of options which may have been affected during the Class Period is not available.

Transcription

1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA ) IN RE SUNBEAM SECURITIES LITIGATION ) Civ-Middlebrooks ) NOTICE OF PENDENCY OF CERTIFIED CLASS ACTION, HEARING ON PROPOSED PARTIAL SETTLEMENT AND ATTORNEYS* FEE PETITION AND RIGHT TO SHARE IN SETTLEMENT FUND TO: ALL PERSONS WHO PURCHASED THE COMMON STOCK OF SUNBEAM CORPORATION ("SUNBEAM") OR WHO PURCHASED SUNBEAM CALL OPTIONS OR SOLD SUNBEAM PUT OPTIONS ON THE OPEN MARKET DURING THE PERIOD FROM APRIL 23, 1997 THROUGH AND INCLUDING JUNE 30, PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY PROCEEDINGS IN THIS ACTION. IF YOU ARE A CLASS MEMBER, YOU ULTIMATELY MAY BE ENTITLED TO RECEIVE BENEFITS PURSUANT TO THE PROPOSED PARTIAL SETTLEMENT DESCRIBED HEREIN. CLAIMS DEADLINE: CLAIMANTS MUST SUBMIT PROOFS OF CLAIM, ON THE FORM ACCOMPANYING THIS NOTICE, POSTMARKED ON OR BEFORE NOVEMBER 15, EXCLUSION DEADLINE: REQUESTS FOR EXCLUSION MUST BE POSTMARKED ON OR BEFORE SEPTEMBER 10, 2001, AND MUST BE RECEIVED BY SEPTEMBER 15, SECURITIES BROKERS AND OTHER NOMINEES: PLEASE SEE INSTRUCTIONS ON PAGE 6 HEREIN. I. Purpose of this Notice SUMMARY OF SETTLEMENT AND RELATED MATTERS 1. This Notice is given pursuant to Rule 23 of the Federal Rules of Civil Procedure and Orders of the Court dated May 23, 2001 and July 3, The purpose of this Notice is to inform you: (i) that this Action has been certified to proceed as a class action and will affect all Class Members* rights; and (ii) to inform you of a proposed Settlement with Arthur Andersen, one of the defendants herein (the "Settlement"). This Notice describes the rights of Class Members, and the rights you may have under the proposed Settlement, and what steps you may take in relation to this Action. This Notice is not an expression of any opinion by the Court as to the merits of any claims or any defenses asserted by any party in this Action, or the fairness or adequacy of the proposed Settlement. II. Statement of Plaintiff Recovery 2. Pursuant to the Settlement described herein, a Settlement Fund consisting of $110,000,000 in cash, plus interest, has been established. Plaintiffs estimate that there were approximately 144 million shares of Sunbeam common stock traded during the Class Period which may have been damaged as a result of the alleged wrongdoing described below, of which approximately 56 million shares were retained until the end of the Class Period. Plaintiffs estimate that the average recovery per damaged share of Sunbeam common stock under the Settlement is $.76 per damaged share 1 before deduction of Court-awarded attorneys* fees and expenses. Depending on the number of claims submitted, when during the Class Period a Class Member purchased his or her shares of Sunbeam common stock, and whether those shares were held at the end of the Class Period or sold during the Class Period, and if sold, when they were sold, an individual Class Member may receive more or less than this average amount. Class Members are referred to the Plan of Allocation of Settlement Proceeds Among Class Members, attached as Exhibit A, for more information. 3. Under the relevant securities laws, a claimant*s recoverable damages are limited to the losses attributable to the alleged fraud. Losses which resulted from factors other than the alleged fraud are not compensable from the Settlement Fund. III. Statement of Potential Outcome of Case 4. The parties disagreed on both liability and damages and do not agree on the average amount of damages per share that would be recoverable if Plaintiffs were to have prevailed on each claim alleged. The issues on which the parties disagree include: (a) the appropriate economic model for determining the amount by which Sunbeam common stock was allegedly artificially inflated (if at all) 1Per share recovery is based on common stock only because information to determine the average number of options which may have been affected during the Class Period is not available.

