EXHIBIT 10.38
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 31, 1998 between
Sunbeam Corporation, a Delaware corporation (the "Company") and Xxxxx X. Xxxxx
(the "Executive").
The Company wishes to employ the Executive, and the Executive
wishes to accept such employment, on the terms and conditions set forth in this
Agreement.
Accordingly, the Company and the Executive hereby agree as
follows:
1 Employment, Duties and Acceptance.
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1.1 Employment, Duties. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as Vice President - Finance or in such other
executive position as may be mutually agreed upon by the Company and the
Executive, and to perform such other duties consistent with such position as may
be assigned to the Executive by the Board of Directors of the Company (the
"Board").
1.2 Acceptance. The Executive hereby accepts such employment
and agrees to render the services described above. During the Term, the
Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be. The
Executive hereby represents and warrants that the Executive is not subject to
any other agreement, including without limitation any agreement not to compete
or confidentiality agreement, which would be violated by the Executive's
performance of services hereunder.
1.3 Location. The duties to be performed by the Executive
hereunder shall be performed primarily at the office of the Company in Palm
Beach County, Florida, subject to reasonable travel requirements on behalf of
the Company.
2 Term of Employment; Certain Post-Term Benefits.
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2.1 The Term. The term of the Executive's employment under
this Agreement (the "Term") shall commence on June 15, 1998 and shall end on
June 14, 2000.
2.2 Special Curtailment. The Term shall end earlier than the
original termination date provided in Section 2.1, if sooner terminated pursuant
to Section 4.
3 Compensation; Benefits.
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3.1 Salary. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay the Executive during the
Term a base salary, payable semi-monthly in arrears, at the annual rate of not
less than $270,000 (the "Base Salary"), less such deductions or amounts to be
withheld as required by applicable law and regulations. In the event that the
Company, in its sole discretion, from time to time determines to increase the
Base Salary, such increased amount shall, from and after the effective date of
the increase, constitute "Base Salary" for purposes of this Agreement.
3.2 Annual Bonus. In addition to the amounts to be paid to the
Executive pur suant to Section 3.1, the Executive will be eligible to receive a
performance-based bonus with respect to each year of the Term commencing in
1999, based upon a target bonus opportunity of 50% of Base Salary, payable
within 90 days following the end of the Company's fiscal year. Performance goals
for such bonuses shall be determined by the Compensation Committee of the Board
of Directors. Upon expiration of the Term without renewal, the Executive shall
be eligible to receive a pro rata performance-based bonus for the final bonus
period commencing during the Term based upon performance through June 30, 2000,
and payable within 90 days following such expiration of the Term.
3.3 Guaranteed Bonus. For 1998, the Executive shall receive a
guaranteed bonus equal to $73,125 (the "1998 Bonus"), payable on or before
January 15, 1999.
3.4 Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive
during the Term in the performance of the Executive's services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as the Company customarily may require of its officers
provided, however, that the maximum amount available for such expenses during
any period may be fixed in advance by the Chairman or Vice Chairman of the Board
of Directors or the Board of Directors.
3.5 Vacation. During the Term, the Executive shall be entitled
to a vacation period or periods of four weeks taken in accordance with the
vacation policy of the Company during each year of the Term. Vacation time not
used by the end of a year shall be forfeited.
3.6 Fringe Benefits. During the Term, the Executive shall be
entitled to all benefits for which the Executive shall be eligible under any
qualified pension plan, 401(k) plan, group insurance or other so-called "fringe"
benefit plan which the Company provides to its employees generally, together
with executive medical benefits for the Executive, the Executive's spouse and
the Executive's children as from time to time in effect for officers of the
Company generally. The Executive shall be entitled to participate in the
Company's relocation program in
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connection with entering into this Agreement, and in the case of the sale of
Executive's present home in Wichita, Kansas, the provisions of Appendix II shall
apply.
