UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 001-13615
Rayovac Corporation
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(Exact name of registrant as specified in its charter)
Wisconsin 22-2423556
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
601 Rayovac Drive, Madison, Wisconsin 53711
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(Address of principal executive offices) (Zip Code)
(608) 275-3340
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K.
On May 7, 2002, the aggregate market value of the voting stock held
by non-affiliates of the registrant was $524,973,421. As of May 7, 2002,
there were outstanding 32,030,105 shares of the registrant's Common Stock,
$0.01 par value.
Explanatory Note
This Amendment No. 1 to the Annual Report on Form 10-K (the "Form
10-K") of Rayovac Corporation (the "Company") for the fiscal year ended
September 30, 2001 is being filed to amend Item 11 (Executive Compensation) of
the Form 10-K to revise the summary compensation table required by Item 11. In
accordance with Rule 12b-15 under the Securities Exchange Act of 1934, the
complete text of Item 11 as amended is set forth herein. The revised summary
compensation table properly reflects the bonus and other compensation paid to
the Company's chief executive officer and the other four most highly compensated
executive officers (the "Named Executive Officers") during the fiscal years
ended September 30, 2001, 2000 and 1999, respectively. The revised summary
compensation table corrects presentation errors for the bonus and other
compensation paid to the Named Executive Officers, which were reflected in the
incorrect fiscal years. The revised summary compensation table contains no
change in previously reported information other than as described above. The
Company's audited financial statements as of and for the fiscal year ended
September 30, 2001 did not contain these errors and have not been changed.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth compensation paid to our Chief Executive
Officer and the other four most highly compensated executive officers during
fiscal 2001, fiscal 2000 and fiscal 1999 (the "Named Executive Officers") for
services rendered in all capacities to us. Certain prior year amounts have been
reclassified to conform with current year presentation.
OTHER RESTRICTED SECURITIES
FISCAL ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION($) AWARDS($)(1) OPTIONS(#)
--------------------------- -------- ----------- ---------- ------------------ -------------- ------------
David A. Jones, 2001 $550,000 $361,200 (2) $1,180,000 50,000
Chairman of the Board and 2000 500,000 $400,000 278,700 (4)
Chief Executive Officer............. 1999 500,000 250,000 272,800 (5)
Kent J. Hussey, 2001 385,000 125,200 (7) 826,000 50,000
President and Chief Operating 2000 350,000 56,500 (8) 40,000
Officer............................. 1999 325,000 412,500
Luis A. Cancio, 2001 293,000 80,000 (9) 537,500 50,000
Executive Vice President-Latin 2000 286,000 33,200(10) 50,000
America............................. 1999 47,700 100,000
Stephen P. Shanesy, 2001 290,000 84,700(12) 567,500 50,000
Executive Vice President of 2000 265,000 35,000
Global Brand Management............. 1999 250,000 100,000 25,000
Merrell M. Tomlin, 2001 290,000 70,800(12) 560,000 50,000
Executive Vice President of 2000 250,000 32,500(14) 35,000
Sales............................... 1999 230,000 114,000 25,000
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION($)
--------------------------- ------------------
David A. Jones, $5,741,400 (3)
Chairman of the Board and
Chief Executive Officer............. 4,700 (6)
Kent J. Hussey, 1,418,500 (3)
President and Chief Operating
Officer............................. 4,700 (6)
Luis A. Cancio,
Executive Vice President-Latin
America............................. 10,000(11)
Stephen P. Shanesy, 796,200(13)
Executive Vice President of
Global Brand Management............. 1,800 (6)
Merrell M. Tomlin, 924,600 (3)
Executive Vice President of
Sales............................... 143,100(15)
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(1) At September 30, 2001 an aggregate of 277,137 restricted shares were
outstanding valued at $4,226,355. Vesting is scheduled for September 30,
2003 on 210,423 shares. The remaining 66,714 shares are scheduled to vest
one third each year beginning September 30, 2001. The Company has the
discretion to pay or defer dividends, if declared, until the expiration of
restrictions.
(2) Includes approximately $104,000 related to a supplemental executive
retirement program, $80,000 related to personal use of the Company aircraft,
$70,000 related to interest on the Executive Note (as defined herein) and
$60,000 related to a Company provided residence.
(3) Represents compensation from the exercise of stock options.
(4) Includes approximately $70,000 related to a Company provided residence,
$70,000 related to interest on the Executive Note (as defined herein) and
$90,000 related to personal use of the Company aircraft.
(5) Includes approximately $120,000 related to a Company provided residence,
$70,000 related to interest on the Executive Note (as defined herein) and
$50,000 related to personal use of the Company aircraft.
(6) Represents pension plan termination benefits.
(7) Includes approximately $70,000 related to a supplemental executive
retirement program.
(8) Includes approximately $20,000 related to personal use of the Company
aircraft and $20,000 related to personal use of a Company provided vehicle.
(9) Includes approximately $50,000 related to a supplemental executive
retirement program.
(10) Represents personal use of a Company provided vehicle and contributions to
401K plan.
