Rayovac 2008 Annual Report Download - page 123

Table of Contents
Index to Financial Statements
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Review, approval or ratification of transactions with related persons
Our policies and procedures for review and approval of related-person transactions appear in our Code of Ethics for our Principal Executive Officer and
Senior Financial Officers and our Code of Business Conduct and Ethics, each of which is posted on our website.
All of our executive officers, directors and employees are required to disclose to our General Counsel all transactions which involve any actual, potential
or suspected activity or personal interest that creates or appears to create a conflict between our interests and the interests of the executive officer, director or
employee. In cases involving executive officers, directors or senior-level management, our General Counsel will investigate the proposed transaction for
potential conflicts of interest and then refer the matter to our Audit Committee to make a full review and determination. In cases involving other employees, our
General Counsel, in conjunction with the employee’s regional supervisor and our Vice President of Internal Audit, will review the proposed transaction. If they
determine that no conflict of interest will result from engaging in the proposed transaction, then they will refer the matter to our CEO for final approval.
Our Audit Committee is required to consider all questions of possible conflicts of interest involving executive officers, directors and senior-level
management and to review and approve certain transactions, including all (i) of our transactions in which a director, executive officer or an immediate family
member of a director or executive officer has an interest, (ii) proposed business relationships between us and a director, executive officer or other member of
senior management, (iii) investments by an executive officer in a company that competes with us or an interest in a company that does business with us, and
(iv) situations where a director or executive officer proposes to be our customer, be employed by, serve as a director of or otherwise represent one of our
customers.
Our legal department and financial accounting department monitor our transactions for an evaluation and determination of potential related person
transactions that would need to be disclosed in our periodic reports or proxy materials under generally accepted accounting principles and applicable SEC rules
and regulations.
Transactions with related persons
On February 7, 2005, we acquired all of the equity interests of United pursuant to the Agreement and Plan of Merger (as amended, the “Merger
Agreement”) by and among us, Lindbergh Corporation and United dated as of January 3, 2005 filed as an exhibit to the Current Report on Form 8-K filed by us
on January 4, 2005. Pursuant to the terms of the Merger Agreement, Lindbergh Corporation merged with and into United, with United continuing as the
surviving corporation (the “Merger”). The purchase price for the acquisition, excluding fees and expenses, consisted of $70 million in cash, 13.75 million shares
of our Common Stock and the assumption of outstanding United indebtedness, which was $911.5 million as of January 21, 2005. The purchase price was
determined through negotiations between our representatives, who were operating under supervision and direction of an acquisition committee of our Board of
Directors, and representatives of United. The acquisition committee consisted of Messrs. Lupo, Bowlin and Carmichael and Ms. Thomas and former director
Neil P. Defeo.
Certain affiliates of Thomas H. Lee Partners, L.P. were the majority shareholders of United as of immediately prior to the consummation of our acquisition
of United, and as a result of our acquisition of United, became significant shareholders of our Common Stock. In addition, two of our former directors, Messrs.
Schoen and Brizius, were members of Thomas H. Lee Advisors, LLC, which is the general partner of Thomas H. Lee Partners, L.P., which is the manager of
THL Equity Advisors IV, LLC, which, in turn, is the general partner of each of the Thomas H. Lee related funds that were shareholders of United immediately
prior to the Merger and thereafter became significant shareholders of our Common Stock. Those two directors resigned from the Board of Directors on May 28,
2007 and affiliates of Thomas H. Lee Partners, L.P. were no longer significant shareholders of the Company as of the end of Fiscal 2008.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008