3.7 Stock Options. The Company shall grant to the Executive on
the date hereof, subject to the receipt of shareholder approval to the extent
required under (1) Section 162(m) of the Internal Revenue Code of 1986, as
amended, (2) the terms of the Amended and Restated Sunbeam Corporation Stock
Option Plan (the "Option Plan"), if the grant is to be made under such plan, or
(3) the shareholder approval policy of the New York Stock Exchange, which
shareholder approval shall be requested by the Company when it next solicits
proxies from its shareholders, non-qualified stock options (the "Options") with
a scheduled 10-year term to purchase shares of the common stock of the Company,
par value $.01 per share. The Options shall be granted in an amount and at the
exercise price as set forth on Appendix I to this Agreement. The Options shall
vest and become exercisable in full on June 14, 2000 (if the Executive remains
employed pursuant to this Agreement as of such date) or, to the extent the
Option is outstanding, upon a "Change in Control" of the Company. The Options
shall be subject to earlier vesting or forfeiture as set forth in Section 4. The
Options shall be subject to all other terms and conditions as set forth in an
Option Agreement between the Company and the Executive. For purposes of this
Agreement, Change in Control shall have the meaning set forth in the Option Plan
as in effect as of the date of this Agreement.
3.8 Additional Benefits. During the Term, the Executive shall
be entitled to such additional benefits generally provided to other senior
executives of the Company.
4 Termination.
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4.1 Death. If the Executive shall die during the Term, the
Term shall terminate and no further amounts or benefits shall be payable
hereunder, except that the Executive's legal representatives shall be entitled
to receive continued payments in an amount equal to 60% of the Base Salary, in
the manner specified in Section 3.1, until the longer of 12 months or the end of
the Term (as in effect immediately prior to the Executive's death). The Options
shall become vested and exercisable as of the Executive's death during the Term
(provided, that, to the extent shareholder approval continues to be required
under Section 3.7, such accelerated vesting and exercisability shall occur upon
such approval), and shall remain exercisable for three years following the later
of such death during the Term or the receipt of any required shareholder
approval with respect to such Options, by the beneficiary designated by the
Executive on a form prescribed for such purpose by the Company, or in the
absence of such designation by the Executive's legal representative.
4.2 Disability. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's services hereunder for (i) a
period of six consecutive months or (ii) for shorter periods aggregating six
months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equalled an aggregate of six months, by
written notice to the
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Executive (but before the Executive has recovered from such disability),
terminate the Term and no further amounts or benefits shall be payable
hereunder, except that the Executive shall be entitled to receive continued
payments in an amount equal to 60% of the Base Salary, in the manner specified
in Section 3.1, until the longer of 12 months or the end of the Term (as in
effect immediately prior to such termination). Upon the Executive's termination
for disability, the Options shall, subject to the receipt of any required
shareholder approval under Section 3.7, continue to vest and become exercisable
pursuant to their original vesting schedule, and shall remain exercisable for
three years following vesting. If the Executive shall die before receiving all
payments to be made by the Company in accordance with this Section 4.2, such
payments shall be made to the beneficiary designated by the Executive on a form
prescribed for such purpose by the Company, or in the absence of such
designation to the Executive's legal representative.
4.3 Cause/Voluntary Termination. In the event of gross neglect
by the Executive of the Executive's duties hereunder, conviction of the
Executive of any felony, conviction of the Executive of any lesser crime or
offense involving the property of the Company or any of its subsidiaries or
affiliates, willful misconduct by the Executive in connection with the
performance of any material portion of the Executive's duties hereunder, a
willful breach by the Executive of Sections 5, 6 or 7 or any other material
provision of this Agreement or any other conduct on the part of the Executive
which would make the Executive's continued employment by the Company materially
prejudicial to the best interests of the Company, the Company may at any time by
written notice to the Executive terminate the Term and, upon such termination,
this Agreement shall terminate and the Executive shall be entitled to receive no
further amounts or benefits hereunder, except any as shall have been earned to
the date of such termination and owed to the Executive. In the event the
Executive voluntarily terminates employment (other than pursuant to Section 4.4
as a result of a breach of this Agreement by the Company), this Agreement shall
terminate and the Executive shall be entitled to receive no further amounts or
benefits hereunder, except any as shall have been earned by and owned to the
Executive as of the date of such termination. Upon a termination of the
Executive's employment under this Section 4.3, all unvested Options shall be
immediately forfeited.
