UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement | |||
¨ | Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
x | Definitive Proxy Statement | |||
¨ | Definitive Additional Materials | |||
¨ | Soliciting Materials Pursuant to sec. 240.14a-12 | |||
| ||||
(Exact Name of Registrant as Specified in its Charter) | ||||
Payment of Filing Fee (Check the appropriate box) | ||||
x | No fee required. | |||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.1 | |||
(1) | Title of each class of securities to which transaction applies:
| |||
| ||||
(2) | Aggregate number of securities to which transaction applies:
| |||
| ||||
(3) | Per unit or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| |||
| ||||
(4) | Proposed maximum aggregate value of transaction:
| |||
| ||||
(5) | Total fee paid: | |||
| ||||
¨ | Fee paid previously with preliminary materials. | |||
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid
| |||
| ||||
(2) | Form, Schedule or Registration Statement No.:
| |||
| ||||
(3) | Filing Party:
| |||
| ||||
(4) | Date Filed:
| |||
|
ENERGIZER HOLDINGS, INC.
533 Maryville University Drive
St. Louis, Missouri 63141
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Energizer Holdings, Inc. to be held at 3:00 p.m. on Monday, January 30, 2012 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.
We hope you will attend in person. If you plan to do so, please bring the enclosed Shareholder Admission Ticket with you.
Whether you plan to attend the meeting or not, we encourage you to read this Proxy Statement and vote your shares. You may sign, date and return the enclosed proxy as soon as possible in the postage-paid envelope provided, or you may vote by telephone or via Internet. However you decide to vote, we would appreciate you voting as soon as possible.
We look forward to seeing you at the Annual Meeting!
WARD M. KLEIN
Chief Executive Officer
December 9, 2011
ENERGIZER HOLDINGS, INC.
533 Maryville University Drive
St. Louis, Missouri 63141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND INTERNET AVAILABILITY OF PROXY MATERIALS
To the Shareholders:
The Annual Meeting of Shareholders of Energizer Holdings, Inc. will be held at 3:00 p.m. on Monday, January 30, 2012, at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.
The purpose of the meeting is:
| to elect three directors to serve three-year terms ending at the Annual Meeting held in 2015, or until their respective successors are elected and qualified; |
| to ratify the appointment of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm for fiscal 2012; |
| to cast an advisory vote on executive compensation; |
| to cast an advisory vote on the frequency of the executive compensation vote; and |
| to act upon such other matters as may properly come before the meeting. |
You may vote if you are a shareholder of record on December 1, 2011. It is important that your shares be represented and voted at the Meeting. Please vote in one of the following ways:
| USE THE TOLL-FREE TELEPHONE NUMBER shown on the enclosed proxy card; |
| VISIT www.energizerholdings.com to vote via the Internet, using the identification number indicated on the proxy card; |
| MARK, SIGN, DATE AND PROMPTLY RETURN the proxy card in the postage-paid envelope; OR |
| VOTE BY WRITTEN BALLOT at the Annual Meeting. |
The attached Proxy Statement as well as the Companys 2011 Annual Report to Shareholders, have also been posted on the Companys website at www.energizerholdings.com. Information on our website does not constitute part of this document.
By Order of the Board of Directors,
Mark S. LaVigne
Secretary
December 9, 2011
Page | ||||
ii | ||||
1 | ||||
3 | ||||
3 | ||||
6 | ||||
11 | ||||
14 | ||||
16 | ||||
16 | ||||
27 | ||||
27 | ||||
28 | ||||
31 | ||||
33 | ||||
39 | ||||
40 | ||||
44 | ||||
48 | ||||
Item 4. Advisory Vote Determining the Frequency of Advisory Votes on Executive Compensation |
48 | |||
49 | ||||
52 |
(i)
This summary highlights information contained in this proxy statement. The summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
Annual Meeting of Shareholders | Time and date: 3:00 p.m., Central Time, January 30, 2012 Place: Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141 Record Date: December 1, 2011 Voting: Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on | |
Voting matters and board recommendations | Election of three directors (FOR EACH NOMINEE) Ratification of the appointment of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm for fiscal 2012 (FOR) Advisory vote on executive compensation (FOR) Advisory vote on the frequency of the executive compensation votes (EVERY YEAR) | |
Board nominees | Bill G. Armstrong. Former Executive Vice President and Chief Operating Officer, Cargill Animal Nutrition. Director since 2005. J. Patrick Mulcahy. Chairman of the Board of Energizer Holdings, Inc. since 2007. Director since 2000. Pamela M. Nicholson. President and Chief Operating Officer, Enterprise Holdings, Inc. since 2008. Director since 2002. | |
Other directors | Term expiring in 2013
R. David Hoover. Chairman and Former Chief Executive Officer, Ball Corporation. Director since 2000. John C. Hunter. Former Chairman, President and Chief Executive Officer of Solutia, Inc. Director since 2005. John E. Klein. President of Randolph College since August 2007. Director since 2003.
Term expiring in 2014
Ward M. Klein. Chief Executive Officer, Energizer Holdings, Inc. since 2005. Director since 2005. W. Patrick McGinnis. Chief Executive Officer and President, Nestlé Purina PetCare Company. Director since 2002. John R. Roberts. Former Executive Director, Civic Progress St. Louis and former Managing Partner, Mid-South Region, Arthur Andersen LLP. Director since 2003. | |
Named executive officers | Ward M. Klein, Chief Executive Officer Daniel J. Sescleifer, Executive Vice President & Chief Financial Officer Joseph W. McClanathan, President & CEO, Energizer Household Products David P. Hatfield, President & CEO, Energizer Personal Care Gayle G. Stratmann, Vice President and General Counsel | |
Independent registered public accounting firm | Although not required by law, we are asking shareholders to ratify the selection of PricewaterhouseCoopers, LLP as our independent registered accounting firm for fiscal 2012. |
(ii)
Advisory vote on executive compensation | We ask our shareholders to approve on an advisory basis the compensation of our named executive officers. Our board recommends a FOR vote because we believe that our compensation program achieves its objective of rewarding management based upon its success of building shareholder value. | |
Frequency vote on executive compensation | Our board recommends that shareholders vote in favor of holding the advisory vote on executive compensation annually, because the annual vote allows the shareholders to provide input on our executive compensation programs for our named executive officers on a regular basis. | |
Key elements of our compensation program | Aggregate pay package. Our aggregate pay packages are targeted at 50th percentile for our peer group. Annual cash bonus program. Bonuses are payable based on the following components: 70% related to the achievement of company targets (which, for 2011, were set at 8% adjusted earnings per share growth over the previous year) and 30% related to the assessment of individual performance. Long-term incentive awards. Currently, we award restricted stock equivalents with a three year vesting period. For awards in fiscal 2011, 70% of the award is performance-based and only vests if targets for three year compound annual growth in earnings per share are met. Deferred compensation plan. The executives may defer their cash bonus award and may receive a 25% Company match with a three-year vesting period. Supplemental retirement plans. Our executives participate in the retirement plans available for all employees; the supplemental retirement plans restore retirement benefits otherwise limited by IRS regulations. Severance and other benefits following change of control. We have ongoing change of control employment agreements which provide executives with increased security and allow them to make decisions focusing on the interests of shareholders and not their own personal financial interests. | |
2011 compensation decisions | Adoption of a policy eliminating tax gross-up payments and adoption of the best-of-net approach for future change in control employment agreements. Agreed to use fiscal year 2010 EPS of $5.72 as the baseline for fiscal 2012 bonus plan and 3-year equity awards resulting in more challenging performance goals than if the lower fiscal year 2011 EPS would be used. |
(iii)
PROXY STATEMENTVOTING PROCEDURES
2
Our board of directors currently consists of nine members and is divided into three classes, each consisting of three members, and terms of service expiring at successive annual meetings.
Three directors will be elected at the 2012 Annual Meeting to serve for a three-year term expiring at our annual meeting in 2015. The board has nominated Bill G. Armstrong, J. Patrick Mulcahy and Pamela M. Nicholson for election as directors at this meeting. Each nominee is currently serving as a director and has consented to serve for the three-year term. Each nominee elected as a director will continue in office until his or her successor has been elected and qualified. If any nominee is unable to serve as a director at the time of the annual meeting, your proxy may be voted for the election of another person the board may nominate in his or her place, unless you indicate otherwise.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for the election of each director.
The board of directors recommends a vote FOR the election of these nominees as directors of the Company.
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
Please review the following information about the nominees and other directors continuing in office. The ages shown are as of December 31, 2011.
BILL G. ARMSTRONG, Director Since 2005, Age 63 (Standing for election at this meeting for a term expiring in 2015)
Mr. Armstrong is a private equity investor and is also a director of Ralcorp Holdings, Inc.
Mr. Armstrong served as Executive Vice President and Chief Operating Officer, Cargill Animal Nutrition (animal feed products), from 2001 to 2004. Prior to his employment with Cargill, Mr. Armstrong served as Chief Operating Officer of Agribrands International, Inc., an international agricultural products business, and as Executive Vice President of Operations of the international agricultural products business of Ralston Purina Company. He also served as managing director of Ralstons Philippine operations, and during his tenure there, was a director of the American Chamber of Commerce. As a result of his international and operational experience, he provides a global perspective to the board, which has become increasingly important as our international operations have grown to account for approximately half of our annual sales and profitability. | ||
J. PATRICK MULCAHY, Director Since 2000, Age 67 (Standing for election at this meeting for a term expiring in 2015)
Mr. Mulcahy has served as Chairman of the Board of Energizer Holdings, Inc. since 2007. Mr. Mulcahy served as Vice Chairman of the Board from January 2005 to January 2007, and prior to that time served as Chief Executive Officer, Energizer Holdings, Inc. from 2000 to 2005, and as Chairman of the Board and Chief Executive Officer of Eveready Battery Company, Inc. from 1987 until his retirement in 2005. He is also a director of Hanesbrands, Inc. and Ralcorp Holdings, Inc., and was formerly a director of Solutia, Inc.
Mr. Mulcahy has over forty years of experience in consumer products industries, including almost twenty years as chief executive of our battery business. He was our first chief executive officer, and managed and directed the acquisition of our Schick-Wilkinson Sword business in 2003. He is very knowledgeable about the dynamics of our various businesses and the categories in which they compete. His experience with the complex financial and operational issues of consumer products businesses brings critical financial, operational and strategic expertise to our board of directors. |
3
PAMELA M. NICHOLSON, Director Since 2002, Age 52 (Standing for election at this meeting for a term expiring in 2015)
Ms. Nicholson has served as President and Chief Operating Officer, Enterprise Holdings, Inc. (auto rental and leasing) since 2008. She served as Executive Vice President and Chief Operating Officer for Enterprise from 2004 to 2008, and as Senior Vice President, North American Operations from 1999 to 2004.
Ms. Nicholson has served almost thirty years at Enterprise, obtaining extensive operational and management expertise. As the first woman president of Enterprise, a private company and one of the largest and most comprehensive vehicle rental businesses worldwide, she has been named four times to Fortune Magazines Top 50 Most Powerful Women list. Ms. Nicholson provides our board with global perspective with respect to operational and business issues, and insight with respect to executive compensation and diversity issues. | ||
R. DAVID HOOVER, Director Since 2000, Age 66 (Continuing in OfficeTerm expiring in 2013)
Mr. Hoover has served as Chairman of Ball Corporation (beverage and food packaging and aerospace products and services) since January 2011. He served as the Chairman and Chief Executive Officer of Ball Corporation from January 2010 to January 2011; Chairman, President and Chief Executive Officer, April 2002 to January 2010 and President and Chief Executive Officer, January 2001 to April 2002. Also a director of Ball Corporation and Eli Lilly and Company, and formerly a director of Qwest Communications International, Inc. and Irwin Financial Corporation.