2 during the Class Period; (b) the amount by which Sunbeam common stock was allegedly artificially inflated (if at all) during the Class Period; (c) the effect of various market forces influencing the trading price of Sunbeam common stock at various times during the Class Period; (d) the extent to which external factors, such as general market and industry conditions, influenced the trading price of Sunbeam common stock at various times during the Class Period; (e) the extent to which the various matters that Plaintiffs alleged were materially false or misleading influenced (if at all) the trading price of Sunbeam common stock at various times during the Class Period; (f) the extent to which the various allegedly adverse material facts that Plaintiffs alleged were omitted influenced (if at all) the trading price of Sunbeam common stock at various times during the Class Period; and (g) whether the statements made or facts allegedly omitted were material or otherwise actionable under the federal securities laws. 5. Common Stock Plaintiffs* Counsel consider that there was a risk that Plaintiffs and the Class might not have prevailed on all their claims as against Arthur Andersen and that there were risks that ultimately, after further litigation, trial and appeals, Plaintiffs could have recovered nothing from Arthur Andersen or substantially less than the settlement amount. For example, a jury may have found that Arthur Andersen was itself misled by Sunbeam and its management about the Company*s earnings and financial results and is therefore not liable in damages. Arthur Andersen might also not be held liable by a jury, if the jury found that Arthur Andersen*s conduct did not rise to the level of a knowing deception or reckless indifference to the truth. Even if Arthur Andersen were found liable for its unqualified audit opinion certifying Sunbeam*s 1997 financial statements, which opinion was included in Sunbeam*s March 6, 1998 Form 10-K, it might not be found liable for any of the allegedly false and misleading statements made by Sunbeam from the beginning of the Class Period on April 23, 1997 until the publication of the 1997 Form 10-K on March 6, Arthur Andersen might also avoid any liability to the Class if a jury found that Sunbeam*s original 1997 financial statements were not in violation of Generally Accepted Accounting Principles (GAAP) at the time they were issued or if the jury found that Arthur Andersen was misled by false statements by Sunbeam, its officers, or employees. 6. Arthur Andersen denies that it is liable to the Plaintiffs or the Class and denies that Plaintiffs or the Class have suffered any damages as a result of any alleged wrongdoing of Arthur Andersen. IV. Statement of Attorneys* Fees and Costs Sought 7. Common Stock Plaintiffs* Counsel intend to apply for fees of up to thirty percent (30%) of the Gross Settlement Fund, and for reimbursement of expenses incurred in connection with the prosecution of this Action up to a maximum amount of approximately $4,500,000. The requested fees and expenses would amount to an average of $.26 per damaged share in total for fees and expenses. Common Stock Plaintiffs* Counsel have expended considerable time and effort in the prosecution of this litigation on a contingent fee basis, and have advanced the expenses of the litigation, in the expectation that if they were successful in obtaining a recovery for the Class they would be paid from such recovery. In this type of litigation, it is customary for counsel to be awarded a percentage of the common fund recovery as their attorneys* fees. V. Further Information 8. Further information regarding the Action and this Notice may be obtained by contacting Common Stock Plaintiffs* Co-Lead Counsel: Abraham Rappaport, Esq., Milberg Weiss Bershad Hynes & Lerach LLP, The Plaza, Suite 900, 5355 Town Center Road, Boca Raton, Florida 33486, Telephone (561) ; M. Richard Komins, Esq., Barrack, Rodos & Bacine, 3300 Two Commerce Square, 2001 Market Street, Philadelphia, Pennsylvania 19103, Telephone (215) ; Merrill Davidoff, Esq., Berger & Montague, P.C., 1622 Locust Street, Philadelphia, Pennsylvania 19103, Telephone (215) ; or Robert M. Kornreich, Esq., Wolf Popper LLP, 845 Third Avenue, New York, New York 10022, Telephone (212) VI. Reasons for the Settlement 9. The principal reason for the Settlement is the benefit to be provided to the Class now. This benefit must be compared to the risk, as discussed above, that no recovery might be achieved as against this settling Defendant after a contested trial, or even if Plaintiffs were to ultimately prevail in whole or in part against Arthur Andersen at a contested trial, that any judgment would likely be subject to appeals, delaying recovery, possibly years into the future. NOTICE OF SETTLEMENT FAIRNESS HEARING 10. NOTICE IS HEREBY GIVEN, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of Florida (the "Court") dated May 23, 2001, that a hearing will be held before the Honorable Donald M. Middlebrooks in the United States Courthouse, 301 North Miami Avenue, Miami, Florida 33128, at 2:00 p.m., on November 27, 2001 (the "Settlement Fairness Hearing") to determine whether a proposed settlement (the "Settlement") of the above-captioned action (the "Action") as set forth in the Stipulation and Agreement of Settlement With Defendant Arthur Andersen LLP dated as of May 3, 2001 (the "Stipulation"), is fair, reasonable and adequate and to consider the proposed Plan of Allocation for the Settlement proceeds and the application of Common Stock Plaintiffs* Counsel for attorneys* fees and reimbursement of expenses.

