UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
FOR
ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT
TO SECTION 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
(Mark
One)
[X]
Annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934
for
the
fiscal year ended December 31, 2005.
or
[ ]
Transition
report pursuant to section 15(d) of the Securities Exchange Act of 1934
for
the
transition period from
to
.
Commission
file number: 001-13615
A. Full
title of the plan and the address of the plan, if different from that of the
issuer named below:
Rayovac
401(k) Retirement Savings Plan.
B. Name
of
issuer of securities held pursuant to the plan and the address of its principal
executive office:
Spectrum
Brands, Inc.
6
Concourse Parkway
Suite
3300
Atlanta,
GA 30328
The
following financial statements are furnished herewith:
Report
of
Kiesling Associates LLP.
Statements
of Assets Available for Plan Benefits.
Statements
of Changes in Assets Available for Plan Benefits.
Notes
to
Financial Statements.
Report
of
KPMG LLP.
Statement
of Assets Available for Plan Benefits.
Statement
of Changes in Assets Available for Plan Benefits.
Notes
to
Financial Statements.
The
following exhibits are furnished herewith:
Exhibit
23.1 Consent
of Kiesling Associates LLP.
Exhibit
23.2 Consent
of KPMG LLP.
Rayovac
401(k) Retirement Savings Plan
Atlanta,
Georgia
FINANCIAL
STATEMENTS
Including
Report of Independent Registered Public Accounting Firm
December
31, 2005
Rayovac
401(k) Retirement Savings Plan
TABLE
OF
CONTENTS
|
Report
of Independent Registered Public Accounting Firm
|
1
|
|||
|
Financial
Statements
|
||||
|
Statement
of Net Assets Available for Plan Benefits
|
2
|
|||
|
Statement
of Changes in Net Assets Available for Plan Benefits
|
3
|
|||
|
Notes
to Financial Statements
|
4
|
|||
|
Supplemental
Information
|
||||
|
Schedule
of Assets (Held at End of Year)
|
12
|
Report
of Independent Registered Public Accounting Firm
To
the
Retirement Committee
Rayovac
401(k) Retirement Savings Plan
We
have
audited the accompanying statement of net assets available for benefits of
Rayovac 401(k) Retirement Savings Plan as of December 31, 2005, and the
related statement of changes in net assets available for benefits for the year
then ended. These financial statements are the responsibility of the plan’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for plan benefits of the plan as
of
December 31, 2005, and the changes in net assets available for plan
benefits for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
Our
audit
was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of Rayovac 401(k)
Retirement of Savings Plan, as listed in the table of contents, is presented
for
the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental information is the
responsibility of the plan’s management. The supplemental information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/
Kiesling Associates LLP
Kiesling
Associates LLP
Madison,
Wisconsin
June
9,
2006
1
Rayovac
401(k) Retirement Savings Plan
STATEMENT
OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December
31, 2005
|
2005
|
||||
|
Plan
interest in Master Trust for Spectrum Brands
|
$
|
76,269,026
|
||
|
NET
ASSETS AVAILABLE FOR PLAN BENEFITS
|
$
|
76,269,026
|
See
accompanying notes to financial statements.
2
Rayovac
401(k) Retirement Savings Plan
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year
ended December 31, 2005
|
2005
|
||||
|
INCREASE
IN ASSETS:
|
||||
|
Investment
gain from Master Trust for Spectrum Brands
|
$
|
2,758,123
|
||
|
Interest
and dividends
|
1,315,789
|
|||
|
Participant
Contributions
|
4,202,833
|
|||
|
Employer
Contributions
|
2,237,440
|
|||
|
Rollovers
|
388,348
|
|||
|
Total
increases
|
10,902,533
|
|||
|
DEDUCTIONS
FROM ASSETS:
|
||||
|
Distributions
and benefits paid
|
3,104,783
|
|||
|
Administrative
expenses
|
13,435
|
|||
|
Total
deductions
|
3,118,218
|
|||
|
Net
increase before plan transfer
|
7,784,315
|
|||
|
Transfers
from other plans
|
23,862
|
|||
|
Net
increase
|
7,808,177
|
|||
|
NET
ASSETS AVAILABLE FOR PLAN BENEFITS
|
||||
|
Beginning
of year
|
68,460,849
|
|||
|
End of year
|
$
|
76,269,026
|
See
accompanying notes to financial statements.
