Rayovac 2008 Annual Report Download - page 32

Table of Contents
Index to Financial Statements
(4) Exited this facility in October 2008.
(5) Expected to close by January 31, 2009 in connection with previously announced shutdown of the growing products portion of the Home and Garden
Business.
We also own, operate or contract with third parties to operate distribution centers, sales offices and administrative offices throughout the world in support
of our business. We lease our administrative headquarters, located in Atlanta, Georgia, and our primary research and development facility and North America
headquarters, located in Madison, Wisconsin.
We believe that our existing facilities are suitable and adequate for our present purposes and that the productive capacity in such facilities is substantially
being utilized or we have plans to utilize it.
ITEM 3. LEGAL PROCEEDINGS
Litigation
We are subject to litigation from time to time in the ordinary course of business. The amount of any liability with respect to any litigation to which we are
now subject cannot currently be determined. Other than the matters set forth below, we are not party to any pending legal proceedings which, in the opinion of
management, are material or may be material to our business or financial condition.
We are involved in an ongoing arbitration proceeding with Tabriza Brasil Empreendimentos Ltda. (“Tabriza”), Interelectrica Administraçăo e
Participaçơes Ltda. and VARTA AG, the former owners of our subsidiary Microlite S.A. (“Microlite”), with respect to a number of matters arising out of our
acquisition of Microlite in our fiscal year ended September 30, 2004 (“Fiscal 2004”), including our right to receive indemnification for various alleged breaches
of representations, warranties, covenants and agreements made by the selling shareholders in the acquisition agreement and our obligation to pay additional
amounts to Tabriza pursuant to its earn-out rights under the acquisition agreement. We acquired Microlite in Fiscal 2004. In November 2007, the arbitration
panel resolved certain matters at the summary judgment stage. All other disputed matters remain open pending the final decision by the arbitration panel. Among
the matters decided at the summary judgment stage, the panel found in favor of Tabriza with respect to the questions of whether Tabriza is entitled to receive
from us interest on certain earn-out payments previously made and whether Tabriza is entitled to receive from us an additional amount with respect to the
earn-out as a result of a decision issued by an independent auditor engaged by the parties to determine certain disputed matters submitted to it with respect to the
earn-out calculation. We currently estimate that the additional earn-out amounts owed to Tabriza arising out of the decisions on these two matters, which have
been reflected as additional acquisition consideration, will be at least $5 million. Such additional amounts due Tabriza are included in Accrued liabilities: Other
in our Consolidated Balance Sheets as of September 30, 2007 included in this Annual Report on Form 10-K. Determination of the total net amount owed by or
payable to the Company arising out of the arbitration proceeding cannot be determined until the arbitration panel has issued its final decision, which is currently
anticipated to be issued in the first quarter of Fiscal 2009.
Environmental
We are subject to various federal, state and local environmental laws and regulations. We believe we are in substantial compliance with all such
environmental laws that are applicable to our operations. See also the discussion captioned “Governmental Regulation and Environmental Matters” under Item 1
above.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008