{"id":39553,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-salton-maxim-housewares-inc-and-david-c.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-salton-maxim-housewares-inc-and-david-c","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-salton-maxim-housewares-inc-and-david-c.html","title":{"rendered":"Employment Agreement &#8211; Salton\/Maxim Housewares Inc. and David C. Sabin"},"content":{"rendered":"<pre>\n                              EMPLOYMENT AGREEMENT\n                                        \n                                        \n                                    Between\n                                        \n                         SALTON\/MAXIM HOUSEWARES, INC.\n                                        \n                                      And\n                                        \n                                 DAVID C. SABIN\n\n\n\n\n\n                               TABLE OF CONTENTS\n\n                                                                           PAGE\n\nARTICLE I.  DEFINITIONS...................................................   1\n     1.1    'Accrued Annual Base Salary'..................................   1\n     1.2    'Accrued Annual Incentive Bonus'..............................   1\n     1.3    'Affiliate'...................................................   1\n     1.4    'AFR Rate'....................................................   1\n     1.5    'Anniversary Date'............................................   1\n     1.6    'Annual Base Salary'..........................................   1\n     1.7    'Annual Incentive Bonus'......................................   1\n     1.8    'Beneficiary'.................................................   1\n     1.9    'Board'.......................................................   2\n     1.10   'Cause'.......................................................   2\n     1.11   'Change of Control'...........................................   2\n     1.12   'Code'........................................................   3\n     1.13   'Common Stock'................................................   3\n     1.14   'Commencement Date'...........................................   3\n     1.15   'Company'.....................................................   3\n     1.16   'Compensation Committee'......................................   3\n     1.17   'Contract Term'...............................................   3\n     1.18   'Date of Termination'.........................................   3\n     1.19   'Disability'..................................................   3\n     1.20   'Excise Tax'..................................................   4\n     1.21   'Executive'...................................................   4\n     1.22   'Fair Market Value'...........................................   4\n     1.23   'Fiscal Year'.................................................   4\n     1.24   'Full Retirement Benefits'....................................   4\n     1.25   'Good Reason'.................................................   4\n     1.26   'Incumbent Directors'.........................................   5\n     1.27   'Initial Base Salary..........................................   5\n     1.28   'Maximum Goals'...............................................   5\n     1.29   'Maximum Bonus'...............................................   5\n     1.30   'Merger'......................................................   5\n     1.31   '1934 Act'....................................................   5\n     1.32   'Notice of Consideration'.....................................   5\n     1.33   'Performance Period'..........................................   6\n     1.34   'Permitted Transferee'........................................   6\n     1.35   'Person'......................................................   6\n     1.36   'Prorata Annual Incentive Bonus'..............................   6\n     1.37   'Prorata Retirement Benefits'.................................   6\n     1.38   'Stock Option'................................................   6\n     1.39   'Stock Option Term'...........................................   6\n\n\n                                       i\n\n\n\n\n\n     1.40   'Subsequent Base Salary'........................................  6\n     1.41   'Subsidiary'....................................................  6\n     1.42   'Target Bonus'..................................................  6\n     1.43   'Target Goals'..................................................  6\n     1.44   'Taxes'.........................................................  7\n     1.45   'Tax Gross-Up Payment'..........................................  7\n     1.46   'Termination of Employment'.....................................  7\n     1.47   'Termination of Employment Without Cause'.......................  7\n     1.48   'Threshold Bonus'...............................................  7\n     1.49   'Threshold Goals'...............................................  7\n     1.50   'Voting Securities'.............................................  7\n\nARTICLE II.  DUTIES.........................................................  7\n     2.1    Duties..........................................................  7\n     2.2    Other Activities................................................  7\n\nARTICLE III.  TERM OF AGREEMENT.............................................  8\n     3.1    Term............................................................  8\n\nARTICLE IV.  COMPENSATION...................................................  8\n     4.1    Salary..........................................................  8\n     4.2    Bonus...........................................................  8\n\nARTICLE V.  STOCK OPTION GRANT..............................................  9\n     5.1    Grant of Stock Options..........................................  9\n\nARTICLE VI.  OTHER BENEFITS................................................. 10\n     6.1    Incentive, Savings and Retirement Plans......................... 10\n     6.2    Welfare Benefits................................................ 10\n     6.3    Fringe Benefits................................................. 10\n     6.4    Vacation........................................................ 10\n     6.5    Expenses........................................................ 10\n     6.6    Office and Support Staff........................................ 10\n     6.7    Tax Gross-Up Payment............................................ 11\n\nARTICLE VII.  TERMINATION BENEFITS.......................................... 11\n     7.1    Termination of Employment for Cause or Other Than for Good \n            Reason.......................................................... 11\n     7.2    Termination of Employment for Death or Disability............... 