3
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
1 - Description of the Plan
The
following description of the Rayovac 401(k) Retirement Savings Plan (the "Plan")
provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
The
Plan
is a defined contribution plan covering all domestic salaried and non-union
hourly employees of Spectrum Brands ("the Company" or "the Plan Sponsor").
The
purpose of the Plan is to provide supplemental support for participants upon
their retirement. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The Plan's assets are included
in the Master Trust for the Company (Master Trust). The Master Trust also
includes the assets of the Rayovac 401(k) Savings Plan for Hourly Employees
(which covers hourly union employees).
Eligibility
Employees
are eligible to participate in the Plan on the first day of the month coinciding
with the 90th day following the date the employee performed his or her first
hour of service. Part-time employees of the Dixon Division are eligible to
participate in the Plan on the first day of the month coinciding with the
twelve-month period following the employee's employment date.
Contributions
Active
participants are permitted to make contributions to the Plan in whole
percentages up to 50% of their pretax annual compensation, as defined in the
Plan document, subject to applicable limits of the Internal Revenue
Code.
The
Company is required to make periodic contributions ranging from 3% to 6% of
the
Participant's compensation, depending on whether the employee is hourly or
salaried and the age of salaried employees, as defined in the Plan. For each
participant in the Dixon and the Nashville Division, the Company is required
to
make matching contributions equal to 25% of the first 4% of pay the participant
contributes to the Plan as elective deferrals. Additional amounts may be
contributed at the option of the Company's board of directors. There were no
additional contributions in 2005.
Company
contributions to participant accounts are limited to the applicable limits
of
the Internal Revenue Code.
Participant
Accounts
Each
participant's account is credited with the participant's contributions and
an
allocation of the Company's contributions and Plan earnings, and charged with
an
allocation of administrative expenses. Allocations are based on participant's
compensation or account balances, as defined in the Plan document.
Vesting
A
participant is fully vested in his or her entire account balance, including
the
balances attributable to both the employee contributions and employer
contributions, at all times.
4
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
1 - Description of the Plan
(cont.)
Investment
Fund Options
Participant
contributions and investment earnings were directed by the individual Plan
participants to certain investment choices offered under the Plan through the
Master Trust. Descriptions of the investment fund options at December 31, 2005
are as follows:
Stable
Value Fund
Stable
Value Fund, which seeks a reasonable level of income together with stability
of
principal, invests in Key Trust Company EB Managed GIC Funds, which invest
primarily in various investment contracts. The fund may also invest a portion
of
its assets in cash or money market accounts for liquidity purposes
only.
PIMCO
Total Return Fund
PIMCO
Total Return Fund, an income oriented mutual fund which also seeks capital
appreciation over time, invests in a range of bonds and equities resulting
in an
intermediate maturity portfolio with a duration between three and six years.
Bonds may have variable, fixed or floating rates of interest. The fund seeks
maximum total return consistent with preservation of capital and prudent
investment management.
Vanguard
Index Trust 500 Portfolio
Vanguard
Index Trust 500 Portfolio, and income mutual fund, invests in all 500 stocks
in
the Standard & Poor's Composite Stock Price Index (the S&P 500 Index),
an index which emphasizes large-capitalization companies and is generally
considered to be representative of the U.S. stock market, in approximately
the
same proportions as they are represented in the S&P 500 Index. The fund
seeks to replicate the aggregate price and yield performance of the S&P 500
Index. Balances in this fund may also be invested in short-term money market
instruments.
Rayovac
Stock Fund
Rayovac
Stock Fund invests in Rayovac Corporation common stock. The fund may also invest
a portion of its assets in cash or money market accounts for liquidity purposes
only.
