Rayovac 2014 Annual Report Download - page 43

rules requiring that a majority of SB Holdings’ board of directors and SB Holdings’ entire compensation
committee be independent do not apply. As a result, the ability of SB Holdings’ independent directors to
influence its business policies and affairs may be reduced.
If HRG were to sell substantial amounts of SB Holdings’ common stock in the public market, or investors
perceive that these sales could occur, the market price of SB Holdings’ common stock could be adversely
affected. SB Holdings has entered into a registration rights agreement (the “Registration Rights Agreement”)
with HRG, certain of HRG’s stockholders and certain other of our stockholders. If requested properly under the
terms of the Registration Rights Agreement, these stockholders have the right to require SB Holdings to register
all or some of such shares for sale under the Securities Act in certain circumstances, and also have the right to
include those shares in a registration initiated by SB Holdings. If SB Holdings is required to include the shares of
its common stock held by these stockholders pursuant to these registration rights in a registration initiated by SB
Holdings, sales made by such stockholders may adversely affect the price of SB Holdings’ common stock and
SB Holdings’ ability to raise needed capital. In addition, if these stockholders exercise their demand registration
rights and cause a large number of shares to be registered and sold in the public market or demand that SB
Holdings register its shares on a shelf registration statement, such sales or shelf registration may have an adverse
effect on the market price of SB Holdings’ common stock.
We are one of several companies in which HRG owns a controlling interest. The interests of HRG and these
other companies may, from time to time, diverge from the interests of other SB Holdings stockholders and from
each other, particularly with regard to new investment opportunities. HRG is not restricted from investing in
other businesses involving or related to the marketing or distribution of household products, pet and pest
products and personal care products. HRG may also engage in other businesses that compete or may in the future
compete with SB Holdings.
Even though SB Holdings’ common stock is currently traded on the NYSE, it has less liquidity than many
other stocks quoted on a national securities exchange.
The trading volume in SB Holdings’ common stock on the NYSE has been relatively low when compared
with larger companies listed on the NYSE or other stock exchanges. Because of this, it may be more difficult for
stockholders to sell a substantial number of shares for the same price at which stockholders could sell a smaller
number of shares. We cannot predict the effect, if any, that future sales of SB Holdings’ common stock in the
market, or the availability of shares of its common stock for sale in the market, will have on the market price of
SB Holdings’ common stock. We can give no assurance that sales of substantial amounts of SB Holdings’
common stock in the market, or the potential for large amounts of sales in the market, would not cause the price
of SB Holdings’ common stock to decline or impair SB Holdings’ future ability to raise capital through sales of
its common stock. Furthermore, because of the limited market and generally low volume of trading in SB
Holdings’ common stock that could occur, the share price of its common stock could be more likely to be
affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in
the market’s perception of our business, and announcements made by SB Holdings, its competitors or parties
with whom SB Holdings has business relationships. The lack of liquidity in SB Holdings’ common stock may
also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange
for any financing we may need in the future. In addition, we may experience other adverse effects, including,
without limitation, the loss of confidence in us by current and prospective suppliers, customers, employees and
others with whom we have or may seek to initiate business relationships.
The market price of SB Holdings’ common stock is likely to be highly volatile and could fluctuate widely in
price in response to various factors, many of which are beyond our control.
Factors that may influence the price of the common stock include, without limitation, the following:
• loss of any of our key customers or suppliers;
• additions or departures of key personnel;
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