Sunbeam 2005 Annual Report Download - page 73

Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
would lapse immediately in the event of a change in control. Following the signing of the AHI transaction
during October 2004, the Board amended the terms of all of the 210,000 restricted shares of common stock
issued in August 2004 to lapse immediately. Also in conjunction with the AHI transaction, during October
2004, the Board accelerated the granting of an aggregate amount of 1,102,500 restricted shares of common
stock under the 2003 Plan to two executive officers of the Company that would otherwise have been
granted to these executive officers in 2005-2007 pursuant to such executives’ employment agreements.
The Board approved that the restrictions on these shares lapsed upon issuance. The Company records
non-cash compensation expense for its issued and outstanding restricted stock either when the restrictions
lapse or ratably over time, when the passage of time is the only restriction. As such, the Company recorded
a non-cash compensation expense for all these restricted stock issuances and restriction lapses of
approximately $32.4 million in the fourth quarter of 2004. In July 2004, the Board approved a grant of
15,000 restricted shares of common stock to Mr. Jonathan Franklin, who was a consultant to the Company
and who is a brother of Mr. Martin E. Franklin, the Company’s Chairman and Chief Executive Officer.
The restrictions on 7,500 of these shares lapsed immediately and the Company recorded a non-cash
compensation charge based on the fair market value of its common stock on the date of grant. The
restrictions on the remaining 7,500 of these shares lapse ratably over a four year period. Non-cash
compensation expense is being recognized on these shares based on the market value of the Company’s
common stock at the time of the lapsing. All of the shares which still have a restriction remaining will have
the restrictions lapse immediately upon the event of a change in control. Also during 2004, the Company
issued 105,120 (“2004 Shares”) of restricted stock to certain other officers and employees. The restrictions
on 40,125 of the 2004 Shares lapse ratably over five years of employment with the Company, and the
restrictions on the remaining 64,995 2004 Shares lapse upon the latter of either the Company’s stock price
achieving a volume weighted average of $42.67 per share for ten consecutive business days or November 1,
2008. All of the 2004 Shares were issued from the Company’s treasury stock.
During 2003, the Company issued an aggregate amount of 843,750 shares of restricted stock to three of
its executive officers, under its 2003 Stock Incentive Plan. During 2003, all of these restricted stock
issuances either provided or were amended to provide that the restrictions lapsed upon the earlier of (i) a
change in control; or (ii) the earlier of our common stock achieving a closing price of $18.67 (up from
$15.55) or the Company achieving annualized revenues of $800 million. During the fourth quarter of 2003,
all such restrictions lapsed which resulted in a restricted stock charge. During the fourth quarter of 2003,
the Company recorded a non-cash restricted stock charge of approximately $21.8 million related to the
lapsing of restrictions over these restricted stock issuances to three of the Company’s executive officers.
Also during 2003, the Company issued 10,800 of restricted stock to certain other officers and employees.
The restrictions on these shares lapse ratably over five years of employment with the Company, and all of
these shares were issued out of the Company’s treasury account.
In February 2003, the Company adopted the 2003 Employee Stock Purchase Plan whereby stock of
the Company can be acquired at a 15% discount and no compensation charge is recorded by the Company
prior to October 31, 2005. As of December 31, 2005, there were approximately 0.3 million shares available
for grant under the 2003 Employee Stock Purchase Plan.
Common Stock
As discussed in Note 3, the Company issued 6,150,123 shares of common stock to partially fund the
purchase price of the THG Acquisition. Furthermore, in connection with the AHI Acquisition, the
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