AIM
Small Cap Growth Fund
AIM
Small
Cap Growth Fund invests in a portfolio which in turn invests as least 65% of
its
total assets in equity securities of U.S. issuers that have market
capitalizations less than that of the largest company in the Russell 2000 Index.
The fund's investment objective is long-term growth of capital.
Oakmark
Equity and Income Fund
Oakmark
Equity and Income Fund seeks current income and preservation and growth of
capital. The fund generally invests between 50% and 75% of assets in equities
and between 25% and 50% of assets in U.S. government and corporate debt rated
AA
or higher. It may invest up to 20% of assets in unrated debt or debt rated
below
investment grade. The fund may also invest up to 25% of assets in foreign
securities.
5
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
1 - Description of the Plan
(cont.)
Van
Kampen Growth and Income Fund
Van
Kampen Growth and Income Fund seeks income and long-term growth of capital.
The
fund invests primarily in income-producing equities, including common stocks
and
convertible securities (although investments are also made in non-convertible
preferred stocks and debt securities). It limits investments in foreign
securities to 25% of assets.
American
Funds Growth Fund of America Fund
American
Funds Growth Fund of America Fund seeks capital growth. The fund invests
primarily in common stocks. Management selects securities that it believes
are
reasonably priced and represent solid long-term investment opportunities. The
fund may invest up to 15% of assets in securities of issuers domiciled outside
of the U.S. and Canada and not included in the S&P 500 Index. It may also
invest up to 10% of assets in debt securities rated below
investment-grade.
MainStay
MAP Fund
MainStay
MAP Fund seeks long-term growth of capital; current income is a secondary
consideration. The fund normally invests at least 65% of assets in equity
securities of domestic issues. It may also invest in common and preferred
stocks, convertible securities, ADRs, bonds, notes, and debentures.
MFS
International New Discovery
MFS
International New Discovery Fund seeks capital appreciation. The fund normally
invests at least 65% of assets in equity securities of companies with small
market capitalizations, typically from at least three countries. It may invest
in common stocks and related equity securities, such as preferred stock,
convertible securities, and depositary receipts of foreign issues. The fund
may
also invest in foreign markets, emerging markets, and over-the-counter markets.
It may engage in active and frequent trading.
Old
Mutual Mid Cap Fund
Old
Mutual Mid Cap Fund seeks above-average total return over a three to five year
market cycle. The fund normally invests at least 80% of assets in equities
issued by companies with market capitalizations similar to the market
capitalizations of companies in the S&P MidCap 400 Index. It may invest,
without limitation, in high-grade U.S. dollar denominated debt securities and
cash equivalents for temporary defensive purposes.
Hotchkis
Large Cap Fund
Hotchkis
Large Cap Fund seeks current income and long-term growth of income, as well
as
capital appreciation. The fund primarily invests in domestic equity securities
of companies with large market capitalizations.
Artisan
Small Cap Fund
Artisan
Small Cap Fund seeks long-term capital growth. The fund primarily invests in
domestic equity securities of companies with market capitalizations between
$200 million and $1.5 billion.
6
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
1 - Description of the Plan
(cont.)
Franklin
Micro Cap Value Fund,
Franklin
Micro Cap Value Fund seeks total return. The fund normally invests at least
80%
of assets in equity securities of companies with market capitalizations of
less
than $300 million at the time of purchase. It may invest the balance in equities
of larger companies, as well as a portion of assets in debt. Management
typically seeks undervalued securities that have low P/E ratios. The fund may
also invest up to 10% of assets in foreign securities. It is
nondiversified.
Payment
of Benefits
Upon
retirement or termination of employment, the participant's account balance
is
payable to him or her, or in the event of death, the participant's beneficiary.
Participants may be eligible for a hardship withdrawal from their pretax
participant account under certain circumstances and with the Plan
Administrator's approval.
NOTE
2 - Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying financial statements have been prepared on the accrual basis and
present the net assets available for plan benefits and changes in those assets
in accordance with accounting principles generally accepted in the United States
of America.
Trust
Fund Managed by New York Life Trust Company
Under
the
terms of a trust agreement between the New York Life Trust Company (the Trustee)
and the Plan, the Trustee manages the Master Trust on behalf of the
Plan.
