(9) Stock Compensation

The Company recognized consolidated stock compensation expense as follows:


	Three Months Ended
	December 30, 2012		January 1, 2012
Stock compensation expense	$	6.5	$	4.5
Less:
Related tax benefit		0.3		—
Noncontrolling interest		1.4		2.0

Net	$	4.8	$	2.5

The amounts before taxes and non-controlling interest are principally included in “Selling, acquisition, operating and general expenses” in the accompanying Condensed Consolidated Statements of Operations.

A summary of stock options outstanding as of December 30, 2012 and related activity during the three months then ended, under HGI and FGL’s respective incentive plans are as follows (share amounts in thousands):


	HGI						FGL
Stock Option Awards	Options		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Options		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Stock options outstanding at September 30, 2012		2,285	$	4.96	$	1.77		201	$	38.20	$	3.90
Granted		1,498		8.52		3.53		—		—		—

Stock options outstanding at December 30, 2012		3,783		6.37		2.46		201		38.20		3.90

Stock options vested and exercisable at December 30, 2012		812		6.13		2.35		—		—		—

Stock options outstanding and expected to vest		2,971		6.43		2.50		179		38.20		3.90

A summary of restricted stock and restricted stock units outstanding as of December 30, 2012 and related activity during the three months then ended, under HGI and Spectrum Brands’ respective incentive plans are as follows (share amounts in thousands):


	HGI					Spectrum Brands
Restricted Stock Awards	Shares			Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Restricted stock outstanding at September 30, 2012		830		$	4.93		13	$	28.00
Granted		3,227			8.52		—		—
Vested		(633	)		8.23		—		—
Forfeited		—			—		—		—

Restricted stock outstanding at December 30, 2012		3,424			7.70		13		28.00

Restricted stock expected to vest		3,424			7.70		13		28.00


	HGI					Spectrum Brands
Restricted Stock Units	Units			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Restricted stock units outstanding at September 30, 2012		17		$	4.61		1,931		$	28.45
Granted		—			—		574			44.63
Vested		(17	)		4.61		(1,004	)		28.30
Forfeited		—			—		(263	)		28.85

Restricted stock units outstanding at December 30, 2012		—			—		1,238			35.98

Restricted stock units vested and exercisable at December 30, 2012		22			4.61		—			—

Restricted stock units expected to vest		—			—		1,238			35.98

HGI

HGI granted stock option awards representing approximately 1,498 thousand and 75 thousand shares during the three months ended December 30, 2012 and January 1, 2012, respectively. All of these grants are time based, and vests either immediately, or over periods of 12 to 36 months. The total fair value of the stock option grants on their respective grant dates were approximately $5.3 and $0.1, respectively.

HGI granted restricted stock awards representing approximately 3,227 thousand and 68 thousand shares during the three months ended December 30, 2012 and January 1, 2012, respectively. All of these grants are time based, and vests either immediately, or over periods of 7 to 36 months. The total fair value of the restricted stock grants on their respective grant dates were approximately $27.5 and $0.3, respectively.

HGI granted restricted stock unit awards representing approximately 22 thousand shares during the three months ended January 1, 2012. All of these grants are time based, and vests either immediately, or over periods of 7 to 12 months. The total fair value of the restricted stock grants on their respective grant dates was approximately $0.1.

Under HGI’s executive bonus plan for Fiscal 2013, executives will be paid in cash, stock options and restricted stock shares. The equity grants will have a grant date in the first fiscal quarter of 2014 and the shares will vest between 12 and 36 months from the grant date.

As of December 30, 2012, there was approximately $25.1 of total unrecognized compensation costs related to unvested share-based compensation agreements, which is expected to be recognized over a weighted-average period of 2.74 years.

The fair values of restricted stock and restricted stock unit awards are determined based on the market price of HGI’s common stock on the grant date. The fair value of stock option awards is determined using the Black-Scholes option pricing model. The following assumptions were used in the determination of these grant date fair values using the Black-Scholes option pricing model:


	2013	2012
Risk-free interest rate	0.84%	1.19%
Assumed dividend yield	—%	—%
Expected option term	5.3 to 6.0 years	6.0 years
Volatility	42.8% to 44.0%	33.0%

The weighted-average remaining contractual term of outstanding stock option awards at December 30, 2012, was 9.46 years.

Spectrum Brands

Spectrum Brands granted restricted stock unit awards representing approximately 574 thousand shares during the three months ended December 30, 2012. Of these grants, 22 thousand restricted stock units are time based and vest over a one year period. Of the remaining 552 thousand restricted stock units, 90 thousand are performance based and vest over a one year period, and 462 thousand are performance and time-based and vest over a two year period. The total fair value of the restricted stock units on the dates of the grants was approximately $25.6.

Spectrum Brands granted restricted stock unit awards representing approximately 704 shares during the three months ended January 1, 2012. Of these 704 thousand grants, 17 thousand restricted stock units are time-based and vest over a one year period. The remaining 687 thousand restricted stock units are performance and time-based and vest over a two year period. The total market value of the restricted stock units on the dates of the grants was approximately $18.9.

The fair values of restricted stock awards and restricted stock units are determined based on the market price of Spectrum Brands’ common stock on the grant date.

FGL

On November 2, 2011, FGL’s compensation committee (on behalf of its board of directors) approved a long-term stock-based incentive plan that permits the grant of options to purchase shares of FGL common stock to key employees of FGL. On November 2, 2011, FGL’s compensation committee also approved a dividend equivalent plan that permits holders of these options the right to receive a payment in cash in an amount equal to the ordinary dividends declared and paid or debt service payments to HGI by FGL in each calendar year, divided by the total number of FGL common shares outstanding, starting in the year in which the dividend equivalent is granted through the year immediately prior to the year in which the dividend equivalent vests with respect to a participant’s option shares. As of December 30, 2012, FGL determined that it was probable that the dividend equivalent will vest and recorded a provision of $0.7 for the ratable recognition of such projected liability over the option vesting period.

The weighted-average remaining contractual term of outstanding stock option awards at December 30, 2012, was 1.84 years.