4,304 for the Company's 401(k) matching contribution and $738
for Company-paid premiums for term life insurance.
(7) Includes Mr. Jenkins' salary from Coleman from the date of the acquisition
by Sunbeam in March 1998 of 79% of the outstanding stock of Coleman until
his termination of employment with Coleman, Mr. Jenkins' salary from
Sunbeam from the date of employment by Sunbeam and $12,327 for accrued
vacation in 1998 upon Mr. Jenkins' termination of employment with Coleman.
(8) Includes the entire amount of bonuses paid to Mr. Jenkins in 1999 for
services rendered to Coleman and to Sunbeam during 1998.
(9) Includes a car allowance, reimbursement of relocation expenses of $37,692
and taxes paid by the Company on such relocation expenses.
(10) Includes severance payments of $18,633 made to Mr. Jenkins in connection
with the termination of his employment with Coleman, and $487 for the
Company's 401(k) matching contribution.
(11) Includes $4,304 for the Company's 401(k) matching contribution and $720
for Company-paid premiums for term life insurance.
(12) Mr. Hall resigned as President, International in April 2000.
(13) Includes $44,094 for relocation expenses, $9,173 for taxes paid by the
Company on such relocation expenses and the value of a Company-provided
automobile.
(14) Includes $43,863 for relocation expenses, taxes paid by the Company on
such relocation expenses, and the value of a Company-provided automobile.
Option Grants In Last Fiscal Year
The following table sets forth information with respect to the options to
purchase shares of Common Stock granted to the Named Executives during 1999.
<TABLE>
<CAPTION>
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration Grant Date
Name Granted (1) Year ($/Share) Date (3) Value (4)
---- --------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Jerry W. Levin............. 250,000 (2) 4.1% $ 5.56 4/1/2009 $ 806,462
Bobby G. Jenkins........... 100,000 (2) 1.6% 5.56 4/1/2009 322,597
Ronald H. Dunbar........... 150,000 (2) 2.5% 6.68 2/4/2009 581,370
125,000 (2) 2.1% 4.38 12/15/2009 317,663
</TABLE>
(1) All options have a term of ten years from their respective grant dates.
5
<PAGE>
(2) These options become exercisable over a period of three years in equal
annual increments commencing on the first anniversary of the grant date.
(3) Grant dates were April 1, 1999 for Messrs. Levin and Jenkins and February
4, 1999 and December 15, 1999 for Mr. Dunbar.
(4) Grant date values were calculated using the Black-Scholes options pricing
model which has been adjusted to take dividends into account for the
period prior to announced discontinuance of dividends. Use of this model
should not be viewed in any way as a forecast of the future performance of
the Common Stock. The estimated present value of each stock option as set
forth above is based on the following inputs:
Grant Dates
2/04/99 4/1/99 12/15/99
--------- --------- ---------
Risk Free Interest Rate........... 4.87% 5.31% 6.29%
Stock Price Volatility............ 56.32% 55.58% 55.98%
Dividend Yield.................... 0.00% 0.00% 0.00%
The model assumes: (a) an expected option term of five years; (b) a
risk-free interest rate based on closing five-year U.S. Treasury Strip
yield on the date of valuation; and (c) no forfeitures. Stock price
volatility is calculated using weekly stock prices for a period of five
years ended as of December 31, 1999. Notwithstanding the fact that these
options are, with limited exceptions, non-transferable, no discount for
lack of marketability was taken.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information with respect to option exercises by
the Named Executives during 1999 and the number of options held by the Named
Executives at the Company's fiscal year end.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options Held at In-the-Money Options at
December 31, 1999 December 31, 1999(1)
----------------------------- ------------------------------
Shares Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------------ ----------- ------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Jerry W. Levin.............. 0 0 0 3,000,000 0 0
Paul E. Shapiro............. 0 0 0 600,000 0 0
Bobby G. Jenkins............ 0 0 0 550,000 0 0
Jack D. Hall (2)............ 0 0 0 400,000 0 0
Ronald H. Dunbar............ 0 0 50,000 375,000 0 0
<FN>
(1) The closing price of the Common Stock on December 31, 1999 was $4.20 per
share.
(2) Mr. Hall resigned as President, International in April 2000.
</FN>
</TABLE>
Defined Benefit or Actuarial Plan Disclosure
Messrs. Levin, Shapiro and Jenkins participate in the New Coleman Company, Inc.
Retirement Plan for Salaried Employees (the "Coleman Retirement Plan"), a
noncontributory qualified defined benefit retirement plan. Effective January 1,
1999, the Coleman Retirement Plan adopted a "cash balance" benefit formula.
Under this formula, the benefit that Messrs. Levin and Shapiro earn on and after
that date is based on both (i) an annual "pay credit" (which is fixed
percentage, determined by reference to a table, of that year's compensation not
in excess of the maximum compensation limits established by the Internal Revenue
Code of 1986, as amended (the "Code")) and (ii) an annual "interest credit" on
their previously earned benefits. (The annual pay credit percentage increases
with age. The annual interest credit is based on the interest rate on 30-year
Treasury securities, subject to a floor and a ceiling rate.) Under the cash
balance formula, Mr. Jenkins receives only annual "interest credits" on the
benefit which he earned as of December 31, 1998. The annual pension from the
Coleman Retirement Plan will be reduced by any pension amounts payable by other
plans in which Messrs. Levin, Shapiro and Jenkins may have participated while
employed by a company that was in the same "controlled group" of
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companies as Coleman. Their projected annual benefits under the Coleman
Retirement Plan, payable in a single life annuity form at age 65, would be:
Name Annuity Amount
---- --------------
Mr. Levin $19,154.64
Mr. Shapiro $13,295.04
Mr. Jenkins $5,584.68
Mr. Dunbar is entitled to a supplemental retirement benefit pursuant to his
employment agreement. See "Employment Contracts and Termination of Employment
and Change In Control Arrangements--Employment Arrangements with Mr. Ronald H.