12\n     7.3    Termination of Employment By The Company Without Cause Or By the\n            Executive for Good Reason....................................... 12\n     7.4    Termination Benefits upon a Change of Control................... 13\n     7.5    Other Termination Benefits...................................... 13\n\nARTICLE VIII.  RESTRICTIVE COVENANTS........................................ 13\n\n                                        \n                                       ii\n\n\n\n\n\n     8.1    Non-Solicitation of Employees; Confidentiality; Non-Competition.. 13\n<font size=\"2\">     8.2    Injunction....................................................... 13\n\nARTICLE IX.  MISCELLANEOUS................................................... 14\n     9.1    Full Settlement.................................................. 14\n     9.2    Enforcement...................................................... 14\n     9.3    Assignment, Successors........................................... 15\n     9.4    Beneficiary...................................................... 15\n     9.5    Nonalienation of Benefits........................................ 15\n     9.6    Severability..................................................... 15\n     9.7    Amendment and Waiver............................................. 15\n     9.8    Notices.......................................................... 15\n     9.9    Counterpart Originals............................................ 16\n     9.10   Entire Agreement................................................. 16\n     9.11   Effect on Other Agreements....................................... 16\n     9.12   Applicable Law................................................... 16\n     9.13   Survival of Executive's Rights................................... 16\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/font>                                      iii\n\n\n\n\n                              EMPLOYMENT AGREEMENT\n\n\n     THIS AGREEMENT, effective as of December 19, 1997, is made by and between\nSalton\/Maxim Housewares, Inc., a Delaware corporation (hereinafter the\n'Company'), and David C. Sabin (the 'Executive'), a resident of the State of\nIllinois; and\n\n     WHEREAS, the Company desires to obtain the services of the Executive and\nExecutive is willing to render such services, in accordance with the terms\nherein set forth; and\n\n     NOW, THEREFORE, in consideration of the mutual undertakings of the parties\nhereto, the Company and the Executive agree as follows:\n\n                                   ARTICLE I.\n                                  DEFINITIONS\n\n     1.1   'Accrued Annual Base Salary' means that portion of the Executive's\nAnnual Base Salary which is accrued but unpaid as of the Date of Termination.\n\n     1.2   'Accrued Annual Incentive Bonus' means the amount of any Annual\nIncentive Bonus earned with respect to the calendar year ending prior to the\nDate of Termination but which is unpaid as of the Date of Termination.\n\n     1.3   'Affiliate' means any corporation or other entity which directly or\nthrough intervening entities owns more than thirty five percent (35%) of the\ncombined power or value of all shares of stock of a corporation or more than\nthirty five percent (35%) of the capital and profits interest of an\nunincorporated entity, and any corporation or other entity so owned by an\nAffiliate.\n\n     1.4   'AFR Rate' means the applicable federal interest rate determined in\naccordance with Section 1274 of the Code.\n\n     1.5   'Anniversary Date' means any annual anniversary of the Commencement\nDate.\n\n     1.6   'Annual Base Salary' means (i) the Initial Base Salary from December\n19, 1997 through and including June 30, 1998, and (ii) the Subsequent Base\nSalary from July 1, 1998 through the Contract Term; provided, however, that the\nterm Annual Base Salary as used in this Agreement shall refer to the Subsequent\nBase Salary as increased pursuant to the terms of Section 4.1 hereof.\n\n     1.7   'Annual Incentive Bonus' has the meaning specified in Section 4.2 of\nthis Agreement.\n\n     1.8   'Beneficiary' means that term as defined in Section 9.4.\n\n\n\n\n\n\n     1.9   'Board' means that term as defined in Section 2.1.\n\n     1.10  'Cause' means (a) the Executive's committing any felony or other\ncrime involving dishonesty (b) willful or intentional material breach of this\nAgreement including but not limited to intentionally or willfully wrongful\nconduct in performing or refusing to perform the duties under this Agreement;\nprovided that Cause as defined in Clause (b) shall not constitute Cause unless\nExecutive is provided with written notice ('Notice to Cure') of such cause and\nfails to cure it within a reasonable period (not less than 15 nor more than 30\ndays) after receipt of the Notice to Cure, except that Executive will not be\nentitled to a Notice to Cure and opportunity to cure if the Executive knew that\nthe wrongful conduct would result in material harm to the Company; and provided\nfurther that the Company shall not be required to provide the Notice to Cure in\ncases of repeated acts or omissions (provided that notice with respect to such\nact shall have been given at least once); and provided further that Cause as\ndefined in clause (b) shall not mean:\n\n           (i)   bad judgment;\n\n           (ii)  negligence;\n\n           (iii) any act or omission believed by the Executive in good faith to\n     have been in or not opposed to the interest of the Company (without intent\n     of the Executive to gain therefrom, directly or indirectly, a profit to\n     which the Executive was not legally entitled); or\n\n           (iv)  any act or omission with respect to which notice of termination\n     of employment of the Executive is given more than twelve (12) months after\n     the earliest date on which any member of the Board who is not a party to\n     the act or omission, knew of such act or omission.\n\n     1.11  'Change of Control' shall be deemed to have occurred upon any of the\nfollowing events:\n\n           (a)  any person (as such term is used in Rule 13d-5 of the Securities\n     Exchange Act of 1934 (the '1934 Act') or group (as such term is defined in\n     Section 13(d) of the 1934 Act), other than a Subsidiary or any employee\n     benefit plan (or any related trust) of the Company becomes the beneficial\n     owner of thirty-five percent (35%) or more of the Common Stock of the\n     Company or of securities of the Company that are entitled to vote generally\n     in the election of directors of the Company ('Voting Securities')\n     representing thirty-five percent (35%) or more of the combined voting power\n     of all Voting Securities of the Company;\n\n           (b)  within a period of 24 months or less, the individuals who, as of\n     any date on or after July 30, 1998, constitute the Board (the 'Incumbent\n     Directors') cease for any\n\n                                       2\n\n\n\n\n     reason to constitute at least seventy five percent (75%) of the Board\n     unless at the end of such period, seventy five percent (75%) of individuals\n     then constituting the Board are persons who are Incumbent Directors or were\n     nominated upon the recommendation of seventy five percent (75%) of the\n     Incumbent Directors.