Rayovac 2010 Annual Report Download - page 165

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Harbinger Parties) owned approximately 36% of the outstanding SB Holdings common stock. Harbinger Group,
Inc. (“HRG”) and the Harbinger Parties are parties to a Contribution and Exchange Agreement (the “Exchange
Agreement”), pursuant to the terms of which the Harbinger Parties will contribute 27,757 shares of SB Holdings
common stock to HRG and received in exchange for such shares an aggregate of 119,910 shares of HRG
common stock (the “Share Exchange”). Immediately following the consummation of the Share Exchange,
(i) HRG will own 27,757 shares of SB Holdings common stock and the Harbinger Parties will own 6,500 shares
of SB Holdings common stock, approximately 54.4% and 12.7% of the outstanding shares of SB Holdings
common stock, respectively, and (ii) the Harbinger Parties will own 129,860 shares of HRG common stock, or
approximately 93.3% of the outstanding HRG common stock.
In connection with the Mergers, the Harbinger Parties and SB Holdings entered into a stockholder
agreement, dated February 9, 2010 (the “Stockholder Agreement”), which provides for certain protective
provisions in favor of minority stockholders and provides certain rights and imposes certain obligations on the
Harbinger Parties, including:
• for so long as the Harbinger Parties own 40% or more of the outstanding voting securities of SB
Holdings, the Harbinger Parties and HRG will vote their shares of SB Holdings common stock to effect
the structure of the SB Holdings board of directors as described in the Stockholder Agreement;
• the Harbinger Parties will not effect any transfer of equity securities of SB Holdings to any person that
would result in such person and its affiliates owning 40% or more of the outstanding voting securities
of SB Holdings, unless specified conditions are met; and
• the Harbinger Parties will be granted certain access and informational rights with respect to SB
Holdings and its subsidiaries.
On September 10, 2010, the Harbinger Parties and HRG entered into a joinder to the Stockholder
Agreement, pursuant to which, effective upon the consummation of the Share Exchange, HRG will become a
party to the Stockholder Agreement, subject to all of the covenants, terms and conditions of the Stockholder
Agreement to the same extent as the Harbinger Parties were bound thereunder prior to giving effect to the Share
Exchange.
Certain provisions of the Stockholder Agreement terminate on the date on which the Harbinger Parties or
HRG no longer constitutes a Significant Stockholder (as defined in the Stockholder Agreement). The Stockholder
Agreement terminates when any person (including the Harbinger Parties or HRG) acquires 90% or more of the
outstanding voting securities of SB Holdings.
Also in connection with the Mergers, the Harbinger Parties, the Avenue Parties and SB Holdings entered
into a registration rights agreement, dated as of February 9, 2010 (the “SB Holdings Registration Rights
Agreement”), pursuant to which the Harbinger Parties and the Avenue Parties have, among other things and
subject to the terms and conditions set forth therein, certain demand and so-called “piggy back” registration
rights with respect to their shares of SB Holdings common stock. On September 10, 2010, the Harbinger Parties
and HRG entered into a joinder to the SB Holdings Registration Rights Agreement, pursuant to which, effective
upon the consummation of the Share Exchange, HRG will become a party to the SB Holdings Registration
Rights Agreement, entitled to the rights and subject to the obligations of a holder thereunder.
Other Agreements
On August 28, 2009, in connection with Spectrum Brands’ emergence from Chapter 11 reorganization
proceedings, Spectrum Brands entered into a registration rights agreement with the Harbinger Parties, the
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