Dunbar."
Directors' Compensation
During 1999, each of the Directors of the Company who were not employees of
either the Company or an affiliate ("Outside Directors") received a $10,000
annual retainer and $1,000 for each meeting of the Board of Directors or its
Committees attended by such Outside Director, whether in person or by telephone.
In addition, pursuant to the Amended and Restated Sunbeam Corporation Stock
Option Plan (the "Option Plan"), each of the Outside Directors was automatically
granted 1,500 shares of restricted stock upon his or her initial election or
appointment to the Board of Directors or upon each subsequent re-election to the
Board of Directors (prorated in case of an election or appointment at any time
other than at an annual meeting of stockholders). Such restricted stock vested
immediately upon the Outside Director's acceptance of his or her election or
appointment.
In February 2000, the Compensation Committee and the Board of Directors approved
a new non-employee Directors' compensation program consisting of (i) an annual
retainer of $25,000, (ii) a fee of $1,000 for each Board or Committee meeting
attended by a Director, whether in person or by telephone, (iii) a $2,000 annual
fee for each Committee Chairmanship, and (iv) an annual grant of an option to
purchase 5,000 shares of Common Stock to be granted on the date of election of a
non-employee Director and upon each subsequent re-election, having an exercise
price equal to the Fair Market Value (as defined in the 2000 Option Plan) on the
date of grant, and vesting at the rate of one-third on each anniversary of the
date of grant.
Directors are also reimbursed for all ordinary and necessary out-of-pocket
expenses incurred by them in attending meetings of the Board of Directors or its
Committees.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
Employment Agreements with Messrs. Levin, Shapiro and Jenkins
Effective January 3, 2000, the Company entered into new employment agreements
with (i) Mr. Levin (the "Levin Agreement"), (ii) Mr. Shapiro (the "Shapiro
Agreement"), and (iii) Mr. Jenkins (the "Jenkins Agreement" and collectively
with the Levin Agreement and the Shapiro Agreement, the "Employment
Agreements"). The Employment Agreements increased the compensation payable to
each of the three executives and extended the term of their existing employment
agreements with the Company. Pursuant to their respective Employment Agreements,
the Company agreed to employ Mr. Levin as Chairman and Chief Executive Officer,
Mr. Shapiro as Executive Vice President and Chief Administrative Officer, and
Mr. Jenkins as Executive Vice President and Chief Financial Officer. The term of
each of the Employment Agreements expires June 30, 2003. Messrs. Levin, Shapiro
and Jenkins are sometimes referred to herein as the "Executives".
Compensation
Under the Levin Agreement, Mr. Levin is to be paid base salary at an annual rate
of $1,150,000, increasing to (i) $1,300,000 effective July 1, 2000, (ii)
$1,450,000 effective July 1, 2001 and (iii) $1,600,000 effective July 1, 2002.
Under the Shapiro Agreement, Mr. Shapiro is to be paid a base salary at an
annual rate of $750,000, increasing to (i) $850,000 effective July 1, 2000, (ii)
$950,000 effective July 1, 2001 and (iii) $1,050,000 effective July 1, 2002.
Under the Jenkins Agreement, Mr. Jenkins is to be paid a base salary at an
annual rate of $425,000, increasing to (i) $475,000 effective July 1, 2000, (ii)
$525,000 effective July 1, 2001 and (iii) $575,000 effective July 1, 2002.
Pursuant to their respective Employment Agreements, Messrs. Levin, Shapiro and
Jenkins are entitled to a performance-based target annual bonus of 125% of
annual base salary, 75% of annual base salary, and 60% of annual base salary,
respectively, and if certain performance objectives are met, each Executive may
be paid a performance-based annual bonus of up to two times their respective
target amounts. Pursuant to the Levin Agreement, Mr. Levin will receive a
re-signing bonus of $500,000 payable on each of July 1, 2000, 2001 and 2002.
Pursuant to the Shapiro Agreement, Mr. Shapiro will receive a re-signing bonus
of $250,000 payable on each of July 1, 2000, 2001 and 2002. Each of the
Executives also participates in other benefit plans generally available to other
employees and senior executives of the Company. Each of the Executives also
receives such
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perquisites as a company car or car allowance, one country club membership,
reimbursement of financial, tax and estate planning fees, first class air
travel, residential security system, and, only in the case of Mr. Levin, private
aircraft travel for travel in North America.
Equity Grants
Pursuant to the Employment Agreements and subject to stockholder approval,
Messrs. Levin, Shapiro and Jenkins received grants of stock options on January
3, 2000 to purchase 3,000,000, 600,000 and 550,000 shares of Common Stock,
respectively, at $4.125 per share. The options will vest in full on June 30,
2003 or upon the occurrence of a change of control of the Company or certain
other events. See "Approval of Stock Option Grants to Jerry W. Levin," "Approval
of Stock Option Grants to Paul E. Shapiro" and "Approval of Stock Option Grants
to Bobby Jenkins".
Termination and Change in Control Provisions
The Company may terminate an Executive's employment under the Employment
Agreement for Cause. "Cause" means: (i) willful gross neglect of or willful
gross misconduct in carrying out the duties under the Agreement, resulting in
either case, in material economic harm to the Company, or (ii) the conviction of
a felony or of any crime involving moral turpitude. If the Company terminates an
Executive's employment for Cause, or an Executive voluntarily resigns, the
Executive will be entitled to receive (i) base salary through the date of
termination, and (ii) all outstanding options not then exercisable shall be
forfeited and exercisable options will remain exercisable until the earlier of
the 90th day after the date of termination or the originally scheduled
expiration date of the options.