\n\n           (c)  approval by the stockholders of the Company of either of the\n     following:\n\n                (i)  a merger, reorganization or consolidation ('Merger') with\n           respect to which the individuals and entities who were the respective\n           beneficial owners of Common Stock and Voting Securities of the\n           Company immediately before such Merger do not, after such Merger,\n           beneficially own, directly or indirectly, more than fifty percent\n           (50%) of, respectively, the common stock and the combined voting\n           power of the Voting Securities of the corporation resulting from such\n           Merger in substantially the same proportion as their ownership\n           immediately before such Merger, or\n\n                (ii) the sale or other disposition of all or substantially all\n           of the assets of the Company.\n\nNotwithstanding the foregoing, there shall not be a Change in Control if, in\nadvance of such event, Executive agrees in writing that such event shall not\nconstitute a Change in Control.\n\n     1.12  'Code' means the Internal Revenue Code of 1986, as amended from time\nto time.\n\n     1.13  'Common Stock' means common stock of the Company.\n\n     1.14  'Commencement Date' means that term as defined in Section 3.1.\n\n     1.15  'Company' has the meaning specified in the recitals to this\nAgreement.\n\n     1.16  'Compensation Committee' means the Company's compensation committee\nas formed, elected and reelected by the Board.\n\n     1.17  'Contract Term' has the meaning specified in Section 3.1 of this\nAgreement.\n\n     1.18  'Date of Termination' means the date as of which the Executive's\nemployment with the Company is terminated by the Company or by the Executive for\nany reason including, but not limited to, death or Disability.\n\n     1.19  'Disability' means a mental or physical condition which, in the\nopinion of the Board, renders Executive unable or incompetent to carry out the\njob responsibilities which such Executive held or the duties to which Executive\nwas assigned at the time the disability was incurred, which has existed for at\nleast three (3) months and which in the opinion of a physician mutually agreed\nupon by the Company and Executive (provided that neither party shall\n\n\n                                       3\n\n\n\n\nunreasonably withhold his agreement) is expected to be permanent or to last for\nan indefinite duration or a duration in excess of six (6) months.\n\n     1.20  'Excise Tax' has the meaning specified in Section 6.7.\n\n     1.21  'Executive' has the meaning specified in the recitals to this\nAgreement.\n\n     1.22  'Fair Market Value' means (a) the average of the high and low prices\nof the Common Stock reported on the Nasdaq National Market, (b) if the Common\nStock shall not then be listed on the Nasdaq National Market but there is a\npublic market for the Common Stock, the average of the high and low prices of\nthe Common Stock on the national securities exchange on which the Common Stock\nis traded, or if no quotations are available, the average high bid and low asked\nquotations in the over-the-counter market, or (c) if there is no public market\nfor the Common Stock, the fair market value of the Common Stock determined by\nthe Compensation Committee through whatever means or method as in the good faith\nexercise of its discretion it shall at the time deem appropriate.\n\n     1.23  'Fiscal Year' means the 52-53 week period ending on the Saturday\nclosest to June 30.\n\n     1.24  'Full Retirement Benefits' means that term as defined in Section\n6.8(a).\n\n     1.25  'Good Reason' means the occurrence of any one of the following events\nunless Executive specifically agrees in writing that such event shall not be\nGood Reason:\n\n           (a)  any material breach of the Agreement by the Company including,\n     but not limited to:\n\n                (i)   the failure of the Company to comply with the provisions\n           of Articles IV, V or VI of the Agreement;\n\n                (ii)  failure to appoint, elect or reelect the Executive as a\n           member and Chairman of the Board;\n\n                (iii) causing or requiring Executive to report to anyone other\n           than the Board; and\n\n                (iv)  assignment of duties materially inconsistent with his\n           position and duties described in this Agreement.\n\n           (b)  the failure of the Company to assign this Agreement to a\n     successor to the Company or failure of a successor to the Company to\n     explicitly assume and agree to be bound by the Agreement,\n\n\n\n                                       4\n\n\n\n\n           (c)  the Company's requiring the Executive to be based at any office\n     or location more than 50 miles from the Company's offices as of the date of\n     execution of this Agreement in Mt. Prospect, Illinois,\n\n           (d)  the Termination of Employment without Cause by the Company of\n     William B. Rue or the Termination of Employment by William B. Rue for Good\n     Reason (in each case as determined in accordance with the employment\n     agreement between the Company and William B. Rue),\n\n           (e)  the Termination of Employment without Cause by the Company of\n     Leonhard Dreimann or the Termination of Employment by Leonhard Dreimann for\n     Good Reason (in each case as determined in accordance with the employment\n     agreement between the Company and Leonhard Dreimann),\n\n           (f)  a Termination of Employment by Executive for any reason during\n     the 30-day period immediately following the one-year anniversary of a\n     Change of Control; provided, however, that this Subsection 1.26(f) shall\n     not be treated as Good Reason for purposes of Section 8.1 hereof.\n\nNotwithstanding the foregoing, no act or omission by the Company shall\nconstitute Good Reason as defined in subparagraph (a) or (b) hereof unless the\nExecutive gives the Company thirty (30) days prior written notice of the act or\nomission which constitutes Good Reason and the Company fails to cure such act or\nomission within the thirty (30) day period (provided that Executive shall not be\nrequired to provide the foregoing notice in cases of repeated acts or omissions\n(provided that notice with respect to such act shall have been given at least\nonce) or intentional acts or omissions by the Company); and such notice of\nTermination of Employment for Good Reason is given within twelve (12) months\nafter Executive had actual knowledge of such act or omission.