Mr. Hoover began his employment at Ball Corporation in 1970, and has served in numerous finance and administration, treasury and operational capacities during his tenure at Ball, including service as chief financial officer, chief operating officer and chief executive officer. His broad and extensive experience provides our board with valuable insight into complex business, operational and financial issues. His chairmanship of our finance and oversight committee has been significant, particularly during the recent global recession, as that committee directly advises management on financial and economic issues and strategies. | ||
JOHN C. HUNTER, III, Director Since 2005, Age 64 (Continuing in OfficeTerm expiring in 2013)
Mr. Hunter served as Chairman, President and Chief Executive Officer of Solutia, Inc. (chemical products) from 1999 to 2004. He is now retired. Solutia and certain subsidiaries filed voluntary petitions for bankruptcy in 2003, and emerged from bankruptcy in 2008. Also a director of Penford Corporation, KMG Chemicals, Inc. and formerly a director of Hercules, Inc.
Mr. Hunter has a degree in chemical engineering and a Masters in business administration. During his career with Solutia and its former parent, Monsanto, Inc., he obtained many years of experience in the specialty chemicals business, as well as an in-depth knowledge of environmental issues. As a result, he provides insightful risk management experience to our board, and a practical perspective and understanding as we deal with environmental, regulatory and sustainability issues. |
4
JOHN E. KLEIN, Director Since 2003, Age 66 (Continuing in OfficeTerm expiring in 2013)
Mr. Klein has served as President of Randolph College (education) since August 2007. Prior to that, Mr. Klein served as Executive Vice Chancellor for Administration, Washington University in St. Louis (education) from 2004 to August 2007. From 1985 to 2004, he served as President and Chief Executive Officer, Bunge North America, Inc. (agribusiness), and formerly served as a director of Embrex, Inc.
Mr. Klein obtained a law degree and practiced law with a firm in New York City for several years before joining Bunge Ltd. He had a number of international postings in Europe and South America and senior positions in the United States before being named chief executive of Bunges North American operations. He has also obtained significant administrative experience in the field of higher education. He brings the benefits of his diverse legal, international, operational and administrative background and experience to our board, and to his chairmanship of our nominating and executive compensation committee. In that role, he has gained extensive knowledge of our compensation plans and programs, and a thorough understanding of current issues, trends and concerns in executive compensation design. | ||
WARD M. KLEIN, Director Since 2005, Age 56 (Continuing in officeTerm expiring in 2014)
Mr. Klein has served as Chief Executive Officer, Energizer Holdings, Inc. since 2005. Prior to that time, he served as President and Chief Operating Officer from 2004 to 2005, as President, International from 2002 to 2004, and as Vice President, Asia Pacific and Latin America from 2000 to 2002. Also a director of Brown Shoe Company, Inc., and formerly a director of AmerUs Group Co. Mr. Klein also serves on the Board of Directors as Deputy Chairman of the Federal Reserve Bank of St. Louis and as President of Civic Progress, St. Louis.
Mr. Klein has over 20 years of service with Energizer, in international as well as domestic leadership positions, and has obtained extensive knowledge of our business operations and industry dynamics. In his capacity as chief executive officer, and the only management member of the board of directors, Mr. Klein provides a necessary and unique perspective to the board. | ||
W. PATRICK MCGINNIS, Director Since 2002, Age 64 (Continuing in officeTerm expiring in 2014)
Mr. McGinnis has served as Chief Executive Officer and President, Nestlé Purina PetCare Company (pet foods and related products) since 2001. Also a director of Brown Shoe Company, Inc.
Mr. McGinnis has almost forty years of experience in consumer products industries, including almost twenty years as chief executive of the Purina pet food business. As a result, he has expertise with respect to marketing and other commercial issues, competitive challenges, and long-term strategic planning, as well as valuable perspectives with respect to potential acquisitions of consumer products businesses. |
5
JOHN R. ROBERTS, Director Since 2003, Age 70 (Continuing in officeTerm expiring in 2014)
Mr. Roberts served as Executive Director, Civic Progress St. Louis (civic organization) from 2001 through 2006. He is now retired. From 1993 to 1998, he served as Managing Partner, Mid-South Region, Arthur Andersen LLP (public accountancy). Also a director of Regions Financial Corporation and Centene Corporation.
Mr. Roberts brings many years of experience as an audit partner at Arthur Andersen to our board. His extensive knowledge of financial accounting, accounting principles, and financial reporting rules and regulations, and his experience in evaluating financial results and generally overseeing the financial reporting process of large public companies from an independent auditors perspective, provides invaluable expertise to our board and audit committee. His service as a board member and audit committee chair for other public companies reinforces the knowledge and insight he provides to our board. |
BOARD OF DIRECTORS STANDING COMMITTEES
Board Member |
Board | Audit | Executive | Nominating and Executive Compensation |
Finance and
Oversight | |||||
Bill G. Armstrong |
ü | ü | ü | |||||||
R. David Hoover |
ü | ü* | ||||||||
John C. Hunter |
ü | ü | ||||||||
John E. Klein |
ü | ü | ü* | |||||||
Ward M. Klein |
ü | ü | ü | |||||||
W. Patrick McGinnis |
ü | ü | ü | |||||||
J. Patrick Mulcahy |
ü* | ü* | ü | |||||||
Pamela M. Nicholson |
ü | ü | ü | |||||||
John R. Roberts |
ü | ü* | ü | ü | ||||||
Meetings held in 2011 |
7 | 7 | 0 | 7 | 6 |
6
7
8
9
10
11
12
DIRECTOR COMPENSATION TABLE
Name | Fees Earned or Paid in Cash (1) |
Stock Awards (2)(3) |
Option Awards (4) |
Non-Equity Incentive Plan Compensation |
Change in Pension Value and Non- Qualified Deferred Compensation Earnings |
All Other Compensation (5)(6) |
Total | |||||||||||||
B.G. Armstrong |
$ | 91,250 | $ | 128,650 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 219,900 | ||||||||||
R.D. Hoover |
$ | 97,250 | $ | 132,441 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 229,691 | ||||||||||
J.C. Hunter |
$ | 83,750 | $ | 106,342 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 190,092 | ||||||||||
J.E. Klein |
$ | 109,250 | $ | 134,555 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 243,805 | ||||||||||
R.A. Liddy* |
$ | 10,862 | $ | 76,368 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 87,230 | ||||||||||
W.P. McGinnis |
$ | 80,750 | $ | 100,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 180,750 | ||||||||||
J.P. Mulcahy |
$ | 117,250 | $ | 140,241 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 257,491 | ||||||||||
P.M. Nicholson |
$ | 88,250 | $ | 127,921 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 216,171 | ||||||||||
J.R. Roberts |
$ | 109,250 | $ | 134,555 | $ 0 | $ 0 | $ 0 | $ 0 | $ | 243,805 |
13
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Our audit committee, in accordance with authority granted in its charter by the board, appointed PricewaterhouseCoopers LLP (PwC) as independent auditor for the current fiscal year. PwC has served as our independent auditor for every fiscal year since 2000, and PwC has begun certain work related to the 2012 audit as approved by the audit committee. Information on independent auditor fees for the last two fiscal years is set forth below. A representative of PwC will be present at the 2012 Annual Meeting of Shareholders and will have an opportunity to make a statement, if desired, as well as to respond to appropriate questions.
Although NYSE listing standards require that the audit committee be directly responsible for selecting and retaining the independent auditor, we are providing shareholders with the means to express their views on this issue. Although this vote will not be binding, in the event the shareholders fail to ratify the appointment of PwC, the audit committee will reconsider its appointment. Even if the appointment is ratified, the audit committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year if the audit committee determines that such a change would be in the best interests of the Company and its shareholders.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for ratification.
The members of the audit committee and the board of directors recommend a vote FOR ratification of PwC as the Companys independent auditor for fiscal year 2012.
Fees Paid to PricewaterhouseCoopers LLP
(in thousands)
FY 10 | FY 11 | |||||||
Audit Fees |
$ | 3,425 | $ | 4,215 | ||||
Audit-Related Fees |
21 | 84 | ||||||
Tax Fees |
||||||||
Tax Compliance/preparation |
89 | 455 | ||||||
Other Tax Services |
924 | 1,116 | ||||||
|
|
|
|
|||||
Total Tax Fees |
1,013 | 1,571 | ||||||
All Other Fees |
0 | 0 | ||||||
|
|
|
|
|||||
Total Fees |
$ | 4,459 | $ | 5,870 | ||||
|
|
|
|
14
15
The following narratives and tables discuss the compensation paid in fiscal 2011 to our chief executive officer, chief financial officer and our other three most highly compensated executive officers, whom we refer to collectively as our named executive officers.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
Our commitment to maintaining the best compensation practices is evidenced by the following existing features and recent changes to our executive compensation program:
| Our goal is to instill a pay for performance culture throughout our operations, with total compensation opportunities targeted at the 50th percentile of our peer group, with below the 50th percentile for base salary and above the 50th percentile for annual and long-term performance incentives. |
| We provide a mix of short- and long-term compensation. |
| A significant portion of targeted compensation for our named executive officers is variablenot fixedcompensation, with much of that dependent upon achievement of pre-established earnings goals, subject to forfeiture if threshold goals are not achieved. In fiscal 2011, the three-year vesting period for performance awards granted in October 2008 ended, and the compound adjusted EPS growth for that period did not result in any vesting of the awards granted. |
| We have adopted stock ownership guidelines for executive officers, as well as prohibitions on trading in derivatives. |
| In 2010, we eliminated reimbursement of income taxes associated with the personal use of our aircraft by our chief executive officer and eliminated the personal use of our aircraft by the chairman of the board. |
| The compensation committee, in consultation with management, determined it was appropriate to use fiscal year 2010 diluted earnings per share (EPS) of $5.72 for fiscal 2012 bonus plan and 3-year equity awards resulting in more challenging performance goals than if the lower fiscal year 2011 EPS would be used. |
| In November 2011, we adopted a policy eliminating tax gross-up payments and adopting the best-of-net approach for future change in control employment agreements. |
16
The elements of our executive compensation program as well as the purpose of each item are shown in the following table:
Compensation Element | Description | Purpose | ||
Base Salary |
Annual fixed salary, payable in cash. | Helps attract and retain key individuals.
Annual adjustment opportunity motivates performance against focal points for the year. | ||
Annual Cash Bonus |
Bonuses are payable in cash upon achievement of the pre-determined companywide adjusted EPS target (70% of the total bonus target), and assessment of individual performance (30%). | Promotes achievement of both company-wide and individual performance goals. | ||
Three Year Equity Awards |
Stock-settled restricted stock equivalents with a three year vesting period; 70% of the award vests based on three year compound annual growth in EPS and 30% vests on the third anniversary of the grant if the recipient remains employed by us. | Provides a direct link to shareholder interests by tying a significant portion of executives personal wealth to the performance of our common stock.
Promotes achievement of long-term company-wide earnings performance goals.
Vesting requirements help to retain key employees. | ||
Deferred Compensation Plan |
Executives may defer their annual bonus; we match 25% for deferrals into a fund tracking the performance of our common stock. | Provides a direct link to shareholder interests by tying a significant portion of executives personal wealth to the performance of our common stock.
Provides a valued benefit to executives on a tax deferred basis, supporting the retention objective of key executives. | ||
Supplemental Retirement Plans |
Executives participate in the retirement plans available for all employees; the supplemental retirement plans restore retirement benefits otherwise limited by IRS regulations. | Ensures that the executives receive the same relative value compared to other employees who are not subject to the IRS limits. | ||
Change of Control Severance Benefits |
Executives are entitled to benefits only if they are involuntarily terminated (or they resign for good cause) following a change of control of our company. | Provide executives with increased security and allow them to make decisions focusing on the interests of shareholders and not their own personal financial interests. |
17
Objectives
The key objective of our compensation philosophy is to reward management based upon its success in increasing shareholder value. With a focus on that overarching goal, the overall executive compensation program is designed to provide a compensation package that will enable us to attract and retain highly talented executives and maintain a performance-oriented culture.
Pay for Performance
Our goal is to instill a pay for performance culture throughout our operations, with total compensation opportunities targeted at the 50th percentile of our peer group.
In 2011, a significant portion of targeted compensation for our named executive officers, consisting of the annual cash bonus and three-year equity awards, was variablenot fixedcompensation, with much of that dependent upon achievement of pre-established goals, subject to forfeiture if threshold goals were not achieved. These performance based incentives, which focus on long-term performance, reward the named executive officers for the achievement of outstanding and sustained company performance, which builds shareholder value. We believe this compensation structure offers high potential rewards for superior performance, and a steep reduction for results below target. Accordingly, the total compensation actually realized by the executive officers is primarily a function of realized results and to the extent actual compensation varies from our targeted total compensation percentile, it is a function of the executives and the companys performance.