The Company may terminate an Executive's employment for disability continuing
for more than six months. As defined in each Employment Agreement, disability
generally means the Executive's inability, due to physical or mental incapacity,
to substantially perform his duties and responsibilities under the Employment
Agreement as determined by a medical doctor. The Employment Agreements provide
that if the Company terminates an Executive's employment for disability, the
Executive is entitled to receive (i) disability benefits in accordance with long
term disability program for senior executives, provided that in no event may
such benefits provide the Executive with less than 60% of his then current base
salary to age 65, (ii) base salary through the end of the month in which
disability benefits begin, (iii) a lump sum payment equal to 60% of all
re-signing bonus amounts, if any, not previously paid (in the case of Messrs.
Levin and Shapiro), (iv) a pro-rata annual incentive award for the year in which
termination due to disability occurs, based on target bonus for the year of
termination, payable when bonuses are paid to other officers, (v) full vesting
and exercisability of all outstanding options which will remain exercisable
through the end of their originally scheduled terms, and (vi) continued
participation in all medical, dental, vision and hospitalization insurance
coverage and in all other employee benefit plans or programs in which the
Executive was participating on the date of the termination of his employment for
a period of 24 months following termination of employment. If the Company's
benefit plans do not permit continuation of an Executive's participation in the
benefit plans following his termination, the Company is required to provide the
Executive with an amount which is sufficient for him to purchase equivalent
benefits.
If an Executive's employment is terminated by the Company without Cause, or if
there is a Constructive Termination without Cause or the Company gives notice of
non-renewal, the Executive will be entitled to receive (i) base salary through
the termination date, (ii) all re-signing bonus amounts not previously paid (in
the case of Messrs. Levin and Shapiro), (iii) pro-rata annual incentive award
based upon target bonus for the year of termination, (iv) a lump sum payment in
an amount equal to the greater of (A) base salary for the remainder of his
employment term without regard to earlier termination thereof, or (B) two times
his base salary (based on the average base salary for the remaining period under
the Employment Agreement), (v) a lump-sum payment equal to the greater of (i)
annual incentive awards for the remainder of his employment term without regard
to earlier termination thereof, or (ii) two times his annual incentive award,
based on target bonus for the year of termination. In addition to the above
payment, all outstanding options will become fully vested and will remain
exercisable through the end of their originally scheduled term. The Executive
will be entitled to continued participation for the Executive and his family in
all medical, dental, vision and hospitalization insurance coverage on the date
of the termination of employment until age 65 (in the case of Messrs. Levin and
Shapiro); and in the case of Mr. Jenkins, for a period equal to the greater of
(A) the remainder of the term or (B) 24 months following termination of
employment. The Executive will also be entitled to participate in other employee
benefit plans or programs in which the Executive was participating for a period
equal to the greater of (A) the remainder of the term or (B) 24 months following
termination of employment except that if an Executive becomes re-employed with
another employer and is eligible to receive medical or other welfare benefits
under another employer-provided plan, the medical and other welfare benefits
described above will be secondary to those provided under such other plan during
such applicable period of eligibility.
Constructive Termination without Cause means termination by the Executive of his
employment at his initiative within 30 days following the occurrence of any of
the following events without his consent: (i) a reduction in the Executive's
then current Base Salary or target bonus opportunity as a percentage of Base
Salary; (ii) the taking of any other action by the Company that would diminish
the incentive opportunities of the Executive as provided in his respective
Employment Agreement, (iii) the taking of any action by the Company that would
significantly diminish the aggregate value of the benefits provided to the
Executive under the Company's medical, health, accident, disability, life
insurance, thrift and retirement plans; (iv) the removal of the Executive from
any
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of the positions described in his respective Employment Agreement, (v) the
failure of the Company's stockholders to approve either the Incentive Plan
Amendment or such Executive's option grant (as set forth in Proposal Nos. 6 and
2, 3, or 4; respectively, (vi) a material diminution in the Executive's duties;
(vii) a change in the reporting structure so that the Executive reports to
someone other than as provided in his respective Employment Agreement; (viii)
relocation of the Executive's principal place of employment to a location other
than Palm Beach County, or North Broward County, Florida or New York City; (ix)
a material breach by the Company of any provision of the Employment Agreement;
(x) any purported termination of the Executive's employment that is not effected
due to disability, for Cause or the provisions of Termination without Cause;
(xi) the failure of the Company to obtain the assumption in writing of its
obligation to perform the Employment Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after a merger,
consolidation, sale or similar transaction, except that, in the event of a
Change of Control (as defined in an Executive's Employment Agreement), the
Executive will be entitled to given notice of a Constructive Termination even if
a successor has assumed the Employment Agreement, or (xii) the occurrence of a
Change in Control.
If an Executive's employment terminates due to his death, his estate or
beneficiaries will be entitled to (i) a lump-sum payment equal to 60% of base
salary that would be payable for a period which is the greater of (A) 12 months
or (B) the remaining term of the Employment Agreement without regard to earlier
termination thereof, (ii) a lump sum payment equal to 60% of all re-signing
bonuses not previously paid (in the case of Messrs. Levin and Shapiro), (iii) a
pro-rata annual incentive award for the year in which the death occurs based on
target bonus for the year of termination, and payable when bonuses are paid to
other officers, and (iv) full vesting of all outstanding options which will
remain exercisable through the end of their originally scheduled terms.
In the event of a Change of Control, all amounts, entitlements or benefits in
which an Executive is not yet vested shall become fully vested including,
without limitation, all outstanding options which will remain exercisable
through the end of their regularly scheduled terms.
Pursuant to their respective Employment Agreements, in the event that any
payment pursuant to an Employment Agreement is subject to excise taxes pursuant
to section 4999 of the Code, then such Executive will be paid an additional
amount equal to such excise taxes.
Pursuant to their previous employment agreements with the Company, and subject
to stockholder approval at the Annual Meeting, Messrs. Levin, Shapiro and
Jenkins were granted options to purchase 2,750,000, 600,000 and 400,000 shares
of Common Stock, respectively. These options will vest and be exercisable on
June 30, 2001 or upon, among other things, a change of control.