4.4 Company Breach. In the event of the breach of any material
provision of this Agreement by the Company (including without limitation the
failure to obtain shareholder approval of the stock option grant described under
Section 3.7 to the extent such approval is required under such Section 3.7, at
or prior to the Company's first annual meeting of shareholders following the
date of this Agreement), the Executive shall be entitled to terminate the Term
upon 60 days' prior written notice to the Company. Upon such termination, or in
the event the Company terminates the Term or this Agreement other than pursuant
to the provisions of Sections 4.2 or 4.3, the Company shall continue to provide
the Executive (i) payments of Base Salary, in the manner and amount specified in
Section 3.1, (ii) at the time such bonus payments would have otherwise been
paid, the sum of (A) in the event of the Executive's termination prior to
payment of the 1998 Bonus, the 1998 Bonus and (B) an amount equal to the
Executive's target bonus opportunity percentage as in effect as of the date of
termination, multiplied by the Executive's Base Salary as of the date of
termination, payable with respect to each remaining
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bonus period which would otherwise have ended during the Term (the "Full Bonus
Periods"), and payable on a pro rata basis for the final bonus period which
would have otherwise commenced during the scheduled Term following the last Full
Bonus Period (based upon the portion of such bonus period which would have been
completed as of the end of the scheduled Term), and (iii) medical, dental, life
and long-term disability insurance benefits in the manner and amounts specified
in Sections 3.6 (provided that the Executive shall continue to bear the cost of
such benefits required to be paid by employees) or, for a period of twelve
months after the last day of the month in which termination described in this
Section 4.4 occurred, whichever is longer (the "Damage Period"); provided,
however, that if the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under another
employee-provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. In addition, upon such termination of
employment, each of the Options shall immediately vest and become exercisable
(provided, that, to the extent shareholder approval continues to be required
under Section 3.7, such accelerated vesting and exercisability shall occur upon
receipt of such approval) in an amount equal to (a) the number of shares subject
to such Option, multiplied by (b) (i) the number of full and partial months
during the Term prior to the Executive's termination of employment, divided by
(ii) twenty-four. The vested portion of the Options shall remain exercisable for
three years following the later of the Executive's termination of employment or
the receipt of any required shareholder approval with respect to such Options,
and the remaining portion of the Options shall be forfeited upon the Executive's
termination of employment. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced (except as provided in this Section 4.4) whether or
not the Executive obtains other employment.
4.5 Litigation Expenses. Except as provided for in Section
5.7, if the Company and the Executive become involved in any action, suit or
proceeding relating to the alleged breach of this Agreement by the Company or
the Executive, and if a judgment in such action, suit or proceeding is rendered
in favor of the Executive with respect to a material portion of such action,
suit or proceeding, the Company shall reimburse the Executive for all expenses
(including reasonable attorneys' fees) reasonably incurred by the Executive in
connection with such action, suit or proceeding.
5 Protection of Confidential Information; Non-Competition.
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5.1 In view of the fact that the Executive's work for the
Company will bring the Executive into close contact with many confidential
affairs of the Company not readily available to the public, and plans for future
developments, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence all
confidential matters of the Company, including, without limitation, "know how",
trade secrets, customer lists, pricing policies, operational methods, technical
processes, formulae, inventions and research projects, other business affairs of
the Company, and any information whatsoever concerning any director,
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officer, employee or agent of the Company or their respective family members
learned by the Executive heretofore or hereafter, and not to disclose them to
anyone outside of the Company, either during or after the Executive's employment
with the Company, except in the course of performing the Executive's duties
hereunder or with the Company's express written consent. The foregoing
prohibitions shall include, without limitation, directly or indirectly
publishing (or causing, participating in, assisting or providing any statement,
opinion or information in connection with the publication of) any diary, memoir,
letter, story, photograph, interview, article, essay, account or description
(whether fictionalized or not) concerning any of the foregoing, publication
being deemed to include any presentation or reproduction of any written, verbal
or visual material in any communication medium, including any book, magazine,
newspaper, theatrical production or movie, or television or radio programming or
commercial; and
5.1.2 To deliver promptly to the Company on termination of the
Executive's employment by the Company, or at any time the Company may so
request, all memoranda, notes, records, reports, manuals, drawings, blueprints
and other documents (and all copies thereof) relating to the Company's business
and all property associated therewith, which the Executive may then possess or
have under the Executive's control.