Alignment of Executive and Shareholder Interests
A significant portion of our compensation program, similarly to our peer companies, consists of equity grants that align our officers interests with those of shareholders by tying a significant portion of the officers personal wealth to the performance of our common stock.
Our incentive compensation program (both annual bonuses and three-year equity grants) has focused since its inception in 2002 on consistent adjusted EPS growth from year to year. We believe that such focus has provided strong motivation for superior executive performance and aligns the interests of management with those of the shareholders. Our incentive programs are designed to reward consistent, sustainable growth in adjusted EPS over single and multiple year periods. See Elements of CompensationIncentive ProgramsAdjusted EPS for more detail on the determination of adjusted EPS.
Retention
Our executive officers are highly experienced, with average length of service with the Company of over 20 years, and have been successful in diversifying our businesses, improving operating results and sustaining long-term adjusted EPS growth. Because of managements level of experience and successful track record, as well as the value of maintaining continuity in senior executive positions, we view retention of key executives as critical to the ongoing success of our operations. Consequently, we:
| utilize benchmarking against a peer group of companies in order to ensure that we can retain key executives and remain competitive in attracting new employees; and |
| establish vesting periods for our equity-based awards and for the Company match under our deferred compensation plan, so that those elements of our compensation program will provide additional retention incentives. |
Our executive compensation program also includes features to address other compensation-related issues such as health, welfare, and retirement concerns of employees, including features that were retained at the time of our spin-off in 2000. We believe that providing a comprehensive and competitive compensation package with continuity of benefit programs strengthens our ability to retain senior executives.
18
Implementation of the Compensation Program
Our board of directors has delegated authority to the Nominating and Executive Compensation Committee to approve all compensation and benefits for our executive officers. The committee sets executive salaries and bonuses, reviews executive benefit programs, including change in control severance agreements, and grants cash bonus awards to our executive officers under our cash bonus program, as well as equity awards to all eligible employees and executives under our 2009 incentive stock plan. The committee has not delegated this authority to any other individuals or groups, except for certain administrative tasks involving our benefit programs.
To assist it in evaluating our executive and director compensation programs on a competitive market basis, the committee has directly retained an outside consultant, Meridian Compensation Partners LLC, which is asked to:
| provide comparative market data for our peer group (and other companies, as needed) with respect to the compensation of the named executive officers and the directors; |
| analyze our compensation and benefit programs relative to our peer group; and |
| advise the committee on trends in compensation practice and on management proposals with respect to executive compensation. |
A representative of Meridian attends committee meetings from time to time to serve as a resource on executive and director compensation matters. In order to encourage independent review and discussion of executive compensation matters, the committee meets with Meridian in executive session without management present. The committee has sole authority to retain or replace Meridian in its role as its consultant. Aside from its service to the committee, Meridian does not provide any other services to the Company. The committee regularly reviews the performance and independence of Meridian, as well as fees paid. Management has retained a separate consultant, Towers Watson, which advises it (but not the committee) on market trends in executive compensation, provides ad hoc analysis and recommendations, and reviews and comments on compensation proposals. We believe that having separate consultants promotes Meridians independence with respect to its advice. In addition to advising management with respect to executive compensation, Towers Watson has assisted management in a variety of other matters, including cost analysis with respect to our change in control agreements, global salary and benefits benchmarking, development and implementation of a performance management and succession planning system and general benefits consulting and related communication strategy.
Meridian, with input from the committee, has developed a customized peer group of 20 companies based on a variety of criteria, including some or all of the following:
| consumer products businesses, |
| businesses with a strong brand focus, |
| competitors for executive talent, and |
| similarly-sized businesses in terms of revenues and market capitalization. |
Through a proprietary database, Meridian uses data provided by that peer group based on a variety of metrics to determine a market comparison for our executive compensation program. Total compensation opportunities are targeted at the 50th percentile of the peer group, size-adjusted by revenues, using regression analysis. The market comparison is made for each key component of compensation, including base pay, target annual bonus, target total cash compensation and grant-date value of long-term incentives.
Beyond the positional comparisons, the aggregate size of equity grants are also compared to the peer group based on the annual run rate, dilution, and overhang, to ensure that they are consistent with the median of the peer group. Meridian also analyzes the Companys change-in-control program for our executives to determine consistency in design, and reviews the costing that management prepares against prevailing market practice.
19
The peer group utilized by Meridian for its review of fiscal 2011 executive compensation consists of the following companies. The industries in which the companies are engaged are noted: (1) household products; (2) personal care; (3) food and beverage; and (4) apparel.
Alberto-Culver(2) |
Clorox(1) | Hanesbrands(4) | Revlon(2) | |||
Avon Products(2) |
Colgate-Palmolive(2) | Hasbro(1) | S.C. Johnson & Son(1) | |||
Brown-Forman(3) |
Del Monte Foods(3) | Hershey(3) | Scotts Miracle-Gro(1) | |||
Brown Shoe(4) |
Fortune Brands(1)(3) | Mattel(1) | Stanley Black & Decker(1) | |||
Church & Dwight(1)(2) |
Hallmark Cards(1) | Newell Rubbermaid(1) | Tupperware(1) |
The following table provides an overview of how we compared to our peer group companies on certain financial criteria (based on publicly available information as of August 2010):
(in millions of dollars) | Revenue (FY2009) |
Market Capitalization (as of 7/31/2010) |
||||||
75th Percentile |
5,482 | 8,814 | ||||||
50th Percentile |
3,980 | 5,295 | ||||||
25th Percentile |
2,508 | 2,800 | ||||||
Energizer Holdings, Inc. |
4,500 | 4,309 | ||||||
Energizer Holdings, Inc. percentile |
60% | 41% |
Elements of Compensation
Base Pay
We benchmark base pay against our peer group on an annual basis as a guide to setting compensation for all key positions throughout the Company, including the named executive officers. Our management and the committee believe that an important benchmark for base salaries is the 50th percentile for the peer group, but that it is important to consider the interplay of all of the benchmarked components of compensation and to make adjustments as warranted.
At the beginning of each fiscal year the committee establishes the salaries of the executive officers (other than the chief executive officer) based on recommendations of the chief executive officer. These recommendations are based on an assessment of the individuals responsibilities, experience, and individual performance against focal points. The salary of the chief executive officer is based on the recommendation of the committees compensation consultant, which, without input from management, provides the committee with a range of possible salary and long-term incentive award levels. The committee uses this only as a tool, and sets new pay levels based partly on market data, but mostly on the performance and contribution of the chief executive officer. The committee assesses the chief executive officers contributions during the prior year and performance against focal points, and subjectively determines an appropriate salary for the upcoming year.
As long as the recommendations of the chief executive officer and the compensation consultant remain within the targeted range relative to the peer group, and the committee concurs with the assessment of performance, the committee has historically approved the recommendations as made. The committee evaluated the base salaries of the named executive officers at its October 2010 meeting and elected to increase them for fiscal 2011. The base salaries of the named executive officers for fiscal 2011 were as follows: W. Klein$1,000,000; D. Sescleifer$510,000; J. McClanathan$510,000; D. Hatfield$510,000; and G. Stratmann$410,000. The committees consultant confirmed that these salaries of our executive officers remained consistent with the Companys overall compensation objectives.
20
Incentive Programs
The committee has annually approved a two-tier incentive compensation structure for our key executives, consisting of an annual performance program, paid in cash, and a three-year performance program, paid in restricted stock equivalents. In order to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the IRC), awards to officers under our annual performance program are made under the terms of our shareholder-approved executive officer bonus plan, and the three-year performance awards are granted under the terms of our 2009 incentive stock plan.
Adjusted EPS
The performance measure used both in our annual cash bonus program and three-year equity grants is adjusted EPS. We use EPS results, determined in accordance with U.S. generally accepted accounting principles (GAAP), subject to certain adjustments for certain limited matters, including, among others, extraordinary dividends, stock splits or stock dividends, extraordinary transactions such as mergers or spin-offs and unusual or non-recurring accounting impacts, which may include cash or non-cash restructuring charges, or changes in accounting standards or treatment.
The performance goals are set by the committee at the beginning of each fiscal year, and are intended to promote shareholder value by means of healthy and consistent EPS improvement. In fiscal 2011 (as well as fiscal 2010), the targeted adjusted EPS goal was set at 8% above prior year results for the annual cash bonus program and three-year performance awards. This metric is based on current business conditions, relative performance of our peer group of companies, and the need to invest in our businesses for long-term growth, despite the impact on short-term EPS.
In 2011, the committee, in consultation with management, considered whether to adjust for the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the following events when determining the achievement of targets under the previously granted equity awards or under the fiscal 2011 annual bonus plan: (i) the restructuring in the Household Products divisions, (ii) the payment of make-whole premiums and duplicate interest, which resulted from refinancing of certain debt obligations, (iii) various integration and transaction costs related to the acquisition of ASR which under newly-adopted accounting rules are now charged as current period expenses (as opposed to being treated as part of the purchase price or as an opening balance sheet liability), and (iv) certain non-cash adjustments to long-term deferred tax items. While the committee retains (through the use of its negative discretion) the flexibility to adjust for such types of factors in the future, no adjustments were necessary in 2011 since no additional vesting would have occurred under the award agreements. Similarly, no adjustments were made for the annual cash bonus plan. In addition, as a result of discussions between management and the Committee, it was determined previously that the fiscal year 2010 EPS of $5.72 would be used as a baseline for fiscal 2012 bonus plan and 3-year equity awards, resulting in more challenging performance goals than if the lower fiscal year 2011 EPS would be used.
Annual Cash Bonus Program
The annual bonus is designed to promote achievement of both Company and individual performance goals, with a component equal to 70% of an individuals annual bonus target focused on objective Company performance, and a component equal to the remaining 30% of the annual bonus target focused on both objective and subjective individual performance.
The committee has assigned individual bonus targets to each of the officers, based upon historical practice at the Company and prevailing market practice information provided by the committees consultant. For fiscal 2011, the following bonus targets, defined as a percentage of the individuals base pay, were assigned to the named executive officers:
| Mr. Klein - 100%; |
| Mr. Sescleifer - 80%; |
21
| Mr. McClanathan - 80%; |
| Mr. Hatfield - 80%; |
| Ms. Stratmann - 60%. |
Bonuses Based on Company Performance
The Company performance component of the annual cash bonus program is designed to reward significant annual adjusted EPS growth. The following table provides information on the potential bonuses that could have been earned in fiscal 2011. As the actual results in fiscal 2011 were below the threshold level, no bonuses were awarded for company performance in fiscal 2011.
Goals for Annual Objective Component Set at Beginning of Each Fiscal Year |
Bonus which will be Awarded upon Achievement of Goals |
Actual FY 2011 EPS result | ||
Threshold: set at prior years final GAAP results ($5.72) |
10% of 70% of officers bonus target |
$3.72 | ||
Target: set at 8% above Threshold goal for FY 2011 ($6.18) |
100% of 70% of officers bonus target |
- | ||
Stretch: set at 16% above Threshold goal ($6.64) |
200% of 70% of officers bonus target |
- | ||
Bonuses indicated increase proportionately in 1/10(th) of 1% increments, for final results between the goals indicatedwith maximum bonus at stretch. No bonuses tied to the Company performance component are paid for results below the Threshold goal, but bonuses may still be paid on the individual performance component. |
Bonuses Based on Individual Performance
The individual performance component of the annual cash bonus program is based upon a subjective evaluation of the officers performance during the year, including performance against pre-established focal points for business and operational improvement. Based on that evaluation, officers are eligible to receive the following bonuses based on their subjective rating by the committee:
Rating |
Individual Performance Bonus | |
1 or major contributor |
200% of 30% of officers bonus target | |
2 or significant contributor |
150% of 30% of officers bonus target | |
3 or solid contributor |
75-110% of 30% of officers bonus target | |
4 or marginal contributor |
0 | |
5 or unsatisfactory contributor |
0 |
The board of directors establishes the focal points of the chief executive officer at the beginning of the year, and the chief executive officer sets the focal points for the other executive officers. The focal points for those other officers for 2011 generally addressed specific operational objectives, budgeted financial objectives, organizational and management objectives, and more specific objectives directly related to each officers position. The focal points for the chief executive officer addressed EPS performance, as well as top-line operating objectives for our Household Products and Personal Care businesses, sales and profit growth objectives, and organizational and management objectives.