Valuation
of Investments and Income Recognition
The
fair
value of the Plan's interest in the Master Trust is based on the beginning
of
year value of the Plan's interest in the Master Trust (based on the fair value
of the respective investments, as described in the following paragraph) plus
actual contributions and allocated investment income, including unrealized
gains
and losses, less actual distributions, and allocated administrative
expenses.
Investments
in shares of mutual funds are stated at quoted net asset values. Investments
in
shares of Spectrum Brands common stock are stated at quoted market
prices.
Purchases
and sales of securities are reflected on a trade-date basis. The Plan reports
realized and unrealized gains and losses for financial statement purposes based
on revalued cost wherein cost is determined to be fair value at the end of
the
prior plan year, or historical cost if the investment was acquired since the
beginning of the plan year, as required by the Department of Labor.
7
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
2 - Summary of Significant Accounting Policies
(cont.)
Valuation
of Investments and Income Recognition (cont.)
The
Plan's investments are exposed to various risks, such as interest rate, market,
and credit risks. Due to the level of risk associated with certain investments
and the level of uncertainty related to changes in the values of investments,
it
is at least reasonably possible that changes in risks in the near term would
materially affect participants' account balances and the amounts reported in
the
statement of net assets available for plan benefits and the statement of changes
in net assets available for plan benefits.
Benefits
paid
Benefits
paid to participants are recorded upon distribution.
Administrative
Expenses
Expenses
incurred in the administration of the Plan are paid both by the Plan and by
the
Company. Administrative expenses for 2005 were approximately $20,600. The fees
paid by the Company for 2005 were approximately $7,200. The fees paid by the
Plan for 2005, which consist of management fees, were approximately
$13,400.
Use
of Estimates
The
Plan
Administrator has made a number of estimates and assumptions relating to the
reporting of net assets available for plan benefits and the disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of changes in assets available for plan benefits during the reporting
period to prepare these financial statements in conformity with accounting
principles generally accepted in the United States of America. Actual results
could differ from those estimates.
Participant
Loans
Participants
may receive loans from their accounts up to the lesser of 50% of the individual
participant's vested account balance or $50,000. If the participant has received
a loan in the past, however, the $50,000 limit is reduced by the highest
outstanding loan balance during the preceding 12-month period. Loan terms must
not exceed five years, except in the case of loans used for purchase of a
primary residence, in which case the loan period must not exceed ten years.
Loans are secured by the vested balance in the participant's account and bear
interest at the prime rate plus 150 basis points. Principal and interest
payments are due on a quarterly basis or more often and are reinvested in the
investment option(s) selected by the participant.
8
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
3 - Party-in-interest Transactions
The
Plan
has not considered Company contributions to the Plan or benefits paid by the
Plan for participants as party-in-interest transactions.
Fees
incurred by the Plan for investment management services amounted to
approximately $13,400 for the year ended December 31, 2005.
Fees
paid
during the year for legal, accounting, actuarial, and other professional
services rendered by parties-in-interest were based on customary and reasonable
rates for such services.
NOTE
4 - Tax Status
The
Internal Revenue Service has determined and informed the Company by a letter
dated October 2, 2001, that the Plan and related Trust are designed in
accordance with applicable sections of the Internal Revenue Code. The Plan
has
been amended since receiving the determination letter. However, the plan
administrator believes that the Plan is currently designed and being operated
in
accordance with the applicable requirements of the Internal Revenue Code and,
therefore, the plan continues to qualify under Section 401(k) and the related
trust continues to be tax-exempt as of December 31, 2005. Therefore, no
provision for income taxes is included in the Plan's financial
statements.
NOTE
5 - Plan Termination
The
Company has the right under the Plan agreement to reduce or cease contributions
at the discretion of the Board of Directors, or to amend the Plan at any time
and in any respect. However, no such action may deprive any participant or
beneficiary under the Plan of any vested right. In the event the Plan is wholly
or partially terminated, or upon the complete discontinuance of contributions
under the Plan by any entity that is a part of the Company, each participant's
interest in their account shall be nonforfeitable on the date of such
termination or discontinuance.