3 NOTICE OF CLASS CERTIFICATION 11. NOTICE IS ALSO HEREBY GIVEN, that the Court, by Order dated May 23, 2001, has certified the Action to proceed as a class action for all purposes under Rule 23 of the Federal Rules of Civil Procedure on behalf of a Plaintiff Class consisting of: "all persons who purchased the common stock of Sunbeam Corporation ("Sunbeam") or who purchased Sunbeam call options or sold Sunbeam put options on the open market during the period from April 23, 1997 through and including June 30, 1998." Excluded from the Class are: (a) the Defendants; the officers and directors of Sunbeam; management employees of Sunbeam; all persons who were partners or principals of Arthur Andersen (or any parent, subsidiary or affiliate of Arthur Andersen) at any time since April 23, 1997; members of the immediate families (parents, spouses, siblings and children) of each of the Defendants who are individual persons; any entities in which any of the Defendants has a controlling interest; the legal representatives, heirs, successors, predecessors in interest, affiliates or assigns of the Defendants; (b) except to the extent their shares were purchased in the open market during the Class Period, MacAndrews & Forbes Holdings, Inc. and its principals, affiliates and subsidiaries (including without limitation Ronald Perelman); Michael Price, and any entity controlled by Michael Price, including without limitation, Franklin Resources, Inc., Franklin Mutual Advisers, Inc. and Franklin Mutual Series Fund, Inc.; and any former shareholders of The Coleman Company, Inc. ("Coleman") that received Sunbeam shares as part of the Coleman merger with Sunbeam; and (c) plaintiffs in U.S. National Bank of Galveston, et al. v. Sunbeam, ( CIV-Middlebrooks). The Court, by Order dated May 23, 2001, had previously certified the Action to proceed as a class action on behalf of the same Class, but for the purposes of the proposed settlement only. BACKGROUND OF THE LITIGATION 12. Sunbeam is engaged in the business of developing, manufacturing, and marketing consumer products such as gas barbecue grills, outdoor casual furniture, warming blankets, vaporizers and other kitchen and household appliances. Settling Defendant Arthur Andersen LLP, a firm of certified public accountants with offices located nationwide, served as Sunbeam*s independent outside auditor prior to and during the Class Period. 13. On July 17, 1996, Sunbeam announced the hiring of defendant Albert J. Dunlap as its new Chairman and Chief Executive Officer in a press release that described Dunlap as "well known for his success in turning around companies and improving shareholder value." By the end of July 1996, Dunlap had replaced Sunbeam*s top managers with his own management team, including defendants Russell A. Kersh, Donald R. Uzzi and David C. Fannin, and announced plans to institute a dramatic and aggressive restructuring of the Company. 14. On April 23, 1997, the first day of the Class Period, Sunbeam issued a press release announcing its financial results for the first quarter of Plaintiffs allege that Sunbeam*s financial statements for Sunbeam*s 1997 second, third and fourth quarters, 1997 year end results and 1998 first quarter results were materially overstated. As a result of those allegedly falsely inflated financial statements, as well as other statements made by Sunbeam and its management, the investing public was allegedly misled throughout the Class Period into believing that Dunlap and his management team had, indeed, reversed Sunbeam*s business and financial decline. On March 6, 1998, Sunbeam filed with the SEC its report on Form 10-K for the year ended December 28, 1997 (the " K") which contained Arthur Andersen*s report that they had performed an audit of Sunbeam*s 1997 financial statements in accordance with Generally Accepted Auditing Standards ("GAAS") and that Sunbeam*s 1997 financial statements presented fairly, in all material respects, the financial position of Sunbeam Corporation in accordance with GAAP. Plaintiffs allege that Sunbeam*s financial statements were materially false and misleading. On June 30, 1998, the end of the Class Period, Sunbeam announced that the Audit Committee of its Board of Directors would conduct a review into the accuracy of its 1997 financial statements and that "pending the completion of its review, its 1997 financial statements and the report of Arthur Andersen LLP should not be relied upon." In November 1998, Sunbeam filed with the SEC restated financial statements for fiscal years 1996, 1997 and the first quarter of Plaintiffs allege in their Consolidated Amended Class Action Complaint that the fraudulent scheme to inflate Sunbeam*s financial results was based on a number of allegedly deceptive accounting practices by Sunbeam and its management, including: manipulation of restructuring charges, recognizing revenue on shipments to distributors where no transfer of title occurred, recognizing revenue on shipments where the distributor had an unlimited right of return, and recognizing revenue on "bill and hold" sales where a customer was billed, but the sale failed to meet SEC criteria for revenue recognition. 16. Plaintiffs filed a Consolidated Amended Class Action Complaint on January 6, Motions to dismiss the Consolidated Amended Class Action Complaint (the "First Amended Complaint"), were filed by: (1) Sunbeam, William T. Rutter, Howard G. Kristol and David C. Fannin; (2) Albert J. Dunlap and Russell A. Kersh; (3) Donald R. Uzzi; (4) Robert Gluck; and (5) Arthur Andersen. The Court on December 10, 1999, denied the motions as to Sunbeam, Dunlap, Kersh, Gluck and Arthur Andersen, and granted, by Order dated December 10, 1999, the motions as to Rutter, Kristol and Fannin, with leave to further amend. Plaintiffs then filed a Second Consolidated Amended Class Action Complaint on June 30, 2000 (the "Complaint"). The Complaint*s allegations against Arthur Andersen (and against Sunbeam, Dunlap, Kersh, Gluck and Uzzi) are the same as those that formed the basis of the claims in the First Amended Complaint that were sustained by the Court. The Complaint also again names Fannin as a defendant, and contains additional allegations in support of the Plaintiffs* claims against defendant Fannin. Fannin again filed a motion to dismiss which has been denied. 17. The Complaint alleges that Plaintiffs and other Class Members purchased the common stock of Sunbeam during the Class Period

