Energizer 2000 Annual Report Download - page 41

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from Energizer and the sale of its interests in the receivables to
a multi-seller receivables securitization company. The SPE is not
consolidated for financial reporting purposes. Energizer’s investment
in the SPE is classified as Other Current Assets on the Consolidated
Balance Sheet as disclosed below.
As of September 30, 2000, Energizer had sold $257.1 of outstanding
accounts receivable to the SPE. The SPE sold the receivables
to an unrelated third party for $100.0 in cash and maintains a
subordinated retained interest in the remaining $157.1 of receiv-
ables, which is equivalent to Energizer’s investment in the SPE. The
net proceeds of the transaction were used to reduce various debt
instruments. The proceeds are reflected as operating cash flows in
Energizer’s Consolidated Statement of Cash Flows.
(13) PREFERRED STOCK
Energizer’s Articles of Incorporation authorize Energizer to
issue up to 10 million shares of $.01 par value of preferred
stock. As of September 30, 2000, there were no shares of
preferred stock outstanding.
(14) SHAREHOLDERS EQUITY
On March 16, 2000, the Board of Directors declared a dividend
of one share purchase right (Right) for each outstanding share
of ENR common stock. Each Right entitles a shareholder of ENR
stock to purchase an additional share of ENR stock at an exercise
price of $150, which price is subject to antidilution adjustments.
Rights, however, may only be exercised if a person or group has
acquired, or commenced a public tender for 20% or more of the
outstanding ENR stock, unless the acquisition is pursuant to a
tender or exchange offer for all outstanding shares of ENR stock
and a majority of the Board of Directors determines that the price
and terms of the offer are adequate and in the best interests of
shareholders (a Permitted Offer). At the time that 20% or more
of the outstanding ENR stock is actually acquired (other than in
connection with a Permitted Offer), the exercise price of each Right
will be adjusted so that the holder (other than the person or member
of the group that made the acquisition) may then purchase a share
of ENR stock at one-third of its then-current market price. If
Energizer merges with any other person or group after the Rights
become exercisable, a holder of a Right may purchase, at the exer-
cise price, common stock of the surviving entity having a value
equal to twice the exercise price. If Energizer transfers 50% or more
of its assets or earnings power to any other person or group after the
Rights become exercisable, a holder of a Right may purchase, at the
exercise price, common stock of the acquiring entity having a value
equal to twice the exercise price.
Energizer can redeem the Rights at a price of $.01 per Right at any
time prior to the time a person or group actually acquires 20% or
more of the outstanding ENR stock (other than in connection with a
Permitted Offer). In addition, following the acquisition by a person
or group of at least 20%, but not more than 50% of the outstanding
ENR stock (other than in connection with a Permitted Offer),
Energizer may exchange each Right for one share of ENR stock.
Energizer’s Board of Directors may amend the terms of the Rights
at any time prior to the time a person or group acquires 20% or
more of the outstanding ENR stock (other than in connection with
a Permitted Offer) and may amend the terms to lower the threshold
for exercise of the Rights. If the threshold is reduced it cannot be
lowered to a percentage which is less than 10%, or, if any share-
holder holds 10% or more of the outstanding ENR stock at that
time, the reduced threshold must be greater than the percentage
held by that shareholder. The Rights will expire on April 1, 2010.
At September 30, 2000, there were 300 million shares of ENR stock
authorized, of which 8,013,000 shares were reserved for issuance
under the 2000 Incentive Stock Plan.
In September 2000, Energizer’s Board of Directors approved a share
repurchase plan authorizing the repurchase of up to 5 million shares
of Energizer’s common stock.