Energizer 2010 Annual Report Download - page 96

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Exhibit 13
ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
86
under the Company’s share-based compensation program are generally issued from treasury
shares.
Options
In October 2009, the Company granted non-qualified stock options to purchase 266,750 shares
of ENR stock to certain executives and employees of the Company. The options vest on the
third anniversary of the date of the grant, but may accelerate and become exercisable before
that date upon the recipient’s death or disability or upon a change in control. The options remain
exercisable for 10 years from the date of grant. However, this term may be reduced under
certain circumstances including the recipient’s termination of employment.
As of September 30, 2010, the aggregate intrinsic value of stock options outstanding and stock
options exercisable was $20.1 and $19.6, respectively. The aggregate intrinsic value of stock
options exercised for the years ended September 30, 2010, 2009 and 2008 was $21.1, $9.3 and
$36.7, respectively. When valuing new grants, Energizer uses an implied volatility, which
reflects the expected volatility for a period equal to the expected life of the option. No new
option awards were granted in the years ended September 30, 2009 and 2008. The weighted-
average fair value of options granted in fiscal 2010 was $27.00 per option. This was estimated
using the Black Scholes option-pricing model with the following weighted-average assumptions:
2010
Risk-free interest rate 3.98%
Expected life of option 5.5 years
Expected volatility of ENR stock 37.04%
Expected dividend yield on ENR stock -
As of September 30, 2010, unrecognized compensation costs related to stock options granted
was $4.5. For outstanding nonqualified stock options, the weighted-average remaining
contractual life is 4.7 years.
The following table summarizes nonqualified ENR stock option activity during the current fiscal
year (shares in millions):
Shares
Weighted-Average
Exercise Price
Outstanding on October 1, 2009 1.32 $33.06
Issued 0.27 65.63
Cancelled (0.03) 41.94
Exercised (0.56) 22.85
Outstanding on September 30, 2010 1.00 $47.12
Exercisable on September 30, 2010 0.74 $40.85
Restricted Stock Equivalents (RSE)
In October 2006, the Board of Directors approved two grants of RSE. First, a grant to certain
employees included 112,350 shares that vest ratably over four years. The second grant for
303,000 shares was awarded to senior executives and consists of two pieces: 1) 25% of the
total restricted stock equivalents granted vested on the third anniversary of the date of grant; 2)
the remainder of the RSE did not vest because the Company performance target was not
achieved.