\n\n     1.26  'Incumbent Directors' means that term as defined in Section 1.11.\n\n     1.27  'Initial Base Salary' means that term as defined in Section 4.1.\n\n     1.28  'Maximum Goals' means that term as defined in Section 4.2.\n\n     1.29  'Maximum Bonus' means that term as defined in Section 4.2.\n\n     1.30  'Merger' means that term as defined in Section 1.11.\n\n     1.31  '1934 Act' means that term as defined in Section 1.11.\n\n     1.32  'Notice of Consideration' means that term as defined in Section 7.1.\n\n\n\n                                       5\n                                        \n\n\n\n     1.33  'Performance Period' means each period of time ending the last day of\neach calendar year included in the term of this Agreement commencing with the\ncalendar year ending December 31, 1998.\n\n     1.34  'Permitted Transferee' means the spouse of the Executive, a lineal\ndescendent of the Executive or a spouse of a lineal descendent of the Executive\nor a trust, limited partnership or other entity principally benefitting all or a\nportion of such individuals.\n\n     1.35  'Person' means any individual, sole proprietorship, partnership,\njoint venture, trust, unincorporated organization, association, corporation,\ninstitution, public benefit corporation, entity or government (whether federal,\nstate, county, city, municipal or otherwise, including, without limitation, any\ninstrumentality, division, agency, body or department thereof).\n\n     1.36  'Prorata Annual Incentive Bonus' means (a) the product of the amount\nof the Target Bonus to which the Executive would have been entitled if he had\nbeen employed by the Company on the last day of the Performance Period\ncontaining the Date of Termination and if the Company had achieved its Target\nGoals for such Performance Period, multiplied by (b) a fraction of the numerator\nof which is the numbers of days which have elapsed in such Performance Period\nthrough the Date of Termination and the denominator of which is 365.\n\n     1.37  'Prorata Retirement Benefits' means that term as defined in Section\n6.8(b).\n\n     1.38  'Stock Option' means that term as defined in Section 5.1.\n\n     1.39  'Stock Option Term' means that term as defined in Section 5.1.\n\n     1.40  'Subsequent Base Salary' means that term as defined in Section 4.1.\n\n     1.41  'Subsidiary' means, with respect to any Person, (a) any corporation\nor other entity of which an aggregate of more than fifty percent (50%) of the\noutstanding capital stock having ordinary voting power to elect a majority of\nthe board of directors of such corporation (irrespective of whether, at the\ntime, Stock of any other class or classes of such corporation shall have or\nmight have voting power by reason of the happening of any contingency) is at the\ntime, directly or indirectly, owned legally or beneficially by such Person\nand\/or one or more Subsidiaries of such Person, and (b) any partnership in which\nsuch Person and\/or one or more Subsidiaries of such Person shall have an\ninterest (whether in the form of voting or participation in profits or capital\ncontribution) of more than fifty percent (50%).\n\n     1.42  'Target Bonus' means that term as defined in Section 4.2.\n\n     1.43  'Target Goals' means that term as defined in Section 4.2.\n\n\n                                       6\n\n\n\n\n\n\n         1.44   'Taxes' means the incremental federal, state and local income,\nexcise and other taxes payable to the Executive with respect to any applicable\nitem of income.\n\n         1.45   'Tax Gross-Up Payment' means an amount payable to the Executive\nin immediately available funds such that after payment of Taxes on such payment\nthere remains a sufficient amount to pay the Taxes being reimbursed.\n\n         1.46   'Termination of Employment' occurs the first day on which an\nindividual is for any reason no longer employed by the Company.\n\n         1.47   'Termination of Employment Without Cause' means a termination of\nthe Executive's employment by the Company for any reason other than Cause,\nincluding termination at the end of the Contract Term after the Company's giving\na Notice of Non-Renewal.\n\n         1.48   'Threshold Bonus' means that term as defined in Section 4.2.\n\n         1.49   'Threshold Goals' means that term as defined in Section 4.2.\n\n         1.50   'Voting Securities' means that term as defined in Section 1.11.\n\n\n                                  ARTICLE II.\n                                    DUTIES\n\n         2.1   Duties. The Executive shall be a member and the Chairman of the\nBoard of Directors (the 'Board') of the Company and Secretary of the Company.\nExecutive shall, as Chairman, preside at all meetings of the Board and shall\nassume a primary role in developing sales for the Company and maintaining good\nbusiness relations with the customers and suppliers of the Company; it being\ncontemplated that the shareholders and Directors of the Company will elect and\nre-elect the Executive to the offices of a member and Chairman of the Board and\nSecretary throughout the Contract Term. During the Contract Term, and excluding\nany periods of vacation, sick leave or disability to which the Executive is\nentitled, the Executive agrees to devote the Executive's full attention and time\nto the business and affairs of the Company and to use the Executive's best\nefforts to perform faithfully and efficiently the duties and responsibilities of\nthe Executive's positions as described herein.\n\n         2.2   Other Activities. During the Contract Term, it shall not be a\nviolation of this Agreement for the Executive to (a) serve on corporate, civic\nor charitable boards or committees, (b) deliver lectures, fulfill speaking\nengagements or teach at educational institutions or (c) manage personal\ninvestments, so long as such activities do not significantly interfere with the\nperformance of the Executive's duties in accordance with this Agreement.\n\n\n\n                                        \n                                       7\n\n\n\n\n\n                                  ARTICLE III.\n                               TERM OF AGREEMENT\n\n         3.1   Term. Subject to the extension and termination provisions\nhereinafter provided, the initial term of this Agreement shall begin on December\n19, 1997 (the 'Commencement Date') and end on December 31, 2001. The term (the\n'Contract Term') shall mean the initial term of this Agreement plus any\nextensions thereto. Except as provided in Article VII, the employment of\nExecutive by the Company shall not be terminated prior to the end of the\nContract Term.\n\n\n                                  ARTICLE IV.