Rayovac 2010 Annual Report Download - page 166

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Avenue Parties and D.E. Shaw Laminar Portfolios, L.L.C. (“D.E. Shaw”), pursuant to which the Harbinger
Parties, the Avenue Parties and D.E. Shaw 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 Spectrum
Brands’ 12% Senior Subordinated Toggle Notes due 2019.
In connection with the Mergers, Russell Hobbs and Harbinger Master Fund entered into an indemnification
agreement, dated as of February 9, 2010 (the “Indemnification Agreement”), by which Harbinger Master Fund
agreed, among other things and subject to the terms and conditions set forth therein, to guarantee the obligations
of Russell Hobbs to pay (i) a reverse termination fee to Spectrum Brands under the merger agreement and
(ii) monetary damages awarded to Spectrum Brands in connection with any willful and material breach by
Russell Hobbs of the Merger Agreement. The maximum amount payable by Harbinger Master Fund under the
Indemnification Agreement was $50,000 less any amounts paid by Russell Hobbs or the Harbinger Parties, or
any of their respective affiliates as damages under any documents related to the Mergers. No such amounts
became due under the Indemnification Agreement. Harbinger Master Fund also agreed to indemnify Russell
Hobbs, SB Holdings and their subsidiaries for out-of-pocket costs and expenses above $3,000 in the aggregate
that become payable after the consummation of the Mergers and that relate to the litigation arising out of Russell
Hobbs’ business combination transaction with Applica Incorporated.
(14) Restructuring and Related Charges
The Company reports restructuring and related charges associated with manufacturing and related initiatives in
Cost of goods sold. Restructuring and related charges reflected in Cost of goods sold include, but are not limited
to, termination and related costs associated with manufacturing employees, asset impairments relating to
manufacturing initiatives, and other costs directly related to the restructuring or integration initiatives
implemented.
The Company reports restructuring and related charges relating to administrative functions in Operating
expenses, such as initiatives impacting sales, marketing, distribution, or other non-manufacturing related
functions. Restructuring and related charges reflected in Operating expenses include, but are not limited to,
termination and related costs, any asset impairments relating to the functional areas described above, and other
costs directly related to the initiatives implemented as well as consultation, legal and accounting fees related to
the evaluation of the Predecessor Company’s capital structure incurred prior to the Bankruptcy Filing.
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