The committee determines the rating for the chief executive officer, based on his performance during the year, with input from the chairman of the board, and also reviews subjective assessments of the chief executive officers performance, which are provided by each of the directors. See note 4 to the Summary Compensation Table for amounts paid to our named executive officers with respect to the annual individual performance component.
22
Equity Awards
Our amended and restated 2009 incentive stock plan, as approved at our 2011 annual meeting of shareholders, authorizes the committee to grant various types of equity awards. Since 2005, the committee has granted to key executives primarily restricted stock equivalent awards, with achievement of Company performance targets over three years as a condition to vesting of the majority of the award, and continued employment with the Company over the same period as a condition to vesting of the remainder of the award. In October 2010, the committee continued this practice, awarding three-year incentive awards with performance based component constituting 70% of the total award and the time-vesting component 30% of the award.
Timing and Procedures for Grants
Except for exceptional cases, such as promotions or new hires, long-term incentive awards are generally granted at the November meetings of the committee, at the time when salary levels and bonus programs for the new fiscal year are determined. The committee and management have agreed that it is also an appropriate time to review and consider additional awards as part of the total compensation packages.
For the past several years, the size of equity awards for the executive officers has been, in part, based upon benchmarked data from our peer group provided by Meridian, valued on the basis of grant-date present value. The size of awards also reflects other factors, such as officers individual circumstances, current dilution rates, and the market run-rate for equity grants among the peer group. The number of restricted stock equivalents (subject to both time- and performance-based vesting) awarded, as well as the mix between the two types of awards, are based on the amounts targeted to be delivered after three years, and the corresponding grant date present value of the restricted stock equivalents. The restricted stock equivalent awards are stock-settled at the end of the three-year period, when they convert into unrestricted shares of our common stock if the vesting requirements are met. The value of the payout that our executives receive increases with the increase in the EPS due to the increase in the number of shares received (as payouts are adjusted upwards if the more challenging goals are met), as well as due to the increase in the stock price (as the value of the payout increases with the increase in our stock price).
The chief executive officer recommends to the committee the number of shares or share units to be awarded to the committee for each named executive officer (other than the chief executive officer). With respect to awards to the chief executive officer, Meridian, without input from the chief executive officer or other members of management, provides a range of potential awards to the committee. However, the committee considers alternatives outside the range and determines the award considering also the competitive posture, performance of the Company, and experience and effectiveness of the chief executive officers leadership.
Grants During 2011
In October 2010, the committee granted three-year equity awards based on the total award pool of 1.5% of operating earnings for fiscal 2010, as determined by the committee in October 2009. When the equity awards were determined in October 2010, the officers as a group were approximately at 113% of our peer group, and each individually were in a range between 5% below our peer group and 143% above our peer group. The threshold for payout under the three-year performance awards granted in October 2010 is 5% compound EPS growth, with approximately 12.5% of the award vesting at that threshold, and pro rata increases up to 50% vesting at 8% compound growth and a maximum of 100% vesting at 12% compound growth over the three-year period, with the base adjusted EPS of $5.72. The committee believes that the thresholds are appropriate because of the need to invest in our businesses over the next several years, the comparable performance levels among our peers, and the need to establish realistic, achievable goals. The number of units granted to each named executive office is shown in the Grants of Plan-Based Awards table.
23
Performance Awards Vesting in 2011
In fiscal 2011, the three-year vesting period for performance awards granted in October 2008 ended. The compound adjusted EPS growth for that period did not result in any vesting of the awards granted. As noted in Incentive ProgramsAdjusted EPS, the committee exercised its discretion not to adjust the fiscal 2011 EPS number, as an adjustment would not have resulted in a different vesting of awards.
Other Equity Awards
Since the Companys spin-off in 2000, the committee has from time-to-time granted non-qualified stock options as well as restricted stock equivalent awards which vest over time. For example, in October 2009, because of concerns over the impact of non-attainable performance goals in outstanding performance awards on retention of key executives, the committee approved the grant to such executives, including the named executive officers, of retention stock option awards with an exercise price equal to the market value of our common stock on the date of grant. The retention stock option awards will only vest and become exercisable on the third anniversary of grant if the recipient remains employed by the Company on that date. No such awards were granted in fiscal 2011.
Deferred Compensation Plan
The executive officers and other key employees are permitted to request the deferral of their annual cash bonus awards under the terms of our deferred compensation plan. Deferrals of an executives cash bonus into the Energizer common stock unit fund of the plan receive a 25% Company match, vesting three years from the date of crediting. The plan is a legacy plan inherited from our former parent that we have retained as a part of our compensation program. The 25% match provides a direct link to shareholder interests by providing an incentive for additional investment of personal wealth in Energizer stock equivalents. In addition, the 25% Company match is highly valued by our executives as part of their overall compensation package, as are the tax deferral benefits of the plan. The three year vesting period for the Company match also helps us retain key executives. The plan is more fully described in the narrative to the Non-qualified Deferred Compensation Table below.
Supplemental Retirement Plans
Our named executive officers are covered, like other employees, by our defined benefit pension plan. As a qualified plan, it is subject to maximum pay and benefit limits under the tax rules. Our named executive officers are also covered by our qualified defined contribution 401(k) plan, or the savings investment plan, and are entitled to a Company match on a portion of their deferrals to the plan. The amounts which may be deferred on a tax preferred basis into the qualified plan, as well as the amount of the matching contributions, are also subject to IRS limitations. Like many companies our size, we have established supplemental plans to compensate executives for these limits. The pension restoration plan (the executive supplemental retirement plan) provides a supplement to an executives pension benefit equal to the amount that the executive would have received but for the tax limitations. The excess 401(k) plan (the executive savings investment plan) permits executives to defer any excess contributions and matching payments not permitted into the qualified savings investment plan.
These supplemental retirement plans are legacy benefits which were also offered by our former parent, and the committee believes they are highly valued by the executives. The pension restoration plan preserves the full, unreduced benefit which the executives would otherwise receive under the qualified plans pension formula, and the excess 401(k) plan offers the opportunity to save for retirement, on a tax deferred basis, at the same levels of deferral and Company match that the executives would otherwise receive under the qualified 401(k) plan without IRS limits. According to market data provided by Meridian, these types of benefits are generally offered by our peer group described above, often with enhanced benefit formulas (which we do not provide). We believe that not including these programs would put us at a competitive disadvantage in retaining our key executives.
24
Details of pension benefits under the pension restoration plan are set forth in the Pension Benefits Table, including the accompanying narrative, below, and details of the excess 401(k) plan, including the contributions, earnings, and year-end balances, are set forth in the Non-qualified Deferred Compensation Table, including the narrative, below.
Severance and Other Benefits Following a Change of Control
Unlike many other public companies, we have not offered employment agreements to our executives. However, we have ongoing change of control employment agreements with each of our executive officers, as discussed under Potential Payments upon Termination or Change of Control.
The change of control employment agreements are designed to provide executives with increased security in the event of a change of control, and allow them to weigh alternative future courses for the Company focused on the interests of shareholders and not their own personal financial interests. The committee annually reviews the cost and the terms of the agreements in light of advice provided by Meridian, based upon surveys of Fortune 200 companies as well as our peer group, and its own internal data and expertise. We believe that the retention value provided by the agreements, and the benefit to us when the executive is provided the opportunity to focus on the interests of shareholders and not the executives own personal financial interests, outweighs the potential cost given that:
| such protections are common among companies of our size, and allow us to offer a competitive compensation package; |
| Meridian has advised that the aggregate projected cost of the agreements is at the lower end of prevailing practice; |
| such costs will only be triggered if the new controlling entity involuntarily terminates the protected executives, or the executives are able to terminate for good reason, during the protected period; |
| the agreements include non-compete and non-solicitation covenants binding on the executives, which can provide significant benefit to the new controlling entity; and |
| the individuals with the agreements are carefully selected by the board of directors, and we believe they are critical to the process of evaluating or negotiating a potential change of control transaction or in the operation of our business during the negotiations or integration process, so that their retention would be critical to the success of any such transaction. |
The committee has from time to time in the last several years initiated further limitations on the benefits provided. In November 2011, the board of directors, upon the recommendation of the committee, adopted a policy pursuant to which we will not include tax gross-up payments relating to severance payments, and instead adopt the best-of-net approach for future change in control employment agreements with executive officers.
A description of the projected cost if a change of control were to have occurred on the last day of fiscal 2011 and all of the named executive officers were terminated on that date is provided under Potential Payments upon Termination or Change of Control.
Perquisites
We offer a limited number of perquisites for our executive officers. Our board of directors has authorized the personal use of our Company-owned aircraft, for up to 50 flight hours per year by the chief executive officer, but does not permit reimbursement of taxes associated with the chief executive officers personal use of the aircraft. The board has also authorized individuals to bring family members and guests along on business flights. The remaining perquisites or executive benefits consist of the executive financial planning program, executive health plan, executive long-term disability plan, and executive excess liability plan. In addition, Mr. Hatfield is reimbursed for commuting expenses as a result of his assignment to our office in Connecticut, but he is not reimbursed for taxes associated with that reimbursement. We regularly review the benefits provided to our executives and make appropriate modifications. For example, in 2006, the committee froze the executive medical
25
plan, allowing it to continue in effect for then current participants, but discontinuing it for any future participants. In 2008, the committee froze the executive retiree life insurance plan, allowing it to continue in effect for our then current retired executives, but not for future retirees, including the named executive officers.
Stock Ownership Requirements
Our stock ownership guidelines provide that the chief executive officer must maintain ownership of our common stock with a value of at least five times his base salary, and other executive officers must maintain common stock ownership with a value of at least three times their base salaries. New executive officers would be given a period of five years to attain full compliance with the guidelines.
For purposes of these determinations, stock ownership includes shares of our common stock which are owned directly or by family members residing with the executive, or by family trusts, as well as vested options, vested and deferred restricted stock equivalents, unvested restricted stock equivalents (other than equivalents subject to achievement of performance targets), and common stock or stock equivalents credited to an officer under our savings investment plan, our excess 401(k) plan, or our deferred compensation plan. As of September 30, 2011, all of our officers are in compliance with the guidelines.
Trading in Energizer Stock Derivatives
It is our policy that employees, officers and directors may not engage in speculative transactions in our securities. Under the policy, an officer may not invest or trade in market-traded options, engage in short-sales of our securities, or speculate on relatively short-term price movements of our common stock.
Deductibility of Certain Executive Compensation
U.S. tax laws set a limit on deductible compensation of $1,000,000 per year per person for the chief executive officer and the next 3 highest paid officers (other than the chief financial officer). Performance-based awards which meet certain requirements are excluded when determining whether such an executive has received compensation in excess of this limit. The applicable plan provisions give the committee authority to require the deferral of certain bonus and salary payments to such officers in order to preserve the deductibility of those payments. The committee has approved measures to ensure the deductibility of payments under the annual cash bonus program and annual restricted stock equivalent grants, by making such payments contingent upon achievement of shareholder-approved performance goals. We believe a significant portion of the compensation paid to the named executive officers should remain deductible as performance-based awards under shareholder-approved plans. The committee intends to continue to review and monitor its policy with respect to the deductibility of compensation.
Compensation Policies and Practices as they Relate to Risk Management
Management has reviewed with the committee the Companys compensation policies and practices for all employees, including executive officers, and has determined that our compensation programs are not likely to have a material adverse effect on the Company. The committee also reviewed our compensation programs for certain design features that may have the potential to encourage excessive risk-taking, including:
| too much focus on equity; |
| compensation mix overly weighted toward annual incentives; |
| highly leveraged payout curves and uncapped payouts; |
| unreasonable goals or thresholds; and |
| steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds. |
26
Management and the committee discussed that such design features were either not present or not significant in the employee incentive programs, and furthermore, noted several design features of those programs that reduce the likelihood of excessive risk-taking:
| the executive compensation program design provides a balanced mix of cash and equity, annual and longer-term incentives, and performance metrics tied primarily to earnings per share (for long-term incentives, measured over a three year period); |
| for the executive compensation program, maximum payout levels for bonuses and performance awards are capped at 200 percent of target (except in limited circumstances); |
| the Company does not grant stock options on a regular basis; |
| the committee has the authority to adjust awards under executive incentive programs downward; |
| executive officers are subject to share ownership and retention guidelines; and |
| elements of our executive compensation are subject to multiple metrics and performance periods within the same fiscal year, adequate oversight and supervision by individuals who do not participate in the same bonus plan, and generally are a modest percentage of the individuals annual salary. |
The committee determined that, for all employees, the Companys compensation programs do not encourage excessive risk and instead encourage behavior that supports sustainable value creation.