\n                                  COMPENSATION\n\n         4.1   Salary. Commencing with the Commencement Date hereof through June\n30, 1998, the Company shall pay to the Executive in accordance with the normal\npayroll practices of the Company an annual salary at a rate of $425,000 per year\n(the 'Initial Base Salary'). Commencing with July 1, 1998 through the remaining\nyears of the Contract Term, the Company shall pay to the Executive in accordance\nwith the normal payroll practices of the Company an annual salary at the rate of\n$500,000 per year (the 'Subsequent Base Salary'). During the Contract Term, the\nAnnual Base Salary shall be reviewed at least annually and may be increased at\nany time and from time to time as shall be determined by the Compensation\nCommittee, after consultation with the Executive. Any increase in Annual Base\nSalary shall not serve to limit or reduce any other obligation to the Executive\nunder this Agreement. Annual Base Salary shall not be reduced after any such\nincrease without the express written consent of the Executive.\n\n         4.2   Bonus. The Company shall pay or cause to be paid to the Executive\nan annual cash bonus ('Annual Incentive Bonus') in accordance with the terms\nhereof for each Performance Period which ends during the Contract Term. The\nExecutive shall be eligible for an Annual Incentive Bonus ranging from zero to\none hundred and twenty five percent (125%) of his Annual Base Salary. If the\nCompany achieves target performance goals (the 'Target Goals'), as determined by\nthe Compensation Committee on a calendar year basis after consulting with\nExecutive, such Annual Incentive Bonus shall be one hundred percent (100%) of\nthe Executive's Annual Base Salary (the 'Target Bonus'). If the Company achieves\nmaximum performance goals ('Maximum Goals'), as determined by the Compensation\nCommittee on a calendar year basis after consulting with Executive, such Annual\nIncentive Bonus shall be one hundred and twenty five percent (125%) of the\nExecutive's Annual Base Salary ('Maximum Bonus'). If the Company achieves\nthreshold performance goals, as determined by the Compensation Committee on a\ncalendar year basis after consulting with Executive, such Annual Incentive Bonus\nshall be twenty five percent (25%) of the Executive's Annual Base Salary (the\n'Threshold Goals'). If the Company does not achieve such Threshold Goals,\nExecutive shall not receive an Annual Incentive Bonus for such year. If the\nCompany achieves a level which falls between the Threshold Goals and the\n\n                                        \n                                       8\n\n\n\n\n\nTarget Goals or between the Target Goals and the Maximum Goals, lineal\ninterpolation shall be used to determine the percentage of Executive's Annual\nIncentive Bonus received by Executive for such year. Such performance goals\nshall be set by the Compensation Committee no later than ninety (90) days after\nthe first day of each calendar year. The Company shall pay Executive all Annual\nIncentive Bonus amounts that are payable with respect to a calendar year in a\nsingle lump-sum cash payment as soon as practicable after the Company can\ndetermine whether and the degree to which Maximum Goals, Target Goals or\nThreshold Goals have been achieved after the end of such calendar year.\n\n\n                                   ARTICLE V.\n                               STOCK OPTION GRANT\n\n         5.1   Grant of Stock Options. As an inducement to the Executive to\nenter into this Agreement, the Company hereby agrees to cause the Stock Option\nCommittee of the Board to grant to the Executive (pursuant to, and subject to\nstockholder approval of, the Salton\/Maxim Housewares, Inc. 1998 Stock Option\nPlan (the '1998 Plan')): (i) on December 18, 1998, stock options to purchase\n63,179 shares of Common Stock with an exercise price equal to the closing price\nof the Common Stock reported on the Nasdaq National Market on December 18, 1998;\nand (ii) On December 17, 1999, stock options to purchase 63,179 shares of Common\nStock with an exercise price equal to the closing price of the Common Stock on\nthe Nasdaq National Market on December 17, 1999; provided that the foregoing\nstock option grants need not be made if prior to the required date of such\ngrants the Executive's employment is terminated for Cause or if the Executive's\nemployment is terminated without Good Reason or due to his death or Disability.\nThe stock options to be granted pursuant to this Section 5.1 are collectively\nreferred to herein as the 'Stock Options.'\n\n         The Company agrees to use its reasonable best efforts (which shall\ninclude the solicitation of proxies) to obtain stockholder approval of the 1998\nPlan as soon as practicable. In the event that (i) the 1998 Plan is not approved\nby stockholders on or prior to December 18, 1998, or (ii) the Stock Option\nCommittee of the Board fails to grant the aforementioned Stock Options for any\nreason other than the termination of the Executive's employment for Cause or by\nthe Executive for Good Reason, death or Disability, then the Company agrees to\ngrant to the Executive stock appreciation rights which provide the Executive\nwith substantially the same benefits as the Stock Options (as if the Executive\ncontinued to be an employee of the Company). The term of the Stock options will\nbe ten (10) years and one-third of the Stock Options will vest each anniversary\nof December 19, 1997. The other terms and conditions of the Stock Options will\nbe set forth in the 1998 Plan. Notwithstanding the foregoing, in the event that\nprior to December 17, 1999, the Company announces a Change of Control, then upon\nconsummation of such Change of Control, the Executive shall be entitled to elect\nto receive in lieu of the exercise of any of the Stock Options which are\nrequired to be granted to the Executive in accordance with this Section 5.1 a\nlump sum payment upon such Change of Control in an amount equal to (i) the\n\n\n                                       9\n\n\n\n\n\ndifference between (x) the average of the closing price of the Common Stock\nreported on the Nasdaq National Market for the five trading days immediately\npreceding the Change of Control and (y) $15.25, multiplied by (ii) the number of\nshares of Common Stock subject to the Stock Options.\n\n\n                                  ARTICLE VI.\n                                 OTHER BENEFITS\n\n         6.1   Incentive, Savings and Retirement Plans. In addition to Annual\nBase Salary and Annual Incentive Bonuses, the Executive shall be entitled to\nparticipate during the Contract Term in all incentives (including long-term\nincentives), savings and retirement plans, practices, policies and programs\napplicable to other peer executives of the Company (subject to the eligibility\nrequirements of such plans), and other perquisites which are available to other\nexecutives of the Company or which hereafter are made available to other\nexecutive employees of the Company by the Board.