Employment Agreement with Mr. Jack D. Hall
The Company had entered into an employment agreement with Mr. Jack Hall on
October 1, 1998 (the "Hall Agreement"). The term of the Hall Agreement expired
October 1, 2000. Mr. Hall resigned as President, International in April 2000.
Under the Hall Agreement, Mr. Hall was to be paid a base salary at an annual
rate not less than $400,000. Additionally, under the Hall Agreement, Mr. Hall
was eligible to receive a performance-based annual target bonus equal to 60% of
his annual base salary. Mr. Hall also participated in the other benefit plans
available generally to employees or other senior executives of Sunbeam. The Hall
Agreement provided for severance payments for certain terminations of the Hall
Agreement.
The Company is in discussions regarding severance to be paid to Mr. Hall,
although no agreement has been reached as of April 30, 2000.
Employment Arrangements with Mr. Ronald H. Dunbar
The Company and Ronald H. Dunbar have entered into an Agreement dated January
29, 1999 (the "Dunbar Agreement"). Mr. Dunbar is the Company's Senior Vice
President, Human Resources.
Under the Dunbar Agreement, Mr. Dunbar is entitled to a supplemental retirement
benefit if (i) Mr. Dunbar remains employed by Sunbeam until at least age 65,
(ii) Mr. Dunbar dies prior to age 65 while still employed by Sunbeam, or (iii)
Mr. Dunbar is terminated by Sunbeam prior to age 65 other than for cause. The
supplemental benefits are not payable unless Mr. Dunbar elects not to receive
benefits under certain retirement plans of Revlon Consumer Products Corporation
("RCPC") (the "Revlon Retirement Plans") until after Mr. Dunbar's employment
with Sunbeam ends. If Mr. Dunbar remains employed by Sunbeam until age 65 or
dies prior to age 65 while still employed by Sunbeam, Mr. Dunbar will be
entitled to a supplemental retirement benefit equal to the amount Mr. Dunbar (or
his beneficiary) would have received under the Revlon Retirement Plans had Mr.
Dunbar remained with RCPC in "credited service" under the Revlon Retirement
Plans, less in each case, the amount Mr. Dunbar (or his beneficiary) is entitled
to under the Revlon Retirement Plans and certain retirement benefits from
Sunbeam. If Mr. Dunbar's employment is terminated other than for cause prior to
age 65, Mr. Dunbar will be entitled to a supplemental retirement benefit equal
to the amount Mr. Dunbar (or his beneficiary) would have received under the
Revlon Retirement Plans had Mr. Dunbar remained with RCPC in "credited service"
under the Revlon Retirement Plans until the earlier of (i) Mr. Dunbar's death,
(ii) Mr. Dunbar reaching age 65 and (iii) the date Mr. Dunbar begins to receive
benefits under the Revlon Retirement Plans, less in each case, the amount Mr.
Dunbar (or his beneficiary) is entitled to receive under the Revlon Retirement
Plans and certain retirement benefits from Sunbeam.
9
<PAGE>
Pursuant to the Dunbar Agreement, Mr. Dunbar is also entitled to severance
payments in the event of Mr. Dunbar's termination, other than for cause prior to
age 65, equal to the amount Mr. Dunbar would have been entitled to under the
Revlon Executive Severance Policy, reduced by the amount of severance benefits
Mr. Dunbar is entitled to receive under any severance policies or programs which
Sunbeam then has in effect. If Mr. Dunbar's employment is terminated for any
reason after age 65, Mr. Dunbar will only be entitled to those severance
benefits, if any, provided under severance policies and programs which Sunbeam
otherwise then has in effect. Furthermore, pursuant to a memorandum to Mr.
Dunbar dated August 18, 1998 offering employment at the Company, Mr. Dunbar was
offered severance equal to one year's base salary plus target bonus under the
Company's Incentive Plan.
Sunbeam Executive Severance Policy
Sunbeam's Executive Severance Policy provides that upon termination of
employment of eligible executive employees, other than voluntary resignation or
termination by Sunbeam for good reason, in consideration for the execution of a
release, confidentiality agreement and non-competition agreement, the eligible
executive will be entitled to receive, in lieu of severance under any employment
agreement then in effect, a number of months of severance pay based upon such
executive's grade level and years of service reduced by the amount of any
compensation from subsequent employment, unemployment compensation or statutory
termination payments received by such executive during the severance period, as
well as continued participation in medical and certain other benefit plans for
the severance period (or in lieu thereof, at the election of the Company, upon
commencement of subsequent employment, a lump sum payment equal to the then
present value of 50% of the amount of base salary then remaining payable through
the balance of the severance period). Although Messrs. Levin, Shapiro, Jenkins
and Dunbar are entitled to participate in the Company's Executive Severance
Policy, they each have severance provisions contained in their respective
employment agreements or arrangements (see "Employment Agreements with Messrs.
Levin, Shapiro and Jenkins" and "Employment Arrangements with Mr. Dunbar").
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
establishing the general compensation policies of the Company and administering
the Option Plan, the Incentive Plan, and if approved by the Company's
stockholders at the Annual Meeting, the LTIP and the 2000 Option Plan. The
Compensation Committee reviews and/or approves specific compensation levels for
the Company's senior officers and certain corporate management personnel
(collectively, the "executive officers" and, individually, an "executive
officer").
Executive Officer Compensation
Philosophy
It is the philosophy of the Company that executive compensation be directly
linked to the interests of the Company's stockholders and therefore to financial
objectives that the Company believes are primary determinants of long-term
stockholder value. The Compensation Committee's objectives in administering the
Company's executive compensation plans are to ensure that pay levels and
incentive compensation are: (i) properly linked to stockholder value, (ii)
competitive in attracting, retaining and motivating the best personnel and (iii)
simple in design and easily understood. The compensation plans for the Company's
executive officers emphasize the importance of the Company's performance by
providing a direct correlation between executive compensation and stockholder
interests. The stock option element of compensation is intended to encourage
ownership and retention of Company stock by all employees, and especially
executive officers.