NOMINATING AND EXECUTIVE COMPENSATION COMMITTEE REPORT
The Nominating and Executive Compensation Committee of the Companys Board of Directors consists entirely of non-employee directors that are independent under the NYSE listing standards. The Committee has reviewed and discussed the Companys Compensation Discussion and Analysis with management. Based on these reviews and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2011.
John E. KleinChairman Bill G. Armstrong |
John C. Hunter John R. Roberts |
EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about the Companys common stock that may be issued upon the exercise of options, warrants and rights under all of the Companys existing compensation plans as of September 30, 2011.
Plan Category |
(1) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights |
(2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
(3) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (1), and as Noted Below) |
|||||||||
Equity compensation plans approved by security holders |
2,997,658 | $ | 50.36 | 4,572,997 | ||||||||
Equity compensation plans not approved by security holders | None | N/A | None | |||||||||
Total |
2,997,658 | $ | 50.36 | 4,572,997 |
27
Name and Principal Position |
Year | Salary | Bonus (1) |
Stock Awards (2) |
Option Awards (3) |
Non-Equity Incentive Plan Comp. (1)(4) |
Change
in Pension Value and Nonquald Deferred Comp. Earnings (5) |
All Other Compensation (6) |
Total ($) |
|||||||||||||||||||||||||||
Ward M. Klein |
2011 | $ | 991,667 | $ | 0 | $ | 3,651,834 | $ | 0 | $ | 450,000 | $ | 1,041,563 | $ | 378,112 | $ | 6,513,176 | |||||||||||||||||||
Chief Executive Officer | 2010 | $ | 893,750 | $ | 0 | $ | 3,768,093 | $ | 1,026,000 | $ | 1,800,000 | $ | 1,697,688 | $ | 179,594 | $ | 9,365,125 | |||||||||||||||||||
2009 | $ | 833,430 | $ | 0 | $ | 4,277,620 | $ | 0 | $ | 0 | $ | 3,397,574 | $ | 269,054 | $ | 8,777,678 | ||||||||||||||||||||
Daniel J. Sescleifer | 2011 | $ | 507,090 | $ | 0 | $ | 1,081,376 | $ | 0 | $ | 183,600 | $ | 106,226 | $ | 71,621 | $ | 1,949,913 | |||||||||||||||||||
Executive Vice President & Chief Financial Officer | 2010 | $ | 472,083 | $ | 0 | $ | 978,109 | $ | 675,000 | $ | 703,000 | $ | 155,265 | $ | 45,279 | $ | 3,028,736 | |||||||||||||||||||
2009 | $ | 446,300 | $ | 0 | $ | 1,270,821 | $ | 0 | $ | 0 | $ | 165,121 | $ | 21,016 | $ | 1,903,258 | ||||||||||||||||||||
Joseph W. McClanathan | 2011 | $ | 508,371 | $ | 0 | $ | 1,101,626 | $ | 0 | $ | 183,600 | $ | 317,207 | $ | 67,503 | $ | 2,178,307 | |||||||||||||||||||
President & CEO, Energizer Household Products |
2010 | $ | 488,767 | $ | 0 | $ | 938,618 | $ | 472,500 | $ | 784,000 | $ | 220,495 | $ | 30,984 | $ | 2,935,364 | |||||||||||||||||||
2009 | $ | 480,087 | $ | 0 | $ | 1,265,709 | $ | 0 | $ | 0 | $ | 617,763 | $ | 25,062 | $ | 2,388,621 | ||||||||||||||||||||
David P. Hatfield | 2011 | $ | 508,371 | $ | 0 | $ | 905,626 | $ | 0 | $ | 244,800 | $ | 185,561 | $ | 103,932 | $ | 1,948,290 | |||||||||||||||||||
President & CEO, Energizer Personal Care |
2010 | $ | 482,504 | $ | 0 | $ | 986,515 | $ | 810,000 | $ | 784,000 | $ | 148,462 | $ | 54,615 | $ | 3,266,096 | |||||||||||||||||||
2009 | $ | 404,919 | $ | 0 | $ | 1,237,409 | $ | 0 | $ | 0 | $ | 412,071 | $ | 136,692 | $ | 2,191,091 | ||||||||||||||||||||
Gayle G. Stratmann | 2011 | $ | 407,106 | $ | 0 | $ | 761,833 | $ | 0 | $ | 147,600 | $ | 116,545 | $ | 60,180 | $ | 1,493,264 | |||||||||||||||||||
Vice President and | 2010 | $ | 372,923 | $ | 0 | $ | 706,182 | $ | 506,250 | $ | 416,250 | $ | 135,859 | $ | 35,192 | $ | 2,172,656 | |||||||||||||||||||
General Counsel | 2009 | $ | 354,850 | $ | 0 | $ | 861,423 | $ | 0 | $ | 0 | $ | 197,981 | $ | 16,433 | $ | 1,430,687 |
28
29
30
Awards to the named executive officers, and to other key executives, were made in fiscal 2011 under three separate plans or programs:
| potential cash awards under our annual cash bonus program, dependent upon achievement of Company and individual performance measures established at the beginning of each fiscal year, as described in more detail in Compensation Discussion and AnalysisElements of CompensationIncentive ProgramsAnnual Cash Bonus Program; |
| three-year restricted stock equivalent awards under the terms of our 2009 incentive plan, which include a performance component and a time-vesting component, as described in more detail in Compensation Discussion and AnalysisElements of CompensationIncentive ProgramsEquity Awards; and |
| Company-matching deferrals (payable in cash at retirement) under our deferred compensation plan, as described in more detail in the narrative to the Non-qualified Deferred Compensation Table below. |
31
GRANTS OF PLAN-BASED AWARDS TABLE
Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards (#) |
|||||||||||||||||||||||||||||||||||||||||||
Name | Type of Award | Grant Date |
Date of Comp. Comm. Action(6) |
Threshold | Target | Maximum | Threshold | Target | Maximum | All Other Stock Awards: Number of Shares of Stock(#) |
All Other Option Awards: Number of Shares Underlying Options (#) |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards(7) |
|||||||||||||||||||||||||||||||
W.M. Klein |
Bonus: Annl.Co.Perf. | 11/1/10(1) | $ | 70,000 | $ | 700,000 | $ | 1,400,000 | ||||||||||||||||||||||||||||||||||||
Bonus: Annl.Ind.Perf. | 11/1/10(2) | $ | 225,000 | $ | 300,000 | $ | 600,000 | |||||||||||||||||||||||||||||||||||||
Perf.Awd.:3Yr.CAGR | 11/1/10(3) | 6,704 | 26,815 | 53,630 | $ | 1,966,344 | ||||||||||||||||||||||||||||||||||||||
Perf.Awd.: TimeVest | 11/1/10(4) | 22,985 | 1,685,490 | |||||||||||||||||||||||||||||||||||||||||
Company Match | 11/30/10(5) | 10/12/09 | 0 | $ | 0 | |||||||||||||||||||||||||||||||||||||||
D.J. Sescleifer |
Bonus: Annl.Co.Perf. | 11/1/10(1) | $ | 28,560 | $ | 285,600 | $ | 571,200 | ||||||||||||||||||||||||||||||||||||
Bonus: Annl.Ind.Perf. | 11/1/10(2) | $ | 91,800 | $ | 122,400 | $ | 244,800 | |||||||||||||||||||||||||||||||||||||
Perf.Awd.:3Yr.CAGR | 11/1/10(3) | 1,663 | 6,650 | 13,300 | $ | 487,645 | ||||||||||||||||||||||||||||||||||||||
Perf.Awd.: TimeVest | 11/1/10(4) | 5,700 | $ | 417,981 | ||||||||||||||||||||||||||||||||||||||||
Company Match | 11/30/10(5) | 10/12/09 | 2,502 | $ | 175,750 | |||||||||||||||||||||||||||||||||||||||
J.W.McClanathan |
Bonus: Annl.Co.Perf. | 11/1/10(1) | $ | 28,560 | $ | 285,600 | $ | 571,200 | ||||||||||||||||||||||||||||||||||||
Bonus: Annl.Ind.Perf. | 11/1/10(2) | $ | 91,800 | $ | 122,400 | $ | 244,800 | |||||||||||||||||||||||||||||||||||||
Perf.Awd.:3Yr.CAGR | 11/1/10(3) | 1,663 | 6,650 | 13,300 | $ | 487,645 | ||||||||||||||||||||||||||||||||||||||
Perf.Awd.: TimeVest | 11/1/10(4) | 5,700 | $ | 417,981 | ||||||||||||||||||||||||||||||||||||||||
Company Match | 11/30/10(5) | 10/12/09 | 2,790 | $ | 196,000 | |||||||||||||||||||||||||||||||||||||||
D.P.Hatfield |
Bonus: Annl.Co.Perf. | 11/1/10(1) | $ | 28,560 | $ | 285,600 | $ | 571,200 | ||||||||||||||||||||||||||||||||||||
Bonus: Annl.Ind.Perf. | 11/1/10(2) | $ | 91,800 | $ | 122,400 | $ | 244,800 | |||||||||||||||||||||||||||||||||||||
Perf.Awd.:3Yr.CAGR | 11/1/10(3) | 1,663 | 6,650 | 13,300 | $ | 487,645 | ||||||||||||||||||||||||||||||||||||||
Perf.Awd.: TimeVest | 11/1/10(4) | 5,700 | $ | 417,981 | ||||||||||||||||||||||||||||||||||||||||
Company Match | 11/30/10(5) | 10/12/09 | 0 | $ | 0 | |||||||||||||||||||||||||||||||||||||||
G.G. Stratmann |
Bonus: Annl.Co.Perf. | 11/1/10(1) | $ | 17,220 | $ | 172,200 | $ | 344,400 | ||||||||||||||||||||||||||||||||||||
Bonus: Annl.Ind.Perf. | 11/1/10(2) | $ | 55,350 | $ | 73,800 | $ | 147,600 | |||||||||||||||||||||||||||||||||||||
Perf.Awd.:3Yr.CAGR | 11/1/10(3) | 1,208 | 4,830 | 9,660 | $ | 354,184 | ||||||||||||||||||||||||||||||||||||||
Perf.Awd.: TimeVest | 11/1/10(4) | 4,140 | $ | 303,586 | ||||||||||||||||||||||||||||||||||||||||
Company Match | 11/30/10(5) | 10/12/09 | 1,481 | $ | 104,063 |
32
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
33
34
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number
of (#) |
Number
of (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Plan Awards: That Have Not Vested ($) |
||||||||||||||||||||||||
W. M. Klein |
100,000 | 0 | $ | 42.90 | 1/25/14 | 84,935 | (1) | $ | 5,643,081 | 178,130 | (6) | $ | 11,834,957 | |||||||||||||||||||
45,000 | 0 | $ | 49.18 | 1/13/15 | ||||||||||||||||||||||||||||
0 | 38,000 | $ | 65.63 | 10/11/19 | ||||||||||||||||||||||||||||
D. J. Sescleifer |
5,000 | 0 | $ | 46.13 | 10/18/14 | 31,556 | (2) | $ | 2,096,581 | 43,700 | (7) | $ | 2,903,428 | |||||||||||||||||||
0 | 25,000 | $ | 65.63 | 10/11/19 | ||||||||||||||||||||||||||||
J. W. McClanathan |
50,000 | 0 | $ | 42.90 | 1/25/14 | 31,853 | (3) | $ | 2,116,313 | 43,000 | (8) | $ | 2,856,920 | |||||||||||||||||||
20,000 | 0 | $ | 46.13 | 10/18/14 | ||||||||||||||||||||||||||||
0 | 17,500 | $ | 65.63 | 10/11/19 | ||||||||||||||||||||||||||||
D. P. Hatfield |
16,667 | 0 | $ | 30.10 | 9/22/12 | 25,874 | (4) | $ | 1,719,069 | 43,700 | (9) | $ | 2,903,428 | |||||||||||||||||||
15,000 | 0 | $ | 46.13 | 10/18/14 | ||||||||||||||||||||||||||||
0 | 30,000 | $ | 65.63 | 10/11/19 | ||||||||||||||||||||||||||||
G. G. Stratmann |
2,500 | 0 | $ | 46.13 | 10/18/14 | 23,880 | (5) | $ | 1,586,587 | 32,110 | (10) | $ | 2,133,388 | |||||||||||||||||||
0 | 18,750 | $ | 65.63 | 10/11/19 |
35
36
37
OPTION EXERCISES AND STOCK VESTED
Option Awards | Stock Awards | |||||||||||||||
Name |
Number of Shares (#) |
Value Realized on Exercise ($) |
Number of Shares (#)(1)(2)(3) |
Value Realized on ($) |
||||||||||||
W. M. Klein |
0 | $ | 0 | 14,000 | $ | 1,015,140 | ||||||||||
D. J. Sescleifer |
0 | $ | 0 | 3,500 | $ | 253,785 | ||||||||||
J. W. McClanathan |
0 | $ | 0 | 3,500 | $ | 253,785 | ||||||||||
D. P. Hatfield |
0 | $ | 0 | 3,500 | $ | 253,785 | ||||||||||
G.G. Stratmann |
0 | $ | 0 | 2,500 | $ | 181,275 |
38
39
PENSION BENEFITS TABLE
Name | Plan Name |
