Rayovac 2009 Annual Report Download - page 201

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Pursuant to the Plan and in connection with its Chapter 11 reorganization, Spectrum Brands, Inc. converted from a Wisconsin corporation into a
Delaware corporation and adopted a new certificate of incorporation and bylaws. The terms of the certificate of incorporation and bylaws were negotiated
with certain representatives of the Harbinger Parties, Laminar and the Avenue Parties in the context of the reorganization and in consideration for the
support of the Plan of each of the Harbinger Parties, Laminar and the Avenue Parties holding Spectrum Brands’ then existing Senior Subordinated Notes.
In addition, also pursuant to the Plan, each of the Harbinger Parties, Laminar and the Avenue Parties designated certain persons who were approved
by Spectrum Brands’ then existing directors and the Bankruptcy Court and, pursuant to the Plan and effective as of the Effective Date, appointed together
with Kent J. Hussey as directors of Spectrum Brands. These individuals continue to serve as the directors of Spectrum Brands.
Also in connection with its Chapter 11 reorganization, as of the Effective Date, Spectrum Brands entered into certain agreements with each of the
Harbinger Parties, Laminar and the Avenue Parties governing various relationships between the Company and such parties as holders of its securities. These
agreements include:
• a registration rights agreement with respect to common stock of reorganized Spectrum Brands, Inc., other securities in respect of the common
stock and other equity of reorganized Spectrum Brands, Inc.; and
• a registration rights agreement with respect to the 12% Notes.
The terms of each of these agreements were negotiated in the context of the Company’s Chapter 11 reorganization and in consideration for the
support of each of the Harbinger Parties, Laminar and the Avenue Parties of the Plan.
(15) 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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