Rayovac 2009 Annual Report Download - page 93

Table of Contents
Index to Financial Statements
performance goals are typically established during the first quarter of the relevant fiscal year and reflect the Compensation Committee’s then−current views
of the critical indicators of success of the Company in light of the Company’s then−current primary business priorities.
The specific performance targets with respect to each of these performance goals are set by the Compensation Committee based on the Company’s
annual operating plan, as approved by our Board of Directors. Consistent with the Company’s operation of each of its three business segments, Global
Batteries and Personal Care, the Home and Garden Business and Global Pet Supplies, as standalone business segments, the annual operating plan includes
performance targets for the Company as a whole as well as for each business segment. In the case of divisional managers within those business segments,
divisional level performance targets have also been established.
For Fiscal 2009, the Compensation Committee established adjusted EBITDA and cash flow as the performance goals of the Company, weighted at
50% each, after considering the annual operating plan, the cash requirements imposed by the interest due with respect to the Company’s outstanding
indebtedness, the financial condition of the Company and the Company’s publicly stated intention to explore potential strategies which may be available to
us to reduce or restructure our significant outstanding indebtedness. For purposes of the 2009 MIP, adjusted EBITDA was measured as earnings (defined as
operating income (loss) plus other income less other expenses) before interest, taxes, depreciation and amortization and excluding restructuring and other
one−time charges. In order to emphasize management’s and the Board of Directors’ intention to minimize restructuring expenditures going forward and
ensure that senior management is fully focused on the total cash costs of such expenditures, the Compensation Committee took these factors into account to
adjust how cash flow was measured for the 2009 MIP. For the 2009 MIP, cash flow was measured as adjusted EBITDA (as described above) plus or minus
changes in current and long term assets and liabilities, less payments for taxes, cash restructuring and interest (defined as the variance between actual and
planned interest payments), but excluding proceeds from dispositions and payments for financing fees (if incurred). The Compensation Committee also
provided that neither adjusted EBITDA nor cash flow would be impacted by fees, expenses and savings associated with the Company’s restructuring efforts.
The Compensation Committee retained the ability to modify the measurement criteria if, in its view, the circumstances so warrant.
For Fiscal 2009 the performance targets for each of Mr. Hussey and Mr. Genito were those established for the Company as a whole. With respect to
Mr. Heil, the Fiscal 2009 MIP performance targets were based 80% on the performance targets established for the Global Pet Supplies business segment and
20% on the performance targets established for the Company as a whole. With respect to Mr. Lumley, the Fiscal 2009 MIP performance targets were based
50% on the performance targets established for the Global Batteries & Personal Care business segment, 30% on the performance targets established for the
Home and Garden Business and 20% on the performance targets established for the Company as a whole. Ms. Yoder was not eligible to participate in the
Fiscal 2009 MIP.
The target MIP award levels achievable by each of the current named executive officers (that is to say, the amount achievable if 100% of the
applicable performance targets are met) are as set forth in each such current named executive officer’s employment agreement, expressed as a percentage of
annual base salary. For purposes of the 2009 MIP, the target award percentages for the named executive officers were as follows:
Named Executive MIP Target as % of Annual Base
Kent J. Hussey 125%
Anthony L. Genito 100%
David R. Lumley 100%
John A. Heil 100%
It was possible to receive an award amount under the 2009 MIP above or below the target award percentage. The potential 2009 MIP awards for each
of our named executive officers, expressed as a percentage of the target
90