\n\n         6.2   Welfare Benefits. During the Contract Term, the Executive and\/or\nthe Executive's family, as the case may be, shall be eligible for participation\nin and shall receive all benefits under welfare benefit plans, practices,\npolicies and programs provided by the Company (including, and without\nlimitation, medical, prescription, dental, disability, salary continuance,\nemployee life, group life, dependent life, accidental death and travel accident\ninsurance plans and programs) applicable to other executive employees of the\nCompany.\n\n         6.3   Fringe Benefits. During the Contract Term, the Executive shall be\nentitled to fringe benefits applicable to other peer executives of the Company.\n\n         6.4   Vacation. During the Contract Term, the Executive shall be\nentitled to paid vacation time in accordance with the plans, practices,\npolicies, and programs applicable to other peer executives of the Company, but\nin no event shall such vacation time be less than four (4) weeks per calendar\nyear. Any vacation not taken within three (3) months after the end of the\ncalendar year shall be canceled and shall not accumulate to subsequent years\nunless the Compensation Committee for good business reasons determines\notherwise.\n\n         6.5   Expenses. During the Contract Term, the Executive shall be\nentitled to receive prompt reimbursement for all reasonable employment-related\nexpenses incurred by the Executive upon the Company's receipt of accounting in\naccordance with practices, policies and procedures applicable to other executive\nemployees of the Company.\n\n         6.6   Office and Support Staff. During the Contract Term, the Executive\nshall be entitled to an office or offices of a size and with furnishings and\nother appointments, and to personal secretarial and other assistance, provided\nwith respect to other executive employees of the Company.\n\n\n\n                                       10\n\n\n\n\n\n         6.7   Tax Gross-Up Payment. In the event it shall be determined that\nany payment to the Executive pursuant to this Agreement or any other payment or\nbenefit from the Company, any affiliate of the Company, any shareholder of the\nCompany or any other person would be subject to the excise tax imposed by\nSection 4999 of the Code or any similar tax payable under any federal, state,\nlocal or other law (collectively, the 'Excise Tax'), then the Executive shall be\nentitled to receive a Tax Gross-Up Payment with respect to the Excise Tax.\n\n                                  ARTICLE VII.\n                              TERMINATION BENEFITS\n\n         7.1   Termination of Employment for Cause or Other Than for Good\nReason. If, before the end of the Contract Term, the Company terminates the\nExecutive's employment for Cause or the Executive terminates employment other\nthan for Good Reason, death or Disability, the Company shall pay immediately\nafter the Date of Termination to the Executive an amount equal to the sum of (a)\nthe Executive's Accrued Annual Base Salary and (b) his Accrued Annual Incentive\nBonus. The Company may not terminate the Executive's employment for Cause\nunless:\n\n               (a) no fewer than sixty (60) days prior to the Date of\n         Termination, the Company provides the Executive with written notice of\n         its intent to consider termination of the Executive's employment for\n         Cause, including a detailed description of the specific reasons which\n         form the basis for such consideration (the 'Notice of Consideration');\n\n               (b) if, after providing Notice of Consideration, the Board by\n         three-quarters (3\/4) majority (excepting Executive if Executive is a\n         member of the Board, and any other member of the Board alleged to be\n         involved in the events leading the Board to terminate the Executive for\n         Cause) so determines, the Board may suspend Executive with pay until a\n         final determination pursuant to this Section 7.1 has been made;\n\n               (c) for a period ending thirty (30) days after the date Notice of\n         Consideration is provided, the Executive shall have an opportunity to\n         appear before the Board, with or without legal representation, at the\n         Executive's election, to present arguments on his own behalf;\n\n               (d) following the presentation to the Board as provided in (c)\n         above, the Executive shall be terminated for Cause only if (i) the\n         members of the Board by three-quarters (3\/4) majority (excepting\n         Executive if Executive is a member of the Board, and any other member\n         of the Board alleged to be involved in the events leading the Board to\n         terminate the Executive for Cause) determines that the actions of the\n         Executive constituted Cause and that the Executive's employment should\n         accordingly be terminated for Cause; and (ii) the Board provides the\n         Executive with a written determination setting forth in full\n         specificity the basis of such termination of\n\n\n                                       11\n\n\n\n\n\n         employment which shall be consistent with the reasons set forth in the\n         Notice of Consideration; and\n\n               (e) the Company shall provide the Executive with not less than\n         thirty (30) days advance written notice of termination, including a\n         statement of the Date of Termination and the specific detailed basis\n         for such termination which shall be consistent with the reasons set\n         forth in the Notice of Consideration.\n\n         If Executive is terminated by the Company without full compliance with\n         the substantive and procedural requirements of this Section 7.1 prior\n         to the termination, the termination shall be deemed a Termination\n         Without Cause for all purposes of the Agreement.\n\n         7.2   Termination of Employment for Death or Disability. If, before the\nend of the Contract Term, the Executive's employment terminates due to death or\nDisability, the Company shall pay to the Executive, the beneficiaries designated\nin writing by the Executive, or the Executive's estate, as the case may be,\nimmediately after the Date of Termination an amount which is equal to the sum of\n(a) the Executive's Accrued Annual Base Salary as of the Date of Termination,\nand (b) the Executive's Accrued Annual Incentive Bonus which is unpaid as of the\nDate of Termination, and (c) the Executive's Prorata Annual Incentive Bonus.