Number of (#)(1) |
Present Value ($)(2) |
Payments During Last ($) |
||||||||||
W.M. Klein |
Energizer Retirement Plan | 32 | $ | 1,198,603 | $ | 0 | ||||||||
Supplemental Executive Retirement Plan | 31 | $ | 9,185,674 | $ | 0 | |||||||||
D.J. Sescleifer |
Energizer Retirement Plan | 11 | $ | 354,861 | $ | 0 | ||||||||
Supplemental Executive Retirement Plan | 10 | $ | 571,068 | $ | 0 | |||||||||
J.W. McClanathan |
Energizer Retirement Plan | 37 | $ | 967,571 | $ | 0 | ||||||||
Supplemental Executive Retirement Plan | 36 | $ | 4,169,515 | $ | 0 | |||||||||
D.P. Hatfield |
Energizer Retirement Plan | 26 | $ | 678,603 | $ | 0 | ||||||||
Supplemental Executive Retirement Plan | 25 | $ | 1,559,124 | $ | 0 | |||||||||
G.G. Stratmann |
Energizer Retirement Plan | 21 | $ | 511,588 | $ | 0 | ||||||||
Supplemental Executive Retirement Plan | 20 | $ | 871,691 | $ | 0 |
NON-QUALIFIED DEFERRED COMPENSATION
40
41
NON-QUALIFIED DEFERRED COMPENSATION TABLE
Name | Plan |
Executive ($)(1) |
Registrant ($)(2) |
Aggregate Last FY ($)(3) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Last FYE |
||||||||||||||||
W. M. Klein |
Defd Comp. Plan |
$ | 0 | $ | 0 | $ | (182,347 | ) | $ | 19,354 | $ | 14,014,854 | ||||||||||
Exec. S.I.P. |
$ | 151,000 | $ | 78,463 | $ | (69,436 | ) | $ | 0 | $ | 1,863,183 | |||||||||||
Vested Stock Equivs.(4) |
$ | 1,015,140 | $ | 0 | $ | (136,989 | ) | $ | 0 | $ | 5,304,171 | |||||||||||
Total | $ | 1,166,140 | $ | 78,463 | $ | (388,772 | ) | $ | 19,354 | $ | 21,182,208 | |||||||||||
D.J. Sescleifer |
Defd Comp. Plan |
$ | 703,000 | $ | 175,750 | $ | 69,386 | $ | 16,334 | $ | 5,068,214 | |||||||||||
Exec. S.I.P. |
$ | 25,401 | $ | 12,700 | $ | (60,879 | ) | $ | 0 | $ | 1,192,520 | |||||||||||
Vested Stock Equivs.(4) |
$ | 253,785 | $ | 0 | $ | (35,729 | ) | $ | 0 | $ | 1,450,651 | |||||||||||
Total | $ | 982,186 | $ | 188,450 | $ | (27,222 | ) | $ | 16,334 | $ | 7,711,385 | |||||||||||
J. W. McClanathan |
Defd Comp. Plan |
$ | 784,000 | $ | 196,000 | $ | (334,702 | ) | $ | 21,302 | $ | 9,781,298 | ||||||||||
Exec. S.I.P. |
$ | 26,586 | $ | 10,651 | $ | (30,041 | ) | $ | 0 | $ | 1,305,091 | |||||||||||
Vested Stock Equivs.(4) |
$ | 253,785 | $ | 0 | $ | (55,479 | ) | $ | 0 | $ | 3,111,651 | |||||||||||
Total | $ | 1,064,371 | $ | 206,651 | $ | (420,222 | ) | $ | 21,302 | $ | 14,198,040 | |||||||||||
D. P. Hatfield |
Defd Comp. Plan |
$ | 0 | $ | 0 | $ | (281,329 | ) | $ | 1,594 | $ | 5,119,561 | ||||||||||
Exec. S.I.P. |
$ | 61,042 | $ | 35,242 | $ | (18,459 | ) | $ | 0 | $ | 353,904 | |||||||||||
Vested Stock Equivs.(4) |
$ | 253,785 | $ | 0 | $ | (30,201 | ) | $ | 0 | $ | 985,771 | |||||||||||
Total | $ | 314,827 | $ | 35,242 | $ | (329,989 | ) | $ | 1,594 | $ | 6,459,236 | |||||||||||
G. G. Stratmann |
Defd Comp. Plan |
$ | 416,250 | $ | 104,063 | $ | 121,931 | $ | 10,219 | $ | 3,620,548 | |||||||||||
Exec. S.I.P. |
$ | 83,368 | $ | 12,266 | $ | (6,587 | ) | $ | 0 | $ | 765,432 | |||||||||||
Vested Stock Equivs.(4) |
$ | 181,275 | $ | 0 | $ | (31,771 | ) | $ | 0 | $ | 1,561,872 | |||||||||||
Total | $ | 680,893 | $ | 116,329 | $ | 83,573 | $ | 10,219 | $ | 5,947,852 |
42
43
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have not entered into general employment agreements with any of our named executive officers, nor do we have executive severance plans or programs. However, equity awards under our 2000 and 2009 incentive stock plans and our deferred compensation plan provide for acceleration of vesting of certain awards in the event of certain terminations of employment. In addition, we have entered into change of control employment agreements with our named executive officers and certain of our other key employees which provide for severance compensation, acceleration of vesting, tax reimbursement and continuation of benefits upon certain qualified termination of employment following a change of control.
The information below reflects the value of acceleration or incremental compensation which each officer would receive upon the termination of his or her employment or upon a change in control. Because the value of awards and incremental compensation depend on several factors, actual amounts can only be determined at the time of the event.
The information is based on the following assumptions:
| the event of termination (death, permanent disability, involuntary termination without cause, or voluntary termination), or a change of control of the Company, occurred on September 30, 2011, the last day of our fiscal year; |
| the market value of our common stock on that date was $66.44 (the actual closing price on September 30, 2011); |
| each of the officers were terminated on that date, and |
| corporate and individual federal tax rates were 35%, Missouri state tax rate was 6%, Connecticut state tax rate (for Mr. Hatfield) was 6.7%, and FICA was 1.45%. |
The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried employees-such as amounts accrued under our savings investment plan, accumulated and vested benefits under our retirement plans (including our pension restoration plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay.
The information below also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, or vested stock equivalents that would be issued, all as described in the Non-qualified Deferred Compensation Table, except to the extent that an officer is entitled to an accelerated benefit as a result of the termination.
Death, Disability or Termination of Employment (Other Than Upon a Change of Control)
Upon an officers death, permanent disability, involuntary termination other than for cause (defined as termination for gross misconduct), and, in some cases, retirement, the following plans or programs provide for acceleration of awards. No awards are accelerated for voluntary termination of employment before attainment of age 55, or for involuntary termination for cause, except as noted.
Involuntary Termination |
Death | Disability | Retirement After Age 55 | |||||
Restricted stock equivalent award granted 5/19/03 |
Accelerated | Accelerated | Accelerated | Accelerated | ||||
Three-year performance awards granted 10/13/08, 10/12/09 and 11/1/10. |
Forfeited | Accelerated | Accelerated | Forfeited | ||||
Unvested 25% Company match |
Accelerated | Accelerated | Accelerated | Accelerated |
44
Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five or ten year period, commencing six months from the date of termination.
In the event an officers employment is terminated due to permanent disability, he or she may also be entitled to benefits under our executive long-term disability plan, which pays a supplemental benefit equal to 60% of the amount by which the officers previous years salary and bonus exceeded $150,000. (Amounts below that figure are covered by our long-term disability plan, available generally to salaried U.S. employees.) As noted in the Summary Compensation Table, the Company pays the premiums for $40,000 of term life insurance for all U.S. employees, including the named executive officers.
Upon retirement or death, the officer, or his or her surviving spouse, may also be entitled to continued coverage under our executive health plan, which generally covers medical/dental/vision expenses and deductibles and co-pays not otherwise covered by our underlying medical insurance plan. However, in order to qualify for continued coverage under the executive health plan, the covered person must pay for retiree coverage under our underlying medical and dental insurance plans. Because the cost of such retiree coverage under our medical insurance plan is generally significantly higher than other available medical plans, and none of our current officers are entitled to any subsidy from us for that coverage (as some grandfathered retirees are), it is not ascertainable whether any of the officers will elect to obtain retiree coverage from our plan and qualify for additional coverage under our executive health plan.
The value of awards which would be accelerated for our named executive officers upon death, disability, involuntary termination of employment or retirement as of September 30, 2011 is shown in the following chart. The value of accelerated restricted stock equivalents (both performance- and time-based) and 25% Company match for deferred annual bonus amounts reflects a stock price of $66.44. Stock market changes since September 30, 2011 are not reflected in these valuations.
Accelerated Awards | ||||||||||||||||
Officer Termination Events |
Stock Options |
Restricted Stock Equivalents, |
Unvested 25% Company Match |
Total | ||||||||||||
W. M. Klein: 1 |
$ | 0 | $ | 16,960,914 | $ | 504,448 | $ | 17,465,362 | ||||||||
W. M. Klein: 2 |
$ | 0 | $ | 442,933 | $ | 504,448 | $ | 947,381 | ||||||||
W.M. Klein: 3 |
$ | 0 | $ | 442,933 | $ | 504,448 | $ | 947,381 | ||||||||
D. J. Sescleifer: 1 |
$ | 0 | $ | 4,495,773 | $ | 504,253 | $ | 5,000,026 | ||||||||
D. J. Sescleifer: 2 |
$ | 0 | $ | 442,933 | $ | 504,253 | $ | 947,186 | ||||||||
J. W. McClanathan: 1 |
$ | 0 | $ | 4,429,333 | $ | 531,776 | $ | 4,961,109 | ||||||||
J. W. McClanathan: 2 |
$ | 0 | $ | 442,933 | $ | 531,776 | $ | 974,709 | ||||||||
J. W. McClanathan: 3 |
$ | 0 | $ | 442,933 | $ | 531,776 | $ | 974,709 | ||||||||
D. P. Hatfield: 1 |
$ | 0 | $ | 4,274,307 | $ | 348,157 | $ | 4,622,464 | ||||||||
D. P. Hatfield: 2 |
$ | 0 | $ | 221,467 | $ | 348,157 | $ | 569,624 | ||||||||
G. G. Stratmann: 1 |
$ | 0 | $ | 3,419,445 | $ | 300,568 | $ | 3,720,013 | ||||||||
G. G. Stratmann: 2 |
$ | 0 | $ | 442,933 | $ | 300,568 | $ | 743,501 | ||||||||
G.G. Stratmann: 3 |
$ | 0 | $ | 442,933 | $ | 300,568 | $ | 743,501 |
Termination Events:
1Death or permanent disability;
2Involuntary termination of employment other than for cause;
3Retirement following attainment of age 55 (Mr. Klein, Mr. McClanathan, and Ms. Stratmann had attained age 55 as of September 30, 2011).