(11) Represents relocation payments.
(12) Includes approximately $55,000 related to a supplemental executive
retirement program.
(13) Represents compensation from the exercise of stock options and the purchase
of a company vehicle.
(14) Includes approximately $20,000 related to personal use a company provided
vehicle.
(15) Represents pension plan termination benefits and approximately $140,000 of
relocation payments.
OPTION GRANTS AND EXERCISES
In connection with the 1996 recapitalization, the Board adopted the Rayovac
Corporation 1996 Stock Option Plan (the "1996 Plan"). Pursuant to the 1996 Plan,
options may be granted with respect to an aggregate of 2,318,127 shares of
Common Stock. At September 30, 2001 an aggregate of 1,287,867 options to
purchase shares of Common Stock at a weighted average exercise price of $7.42
per share, 508,181 of which relate to the 911,577 granted to David A. Jones in
accordance with the terms of his employment agreement, were outstanding. See
"Employment Agreement". In September 1997, the Board adopted the 1997 Rayovac
Incentive Plan ("Incentive Plan"). Pursuant to the Incentive Plan, we may grant
stock-based awards, including options and restricted stock, to purchase up to
5,000,000 shares of Common Stock. At September 30, 2001 an aggregate of
1,978,413 options at a weighted average exercise price of $18.48 were
outstanding under the Incentive Plan.
The following table discloses the grants of stock options during fiscal 2001
to the Named Executive Officers.
OPTION GRANTS IN FISCAL 2001
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS EMPLOYEES IN PRICE -----------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) EXPIRATION DATE 5% ($) 10% ($)
---- ----------- ---------------- --------- --------------- --------- -----------
David A. Jones................ 50,000 5.8 $14.50 9/30/2010 $455,950 $1,155,450
Kent J. Hussey................ 50,000 5.8 $14.50 9/30/2010 $455,950 $1,155,450
Luis A. Cancio................ 50,000 5.8 $14.50 9/30/2010 $455,950 $1,155,450
Stephen P. Shanesy............ 50,000 5.8 $14.50 9/30/2010 $455,950 $1,155,450
Merrell M. Tomlin............. 50,000 5.8 $14.50 9/30/2010 $455,950 $1,155,450
The following table sets forth information concerning options to purchase
Common Stock held by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL 2001 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
NAME ON EXERCISE REALIZED $ (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
---- ----------- ---------- --------------------------- ---------------------------
David A. Jones............ 403,396 $5,722,200 325,865/232,316 $3,538,894/$2,017,452
Kent J. Hussey............ 100,000 $1,418,500 106,747/149,112 523,181/532,477
Luis A. Cancio............ -- -- 53,125/146,875 0/37,500
Stephen P. Shanesy........ 55,355 $ 785,200 53,553/115,039 388,821/284,989
Merrell M. Tomlin......... 65,184 $ 924,600 43,724/115,039 282,078/284,989
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(1) These values are calculated using the $15.25 per share closing price of the
Common Stock as quoted on the NYSE on September 30, 2001.
PENSION PLAN
In fiscal 1997 we contributed to a defined benefit pension plan covering all
domestic non-union employees (the "Pension Plan"). On August 1, 1997 the Pension
Plan accruals were frozen and the Pension Plan was officially terminated on
October 1, 1997. We made no contributions to the Pension Plan during fiscal
1999, 2000 or 2001. Distribution of benefits due to participating employees
under the Pension Plan was made during fiscal 1999. In fiscal 1999, 2000 and
2001, we contributed to a defined contribution 401(k) plan covering domestic
non-union employees (the "401(k) Plan"). We made contributions allocated on the
basis of compensation and age as identified in the summary compensation table.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
serving on the Board of Directors. Non-employee directors of the Company are
reimbursed for their out-of-pocket expenses in attending meetings of the Board
of Directors. Messrs. Lupo and Pellegrino received $5,000 per quarterly meeting
in their capacities as directors for fiscal year 2001, plus $1,000 for each of
the four Board of Director meetings they attended. In addition, each received
$500 for each Board Committee meetings he attended. Commencing July 2001,
Mr. Shepherd began receiving the same compensation as Messrs. Lupo and
Pellegrino for attending Board of Director and Board Committee meetings.
Messrs. Schoen and Smith receive no fees in their capacities as directors.
However, as described in "Certain Relationships and Related Transactions",
Thomas H. Lee Company, an affiliate of Thomas H. Lee Partners, L.P., of which
Messrs. Schoen and Smith are managing directors and Mr. Shepherd is formerly a
managing director and currently a special partner, receives fees from us for
consulting and management advisory services.
EMPLOYMENT AGREEMENTS
We have an employment agreement with each of the Named Executive Officers.
On October 1, 2000, we entered into amended and restated employment agreements
with David A. Jones (the "Jones Employment Agreement") and Kent J. Hussey (the
"Hussey Employment Agreement"), as well as employment agreements with each of
Luis A. Cancio, Stephen P. Shanesy and Merrell M. Tomlin (together with the
Jones Employment Agreement and the Hussey Employment Agreement, the "Executive
Employment Agreements").
