Stock Compensation

The Company recognized consolidated stock compensation expense as follows:



	Three months ended				Six months ended
	March 31, 2013		April 1, 2012		March 31, 2013		April 1, 2012
Stock compensation expense	$	15.7	$	7.3	$	22.2	$	11.8
Less:
Related tax benefit	0.2		—		0.5		—
Noncontrolling interest	4.9		2.9		6.3		4.9
Net	$	10.6	$	4.4	$	15.4	$	6.9

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 March 31, 2013 and related activity during the six 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	1,528	8.52		3.53		194		49.45		3.85
Exercised	—	—		—		(15	)	38.14		3.90
Forfeited or expired	—	—		—		—		—		—
Stock options outstanding at March 31, 2013	3,813	6.38		2.47		380		43.34		3.88
Stock options vested and exercisable at March 31, 2013	846	6.08		2.32		—		—		—
Stock options outstanding and expected to vest	2,966	6.47		2.52		330		43.34		3.88

A summary of restricted stock and restricted stock units outstanding as of March 31, 2013 and related activity during the six months then ended, under HGI, Spectrum Brands and FGL’s 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	3,256		8.52		—	—
Vested	(633	)	8.23		—	—
Restricted stock outstanding at March 31, 2013	3,453		7.71		13	28.00
Restricted stock expected to vest	3,453		7.71		13	28.00



	HGI				Spectrum Brands				FGL
Restricted Stock Units	Units		Weighted Average Grant Date Fair Value		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	9		8.33		636		45.03		52	3.85
Vested	(17	)	4.61		(1,005	)	28.31		—	—
Forfeited	—		—		(266	)	28.99		—	—
Restricted stock units outstanding at March 31, 2013	9		—		1,296		36.58		52	3.85
Restricted stock units vested and exercisable at March 31, 2013	22		4.61		—		—		—	—
Restricted stock units expected to vest	9		8.33		1,296		36.58		41	3.85

HGI

HGI granted stock option awards representing approximately 30 thousand and 2,000 thousand shares during the three months ended March 31, 2013 and April 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 $0.1 and $3.5, respectively. HGI granted stock option awards representing approximately 1,528 thousand and 2,075 thousand shares during the six months ended March 31, 2013 and April 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 $5.4 and $3.6, respectively.

HGI granted restricted stock awards representing approximately 29 thousand and 700 thousand shares during the three months ended March 31, 2013 and April 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 $0.2 and $3.4, respectively. HGI granted restricted stock awards representing approximately 3,256 thousand and 768 thousand shares during the six months ended March 31, 2013 and April 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 $27.7 and $3.7, respectively.

HGI granted restricted stock unit awards representing approximately 9 thousand and no shares, respectively, during the three months ended March 31, 2013 and April 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. HGI granted restricted stock unit awards representing approximately 9 thousand and 22 thousand shares, respectively, during the six months ended March 31, 2013 and April 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 and $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 March 31, 2013, there was approximately $19.4 of total unrecognized compensation costs related to unvested share-based compensation agreements, which is expected to be recognized over a weighted-average period of 2.49 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	0.85%	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 March 31, 2013, was 9.20 years.

Spectrum Brands

Spectrum Brands granted restricted stock unit awards representing approximately 62 thousand and 636 thousand shares during the three and six months ended March 31, 2013. Of these 636 thousand grants, 22 thousand restricted stock units are time based and vest over a one year period. Of the remaining 614 thousand restricted stock unit grants, 90 thousand are performance based and vest over a one year period, and 524 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 $28.6.

Spectrum Brands granted restricted stock unit awards representing approximately 13 thousand and 717 thousand shares during the three and six months ended April 1, 2012. Of these 717 thousand grants, 18 thousand restricted stock units are time-based and vest over a one year period. The remaining 699 thousand restricted stock unit grants 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 $19.3.

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 March 31, 2013, FGL determined that it was probable that the dividend equivalent will vest and recorded a provision of $0.9 for the ratable recognition of such projected liability over the option vesting period.

FGL granted stock option awards and restricted stock units representing approximately 194 thousand and 52 thousand shares during the three and six months ended March 31, 2013. These stock options and restricted shares vest over a period of 3 years and expire on the seventh anniversary of the grant date. The total fair value of the option grant and restricted stock unit grant on the grant date was $0.6 and $2.0, respectively.

FGL granted stock option awards representing approximately 205 thousand shares during the three and six months ended April 1, 2012. These stock options vest over a period of 3 years and expire on the seventh anniversary of the grant. The total fair value of the grants on their grant dates was approximately $0.6. On December 31, 2012, FGL elected an alternate settlement for the vested portion of the 2012 share options awards. FGL selected a cash settlement of the vested option awards, which reclassified the plan from an equity plan to a liability plan. FGL recognized additional expense, of approximately $0.6, for the difference between the cash settlement amount and the compensation expense previously recognized. FGL revalued the remaining unvested option awards to fair value and recorded $0.1 compensation expense.

The total compensation cost related to non-vested options and restricted stock units not yet recognized as of March 31, 2013 totaled $3.5 and will be recognized over a weighted-average period of 2.41 years. The weighted-average remaining contractual term of outstanding stock option awards at March 31, 2013, was 2.02 years.

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	0.8%	0.8%
Assumed dividend yield	8%	10%
Expected option term	4.5	4.5
Volatility	27%	35%