Rayovac 2009 Annual Report Download - page 97

Table of Contents
Index to Financial Statements
the Global Pet Supplies business segment. The performance targets for Mr. Lumley were based 65% on the performance targets established for the Global
Batteries and Personal Care business segment and 35% on the performance targets established for the Home and Garden Business. If the Company achieved
less than 80% of the Fiscal 2009 Cash LTIP performance goals, then the participant would receive no cash award under the Fiscal 2009 Cash LTIP. If the
Company achieved at least 80% but less than 92%, of the Fiscal 2009 Cash LTIP performance goals, then the participant would not earn any cash−based
award for Fiscal 2009 but would remain eligible to earn such award, as described below, based on Fiscal 2010 performance. If the Company achieved at
least 92%, but less than 100% of the Fiscal 2009 Cash LTIP performance goals, then the participant would be eligible to earn a stated percentage of the
award, payable as described below, and would remain eligible to earn any remaining unearned portion of the award based on Fiscal 2010 performance. For
performance in excess of the Fiscal 2009 Cash LTIP performance goals, such participant would have received an award in excess of the target cash−based
award amount, up to 200% of such target cash−based award amount for achieving the specified upper threshold amounts of the Fiscal 2009 Cash LTIP
performance goals. For any Cash LTIP award so earned based on Fiscal 2009 performance, 50% of such earned amount is payable on or before
December 31, 2009 and the remaining 50% of such cash award is payable on or before December 31, 2010; provided, that the executive’s employment with
the Company has not been terminated with cause by the Company or voluntarily by the executive prior to such date.
As a retention mechanism, the Compensation Committee guaranteed that each of Mr. Hussey, Mr. Genito, Mr. Heil and Mr. Lumley would receive a
2009 LTIP cash−based award equal to at least 75% of the target cash−based award amount; provided, that such executive’s employment with the Company
had not been terminated with cause by the Company or voluntarily by the executive prior to the payment date. However, the performance of the Company
resulted in cash−based awards in excess of these amounts. The chart below reflects the 2009 Cash LTIP award amounts earned by each of the current named
executive officers, expressed as a percentage of target award amount, based on the Company’s performance in light of the performance goals established by
the Compensation Committee. The dollar amount of the awards for each named executive is set forth in the “Summary Compensation Table”. These award
amounts have been or will be paid in December 2009.
Named Executive LTIP Award as % of Target
Kent J. Hussey 187.5%
Anthony L. Genito 187.5%
David R. Lumley 193.0%
John A. Heil 134.3%
In addition, after taking into account the overall performance of the business in the face of a difficult capital structure and economy, as well as the
critical importance of each of the current named executive to the overall performance of the Company, in November 2008 the Compensation Committee
elected to establish an additional incentive structure for the current named executive officers under the Company’s LTIP. Under the terms of this new
program, each current named executive officer is entitled to receive an additional cash amount equal to fifty percent of such executive’s target LTIP amount,
based on such executive’s salary as of the end of Fiscal 2008. Such amounts are contingent upon continued employment and are payable in two
installments, the first of which was paid in November 2008 and the second of which will be made on or before December 31, 2009. The dollar amount of
the awards for each named executive is set forth in the “Summary Compensation Table”.
For Fiscal 2010, as of the date of this report, the Compensation Committee has not finalized various aspects of the 2010 LTIP, including the
performance targets that will result in target payout and the thresholds for and levels of minimum and maximum payouts. Those aspects of the 2010 LTIP
that have been finalized and approved are described below. As with Fiscal 2009, the Compensation Committee has again established adjusted EBITDA as a
performance goals of the Company, weighted to represent 50% of the total evaluation. Adjusted EBITDA for the 2010 LTIP is measured in the same
manner as for the 2009 LTIP. The remaining performance metrics will be determined by the Compensation Committee after additional consideration. The
Compensation Committee retains the ability to modify the measurement criteria if, in its view, the circumstances so warrant.
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