Executive Officers
On June 15, 1998, Sunbeam announced that Jerry W. Levin of MacAndrews & Forbes
and formerly Chief Executive Officer of Coleman, had been elected as Sunbeam's
Chief Executive Officer. On August 12, 1998, the Company announced it had
entered into a settlement agreement with MacAndrews & Forbes and its affiliates
(collectively "Mafco") in connection with the Company's acquisition of a
controlling interest in Coleman under which agreement Mafco released the Company
from certain claims and Sunbeam was able to retain the services of executive
personnel affiliated with Mafco who had been managing Sunbeam since mid-June of
1998, including Mr. Levin, Mr. Shapiro and Mr. Jenkins. In connection with this
settlement agreement, the Company's Compensation Committee negotiated the terms
of three-year employment agreements between the Company and each of Messrs.
Levin, Shapiro and Jenkins (the "Old Levin Agreement", the "Old Shapiro
Agreement" and the "Old Jenkins Agreement", respectively). Effective January 3,
2000, the Company entered into the Levin Agreement, the Shapiro Agreement and
the Jenkins Agreement, which increased the compensation payable to each of the
three executives and extended the term of each of their employment agreements
through June 30, 2003. See "Employment Agreements with Messrs. Levin, Shapiro
and Jenkins." The terms of the new Employment Agreements were negotiated by the
Compensation Committee, with the advice of an outside consultant, with the goal
of revising the compensation of these three executives to be more competitive
with other comparable companies, although not
10
<PAGE>
necessarily the companies in the Company's self-constructed stockholder return
peer group. See "Stockholder Return Performance Presentation".
Base salaries for the Company's other executives, most of whom were hired in
1998 and 1999 after the employment of Mr. Levin, were established based in large
part upon their salaries at prior positions. The Company does not attempt to
match compensation for such executives to the compensation levels at those
companies which are included in the Company's self-constructed stockholder
return peer groups. See "Stockholder Return Performance Presentation" for a
description of the Company's stockholder return peer group.
Management Incentive Plan
The Incentive Plan is designed to motivate the Company's key employees to
increase stockholder wealth through potential cash bonuses based on the
performance of the Company and their personal performance. The Company's
executive officers and managers and other key employees of the Company are
eligible to participate in the Incentive Plan. Under the Incentive Plan,
participants are eligible to receive bonuses based upon the following financial
performance measurements: (i) earnings before interest, tax and amortization as
stated in conformity with Generally Accepted Accounting Principles ("GAAP");
(ii) asset management goals measured by either changes in days' sales of
receivables and days in inventory or operating working capital per sales dollar;
and (iii) sales targets. Each of the performance goals may relate to the results
of the Company, a business unit, product line, territory or any combination
thereof, and may be adjusted in light of any unusual or non-recurring event
affecting the Company or its financial statements. In addition, participants
other than Senior Officers (as defined below) will be required to meet up to
five personal performance objectives. These performance goals will be oriented
toward quantitative objectives, such as cost savings or earnings enhancement.
The Company's Chief Executive Officer and other executive officers that may be
subject to the provisions of Section 162(m) of the Code, (the "Senior
Officers"), will be awarded bonuses based solely on the Company's performance.
The Incentive Plan provides that during each fiscal year, management of the
Company will recommend to the Compensation Committee certain minimum levels of
Company performance, below which no Senior Officer will receive any bonus under
the Incentive Plan. Participants other than the Senior Officers of the Company
may receive cash bonuses based upon their achievement of personal objectives
even if the Company fails to meet these minimum performance objectives. At the
minimum level of Company performance ("threshold performance"), Incentive Plan
participants will be eligible to receive from 5% to 50% (which will be 62.5%
upon approval of Proposal 5 set forth in this Proxy Statement) of their base
salaries. At another, higher level of performance ("target performance"),
participants will be entitled to receive from 10% to 100% (which will be 125%
upon approval of Proposal 5 set forth in this Proxy Statement) of their base
salaries. At the highest levels of performance ("maximum targets"), participants
may be entitled to receive from 20% to 200% (which will be 250% (subject to a
cap of $4,000,000) upon approval of Proposal 5 set forth in this Proxy
Statement) of their base salaries.
The Compensation Committee believes that this combination of requiring minimum
objective Company performance levels for all participants, coupled with
individual goals (for participants other than the Senior Officers) which are
quantitative in nature and calculated to increase productivity, reduce costs
and/or otherwise enhance profitability of the Company, assists in assuring that
the Company's compensation system, especially the bonus program, aligns the
interests of the Company's officers and other employees with the interests of
its stockholders.
Long-Term Incentive Plan
The Compensation Committee and the Board of Directors adopted the Sunbeam
Corporation Key Executive Long Term Incentive Plan ("LTIP"), subject to the
approval of the Company's stockholders at the Annual Meeting, in order to
provide long-term incentives to the senior managers of the Company's strategic
business units. Under the LTIP, participants are eligible to receive payments
based upon satisfaction of performance measures over cumulative three-year
performance periods that begin each fiscal year. The performance measurements
include earnings before interest, taxes and amortization, net sales and working
capital.
The LTIP provides that during each fiscal year, management of the Company will
recommend to the Compensation Committee certain minimum levels of performance
for executive officers below which no executive officer will receive any
payments under the LTIP. At the minimum level of performance ("threshold
performance") LTIP participants will be eligible to receive 5% to 30% of their
base salaries. At another, higher level of performance ("target performance'),
participants will be entitled to receive from 10% to 60% of their base salaries.
