Harbinger Group Inc.
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SEC Filings

10-K
HRG GROUP, INC. filed this Form 10-K on 12/29/1994
Entire Document
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            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 8. PREFERRED, PREFERENCE AND COMMON STOCK--(CONTINUED)
awards of restricted stock have a restriction period of not less than six
months and not more than five years. The 1987 Plan provided for the issuance of
up to 600,000 shares of the Common Stock. During 1992, the stockholders
approved an amendment to the 1987 Plan that provides for the automatic grant of
a nonqualified stock option to directors of Zapata who are not employees of
Zapata or any subsidiary of Zapata. At September 30, 1994, a total of 163,666
shares of Common Stock were reserved for the future granting of stock options
or the awarding of restricted stock under the 1987 Plan. During 1994, options
to purchase 20,000 shares under the 1987 Plan at $7.19 were granted and an
option to purchase 20,000 shares at $4.22 was exercised. At September 30, 1994,
172,000 options were outstanding under the 1987 Plan at prices ranging from
$3.13 to $7.19 and 98,667 options were exercisable.
 
  On December 6, 1990, the stockholders approved a new stock option plan (the
"1990 Plan"). The 1990 Plan provides for the granting of non-qualified stock
options to key employees of the Company. Under the 1990 Plan, options may be
granted by the Committee at prices equivalent to the market value of the Common
Stock on the date of grant. Options become exercisable in one or more
installments on such dates as the Committee may determine, provided that such
date cannot occur prior to the expiration of one year of continued employment
with the Company following the date of grant. Unexercised options will expire
on varying dates up to a maximum of 10 years from the date of grant. The 1990
Plan provides for the issuance of options to purchase up to 1,000,000 shares of
the Company's Common Stock. At September 30, 1994, a total of 32,666 shares of
Common Stock were reserved for the future granting of stock options under the
1990 Plan. During 1994, options to purchase 35,622 shares under the 1990 Plan
at $3.13 were exercised and options to purchase 104,478 shares at $3.13 were
cancelled. At September 30, 1994, a total of 663,900 options at a price of
$3.13 were outstanding and exercisable under the 1990 Plan. No options were
granted in 1994 under the 1990 Plan.
 
NOTE 9. INCOME TAXES
 
  Zapata adopted Statement of Financial Accounting Standards No. 109 ("SFAS
109"), "Accounting for Income Taxes" as of October 1, 1993. The adoption of
SFAS 109 changed Zapata's method of accounting for income taxes to the asset
and liability approach. This approach requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of existing
temporary differences between the financial reporting and tax reporting basis
of assets and liabilities, and operating loss and tax credit carryforwards for
tax purposes. The impact of adopting SFAS 109 was to record an increase to
capital in excess of par value of $15.3 million and a net deferred tax asset of
$11.6 million arising from the recognition of previously existing credit
carryforward items. Subsequently, the Company announced its decision to sell
its marine protein operation, which reduced the amount of tax credit
carryforward items that are expected to be utilized, resulting in an adjustment
that reduced capital in excess of par and the deferred tax asset by $13.7
million. Due to the implementation of the quasi-reorganization as of October 1,
1990, the Company was required to adjust capital in excess of par value for the
recognition of deductible temporary differences and credit carryforward items
which existed at the date of the quasi-reorganization. Future reductions in the
deferred tax valuation allowance, if any, will be allocated to capital in
excess of par value.
 
  Zapata and its domestic subsidiaries file a consolidated U.S. federal income
tax return. The provision for income tax expense (benefit) consisted of the
following:

<TABLE>
<CAPTION>
                                                              1994    1993  1992
                                                             ------  ------ ----
                                                               (IN THOUSANDS)
      <S>                                                    <C>     <C>    <C>
      Current:
        State............................................... $  650  $      $
        U.S. ...............................................  3,585     636
      Deferred:
        U.S. ............................................... (4,729)  3,164  678
                                                             ------  ------ ----
                                                             $ (494) $3,800 $678
                                                             ======  ====== ====
</TABLE>

 
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