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 þ
Filed
by a Party
other than the Registrant o
Check
the
appropriate box:
o Preliminary
Proxy
Statement
o Confidential,
for use of the Commission Only
(as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy
Statement
o Definitive
Additional Materials
o Soliciting
Materials Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
ENERGIZER
HOLDINGS, INC.
—————————————————————————
(Exact
Name of
Registrant as Specified in its Charter)
Payment
of Filing
Fee (Check the appropriate box)
þ No
fee
required.
o Fee
computed on
table below per Exchange Act Rules 14a-6(i)(l) 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:
|
o Fee
paid previously
with preliminary materials.
o 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 2:30 p.m. on Monday, January 22, 2007 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 Admittance 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 your voting
as
soon as possible.
We
look forward to seeing you at the Annual Meeting!
WARD
M.
KLEIN
Chief
Executive
Officer
December
5,
2006
ENERGIZER
HOLDINGS, INC.
533
Maryville University Drive
St.
Louis,
Missouri 63141
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
To
the Shareholders:
The
Annual Meeting
of Shareholders of Energizer Holdings, Inc. will be held at 2:30 p.m. on
Monday,
January 22, 2007, at Energizer World Headquarters, 533 Maryville University
Drive, St. Louis, Missouri 63141.
The
purpose of the
meeting is to elect four directors to serve three-year terms ending at the
Annual Meeting held in 2010, or until their respective successors are elected
and qualified, 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 November 17, 2006. It is important that your
shares be represented and voted at the Meeting. Please vote in one of these
ways:
| · |
USE
THE
TOLL-FREE TELEPHONE NUMBER shown on the proxy
card;
|
| · |
VISIT
THE WEB
SITE noted on the enclosed proxy card to vote via the Internet;
OR
|
| · |
MARK,
SIGN,
DATE AND PROMPTLY RETURN the enclosed proxy card in the postage-paid
envelope.
|
By
Order of the
Board of Directors,
Timothy
L.
Grosch
Secretary
December
5,
2006
PROXY
STATEMENT ------- VOTING PROCEDURES
YOUR
VOTE
IS VERY IMPORTANT
The
Board
of Directors is soliciting proxies to be used at the 2007 Annual
Meeting.
This proxy
statement and the form of proxy will be mailed to shareholders beginning
December 5, 2006.
Who
Can
Vote
Record
holders of
Energizer Holdings, Inc. Common Stock on November 17, 2006 may vote at the
meeting. On November 17, 2006, there were 56,838,484 shares of Common Stock
outstanding. The shares of Common Stock held in the Company’s treasury will not
be voted.
How
You Can
Vote
There
are three
voting methods:
| · |
Voting
by
Mail. If you choose to vote by mail, simply mark the enclosed proxy
card,
date and sign it, and return it in the postage-paid envelope
provided.
|
| · |
Voting
by
Telephone. You can vote your shares by telephone by calling the toll-free
telephone number on the enclosed proxy
card.
|
| · |
Voting
by
Internet. You can also vote via the Internet. The web site for Internet
voting is on the enclosed proxy card, and voting is available 24
hours a
day.
|
If
you vote by telephone or via the Internet, you should not
return the proxy
card.
How
You May
Revoke or Change Your Vote
You
can revoke the
proxy at any time before it is voted at the meeting by:
| · |
sending
written notice of revocation to the
Secretary;
|
| · |
submitting
another proper proxy by telephone, Internet or paper ballot;
or
|
| · |
attending
the
Annual Meeting and voting in person. If your shares are held in the
name
of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor from the holder of record, to be able to vote
at
the meeting.
|
General
Information on Voting
You
are entitled to
cast one vote for each share of Common Stock you own on the record date.
Shareholders do not have the right to vote cumulatively in electing directors.
The election of each director nominee must be approved by a majority of shares
entitled to vote and represented at the Annual Meeting in person or by proxy.
Shares represented by a proxy marked “abstain” on any matter, or that provide
that a vote be withheld with respect to the election of any one or more of
the
nominees for election as directors, will be considered present at the Meeting
for purposes of determining a quorum and for purposes of calculating the
vote,
but will not be considered to have voted in favor of the proposal or nominee.
Therefore, any proxy marked “abstain” will have the effect of a vote against the
matter. Shares represented by a proxy as to which there is a “broker non-vote”
(for example, where a broker does not have discretionary authority to vote
the
shares), will be considered present at the meeting for purposes of determining
a
quorum, but will have no effect on the vote.
All
shares that
have been properly voted - whether by telephone, Internet or mail - and not
revoked, will be voted at the Annual Meeting in accordance with your
instructions. If you sign the enclosed proxy card but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the Board of Directors.
If
any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed proxy card will have the
discretion to vote on those matters for you. At the date this proxy statement
went to press, no other matters had been raised for consideration at the
Annual
Meeting.
Voting
By
Participants in the Company’s Savings Investment Plan
If
you participate in the Company’s Savings Investment Plan and had an account in
the Energizer Common Stock Fund on November 9, 2006, the proxy will also
serve
as voting instructions to the trustee for that plan, Vanguard Fiduciary Trust
Company, an affiliate of The Vanguard Group of Investment Companies, for
the
shares of Common Stock credited to your account on that date. If the trustee
does not receive directions with respect to any shares of Common Stock held
in
the plan, it will vote those shares in the same proportion as it votes shares
for which directions were received.
Costs
of
Solicitation
The
Company will
pay for preparing, printing and mailing this proxy statement. We have engaged
Georgeson & Company, Inc. to help solicit proxies from shareholders for a
fee of $11,500 plus its expenses. Proxies may also be solicited personally
or by
telephone by regular employees of the Company without additional compensation,
as well as by employees of Georgeson. The Company will reimburse banks, brokers
and other custodians, nominees and fiduciaries for their costs of sending
the
proxy materials to our beneficial owners.
ITEM
1.
ELECTION OF DIRECTORS
The
Board of
Directors currently consists of twelve members and is divided into three
classes, with each class currently consisting of four members, with terms
of
service expiring at successive Annual Meetings.
Four
directors will
be elected at the 2007 Annual Meeting to serve for a three-year term expiring
at
our Annual Meeting in the year 2010. The Board has nominated R. David Hoover,
John C. Hunter, John E. Klein and John R. Roberts for election as directors
at
this Meeting. Each nominee is currently serving as a director and has consented
to serve for a new 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 outstanding shares of Common Stock entitled to
vote
and represented in person or by proxy 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, 2006.
 |
R.
DAVID HOOVER,
Director
Since 2000, Age 61
(Standing
for election at this meeting for a term expiring in
2010)
Mr.
Hoover
has served as Chairman, President and Chief Executive Officer,
Ball
Corporation (beverage and food packaging and aerospace products
and
services) since 2002. Prior to that, he served as President and
Chief
Executive Officer from 2001 to 2002, and as Vice Chairman, President
and
Chief Operating Officer from April 2000 to 2001. Also a director
of Ball
Corporation, Irwin Financial Corporation and Qwest Communications
International, Inc.
|
 |
JOHN
C. HUNTER,
Director
Since 2005, Age 59
(Standing
for election at this meeting for a term expiring in
2010)
Mr.
Hunter
served as Chairman, President and Chief Executive Officer of
Solutia, Inc.
(chemical products) from 1999 to 2004. On December 17, 2003,
while Mr.
Hunter served as President and Chief Executive Officer, Solutia,
Inc. and
fourteen of its U.S. subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Also a
director of Penford Corporation and Hercules,
Inc.
|
 |
JOHN
E. KLEIN,
Director
Since 2003, Age 61
(Standing
for election at this meeting for a term expiring in
2010)
Mr.
Klein has
served as Executive Vice Chancellor for Administration, Washington
University in St. Louis (education) since 2004. From 1985 to
2004, he
served as President and Chief Executive Officer, Bunge North
America, Inc.
(agribusiness). Also a director of Embrex, Inc.
|
 |
JOHN
R. ROBERTS,
Director
Since 2003, Age 65
(Standing
for election at this meeting for a term expiring in
2010)
Mr.
Roberts
has served as Executive Director, Civic Progress St. Louis (civic
organization) since 2000. 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.
|
 |
WARD
M. KLEIN, Director
Since 2005, Age 51
(Continuing
in Office - Term expiring in 2008)
Mr.
Klein has
served as Chief Executive Officer, Energizer Holdings, Inc. since
January
25, 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 AmerUs Group Co.
|
 |
RICHARD
A. LIDDY,
Director
Since 2000, Age 71
(Continuing
in Office - Term expiring in 2008)
Mr.
Liddy
served as Chairman of the Board of GenAmerica Financial Corporation
(insurance holding company) from 2000 to 2002. He also served
as Chairman
of the Board of the Reinsurance Group of America, Incorporated
(insurance)
from 1995 to 2002. Mr. Liddy was President of GenAmerica Financial
from
1988 to 2000 and Chief Executive Officer of General American
Life
Insurance Company from 1992 to 2000. Also a director of Ralcorp
Holdings,
Inc. and Ameren Corporation.
|
 |
W.
PATRICK MCGINNIS,
Director
Since 2002, Age 59
(Continuing
in Office - Term expiring in 2008)
Mr.
McGinnis
has served as Chief Executive Officer and President, Nestlé Purina PetCare
Company (pet foods and related products) since 2001. From 1999
to 2001, he
served as Chief Executive Officer and President, Ralston Purina
Company.
Also a director of Brown Shoe Company,
Inc.
|
 |
JOE
R. MICHELETTO, Director
Since 2000, Age 70
(Continuing
in Office - Term expiring in 2008)
Mr.
Micheletto served as Chief Executive Officer and President, Ralcorp
Holdings, Inc. (food products) from 1996 to 2003. Also a director
of
Ralcorp Holdings, Inc. and Chairman of the Board of Vail Resorts,
Inc.
|
 |
BILL
G. ARMSTRONG,
Director
Since 2005, Age 58
(Continuing
in Office - Term expiring in 2009)
Mr.
Armstrong
served as Executive Vice President and Chief Operating Officer,
Cargill
Animal Nutrition (animal feed products), from 2001 to 2004. Prior
to that,
Mr. Armstrong served as Chief Operating Officer, Agribrands International,
Inc. (animal feed products) from 1998 to 2001. Also a director
of Ralcorp
Holdings, Inc.
|
 |
J.
PATRICK MULCAHY,
Director
Since 2000, Age 62
(Continuing
in Office - Term expiring in 2009)
Mr.
Mulcahy
has served as Vice Chairman of the Board since January, 2005,
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 to 2005. Also a director
of
Solutia, Inc. and Hanesbrands, Inc.
|
 |
PAMELA
M. NICHOLSON,
Director
Since 2002, Age 47
(Continuing
in Office - Term expiring in 2009)
Ms.
Nicholson
has served as Executive Vice President and Chief Operating Officer,
Enterprise Rent-A-Car (auto leasing) since 2004. She served as
Senior Vice
President, North American Operations for Enterprise from 1999
to
2004.
|
 |
WILLIAM
P. STIRITZ,
Director
Since 2000, Age 72
(Continuing
in Office - Term expiring in 2009)
Mr.
Stiritz
has served as Chairman of the Board since 2000, and served as
Chairman of
the Energizer Holdings, Inc. Management Strategy and Finance
Committee
from 2000 to 2005. Mr. Stiritz served as Chairman of the Board,
Chief
Executive Officer and President of Agribrands International (animal
feed
products) from 1998 to 2001. He also served as Chairman of the
Board of
Ralston Purina Company from 1982 to 2001. Also a director of
Ralcorp
Holdings, Inc., Vail Resorts, Inc. and Federated Department Stores,
Inc.
|
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
|
||||
|
John
C.
Hunter
|
ü
|
ü
|
|||
|
John
E.
Klein
|
ü
|
ü
|
ü
|
ü*
|
|
|
Ward
M.
Klein
|
ü
|
ü
|
ü
|
||
|
Richard
A.
Liddy
|
ü
|
ü
|
ü
|
ü
|
|
|
W.
Patrick
McGinnis
|
ü
|
ü
|
ü
|
||
|
Joe
R.
Micheletto
|
ü
|
ü
|
|||
|
J.
Patrick
Mulcahy
|
ü
|
ü
|
ü*
|
||
|
Pamela
M.
Nicholson
|
ü
|
ü
|
ü
|
ü
|
|
|
John
R.
Roberts
|
ü
|
ü*
|
ü
|
ü
|
|
|
William
P.
Stiritz
|
ü*
|
ü*
|
ü
|
||
|
Meetings
held
in 2006
|
6
|
5
|
0
|
5
|
7
|
*Chairperson
Audit:
Reviews auditing,
accounting, financial reporting and internal control functions. Responsible
for
engaging and supervising our independent accountants, resolving differences
between management and our independent accountants regarding financial
reporting, pre-approving all audit and non-audit services provided by our
independent accountants, and establishing procedures for the receipt, retention
and treatment of complaints regarding accounting, internal accounting controls
or auditing matters. The Board of Directors has determined that all members
are
independent and financially literate in accordance with the criteria established
by the Securities and Exchange Commission and the New York Stock Exchange.