\n\n         7.3   Termination of Employment By The Company Without Cause Or By the\nExecutive for Good Reason. If there is a Termination of Employment Without Cause\nor a Termination of Employment by the Executive for Good Reason, the Executive\nshall receive the following: (a) immediately after the Date of Termination in a\nlump-sum in immediately available funds, an amount equal to the sum of (i) the\nExecutive's Accrued Annual Base Salary, and (ii) any Accrued Annual Incentive\nBonus, and (iii) the Executive's Prorata Annual Incentive Bonus; (b) immediately\nafter the Date of Termination in a lump-sum in immediately available funds, an\namount equal to the product of (i) the number of years (stated as whole and\nfractional years) remaining in the Contract Term as of the Date of Termination,\nmultiplied by (ii) the sum of the Annual Base Salary and the Target Bonus; (c)\nimmediately after the Date of Termination in a lump-sum in immediately available\nfunds, the total amount (if any) of the Executive's unvested benefits under any\nCompany sponsored plan or program which is forfeited on account of the\nExecutive's employment being terminated; and (d) the benefits (or if not\navailable the economic equivalent of the benefits) described in Sections 6.1,\n6.2 and 6.3 to which Executive is entitled as of the Date of Termination shall\nbe continued for the period described in clause (b)(i) above, or at the election\nof the Executive, an immediate lump-sum cash payment equal to the value of such\nbenefits provided that, with respect to any benefit to be provided on an insured\nbasis, such value shall be the present value of the premiums expected to be paid\nfor such coverage, and with respect to other benefits, such value shall be the\npresent value of the expected net cost to the Company of providing such\nbenefits.\n\n\n\n                                       12\n\n\n\n\n\n         7.4   Termination Benefits upon a Change of Control. If within two\nyears after a Change of Control, there is a Termination of Employment by the\nExecutive for other than Good Reason, then Executive shall receive the payments\nrequired by Section 7.3 except that the amount payable pursuant to Section\n7.3(b) shall be an amount equal to the product of the number of years (stated as\nwhole and fractional years) remaining in the Contract Term as of the Date of\nTermination multiplied by the Annual Base Salary.\n\n         7.5   Other Termination Benefits. In addition to any amounts or\nbenefits payable upon termination of employment hereunder and except as\notherwise provided herein, the Executive shall be entitled to any payments or\nbenefits explicitly provided hereunder or under the terms of any plan, policy or\nprogram of the Company or as otherwise required by applicable law.\n\n\n                                 ARTICLE VIII.\n                             RESTRICTIVE COVENANTS\n\n         8.1   Non-Solicitation of Employees; Confidentiality; Non-Competition.\nThe Executive covenants and agrees that at no time during the Executive's\nemployment by the Company nor during the one-year period immediately following\nTermination of Employment for Cause, or Termination of Employment by Executive\nfor other than Good Reason will the Executive (i) directly or indirectly employ\nor seek to employ any person or entity employed at that time by the Company or\notherwise encourage or entice any such person or entity to leave such\nemployment; (ii) become employed by, enter into a consulting arrangement with or\notherwise agree to perform personal services for a Competitor (as defined\nbelow); (iii) acquire an ownership interest in a Competitor, or (iv) solicit any\ncustomers or vendors of the Company on behalf of or for the benefit of a\nCompetitor. Executive further covenants and agrees that at no time during the\nExecutive's employment by the Company nor at any time following Termination of\nEmployment with the Company will the Executive communicate, furnish, divulge or\ndisclose in any manner to any person or entity confidential business information\nor trade secrets of the Company, without the prior express written consent of\nthe Company. For purposes of this Section 8.1, 'Competitor' means any entity\nwhich engages in the design or distribution to department stores or catalogue\nvendors of household products which directly compete with those sold by the\nCompany.\n\n         8.2   Injunction. The Executive acknowledges that the Company relies on\nthe provisions of this Article VIII and that monetary damages will not be an\nadequate remedy to a breach of this Article, and that it would be impossible for\nthe Company to measure damages in the event of such a breach. Therefore, the\nExecutive agrees that, in addition to other rights that the Company may have,\nthe Company is entitled to an injunction preventing the Executive from doing any\nact that would be in breach of this Article VIII.\n\n\n\n\n                                       13\n\n\n\n\n\n                                  ARTICLE IX.\n                                 MISCELLANEOUS\n\n         9.1   Full Settlement. The Company's obligation to make the payments\nprovided for in this Agreement and otherwise to perform its obligations\nhereunder shall not be affected by any circumstances, including without\nlimitation, set-off, counterclaim, recoupment, defense or other claim, right or\naction which the Company may have against the Executive or others provided,\nhowever, that if the Company causes the Executive to have a Termination of\nEmployment for Cause pursuant to this Agreement on account of theft or\nembezzlement, the Company may offset against the amounts due under this\nAgreement the amounts taken from the Company by the Executive through theft or\nembezzlement. In no event shall the Executive be obligated to seek other\nemployment or take any other action by way of mitigation of the amounts payable\nto the Executive under any of the provisions of this Agreement, nor shall the\namount of any payment hereunder be reduced, except as otherwise specifically\nprovided herein, by any compensation earned by the Executive as result of\nemployment by another employer.\n\n         9.2   Enforcement.\n\n               (a) If the Executive incurs legal or other fees and expenses in\n         an effort to establish entitlement to fees and benefits under this\n         Agreement, the Company shall reimburse the Executive for such fees and\n         expenses regardless of the outcome of such effort and a Tax Gross-Up\n         Payment on Taxes incurred with respect to amounts paid pursuant to this\n         Section 9.2.\n\n               (b) The Company shall provide reimbursement of fees and expenses,\n         as described in paragraph (a) above, to the Executive on a monthly\n         basis upon the Executive's written submission of a request for\n         reimbursement together with proof that the fees and expenses were\n         incurred.