Rayovac 2012 Annual Report Download - page 133

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(In thousands, except per share amounts)
stock, and (ii) the outstanding shares of Russell Hobbs common stock and preferred stock were canceled and
converted into the right to receive shares of SB Holdings common stock.
Pursuant to the terms of the Merger Agreement, on February 9, 2010, Spectrum Brands entered into support
agreements with Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations
Fund, L.P. and Global Opportunities Breakaway Ltd. (together the “Harbinger Parties”) and Avenue International
Master, L.P. and certain of its affiliates (the “Avenue Parties”), in which the Harbinger Parties and the Avenue
Parties agreed to vote their shares of Spectrum Brands common stock acquired before the date of the Merger
Agreement in favor of the Merger and against any alternative proposal that would impede the Merger.
Immediately following the consummation of the Merger, the Harbinger Parties owned approximately 64%
of the outstanding SB Holdings common stock and the stockholders of Spectrum Brands (other than the
Harbinger Parties) owned approximately 36% of the outstanding SB Holdings common stock.
On January 7, 2011, the Harbinger Parties contributed 27,757 shares of SB Holdings common stock to
Harbinger Group Inc. (“HRG”) and received in exchange for such shares an aggregate of 119,910 shares of HRG
common stock (such transaction, the “Share Exchange”), pursuant to a Contribution and Exchange Agreement
(the “Exchange Agreement”). Immediately following the Share Exchange, (i) HRG owned approximately 54.4%
of the outstanding shares of SB Holding’s common stock and the Harbinger Parties owned approximately 12.7%
of the outstanding shares of SB Holdings common stock, and (ii) the Harbinger Parties owned 129,860 shares of
HRG common stock, or approximately 93.3% of the outstanding HRG common stock.
On June 28, 2011 the Company filed a Form S-3 registration statement with the SEC under which 1,150
shares of its common stock and 6,320 shares of the Company’s common stock held by Harbinger Capital
Partners Master Fund I, Ltd. were offered to the public.
In November 2011, HRG announced a stock purchase program for the Company’s common stock, with an
authorization of $30,000 under the program. This purchase program was completed in March 2012. Following
the completion of the secondary offering of the Company’s common stock in August 2011 by Harbinger Capital
Partners Master Fund I, Ltd. and the completion of the HRG stock purchase program for the Company’s common
stock noted above, HRG owned approximately 57% of the Company’s common stock, and the Harbinger Parties
owned less than 1 percent of the Company’s common stock.
In August 2012, HRG announced a share repurchase program of up to 1,000 shares of the Company’s
common stock.
In connection with the Merger, the Harbinger Parties and SB Holdings entered into a stockholder agreement,
dated February 9, 2010 (the “Stockholder Agreement”), which provides for certain protective provisions in favor
of minority stockholders and provides certain rights and imposes certain obligations on the Harbinger Parties,
including:
• for so long as the Harbinger Parties and their affiliates beneficially own 40% or more of the
outstanding voting securities of SB Holdings, the Harbinger Parties and the Company will cooperate to
ensure, to the greatest extent possible, the continuation of the structure of the SB Holdings board of
directors as described in the Stockholder Agreement;
• the Harbinger Parties will not effect any transfer of equity securities of SB Holdings to any person that
would result in such person and its affiliates owning 40% or more of the outstanding voting securities
of SB Holdings, unless specified conditions are met; and
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