Rayovac 2009 Annual Report Download - page 96

Table of Contents
Index to Financial Statements
Mr. Hussey also received a grant for Fiscal 2009 under the Company’s then−existing equity−based long term incentive plan. However, as described
below under “Pre−Bankruptcy Equity Grants”, that grant, as well as all other then−existing capital stock of the Company, was extinguished upon the
Company’s emergence from Chapter 11 of the Bankruptcy Code on August 28, 2009 in accordance with the Company’s Plan of Reorganization.
Cash−Based Long Term Incentive Plan
For Fiscal 2010, in order to focus members of our management that do not participate in the Equity LTIP on the long−term performance of the
Company, the Company has established a cash−based long−term incentive plan (“Cash LTIP”). Awards under the Cash LTIP are earned based on the
performance of the Company over time and continued employment with the Company. In determining the target LTIP award levels, the Compensation
Committee considers each executive’s total compensation relative to other similarly situated executives within the Company, long term incentive
compensation paid to similarly situated executives in other companies, experience level and the duties and responsibilities of such executive’s position. In
Fiscal 2009, as described below, our current named executive officers participated in the then−existing Cash LTIP; however, as described above under
“Equity−Based Long Term Incentive Plan” for Fiscal 2010, our current named executive officers are not eligible to participate in the Cash LTIP.
The target levels for the cash awards under the Cash LTIP are determined at the beginning of the fiscal year for which such award is made, subject to
increase in the event of changes in responsibility for the participant, which are then paid over a two or more year period based on continued employment
and the achievement by the Company of performance goals established by the Compensation Committee that are tied to the Company’s annual operating
plan, based on the Compensation Committee’s then−current view of the goal or goals the Compensation Committee determines to be most important in
measuring the achievement of the Company’s then−current long−term goals. In addition, the Compensation Committee retains the flexibility to increase the
Cash LTIP award amount for individual management personnel; to the extent the Compensation Committee deems it appropriate to do so in light of specific
performance circumstances.
For Fiscal 2009, the Compensation Committee, taking into account the remaining number of shares authorized to be issued under the 2004 Rayovac
Incentive Plan and the then−current market value of the Company’s stock, modified the equity−based and cash−based long term incentive programs
applicable to those named executive officers who continued to be employed by the Company such that (i) for Mr. Hussey, approximately 8.6% of such
award was an equity−based award (resulting from a grant of 187,500 shares on November 17, 2008) and the remainder of such award was a cash−based
award and (ii) for all other then−current named executive officers, 100% of such award was a cash−based award. For each eligible named executive officer,
the target value of such award was established pursuant to the employment agreement for such named executive officer, which in each case provides for a
target long term incentive plan award equal in value to a defined percentage of such executive’s annual base salary. Ms. Yoder was not eligible to
participate in the Fiscal 2009 Cash LTIP. The target Cash LTIP award levels for each named executive officer eligible to receive a Cash LTIP award for
Fiscal 2009 was:
Named Executive Cash LTIP Target Level as % of Annual Base
Kent J. Hussey 175%
Anthony L. Genito 150%
David R. Lumley 150%
John A. Heil 150%
For Fiscal 2009, the Cash LTIP award was earned based on continued employment and on the achievement of the performance goals for Fiscal 2009
established by the Compensation Committee, which were based on the achievement of adjusted EBITDA and cash flow targets tied to the Company’s
annual operating plan. For Fiscal 2009, the performance targets for each of Mr. Hussey and Mr. Genito were based on the performance of the Company as a
whole. The performance targets for Mr. Heil were based on the performance targets established for
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