\n\n               (c) If Executive does not prevail (after exhaustion of all\n         available judicial remedies), and a court of competent jurisdiction\n         determines that the Executive had no reasonable basis for bringing an\n         action hereunder or there was an absence of good faith for bringing an\n         action hereunder, no further reimbursement for legal fees and expenses\n         shall be due to the Executive and Executive shall refund any amounts\n         previously reimbursed hereunder with respect to such action.\n\n               (d) If the Company fails to pay any amount provided under this\n         Agreement when due, the Company shall pay interest on such amount at a\n         rate equal to (i) the rate of interest on the Company's revolving\n         credit charged by the Company's principal lender plus three percent\n         (3%), or (ii) in the absence of such revolving credit, 300 basis points\n         over the prime commercial lending rate announced by the LaSalle\n         National Bank on the date such amount is due or, if no such rate shall\n         be\n\n\n\n                                       14\n\n\n\n\n\n         announced on such date, the immediately prior date on which the LaSalle\n         National Bank announced such a rate.\n\n         9.3   Assignment, Successors. The Company may freely assign its\nrespective rights and obligations under this Agreement to a successor of the\nCompany's business, without the prior written consent of the Executive. This\nAgreement shall be binding upon and inure to the benefit of the Executive and\nthe Executive's estate and the Company and any assignee of or successor to the\nCompany.\n\n         9.4   Beneficiary. If the Executive dies prior to receiving all of the\nsalary and bonus payable hereunder pursuant to Article IV or exercising the\nStock Options, or otherwise provided under the terms and conditions of the\nCompany's other benefit plans, programs or policies, such salary and bonus shall\nbe paid in a lump-sum payment to and the Stock Options may be exercised by the\nbeneficiary ('Beneficiary') designated by the Executive in writing to the\nCompany during the Executive's lifetime, which the Executive may change from\ntime to time by new designation filed in like manner without the consent of any\nBeneficiary; or if no such Beneficiary is designated, to the Executive's estate.\n\n         9.5   Nonalienation of Benefits. Benefits payable under this Agreement\nshall not be subject in any manner to anticipation, alienation, sale, transfer,\nassignment, pledge, encumbrance, charge, garnishment, execution or levy of any\nkind, either voluntary or involuntary, prior to actually being received by the\nExecutive, and any such attempt to dispose of any right to benefits payable\nhereunder shall be void.\n\n         9.6   Severability. If all or any part of this Agreement is declared by\nany court or governmental authority to be unlawful or invalid, such unlawfulness\nor invalidity shall not serve to invalidate any portion of this Agreement not\ndeclared to be unlawful or invalid. Any paragraph or part of a paragraph so\ndeclared to be unlawful or invalid shall, if possible, be construed in a manner\nwhich will give effect to the terms of such paragraph or part of a paragraph to\nthe fullest extent possible while remaining lawful and valid.\n\n         9.7   Amendment and Waiver. This Agreement shall not be altered,\namended or modified except by written instrument executed by the Company and\nExecutive. A waiver of any term, covenant, agreement or condition contained in\nthis Agreement shall not be deemed a waiver of any other term, covenant,\nagreement or condition, and any waiver of any default in any such term,\ncovenant, agreement or condition shall not be deemed a waiver of any later\ndefault thereof or of any other term, covenant, agreement or condition.\n\n         9.8   Notices. All notices and other communications hereunder shall be\nin writing and delivered by hand or by first class registered or certified mail,\nreturn receipt requested, postage prepaid, addressed as follows:\n\n\n\n                                       15\n\n\n\n\n\n         If to the Company:                 Salton\/Maxim Housewares, Inc.\n                                            550 Business Center Drive\n                                            Mt. Prospect, IL 60056\n\n\n         If to the Executive:               David C. Sabin\n                                            262 East Deerpath, Suite N\n                                            Lake Forest, IL 60045\n\n\nEither party may from time to time designate a new address by notice given in\naccordance with this Section. Notice and communications shall be effective when\nactually received by the addressee.\n\n         9.9   Counterpart Originals. This Agreement may be executed in several\ncounterparts, each of which shall be deemed to be an original but all of which\ntogether will constitute one and the same instrument.\n\n         9.10  Entire Agreement. This Agreement forms the entire agreement\nbetween the parties hereto with respect to any severance payment and with\nrespect to the subject matter contained in the Agreement.\n\n         9.11  Effect on Other Agreements. This Agreement shall supersede all\nprior agreements, promises and representations regarding severance or other\npayments contingent upon termination of employment, whether in writing or\notherwise.\n\n         9.12  Applicable Law. The provisions of this Agreement shall be\ninterpreted and construed in accordance with the laws of the State of Illinois,\nwithout regard to its choice of law principles.\n\n         9.13  Survival of Executive's Rights. All of the Executive's rights\nhereunder, including but not limited to his rights to compensation and benefits,\nand his obligations under Section 8.1 hereof, shall survive the termination of\nthe Executive's employment and\/or the termination of this Agreement.\n\n\n\n                                       16\n\n\n\n\n         IN WITNESS WHEREOF, the parties have executed this Agreement on the\ndate first above written.\n\n\n                                              SALTON\/MAXIM HOUSEWARES, INC.\n\n\n                                              ---------------------------------\n                                              By:\n                                              Its:\n\n\n\n\n\n                                              ----------------------------------\n                                                DAVID C. SABIN\n\n\n              \n                                       17\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8750],"corporate_contracts_industries":[9393],"corporate_contracts_types":[9539,9544],"class_list":["post-39553","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-salton-inc","corporate_contracts_industries-consumer__appliances","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39553"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39553"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39553"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}