Each of the Executive Employment Agreements:
- has a term of three years, expiring on September 30, 2003, and, except for
the Jones Employment Agreement, provides for automatic renewal for
successive one-year periods unless terminated earlier upon 90-days'
written notice by either the respective Named Executive Officer or us;
- provides that the Named Executive Officer has the right to resign and
terminate his respective Executive Employment Agreement at any time upon
60-days' notice. Upon such resignation, we must pay any unpaid base salary
through the date of termination to the resigning Named Executive Officer;
- except in the case of the Jones Employment Agreement, provides that upon
termination of the Named Executive Officer's employment without cause or
for death or disability, we will pay to the terminated Named Executive
Officer, or such Named Executive Officer's estate, two times the Named
Executive Officer's base salary and annual bonus, to be paid out over the
following twelve months. In addition, each Named Executive Officer shall
be entitled to receive insurance and other benefits for the greater of
24 months or the remainder of the term;
- provides us with the right to terminate the Named Executive Officer's
employment for "cause" (as defined therein), in which event we shall be
obligated to pay to the terminated Named Executive Officer any unpaid base
salary accrued through the date of termination; and
- provides that, during the term of the agreement or the period of time
served as an employee or director, and for one year thereafter, the Named
Executive Officer shall not engage in or have any business which is
involved in the industries in which we are engaged.
Under their respective employment agreements, Mr. Jones is entitled to a
base salary of $550,000 per annum, Mr. Hussey is entitled to a base salary of
$385,000 per annum, Mr. Shanesy and Mr. Tomlin are each entitled to a base
salary of $290,000 per annum and Mr. Cancio is entitled to a base salary of
$275,000 per annum (such base salaries may be increased from time to time at the
discretion of the Board of Directors) and each Named Executive Officer is
entitled to an annual bonus based upon our achieving certain annual performance
goals established by the Board of Directors.
In addition, pursuant to the Jones Employment Agreement, Mr. Jones was paid
a bonus of $400,000 in October 2000 as compensation for past services and will
be paid an additional bonus of $400,000 on September 30, 2003. In addition, the
Jones Employment Agreement provides that Mr. Jones will be granted the option to
purchase his Rayovac-owned home for a nominal amount on April 30, 2003. In the
event of a "sale" of Rayovac (as defined in the Jones Employment Agreement),
Mr. Jones' right to receive the September 30, 2003 bonus and his right to
acquire his Rayovac-owned home shall accelerate to the date of the "sale".
Pursuant to the Jones Employment Agreement, Mr. Jones purchased 227,895 shares
of Common Stock at approximately $4.39 per share in connection with our 1996
recapitalization. One-half of the purchase price for those shares was paid in
cash and one-half was paid with a promissory note from Mr. Jones will receive
additional salary at an initial rate of $35,000 annually as long as the Jones
Equity Note remains outstanding.
The Jones Employment Agreement further provides that, upon termination of
Mr. Jones' employment due to death or disability, we will pay him or his estate
his base salary for the next 24 months following termination and we will
continue to pay him or his estate two times the pro rata portion of his annual
bonus. In addition, we will continue to pay him his additional salary at an
initial rate of $35,000 annually, as long as the Jones Equity Note is
outstanding, for the duration of the term of his agreement, and he shall be
entitled to insurance and other specified benefits for the greater of 24 months
or the remainder of the term. In the event Mr. Jones is terminated "without
cause" (as defined in the Jones Employment Agreement), he shall continue to be
paid his annual bonus for the greater of 24 months or the remainder of the term.
Mr. Jones shall also be entitled to receive additional salary at an initial rate
of $35,000 annually, as long as the Jones Equity Note is outstanding, and
insurance and other benefits for the greater of 24 months or the remainder of
the term.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, the Compensation Committee of the Board of Directors was
comprised of Scott A. Schoen, Thomas R. Shepherd and Warren C. Smith, Jr. No
member of our Compensation Committee is currently or has been, at any time since
our formation, one of our officers or employees. No member of our Compensation
Committee serves a member of the board of directors or compensation committee of
any entity that has one of more executive officers serving as a member of our
Board of Directors or Compensation Committee.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RAYOVAC CORPORATION
By: /s/ David A. Jones
----------------------------
Name: David A. Jones
Title: Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: May 14, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of May 14, 2002.
SIGNATURE TITLE
/s/ David A. Jones
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David A. Jones Chairman of the Board and Chief
Executive Officer
(PRINCIPAL EXECUTIVE OFFICER)
/s/ Kent J. Hussey
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Kent J. Hussey President and Chief Financial
Officer and Director
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/ John S. Lupo
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John S. Lupo Director
/s/ Philip F. Pellegrino
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Philip F. Pellegrino Director
/s/ Scott A. Schoen
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Scott A. Schoen Director
/s/ Thomas R. Shepherd
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Thomas R. Shepherd Director
/s/ Scott L. Jaeckel
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Scott L. Jaeckel Director
/s/ Barbara S. Thomas
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Barbara S. Thomas Director