The
Board has elected John R. Roberts as Chair of the Audit Committee, and
has
determined that he is both independent and an audit committee financial
expert,
as defined by Securities and Exchange Commission guidelines.
Executive:
May
act on behalf
of the Board in the intervals between Board meetings.
Nominating
and Executive Compensation:
Sets compensation
of executive officers, approves deferrals under the Company’s Deferred
Compensation Plan, administers the Company’s 2000 Incentive Stock Plan and
grants equity-based awards under that plan. Administers and approves awards
under the Executive Officer Bonus Plan. Monitors management compensation
and
benefit programs, and reviews principal employee relations policies. Recommends
nominees for election as directors or executive officers to the Board.
Recommends committee memberships and compensation and benefits for directors.
Also responsible for conducting the annual self-assessment process of the
Board
and its Committees, and regular review and updating of the Company’s Corporate
Governance Principles. The Board of Directors has determined that all members
are non-employee directors, and are independent, as defined in the listing
standards of the New York Stock Exchange.
Finance
and
Oversight:
Reviews the
Company’s financial condition, objectives and strategies, and acquisitions and
other major transactions, and makes recommendations to the Board concerning
financing requirements, the Company’s stock repurchase program and dividend
policy, foreign currency management and pension fund performance.
During
fiscal year
2006, all directors attended 75% or more of the Board meetings and Committee
meetings on which they served during their period of service. Each director
is
highly encouraged to attend the Company’s Annual Meeting of Shareholders each
year. All directors attended the 2006 Annual Meeting.
Committee
Charters, Governance and Codes of Conduct
The
Charters of the
Committees of the Board of Directors, and the Company’s Corporate Governance
Principles, have been posted on the Company’s website at www.energizer.com,
under “Our
Company: Corporate Governance”. The Company’s code of business conduct and
ethics applicable to the members of the Board of Directors, as well as
the code
applicable to the officers and employees, have each been posted on the
Company’s
website as well, under “Our Company - Codes of Conduct."
Copies
of the
Committee Charters, the Corporate Governance Principles, and the codes
of
conduct will be provided without charge to any shareholder upon request
directed
in writing to the Secretary, Energizer Holdings, Inc., 533 Maryville University
Drive, St. Louis, Missouri 63141.
Director
Independence
The
Company’s
Corporate Governance Principles, adopted by the Board of Directors, provide
that
a majority of the Board, and the entire membership of the Audit and the
Nominating and Executive Compensation Committees of the Board, shall consist
of
independent, non-management directors who meet the criteria for independence
required by the New York Stock Exchange. A director will be considered
independent if he or she does not have a material relationship with the
Company,
as determined by the Board of Directors. To that end, the Board, in the
Corporate Governance Principles, has established the following guidelines
for
determining whether a director is independent, consistent with the listing
standards of the New York Stock Exchange: a director will not be considered
independent if, within the last three years (i) the director or an immediate
family member was employed by the Company or a subsidiary as an executive
officer, (ii) the director or an immediate family member was employed in
a
professional capacity by the Company's external auditor, or in the Company’s
Internal Audit department, (iii) any of the present executive officers
of the
Company serve on the compensation committee of another company that employs
the
director or an immediate family member of the director as an executive
officer.
The
following
relationships will be considered material, which would also impact independence:
(i)
a Company
director or an immediate family member is an executive officer, or the
director
is an employee, of another company which does business with the Company
and the
payments to, or amounts received from, that other company exceed the greater
of
$1 million, or 2% of such other company’s consolidated gross revenues;
(ii)
a Company
director or an immediate family member, within the last three years, received
more than $100,000 per year in direct compensation from the Company, other
than
director and committee fees and pension or other forms of deferred compensation
for prior service (provided such compensation is not contingent in any
way on
continued service);
(iii)
a Company
director is an executive officer of a charitable organization and the Company's
annual charitable contributions to the organization (exclusive of gift-match
payments) exceed the greater of $100,000 or 2% of the organization's total
annual charitable receipts;
(iv)
a Company
director is a partner of or of counsel to a law firm that performs substantial
legal services to the Company on a regular basis; or
(v)
a Company
director is a partner, officer or employee of an investment bank or consulting
firm that performs substantial services to the Company on a regular basis.
For
other significant relationships not specifically covered, a majority of
the
Company's independent directors, after considering all of the relevant
circumstances, may make a determination whether or not such relationship
is
material and whether the director may therefore be considered independent
under
the New York Stock Exchange listing standards.
Director
affiliations and transactions are regularly reviewed to ensure that there
are no
conflicts or relationships with the Company that might impair a director’s
independence. Every year, the Company submits a questionnaire to each director
and executive officer, and conducts its own internal review, for the purpose
of
identifying all transactions or relationships between each director, or
any
member of his or her immediate family, and the Company, its senior management
and its independent auditor. Pursuant to that review, the Board has considered
the independence of W. Patrick McGinnis and Joe R. Micheletto in light
of the
fact that the Company jointly owns three corporate aircraft with Nestle
Purina
Petcare Company, for which Mr. McGinnis serves as Chief Executive Officer
and
President, and Ralcorp Holdings, Inc., for which Mr. Micheletto serves
as Vice
Chairman of the Board. The aircraft are jointly owned in order to share
the
fixed costs associated with ownership which do not change based on usage,
such
as pilots’ salaries, aircraft acquisition expenses, and non-trip related
maintenance and hangar fees. The aircraft are maintained and operated by
employees of Nestle, and a pro rata portion of the fixed expenses are reimbursed
to Nestle by the other owners based upon their respective percentages of
ownership. Each owner is also assessed a charge per flight hour to cover
all
variable operating costs associated with each flight, including fuel costs,
mileage, trip-related maintenance, landing fees, trip-related hangar and
parking
costs, and on-board catering. No additional margin or operating fee is
paid to
Nestle. The independent members of the Board determined that neither Mr.
McGinnis nor Mr. Micheletto have any direct or indirect financial or other
interests in the Company’s reimbursement of its aircraft expenses, or the
Company’s continued ownership of its share of the aircraft, and consequently
determined that the independence of Mr. McGinnis and Mr. Micheletto was
not
impacted.
Accordingly,
based
on the responses to the 2006 questionnaire and the results of its review,
the
Board has affirmatively determined that the following eight non-employee
directors are independent from management: Bill G. Armstrong, John C. Hunter,
John E. Klein, Richard A. Liddy, W. Patrick McGinnis, Joe R. Micheletto,
Pamela
M. Nicholson, and John R. Roberts.
Director
Nominations
The
Nominating and
Executive Compensation Committee is responsible for recommending candidates
for
election to the Company’s Board of Directors, consistent with the requirements
for membership set forth in the Company’s Corporate Governance Principles. Those
requirements include integrity, independence, energy, forthrightness, analytical
skills and a willingness to challenge and stimulate management, and the
ability
to work as part of a team in an environment of trust. The Principles also
indicate the Board’s belief that each director should have a basic understanding
of (i) the principal operational and financial objectives and plans and
strategies of the Company, (ii) the results of operations and financial
condition of the Company and its business segments, and (iii) the relative
standing of the Company and its business segments in relation to its
competitors. In addition to those standards, the Committee seeks directors
who
will represent the diverse interests of the Company’s shareholders, and who
bring to the Board a breadth of experience from a variety of industries
and
professional disciplines. The Committee is also responsible for articulating
and
refining specific criteria for Board and committee membership to supplement,
as
appropriate, the more general criteria set forth in the Principles.
The
Committee
expects a high level of commitment from Board members and evaluates each
candidate’s leadership and experience, skills, expertise and character traits,
including the candidate’s ability to devote sufficient time to Board and
Committee meetings in light of other professional commitments. The Committee
also reviews whether a potential candidate meets Board and/or Committee
membership requirements, as set forth in the Company’s Corporate Governance
Principles, determines whether a potential candidate is independent according
to
the Board’s established criteria, and evaluates the potential for a conflict of
interest between the director and the Company.
Historically,
when
vacancies have occurred, or when the Board determined that additional members
were appropriate, candidates have been recommended to the Committee by
other
Board members or the Chief Executive Officer. The Committee, however, will
consider and evaluate any shareholder-recommended candidates by applying
the
same criteria used to evaluate candidates recommended by directors or
management. The Committee also has authority to retain a recruitment firm
if it
deems it advisable. Shareholders who wish to suggest an individual for
consideration for election to the Board of Directors may submit a written
nomination to the Secretary of the Company, 533 Maryville University Drive,
St.
Louis, Missouri 63141, along with the shareholder’s name, address and number of
shares of Common Stock beneficially owned; the name of the individual being
nominated and number of shares of Common Stock beneficially owned; the
candidate’s biographical information, including age, business and residential
address, and principal occupation for the previous 5 years, and the nominee’s
consent to being named as a nominee and to serving on the Board. A description
of factors qualifying or recommending the nominee for service on the Board
would
also be helpful to the Committee in its consideration. To assist in the
evaluation of shareholder-recommended candidates, the Committee may request
that
the shareholder provide certain additional information required to be disclosed
in the Company’s proxy statement under Regulation 14A of the Securities Exchange
Act of 1934. If the Committee determines a candidate, however proposed,
is
suitable for Board membership, it will make a recommendation to the Board
for
its consideration.
Under
the Company’s
Bylaws, shareholders may also nominate a candidate for election at an annual
meeting of shareholders. See “Shareholder Proposals for 2008 Annual Meeting” for
details regarding the procedures and timing for the submission of such
nominations. Director nominees submitted through this process will be eligible
for election at the Annual Meeting, but will not be included in proxy material
sent to shareholders prior to the meeting, except as described in that
section.
Communicating
Concerns to the Board
The
Company has
established several means for shareholders or others to communicate their
concerns to the Board of Directors. If the concern relates to the Company's
financial statements, business ethics, corporate conduct, accounting practices
or internal controls, the concern should be submitted in writing to Mr.
John R.
Roberts, the Chair of the Audit Committee, in care of the Secretary of
the
Company, whose address is 533 Maryville University Drive, St. Louis, Missouri
63141. If the concern relates to the Company's governance practices, the
concern
may be submitted in writing to Mr. John Klein, the Chairman of the Nominating
and Executive Compensation Committee, in care of the Secretary of the Company.
Executive sessions without management directors present are scheduled at
each
Board meeting, and are chaired by Mr. J. Patrick Mulcahy, the Vice Chairman
of
the Board and Chairman of the Finance and Oversight Committee. Concerns
may be
raised with the non-management directors by written communication to Mr.
Mulcahy, in care of the Secretary of the Company. If the shareholder is
unsure
as to which category his or her concern relates, he or she may communicate
it to
any one of the independent directors in care of the Secretary of the
Company.
The
Company's
"whistleblower" policy prohibits the Company or any of its employees from
retaliating or taking any adverse action against anyone for raising a concern.
If a shareholder or employee nonetheless prefers to raise his or her concern
in
a confidential or anonymous manner, he
or she may call
Global Compliance Services’ AlertLine, the Company’s outside service provider,
toll-free at 877-521-5625, or leave a message at the Company’s confidential web
address: https:/energizer.alertline.com. Confidential letters may be sent
to any
independent director at:
AlertLine
PMB
3767
13950
Ballantyne
Corporate Place
Charlotte,
North
Carolina 28273
U.S.A.
Director
Compensation
All
directors,
other than Ward M. Klein, received the following fees for serving on the
Board
or its Committees. Mr. Klein receives no compensation other than his normal
salary from the Company for his service on the Board and its
Committees.
Annual
Retainer…………………..……$40,000
Fee
for Each Board
Meeting………… $1,000
Fee
for Each
Committee Meeting…… $1,000
The
chairpersons of
the Committees also receive an additional annual retainer of $10,000 for
each
Committee that they chair, and the Chairman of the Board receives the same
additional annual retainer for his services as Chairman. At the end of
each
calendar year, each director also receives a 33 1/3% Company Match on deferrals
of retainers and fees into the Energizer Common Stock Fund of the Deferred
Compensation Plan, the terms of which are described in more detail below.
In
November of 2005, the Board approved, as additional director compensation,
the
annual crediting to each director of stock equivalents in the Energizer
Common
Stock Fund, with a value, as of December 31 of that year, of $57,000, based
upon
median director compensation at the comparator companies selected by the
Nominating and Executive Compensation Committee for purposes of executive
compensation. In November of 2006, the Board determined to maintain the
same
compensation structure for fiscal year 2007, including the crediting of
equivalents with a value, as of December 31, 2006, of $57,000, and to review
the
compensation structure in depth every other year. The Company also pays
the cost
of transportation and lodging for attendance at Board and Committee meetings
for
the out-of-town directors. In 2006, the amounts paid for Messrs. Hoover,
Armstrong and Hunter were $5,916, $16,453,
and
$26,167, respectively. In addition, the directors are also covered under
the
terms of the Company’s general directors’ and officers’ liability insurance
policies, the premiums for which are a general expense of the Company -
the
Company does not obtain a specific policy for each director, or for the
directors as a group.