4 at artificially inflated prices as a result of the Defendants* dissemination of false and misleading statements regarding Sunbeam in violation of Section 10(h) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and, as to the Individual Defendants only, Section 20(a) of the Securities Exchange Act of Plaintiffs contend that Arthur Andersen issued its report on Sunbeam*s financial statements, for year end 1996 and 1997, while knowingly or recklessly disregarding that they were not presented in accordance with GAAP, that the audits were not performed in accordance with GAAS and that Arthur Andersen*s audit opinion reports were made in violation of Section 10(b) and Rule 10b-5. SUBSEQUENT EVENTS 18. Sunbeam has filed a petition in bankruptcy and the Action has been stayed as against Sunbeam. It is unlikely that Sunbeam will be a source of any significant future recovery for the Class. BACKGROUND TO THE SETTLEMENT 19. Arthur Andersen has denied and continues to deny each and all claims and contentions alleged by the Common Stock Plaintiffs in the Litigation. Arthur Andersen expressly has denied and continues to deny all charges of wrongdoing or liability against it arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Litigation. Arthur Andersen also has denied and continues to deny, inter alia, the allegations that the Common Stock Plaintiffs or the Class have suffered damage, and that the price of Sunbeam common stock was artificially inflated by reason of the alleged misrepresentations and/or non-disclosures by Arthur Andersen, or that Common Stock Plaintiffs or the Class were harmed by the conduct alleged in the Complaint relating to Arthur Andersen. The Stipulation is not and shall not be construed or be deemed to be evidence or an admission or a concession on the part of Arthur Andersen of any fault or liability or damages whatsoever, and Arthur Andersen does not concede any infirmity in the defenses which it has asserted or intended to assert in the Action. 20. Prior to entering into the Stipulation, Common Stock Plaintiffs* Counsel conducted an investigation relating to the events and transactions underlying Plaintiffs* claims and conducted substantial pretrial discovery on the merits, including, among other things: the inspection and analysis of over 900,000 pages of documents produced by defendants and non-parties, which includes Sunbeam*s customers, vendors, financial consultants, advertising agency, public relations firms, former employees, and financial analysts; the taking of deposition testimony from over 80 fact witnesses and conducting interviews with various other witnesses; the reading and analysis of numerous transcripts of testimony given before the Securities and Exchange Commission and in the arbitration between Al Dunlap and Russell Kersh and Sunbeam; and extensive consultation with experts on accounting, auditing, and damage issues. Common Stock Plaintiffs* Counsel*s decision to enter into this Settlement with Arthur Andersen was made with knowledge of the facts and circumstances underlying Plaintiffs* claims and the strengths and weaknesses of those claims as against Arthur Andersen. In determining to settle the Action as against Arthur Andersen, they have evaluated the extensive pre-trial investigation and discovery taken in the Action and taken into account the substantial expense and length of time necessary to prosecute the Action through trial, post-trial motions, and likely appeals, taking into consideration the significant uncertainties in predicting the outcome of this complex litigation as against Arthur Andersen. Counsel for Plaintiffs believe that the Settlement described herein confers very substantial benefits upon the Class. Based upon their consideration of all of these factors, Plaintiffs and their counsel have concluded that it is in the best interest, of Plaintiffs and the Class to settle the Action as against Arthur Andersen on the terms described herein. 21. Plaintiffs recognized the uncertainty and the risk of the outcome of any litigation, especially complex litigation such as this, and the difficulties and risks inherent in the trial of such an action. Plaintiffs desired to settle the claims of the Class against Arthur Andersen on the terms and conditions described herein which provide substantial benefits to the Class. Common Stock Plaintiffs* Counsel deem such settlement to be fair, reasonable and adequate, and in the best interests of the members of the Class. 22. The amount of damages caused by Arthur Andersen, if any, that Plaintiffs could prove was also a matter of serious dispute, and the Settlement does not constitute a finding, admission or concession that provable damages could be measured as against Arthur Andersen. No determination has been made by the Court as to liability or the amount, if any, of damages suffered by the Class, nor on the proper measure of any such damages caused by Arthur Andersen. The determination of damages, like the determination of liability, is a complicated and uncertain process, typically involving conflicting expert opinions. During the course of the Action, Defendants, in addition to denying any liability, disputed that Plaintiffs and the Class were damaged by any wrongful conduct on Defendants* parts. The Settlement herein is providing an immediate and substantial cash benefit and avoids the risks that liability or damages might not have been proven at trial. 23. This Notice does not imply that there has been or would be any finding of violation of the law or that recovery could be had in any amount if the Action were not settled. TERMS OF THE SETTLEMENT

5 24. In full and complete settlement of the claims which have or could have been asserted in this Action as against Arthur Andersen, and subject to the terms and conditions of the Stipulation, Arthur Andersen has paid into escrow on behalf of Plaintiffs and the Class $110,000,000 (the "Cash Settlement Amount"), which has been earning interest for the benefit of the Class since May 4, Pursuant to the Settlement, and on the Effective Date, Plaintiffs and other members of the Class on behalf of themselves, their heirs, executors, administrators, successors and assigns, and any persons they represent, and the past and present subsidiaries, parents, successors and predecessors, affiliates, and divisions of Plaintiffs and members of the Class, as well as all present and former members, officers, directors, partners, principals, agents, and employees of Plaintiffs and members of the Class shall release and forever discharge, and shall forever be enjoined from prosecuting, the Released Parties (defined below) with respect to each and every Settled Claim (defined below). The litigation will continue as against the defendants other than Arthur Andersen. 