Rumors continue to swirl around O'Sullivan Industries, the top employer in Lamar for the past four decades.
The company's first million-dollar a year CEO, Bob Parker, reportedly has removed two-long time officials, Tom O'Sullivan Jr., son and namesake of the company's founder, and Tom Riegel, who has been with O'Sullivan since 1971.
Reportedly, layoffs are in the offing for O'Sullivan.
While people who are making far less will have to wonder how they are going to make their next car payments and put food on the table, the most-recently hired O'Sullivan officials will be doing just fine.
As mentioned earlier, Parker, who was hired May 17 after previously working for Newell Rubbermaid, is receiving $1 million annually. His contract also insures that he will receive a bonus of at least an additional half-million dollars. The previous CEO, Richard Davidson, received an annual salary of $530,000 in 2002, according to company filings with the Securities and Exchange Commission.
As a condition of his hiring, Parker received 291,905 shares of Series B Junior Preferred Stock, 40,000 shares of Series C Preferred Stock, and 467,614 shares of Class B Common Stock in O'Sullivan.
His health insurance is 100 percent paid with a $250 deductible. He receives an auto allowance of $1,200 a month or $14,400 a year (Executives have to have this. You know how easy it is to go through a million dollars nowadays.) The company also provides him with $800,000 in life insurance, a 401K plan, an 80-20 dental plan and, of course, a sizable golden parachute of a full year's salary, one million dollars, if the board of directors decides to give him the ax.
Parker has already begun the process of bringing his buddies from Rubbermaid to O'Sullivan. During the past few weeks, the company has hired Rick Allan Walters, formerly of Rubbermaid, as chief financial officer with an annual salary of $250,000 and a guaranteed bonus of $200,000. Walters also is receiving all of the other fringe benefits that the board of directors used to lure Parker.
Also hired from Rubbermaid was Michael Orr at a salary of $230,000 and a guaranteed bonus of $184,000, plus the other fringe benefits.
The hirings of the Rubbermaid Trio are the latest maneuvers in the gradual phasing out of the original O'Sullivan family. Daniel O'Sullivan, oldest son of founder Tom O'Sullivan, retired March 31,2000, at age 60. In exchange for his early retirement as CEO, O'Sullivan was paid $42,160 a month for 36 months. He will continue to receive $11,458 a month until he reaches his 65th birthday. The total buyout will amount to approximately $2.2 million. He also continues to be covered under the company's health and life insurance plans.
Terry Riegel, who accepted an early retirement from his position as executive vice president, received a lump sum payment of $335,336.54 on Jan. 2, 2004. Since May 15, he has been receiving $5,000 a month. This will continue for 30 months. Riegel and his family's health insurance costs will continue to be footed by the company through Nov. 15, 2007. He will also continue to serve as a company consultant until that time and will not go into competition against O'Sullivan. Daniel O'Sullivan has a similar no-compete clause in his contract.
Though nothing is going to take away the sting of pushed out of a company that your family put on the map, Federal Securities and Exchange documents indicate Tom O'Sullivan Jr will not be left destitute.
The very top officials at O'Sullivan Industries, including Tom O'Sullivan Jr. receive the following severance package:
1. A cash payment equal to their current base salary and the highest bonus received during the past three years. O'Sullivan's base salary in 2003 was $179,531. He received a $76,300 bonus the previous year.
2. A cash payment equal to the bonus earned by the employee in the year of termination, calculated on a pro-rated basis.
3. A cash payment for accrued and unpaid vacation pay.
4. A cash payment for a 12-month automobile allowance.
5. Continued life and health insurance for the next 12 months.
6. A lump payment, adjusted for taxes, for an amount equal to their profit sharing money.
7. A cash payment based on the amount he was scheduled to receive in deferred compensation if he had worked until age 65. According to SEC records. O'Sullivan is 49 years old.
8. All outstanding stock options vest and become immediately exercisable.
9. O'Sullivan will be required to pay cash for any shares of unrestricted common stock and options for stocks at fair market value.
10. One year of outplacement services is guaranteed.
11. If O'Sullivan moves more than 20 miles from his house to take another job within the next 36 month, the company has to buy his property.
More to come
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Today's Joplin Globe featured an article about the middle school situation in the city. No one has asked me, but I would prefer to see three middle schools, maintained as neighborhood schools, with a new school being built for South. I hate to see the continued evaporation of the neighborhood schools.
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Teachers report for duty tomorrow (Thursday). I'm ready to get started. I just wish teachers had the same kind of fringe benefits that million-dollar CEOS have (whether their companies make money or not).i