The
directors may
make requests for contributions to charitable organizations from the Energizer
Charitable Trust, which has been funded from time to time by the Company,
and
the trustees of that Trust, all employees of the Company, have determined
to
honor such requests which are in accordance with the charitable purpose
of the
Trust, and which do not exceed $10,000 in any year. The directors may request
contributions in excess of that amount, but such requests are at the sole
discretion of the trustees. All contributions are made out of the funds
of the
Trust, and are not paid by the Company.
On
May 2, 2005, the Board approved a resolution authorizing Mr. Stiritz and
Mr.
Mulcahy, as Chairman and Vice Chairman, respectively, to use Company-owned
aircraft for personal
travel
for up
to
30 flight
hours per
year, per individual, when the Company-owned aircraft are not being used
on
business related trips. In addition, each of them was authorized to permit
family members and guests to accompany them on business or personal flights
on
Company-owned aircraft. The Board also approved reimbursement of both
individuals for any taxes associated with (i) their personal use of the
Company
aircraft, and (ii) the personal use by their family members and guests,
but not
including any taxes on such reimbursement. In FY 2006, the incremental
cost to
the Company of their personal use of the Company aircraft, on a variable
cost
basis, was $34,467 for Mr. Stiritz and $26,990 for Mr. Mulcahy, and the
amounts
reimbursed to those individuals for taxes associated with personal use,
in the
prior calendar year (which is paid on a delayed basis) were $12,125 and
$2,523,
respectively. The incremental cost to the Company for the directors’ personal
use described above reflects the assessed charge per flight hour for such
use.
(See the discussion under Director Independence above.) Since the aircraft
are
used primarily for business travel, the above amounts exclude any prorated
portion of the Company’s fixed costs.
In
light of Mr. Mulcahy’s responsibilities as Vice Chairman of the Board and
Chairman of its Finance and Oversight Committee, he is provided use of
an office
and computer at Company headquarters and part-time secretarial assistance,
as
well as a cellphone and certain business publication subscriptions. From
time to
time, as part of his responsibilities as Chairman of the Finance and Oversight
Committee, he incurs travel and other business expenses on behalf of the
Company, for which he is reimbursed.
Stock
Awards
As
part of the overall director compensation structure, upon initial appointment
to
the Board, each non-employee director is granted an option to purchase
10,000
shares of Common Stock of the Company under the terms of the Company’s 2000
Incentive Stock Plan. These options have a ten year term, have an exercise
price
equal to the closing price, as of the date of grant, of the Common Stock
on the
New York Stock Exchange composite index, and are exercisable at the rate
of 20%
per year, beginning on the first anniversary of the date of grant. They
are
exercisable prior to that date upon the director’s death, declaration of total
and permanent disability, retirement or resignation from the Board, or
upon a
change in control of the Company. (Mr. Stiritz and Mr. Mulcahy, who were
officers of the Company at the time of their initial appointment, each
received,
in lieu of the director grant, an option to purchase 500,000 shares of
Common
Stock.)
From
2000 through
2003, each non-employee director also received a restricted stock equivalent
award, under which the director would be credited with a restricted stock
equivalent for each share of the Company's Common Stock he acquired within
two
years, up to a limit of 10,000 shares. (Mr. Stiritz and Mr. Mulcahy, as
officers
at that time, received similar awards, but each with a limit of 130,000
shares.)
The equivalents granted vest three years from crediting and convert, at
that
time, into an equal number of shares of Common Stock. They also vest upon
a
director’s death, declaration of total and permanent disability, or upon a
change in control of the Company. If previously elected by the director,
conversion may be deferred until the director terminates service on the
Board.
As of November 1, 2006 the following directors are credited with the indicated
number of unvested restricted stock equivalents: Mr. J. Klein - 10,000
equivalents; and Ms. Nicholson - 10,000 equivalents. Of these, 10,000 granted
to
Mr. Klein and 2,000 granted to Ms. Nicholson will vest within 60 days and
consequently are included in the Common Stock Ownership Table. In January,
2005,
upon his retirement as Chief Executive Officer, Mr. Mulcahy was granted
10,000
restricted stock equivalents as consideration for an agreement not to compete
with the Company. Vested equivalents credited to the directors are indicated
in
footnote (G)
to the Common
Stock Ownership table of this Proxy Statement.
Deferred
Compensation Plan
Directors
can elect
to have their retainer and meeting fees paid monthly in cash, or defer
payment
until their resignation from the Board, under the terms of the Energizer
Holdings, Inc. Deferred Compensation Plan. Under that Plan, they can defer
in
the form of stock equivalents under the Energizer Common Stock Unit Fund,
which
tracks the value of the Company’s Common Stock, they can defer into the Prime
Rate Option, under which deferrals are credited with interest at Morgan
Guaranty
Trust Company of New York’s prime rate, an above-market interest rate, or they
can defer into any of the Measurement Fund Options which track the performance
of the Vanguard investment funds offered under the Company’s Savings Investment
Plan. Deferrals into the Energizer Common Stock Unit Fund during each calendar
year are increased by a 33 1/3% match from the Company at the end of that
year.
In addition, as noted above, on December 31, 2005, each non-employee director
was also credited with equivalents having a value on that date of $57,000.
Deferrals in the Plan are paid out in a lump sum in cash within 60 days
following the director’s termination of service on the Board.
OTHER
BUSINESS
The
Board knows of
no business which will be presented at the 2007 Annual Meeting other than
that
described above. The Company’s 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
Meeting. No such notice with respect to the 2007 Annual Meeting was received
by
the deadline of October 24, 2006.
SELECTION
OF AUDITORS
The
Audit
Committee, in accordance with authority granted in its charter by the Board,
appointed PricewaterhouseCoopers LLP (“PwC”) as independent accountants for the
current fiscal year. PwC has served as the Company’s independent accountant for
every fiscal year since 2000. A representative of that firm will be present
at
the 2007 Annual Meeting of Shareholders and will have an opportunity to
make a
statement, if desired, as well as to respond to appropriate
questions.
Fees
Paid
to PricewaterhouseCoopers LLP (in thousands)
|
FY
06
|
FY
05
|
|
|
Audit
Fees
|
$4,223
|
$4,290
|
|
Audit-Related
Fees
|
$
83
|
$
146
|
|
Tax
Fees
|
||
|
Tax
Compliance/
preparation
|
$
780
|
$
762
|
|
Other
Tax
Services
|
$
326
|
$
840
|
|
Total
Tax
Fees
|
$1,106
|
$1,602
|
|
All
Other
Fees
|
$
3
|
|
|
Total
Fees
|
$5,412
|
$6,041
|
Services
Provided by PricewaterhouseCoopers LLP
The
table above
discloses fees paid to PwC during the last two fiscal years for the
following
professional services:
| · |
Audit
Fees
- These are
fees for professional services performed by PwC for the audit
of the
Company’s annual financial statements and review of financial statements
included in the Company’s 10-Q filings, and services that are normally
provided in connection with statutory and regulatory filings
or
engagements.
|
| · |
Audit-Related
Fees
- These are
fees for assurance and related services performed by PwC that
are
reasonably related to the performance of the audit or review
of the
Company’s financial statements. This includes: employee benefit and
compensation plan audits; due diligence related to mergers
and
acquisitions; internal control reviews; attestations by PwC
that are not
required by statute or regulation; and consulting on financial
accounting/reporting standards.
|
| · |
Tax
Fees
- These are
fees for professional services performed by PwC with respect
to tax
compliance, tax advice and tax planning. This includes preparation
of
original and amended tax returns for the Company and its consolidated
subsidiaries; refund claims; payment planning; tax audit assistance;
and
tax work stemming from “Audit-Related”
items.
|
| · |
All
Other Fees
- These are
fees for other permissible work performed by PwC that does
not meet the
above category descriptions. This includes litigation assistance,
tax
filing and planning for individual employees involved in the
Company’s
expatriate program and various local engagements that are permissible
under applicable laws and regulations.
|
Audit
Committee Pre-Approval Policy
The
Audit Committee
has a formal policy concerning approval of all services to be provided
by PwC,
the Company’s independent auditor, including audit, audit-related, tax and other
services. The policy requires that all services PwC may provide to
the Company
must be pre-approved by the Committee. The Chairman of the Committee
has the
authority to pre-approve permitted services that require action between
regular
Committee meetings, provided he reports to the Committee at the next
regular
meeting. Early in each fiscal year, the Committee approves the list
of planned
audit and non-audit services to be provided by PwC during that year,
as well as
a budget estimating spending for such services for the fiscal year.
Any proposed
services exceeding the maximum fee levels set forth in that budget
must receive
specific pre-approval by the Audit Committee. The Committee approved
all
services provided by PwC during fiscal year 2006.
STOCK
OWNERSHIP INFORMATION
Five
Percent Owners of Common Stock.
The table below
lists the persons known by the Company to beneficially own at least
5% of the
Company’s common stock as of November 1, 2006.
|
Name
and Address of Beneficial
Owner
|
Title
of Class
|
Amount
and
Nature
of
Beneficial
Ownership
|
%
of
Shares
Outstanding
|
|
Ariel
Capital
Management, LLC
200
East
Randolph Drive
Suite
2900
Chicago,
IL
60601
|
Common
Stock
|
5,663,379(A)
|
9.97%
|
|
Goldman
Sachs
Asset Management
32
Old
Slip
New
York, NY
10005
|
Common
Stock
|
5,344,331(B)
|
9.41%
|
|
William
P.
Stiritz
533
Maryville
University Drive
St.
Louis, MO
63141
Attn.:
Corporate Secretary
|
Common
Stock
|
3,420,957(C)
|
5.96%(D)
|
| (A) |
Based
on a
written statement by the shareholder, which disclaims any beneficial
economic interest in any of the shares, and states that it holds
the
voting power and/or investment discretion solely in a fiduciary capacity
as an investment adviser for its clients, none of which individually
owns
more than 5% of the Common Stock. Of the total shares beneficially
owned,
the shareholder has voting and investment powers as follows: sole
voting -
4,529,224 shares; shared voting - 0 shares; sole dispositive - 5,660,159
shares; and shared dispositive - 3,220
shares.
|
| (B) |
Based
on a
13F filed as of September 30, 2006 by the shareholder, a separate
operating unit of Goldman Sachs & Co., which disclaims any beneficial
economic interest in any of the shares, and states that it holds
the
voting power and/or investment discretion solely in a fiduciary capacity
as an investment adviser for its clients, none of which individually
owns
more than 5% of the Common Stock. Of the total shares beneficially
owned,
the shareholder has voting and investment powers as follows: sole
voting -
4,007,925 shares; shared voting - 0 shares; sole dispositive - 3,238,530
shares; and other dispositive power - 2,105,801
shares.
|
| (C) |
Based
on a
written statement from the shareholder, which disclaims any beneficial
interest in 521,357 shares owned by the shareholder’s spouse. The total
shares beneficially owned also includes shares which may be acquired
within 60 days upon exercise of vested options and conversion of
restricted stock equivalents. Of the total shares beneficially owned,
the
shareholder has voting and investment powers as follows: sole voting
-
2,269,600 shares; shared voting - 0 shares; sole dispositive - 2,269,600
shares; and shared dispositive - 0
shares.
|
| (D) |
The
number of
shares outstanding used in this calculation was the number actually
outstanding on November 1, 2006, plus 630,000 shares which Mr. Stiritz
could acquire upon exercise of options or conversion of stock equivalents
within 60 days.
|
COMMON
STOCK OWNERSHIP OF DIRECTORS
AND
EXECUTIVE OFFICERS
The
table below
contains information regarding stock ownership of directors, nominees and
executive officers as of November 1, 2006. It does not reflect any changes
in
ownership that may have occurred after that date.
|
Directors
And
Executive
Officers
|
Shares
Beneficially
Owned
|
Shares
held in Savings Investment Plan (A)
|
Options
Exercisable Within 60 Days (B)
|
%
of
Shares Outstanding (C)
(*denotes
less
than
1%)
|
|
Bill
G.
Armstrong
|
1,000
|
0
|
10,000
|
*
|
|
R.
David
Hoover
|
20,000
(G)
|
0
|
10,000
|
*
|
|
John
C.
Hunter
|
0
|
0
|
10,000
|
*
|
|
John
E.
Klein
|
21,700(G)
|
0
|
10,000
|
*
|
|
Richard
A.
Liddy
|
19,000
(G)
|
0
|
10,000
|
*
|
|
W.
Patrick
McGinnis
|
38,918
|
0
|
10,000
|
*
|
|
Joe
R.
Micheletto
|
20,008
(G)
|
0
|
10,000
|
*
|
|
Pamela
M.
Nicholson
|
12,000(G)
|
0
|
10,000
|
*
|
|
John
R.