26. Arthur Andersen LLP, will be released from all claims relating to the allegations in the Complaint or to any purchase of common stock of Sunbeam on the open market or to any purchase of calls to buy or any sale of puts to sell Sunbeam common stock during the Class Period. In addition, the Settlement will release all Class Members* Settled Claims against: (i) Arthur Andersen, Andersen Worldwide, SC, Accenture LLP (formerly known as Andersen Consulting LLP), Accenture Partners, SC (formerly known as Andersen Consulting Partners, SC); (ii) the respective past and present subsidiaries, parents, successors and predecessors, member firms, affiliates, and divisions of (i); (iii) all present and former members, partners, principals, agents, and employees of (i) and (ii); (iv) all heirs, executors, administrators, spouses, and assigns of (iii); and (v) insurers and reinsurers of (i), (ii) and (iii) in their capacities as insurers of (i), (ii) and (iii), but only to the extent that they are insuring claims relating to this Action against (i), (ii) and (iii) (collectively, the "Released Parties.") 27. "Settled Claims" means any claims, rights or causes of action or liabilities whatsoever, whether based on federal, state, local, statutory or common law or any other law, rule or regulation, including both known and unknown claims, that have been or could have been asserted in any forum by the Class Members or any of them or the successors and assigns of any of them, against any of the Released Parties (as defined above) which arise out of or relate in any way to the allegations, transactions, facts, matters or occurrences, representations or omissions involved, set forth, referred to or that could have been asserted in the Complaint relating to the purchase of shares of Sunbeam common stock or call options, or the sale of put options, on Sunbeam common stock during the Class Period. 28. If the Settlement is approved by the Court, all claims which have or could have been asserted in the Action as against Arthur Andersen relating to the purchase of Sunbeam common stock or call options, or the sale of Sunbeam put options, during the Class Period will be dismissed on the merits and with prejudice as to all Class Members and all Class Members shall be forever barred from prosecuting a class action or any other action raising any Settled Claims against any Released Party. 29. The Stipulation provides that Arthur Andersen may withdraw from and terminate the Settlement in the event that in excess of a certain amount of claimants exclude themselves from the Class. 30. The Settlement will become effective at such time as an Order entered by the Court approving the Settlement shall become final and not subject to appeal (the "Effective Date"). ALLOCATION OF SETTLEMENT PROCEEDS AMONG CLASS MEMBERS 31. The $110,000,000 Cash Settlement Amount and the interest earned thereon shall be the Gross Settlement Fund. The Gross Settlement Fund, less all taxes, approved costs, fees and expenses (the "Net Settlement Fund") shall be distributed to members of the Class who submit acceptable Proofs of Claim ("Authorized Claimants"). The Claims Administrator shall determine each Authorized Claimant*s pro rota share of the Net Settlement Fund based upon each Authorized Claimant*s "Recognized Claim." 32. An Authorized Claimant*s "Recognized Claim" shall be determined based upon the proposed "Plan of Allocation" annexed hereto as Exhibit A, or such other Plan of Allocation as may be approved by the Court as a fair and reasonable method for allocating the Net Settlement Fund to Class Members. It is not a condition of the Settlement that the particular proposed Plan of Allocation annexed hereto as Exhibit A be approved by the Court, and the Court may consider and approve a Plan of Allocation with alternative or amended provisions for calculating the Recognized Claims of Class Members. Such Plan of Allocation shall not affect the validity of the Settlement provided it is approved by the Court as reasonable. 33. Each Authorized Claimant shall be allocated a pro rota share of the Net Settlement Fund based on his, her or its Recognized Claim as compared to the total Recognized Claims of all Authorized Claimants. 34. Class Members who do not submit acceptable Proofs of Claim will not share in the settlement proceeds. Class Members who do not either submit a request for exclusion or submit an acceptable Proof of Claim will nevertheless be bound by the Settlement and the Order and Final Judgment of the Court dismissing this Action. 35. After the Claims Administrator has made reasonable and diligent efforts to have Class Members who are entitled to participate in the distribution of the Net Settlement Fund cash their distribution checks, any balance remaining in the Net Settlement Fund one (1)

6 year after the initial distribution by reason of uncashed checks or otherwise, shall be re-distributed to Class Members who have cashed their checks to the extent feasible, any funds which cannot feasiblely be redistributed shall be contributed to non-sectarian, not-for-profit, 501(c)(3) organization(s) designated by Common Stock Plaintiffs* Co-Lead Counsel, subject to the approval of the Court. THE RIGHTS OF CLASS MEMBERS 36. The Court has certified this Action to proceed as a class action as described herein. If you purchased the common stock of Sunbeam or purchased Sunbeam call options or sold Sunbeam put options on the open market during the period from April 23, 1997 through and including June 30, 1998, and are not excluded from the Class definition (see paragraph 11 above), then you are a Class Member. Class Members have the following options pursuant to Rule 23 (c) (2) of the Federal Rules of Civil Procedure: (a) If you wish to remain a member of the Class, you may share in the proceeds of the Settlement, provided that you submit an acceptable Proof of Claim. Class Members will be represented by the Plaintiffs and their counsel, unless you enter an appearance through counsel of your own choice at your own expense. You are not required to retain your own counsel, but if you choose to do so, such counsel must file an appearance on your behalf on or before September 24, 2001, and must serve copies of such appearance on the attorneys listed in paragraph 44 below. (b) If you do not wish to remain a member of the Class, you may exclude yourself from the Class by following the instructions in paragraph 42 below. Persons who exclude themselves from the Class will NOT receive any share of the Settlement proceeds