At the highest level of performance ("maximum targets"), participants may be
entitled to receive 20% to 120% of their base salaries. Awards may be paid in
cash and/or Common Stock, at the Company's election.
The Compensation Committee believes that the LTIP, which requires satisfaction
of performance criteria measured over a three-year period, enhances the ability
of the Company's compensation system to align the interests of the Company's
officers and other employees with the interests of its stockholders.
11
<PAGE>
Stock Option Plan
The Compensation Committee believes that the Company's stock option program is
an important factor in attracting and retaining the high caliber employees
essential to the Company's success and in aligning those individuals' long term
interests with those of the stockholders. As of March 31, 2000, options to
purchase an aggregate of 10,430,967 shares of Common Stock were outstanding and
only 801,567 shares of the 16,300,000 shares originally authorized under the
Option Plan remained available for future grants. Therefore, the Compensation
Committee and the Board of Directors approved the 2000 Option Plan, subject to
the approval of the Company's stockholders, which provides for awards of stock
options, stock appreciation rights, restricted stock, stock bonus and/or
performance awards covering up to 8,000,000 shares of Common Stock.
Non-Employee Directors' Compensation
The Compensation Committee and the Board of Directors approved a non-employee
Directors' compensation program consisting of (i) an annual retainer of $25,000,
(ii) a fee of $1,000 for each Board or Committee meeting attended by such
non-employee Director (whether in person or by telephone), (iii) a $2,000 annual
fee for each Committee Chairmanship and (iv) an annual grant of a stock option
to purchase 5,000 shares of Common Stock to be granted on the date of election
of a non-employee Director and upon each subsequent reelection having an
exercise price of the Fair Market Value (as defined in the 2000 Option Plan) on
the date of grant, and vesting at the rate of one-third on each anniversary of
the date of grant. The previous non-employee Directors' compensation program
provided for an annual retainer of $10,000, a fee of $1,000 for each Board or
Committee meeting attended by a Director (whether in person or by telephone),
and the grant of 1,500 shares of restricted stock upon his or her election to
the Board of Directors and upon each subsequent reelection to the Board of
Directors (pro-rated in the case of an election or appointment at any time other
than an annual meeting of stockholders) which vested immediately upon acceptance
of his or her election or appointment. The Compensation Committee determined to
increase the compensation payable to non-employee Directors to make such
compensation more competitive with comparable companies and thereby assist the
Company in attracting qualified directors.
Compliance with Certain Tax Laws
Section 162(m) of the Code limits the deductibility of certain compensation in
excess of $1,000,000 per year paid by a public corporation to its Senior
Officers. However, an exception to the deduction limitations of Section 162(m)
of the Code applies to certain performance-based compensation, provided that the
plan pursuant to which such compensation will be paid has been approved by
stockholders with a separate vote and certain other requirements have been met.
Mr. Levin's annual base salary is $1,150,000 per year under the Levin Agreement,
with additional increases set forth in his Employment Agreement. Mr. Shapiro's
annual base salary is $750,000 under the Shapiro Agreement, increasing to
$1,050,000 effective July 1, 2002. While the base compensation of Messrs. Levin
and Shapiro exceeds the limitations of Section 162(m) of the Code, the
Compensation Committee believes that such compensation is appropriate in order
to provide Messrs. Levin and Shapiro with compensation competitive with the
compensation paid by other comparable companies. See "Employment Agreements with
Messrs. Levin, Shapiro and Jenkins." The Company's stockholders approved the
Incentive Plan at the Company's 1999 annual meeting, therefore, payments will be
performance-based compensation pursuant to Section 162(m) of the Code. Subject
to the approval of the Company's stockholders at the Annual Meeting, payments
under the LTIP and the grants of options to Messrs. Levin, Shapiro and Jenkins
and grants of options and other awards under the Option Plan and the 2000 Option
Plan are also expected to qualify as performance-based compensation pursuant to
Section 162(m).
Compensation of Chief Executive Officer
In order to continue to retain the services of Mr. Levin, which the Compensation
Committee considered essential in order to ensure efficient management of the
Company's business and the successful execution of the Company's strategy of
maximizing stockholder value, the Company entered into the Levin Agreement with
Mr. Levin. (See "Employment Agreements with Messrs. Levin, Shapiro and
Jenkins".)
In setting Mr. Levin's compensation under the Levin Agreement, the Compensation
Committee considered factors such as individual and corporate performance
(without reference to any specific performance-related targets) and individual
experience and expertise. In addition, the Compensation Committee considered Mr.
Levin's overall compensation relative to compensation levels of Chief Executives
of other comparable companies. No particular weight was given by the
Compensation Committee to any of the foregoing factors.
Prior to the effectiveness of the Levin Agreement, Mr. Levin's compensation was
governed by the Old Levin Agreement. See "--Philosophy" and "--Executive
Officers". Pursuant to the Old Levin Agreement, Mr. Levin's base salary was at
least $1,000,000 per year for each year of his employment agreement. In
addition, pursuant to the Old Levin Agreement, Mr. Levin was granted 2,750,000
stock options at exercise prices ranging from $7 per share to $14 per share. In
order to provide Mr. Levin with compensation that was more competitive with
other comparable companies, as of April 1, 1999, the Compensation Committee
approved an increase in Mr. Levin's base salary to $1,150,000 and granted Mr.
Levin stock options pursuant to the Option Plan to purchase 250,000 shares of
12
<PAGE>
Common Stock at an exercise price of $5.56 per share, which was the Fair Market
Value per share (as defined in the Option Plan) on the date of grant. Such stock
option grant vests at the rate of one-third on the first, second and third
anniversary of the date of grant. Mr. Levin was paid a bonus of $1,216,000 for
the 1999 fiscal year under the Incentive Plan. The Compensation Committee also
approved a discretionary bonus of $284,000 to recognize the substantial success
of Mr. Levin during 1999 in non-financial areas of the Company.
