Document zzXZXnJ8nY2oBvpVdOaEbwEbg

elOvk Page 23 of 84 Table of Contents part of Cooper management's ongoing assessment of required production capacity in consideration of the current demand levels In connection with these commitments, certain production capacity and related assets were sold, outsourced, discontinued or moved to a lower cost environment Cooper recorded a provision for these announced actions of $39 1 million ($15 0 million of which was non-cash), or $29 8 million after taxes ($ 32 per diluted common share) Of this amount, $24 0 million ($110 million of which was non-cash) was associated with the Electrical Products segment, $12 7 million ($3 4 million of which was non-cash) was associated with the Tools & Hardware segment and the remainder was related to General Corporate During the fourth quarter of 2003, Cooper reduced estimates of the cost related to those actions by $1 5 million The following table reflects activity related to the fourth quarter 2002 restructuring charge 2002 Restructuring Charge Asset write-offs Employees terminated Cash expenditures Balance at December 31, 2002 Employees terminated Cash expenditures Reversal of excess accruals Balance at December 31, 2003 Employees terminated Cash expenditures Balance at December 31, 2004 Number of Employees 1,206 -- (184) -- 1,022 (982) -- ________ 0 31 (31) -- -- Accrued Facilities Closure Severance and Rationalization ($ in millions) $ 183 $ 20 8 -- (15 0) -- (2 1) 162 -- (14 9) (0 9) 04 -- -- 58 -- (2 9) (0 6) 23 -- (0 4) $ --$ -- 0 7) 06 A total of 435 salaried and 771 hourly positions were eliminated as a result of the closure and rationalization actions Of those planned position eliminations, approximately 600 positions were replaced ultimately as a result of Cooper's ongoing efforts to relocate production capacity to lower cost locations The expenditures related to the 2002 restructuring charge were funded from cash provided by operating activities Cooper estimates that the earnings impact in 2003 from these actions was approximately $10 million in pretax savings, the majority of which benefited the second half of the year These initial savings were realized from personnel reductions that principally impacted selling and administrative expenses and lower cost of sales Cooper estimates that incremental savings of $25 0 to $30 0 million were realized in 2004, largely reflected as lower cost of sales During the fourth quarter of 2001, Cooper committed to the consolidation or closure of certain Electrical Products segment facilities and recorded a provision for severance and other related costs of these announced actions of $7 1 million ($1 7 million of which was non-cash) Plans to consolidate or close facilities arose as a result of Cooper management continuing to review and modify their assessment of required production and distribution facilities and capacity, in consideration of depressed demand levels On August 1, 2001, Danaher Corporation ("Danaher") announced it had made an unsolicited proposal to Cooper for a merger through a stock and cash transaction subject to conducting due diligence procedures On August 8, 2001, Cooper's Board of Directors unanimously rejected Danaher's proposal and authorized management to explore all strategic alternatives that would maximize shareholder value including mergers, sales, strategic alliances, acquisitions or other similar strategic alternatives During the 2001 fourth quarter, Cooper recorded a General Corporate restructuring charge of $35 0 million for the fees and expenses of financial advisors and $1 0 million for legal and other external costs associated with performing the strategic alternatives review On February 13, 2002, Cooper announced that it completed its strategic alternatives review process After careful review of all the available alternatives with management and its financial advisors, Cooper's Board of Directors concluded that it was in the best interests of Cooper's shareholders to move forward with its plan to reincorporate in Bermuda 19 http //www sec gov/Archives/edgar/data/1141982/000095012905001490/h22660el0vk.htm 2/6/2006