Legal and Regulatory Actions Taken

Appendix XVII

Sunbeam Corporation

pay $110 million in April 2001. Since that time the money has been held in

escrow earning interest, pending the final settlement with Sunbeam. Mr.

Dunlap, the former CEO, also paid $15 million. Another portion of the

settlement came from the Chubb Group's Executive Risk Indemnity Inc.

($13.5 million), and Great American Insurance Group ($2 million). Both

firms had policies covering Sunbeam officials.

On May 15, 2001, SEC filed a civil action in the U.S. District Court of Miami

against five former officers of Sunbeam (Mr. Dunlap, chairman and CEO;

Russell Kersh, chief financial officer (CFO); Robert Gluck, chief accounting

officer; Donald R. Uzzi and Lee B. Griffith, former vice presidents) and

Phillip Harlow, former Arthur Andersen engagement partner. On May 15,

2001, SEC also instituted an administrative proceeding against Sunbeam,

which was concurrently settled. The complaint charged Sunbeam with

filing false and misleading reports with the Commission from the fourth

quarter of 1996 through the first quarter of 1998. Sunbeam consented to the

entry of a cease-and-desist order prohibiting future violations of the

antifraud, reporting, books and records, and internal controls provisions of

the securities laws. Finally, an administrative action was also filed and

concurrently settled against David Fannin, former Sunbeam general

counsel, for participating in drafting misleading press releases on the

company's operations.

The civil complaint alleges that Messrs. Dunlap and Kersh, together with

others, employed improper accounting techniques and undisclosed

nonrecurring transactions to misrepresent Sunbeam's results of operations.

According to SEC's complaint, through this conduct, Messrs. Dunlap and

Kersh, personally and as controlling persons within the meaning of Section

20(a) of the Exchange Act, and Messrs. Gluck and Griffith violated or aided

and abetted violations of Section 17(a) of the Securities Act of 1933 and

Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and (with the exception of

Mr. Dunlap) 13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1,

13a-13, 13b2-1, and 13b2-2 thereunder; and Messrs. Uzzi and Harlow

violated or aided and abetted violations of all of the above provisions,

except Exchange Act Rule 13b2-2. SEC seeks, permanent injunctions

against all defendants for future violations of the above provisions of the

securities laws and civil penalties and, in the case of Messrs. Dunlap, Kersh,

Gluck, and Uzzi, seeks permanent bars from acting as an officer or director

of any public company.

On September 4, 2002, Messrs. Dunlap and Kersh agreed to settle their

cases with SEC, while not admitting or denying guilt. Mr. Dunlap paid

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