Rayovac 2008 Annual Report Download - page 145

Table of Contents
Index to Financial Statements
SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Amounts recorded in AOCI on the Consolidated Statements of Shareholders’ Equity (Deficit) and Comprehensive Income (Loss) for the years ended
September 30, 2008, 2007 and 2006 are net of the following tax (benefit) expense amounts:
Pension
Adjustment
Cash
Flow Hedges
Adjustment to
Adopt SFAS 158
Translation
Adjustment Total
2008 $ (1,139) $ (4,765) $ — $ (318) $ (6,222)
2007 (1,307) (3,747) 431 1,217 (3,406)
2006 2,791 6,091 — 266 9,148
(w) Stock Compensation
In connection with the adoption of SFAS 123 (Revised 2004), “Share-Based Payment” (“SFAS 123(R)”), the Company is required to recognize expense related
to the fair value of its employee stock option awards. Total stock compensation expense associated with both stock options and restricted stock awards
recognized by the Company during Fiscal 2008, 2007 and 2006 was $5,098, $21,329 and $15,896 or $3,141, $13,224 and $10,650, net of taxes, respectively. The
amounts before tax are included in General and administrative expenses and Restructuring and related charges in the Consolidated Statements of Operations, of
which $433 and $9,972 or $267 and $6,681, net of taxes, was included in Restructuring and related charges during Fiscal 2008 and 2007 primarily related to the
accelerated vesting of certain awards. There were no amounts before tax included in Restructuring and related charges in the Consolidated Statements of
Operation in Fiscal 2006. The Company expects that total stock compensation expense for the fiscal year ended September 30, 2009 (“Fiscal 2009”) will be
approximately $3,326 before the effect of income taxes. As of September 30, 2008, there was $5,058 of unrecognized compensation cost related to restricted
stock that is expected to be recognized over a weighted average period of approximately 3 years.
The Company uses or has used two forms of stock based compensation. Shares of restricted stock have been awarded to certain employees and members
of management since our fiscal year ended September 30, 2001. Prior to the fourth quarter of Fiscal 2004, the Company also issued stock options to employees,
some of which remained unvested at the adoption date of SFAS 123(R). Restricted stock is now the only form of stock based compensation used by the
Company.
Stock options previously awarded generally vest under a combination of time-based and performance-based vesting criteria. Under the time-based vesting,
the stock options become exercisable primarily in equal increments over a three year period, while under the performance-based vesting such options become
exercisable over the same time period or one day prior to the end of the exercise period, if certain performance criteria are not met. The period during which such
options, if vested, may be exercised generally extends ten years from the date of grant.
Restricted stock shares granted in Fiscal 2008 and 2007 generally have vesting periods which can range from one to five years. Approximately 61% of the
shares granted in Fiscal 2008 and 89% of the shares granted in Fiscal 2007 are purely performance based and vest only upon the achievement of certain
performance goals. Such performance goals consist of reportable segment and consolidated company Earnings Before Interest Taxes Depreciation and
Amortization (“EBITDA”) and cash flow components, each as defined by the Company for purposes of such awards. The remaining shares granted in Fiscal
2008 and Fiscal 2007 are time based, which vest either 100% after three years or on a pro rata basis over three years.
Restricted stock shares granted through Fiscal 2006 generally have vesting periods of three to five years. Approximately 50% of the restricted stock shares
are purely time-based and vest on a pro rata basis over either a
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008