Rayovac 2015 Annual Report Download - page 41

provisions will cause us to incur costs to certify that our supply chain is conflict free and we may face difficulties
if our suppliers are unwilling or unable to verify the source of their materials. Our ability to source these minerals
and metals may also be adversely impacted. In addition, our customers may require that we provide them with a
certification and our inability to do so may disqualify us as a supplier.
Class action and derivative action lawsuits and other investigations, regardless of their merits, could have
an adverse effect on our business, financial condition and results of operations.
We and certain of our officers and directors have been named in the past, and, may be named in the future,
as defendants of class action and derivative action lawsuits. In the past, we have also received requests for
information from government authorities. Regardless of their subject matter or merits, class action lawsuits and
other government investigations may result in significant cost to us, which may not be covered by insurance, may
divert the attention of management or may otherwise have an adverse effect on our business, financial condition
and results of operations.
We may be exposed to significant product liability claims which our insurance may not cover and which
could harm our reputation.
In the ordinary course of our business, we may be named as a defendant in lawsuits involving product liability
claims. In any such proceeding, plaintiffs may seek to recover large and sometimes unspecified amounts of damages
and the matters may remain unresolved for several years. Any such matters could have a material adverse effect on
our business, results of operations and financial condition if we are unable to successfully defend against or settle
these matters or if our insurance coverage is insufficient to satisfy any judgments against us or settlements relating
to these matters. Although we have product liability insurance coverage and an excess umbrella policy, our
insurance policies may not provide coverage for certain, or any, claims against us or may not be sufficient to cover
all possible liabilities. Additionally, we do not maintain product recall insurance. We may not be able to maintain
such insurance on acceptable terms, if at all, in the future. Moreover, any adverse publicity arising from claims
made against us, even if the claims were not successful, could adversely affect the reputation and sales of our
products. In particular, product recalls or product liability claims challenging the safety of our products may result
in a decline in sales for a particular product and could damage the reputation or the value of the related brand. This
could be true even if the claims themselves are ultimately settled for immaterial amounts. This type of adverse
publicity could occur and product liability claims could be made in the future.
We may incur material capital and other costs due to environmental liabilities.
We are subject to a broad range of federal, state, local, foreign and multi-national laws and regulations
relating to the environment. These include laws and regulations that govern:
• discharges to the air, water and land;
• the handling and disposal of solid and hazardous substances and wastes; and
• remediation of contamination associated with release of hazardous substances at our facilities and at
off-site disposal locations.
Risk of environmental liability is inherent in our business. As a result, material environmental costs may
arise in the future. In particular, we may incur capital and other costs to comply with increasingly stringent
environmental laws and enforcement policies, such as the EU Directives: Restriction of the Use of Hazardous
Substances in Electrical and Electronic Equipment, Waste of Electrical and Electronic Equipment and the
Directive on Batteries and Accumulators and Waste Batteries, discussed above. Our international operations may
expose us to risks related to compliance with the laws and regulations of foreign countries. See “Our
international operations may expose us to risks related to compliance with the laws and regulations of foreign
countries” in this Form 10-K.
Moreover, there are proposed international accords and treaties, as well as federal, state and local laws and
regulations, that would attempt to control or limit the causes of climate change, including the effect of
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