Rayovac 2009 Annual Report Download - page 100

Table of Contents
Index to Financial Statements
Company surrendered its leased aircraft, in certain circumstances, Mr. Hussey was permitted to travel to outside board meetings on the Company’s aircraft,
in which case the Company received some reimbursement from the companies on whose boards Mr. Hussey served.
Timing and Pricing of Stock−Based Grants
Annual grants of restricted stock to our named executive officers are made on the date such grants are approved by the Compensation Committee. For
purposes of valuing all grant awards, the grant price is the average of the high and low price of a share on the grant date.
Tax Treatment of Certain Compensation
Pursuant to Section 162(m) of the Internal Revenue Code, the Company may not be able to deduct certain forms of compensation paid to its
executives who remain employed at the end of a fiscal year to the extent such compensation exceeds $1,000,000. This section also includes an exception for
certain performance−based compensation awards. While the Compensation Committee believes that it is generally in the Company’s best interests to satisfy
these deductibility requirements, it retains the right to authorize payments in excess of the deductibility limits if it believes it to be in the interests of the
Company and its shareholders. The Company has had in the past, and may have in the future, instances where it has paid compensation to its executives that
exceed the deductibility limits. For example, for Fiscal 2009, the compensation paid to Mr. Hussey, Mr. Lumley, and Mr. Heil by the Company included
$2,411,153, $619,489, and $494,353 in compensation respectively that is not deductible pursuant to Section 162(m) of the Internal Revenue Code.
Tax Gross−Ups
The Company provides increases in payments to the named executive officers and other management personnel to cover personal income tax due as a
result of imputed income in connection with the provision of the following perquisites: car allowance or company leased car, financial planning and tax
planning and executive life and disability insurance. To the extent the use of the Company’s leased aircraft (prior to the surrender of that aircraft) for
permitted personal travel results in imputed income to Mr. Hussey, the Company provides gross−up payments to cover personal income tax due on such
imputed income. Beyond these tax gross−up payments, the Company does not make any other payment to the named executive officers to cover personal
income taxes.
Governing Plans
Upon the Company’s emergence from Chapter 11 of the Bankruptcy Code on August 28, 2009, pursuant to the Company’s Plan of Reorganization,
the 2009 Incentive Plan became effective. At the same time, all outstanding grants of stock options and restricted stock made pursuant to the 2004 Rayovac
Incentive Plan, the 1997 Rayovac Incentive Plan or the Rayovac Corporation 1996 Stock Option Plan (the “Prior Plans”) were extinguished by operation of
the Plan of Reorganization. No additional grants may be made pursuant to the Prior Plans.
Recoupment Policy
Pursuant to the 2009 Incentive Plan, any equity award agreement made may provide that the Compensation Committee may in its sole discretion
cancel such award, except as prohibited by applicable law, if the participant, without the consent of the Company, while employed by or providing services
to the Company or any affiliate or after termination of such employment or service, violates a non−competition, non−solicitation or non−disclosure
covenant or agreement or otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any affiliate, including fraud or
conduct contributing to any financial restatements or irregularities engaged in activity, as determined by the Compensation Committee in its sole discretion.
The Compensation Committee may also provide in any award agreement that the participant will forfeit any gain realized on the vesting or exercise of such
award, and must repay the gain to the Company, in each case except as prohibited by applicable law, if (a) the participant engages in any activity referred to
in the preceding sentence or (b) the amount of any such gain was calculated based on the achievement of certain financial results that were subsequently
reduced due to a restatement. However, none of the existing equity awards expressly includes such provisions.
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