Rayovac 2010 Annual Report Download - page 88

Agreement also provides for customary events of default, including payment defaults and cross-defaults on other
material indebtedness.
At September 30, 2010, we were in compliance with all covenants under the ABL Credit Agreement.
During Fiscal 2010 we recorded $10 million of fees in connection with the ABL Revolving Credit Facility.
The fees are classified as Debt issuance costs and will be amortized as an adjustment to interest expense over the
remaining life of the ABL Revolving Credit Facility.
As a result of borrowings and payments under the ABL Revolving Credit Facility at September 30, 2010,
we had aggregate borrowing availability of approximately $225 million, net of lender reserves of $29 million.
At September 30, 2010, we had an aggregate amount outstanding under the ABL Revolving Credit Facility
of $37 million for outstanding letters of credit of $37 million.
At September 30, 2009, we had an aggregate amount outstanding under our then-existing asset based
revolving loan facility of $84 million which included a supplemental loan of $45 million and $6 million in
outstanding letters of credit.
Interest Payments and Fees
In addition to principal payments on our Senior Credit Facilities, we have annual interest payment
obligations of approximately $71 million in the aggregate under our 9.5% Notes and annual interest payment
obligations of approximately $29 million in the aggregate under our 12% Notes. We also incur interest on our
borrowings under the Senior Credit Facilities and such interest would increase borrowings under the ABL
Revolving Credit Facility if cash were not otherwise available for such payments. Interest on the 9.5% Notes and
interest on the 12% Notes is payable semi-annually in arrears and interest under the Senior Credit Facilities is
payable on various interest payment dates as provided in the Senior Credit Agreement and the ABL Credit
Agreement. Interest is payable in cash, except that interest under the 12% Notes is required to be paid by
increasing the aggregate principal amount due under the subject notes unless we elect to make such payments in
cash. Effective with the payment date of August 28, 2010, we elected to make the semi-annual interest payment
scheduled for February 28, 2011 in cash. Thereafter, we may make the semi-annual interest payments for the
12% Notes either in cash or by further increasing the aggregate principal amount due under the notes subject to
certain conditions. Based on amounts currently outstanding under the Senior Credit Facilities, and using market
interest rates and foreign exchange rates in effect at September 30, 2010, we estimate annual interest payments of
approximately $61 million in the aggregate under our Senior Credit Facilities would be required assuming no
further principal payments were to occur and excluding any payments associated with outstanding interest rate
swaps. We are required to pay certain fees in connection with the Senior Credit Facilities. Such fees include a
quarterly commitment fee of up to 0.75% on the unused portion of the ABL Revolving Credit Facility and certain
additional fees with respect to the letter of credit subfacility under the ABL Revolving Credit Facility.
Equity Financing Activities. During Fiscal 2010, we granted approximately 0.9 million shares of restricted
stock. Of these grants, 0.3 million restricted stock units were granted in conjunction with the Merger and are
time-based and vest over a one year period. The remaining 0.6 million shares are restricted stock grants primarily
vest over a two year period. The total market value of the restricted shares on the date of the grant was
approximately $23 million. During Fiscal 2009, Old Spectrum granted approximately 0.2 million shares of
restricted stock. Of these grants, approximately 18% of the shares were time-based and vest on a pro rata basis
over a three year period and 82% of the shares were performance-based and vest upon achievement of certain
performance goals. All vesting dates were subject to the recipient’s continued employment with us. The total
market value of the restricted stock on the date of the grant was approximately $0.1 million which has been
recorded as unearned restricted stock compensation. On the Effective Date, all of the existing common stock of
Old Spectrum was extinguished and deemed cancelled. Subsequent to September 30, 2009, we granted an
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