Roberts
|
20,000
(G)
|
0
|
10,000
|
*
|
|
William
P.
Stiritz
|
2,920,957
(D)(G)
|
0
|
500,000
|
5.83%
|
|
J.
Patrick
Mulcahy
|
441,843
(E)
|
29,219
|
500,000
|
1.65%
|
|
Ward
M.
Klein
|
74,132
(G)
|
5,277
|
201,250
|
*
|
|
David
P.
Hatfield
|
6,997
(G)
|
2,385
|
22,501
|
*
|
|
Joseph
E.
Lynch
|
25,000
(G)
|
423
|
140,000
|
*
|
|
Joseph
W.
McClanathan
|
38,356
(G)
|
3,765
|
113,334
|
*
|
|
Daniel
J.
Sescleifer
|
9,167
(F)(G)
|
0
|
5,002
|
*
|
|
All
Officers
and Directors
|
3,683,771
(F)(G)
|
44,161
|
1,575,588
|
9.04%
|
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 below, directors and executive officers named in the table above
have
sole voting and investment authority with respect to the shares set forth
in the
table. The table above 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.
| (A) |
Column
indicates the most recent approximation of the number of shares of
Common
Stock as to which participants in the Company’s Savings Investment Plan
have voting and transfer rights. Shares of Common Stock which are
held in
the Plan are not directly allocated to individual participants but
instead
are held in a separate fund in which participants acquire units.
Such fund
also holds varying amounts of cash and short-term investments. The
number
of shares allocable to a participant will vary on a daily basis based
upon
the cash position of the fund and the market price of the
stock.
|
| (B) |
Under
the
terms of the stock option agreements granted to the directors, all
options
granted to a director that have otherwise not vested will vest and
become
exercisable in the event that he or she retires or resigns from the
Board.
Options granted to each of the officers provide that they will vest
and
become exercisable in the event that the officer retires after attaining
age 55; accordingly, options granted to Mr. Lynch would become exercisable
if he were to retire.
|
| (C) |
The
number of
shares outstanding for purposes of this calculation was the number
outstanding as of November 1, 2006 plus the number of shares which
could
be acquired upon the exercise of vested options, or options that
could
vest within 60 days, by all officers and directors, and the conversion
of
vested stock equivalents.
|
| (D) |
Mr.
Stiritz
disclaims beneficial ownership of 521,357 shares of Common Stock
owned by
his wife.
|
| (E) |
Mr.
Mulcahy
disclaims beneficial ownership of 12,500 shares of Common Stock owned
by
his wife and 111 shares owned by his
step-daughter.
|
| (F) |
Excludes
110,132 shares of Common Stock held to fund retirement benefits by
the
Energizer Holdings, Inc. Retirement Plan Trust, of which Mr. Sescleifer
and another executive officer serve as two of six trustees who
collectively exercise voting and investment power. The officers disclaim
beneficial ownership of those shares.
|
| (G) |
Includes
vested Common Stock equivalents which will convert to shares of Common
Stock upon the officer’s or director’s retirement, resignation from the
Board or termination of employment with the Company. The number of
vested
equivalents credited to each individual officer or director is as
follows:
Mr. Stiritz: 130,000; Mr. Hoover: 10,000; Mr. Liddy: 10,000; Mr.
Micheletto: 10,000; Mr. Roberts: 10,000; Mr. J. Klein: 10,000; Ms.
Nicholson: 2,000; Mr. Ward Klein: 42,292; Mr. McClanathan: 36,667;
Mr.
Sescleifer: 9,167; Mr. Lynch (vesting in the event of retirement):
25,000;
Mr. Hatfield: 3,334 and all other executive officers:
9,167.
|
EXECUTIVE
COMPENSATION
The
following
tables and narratives discuss the compensation paid in fiscal year 2006 to
the
Chief Executive Officer and the other four most highly compensated executive
officers (“Named Executive Officers”).
The
Summary
Compensation Table set forth below summarizes compensation received by the
Named
Executive Officers for the entire fiscal years indicated.
SUMMARY
COMPENSATION TABLE
|
Long-Term
|
|
|||||||
|
Compensation
|
Long-Term
|
|||||||
|
(Awards)
|
Compensat’n
|
|||||||
| Securities | Restricted |
(Payouts)
|
||||||
| Other Annual | Underlying |
Stock
|
Long-Term
|
All
Other
|
||||
|
Annual
Compensation
|
Compensation
|
Options
|
Equivalents
|
Incentive
|
Compensation
|
|||
| Name and Principal Position |
Year
|
Salary($)
|
Bonus($)
|
($)
|
(#)
|
($)(1)
|
Plan
($)
(3)
|
($)(4)
|
|
Ward
M.
Klein
Chief
Executive Officer
|
2006
2005
2004
|
$700,000
$602,976
$500,000
|
$938,700
$818,350
$742,500
|
$67,371(2)
$2,205
-
|
-
45,000
100,000
|
-
$1,106,550
-
|
$565,500
$450,000
$236,000
|
$1,730,630
$273,005
$21,933
|
|
Joseph
E.
Lynch
CEO
&
President,
Schick-Wilkinson
Sword
|
2006
2005
2004
|
$440,000
$425,000
$411,671
|
$566,016
$433,723
$407,880
|
-
$7,443
-
|
-
10,000
50,000
|
-
$245,900
-
|
$244,800
$237,100
$165,000
|
$482,540
$181,423
$153,660
|
|
Joseph
W.
McClanathan
CEO
&
President, Energizer Battery
|
2006
2005
2004
|
$440,000
$425,000
$350,000
|
$504,416
$460,700
$462,000
|
$4,371
$1,054
$1,051
|
-
20,000
50,000
|
-
$461,300
-
|
$306,000
$280,000
$236,000
|
$531,856
$165,564
$
12,422
|
|
Daniel
J.
Sescleifer
Executive
Vice President
and
Chief
Financial Officer
|
2006
2005
2004
|
$370,000
$325,000
$284,900
|
$396,936
$405,340
$376,200
|
-
$5,225
-
|
-
10,000
-
|
-
$230,650
-
|
$226,200
$228,000
$220,000
|
$308,929
$132,698
$65,203
|
|
David
P.
Hatfield
Executive
Vice President and Chief Marketing Officer
|
2006
2005
2004
|
$290,000
$275,000
$241,251
|
$249,342
$227,040
$247,500
|
-
-
-
|
-
20,000
-
|
-
$461,300
-
|
$153,450
$150,000
$117,765
|
$158,024
$102,547
$
98,599
|
(1)
Table shows value
of restricted stock equivalents as of date of grant. As of September 30,
2006,
the aggregate number and value of unvested restricted stock equivalents credited
to each of the Named Executive Officers was as follows:
| w |
Mr.
Klein,
30,208 equivalents; $2,174,674
|
| w |
Mr.
Lynch,
17,083 equivalents; $1,229,805
|
| w |
Mr.
McClanathan, 20,833 equivalents; $1,499,768
|
| w |
Mr.
Sescleifer, 17,083 equivalents;
$1,229,805
|
| w |
Mr.
Hatfield,
10,416 equivalents; $749,848
|
In
May, 2003, Messrs. Lynch, Klein, McClanathan, Sescleifer and Hatfield were
each
granted 20,000 restricted stock equivalents which vest, in one-third increments,
every third year over a nine-year period. In October, 2004, Messrs. McClanathan
and Hatfield were each granted 10,000 restricted stock equivalents, and Mr.
Sescleifer was granted 5,000 restricted stock equivalents, and, in January,
2005, Mr. Klein was granted 22,500 restricted stock equivalents, and Mr.
Lynch
was granted 5,000 restricted stock equivalents, all of which vest, in 25%
increments, every year commencing on the 1st
anniversary date
of the award. With respect to all of the above grants, at vesting, the
equivalents will convert into shares of Common Stock unless the Officer elected
to defer conversion until termination of employment. The equivalents also
vest
upon the Officer’s death, disability, involuntary termination of employment or
change of control of the Company. If dividends are paid on the Common Stock,
an
amount in cash equal to the dividends that would have been paid if the
equivalents had been actual shares of Common Stock will be paid to the Officer
at the time of conversion. Vested but deferred equivalents credited to the
Officers are indicated in footnote (G)
to the Common
Stock Ownership table of this Proxy Statement.
Performance-based
restricted stock equivalent units credited to each of the Named Executive
Officers under the Deferred Compensation Plan during fiscal year 2006, which
are
payable in cash at retirement, are set forth in the Long-Term Incentive Plan
table.
(2)
Amounts in this
column include tax reimbursements and, for Mr. Klein, perquisites.
The
following are the only perquisites provided by the Company to the Named
Executive Officers, but the aggregate value of all perquisites actually received
by each of the other Named Executive Officers did not exceed the minimum
threshold for disclosure in years 2006, 2005 and 2004.
Personal
use of
Company aircraft.
Ward M. Klein,
the Chief Executive Officer, has been authorized to use Company-owned aircraft
for personal
travel
for up
to
30 flight
hours per
year, when the Company-owned aircraft are not being used on business related
trips. In addition, he is authorized to permit family members and guests
to
accompany him on business or personal flights on Company-owned aircraft.
The
Board has also determined that service on other boards of directors is an
important element of executive development, and has authorized Mr. Klein
to use
the aircraft for travel to other board meetings. Although the Company believes
his travel to other board meetings is a valid business expense, the SEC has
indicated that it considers such usage to be a perquisite. During 2006, the
incremental cost to the Company related to Mr. Klein’s personal use of the
aircraft was $13,536, and the cost of his usage for purposes of attending
other
board meetings was $28,058, for a total of $41,594, reflecting the assessed
charge per flight hour for such use.
Executive
Financial Planning Program.
The Company will
reimburse the executives for 80% of the cost of personal financial advisory
services, up to certain annual maximums. During 2006, the following
reimbursement payment was made:
Mr. Klein,
$6,974.
Executive
Health Plan.
The Company pays
the annual premium for each executive for an Executive Health insurance policy
which generally covers all health care and dental expenses to the extent
not
covered by the Company’s Medical and Dental Plans. The executives are required
to pay for underlying coverage under the Medical and Dental Plans at the
same
rate as all other employees. During 2006, the Company paid $11,682 in Executive
Health premiums for each of the Named Executive Officers. The Nominating
and
Executive Compensation Committee, following the end of FY 2006, has elected
to
freeze the Executive Health plan for existing participants, and not to offer
it
to any additional participants.
Executive
Excess Liability Plan.
The Company pays
the annual premium for a group policy providing each executive with personal
excess liability coverage in excess of the executive’s primary personal
liability insurance, the cost of which is borne by each executive. During
2006,
the Company paid $1,500 in premiums for Mr. Klein, and $775 for each of the
other Named Executive Officers.
The
above list of
perquisites does not include any contributions made by the Energizer Charitable
Trust which may have been made at the request of any of the Named Executive
Officers. The trustees of that trust, all employees of the Company,
independently review requests for contributions to charitable organizations
from
employees, officers, and the community at large, and, in their sole discretion,
authorize contributions in accordance with the purposes of the trust.
(3)
Amounts in this
column reflect payment of “banked” bonus opportunities created in fiscal year
2005 under the Company’s Annual and Long-Term Bonus Program, which were payable
contingent upon achievement of budgeted targets for FY 2006. The budgeted
EPS
target for that year was adjusted by $.25 in December, 2005 by the Nominating
and Executive Compensation Committee to reflect the European restructuring
project implemented in 2006. See the Compensation Committee report for a
discussion of that adjustment.
(4)
The amounts shown
in this column with respect to fiscal year 2006 consist of the following:
(i)
above-market
interest (120% of the long-term applicable federal rate) credited to deferrals
into the Prime Rate Fund of the Deferred Compensation Plan:
| w |
Mr.
Klein,
$832
|
| w |
Mr.
McClanathan, $12,380
|
| w |
Mr.
Sescleifer, $2,919
|
| w |
Mr.
Hatfield,
$17,876
|
(ii)
Company
matching contributions or accruals in the Savings Investment Plan and Executive
Savings Investment Plan:
| w |
Mr.
Klein,
$32,888
|
| w |
Mr.
Lynch,
$15,576
|
| w |
Mr.
McClanathan, $23,367
|
| w |
Mr.
Sescleifer, $16,688
|
| w |
Mr.
Hatfield,
$7,963
|
The
amounts shown
do not include benefits which were accrued by the Named Executive Officers
in
the Executive Savings Investment Plan in lieu of the PensionPlus Match Account
in the Energizer Holdings, Inc. Retirement Plan due to certain limits imposed
by
the Internal Revenue Code on accruals in the Retirement Plan. Such additional
amounts are disclosed in the discussion of the PensionPlus Match Account
under
“RETIREMENT PLAN” in this Proxy Statement.
(iii)
Company match
equal to 25% of the portion of the officer’s annual bonus voluntarily deferred
into the Energizer Stock Equivalent Fund of the Deferred Compensation
Plan:
| w |
Mr.