9
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
6 - Master Trust for Spectrum Brands
At
December 31, 2005, the Plan's investment assets were held in a trust
account at New York Life and consist of an interest in a Master Trust. The
Master Trust also includes the investment assets of the Rayovac 401(k) Savings
Plan for Hourly Employees.
A
summary
of investments in the Master Trust as of December 31, 2005, is as
follows:
|
2005
|
||||
|
Assets:
|
||||
|
Investments,
at fair value:
|
||||
|
Mutual
funds
|
$
|
77,827,553
|
||
|
Participant
loans, interest rates of prime plus 150 basis points
|
436,381
|
|||
|
Spectrum
Brands common stock
|
2,586,255
|
|||
|
Total
Assets
|
$
|
80,850,189
|
The
changes in assets of the Master Trust during the year ended December 31,
2005 is as follows:
|
2005
|
||||
|
Increases
in Assets:
|
||||
|
Investment
income:
|
||||
|
Net
appreciation in fair value of investments:
|
||||
|
Mutual
funds
|
$
|
4,131,230
|
||
|
Spectrum
Brands common stock
|
(1,233,765
|
)
|
||
|
Total
appreciation in fair value of investments
|
2,897,465
|
|||
|
Interest
and dividends
|
1,389,166
|
|||
|
Total
investment income in Master Trust
|
4,286,631
|
|||
|
Participant
contributions
|
4,787,347
|
|||
|
Employer
contributions
|
2,237,440
|
|||
|
Rollovers
|
388,348
|
|||
|
Total
increases
|
11,699,766
|
|||
|
Deductions
from assets:
|
||||
|
Distributions
and benefits paid
|
3,339,616
|
|||
|
Administrative
expenses
|
16,269
|
|||
|
Total
deductions
|
3,355,885
|
|||
|
Net increase before plan transfer
|
8,343,881
|
|||
|
Transfers from other plans
|
23,862
|
|||
|
Net
increase
|
8,367,743
|
|||
|
Assets,
beginning of year
|
72,482,446
|
|||
|
Assets,
end of year
|
$
|
80,850,189
|
10
Rayovac
401(k) Retirement Savings Plan
NOTES
TO
FINANCIAL STATEMENTS
December
31, 2005
NOTE
6 - Master Trust for Spectrum Brands
(cont.)
As
of
December 31, 2005, the Plan has an allocated share of approximately 94.3%
of the total Master Trust investments. The Plan has an allocated share of
investment income (loss) of approximately 95% for 2005.
NOTE
7 - Investments
The
following presents investments that represent five percent or more of the Plan's
net assets:
|
2005
|
||||
|
Rayovac
Stable Value Fund, NYL Insurance Anchor Account I
|
$
|
14,486,427
|
||
|
PIMCO
Total Return Fund (Admin), 681,813 shares
|
7,159,042
|
|||
|
Hotchkis
Large Cap Value (A), 324,579 shares
|
7,575,670
|
|||
|
Vanguard
500 Index Fund Inv, 136,491 shares
|
15,685,553
|
|||
|
The
Growth Fund of America R4, 404,418 shares
|
12,407,549
|
|||
|
Artisan
Small Cap Fund, 249,746 shares
|
4,335,597
|
|||
|
MFS
Intl New Discovery A, 213,214 shares
|
5,083,013
|
NOTE
8 - Subsequent Events
On
May 1, 2006, the Master Trust changed their trustee from New York Life
Trust Company to Prudential Bank & Trust, FSB. All assets included in the
Master Trust were transferred effective May 1, 2006. In addition, the Plan
merged in the Rayovac 401(k) Savings Plan for Hourly Employees and two other
plans, and changed the plan name to Spectrum Brands 401(k) Retirement Savings
Plan.
