Rayovac 2008 Annual Report Download - page 30

Table of Contents
Index to Financial Statements
We may increase the principal amount of our outstanding Variable Rate Toggle Senior Subordinated Notes due 2013 in lieu of making cash interest
payments.
With respect to our $347 million aggregate principal amount Variable Rate Toggle Senior Subordinated Notes due 2013 (the “New Notes”), on any
interest payment date prior to October 2, 2010, the Company may, at its option and subject to certain conditions, currently not being met, related to the trading
price of its common stock, pay interest due on any semi-annual interest payment date by increasing the principal amount of such outstanding New Notes pro-rata
by the amount of interest then payable. Any increase in the aggregate outstanding principal amount of the New Notes will subject the Company to higher interest
payments and increased indebtedness exposure in future periods and could have the adverse effects described above in “Our substantial indebtedness could
adversely affect our business, financial condition and results of operations and prevent us from fulfilling our obligations under the terms of our indebtedness.”
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 18% of our total labor force is employed under collective bargaining agreements. Three of these agreements, which cover approximately
45% of the labor force under collective bargaining agreements, or approximately 9% of our total labor force, are scheduled to expire during Fiscal 2009. 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 the Company is subject, there can be no assurances that we will be able to do so and any noncompliance could subject the Company to
disruptions in its operations and materially and adversely affect its results of operations and financial condition.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008