Klein,
$376,050
|
| w |
Mr.
Lynch,
$202,704
|
| w |
Mr.
McClanathan, $152,604
|
| w |
Mr.
Sescleifer, $77,892
|
(iv)
In October of
2005, the Nominating and Executive Compensation Committee awarded the executive
officers Performance Awards denominated in stock equivalent units under the
terms of the Deferred Compensation Plan. 25% of the total units awarded to
each
officer will vest 3 years from the date of grant, at which time it can be
transferred to other investment options offered under the Plan. The number
of
those units, and their value on the date of grant, is indicated below and
that
value is included in this column. Vesting of the remaining 75% of the award
is
subject to achievement of targeted EPS growth over that 3 year period, and
the
number of such units is included in the Long-Term Incentive Plan table. Awards
under the Deferred Compensation Plan are payable only in cash upon a
participant’s retirement or other termination of employment.
| w |
Mr.
Klein,
25,000 equivs. - $1,320,750
|
| w |
Mr.
Lynch,
5,000 equivs. - $264,150
|
| w |
Mr.
McClanathan, 6,500 equivs. - $343,395
|
| w |
Mr.
Sescleifer, 4,000 equivs. - $211,320
|
| w |
Mr.
Hatfield,
2,500 equivs. - $132,075
|
(v)
the Group Life
Insurance Plan ¾
term life
insurance premiums paid by the Company for the first $40,000 of coverage
for
each of the Named Executive Officers, $110.
AGGREGATED
OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL
YEAR
END OPTION VALUES
|
Name
|
Number
of Unexercised
Options
at FY-End (#)
|
Value
of Unexercised Options at FY End
|
||||
|
Shares
Acquired on Exercise (#)
|
Value
Realized
|
Exer-
cisable
|
Unexer-cisable
|
Exercisable
|
Unexercisable
|
|
|
W.
M.
Klein
|
20,000
|
$960,000
|
201,250
|
93,750
|
$9,465,588
|
$2,515,238
|
|
J.
E.
Lynch
|
80,000
|
$3,172,800
|
22,500
|
117,500
|
$638,825
|
$4,775,775
|
|
J.
W.
McClanathan
|
-
|
-
|
108,334
|
61,666
|
$4,856,961
|
$1,958,739
|
|
D.
J.
Sescleifer
|
40,000
|
$1,915,500
|
35,834
|
24,166
|
$1,461,011
|
$892,089
|
|
D.
P.
Hatfield
|
-
|
-
|
17,501
|
14,166
|
$652,967
|
$433,114
|
LONG-TERM
INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
|
Estimated
Future Payments Under Non-Stock
Price-Based
Plans
|
|||||
|
Name
|
Number
of
Shares,
Units or Other Rights (#)
|
Performance
or
Other
Period Until
Maturation
or Payout
|
Threshold
|
Target
|
Maximum
|
|
W.
M. Klein
|
N/A
|
10/01/05
-
9/30/07 (2)
|
$308,000
|
$616,000
|
$616,000
|
|
75,000
(1)
|
10/01/05
-
9/30/08
|
25,000
|
75,000
|
75,000
|
|
|
J.
E.
Lynch
|
N/A
|
10/01/05
-
9/30/07 (2)
|
$165,440
|
$330,880
|
$330,880
|
|
15,000
(1)
|
10/01/05
-
9/30/08
|
5,000
|
15,000
|
15,000
|
|
|
J.
W.
McClanathan
|
N/A
|
10/01/05
-
9/30/07 (2)
|
$121,440
|
$242,880
|
$242,880
|
|
19,500
(1)
|
10/01/05
-
9/30/08
|
6,500
|
19,500
|
19,500
|
|
|
D.
J.
Sescleifer
|
N/A
|
10/01/05
-
9/30/07 (2)
|
$130,240
|
$260,480
|
$260,480
|
|
12,000(1)
|
10/1/05
-
9/30/08
|
4,000
|
12,000
|
12,000
|
|
|
D.
P.
Hatfield
|
N/A
|
10/01/05
-
9/30/07 (2)
|
$60,030
|
$120,060
|
$120,060
|
|
7,500
(1)
|
10/01/05
-
9/30/08
|
2,500
|
7,500
|
7,500
|
|
(1) In
October of 2005,
the Committee granted Performance Awards to the Named Executive Officers,
as set
forth in the table above, pursuant to the Company’s Deferred Compensation Plan.
Under the terms of the Awards, each officer was credited with unvested
restricted stock equivalent units in the Energizer Stock Equivalent investment
option of the Plan. 25% of the total number of units awarded will vest in
3
years from the date of grant, provided the officer remains employed with
the
Company, and the value of those awards is included in the “All Other
Compensation” column of the Summary Compensation Table. The vesting of the
remaining 75% of the units awarded (which are shown in the chart above) is
subject to achievement of performance thresholds, as described below; the
units
will also vest in their entirety upon death, permanent disability, involuntary
termination, or a change in control of the Company. The number of units shown
under Threshold above will vest only if the compound annual growth in the
Company’s earnings per share (EPS) from October 1, 2005 until September 30, 2008
is at least 10%, with a proportionate increase in the number of units vesting
for compound annual growth in excess of that threshold, up to a maximum number
vesting, as shown above, at a compound annual growth rate of 15% over that
period. Upon vesting, the current value of the units awarded may be transferred,
at the participant’s election, to other investment options of the Plan. The
value of vested units is payable in cash only upon a participant’s retirement or
other termination of employment, based on the value of Energizer common stock
at
that time.
(2)
The Company’s
Annual and Long-Term Bonus Program is designed to promote consistent earnings
per share growth from year to year. Under the long-term component of the
Program
approved at the beginning of fiscal year 2006, because final results for
that
year exceeded a budgeted target for EPS (and for Messrs. McClanathan, Lynch
and
Hatfield, additional operating unit profit targets) established at the beginning
of the fiscal year, participants were granted a contingent “banked” bonus equal
to a percentage between 50 and 100% of their individual “bonus target”. (An
individual’s bonus target is a percentage of his or her base salary.)
Participants are not entitled, however, to receive any part of the banked
bonus
unless actual EPS results for fiscal year 2007 are at least equal to EPS
results
for 2006, as adjusted, in which case participants will be paid 50% of their
banked bonus. (See the Compensation Committee Report for a discussion of
adjustments to the EPS targets for 2006 and 2007.) That percentage increases
proportionately for results in excess of that threshold, up to a maximum
of 100%
of the banked bonus, if the budgeted EPS target for 2007 (established at
the
beginning of that fiscal year) is achieved.
Under
the Program,
an individual that is eligible for a long-term award (assuming that thresholds
are met) for a particular fiscal year must remain employed by the Company
through the end of the following fiscal year in order to be eligible for
a
payment.
RETIREMENT
PLAN
The
Energizer
Holdings, Inc. Retirement Plan may provide pension benefits in the future
to the
Named Executive Officers. Most regular U.S. employees that have completed
one
year of employment with the Company or certain of its subsidiaries are eligible
to participate in the Retirement Plan. They become vested after five years
of
service. Normal retirement is at age 65; however, employees who work beyond
age
65 may continue to accrue benefits.
Final
Average Earnings Formula.
Annual
benefits for
Mr. Klein, and other administrative employees who so elected, are computed
by
multiplying their Final Average Earnings (the average of their five highest
consecutive annual earnings during the ten years prior to their termination
of
employment), by a number which is 1.5% of their actual years of service (to
a
maximum of 40 years). That amount is then reduced by up to one-half of their
primary social security benefit at retirement (with the actual amount of
offset
determined by their age and years of service at retirement).
The
following table
shows a range of estimated annual retirement benefits, in the form of a single
life annuity with 60 monthly payments guaranteed, beginning at age 65, that
would be payable from the Retirement Plan to salaried employees, including
the
Named Executive Officers. To the extent a Named Executive Officer’s compensation
or benefits exceed certain limits imposed by the Internal Revenue Code of
1986,
as amended, the table also includes benefits payable from an unfunded
supplemental retirement plan. The table reflects benefits after the reduction
for social security benefits described above for Mr. Klein.
|
RETIREMENT
PLAN TABLE
|
|||||
|
Final
Average Earnings Formula - Annuity Payments
|
|||||
|
Final
Average
|
Years
of Service
|
||||
|
Earnings
|
10
|
15
|
20
|
25
|
30
|
|
$300,000
|
$41,000
|
$61,500
|
$82,000
|
$102,500
|
$123,000
|
|
$400,000
|
$56,000
|
$84,000
|
$112,000
|
$140,000
|
$168,000
|
|
$500,000
|
$71,000
|
$106,500
|
$142,000
|
$177,500
|
$213,000
|
|
$600,000
|
$86,000
|
$129,000
|
$172,000
|
$215,000
|
$258,000
|
|
$700,000
|
$101,000
|
$151,500
|
$202,000
|
$252,500
|
$303,000
|
|
$800,000
|
$116,000
|
$174,000
|
$232,000
|
$290,000
|
$348,000
|
|
$1,000,000
|
$146,000
|
$219,000
|
$292,000
|
$365,000
|
$438,000
|
|
$1,200,000
|
$176,000
|
$264,000
|
$352,000
|
$440,000
|
$528,000
|
|
$1,400,000
|
$206,000
|
$309,000
|
$412,000
|
$515,000
|
$618,000
|
|
$1,500,000
|
$221,000
|
$331,500
|
$442,000
|
$552,500
|
$663,000
|
|
$1,600,000
|
$236,000
|
$354,000
|
$472,000
|
$590,000
|
$708,000
|
|
$1,800,000
|
$266,000
|
$399,000
|
$532,000
|
$665,000
|
$798,000
|
|
$2,000,000
|
$296,000
|
$444,000
|
$592,000
|
$740,000
|
$888,000
|
|
$2,200,000
|
$326,000
|
$489,000
|
$652,000
|
$815,000
|
$978,000
|
|
$2,400,000
|
$356,000
|
$534,000
|
$712,000
|
$890,000
|
$1,068,000
|
|
$2,600,000
|
$386,000
|
$579,000
|
$772,000
|
$965,000
|
$1,158,000
|
|
$2,800,000
|
$416,000
|
$624,000
|
$832,000
|
$1,040,000
|
$1,248,000
|
|
$3,000,000
|
$446,000
|
$669,000
|
$892,000
|
$1,115,000
|
$1,338,000
|
|
Modified
to
reflect the Social Security Offset figure in effect on
9/30/06.
|
|||||
Account
Based Formula. Retirement
benefits
for Mr. McClanathan, Mr. Hatfield and Mr. Sescleifer are calculated under
an
“account based” benefit formula. (Such calculation was elected by Mr.
McClanathan and Mr. Hatfield as a result of a one-time election in 1998,
and was
mandated for Mr. Sescleifer by reason of his employment after that date.)
Under
this benefit formula, a participant’s “base” single sum retirement benefit is
calculated by multiplying the participant’s Final Average Earnings (the average
of his or her five highest consecutive annual earnings during the ten years
prior to his or her termination of employment) by a gross percentage that
is
accumulated over a participant’s working lifetime. The first five years of a
participant’s employment each credit a rate of 4.0% towards that gross
percentage. The next five years credit 5.0% each, the next five 6.5% each,
the
next five 8.0% each and each year in excess of 20 years credits 10% per
year. In
addition to this “base” single sum benefit, an additional “excess” single sum
benefit is calculated as the amount of the participant’s Final Average Earnings
that is in excess of the Social Security Covered Compensation level in
the year
of calculation (i.e., in 2006, $48,816) multiplied by a percentage calculated
as
3.5% of the participant’s actual years of service. The participant also has the
option of receiving his or her pension benefit in the form of an annuity
payable
for the life of the participant, with a guaranteed payment of 60 monthly
payments, which annuity is the actuarial equivalent of the single sum amount.