The foregoing report is furnished by the Compensation Committee of the Board of
Directors.
Compensation Committee
Howard Gittis, Chairman
John H. Klein
Faith Whittlesey
(Current Members)
Compensation Committee Interlocks and Insider Participation
Members of Sunbeam's Compensation Committee during fiscal year 1999 were Howard
Gittis, Chairman, John Klein, and Faith Whittlesey, none of whom presently do,
or previously did, serve as an officer of Sunbeam or any of its subsidiaries.
Mr. Gittis is an executive officer of MacAndrews & Forbes (see "Certain
Relationships and Related Transactions").
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph compares the cumulative total stockholder return on the
Common Stock for the period from December 31, 1994 through December 31, 1999,
with the cumulative total return of the Standard & Poors Composite-500 Stock
Index and an index of Company-constructed index of peer companies. The
Company-constructed peer group index includes Rubbermaid Incorporated, Newell
Co., The Gillette Company, Inc., Brunswick Corp., Salton, Inc. and
Windmere-Durable Holdings. The stock price graph assumes that the value of the
investment in Common Stock was $100 on December 31, 1994, and that all dividends
were reinvested quarterly.
COMPARISON OF TOTAL RETURN SINCE DECEMBER 31, 1994, OF SUNBEAM CORPORATION
COMMON STOCK, S&P 500, AND PEER GROUP COMPANIES
[GRAPHIC OMITTED]
13
<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of April 15, 2000 with respect to
beneficial ownership of the Common Stock by all persons known by the Company to
be the record or beneficial owner of more than 5% of the outstanding shares of
Common Stock. Except as otherwise noted, all beneficial owners listed below have
sole voting and investment power with respect to the shares of Common Stock
owned by them.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Name of Beneficial Ownership Common Stock
---- ----------------------- -------------
<S> <C> <C>
Ronald O. Perelman................................... 37,099,749 (1) 28.4% (1)
Franklin Mutual Advisers, Inc........................ 17,541,398 (2) 16.3%
Albert J. Dunlap..................................... 7,741,564 (3) 6.8% (3)
Invista Capital Management, LLC/Principal Mutual
Holding Company...................................... 7,392,900 (4) 6.9%
<FN>
(1) Represents shares of Common Stock received by Coleman (Parent) Holdings, Inc., an
affiliate of MacAndrews & Forbes ("Parent Holdings"), in the Company's acquisition of 79%
of the outstanding stock of Coleman and 23 million shares of Common Stock that may be
acquired by a subsidiary of MacAndrews & Forbes pursuant to a warrant issued to it by
Sunbeam. The shares of Common Stock subject to the warrant have a $7 per share exercise
price, which exceeds the current market price of the Common Stock. The address of Parent
Holdings is 35 E. 62nd Street, New York, New York 10021. Ronald O. Perelman is the
indirect beneficial owner of all of the outstanding capital stock of Parent Holdings.
Accordingly, Mr. Perelman may be deemed to be the beneficial owner of all of the shares of
Common Stock owned by Parent Holdings. Mr. Perelman's address is 35 E. 62nd Street, New
York, New York 10021.
(2) Information reflected in this table and the notes thereto with respect to Franklin Mutual
Advisers, Inc. ("FMA") is derived from the Schedule 13D, dated November 1, 1996, filed by
FMA or its predecessors with the Securities and Exchange Commission (the "SEC"), as
thereafter amended, most recently on March 1, 1999. The address of FMA is 51 John F.
Kennedy Parkway, Short Hills, New Jersey 07078. The shares listed above are beneficially
owned by one or more open-end investment companies or other managed accounts which,
pursuant to advisory contracts, are advised by FMA. FMA disclaims beneficial ownership of
these shares.
(3) Information reflected in this table and the notes thereto with respect to Mr. Dunlap (the
former Chairman and Chief Executive Officer of the Company) is based upon filings made by
him with the SEC. Mr. Dunlap's holdings include certain purported stock grants for
1,166,667 shares and options to acquire an additional 6,250,000 shares of Common Stock
granted by the Company which are a matter of dispute between the Company and Mr. Dunlap.
Nothing contained in this Proxy Statement should be construed to limit or otherwise affect
the Company's claims against Mr. Dunlap, including claims with respect to his entitlement
to certain equity grants.
(4) Information reflected in this table and the notes thereto with respect to Invista Capital
Management, LLC ("Invista") and Principal Mutual Holding Company ("Principal") is derived
from the Form 13G jointly filed with the SEC by Invista and Principal on February 15,
2000. The address of Invista is 1900 Hub Tower, 699 Walnut Street, Des Moines, Iowa 50309.
The address of Principal is 711 High Street, Des Moines, Iowa 50392. Invista and Principal
exercise shared voting power and investment discretion with respect to all of the shares
of Common Stock beneficially owned by them.
</FN>
</TABLE>
Security Ownership of Management
The following table sets forth the beneficial ownership, reported to the Company
as of April 15, 2000, of Common Stock, including shares as to which a right to
acquire ownership exists, of: (1) each Director and nominee for election as
Director of the Company; (2) each of the Named Executives, and (3) the
Directors, nominees for Director and current executive officers of the Company
as a group.
14
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage of
Name Ownership(1) Common Stock
---- ------------ -------------
<S> <C> <C>
Directors and Director Nominees
Philip E. Beekman.................................... 6,500 (2) *
Charles M. Elson..................................... 12,000 (2) *
Howard Gittis........................................ 0 (3) *
John H. Klein........................................ 1,915 (2) *
Jerry W. Levin....................................... 83,333 (3)(4) *
David J. Pecker...................................... 0 *
James D. Robinson III................................ 25,000 *
Faith Whittlesey..................................... 8,390 (2) *
Howard Kristol....................................... 12,000 (2) *
Peter Langerman...................................... 0 (5) *
Named Executives
Paul E. Shapiro...................................... 0 (3) *
Bobby G. Jenkins..................................... 33,333 (6) *
Jack D. Hall(7)...................................... 0 *
Ronald H. Dunbar..................................... 100,000 (8) *
All Directors, nominees for Directors,
and current executive officers
as a group (14 persons).............................. 283,815 (9) *
<FN>
* Less than one percent.