11
Rayovac
401(k) Retirement Savings Plan
SCHEDULE
OF ASSETS (HELD AT END OF YEAR)
December
31, 2005
|
Identity
of Issue, lessor,
or
Similar Party
|
Description
of Investment
|
Cost
|
Current
Value
|
||||
|
*
|
Participant
Loans
|
Maturities
ranging from 2006 to 2014; interest rates ranging from 5.5% to
10.0%
|
$0
|
$
436,381
|
|||
|
*
|
Master
Trust
|
94.3%
interest in the Master Trust for Spectrum Brands
|
--
|
75,832,645
|
|||
|
*
|
Represents
a party in interest
|
||||||
12
Rayovac
401(k) Retirement Savings Plan
Financial
Statements
December 31,
2004
(With
Report of Independent Registered Public Accounting Firm Thereon)
Rayovac
401(k) Retirement Savings Plan
Table
of Contents
|
Page
|
|
|
Report
of Independent Registered Public Accounting Firm
|
1
|
|
Statement
of Assets Available for Plan Benefits December 31, 2004
|
2
|
|
Statement
of Changes in Assets Available for Plan Benefits for the year then
ended
December 31, 2004
|
3
|
|
Notes
to Financial Statements
|
4
|
Report
of Independent Registered Public Accounting Firm
Plan
Administrator
Rayovac
401(k) Retirement Savings Plan:
We
have
audited the accompanying statement of assets available for benefits of the
Rayovac 401(k) Retirement Savings Plan (the Plan) as of December 31, 2004,
and
the related statement of changes in assets available for benefits for the
year
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the assets available for benefits of the Plan as of December
31, 2004, and the changes in assets available for benefits for the year then
ended in conformity with U.S. generally accepted accounting
principles.
/s/
KPMG
LLP
KPMG
LLP
Atlanta,
Georgia
June
27,
2005
1
|
Rayovac
401(k) Retirement Savings Plan
|
|
Statement
of Assets Available for Plan Benefits
|
|
December
31, 2004
|
|
2004
|
||||
|
Plan
interest in Master Trust for Rayovac Corporation (note 6)
|
$
|
68,460,849
|
||
|
Assets
available for plan benefits
|
$
|
68,460,849
|
||
|
See
accompanying notes to financial statements.
|
2
|
Rayovac
401(k) Retirement Savings Plan
|
|
Statement
of Changes in Assets Available for Plan Benefits
|
|
Year
ended December 31, 2004
|
|
2004
|
||||
|
Increase
in assets:
|
||||
|
Investment
gain from Master Trust for Rayovac
|
||||
|
Corporation
(note 6)
|
$
|
5,461,298
|
||
|
Interest
and dividends
|
1,062,763
|
|||
|
Participant
Contributions
|
3,493,872
|
|||
|
Employer
Contributions
|
1,870,679
|
|||
|
Other
Deposits (Remington Merger)
|
4,675,866
|
|||
|
Rollovers
|
250,745
|
|||
|
Total
increases
|
16,815,223
|
|||
|
Deductions
from assets:
|
||||
|
Distributions
and benefits paid
|
(5,046,627
|
)
|
||
|
Administrative
expenses
|
(11,917
|
)
|
||
|
Total
deductions
|
(5,058,544
|
)
|
||
|
Net
increase in assets
|
11,756,679
|
|||
|
Assets
available for plan benefits:
|
||||
|
Beginning
of year
|
56,704,170
|
|||
|
End
of year
|
$
|
68,460,849
|
||
|
See
accompanying notes to financial statements.
|
||||
3
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
(1)
Description of the Plan
The
following description of the Rayovac 401(k) Retirement Savings Plan (the Plan)
provides general information. Participants should refer to the Plan document
for
a more complete description of the Plan’s provisions.
(a)
General
The
Plan
is a defined contribution plan covering all domestic salaried and non-union
hourly employees of Rayovac Corporation (“the Company” or “the Plan Sponsor”).
The purpose of the Plan is to provide supplemental support for participants
upon
their retirement. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The Plan’s assets are included
in the Master Trust for the Company (Master Trust). The Master Trust also
includes the assets of the Rayovac 401(k) Savings Plan for Hourly Employees
(which covers hourly union employees).