In
no event, however, can the amount of the annuity payable to Mr. McClanathan
or
Mr. Hatfield be less than the annuity that they respectively earned as
of
December 31, 1998 under the Final Average Earnings benefit formula described
above. The following table shows a range of estimated retirement benefits,
in
the form of a single sum amount, that would be payable from the Retirement
Plan
as of the date of termination of employment under the terms of the account-based
formula described above. To the extent that a participant’s compensation or
benefits exceed certain limits imposed by the Internal Revenue Code of
1986, as
amended, the table also includes benefits payable from an unfunded supplemental
retirement plan. Reflecting the annuity conversion rates in effect for
fiscal/plan year 2005-2006, the annuity amount that would be payable as
of a
participant’s Normal Retirement Age (65) based on the indicated single sum
amounts would be determined as 8.1% of the participant’s stated single sum
balance credited with compound interest at a rate of 3% per annum from
the
participant’s date of termination to the participant’s 65th
birthday.
|
RETIREMENT
PLAN TABLE
|
|||||
|
Final
Average Earnings - Account Based Formula
|
|||||
|
Final
Average
|
Years
of Service
|
||||
|
Earnings
|
10
|
15
|
20
|
25
|
30
|
|
$300,000
|
$222,900
|
$364,400
|
$528,300
|
$722,300
|
$916,200
|
|
$400,000
|
$302,900
|
$494,400
|
$715,800
|
$977,300
|
$1,238,700
|
|
$500,000
|
$382,900
|
$624,400
|
$903,300
|
$1,232,300
|
$1,561,200
|
|
$600,000
|
$462,900
|
$754,400
|
$1,090,800
|
$1,487,300
|
$1,883,700
|
|
$700,000
|
$542,900
|
$884,400
|
$1,278,300
|
$1,742,300
|
$2,206,200
|
|
$800,000
|
$622,900
|
$1,014,400
|
$1,465,800
|
$1,997,300
|
$2,528,700
|
|
$1,000,000
|
$782,900
|
$1,274,400
|
$1,840,800
|
$2,507,300
|
$3,173,700
|
|
$1,200,000
|
$942,900
|
$1,534,400
|
$2,215,800
|
$3,017,300
|
$3,818,700
|
|
$1,400,000
|
$1,102,900
|
$1,794,400
|
$2,590,800
|
$3,527,300
|
$4,463,700
|
|
$1,500,000
|
$1,182,900
|
$1,924,400
|
$2,778,300
|
$3,782,300
|
$4,786,200
|
|
$1,600,000
|
$1,262,900
|
$2,054,400
|
$2,965,800
|
$4,037,300
|
$5,108,700
|
|
$1,800,000
|
$1,422,900
|
$2,314,400
|
$3,340,800
|
$4,547,300
|
$5,753,700
|
|
Modified
to
reflect the Social Security Covered Compensation figure in effect
on
9/30/06.
|
|||||
Account
Based Formula for Former Warner-Lambert Plan Participants. Retirement
benefits
for Mr. Lynch are calculated under an “account based” benefit formula for
Schick-Wilkinson Sword employees that formerly participated in the
Warner-Lambert Retirement Plan. Under this benefit formula, a participant’s
“base” single sum retirement benefit is calculated by multiplying the
participant’s Final Average Earnings (the average of his or her five highest
consecutive annual earnings during the ten years prior to his or her
termination
of employment) by a gross percentage that is accumulated over a participant’s
working lifetime while an Energizer employee. Service with Warner-Lambert
is
taken into account for the purpose of determining the level at which
such
participant shall enter the Pension Equity Benefit formula. The first
two years
of Mr. Lynch’s employment with Energizer each credit a rate of 5.0% towards that
gross percentage. The next five years credit 6.5% each, the next five
8.0% each,
and each year in excess of 12 years credits 10% per year. In addition
to this
“base” single sum benefit, an additional “excess” single sum benefit is
calculated as the amount of the participant’s Final Average Earnings that is in
excess of the Social Security Covered Compensation level in the year
of
calculation (i.e., in 2006, $48,816) multiplied by a percentage calculated
as
3.5% of the participant’s actual years of service with Energizer. The
participant also has the option of receiving his pension benefit in the
form of
an annuity payable for the life of the participant, with a guaranteed
payment of
60 monthly payments, which annuity is the actuarial equivalent of the
single sum
amount. The following table shows a range of estimated retirement benefits,
in
the form of a single sum amount, that would be payable from the Retirement
Plan
as of the date of termination of employment under the terms of the account
based
formula described above based on Mr. Lynch’s service history. To the extent that
a participant’s compensation or benefits exceed certain limits imposed by the
Internal Revenue Code of 1986, as amended, the table also includes benefits
payable from an unfunded supplemental retirement plan. Reflecting the
annuity
conversion rates in effect for fiscal/plan year 2005-2006, the annuity
amount
that would be payable as of a participant’s Normal Retirement Age (65) based on
the indicated single sum amounts would be determined as 8.1% of the
participant’s stated single sum balance credited with compound interest at a
rate of 3% per annum from the participant’s date of termination to the
participant’s 65th
birthday.
Due
to Mr. Lynch’s
service with Warner-Lambert prior to Schick’s acquisition, he is entitled to a
frozen benefit in addition to the account based benefit described above.
This
frozen benefit of $25,745.67 annually is in addition to the amounts shown
in the
table. This benefit is payable as an annual annuity for the life of the
participant with 50% of the annuity payable to their surviving spouse.
Monthly
installments commence at age 65 or in a reduced amount at an earlier
date.
|
Final
Average Earnings- Account Based Formula for former
Warner-Lambert
Plan Participants
|
|||||
|
Final
Average
|
Total
Years of Service
|
||||
|
Earnings
|
10
|
15
|
20
|
25
|
30
|
|
$300,000
|
$51,500
|
$193,000
|
$357,000
|
$550,900
|
$744,900
|
|
$400,000
|
$70,000
|
$261,400
|
$482,900
|
$744,300
|
$1,005,800
|
|
$500,000
|
$88,400
|
$329,800
|
$608,800
|
$937,800
|
$1,266,700
|
|
$600,000
|
$106,800
|
$398,300
|
$734,700
|
$1,131,200
|
$1,527,600
|
|
$700,000
|
$125,200
|
$466,700
|
$860,600
|
$1,324,600
|
$1,788,500
|
|
$800,000
|
$143,600
|
$535,100
|
$986,500
|
$1,518,000
|
$2,049,500
|
|
$1,000,000
|
$180,500
|
$671,900
|
$1,238,400
|
$1,904,800
|
$2,571,300
|
|
$1,200,000
|
$217,300
|
$808,800
|
$1,490,200
|
$2,291,700
|
$3,093,100
|
|
$1,400,000
|
$254,100
|
$945,600
|
$1,742,000
|
$2,678,500
|
$3,615,000
|
|
$1,500,000
|
$272,600
|
$1,014,000
|
$1,868,000
|
$2,871,900
|
$3,875,900
|
|
$1,600,000
|
$291,000
|
$1,082,400
|
$1,993,900
|
$3,065,300
|
$4,136,800
|
|
$1,800,000
|
$327,800
|
$1,219,300
|
$2,245,700
|
$3,452,200
|
$4,658,600
|
PensionPlus
Match Account
To
the extent that each of the Named Executive Officers has elected to contribute
compensation on an after-tax basis to the Company-sponsored Savings Investment
Plan (SIP), a matching single sum amount is credited to a nominal account
balance established for each individual in the Retirement Plan. The single
sum
amount credited to the individual's account each year is equal to 325% of
the
first 1% of pay (up to a certain limit imposed on pay by the Internal Revenue
Code) contributed by the individual to the SIP on an after-tax basis. The
amounts so credited each year to the nominal account are further annually
credited each plan year with interest at a rate equal to the average 30-year
U.S. Treasury bond rate in effect during the August preceding the October
1
beginning of each plan year. These nominal accounts may be received by the
participant, upon termination of employment, in the form of a lump sum or
an
equivalent annuity. A participant vests in this benefit at the rate of 25%
per
year for the first four years of employment, with the PensionPlus Match Account
being 100% vested after four years. For fiscal year 2006, the following amounts
were accrued in the PensionPlus Match Accounts of the Named Executive Officers.
To
the
extent a Named Executive Officer’s compensation or benefits exceed certain
limits imposed by the Internal Revenue Code of 1986, as amended, amounts
below
also include benefits payable from the unfunded Executive Savings Investment
Plan.
| · |
Mr.
Klein:
$34,057
|
| · |
Mr.
Lynch:
$14,530
|
| · |
Mr.
McClanathan: $20,434
|
| · |
Mr.
Sescleifer: $17,753
|
| · |
Mr.
Hatfield:
$8,911
|
For
the purpose of
calculating retirement benefits, the Named Executive Officers had, as of
September 30, 2006, the following whole years of credited service: Messrs.
Lynch-11 years (including years of service with Pfizer, Inc.); Klein-27 years;
McClanathan-31 years; Hatfield- 20 years; and Sescleifer-5 years. Earnings
for
2006 used in calculating benefits (other than the PensionPlus Match Account)
under the retirement plans are approximately equal to amounts included in
the
Salary, Bonus and Long-Term Incentive Plans columns in the Summary Compensation
Table.
DEATH
BENEFIT PLAN
The
Company
maintains, at no cost to the participants, an unfunded Executive Retiree
Life
Plan to provide supplemental benefits to certain key members of management,
generally at the level of division vice president and above. The Plan provides
a
death benefit, after retirement of the participant, to his or her named
beneficiary in an amount equal, on an after-tax basis, to 50% of the
participant’s last full year’s salary and bonus prior to retirement. To be
eligible for the benefit, a participant must, at the time of retirement,
meet
certain conditions, including (1) being enrolled in the Company’s voluntary
Group Life Insurance Plan, which is available to almost all non-union
administrative and production employees in the United States, with coverage
of
at least one times earnings; and (2) being age 55 with at least two years
of
service, or having a combination of age and years of service equal to at
least
80. All of the Named Executive Officers participated in the voluntary Group
Life
Insurance Plan, at the required coverage level, during fiscal year
2006.
EMPLOYMENT
CONTRACTS AND TERMINATION OF EMPLOYMENT
AND
CHANGE
IN CONTROL ARRANGEMENTS
Change
of Control Employment Agreements
The
Company has
entered into Change of Control Employment Agreements with each of the Named
Executive Officers. The Agreements have a term of three years from their
effective date (which will be automatically extended every year for an
additional year unless the Company terminates the Agreements at least 90
days
prior to renewal), and provide that the Officers will receive severance
compensation in the event of their involuntary termination (including
constructive termination), other than for cause, within three years following
a
change in control of the Company. A change of control is generally defined
as
the acquisition of 20% or more of the outstanding shares of the Company’s Common
Stock. A change of control will also occur if the initial directors of the
Company, or their recommended or appointed successors, fail to constitute
a
majority of the board, or if the Company’s stockholders approve a merger,
consolidation or sale of all or substantially all of the assets of the Company.
The
severance
compensation payable under the Agreements consists of:
| · |
a
lump sum
payment in an amount equal to 3 times the Officer’s annual base salary and
target bonus;
|
| · |
the
difference between the Officer’s actual benefits under the Company’s
various 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 Officer’s
termination.
|
No
payments would be made in the event that the termination is voluntary, is
due to
death, disability or normal retirement, or is for cause.
In
the event that it is determined that a “golden parachute" excise tax is due
under the Internal Revenue Code, the Company 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.
Acceleration
Clauses
The
stock options
and restricted stock equivalent awards which have been granted to employees
and
directors, including the Named Executive Officers, under the Company's 2000
Incentive Stock Plan, and the Performance Awards under the terms of the Deferred
Compensation Plan, as described in the Long-Term Incentive Plan table, provide
for acceleration of vesting in the event of a change in control of the Company.
Company matching contributions under the terms of the Deferred Compensation
Plan
will accelerate and vest if the participant is involuntarily terminated within
12 months following a change in control of the Company.
NOMINATING
AND EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The
Nominating and
Executive Compensation Committee (the "Committee") is responsible for oversight
of the Company’s executive compensation and benefit policies to ensure that they
provide the appropriate motivation to achieve superior corporate performance
and
shareholder value. It approves direct and indirect compensation of executive
officers and administers and makes awards under the Company’s 2000 Incentive
Stock Plan, and the Executive Officer Bonus Plan which was approved by
shareholders during the past fiscal year. The Committee is composed entirely
of
independent, non-employee directors, consistent with New York Stock Exchange
listing standards and the Company’s Corporate Governance
Principles.
Compensation
Philosophy
A
key objective of the Company’s compensation philosophy is to reward management
based upon its success in building shareholder value. The Company's executive
compensation program is designed to provide a compensation package that,
in the
aggregate, will enable the Company to attract and retain highly talented
executives and maintain a performance-oriented culture. In addition, the
compensation program is designed to emphasize stock-based and/or performance
target-based incentive compensation in order to link compensation much more
directly to the performance of the Company. The compensation program is intended
to be one of “high risk/high opportunity” - with base salaries set below
competitive levels, but with incentive programs providing an opportunity
to
achieve total compensation considerably above average, if exceptional
performance is delivered. As a result, the executive compensation package
is
weighted toward programs that are contingent upon Company performance and
the
performance of the Company’s Common Stock. Management and the Committee have
agreed that the Company’s key performance metric, for the executive officers,
should be earnings per share (“EPS”), which has historically correlated very
closely with the trading price of the Company’s common stock. The Committee
annually approves specific criteria for targeted and exceptional EPS performance
- both on an annual and on a long-term basis. Compensation incentives have
taken
the form of annual bonuses based on performance targets for the Company as
well
as individual assessments, coupled with longer-term incentives designed to
drive
consistent EPS growth from year to year. In the past year, performance awards
tied to compound growth in EPS over a multiple-year period have also been
utilized. The Committee has also granted long-term stock-based incentives
designed to encourage Company stock ownership by executives, and a managerial
perspective that is in alignment with shareholders’ interests.