(1) All of the above named individuals have the sole power to vote and to dispose of the shares of
Common Stock listed above except that 5,000 of the shares beneficially owned by Mr. Beekman are
held by the Beekman Family Limited Partnership, of which he is a General Partner.
(2) Includes restricted shares of Common Stock granted to each of Directors Beekman, Elson, Klein,
Kristol and Whittlesey upon their respective elections, appointments and subsequent reelections to
the Sunbeam Board of Directors, all of which shares were immediately vested.
(3) Does not include shares of Common Stock owned by MacAndrews & Forbes as to which Messrs. Gittis,
Levin and Shapiro disclaim beneficial ownership. See "Security Ownership Of Certain Beneficial
Owners."
(4) Mr. Levin has the right to acquire all of such shares under options which are currently
exercisable; no other options become exercisable within sixty days after April 15, 2000.
(5) Does not include shares of Sunbeam Common Stock owned by Franklin Mutual Advisers, as to which Mr.
Langerman disclaims beneficial ownership. See "Security Ownership Of Certain Beneficial Owners."
(6) Mr. Jenkins has the right to acquire all of such shares under options which are currently
exercisable; no other options become exercisable within sixty days after April 15, 2000.
(7) Mr. Hall resigned as President, International in April 2000.
(8) Mr. Dunbar has the right to acquire all of such shares under options which are currently
exercisable; no other options become exercisable within sixty days after April 15, 2000.
(9) Includes 216,666 shares of Common Stock which all current executive officers of the Company have
the right to acquire under options which are currently exercisable; no other options held by
current executive officers become exercisable within sixty days after April 15, 2000.
</FN>
</TABLE>
15
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Services Provided by MacAndrews & Forbes
Under Sunbeam's August 1998 settlement agreement with an affiliate of MacAndrews
& Forbes, in addition to the services of MacAndrews & Forbes' former executive
personnel who have been managing Sunbeam since Mid-June 1998, MacAndrews &
Forbes agreed to provide management assistance and other support to Sunbeam at
its request in a wide variety of areas. Although the nature and extent of this
assistance and support had not been determined at the time of the settlement,
Sunbeam has significantly benefited from this assistance and support in
connection with the following areas: (i) negotiations with Sunbeam's lending
banks; (ii) the defense of the many lawsuits brought against Sunbeam and certain
of its present and former directors and officers; (iii) the prosecution of
claims against Sunbeam's liability insurance providers; (iv) the defense of
claims against Sunbeam by its former Chief Executive Officer and Chief Financial
Officer; (v) the restatement of certain of Sunbeam's historical financial
statements; (vi) the preparation of various SEC filings by Sunbeam and Coleman;
and (vii) various other insurance, regulatory, litigation and executive
compensation matters. MacAndrews & Forbes employees provide this assistance and
support to Sunbeam. Sunbeam does not pay MacAndrews & Forbes and its affiliates
for the services of its employees, but does reimburse them for out-of-pocket
expenses. Execution of the settlement agreement was a condition to Sunbeam's
continued employment of Messrs. Levin, Shapiro and Jenkins as officers of
Sunbeam.
Settlement of Options
Pursuant to the Company's agreement for the acquisition of the remaining shares
of Coleman common stock in a merger transaction which was completed in January
2000, the unexercised options under Coleman's stock option plans were cashed out
at a price per share equal to the difference between $27.50 and the exercise
price of such option. Ronald O. Perelman, the sole stockholder of MacAndrews &
Forbes, held 500,000 options for which he received a net payment of $6,750,000.
Messrs. Shapiro and Isko held 77,500 and 20,000 options, respectively, for which
they received a net payment of approximately $823,000 and $236,000,
respectively.
Arrangements with Coleman
Coleman and an affiliate of MacAndrews & Forbes are parties to a
cross-indemnification agreement pursuant to which Coleman has agreed to
indemnify such affiliate, its officers, directors, employees, control persons,
agents and representatives against all past, present and future liabilities,
including product liability and environmental matters, relating to the initial
assets of Coleman, that Coleman acquired from an affiliate of MacAndrews &
Forbes in December 1991. In addition, pursuant to this cross-indemnification
agreement, the MacAndrews & Forbes affiliate has agreed to indemnify Coleman and
its officers, directors, employees, agents and representatives against all other
liabilities of such MacAndrews & Forbes affiliate or any of its subsidiaries,
including liabilities relating to the assets it did not transfer to Coleman in
December 1991. This cross-indemnification agreement survived the January 1999
merger of Coleman with a subsidiary of the Company.
Coleman previously was included in the consolidated tax group for the MacAndrews
& Forbes companies and was a party to a tax sharing agreement with a MacAndrews
& Forbes affiliate, pursuant to which Coleman paid to such affiliate the amount
of taxes that would have been paid by Coleman if it were required to file
separate Federal, state or local income tax returns. The obligations of
MacAndrews & Forbes under the tax sharing agreement were terminated upon the
Company's acquisition of control of Coleman; however, the agreements related to
the Company's acquisition of Coleman provide for certain tax indemnities and tax
sharing payments among the Company and the MacAndrews & Forbes affiliates
relating to periods prior to the acquisition.
Office Space
The Company previously subleased office space in New York City from a subsidiary
of MacAndrews & Forbes. The expense for such rent during 1999 was approximately
$90,000.00. The Company believes that the terms of such sublease were comparable
to the market rate for such space. This lease was terminated in 1999.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
By: /s/ BOBBY G. JENKINS
-------------------------------
Bobby G. Jenkins
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: June 22, 2000
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