ITEM
1.01.
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On
October 11,
2005, the Nominating and Executive Compensation Committee (the “Committee”) of
the Board of Directors of the Company met and considered compensation issues
with respect to the Company’s Executive Officers.
(A) At
that
meeting, the Committee adopted the Executive Officer Bonus Plan, which is
intended to establish broad parameters for annual and long-term bonuses to
Executive Officers in order to qualify such bonuses as performance-based
compensation under Section 162(m) of the IRS Code. Effectiveness of the Plan
is
contingent upon shareholder approval of the Plan’s material terms, including
applicable performance criteria, at the 2006 Annual Meeting of Shareholders.
The
material terms of the Plan are as follows:
Eligible
Participants - Executive
Officers
of the Company
Awards
- cash bonuses granted under the terms of the Plan. Awards may be expressed
as a
percentage of salary, or otherwise.
Potential
Awards - potential Awards established by the Committee at the beginning
of a fiscal year, or other performance period. Potential Awards may be annual
or
long-term, and may include non-performance based elements, as well as elements
based upon attainment of Performance Goals.
Performance
Goals - specific, targeted Company performance goals established by the
Committee with respect to performance-based Potential Awards. Performance
Goals
must be based upon performance criteria approved by shareholders. The Committee
would have discretion to increase or decrease performance criteria and targets
if, in its sole judgment, there were extraordinary occurrences, not anticipated
when the Awards were granted, which significantly affected the Company’s
earnings or other performance criteria.
Procedures
- within 90 days after the beginning of each performance period
(the
then-current fiscal year, or longer), the Committee may, in its sole discretion,
establish Potential Awards for some or all of the Executive Officers. The
size
of the Potential Awards, and any applicable Performance Goals, are also at
the
Committee’s sole discretion, subject to a maximum amount of $5 million per Award
(whether the Award is for a single year or multiple years). After the end
of the
performance period, the Committee must determine and certify whether any
applicable Performance Goals were attained, as well as the actual size of
Awards
to be granted to the participants. The Committee may eliminate or reduce
an
Award payable to a participant below that which would otherwise be payable
under
the terms of the Potential Award.
The
form of the
Executive Officer Bonus Plan is attached to this filing as Exhibit
10.1,
(B) At
its
October 11, 2005 meeting, the Committee also approved the material terms
of the
Company’s 2006 Annual and Long-Term Bonus Program, which is applicable to each
of the Executive Officers (but would not be subject to the Executive Officer
Bonus Plan). The material terms of that Program are as follows:
As
in previous years, the Program will be comprised of both annual and long-term
components. The annual component will still be comprised of two elements:
a
Company performance piece, based upon targeted EPS or operating unit results,
and an individual performance piece. As in previous years, the Program will
also
include a long-term component designed to drive consistent growth over a
multiple year period.
The
annual
component will again offer a potential payout of from 50 to 165% of the
individual’s bonus target, which is a percentage of the individual’s base
salary. For the Executive Officers, that percentage ranges from 60% to 100%,
as
noted under (C) below. The Company performance piece of the
Annual component will continue to comprise 70% of the individual’s bonus target,
and the individual performance piece will comprise 30%. The Company performance
piece will continue to be paid out only if threshold targets (equal to FY
2005
EPS, and/or operating unit results, depending upon the individual) are met,
with
payment at that threshold of 50% of the 70% of the individual’s bonus target.
Payment percentages will ratchet up proportionately to 100% of the 70% if
the
budgeted EPS target, which is set at the beginning of the fiscal year is
achieved, and to 150% of the 70% if the EPS stretch target, also set at that
time, is achieved. The individual performance element will continue to offer
a
higher payout for a "1" rating and a lower payout for a "3" rating.
The
long-term
component will again be a contingent bonus opportunity ranging from 50 to
100%
of the individual’s bonus target, which will be created only if budgeted target
results for FY 2006 are met or exceeded, and will be paid after the end of
FY2007 only if FY2006 actual results are met or exceeded during
FY2007.
(C) At
its
October 11, 2005 meeting, the Committee also established the annual salaries
of
the Executive Officers for its 2006 fiscal year. The new annual salaries
for the
Executive Officers that will be Named Executive Officers in the Company’s Proxy
Statement for its upcoming Annual Meeting of Shareholders, are as follows:
Messrs. W. Klein, $700,000, bonus target 100%; J. McClanathan, $440,000,
bonus
target 80%; J. Lynch, $440,000, bonus target 80%; D. Sescleifer, $370,000,
bonus
target 80%; and D. Hatfield, $290,000, bonus target 60%. Annual salaries
for the
other Executive Officers were in a range from $260,000 to $290,000, and the
bonus targets were 60%.
(D) At
its
October 11, 2005 meeting, the Committee granted a Performance Restricted
Stock
Equivalent Award Agreement to certain of the Executive Officers, as
listed
on the exhibit to this filing. The material terms of the Performance Restricted
Stock Equivalent Award Agreement are as follows:
1. Award As
of the date of the award, recipients will be credited with restricted Common
Stock equivalents in the Company’s Deferred Compensation Plan, the value of
which, upon the individual’s retirement or other termination of employment, will
be paid out in cash in accordance with the terms of that Plan.
2. Vesting;
Payment Twenty-five percent of the total restricted stock
equivalents granted to each recipient will vest on the third anniversary
of the
date of grant, twenty-five percent will vest on the date that the Company
publicly releases its earnings for its 2008 fiscal year (the “Announcement
Date”) only if the Company’s compound annual growth in earnings per share
(“CAGR”) for the 3 year period ending on September 30, 2008 equals or exceeds
10%, and the remaining fifty percent will vest in its entirety on the
Anniversary Date only if the Company achieves CAGR at or above 15%, with
smaller
percentages of that remaining fifty percent vesting at each of the milestones
indicated:
CAGR
|
%
Vesting
|
11%
|
20%
|
12%
|
40%
|
13%
|
60%
|
14%
|
80%
|
15%
|
100%
|
3. Acceleration All
unvested restricted stock equivalents granted to a recipient will immediately
vest upon his or her:
|
b.
|
Declaration
of total and permanent disability;
|
|
c.
|
Involuntary
termination of employment, other than for
cause;
|
|
d.
|
Change
of
control of Energizer Holdings, Inc.
|
4. Forfeiture Any
portion of the recipient’s restricted stock equivalents that are not vested will
be forfeited upon:
|
a. |
the
recipient’s involuntary termination for
cause; |
|
b.
|
the
recipient’s voluntary
termination;
|
|
c.
|
a
determination by the Committee that the recipient engaged in competition
with the Company; or
|
|
c.
|
a
determination by the Committee that the recipient engaged in activity
or
conduct contrary to the best interests of the Company, as described
in the
Plan.
|
The
form of the
Performance Restricted Stock Equivalent Award Agreement is attached to this
filing as Exhibit 10.2.
SIGNATURES:
Pursuant
to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto
duly
authorized.
ENERGIZER
HOLDINGS,
INC.
By:
Daniel
J.
Sescleifer
Executive
Vice
President and Chief Financial Officer
Dated:
October 11,
2005
EXHIBIT
INDEX
Exhibit
No.