Rayovac 2010 Annual Report Download - page 21

the Waste of Electrical and Electronic Equipment (“WEEE”). WEEE makes producers or importers of particular
classes of electrical goods financially responsible for specified collection, recycling, treatment and disposal of
past and future covered products. WEEE assigns levels of responsibility to companies doing business in EU
markets based on their relative market share. WEEE calls on each EU member state to enact enabling legislation
to implement the directive. To comply with WEEE requirements, we have partnered with other companies to
create a comprehensive collection, treatment, disposal and recycling program. As EU member states pass
enabling legislation we currently expect our compliance system to be sufficient to meet such requirements. Our
current estimated costs associated with compliance with WEEE are not significant based on our current market
share. However, we continue to evaluate the impact of the WEEE legislation as EU member states implement
guidance and as our market share changes, and, as a result, actual costs to our company could differ from our
current estimates and may be material to our business, financial condition or results of operations. The third
directive is the Directive on Batteries and Accumulators and Waste Batteries, which was adopted in September
2006 and went into effect in September 2008 (the “Battery Directive”). The Battery Directive bans heavy metals
in batteries by establishing maximum quantities of those heavy metals in batteries and mandates waste
management of batteries, including collection, recycling and disposal systems. The Battery Directive places the
costs of such waste management systems on producers and importers of batteries. The Battery Directive calls on
each EU member state to enact enabling legislation to implement the directive. We currently believe that
compliance with the Battery Directive will not have a material effect on our capital expenditures, financial
condition, earnings or competitive position. However, until such time as the EU member states adopt enabling
legislation, a full evaluation of these costs cannot be completed. We will continue to evaluate the impact of the
Battery Directive and its enabling legislation as EU member states implement guidance.
Certain of our products and facilities in each of our business segments are regulated by the United States
Environmental Protection Agency (the “EPA”) and the United States Food and Drug Administration (the “FDA”)
or other federal consumer protection and product safety agencies and are subject to the regulations such agencies
enforce, as well as by similar state, foreign and multinational agencies and regulations. For example, in the U.S.,
all products containing pesticides must be registered with the EPA and, in many cases, similar state and foreign
agencies before they can be manufactured or sold. Our inability to obtain or the cancellation of any registration
could have an adverse effect on our business, financial condition and results of operations. The severity of the
effect would depend on which products were involved, whether another product could be substituted and whether
our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain
registrations of, and access to, substitute chemicals and other ingredients. We may not always be able to avoid or
minimize these risks.
The Food Quality Protection Act (“FQPA”) established a standard for food-use pesticides, which is that a
reasonable certainty of no harm will result from the cumulative effect of pesticide exposures. Under the FQPA,
the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides
in certain of our products continue to be evaluated by the EPA as part of this program. It is possible that the EPA
or a third party active ingredient registrant may decide that a pesticide we use in our products will be limited or
made unavailable to us. We cannot predict the outcome or the severity of the effect of the EPA’s continuing
evaluations of active ingredients used in our products.
Certain of our products and packaging materials are subject to regulations administered by the FDA. Among
other things, the FDA enforces statutory prohibitions against misbranded and adulterated products, establishes
ingredients and manufacturing procedures for certain products, establishes standards of identity for certain
products, determines the safety of products and establishes labeling standards and requirements. In addition,
various states regulate these products by enforcing federal and state standards of identity for selected products,
grading products, inspecting production facilities and imposing their own labeling requirements.
Employees
We had approximately 6,100 full-time employees worldwide as of September 30, 2010. Approximately 20%
of our total labor force is covered by collective bargaining agreements. There is one collective bargaining
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