Energizer 2014 Annual Report Download - page 77

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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
any participant other than a member of the board of directors (including officer directors). This plan is reflected in Other
liabilities on the Consolidated Balance Sheets.
The Company uses the straight-line method of recognizing compensation cost. Total compensation cost charged against income
for the Company’s share-based compensation arrangements was $30.5, $33.0, and $44.9 for the years ended September 30,
2014, 2013 and 2012, respectively, and was recorded in SG&A expense. The total income tax benefit recognized in the
Consolidated Statements of Earnings and Comprehensive Income for share-based compensation arrangements was $11.4,
$12.3, and $16.8 for the years ended September 30, 2014, 2013 and 2012, respectively. Restricted stock issuance and shares
issued for stock option exercises 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. Total options of approximately 215,500 vested on the third anniversary of the date
of the grant. 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, 2014, the aggregate intrinsic value of stock options outstanding and stock options exercisable were each
$3.9. The aggregate intrinsic value of stock options exercised for the years ended September 30, 2014, 2013 and 2012 was $9.6,
$15.7, and $3.4, 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 have been granted since October 2009.
As of September 30, 2014, there are no unrecognized compensation costs related to stock options granted. For outstanding non-
qualified stock options, the weighted-average remaining contractual life is 4.9 years.
The following table summarizes non-qualified ENR stock option activity during the current fiscal year (shares in millions):
Shares
Weighted-Average
Exercise Price
Outstanding on October 1, 2013 0.24 $59.57
Exercised (0.17) $57.38
Outstanding on September 30, 2014 0.07 $65.14
Exercisable on September 30, 2014 0.07 $65.14
Restricted Stock Equivalents (RSE)
In October 2008, the Company granted RSE awards to certain employees which included approximately 265,200 shares that in
most cases vest ratably over four years or upon death, disability or change of control. At the same time, the Company granted
RSE awards to senior executives totaling approximately 374,600 which vested as follows: 1) 25% of the total restricted stock
equivalents granted, or 91,900, net of forfeitures, 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.
In October 2009, the Company granted RSE awards to certain employees which included approximately 266,300 shares that in
most cases vest ratably over four years or upon death, disability or change of control. At the same time, the Company granted
two RSE awards to senior executives totaling approximately 485,600 shares which vested as follows: 1) 30% of the total
restricted stock equivalents granted, or approximately 130,000, net of forfeitures, vested on the third anniversary of the date of
grant; 2) approximately 201,700 shares vested on November 8, 2012 based on the Company’s compound annual growth rate for
earnings per share as defined in the incentive plan (EPS CAGR) for the three year period ended on September 30, 2012. Under
the terms of the performance award, 66.7% of the performance grant vested based on a 9.33% three year EPS CAGR.
In October 2010, the Company granted RSE awards to certain employees which included approximately 313,300 shares that in
most cases vest ratably over four years or upon death, disability or change of control. At the same time, the Company granted
two RSE awards to key executives totaling approximately 289,000 shares which vested as follows: 1) 30% of the total restricted
stock equivalents granted, or approximately 85,300, net of forfeitures, vested on the third anniversary of the date of grant; 2)
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