Sunbeam 2002 Annual Report Download - page 38

Jarden Corporation
Notes to Consolidated Financial Statements (Continued)
6. Special Charges (Credits) and Reorganization Expenses
The Company incurred net special charges (credits) and reorganization expenses of $5.0 million and $0.4
million for 2001 and 2000, respectively. No charges were incurred in 2002. These amounts are comprised of the
following:
Year Ended December 31,
(in millions) 2001 2000
Costs to evaluate strategic options ........................................... $ 1.4 $ 0.6
Discharge of deferred compensation obligations ............................... (4.1) —
Separation costs for former officers .......................................... 2.6 —
Stock option compensation ................................................. 2.4 —
Corporate restructuring costs ............................................... 2.3 —
Costs to exit facilities ..................................................... 0.8 —
Reduction of long-term performance-based compensation ....................... — (1.6)
Litigation charges ........................................................ — 1.4
Items related to divested thermoforming operations ............................ (0.4) —
$ 5.0 $ 0.4
During 2001, certain former officers and participants in the Company’s deferred compensation plans
agreed to forego balances in those plans in exchange for loans from the Company in the same amounts. The
loans, which were completed during 2001, bear interest at the applicable federal rate and require the individuals
to secure a life insurance policy having the death benefit equivalent to the amount of the loan payable to the
Company. All accrued interest and principal on the loans are payable upon the death of the participant and their
spouse. The Company recognized $4.1 million of pre-tax income during 2001 related to the discharge of the
deferred compensation obligations.
On September 25, 2001, the Company announced the departure from the Company of Thomas B. Clark,
Chairman, President and Chief Executive Officer, and Kevin D. Bower, Senior Vice President and Chief Financial
Officer. The Board announced the appointment of Martin E. Franklin as Chairman and Chief Executive Officer
and Ian G.H. Ashken as Vice Chairman, Chief Financial Officer and Secretary. Separation costs associated with
this management reorganization were approximately $2.6 million.
During September 2001, options were granted to participants under the Company’s 2001 Stock Option
Plan. Because the options granted under this new plan were still subject to stockholder approval at the time of
grant, the options resulted in a one-time charge of $2.4 million which was recorded in the fourth quarter of
2001 (see Note 12) following stockholder approval of the 2001 Stock Option Plan on December 18, 2001.
During the fourth quarter of 2001, the Company incurred corporate restructuring costs in the amount of
$2.3 million. These include costs related to the transitioning of the corporate office function from Indianapolis,
Indiana to Rye, New York and Muncie, Indiana, costs to reincorporate in Delaware and to hold a special meeting
of stockholders, and other costs including professional fees. Of this amount, $0.6 million remained unpaid as
of December 31, 2002.
In August 2001, the Company announced that it would be consolidating its home canning metal closure
production from its Bernardin Ltd. Toronto, Ontario facility into its Muncie, Indiana manufacturing operation.
The total cost to exit the Toronto facility was $0.8 million and included a $0.3 million loss on the sale and
disposal of equipment, and $0.5 million of employee severance costs, of which $0.4 million was paid in 2001.
The remaining $0.1 million was paid in 2002. The Company continues to distribute its home canning products
in Canada through Bernardin, Ltd.
During 2001, items recognized related to the divested TPD Assets included a pre-tax gain of $1.0 million
in connection with an insurance recovery associated with a property casualty. Also in August 2001, the
Company announced that it had vacated its former TPD Assets facility in Independence, Iowa and integrated
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