In
determining competitive pay standards, the Committee received advice from
compensation consultants at Hewitt Associates LLC, an independent consultant
retained by the Committee, which, as part of its normal operations, regularly
conducts external market studies for selected benchmark executive positions.
At
the request of the Committee, Hewitt, assisted by management, selected, as
a
comparator, a peer group of over twenty U.S.-based corporations of similar
size
with which the Company may compete in recruiting executive talent. Corporations
in the group include, but are not limited to, corporations included in the
comparison indices set forth in the Performance Graph contained in this Proxy
Statement.
Salaries
Management
and the
Committee have agreed that the target for the base salary component should
generally be below the 50th
percentile for the
comparator companies, with exceptions in appropriate situations. With that
underlying framework, the Committee has established the salaries of the
executive officers (other than the Chief Executive Officer) based on
recommendations of the Chief Executive Officer and the Company’s Vice President,
Human Resources, which are reviewed by the Committee’s consultant. These
recommendations include an assessment of the individual's responsibilities,
experience, individual performance and contribution to the Company's
performance, and also generally take into account compensation data from
other
companies as described above, historical compensation levels at the Company,
and
the competitive environment for attracting and retaining executives. In light
of
these considerations, the desire to bring certain of the officers closer
to
competitive pay levels, the Company’s continuing improvement in financial
performance during fiscal year 2006, and the recommendations of the Committee’s
consultant, the Committee has elected to increase the salaries of the executive
officers for fiscal year 2007, as it did for the previous fiscal year.
A
discussion of the Committee’s decisions regarding Mr. Klein’s annual salary is
set forth below. Salary compensation for the Named Executive Officers for
fiscal
year 2006 is set forth in the Summary Compensation Table.
Annual
and
Long-Term Cash Bonus Award Programs
Beginning
in fiscal
year 2003, the Company initiated an annual and long-term cash bonus award
program, with an annual component focusing primarily on the attainment of
corporate earnings goals for the fiscal year, as well as on the personal
performance of each executive, and a long-term component designed to reward
consistent growth in earnings performance from year to year.
Annual
Component
The
annual
component of the Program provides for a total annual award which is a percentage
(the “bonus target”) of the individual officer’s annual base salary. The annual
award itself is comprised of two elements:
| · |
a
Company
performance piece (based upon objective EPS performance targets)
- which
provides for a payment range applied to 70% of the officer’s bonus target
-
|
| w |
50%
for
threshold EPS results (equal to prior year actual results), increasing
proportionately up to
|
| w |
100%
for
budgeted EPS target (which has been a varying % above prior year
results),
and
|
| w |
150%
for
stretch EPS target (which has been a larger varying % above prior
year
results); and
|
| · |
an
individual
performance piece - which provides for a payment range applied to
30% of
the officer’s bonus target
|
| w |
200%
for a
“1” rating
|
| w |
125%
for a
“2” rating
|
| w |
50%
for a “3”
rating
|
| w |
No
payouts
for ratings below a “3”.
|
In
2006, the Company performance piece for Messrs. McClanathan, Lynch and Hatfield
was based 50% on achievement of EPS targets, and 50% on achievement of operating
profit targets for their operating units, and for all other officers was
based
solely on the achievement of EPS targets. For 2006, and prior years, the
EPS
targets were approved by the Committee, and the Chief Executive Officer then
set
the specific operating unit targets, which were derived from the EPS targets
and
based upon the business plan for the year. The CEO also had authority to
adjust
those operating unit targets (but not the EPS targets) if he deemed adjustment
to the business plan necessary to the attainment of business goals, such
as
building brand equity or strengthening the launch of new products. For 2007,
the
Company performance piece for all officers will be based on EPS targets alone,
and adjustments to the EPS targets approved by the Committee will be made
only
in the event of certain accounting changes and other objective events or
occurrences approved by the Committee at the time that targets were
established.
In
December of 2005, because of the significant and unusual nature of the Company’s
European restructuring program and the closure of its Caudebec facility,
the
Committee approved adjustment of the targets for FY 2006 by $0.25, reflecting
the actual expenses incurred in the restructuring and closure. However, in
recognition of the one-time nature of the charge, and the fact that the
restructuring project is anticipated to generate future cost savings, the
Committee also determined that targets for the 2007 Program, as well as for
the
2006 restricted stock equivalent awards described under Stock
Awards,
would be
increased by that amount, and that targets for the 2007 Program would be
further
increased by an additional $.07, reflecting the anticipated annual savings
from
the project.
After
the
Committee’s October, 2006 meeting, the Company discovered that one of its
non-U.S. subsidiaries had failed over several years to adjust its statutory
pension accounting to accounting principles generally accepted in the U.S.,
resulting in a cumulative, non-material understatement of its pension liability.
To correct the understatement, a $0.06 per diluted share charge against earnings
was then recorded in the fourth quarter of FY 2006. As a result of that charge,
the Company failed to achieve the stretch goal for 2006 earnings per share,
although the adjusted budgeted target was still met. With respect to the
operating unit metrics, which were not impacted by the pension charge, stretch
was achieved for razors and blades, and, for batteries, the budgeted target
was
met.
In
light of the lower 2006 GAAP earnings per share base as a result of the pension
charge, which was not known at the time the Committee approved the 2006
restricted stock equivalent awards described under Stock
Awards,
the Committee has
since elected to increase, by $0.06, the earnings per share targets under
those
awards, so that the desired level of earnings per share growth over the 3-year
performance period of the awards would be maintained.
Long-Term
Component
In
order to promote consistent EPS growth from year to year, the long-term
component of the Company’s bonus program creates, after the end of each fiscal
year, an additional bonus opportunity:
| · |
the
opportunity will be equal to 50% of the officer’s bonus target if the
budgeted EPS target for the year is achieved, proportionately increasing
up to 100% if the stretch EPS target for the fiscal year is
achieved.
|
| · |
50%
of that
bonus opportunity will only be paid out after the end of the next
fiscal
year if EPS results for the prior year are achieved again, proportionately
increasing up to payout of 100% of the opportunity if the budgeted
EPS
target for that next fiscal year is achieved.
|
As
noted, the Company’s actual results for fiscal year 2006 did, in fact, exceed
budgeted targets for that year, so a long-term opportunity, based on the
adjusted EPS figure described above, has been created; however, any actual
bonus
payout will depend upon fiscal year 2007 results. A similar bonus opportunity
was created for fiscal year 2005, and because results for fiscal year 2006
exceeded 2005 results, as well as the adjusted budgeted target for 2006,
the
officers received 100% of the bonus opportunity created during fiscal year
2005.
Details of the potential long-term bonus opportunities for the Named Executive
Officers under the bonus programs for fiscal years 2006 and 2007 are set
forth
on the table titled “Long-Term Incentive Plan - Awards in Last Fiscal Year”, and
the actual long-term payouts of the banked bonus opportunities created in
fiscal
year 2005 are included under Long-Term Compensation (Payouts) in the Summary
Compensation Table. As shareholders approved the material terms of the Executive
Officer Bonus Plan in 2006, the 2007 annual and long-term awards were made
pursuant to that Plan in order to preserve the tax deductibility of those
bonuses.
Deferrals
of Bonus Awards
The
Committee
exercises its discretion in determining whether to permit the Executive Officers
to defer payment of their cash bonus or other cash compensation under the
terms
of the Deferred Compensation Plan. In addition, under the terms of that Plan,
the Committee has for a number of years authorized an additional 25% Company
match on deferrals in the Energizer Common Stock Unit Fund of the Plan, which
match is subject to certain vesting requirements. The Committee believes
that
the Company match further aligns the executive's interests with those of
shareholders of the Company by encouraging an investment in Company stock
equivalents. It also adds a retention feature through the vesting requirements.
Deferrals mandated by the Committee in order to preserve the deductibility
of
compensation pursuant to Section 162(m) of the IRS Code, however, are not
credited with an additional match.
Stock
Awards
Under
the Company’s
2000 Incentive Stock Plan, stock-based incentive awards, including stock
options
and restricted stock equivalent awards, may be granted from time to time.
In
general, the Committee bases its decisions to grant stock-based incentives
on
recommendations of management and the Committee’s independent consultant, with
the intention of keeping the executives’ overall compensation, including the
equity component of that compensation, at a competitive level with the Company’s
comparator group. The Committee also considers the number of shares of Common
Stock outstanding, and the number of shares of Common Stock authorized under
the
2000 Incentive Stock Plan, as well as the Company's compensation objectives
and
policies described above. As with the determination of base salaries and
bonus
awards, the Committee exercises subjective judgment and discretion in view
of
the above criteria; however, the Committee and management have agreed that
the
number of stock-based incentive awards granted per year, as a percentage
of the
Company’s outstanding shares, will not exceed the market rate for equity grants
among the comparator companies.
Given
the important
link to shareholder interests that equity grants create, and the retentive
and
incentive value to the Company provided by a regular, competitive, grant
program, the Committee believes that it is appropriate to have an ongoing
annual
equity grant, of either options, restricted stock equivalents, or restricted
stock equivalents with performance criteria, or a combination of such awards,
which would be made to individuals selected on a yearly basis from pools
of
eligible officers and employees. Potential additional grants could also be
made
throughout the year in special circumstances.
In
October of 2005, in order to provide stronger incentives to continue EPS
growth
over a multiple year period, to provide additional retention incentive to
key
employees whose earlier equity grants have vested or were about to vest,
and to
bring the officers up to market compensation standards in terms of equity-linked
grants, the Committee approved a grant of restricted stock equivalents under
the
terms of the Company’s Deferred Compensation Plan to the Company’s executive
officers. The awards provide that 25% of the equivalents granted will vest
at
the end of 3 years, but none of the remaining equivalents granted will vest
unless the compound annual growth rate for EPS over that 3 year period is
at
least 10%. At that rate of return, an additional 25% will vest, with
proportionately increasing percentages vesting at returns above that threshold,
up to 100% vesting if the compound annual growth rate for that period equals
or
exceeds 15%. Under the terms of the Deferred Compensation Plan, vested
equivalents are paid out in cash upon the officers’ retirement or other
termination of employment. Once vested, the amount so credited may be
transferred to other investment options offered under the Plan.
The
size of the
individual awards to the executive officers was based upon recommendations
of
the Committee’s independent consultant, which were determined by consideration
of comparable market data for equity grants, and a subjective determination
of
the appropriate number of shares necessary to comprise a competitive long-term
component of the executive’s compensation package.
Following
the end
of the fiscal year, in October of 2006, the Committee again approved the
grant
of similar awards, with similar vesting criteria; the new awards, however,
are
not made pursuant to the terms of the Deferred Compensation Plan, and at
vesting
will convert into, and be issued in the form of, shares of Energizer common
stock.
Details
of the 2005
awards with performance criteria are included in the Long-Term Incentive
Plan -
Awards in Last Fiscal Year table, and details of the time-vesting portion
of the
2005
awards are included in the Summary Compensation Table.
Compensation
for the Chief Executive Officer
Upon
Mr. Ward
Klein’s appointment to serve as Chief Executive Officer of the Company in 2005,
the Committee requested that its independent compensation consultant make
recommendations as to an appropriate compensation package, given Mr. Klein’s new
responsibilities. The consultant recommended, and the Committee agreed, that
Mr.
Klein’s 2005 total compensation package should be set below market,
transitioning to fully competitive levels over a 2- to 3- year period. The
Committee also maintained its philosophy of setting the base salary of the
Chief
Executive Officer below market, while providing opportunities to deliver
total
compensation at market levels with commensurate performance through incentive
pay. To that end, the Committee set Mr. Klein’s salary at a level that was
significantly below market for chief executive officer positions among the
comparator companies. However, to provide an opportunity for higher compensation
tied to Company performance, the Committee also set his target bonus under
the
Annual and Long-Term Bonus Program described above at a level of 100% of
his
annual base salary. At the time of his appointment as CEO, the Committee
also
granted Mr. Klein a restricted stock equivalent award and a non-qualified
stock
option, the total value of which, as determined by the Committee’s consultant,
was again below market level for long-term incentive awards for chief executive
officers of the comparator companies. In October of 2005, as part of its
annual
review of equity grants to officers and key employees, the Committee granted
Mr.
Klein a performance award of 100,000 restricted stock equivalents under the
Deferred Compensation Plan, 25,000 of which vest three years from grant,
with
the remaining equivalents vesting only if certain thresholds for compound
annual
growth in EPS over the three year period are achieved, as described above
under
Stock
Awards.
Details of the
portion of the awards with performance criteria are included in the Long-Term
Incentive Plan - Awards in Last Fiscal Year table, and details of the
time-vesting portions of those awards are included in the Summary Compensation
Table. The Committee’s consultant determined that the size of the award was in
line with market equity grants to chief executive officers, and that the
total
compensation for Mr. Klein for fiscal year 2006, including his salary, annual
bonus, and long-term incentives, was within the desired range below market
approved by the Committee.
Mr.
