Rayovac 2010 Annual Report Download - page 39

In addition, the use of certain pesticide and fertilizer products that are sold through our global pet supplies
business and through the Home and Garden Business may, among other things, be regulated by various local,
state, federal and foreign environmental and public health agencies. These regulations may require that only
certified or professional users apply the product, that users post notices on properties where products have been
or will be applied or that certain ingredients may not be used. Compliance with such public health regulations
could increase our cost of doing business and expose us to additional requirements with which we may be unable
to comply.
Any failure to comply with these laws or regulations, or the terms of applicable environmental permits,
could result in us incurring substantial costs, including fines, penalties and other civil and criminal sanctions or
the prohibition of sales of our pest control products. Environmental law requirements, and the enforcement
thereof, change frequently, have tended to become more stringent over time and could require us to incur
significant expenses.
Most federal, state and local authorities require certification by Underwriters Laboratory, Inc. (“UL”), an
independent, not-for-profit corporation engaged in the testing of products for compliance with certain public
safety standards, or other safety regulation certification prior to marketing electrical appliances. Foreign
jurisdictions also have regulatory authorities overseeing the safety of consumer products. Our products may not
meet the specifications required by these authorities. A determination that any of our products are not in
compliance with these rules and regulations could result in the imposition of fines or an award of damages to
private litigants.
Public perceptions that some of the products we produce and market are not safe could adversely affect us.
On occasion, customers and some current or former employees have alleged that some products failed to
perform up to expectations or have caused damage or injury to individuals or property. Public perception that any
of our products are not safe, whether justified or not, could impair our reputation, damage our brand names and
have a material adverse effect on our business, financial condition and results of operations.
If we are unable to negotiate satisfactory terms to continue existing or enter into additional collective
bargaining agreements, we may experience an increased risk of labor disruptions and our results of
operations and financial condition may suffer.
Approximately 20% of our total labor force is employed under collective bargaining agreements. One of
these agreements, which covers approximately 12% of the labor force under collective bargaining agreements, or
approximately 2% of our total labor force, is scheduled to expire on September 30, 2011. While we currently
expect to negotiate continuations to the terms of these agreements, there can be no assurances that we will be
able to obtain terms that are satisfactory to us or otherwise to reach agreement at all with the applicable parties.
In addition, in the course of our business, we may also become subject to additional collective bargaining
agreements. These agreements may be on terms that are less favorable than those under our current collective
bargaining agreements. Increased exposure to collective bargaining agreements, whether on terms more or less
favorable than existing collective bargaining agreements, could adversely affect the operation of our business,
including through increased labor expenses. While we intend to comply with all collective bargaining agreements
to which we are subject, there can be no assurances that we will be able to do so and any noncompliance could
subject us to disruptions in our operations and materially and adversely affect our results of operations and
financial condition.
Significant changes in actual investment return on pension assets, discount rates and other factors could
affect our results of operations, equity and pension contributions in future periods.
Our results of operations may be positively or negatively affected by the amount of income or expense we
record for our defined benefit pension plans. GAAP requires that we calculate income or expense for the plans
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