Rayovac 2009 Annual Report Download - page 173

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
shares of common stock, in the aggregate, could be granted to select employees and non−employee directors of the Predecessor Company under either or
both a time−vesting or a performance−vesting formula at an exercise price equal to the market price of the common stock on the date of grant. The 1996
Plan expired on September 12, 2006.
In 1997, the Predecessor Board adopted the 1997 Rayovac Incentive Plan (“1997 Plan”). Under the 1997 Plan, the Predecessor Company could grant
to employees and non−employee director’s stock options, stock appreciation rights (“SARs”), restricted stock, and other stock−based awards, as well as
cash−based annual and long−term incentive awards. Accelerated vesting will occur in the event of a change in control, as defined in the 1997 Plan. Up to
5,000 shares of common stock could have been issued under the 1997 Plan. The 1997 Plan expired in August 31, 2007.
In 2004, the Predecessor Board adopted the 2004 Rayovac Incentive Plan (“2004 Plan”). The 2004 Plan supplements the 1997 Plan. Under the 2004
Plan, the Predecessor Company could grant to employees and non−employee directors stock options, SARs, restricted stock, and other stock−based awards,
as well as cash−based annual and long−term incentive awards. Accelerated vesting would occur in the event of a change in control, as defined in the 2004
Plan. Up to 3,500 shares of common stock, net of forfeitures and cancellations, could have been issued under the 2004 Plan. The 2004 Plan would have
expired on July 31, 2014.
On the Effective Date all of the existing common stock of the Predecessor Company was extinguished and deemed cancelled. The Successor
Company had no stock options, SARs, restricted stock or other stock−based awards outstanding as of September 30, 2009.
In connection with the adoption of ASC Topic 718: “Compensation−Stock Compensation,” formerly SFAS No. 123 (Revised 2004), “Share−Based
Payment”, (“ASC 718”), the Company is required to recognize expense related to the fair value of its employee stock awards. Total stock compensation
expense associated with both stock options and restricted stock awards recognized by the Predecessor Company during the eleven month period ended
August 30, 2009, Fiscal 2008 and Fiscal 2007 was $2,636, $5,098 and $21,214 or $1,642, $3,141 and $13,224, net of taxes, respectively. The amounts
before tax are included in General and administrative expenses and Restructuring and related charges in the accompanying Consolidated Statements of
Operations, of which $0, $433 and $9,972, or $0, $267 and $6,681, net of taxes, was included in Restructuring and related charges during the eleven month
period ended August 30, 2009, Fiscal 2008 and Fiscal 2007, respectively, primarily related to the accelerated vesting of certain awards related to terminated
employees.
The Predecessor Company granted approximately 229 shares of restricted stock during Fiscal 2009. Of these grants, 42 were time−based and would
vest on a pro rata basis over a three year period and 187 shares were purely performance−based and would vest only upon achievement of certain
performance goals. All vesting dates were subject to the recipient’s continued employment with the Company, except as otherwise permitted by the
Predecessor Board or if the employee was terminated without cause. The total market value of the restricted shares on the date of grant was approximately
$150.
The Predecessor Company granted approximately 408 shares of restricted stock during Fiscal 2008. Of these grants, 158 shares were time−based and
would vest on a pro rata basis over a three year period and 250 were purely performance−based and would vest only upon achievement of certain
performance goals. All vesting dates were subject to the recipient’s continued employment with the Company, except as otherwise permitted by the
Predecessor Board or if the employee was terminated without cause. The total market value of the restricted shares on the date of grant was approximately
$2,165.
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