(b)
Eligibility
Employees
are eligible to participate in the Plan on the first day of the month coinciding
with the ninetieth day following the date the employee performed his or her
first hour of service. Part-time employees of the Dixon Division are eligible
to
participate in the Plan on the first day of the month coinciding with the
twelve-month period following the employee’s employment date.
(c)
Contributions
Active
participants are permitted to make contributions to the Plan in whole
percentages up to 50% of their pretax annual compensation, as defined in the
Plan document, subject to applicable limits of the Internal Revenue Code (the
Code).
The
Company is required to make periodic contributions ranging from 3% to 6% of
the
Participant’s compensation, depending on whether the employee is hourly or
salaried and the age of salaried employees, as defined in the Plan. For each
participant in the Dixon and the Nashville Division, the Company is required
to
make matching contributions equal to 25% of the first 4% of pay the participant
contributes to the Plan as elective deferrals. Additional amounts may be
contributed at the option of the Company’s board of directors. There were no
additional contributions in 2004.
Company
contributions to the participant’s account are generally limited to the lesser
of $40,000 or 100% of the participant’s compensation for the Plan
year.
4
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
(d)
Participant
Accounts
Each
participant’s account is credited with the participant’s contributions and an
allocation of the Company’s contributions and Plan earnings, and charged with an
allocation of administrative expenses. Allocations are based on participant’s
compensation or account balances, as defined in the Plan document.
(e)
Vesting
A
participant is fully vested in his or her entire account balance, including
the
balances attributable to both the employee contributions and employer
contributions, at all times.
(f)
Investment
Fund Options
Participant
contributions and investment earnings were directed by the individual Plan
participants to certain investment choices offered under the Plan through the
Master Trust. Descriptions of the investment fund options for 2004 are as
follows:
Stable
Value Fund
This
fund, which seeks a reasonable level of income together with stability of
principal, invests in Key Trust Company EB Managed GIC Funds, which invest
primarily in various investment contracts. The fund may also invest a portion
of
its assets in cash or money market accounts for liquidity purposes
only.
PIMCO
Total Return Fund
This
fund, an income oriented mutual fund which also seeks capital appreciation
over
time, invests in a range of bonds and equities resulting in an intermediate
maturity portfolio with a duration between three and six years. Bonds may have
variable, fixed, or floating rates of interest. The fund seeks maximum total
return consistent with preservation of capital and prudent investment
management.
Vanguard
Index Trust 500 Portfolio
This
fund, a growth and income mutual fund, invests in all 500 stocks in the Standard
& Poor’s Composite Stock Price Index (the S&P 500 Index), an index which
emphasizes large-capitalization companies and is generally considered to be
representative of the U.S. stock market, in approximately the same proportions
as they are represented in the S&P 500 Index. The fund seeks to replicate
the aggregate price and yield performance of the S&P 500 Index. Balances in
this fund may also be invested in short-term money market
instruments.
Rayovac
Stock Fund
This
fund
invests in Rayovac Corporation common stock. The fund may also invest a portion
of its assets in cash or money market accounts for liquidity purposes
only.
5
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
AIM
Small Cap Growth Fund
This
fund, a growth mutual fund, invests in a portfolio which in turn invests at
least 65% of its total assets in equity securities of U.S. issuers that have
market capitalizations less than that of the largest company in the Russell
2000
Index. This fund’s investment objective is long-term growth of
capital.
Oakmark
Equity and Income Fund
Oakmark
Equity and Income Fund seeks current income and preservation and growth of
capital. The fund generally invests between 50% and 75% of assets in equities
and between 25% and 50% of assets in U.S. government and corporate debt rated
AA
or higher. It may invest up to 20% of assets in unrated debt or debt rated
below
investment-grade. The fund may also invest up to 25% of assets in foreign
securities.
Van
Kampen Growth and Income Fund
Van
Kampen Growth and Income Fund seeks income and long-term growth of capital.
The
fund invests primarily in income-producing equities, including common stocks
and
convertible securities (although investments are also made in non-convertible
preferred stocks and debt securities). It limits investments in foreign
securities to 25% of assets.