5.2 During the Term, the Executive shall not, directly or
indirectly, on his own behalf or behalf of any other person or entity, enter the
employ of, or render any services to, any person, firm or corporation engaged in
any business competitive with the business of the Company or of any of its
subsidiaries or affiliates; the Executive shall not engage in such business on
the Executive's own account; and the Executive shall not become interested in
any such business, directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee, trustee, consultant,
or in any other relationship or capacity provided, however, that nothing
contained in this Section 5.2 shall be deemed to prohibit the Executive from
acquiring, solely as an investment, up to five percent (5%) of the outstanding
shares of capital stock of any public corporation.
5.3 If the Executive willfully commits a breach, or threatens
to commit a breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the
Company shall have the right to terminate the Executive's employment (with the
consequences set forth in Section 4.3 above), and the following additional
rights and remedies:
5.3.1 The right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company; and
5.3.2 The right and remedy to require the Executive to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively "Benefits") derived or received by
the Executive as the result of any transactions constituting a breach of any of
the provisions of Sections 5.1 or 5.2, and the Executive hereby agrees to
account for and pay over such Benefits to the Company.
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Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
5.4 If any of the covenants contained in Sections 5.1 or 5.2,
or any part thereof, hereafter are construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect, without regard to the invalid portions.
5.5 If any of the covenants contained in Sections 5.1 or 5.2,
or any part thereof, are held to be unenforceable because of the duration of
such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
area of such provision and, in its reduced form, said provision shall then be
enforceable.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such covenants as to
breaches of such covenants in such other respective jurisdictions, the above
covenants as they relate to each state being for this purpose severable into
diverse and independent covenants.
5.7 In the event that any action, suit or other proceeding in
law or in equity is brought to enforce the covenants contained in Sections 5.1
and 5.2 or to obtain money damages for the breach thereof, and such action
results in the award of a judgment for money damages or in the granting of any
injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.
6 Inventions and Patents.
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6.1 The Executive agrees that all processes, technologies and
inventions (collectively, "Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
provided that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are
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conceived or made on the Company's time or with the use of the Company's
facilities or materials. The Executive shall further: (a) promptly disclose such
Inventions to the Company; (b) assign to the Company, without additional
compensation, all patent and other rights to such Inventions for the United
States and foreign countries; (c) sign all papers necessary to carry out the
foregoing; and (d) give testimony in support of the Executive's inventorship.
6.2 If any Invention is described in a patent application or
is disclosed to third parties, directly or indirectly, by the Executive within
two years after the termination of the Executive's employment by the Company, it
is to be presumed that the Invention was conceived or made during the Term.
6.3 The Executive agrees that the Executive will not assert
any rights to any Invention as having been made or acquired by the Executive
prior to the date of this Agreement, except for Inventions, if any, disclosed to
the Company in writing prior to the date hereof.
7 Intellectual Property.
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The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.
8 Indemnification.
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The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the Executive
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company.
9 Notices.
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All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
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If to the Company, to:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
If to the Executive, to:
Xxxxx X. Xxxxx
00000 Xxxxx Xxx Xxxxx
Xxxx Xxxxx, XX 00000
General.
9.1 This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely in Delaware.
9.2 The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.3 This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
9.4 This Agreement, and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder (i) to any affiliate or (ii) to
third parties in connection with any sale, transfer or other disposition of all
or substantially all of its business or assets; in any event the obligations of
the Company hereunder shall be binding on its successors or assigns, whether by
merger, consolidation or acquisition of all or substantially all of its business
or assets.
9.5 This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived,
only by a written instrument executed by both of the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any
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other term or covenant contained in this Agreement.
10 Subsidiaries and Affiliates.
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10.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
SUNBEAM CORPORATION
By:
--------------------------------
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Xxxxx X. Xxxxx
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APPENDIX I
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Stock Options.
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The Executive's Options shall be granted for 50,000 shares of
Common Stock, at an exercise price of $7.00 per share. In addition, the
Executive shall have the opportunity to exchange the 75,000 options presently
held by the Executive for 50,000 Options, under the Company's recently announced
Option Exchange Program, provided, that, all of the terms of such Options
obtained in such exchange shall be consistent with the provisions of Sections
3.7 and 4.4 of this Agreement.
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