Sunbeam 2001 Annual Report Download - page 22

$5.0 million, $0.4 million and $2.3 million for
2001, 2000 and 1999, respectively. These
amounts are comprised of the following (in
millions):
2001 2000 1999
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 — 2.3
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 $2.3
During 2001, certain 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 com-
pleted during 2001, bear interest at the appli-
cable 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 dis-
charge of the deferred compensation obliga-
tions.
On September 25, 2001, the Company an-
nounced 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 Of-
ficer. 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 Secre-
tary. Separation costs associated with this man-
agement 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 10) following stock-
holder 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, $1.8 million remained unpaid as of
December 31, 2001.
In August 2001, the Company announced
that it would be consolidating its home can-
ning metal closure production from its Bernar-
din Ltd. Toronto, Ontario facility into its Mun-
cie, Indiana manufacturing operation. The total
cost to exit the Toronto facility was $0.8 mil-
lion and includes a $0.3 million loss on the sale
and disposal of equipment, and $0.5 million of
employee severance costs. Of the $0.5 million
accrued liability established for severance costs,
approximately $0.4 million had been expended
through December 31, 2001. The Company
will continue to distribute its products in
Canada through Bernardin, Ltd.
During 2001, items recognized related to
the divested thermoforming operations in-
cluded a pre-tax gain of $1.0 million in connec-
tion with an insurance recovery associated with
a property casualty. Also in August 2001, the
Company announced that it had vacated its
former Triangle Plastics facility in Indepen-
dence, Iowa and integrated personnel and ca-
pabilities into its other operating and distribu-
tion facilities in the area. The total cost to exit
this Iowa facility was $0.6 million and includes
$0.4 million in future lease obligations and an
additional $0.2 million of costs related to the
leased facility.
During 2000, the Company recorded a pre-
tax gain of $1.6 million related to a reduction
in long-term performance-based compensa-
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