and will not be bound by the Settlement. (c) If you object to the Settlement or any of its terms, or to Common Stock Plaintiffs* Counsel*s application for fees and expenses, and if you do not exclude yourself from the Class, you may present your objections by following the instructions in paragraph 44 below. SUBMISSION AND PROCESSING OF PROOFS OF CLAIM 37. In order to be eligible to receive any distribution from the Settlement Fund, you must complete and sign the attached Proof of Claim and Release form and send it by first class mail postmarked on or before November 15, 2001, addressed as follows: In re: Sunbeam Securities Litigation Claims Administrator P.O. Box 683 Old Chelsea Station New York, NY If you do not submit a proper Proof of Claim form, you will not be entitled to any share of the Settlement Fund. 39. If you are a Class Member and you do not properly exclude yourself from the Class, you will be bound by the Settlement and the Order and Final Judgment of the Court dismissing this Action as against Arthur Andersen, even if you do not submit a Proof of Claim. If you exclude yourself from the Class, you will not be bound by the judgment but you will not be entitled to any share of the Settlement Fund. 40. All Proofs of Claim must be submitted by the date specified in this Notice unless such period is extended by Order of the Court. 41. Each Claimant shall be deemed to have submitted to the jurisdiction of the United States District Court for the Southern District of Florida with respect to his, her or its Proof of Claim EXCLUSION FROM THE SETTLEMENT 42. If you do not wish to be included in the Class and you do not wish to participate in the proposed Settlement described in this Notice, you may request to be excluded. To do so, you must so state in writing postmarked no later than September 10, 2001 (and which must be received at the address indicated below no later than September 15, 2001.) You must set forth: (a) the name of the litigation (In me Sunbeam Securities Litigation, Civ. No Civ-Middlebrooks); (b) your name, address and telephone number, and the name and address of the record owner if different from your own; (c) the number of shares of Sunbeam common stock purchased or acquired and the number of shares sold during the Class Period and the dates and prices of such purchase(s), acquisition(s) and/or sale(s); and (d) that you wish to be excluded from the Class. The exclusion request should be addressed as follows: In re Sunbeam Securities Litigation Exclusions, c/o Claims Administrator P.O. Box 683, Old Chelsea Station, New York, NY YOUR REQUEST FOR EXCLUSION MAY BE CONSIDERED INVALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. ALL REQUESTS FOR EXCLUSION MUST BE POSTMARKED ON OR BEFORE SEPTEMBER 10, 2001 AND MUST BE RECEIVED BY SEPTEMBER 15, 2001.

7 SETTLEMENT FAIRNESS HEARING 43. At the Settlement Fairness Hearing, the Court will determine whether to finally approve this Settlement and dismiss the Action and the claims of the Class Members as against Arthur Andersen. The Court will also determine whether the proposed Plan of Allocation for the Settlement proceeds is fair and reasonable and should be approved. The Settlement Fairness Hearing may be adjourned from time to time by the Court without further written notice to the Class. If the Settlement is approved, the Court will also consider the application of Common Stock Plaintiffs* Counsel for attorneys* fees. 44. At the Settlement Fairness Hearing, any Class Member who has not properly submitted a Request for Exclusion from the Class may appear in person or by counsel and be heard to the extent allowed by the Court in opposition to the fairness, reasonableness and adequacy of the Settlement, the Plan of Allocation, or the application for an award of attorneys* fees and reimbursement of expenses, provided, however, that in no event shall any person be heard in opposition to the Settlement, the Plan of Allocation, or Common Stock Plaintiffs* Counsel*s application for attorneys* fees and expenses and in no event shall any paper or brief submitted by any such person be accepted or considered by the Court, unless, on or before September 24, 2001, such person: (a) files with the Clerk of the Court notice of such person*s intention to appear, showing proof of such person*s membership in the Class, and providing a statement that indicates the basis for such opposition, along with any documentation in support of such objection; and (b) simultaneously serves copies of such notice, proof, statement and documentation, together with copies of any other papers or briefs such person files with the Court, in person or by mail upon Common Stock Plaintiffs* Co-Lead Counsel: Abraham Rappaport, Esq. Merrill Davidoff, Esq. MILBERG WEISS BERSHAD BERGER & MONTAGUE, P.C. HYNES & LERACH LLP 1622 Locust Street The Plaza, Suite 900 Philadelphia, PA Town Center Road (215) Boca Raton, FL (561) M. Richard Komins, Esq. Robert M. Kornreich, Esq. BARRACK, RODOS & BACINE WOLF POPPER LLP 3300 Two Commerce Square 845 Third Avenue 2001 Market Street New York, NY Philadelphia, PA (212) (215) and upon Settling Defendant Arthur Andersen*s Counsel: Eliot Lauer, Esq. CURTIS, MALLET-PREVOST, COLT & MOSLE LLP 101 Park Avenue New York, NY (212) ATTORNEYS* FEES AND DISBURSEMENTS 45. At the Settlement Fairness Hearing or at such other time as the Court may direct, Common Stock Plaintiffs* Counsel intend to apply to the Court for an award of attorneys* fees from the Settlement Fund in an amount not greater than thirty percent (30%) of the Gross Settlement Fund and for reimbursement of their expenses up to a maximum amount of approximately $4,500,000, plus interest at the same rate as earned by the Settlement Fund. Common Stock Plaintiffs* Counsel, without further notice to the Class, may subsequently apply to the Court for fees and expenses incurred in connection with administering and distributing the Settlement proceeds to the members of the Class. FURTHER INFORMATION 46. For a more detailed statement of the matters involved in this Action, reference is made to the pleadings, to the Stipulation, to the Orders entered by the Court and to the other papers filed in the Action, which may be inspected at the Office of the Clerk of the United States District Court for the Southern District of Florida, United States Courthouse, 301 North Miami Avenue, Miami, Florida 33128, during regular business hours. 47. ALL INQUIRIES CONCERNING THIS NOTICE OR THE PROOF OF CLAIM FORM BY CLASS MEMBERS SHOULD BE MADE TO THE CLAIMS ADMINISTRATOR IN WRITING AT THE ADDRESS INDICATED BELOW.