Klein
participated in the fiscal year 2006 bonus program described under Annual
and
Long-Term Cash Bonus Award Programs
above. Under the
terms of that program, the Committee awarded an annual bonus to Mr. Klein,
based
on the quantitative increase in EPS achieved by the Company during 2006,
as well
as a subjective assessment of his performance during the year. The Committee’s
assessment was based upon its consideration of Mr. Klein’s efforts versus focal
points approved at the beginning of the fiscal year by the Board, the results
of
a CEO assessment completed by the members of the Board, as well as a
recommendation which the Committee sought from the Chairman and Vice Chairman
of
the Board. The Committee was pleased with his success in maintaining earnings
growth in the face of a difficult competitive and cost environment for the
Company’s two businesses, and the continuing integration of those businesses
internationally. The Committee also commended his continuing growth in
leadership of the Company and his management of his operational team, but
noted
that he was still relatively new and untested in the position. The Committee
was
also generally satisfied with his performance against his focal points for
the
year.
Because
the
Company’s budgeted EPS target, as adjusted, for fiscal year 2006 was achieved,
and in fact, exceeded, the additional banked bonus opportunity created in
fiscal
year 2005, as described under Annual
and
Long-Term Cash Bonus Award Programs,
became payable to
Mr. Klein. A percentage of the contingent bonus opportunity created in fiscal
year 2006, as described in that section, will be paid to him after the end
of
the current fiscal year only if actual EPS results for 2006 are equaled or
exceeded in fiscal year 2007.
In
October of 2006, again as part of its annual review of executive compensation,
the Committee requested a recommendation from its consultant regarding an
increase in base salary for Mr. Klein for the new fiscal year, and the
appropriateness of an additional equity award. In order to maintain Mr. Klein’s
base salary and total compensation within the desired range set by the
Committee, the consultant recommended that the Committee increase Mr. Klein’s
base salary for fiscal year 2007, and that it also award him an additional
long-term incentive in the form of a restricted stock equivalent award, with
similar vesting requirements (including Company performance criteria over
the
subsequent 3-year period) to those included in the award granted the previous
year. As with the awards to the other executive officers, the Committee believes
that the award is designed to encourage longer term focus on consistent,
significant EPS growth, that it serves as a means of retaining key executives
for the vesting period, and that it is in line with the Committee’s goals for a
competitive executive compensation package.
Deductibility
of Certain Executive Compensation
A
feature of the Omnibus Budget Reconciliation Act of 1993 sets a limit on
deductible compensation of $1,000,000 per year per person for those executives
designated as Named Executive Officers in the Proxy Statement. The Company
has
mandated or reserved the right to mandate the deferral of certain bonus and
salary payments to such officers. For fiscal year 2006, voluntary deferrals
of
payments under the Company’s annual and long-term cash bonus program will
effectively preserve the deductibility of essentially all compensation paid
to
the Named Executive Officers. As shareholders have approved the terms of
the
Executive Officer Bonus Plan, a significant portion of payments to the Named
Executive Officers under the Company’s annual and long-term cash bonus program
for 2007 will be performance-based and thus deductible. The performance-based
restricted stock equivalent awards granted to the Named Executive Officers
after
the end of fiscal year 2006 are pursuant to the shareholder-approved Incentive
Stock Plan, and accordingly will also be deductible when vested and paid.
While
it is the general intention of the Committee to meet the requirements for
deductibility, the Committee may approve payment of non-deductible compensation
from time to time if unusual circumstances warrant it. The Committee will
continue to review and monitor its policy with respect to the deductibility
of
compensation.
Conclusion
The
Committee is
satisfied that the compensation and long-term incentive plans provided to
the
executives of the Company are structured and operated to foster a
performance-oriented culture and create strong alignment with the long-term
best
interests of the Company and its shareholders. It is also satisfied that
compensation levels are reasonable in light of performance and the competitive
environment for attracting and retaining executives.
John
E. Klein -
Chairman W.
Patrick
McGinnis
Bill
G.
Armstrong
Pamela
M. Nicholson
John
C.
Hunter
John
R. Roberts
Richard
A.
Liddy
AUDIT
COMMITTEE REPORT
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.
The
Audit Committee
of the Company’s Board of Directors consists entirely of non-employee directors
that are independent, as defined in Sections 303.01(B)(2)(a) and (3) of the
New
York Stock Exchange Listing Standards.
Management
is
responsible for the Company’s internal controls and the financial reporting
process. The independent accountants are responsible for performing an
independent audit of the Company’s consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Committee’s responsibility is to monitor and oversee these
processes.
With
respect to the
Company’s audited financial statements for the Company’s fiscal year ended
September 30, 2006, management of the Company has represented to the Committee
that the financial statements were prepared in accordance with generally
accepted accounting principles and the Committee has reviewed and discussed
those financial statements with management. The Audit Committee has also
discussed with PricewaterhouseCoopers LLP, the Company’s independent
accountants, the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees) as modified or
supplemented.
The
Audit Committee
has received the written disclosures from PricewaterhouseCoopers LLP required
by
Independence Standards Board Standard No. 1 (Independence Standards Board
Standard No.1, Independence Discussions with Audit Committees), as modified
or
supplemented, and has discussed the independence of PricewaterhouseCoopers
LLP
with members of that firm. In doing so, the Committee considered whether
the
non-audit services provided by PricewaterhouseCoopers LLP were compatible
with
its independence.
Based
on the review
and discussions referred to above, the Audit Committee recommended to the
Company’s Board of Directors that the audited financial statements for the
fiscal year ended September 30, 2006 be included in the Company’s Annual Report
on Form 10-K for that year.
John
R. Roberts-
Chairman Richard
A.
Liddy
Bill
G.
Armstrong
Pamela
M. Nicholson
John
E.
Klein
PERFORMANCE
GRAPH
The
graph below is
presented in accordance with SEC requirements. You are cautioned against
drawing
any conclusions from the data in the graph, as past results do not necessarily
indicate future performance. The graph does not reflect the Company’s forecast
of future financial performance.
Despite
anything to
the contrary in any of the Company’s previous SEC filings under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
that might incorporate future filings, including this Proxy Statement, in
whole
or in part, the following graph as well as the Nominating and Executive
Compensation Committee Report on Executive Compensation and the Audit Committee
Report set forth above will not be incorporated by reference into any such
filings.
The
line graph
below compares the annual percentage change in cumulative total shareholder
return for the Company’s Common Stock with the cumulative total return of the
Standard & Poor’s Midcap 400 and Midcap Electronics Indices.
DELIVERY
OF
DOCUMENTS
Householding
of Annual Meeting Materials.
The Securities
and Exchange Commission 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 proxy statement and 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) 985-2161). If you are currently a shareholder sharing
an
address with another shareholder and wish to have only one proxy statement
and
annual report delivered to the household in the future, please contact us
at the
same address.
Electronic
Delivery.
For next year’s
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)
985-2161). If you choose to receive the proxy statement and annual report
electronically, then prior to next year’s 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.
SHAREHOLDER
PROPOSALS FOR 2008 ANNUAL MEETING
Any
proposals to be
presented at the 2008 Annual Meeting of Shareholders, which will be held
on
January 28, 2008, must be received by the Company, directed to the attention
of
the Secretary, no later than August 1, 2007 in order to be included in the
Company’s 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 Securities and Exchange Commission and the Bylaws
of the
Company.
In
order for a shareholder to nominate a candidate for director, under the
Company’s Bylaws timely notice of the nomination must be received by the Company
in advance of the meeting. Ordinarily, such notice must be received not less
than 90, nor more than 120, days before the meeting (but if the Company gives
less than 90 days’ (1) notice of the meeting or (2) prior public disclosure of
the date of the meeting, then such notice must be received within 7 days
after
notice of the meeting is mailed or other public disclosure of the meeting
is
made), or prior to October 31, 2007 for the 2008 Annual Meeting. The notice
of
nomination must include, as to each person whom the shareholder proposes
to
nominate for election, the candidate’s name, age, business and residential
address, and principal occupation for the previous 5 years, the nominee’s
consent to being named as a nominee and to serving on the Board, and the
number
of shares of Common Stock beneficially owned by the nominee. To assist in
the
evaluation of shareholder-recommended candidates, the Committee may request
that
the shareholder provide certain additional information required to be disclosed
in the Company’s proxy statement under Regulation 14A of the Securities Exchange
Act of 1934. 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 therefor, the name and address of the shareholder
making the proposal, and the number of shares of Common Stock beneficially
owned. These requirements are separate from and in addition to the requirements
a shareholder must meet to have a proposal included in the Company’s Proxy
Statement.
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
the Company’s Bylaws will be provided without charge upon written request to the
Secretary.
By
order of the
Board of Directors,
Timothy
L.
Grosch
Secretary
December
5,
2006
2007
ANNUAL MEETING ADMISSION TICKET
ENERGIZER
HOLDINGS, INC.
2007
ANNUAL
MEETING OF SHAREHOLDERS
Monday,
January 22,
2007
2:30
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.
Admittance
will be
based upon availability of seating.
tFOLD
AND DETACH HERE AND READ THE REVERSE
SIDEt
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ENERGIZER
HOLDINGS, INC.
This
Proxy is
Solicited on Behalf of the Board of Directors
for
the Annual
Meeting of Shareholders on January 22, 2007
|
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” Items
1.
The
undersigned hereby appoints W.M. Klein and G.G. Stratmann as Proxies,
with
the power of substitution, to represent and to vote, as designated
below,
all the shares of the undersigned held of record on November 17,
2006, at
the Annual Meeting of Shareholders to be held on January 22, 2007
and any
adjournments 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):
|
|
|
VOTE
BY TELEPHONE
OR INTERNET
QUICK
*** EASY *** IMMEDIATE
ENERGIZER
HOLDINGS, INC.
|
n
|
You
can now
vote your shares electronically through the Internet or the
telephone.
|
|
n
|
This
eliminates the need to return the proxy card.
|
|
n
|
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.
|
TO
VOTE
YOUR PROXY BY INTERNET
www.energizer.com
Have
your proxy
card in hand when you access the above website. Select “ENR Shareholder Proxy
Voting”. Follow instructions on the website.
TO
VOTE
YOUR PROXY BY MAIL
Mark,
sign, and
date the proxy card below, detach it, and return it in the postage-paid
envelope
provided.
TO
VOTE
YOUR PROXY BY PHONE
1-866-894-0537
Use
any touch-tone
telephone to vote your proxy. Have your proxy card in hand when you call.
Follow
instructions given to you on the phone.
PLEASE
DO
NOT RETURN THE BELOW CARD IF VOTED ELECTRONICALLY
tFOLD
AND DETACH HERE AND READ THE REVERSE
SIDEt
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Proxy
by
Mail
|
Please
mark
your
vote
like
this
x
|
|
ENERGIZER
HOLDINGS, INC.
|
COMMON
STOCK
|
|
THE
BOARD OF
DIRECTORS RECOMMENDS A VOTE “FOR”:
|
|
|
1.
Election
of Directors For All Withhold For
All
Nominees Except
o o o
|
|
|
Nominees:
01
R. David Hoover, 02 John C. Hunter, 03 John E. Klein, 04
John R. Roberts.
To
withhold
authority to vote for any nominees listed above, mark the
“For All Except”
box and write the name(s) of the nominee(s) from whom you
wish to withhold
authority to vote in the space provided below.
|
Please
be
sure to sign and date this Proxy Card.
|
|
|
|
|
IF
YOU WISH
TO VOTE ELECTRONICALLY PLEASE READ THE
INSTRUCTIONS ABOVE
|
|
|
Mark
box at
right if you plan to attend the Annual Meeting on January
22,
2007. o
|
|
|
|
|
|
COMPANY
ID:
PROXY
NUMBER:
ACCOUNT
NUMBER:
|
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.
[SIP
Participants' letter]
ENERGIZER
HOLDINGS,
INC.
December
5,
2006
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 22, 2007. 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
November 17, 2006. Shares credited to your account as of November 9, 2006 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 10, 2006 and November
17,
2006, 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 January 17,
2007.
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
[Electronic
Delivery Letter]
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
2007 Annual
Meeting of Shareholders of Energizer Holdings, Inc. will be held at Energizer
World Headquarters, 533 Maryville University Drive, St. Louis, Missouri on
Monday, January 22, 2007, at 2:30 p.m., local time, for the following
purpose:
To
elect four
directors to serve three-year terms ending at the Annual Meeting held in
2010,
or until their respective successors are elected and qualified.
Shareholders
of
record at the close of business on November 17, 2006, are entitled to notice
of
and to vote at the Annual Meeting.
Holders
of a
majority of the outstanding shares 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 2006
Annual Report and Proxy Statement, please go to the Website www.energizer.com,
click on Our
Company and then click on Investor Information. You will then see two direct
links - one for the 2006 Proxy Statement and one for the 2006 Annual
Report.
VOTE
YOUR
PROXY
To
vote your proxy
over the Internet, please go to the Website www.energizer.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.