45
Change of Control of the Company
Our change of control employment agreements with each of the named executive officers have a term of three years from their effective date (which term is automatically extended every year beginning the first year for an additional year unless our nominating and executive compensation committee elects to terminate an agreement at least 90 days prior to renewal). Each of these agreements provides that the officer will receive severance compensation in the event of his or her involuntary termination (including voluntary termination for good reason), other than for cause, within three years following a change in control of the Company.
Termination for cause means a termination for willful breach of, or failure to perform, employment duties.
Good reason means, among other things, certain changes in the officers status or duties, failure to pay certain compensation or awards or benefits, relocation of his or her office, or improper termination.
Change of control includes, among other things, acquisition of specified amounts of shares by any person, certain changes in the composition of our incumbent board of directors, approval of business combinations under certain circumstances, or other matters approved by our board.
Under the agreements, upon a change of control, each officer, even if not terminated, will receive a pro rata annual bonus (equal to the greater of either target bonus for the year in which the change of control occurred, or the actual bonus for the preceding year) for the portion of the year occurring prior to a change of control.
The agreements also provide that upon a change of control, outstanding equity awards held by each officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a change of control. (Our equity awards generally define a change of control as an acquisition of 50% or more of the outstanding shares of our common stock.) The terms of our outstanding equity awards vary as to the portion of the unvested award that will accelerate and vest upon a change of control, as indicated below:
Restricted stock equivalent award granted 5/19/03 | All unvested equivalents vest | |
Three-year equity awards which include performance awards granted 10/13/08 | 25% of the equivalents vest in total. With respect to the remaining equivalents, if the change of control occurs within 18 months from grant, vesting will be at target, and if it occurs more than 18 months from grant, vesting will be at the greater of target or actual performance. | |
Three-year performance awards granted 10/12/09 and 11/1/10 | 50% of the equivalents vest in total. With respect to the remaining equivalents, if the change of control occurs within 18 months from grant, vesting will be at target, and if it occurs more than 18 months from grant, vesting will be at the greater of target or actual performance. | |
Three-year time based awards granted 10/12/09 and 11/1/10 | 100% vest upon change of control |
If the officer is terminated within 36 months of the change of control, the severance compensation payable under the agreements consists of:
| a lump sum payment in an amount equal to three times the officers annual base salary and target bonus (defined as the most recent five-year actual bonus percentages multiplied by the greater of base salary at either termination or change of control); |
| a pro rata portion of the officers target annual bonus for the year of termination; |
| the difference between the officers actual benefits under our retirement plans at the time of termination and what the officer would have received if he or she had remained employed for an additional period of three years; and |
| the continuation of other executive health, dental and welfare benefits for a period of three years following the officers termination. |
46
No severance payments under the agreements would be made in the event that an officers termination is voluntary (other than for good reason), is due to death, disability or normal retirement, or is for cause. For a period of three years following termination of employment, the officers are each bound by a covenant not to compete, a non-solicitation covenant, and a covenant of confidentiality.
In the event that it is determined that a golden parachute excise tax is due under the IRC, we will, if total benefits payable to the officer are within 10% of the threshold for benefits at which the excise tax is triggered, reduce benefits to the point at which the tax will no longer be due, or, if total benefits are in excess of 10% of the threshold, reimburse the officer for the amount of such tax, including any excise or income taxes associated with such reimbursement.
Payments of cash would be made in a lump sum no sooner than six months following termination of employment, and benefits would be provided for a three-year period following termination, or if such continuation of benefits would not be possible under our benefit programs, the value of such benefits would also be paid in lump sum no sooner than six months following termination.
Estimated Payments and Benefits
Based on the assumptions set out above, the following chart sets forth estimated payments to our named executive officers upon termination following a change of control. If a change of control occurs but their employment is not terminated, the agreements provide a more limited value, as shown in the second chart below. The value of accelerated restricted stock equivalents, performance awards and 25% Company match reflects a stock price of $66.44 (the closing price of our common stock on September 30, 2011). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 2011 are not reflected in these valuations.
Accelerated or Additional BenefitsTermination following Change of Control | ||||||||||||||||||||||||||||
Cash Severance |
Retirement Benefits |
25% Company Match |
Restricted Stock Equivs., Three-Year Performance Awards |
Benefits | Excise Tax Gross-Up/ Reduction |
Total | ||||||||||||||||||||||
W. M. Klein |
$ | 7,089,189 | $ | 2,822,025 | $ | 504,448 | $ | 10,329,189 | $ | 101,786 | $ | 6,101,094 | $ | 26,947,731 | ||||||||||||||
D. J. Sescleifer |
$ | 3,159,851 | $ | 291,135 | $ | 504,253 | $ | 2,877,959 | $ | 101,786 | $ | 0 | $ | 6,934,984 | ||||||||||||||
J. W. McClanathan |
$ | 3,153,070 | $ | 903,065 | $ | 531,776 | $ | 2,834,773 | $ | 101,786 | $ | 1,971,324 | $ | 9,495,794 | ||||||||||||||
D. P. Hatfield |
$ | 3,186,233 | $ | 501,359 | $ | 348,157 | $ | 2,656,493 | $ | 101,786 | $ | 2,281,700 | $ | 9,075,728 | ||||||||||||||
G. G. Stratmann |
$ | 2,166,544 | $ | 334,125 | $ | 300,568 | $ | 2,228,176 | $ | 101,786 | $ | 1,322,432 | $ | 6,453,631 |
For purposes of the calculation of the excise tax gross-up in these charts, the ascribed value of accelerated vesting is based on three assumptions:
| Lapse-of-further-service portion is equal to the gain at the change of control date multiplied by 1% for each full month vesting is accelerated; |
| Early receipt portion is equal to the difference between the gain at normal vesting and the present value of the gain at the time vesting is accelerated (present value based on 120% of the IRS Applicable Federal Rates, compounded semi-annually: 0.31% for short-term and 1.94% for mid-term, using September, 2011 rates; and |
47
| Performance restricted stock equivalents, under which vesting is contingent upon achievement of certain performance goals and continued employment, have been valued assuming a 100% parachute value for the portions of awards that will vest. |
Accelerated Awards Upon a Change of Control (No Termination of Employment) |
||||||||||
Restricted Stock Equivalents, Three-Year Performance Awards |
Excise Tax Gross-Up |
Total | ||||||||
W. M. Klein |
$ | 10,329,189 | $0 | $ | 10,329,189 | |||||
D. J. Sescleifer |
$ | 2,877,959 | $0 | $ | 2,877,959 | |||||
J. W. McClanathan |
$ | 2,834,773 | $0 | $ | 2,834,773 | |||||
D. P. Hatfield |
$ | 2,656,493 | $0 | $ | 2,656,493 | |||||
G. G. Stratmann |
$ | 2,228,176 | $0 | $ | 2,228,176 |
ITEM 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required by Section 14A of the Exchange Act, we are asking our shareholders to provide advisory approval of the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC. While this vote is a non-binding advisory vote, our board and compensation committee are interested in the opinions expressed by our shareholders and will consider the outcome of the vote on this proposal when making future compensation decisions for our named executive officers. We encourage shareholders to review the Compensation Discussion and Analysis for details regarding our executive compensation programs.
We believe that our executive compensation program was designed appropriately and is working to ensure managements interests are aligned with our shareholders interests. The Companys compensation programs are designed to enable and reinforce its overall business strategy by aligning pay with achievement of short and long term financial and strategic objectives, while providing a competitive level of compensation which is needed to recruit, retain and motivate talented executives critical to the Companys success.
The Company is asking its shareholders to support the compensation of the named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices. The Board believes the Companys overall compensation process effectively implements its compensation philosophy and achieves its goals. Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:
RESOLVED, that the shareholders of Energizer approve, on an advisory basis, the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the accompanying footnotes and narratives.
The Board of Directors recommends a vote FOR the approval of our executive compensation.
ITEM 4. ADVISORY VOTE DETERMINING THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
In addition to the advisory approval of our executive compensation and as required by Section 14A of the Exchange Act, we are also seeking a non-binding determination from our shareholders as to the frequency with which shareholders will have an opportunity to provide an advisory vote on our executive compensation. Shareholders may indicate whether they would prefer future advisory votes on executive compensation once every one, two, or three years. Shareholders also may, if they wish, abstain from casting a vote on this proposal.
48
The board of directors has determined that an annual advisory vote on executive compensation is the best approach for Energizer at this time, because it allows Energizers shareholders to provide input on Energizers executive compensation programs for its named executive officers on a regular basis. The annual advisory vote on executive compensation is also consistent with Energizers policy of seeking input from, and engaging in discussions with, its shareholders on executive compensation and corporate governance matters.
We therefore request that our shareholders select One Year when voting on the frequency of advisory votes on executive compensation. Although the vote is advisory and non-binding on us, our board will review the results of the vote and take them into account in making a determination concerning the frequency of advisory votes on executive compensation. We recognize that our shareholders may have different views as to the best approach for the Company, and therefore we look forward to hearing from our shareholders as to their preferences on the frequency of an advisory vote on executive compensation. Nevertheless, our board may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders.
The proxy card provides shareholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove the recommendation of our board.
The Board of Directors recommends that shareholders select ONE YEAR on the proposal recommending the frequency of advisory votes on executive compensation.
Five Percent Owners of Common Stock. The table below lists the persons known by the Company to beneficially own at least 5% of the Companys common stock as of November 1, 2011.
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
% of Shares Outstanding |
||||||
Lazard Asset Management, LLC |
||||||||
30 Rockefeller Plaza, 59th Floor |
||||||||
New York, NY 10112 |
3,775,714 | (A) | 5.64 | % |
(A) | Based upon information set forth in a Schedule 13F filed by Lazard Asset Management, LLC on November 9, 2011 for the quarter ended September 30, 2011. |
49
Ownership of Directors and Executive Officers. The table below contains information regarding beneficial common stock ownership of directors and executive officers as of November 1, 2011. It does not reflect any changes in ownership that may have occurred after that date. In general, beneficial ownership includes those shares a director or executive officer has the power to vote or transfer, as well as shares owned by immediate family members that reside with the director or officer. Unless otherwise indicated, directors and executive officers named in the table below have sole voting and investment power with respect to the shares set forth in the table and none of the stock included in the table is pledged. The table also indicates shares that may be obtained within 60 days upon the exercise of options, or upon the conversion of vested stock equivalents into shares of common stock.
Directors And Executive Officers |
Shares Beneficially |
Shares held in Savings Investment Plan (A) |
Options 60 Days |
% of Shares (*denotes | ||||||||||
Bill G. Armstrong |
1,000 | 0 | 10,000 | * | ||||||||||
R. David Hoover |
25,000(D) | 0 | 0 | * | ||||||||||
John C. Hunter |
0 | 0 | 10,000 | * | ||||||||||
John E. Klein |
14,399(D) | 0 | 0 | * | ||||||||||
W. Patrick McGinnis |
12,143 | 0 | 10,000 | * | ||||||||||
J. Patrick Mulcahy |
669,431(C) | 0 | 0 | * | ||||||||||
Pamela M. Nicholson |
23,173(D) | 0 | 6,700 | * | ||||||||||
John R. Roberts |
20,000(D) | 0 | 2,000 | * | ||||||||||
Ward M. Klein |
158,282(D) | 5,226 | 145,000 | * | ||||||||||
David P. Hatfield |
19,837(D) | 109 | 31,667 | * | ||||||||||
Joseph W. McClanathan |
60,987(D) | 0 | 70,000 | * | ||||||||||
Daniel J. Sescleifer |
32,551(D) | 0 | 5,000 | * | ||||||||||
Gayle G. Stratmann |
37,210(D) | 3,549 | 2,500 | * | ||||||||||
All Executive Officers and Directors as
a Group |
1,086,013(D) | 8,884 | 292,867 | 2.05% |
50
51
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OTHER BUSINESS
The board knows of no business which will be presented at the 2012 Annual Meeting other than that described above. Our bylaws provide that shareholders may nominate candidates for directors or present a proposal or bring other business before an annual meeting only if they give timely written notice of the nomination or the matter to be brought not less than 90 nor more than 120 days prior to the first anniversary of the prior years meeting.