8 SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES 48. If you purchased common stock of Sunbeam Corporation ("Sunbeam") or purchased Sunbeam call options or sold Sunbeam put options on the open market during the period from April 23, 1997 through and including June 30, 1998 for the beneficial interest of a person or organization other than yourself, the Court has directed that, within seven days of your receipt of this Notice, you either: (a) provide to the Claims Administrator the name and last known address of each person or organization for whom or which you purchased such stock during such time period; or (b) request additional copies of this Notice and the Proof of Claim form, which will be provided to you free of charge, and within seven days mail the Notice and Proof of Claim form directly to the beneficial owners of the securities referred to herein. If you choose to follow alternative procedure (b), the Court has directed that, upon such mailing, you send a statement to the Claims Administrator confirming that the mailing was made as directed. You are entitled to reimbursement from the Settlement Fund of your reasonable expenses actually incurred in connection with the foregoing, including reimbursement of postage expense and the cost of ascertaining the names and addresses of beneficial owners. Those expenses will be paid upon request and submission of appropriate supporting documentation. All communications concerning the foregoing should be addressed to the following: In re Sunbeam Securities Litigation P.O. Box 330 Philadelphia, PA Dated: Miami, Florida July 20, 2001 By Order of the Court CLERK OF THE COURT

9 PLAN OF ALLOCATION OF SETTLEMENT PROCEEDS AMONG CLASS MEMBERS Exhibit A 1. The Gross Settlement Fund less all taxes, approved costs, fees and expenses (the "Net Settlement Fund") shall be distributed to Authorized Claimants. The Claims Administrator shall determine each Authorized Claimant's pro rata share of the Net Settlement Fund based upon each Authorized Claimant*s "Recognized Claim" which shall be calculated as follows: COMMON STOCK a. Purchases of Sunbeam common stock: An Authorized Claimant*s "Recognized Claim" from purchases of Sunbeam common stock shall be calculated as follows: i. With respect to Sunbeam common stock purchased during the Period April 23, 1997 to and including March 5, 1998, and (1) Sold BEFORE the March 19 Announcement, Recognized Claim shall mean 10% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges); (2) Sold AFTER the March 19 Announcement and BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 50% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges); ii. 19 Announcement, and (3) Sold or held AFTER April 3,1998 Disclosures, Recognized Claim shall mean 100% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and either: (i) the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges) on or before June 30, 1998; or (ii) if not sold by the close of trading on June 30, 1998, $9.875 per share. With respect to Sunbeam common stock purchased during the Period March 6, 1998 through and including before the March (1) Sold BEFORE the March 19 Announcement, Recognized Claim shall mean 15% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges); (2) Sold AFTER the March 19 Announcement and BEFORE April 3, 1998 Disclosures, Recognized Claim shall mean 75% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges); (3) Sold or held AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 150% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and either: (i) the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges) on or before June 30, 1998; or (ii) if not sold by the close of trading on June 30, 1998, $9.875 per share. iii. With respect to Sunbeam common stock purchased during the Period after the March 19 Announcement through and before the April 3, 1998 Disclosures, and (1) Sold BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 15% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges); iv. (2) Sold or held AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 100% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and either: (i) the sum for which said shares were sold at a loss (net of brokerage commissions and transaction charges) on or before June 30, 1998; or (ii) if not sold by the close of trading on June 30, 1998, $9.875 per share. With respect to Sunbeam common stock purchased during the Period AFTER the April 3, 1998 Disclosures but on or before the June 30,1998 end of the Class Period, Recognized Claim shall mean 75% of the difference, if a loss, between the amount paid for Sunbeam common stock during the Class Period (including brokerage commissions and transaction charges), and either: (i) the sum for

10 which said shares were sold at a loss (net of brokerage commissions and transaction charges) on or before June 30, 1998; or (ii) if not sold by the close of trading on June 30, 1998, $9.875 per share. CALL OPTIONS b. Purchases of call options on Sunbeam common stock: An Authorized Claimant*s "Recognized Claim" from purchases of Call Options on Sunbeam common stock shall be calculated as follows: i. With respect to Sunbeam call options purchased during the Period April 23, 1997 to and including March 5, 1998, and (1) Sold or expired BEFORE the March 19 Announcement, Recognized Claim shall mean 5% of the difference, if a loss, sold at a loss, if they were sold, or (y) $0.00 if they expired worthless; (2) Sold or expired AFTER the March 19 Announcement and BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 25% of the difference, if a loss, between the amount paid for Sunbeam call options during the Class Period, and (x) the sum for which said call options were sold at a loss, if they were sold, or (y) $0.00 if they expired worthless; (3) Sold or expired AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 50% of the difference, if a loss, sold at a loss, if they were sold, or (y) $0.00 if they expired worthless. ii. With respect to Sunbeam call options purchased during the Period March 6,1998 through and including before the March 19 Announcement, and (I) Sold or expired BEFORE the March 19 Announcement, Recognized Claim shall mean 7.5% of the difference, if a loss, sold at a loss, if they were sold, or (y) $0.00 if they expired worthless; iii. (2) Sold or expired AFTER the March 19 Announcement and BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 37.5% of the difference, if a loss, between the amount paid for Sunbeam call options during the Class Period, and (x) the sum for which said call options were sold at a loss, if they were sold, or (y) $0.00 if they expired worthless; (3) Sold or expired AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 75% of the difference, if a loss, sold at a loss, if they were sold, or (y) $0.00 if they expired worthless. With respect to Sunbeam call options purchased during the Period after the March 19 Announcement through and before the April 3, 1998 Disclosures, and (1) Sold or expired BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 7.5% of the difference, if a loss., sold at a loss, if they were sold, or (y) $0.00 if they expired worthless; (2) Sold or expired AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 50% of the difference, if a loss, sold at a loss, if they were sold, or (y) $0.00 if they expired worthless. iv. With respect to Sunbeam call options purchased during the Period AFTER the April 3, 1998 Disclosures but on or before the June 30, 1998 end of the Class Period, Recognized Claim shall mean 37.5% of the difference, if a loss, between the amount paid for Sunbeam call options during the Class Period, and (x) the sum for which said call options were sold at a loss, if they were sold, or (y) $0.00 if they expired worthless. v. If a claimant EXERCISED CALL OPTIONS to purchase Sunbeam common stock, any Recognized Claim from such transaction shall be calculated solely as a purchase of Sunbeam common stock on the date of the exercise, and for a purchase price equal to the cost of the call option plus the strike price paid for the shares. PUT OPTIONS c. Put options on Sunbeam common stock: An Authorized Claimant*s "Recognized Claim" from the sale (writing) of Put Options on Sunbeam common stock shall be calculated as follows:

11 i. With respect to put options on Sunbeam common stock, which the Authorized Claimant wrote (sold) during the Period April 23, 1997 to and including March 5,1998, and (1) Covered (repurchased) BEFORE the March 19 Announcement, Recognized Claim shall mean 5% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written); (2) Covered (repurchased) AFTER the March 19 Announcement and BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 25% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written); (3) Covered (repurchased) AFTER the April 3,1998 Disclosures, Recognized Claim shall mean 50% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written). ii. With respect to put options on Sunbeam common stock, which the Authorized Claimant wrote (sold) during the Period March 6, 1998 through and including before the March 19 Announcement, and (1) Covered (repurchased) BEFORE the March 19 Announcement, Recognized Claim shall mean 7.5% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written); (2) Covered (repurchased) AFTER the March 19 Announcement and BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 37.5% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written); iii. (3) Covered (repurchased) AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 75% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written). With respect to put options on Sunbeam common stock, which the Authorized Claimant wrote (sold) during the Period after the March 19 Announcement through and before the April 3, 1998 Disclosures, and (1) Covered (repurchased) BEFORE the April 3, 1998 Disclosures, Recognized Claim shall mean 7.5% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written); (2) Covered (repurchased) AFTER the April 3, 1998 Disclosures, Recognized Claim shall mean 50% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written). iv. With respect to put options on Sunbeam common stock, which the Authorized Claimant wrote (sold) during the Period AFTER the April 3, 1998 Disclosures but on or before the June 30, 1998 end of the Class Period, Recognized Claim shall mean 37.5% of the difference, if a loss, between the amount paid to cover (repurchase) the put options, and the sum for which said put options were sold (written). v. W ith respect to put options on Sunbeam common stock, which the Authorized Claimant wrote (sold) at any time during the Class Period which PUT OPTION WAS EXERCISED AND ASSIGNED TO THE AUTHORIZED CLAIMANT, any Recognized Claim from such transaction shall be calculated solely as a purchase of Sunbeam common stock on the date of the sale (writing) of the put option, and for a purchase price equal to the strike price paid for the shares less the proceeds received on the sale (writing) of the put option.