52
AUDIT COMMITTEE REPORT
John R. RobertsChairman |
Bill G. Armstrong | |
Pamela M. Nicholson |
John E. Klein |
No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.
53
DELIVERY OF DOCUMENTS
Householding of Annual Meeting Materials. The SEC has approved a rule permitting the delivery of a single set of annual reports and proxy statements to any household at which two or more shareholders reside, if the shareholders consent. Each shareholder will continue to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information you receive, as well as our expenses. In order to take advantage of this opportunity, we have delivered only one copy of this proxy statement and related annual report to multiple shareholders who share an address, unless we received contrary instructions from the impacted shareholders prior to the mailing date. If you prefer to receive separate copies of our proxy statement or annual report, either now or in the future, we will promptly deliver, upon your written or oral request, a separate copy of the proxy statement or annual report, as requested, to any shareholder at your address to which a single copy was delivered. Notice should be given to the Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis, Missouri 63141 (Tel. No. (314) 985-2176).
Electronic Delivery. For next years Annual Meeting of Shareholders, you can help us save significant printing and mailing expenses by consenting to access the proxy statement and annual report electronically over the Internet. If you choose to vote over the Internet, you can indicate your consent to electronic access to these documents by following the instructions at the Internet voting website noted on the enclosed proxy card. If you do not choose to vote over the Internet, or if you are not given the opportunity to consent to electronic access over the Internet, but would still like to consent, you may contact the Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis, Missouri 63141 (Tel. No. (314) 985-2176). If you choose to receive the proxy statement and annual report electronically, then prior to next years annual meeting you will receive e-mail notification when the proxy statement and annual report are available for on-line review over the Internet. Your choice for electronic distribution will remain in effect indefinitely, unless you revoke your choice by sending written notice of revocation to the address noted above. However, if the e-mail notification is returned as undeliverable, a hard copy of the proxy materials and annual report will be mailed to your last known address.
54
SHAREHOLDER PROPOSALS FOR 2013 ANNUAL MEETING
Any proposals to be presented at the 2013 Annual Meeting of Shareholders, which is expected to be held on January 28, 2013, must be received by the Company, directed to the attention of the Secretary, no later than August 11, 2012 in order to be included in the Companys proxy statement and form of proxy for that meeting. Upon receipt of any proposal, the Company will determine whether or not to include the proposal in the proxy statement and proxy in accordance with regulations governing the solicitation of proxies. The proposal must comply in all respects with the rules and regulations of the SEC and our bylaws.
In order for a shareholder to nominate a candidate for director under our bylaws, timely notice of the nomination must be received by us in advance of the meeting. Ordinarily, such notice must be received not less than 90, nor more than 120, days before the first anniversary of the prior years meeting. For the 2013 Annual Meeting, the notice would have to be received between October 2, 2012 and November 1, 2012. However, in the event that (i) no annual meeting is held in 2012 or (ii) the date of the 2013 Annual Meeting is more than 30 days before or more than 60 days after the first anniversary of the 2012 Annual Meeting, notice must be received not earlier than the 120th day prior to the date of the 2013 Annual Meeting and not later than the close of business on the later of the 90th day prior to the date of 2013 Annual Meeting or the seventh day following the day on which notice of the date of the meeting was mailed or on which public notice of the meeting was given. The notice of nomination must include, as to each person whom the shareholder proposes to nominate for election:
| the nominees name, age, business and residential address; |
| the nominees principal occupation for the previous 5 years; |
| the nominees consent to being named as a nominee and to serving on the board; |
| the nominees disclosable interests as of the date of the notice (which information shall be supplemented by such person, if any, not later than 10 days after the record date of the annual meeting to disclose such ownership as of the record date), which includes: |
¡ | shares of common stock; options, warrants, convertible securities, stock appreciation rights, or similar rights with respect to our common stock; any proxy, contract, arrangement, understanding, or relationship conveying a right to vote common stock; |
¡ | any short interest with respect to common stock; |
¡ | any derivative instruments held by a partnership in which the nominee has a partnership interest; and |
¡ | rights to any performance-related fee based on any increase or decrease in the value of common stock or any related derivative instrument; and |
| a description of all monetary or other material agreements, arrangements or understandings between the nominating shareholder and the nominee during the prior three years. |
In addition, the nominating shareholder must provide their name and address and disclosable interests (as such term is described above). The shareholder must be present at the Annual Meeting of Shareholders at which the nomination is to be considered, and must provide a completed questionnaire regarding the nominees background and qualification and compliance with our corporate governance, conflict of interest, and other pertinent policies and guidelines. To assist in the evaluation of shareholder-recommended candidates, the Nominating and Executive Compensation Committee may request that the shareholder provide certain additional information required to be disclosed in the Companys proxy statement under Regulation 14A of the Exchange Act. The shareholder nominating the candidate must also include his or her name and address, and the number of shares of common stock beneficially owned.
In order for a shareholder to bring other business before a shareholder meeting, timely notice must be received by the Company prior to the time described in the preceding paragraph. Such notice must include a description of the proposed business and the reasons for the proposal, the name and address of the shareholder making the proposal, any financial or other interests of the shareholder in the proposal made, and the shareholders disclosable interests. These requirements are separate from the requirements a shareholder must meet to have a proposal included in the Companys proxy statement.
55
In each case, the notice must be given to the Secretary of the Company, whose address is 533 Maryville University Drive, St. Louis, Missouri 63141. A copy of our bylaws will be provided without charge upon written request to the Secretary.
By order of the Board of Directors, |
Mark S. LaVigne Secretary |
December 9, 2011
56
7718 Energizer CST_02 12/6/11 4:36 PM Page 1
VOTE BY INTERNET OR TELEPHONE QUICK *** EASY *** IMMEDIATE |
Energizer Holdings, Inc.
Voting by telephone or Internet is quick, easy and immediate. As a stockholder of Energizer Holdings, Inc., you have the option of voting your shares electronically through the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern Standard Time, on January 29, 2012.
Vote Your Proxy on the Internet:
Go to www.energizerholdings.com
Have your proxy card available when you access the above website. Select ENR Shareholder Proxy Voting. Follow the prompts to vote your shares.
Vote Your Proxy by Phone:
Call 1 (866) 894-0537
Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE
VOTING ELECTRONICALLY OR BY PHONE
Vote Your Proxy by Mail:
Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided.
q FOLD AND DETACH HERE AND READ THE REVERSE SIDE q
PROXY
Signature Signature Date
Please sign exactly as your name(s) appear(s) hereon. When signing as Attorney, Executor, Trustee, Guardian, or Officer of a Corporation, please give title as such. For joint accounts, all named holders should sign. If you receive more than one proxy card, please sign all cards and return in the accompanying postage-paid envelopes.
7718 Energizer CST_02 12/6/11 4:36 PM Page 2
2012 ANNUAL MEETING ADMISSION TICKET
ENERGIZER HOLDINGS, INC.
2012 ANNUAL MEETING OF SHAREHOLDERS
January 30, 2012
3:00 p.m. local time
Energizer World Headquarters
533 Maryville University Drive
St. Louis, Missouri 63141
Please present this ticket for admittance to the Annual Meeting.
q FOLD AND DETACH HERE AND READ THE REVERSE SIDE q
ENERGIZER HOLDINGS, INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Shareholders on January 30, 2012
P
R
O
X
Y |
This proxy when properly executed will be voted in the manner directed herein by the undersigned Shareholder. If no direction is made, this Proxy will be voted FOR all nominees in Item 1, FOR Items 2, and 3 and for ONE YEAR in Item 4 and in the discretion of the proxies, on any other business that may properly come before the meeting. The undersigned hereby appoints W.M. Klein and G.G. Stratmann, or either of them, as true and lawful attorneys-in-fact, agents and proxies, with the power of substitution and revocation, to represent and to vote, as designated below, all the shares of the undersigned held of record on December 1, 2011, at the Annual Meeting of Shareholders to be held on January 30, 2012 and any adjournments or postponement thereof. | |
(Important To be signed and dated on reverse side)
| ||
This proxy covers all Energizer Holdings, Inc. Common Stock you own in any of the following ways (provided the registrations are identical):
| ||
Shares held of record | ||
Energizer Holdings, Inc. Savings Investment Plan |
December 9, 2011
Dear Savings Investment Plan Participant:
Enclosed are a proxy statement, a proxy and an Annual Report for the Annual Meeting of Shareholders of Energizer Holdings, Inc. to be held on January 30, 2012. The enclosed proxy relates to shares of Energizer Common Stock of which you are the record holder and to shares of Energizer Common Stock credited to your account in the Energizer Holdings, Inc. Savings Investment Plan (the Plan).
The Trustee of the Plan will vote all shares of Energizer Common Stock held in the Plan as of December 1, 2011. Shares credited to your account as of November 23, 2011 will be voted in accordance with your instructions on the enclosed proxy card. Any credited shares for which no instructions are received by the Trustee, and any shares in the Plan that were credited between November 24, 2011 and December 1, 2011, will be voted by the Trustee in the same proportion as the shares for which instructions were received from all participants in that Plan.
Please complete, sign and date the enclosed proxy. It should be returned, in the postage-paid envelope provided, to Continental Stock Transfer & Trust Company, which acts as tabulator. Alternatively, you may vote by telephone or via Internet. However you decide to vote, in order to provide the tabulator sufficient time to tabulate the votes, it has been requested that all proxies be returned, or votes be cast, as promptly as possible, but no later than 7:00 p.m., Eastern Standard Time, on January 29, 2012.
You may also have received additional proxy statements and proxies relating to other shares of Energizer Common Stock held by you. These proxies are not duplicates of the one enclosed and we ask that they also be voted as described in the instructions enclosed with them.
WARD M. KLEIN
Chief Executive Officer
Dear Shareholder:
Thank you for consenting to receive your shareholder materials via the Internet. This letter provides you the information you will need to view Energizer Holdings, Inc. Annual Meeting materials online, vote your shares online and print a copy of the materials.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2012 Annual Meeting of Shareholders of Energizer Holdings, Inc. will be held at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri on January 30, 2012 at 3:00 p.m., local time, for the following purposes:
| To elect three directors to serve three-year terms ending at the Annual Meeting held in 2015, or until their respective successors are elected and qualified; |
| To ratify the appointment of PricewaterhouseCoopers LLP as independent auditor; |
| To render a non-binding advisory vote on executive compensation; and |
| To render a non-binding advisory vote on the frequency of advisory votes on executive compensation. |
Shareholders of record at the close of business on December 1, 2011, are entitled to notice of and to vote at the Annual Meeting.
Holders of a majority of the outstanding shares entitled to vote at the meeting must be present in person or by proxy in order for the meeting to be held. Therefore, whether or not you expect to attend the meeting in person, you are urged to vote your proxy either electronically via the Internet or by telephone at 1-866-894-0537. If you attend the meeting and wish to vote your shares personally, you may do so by revoking your proxy at any time prior to the voting thereof. In addition, you may revoke your proxy at any time before it is voted by written notice of revocation to the Secretary of the Company or by submitting a later-dated proxy.
VIEW ANNUAL MEETING MATERIALS
To view the 2011 Annual Report and Proxy Statement, please go to the website www.energizerholdings.com and click on Investors. You will then see two direct links - one for the 2011 Proxy Statement and one for the 2011 Annual Report.
VOTE YOUR PROXY
To vote your proxy over the Internet, please go to the website www.energizerholdings.com and click on ENR Shareholder Proxy Voting.
To access and vote your proxy card via the Internet or by phone, you will need to enter the following information exactly as it appears:
Company Number: $CompanyNumber
Proxy Number: $ProxyNumb
Account Number: $AccountNbr
Thank you again for participating in Energizer Holdings, Inc. electronic distribution program.
You may request a paper copy of these materials or revoke your consent to receive shareholder materials electronically by contacting the Secretary of the Company.