American
Funds Growth Fund of America Fund
American
Funds Growth Fund of America Fund seeks capital growth. The fund invests
primarily in common stocks. Management selects securities that it believes
are
reasonably priced and represent solid long-term investment opportunities. The
fund may invest up to 15% of assets in securities of issuers domiciled outside
of the U.S. and Canada, and not included in the S&P 500 Index. It may also
invest up to 10% of assets in debt securities rated below
investment-grade.
MainStay
MAP Fund
MainStay
MAP Fund seeks long-term growth of capital; current income is a secondary
consideration. The fund normally invests at least 65% of assets in equity
securities of domestic issuers. It may also invest in common and preferred
stocks, convertible securities, ADRs, bonds, notes and debentures.
MFS
International New Discovery
MFS
International New Discovery Fund seeks capital appreciation. The fund normally
invests at least 65% of assets in equity securities of companies with small
market capitalizations, typically from at least three countries. It may invest
in common stocks and related equity securities, such as preferred stock,
convertible securities and depositary receipts of foreign issuers. The fund
may
also invest in foreign markets, emerging markets and over-the-counter markets.
It may engage in active and frequent trading.
6
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
(g)
Payment
of Benefits
Upon
retirement or termination of employment, the participant’s account balance is
payable to him or her, or in the event of death, the participant’s beneficiary.
Participants may be eligible for a hardship withdrawal from their pretax
participant account under certain circumstances and with the Plan
Administrator’s approval.
(2)
Summary
of Significant Accounting Policies
(a)
Basis
of Presentation
The
accompanying financial statements have been prepared on the accrual basis and
present the assets available for plan benefits and changes in those assets
in
accordance with accounting principles generally accepted in the United States
of
America.
(b)
Trust
Fund Managed by New York Life Trust Company
Under
the
terms of a trust agreement between the New York Life Trust Company (the Trustee)
and the Plan, the Trustee manages the Master Trust on behalf of the
Plan.
(c)
Valuation
of Investments and Income Recognition
The
fair
value of the Plan’s interest in the Master Trust is based on the beginning of
year value of the Plan’s interest in the Master Trust (based on the fair value
of the respective investments, as described in the following paragraph) plus
actual contributions and allocated investment income, including unrealized
gains
and losses, less actual distributions, and allocated administrative
expenses.
Investments
in shares of mutual funds are stated at quoted net asset values. Investments
in
shares of Rayovac Corporation common stock are stated at quoted market
prices.
Purchases
and sales of securities are reflected on a trade-date basis. The Plan reports
realized and unrealized gains and losses for financial statement purposes based
on revalued cost wherein cost is determined as fair value at the end of the
prior plan year, or historical cost if the investment was acquired since the
beginning of the plan year, as required by the Department of Labor.
The
Plan’s investments are exposed to various risks, such as interest rate, market,
and credit risks. Due to the level of risk associated with certain investments
and the level of uncertainty related to changes in the values of investments,
it
is at least reasonably possible that changes in risks in the near term would
materially affect participants’ account balances and the amounts reported in the
statements of assets available for plan benefits and the statements of changes
in assets available for plan benefits.
(d)
Benefits
Paid
Benefits
paid to participants are recorded upon distribution.
7
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
(e)
Administrative
Expenses
Expenses
incurred in the administration of the Plan are paid both by the Plan and by
the
Company. Administrative expenses for 2004 were approximately $61,000. The fees
paid by the Company for 2004 were approximately $49,000. The fees paid by the
Plan, which consist of investment management fees, were approximately $12,000
for 2004 (See Note 4).
(f)
Plan
Amendments
During
2001, the Plan was amended and restated to incorporate certain legislatively
mandated changes collectively known as the GUST Acts. During 2002, the Plan
was
amended to accommodate certain changes in the tax laws commonly referred to
as
the Economic Growth and Tax Relief Reconciliation Act of 2001.
During
2004 the Plan was amended to record amounts that transferred from the Remington
Products Company, LLC 401(k) Plan as a result of the merger of such plan, shall
be 100% vested.
(g)
Use
of Estimates
The
Plan
Administrator has made a number of estimates and assumptions relating to the
reporting of assets available for plan benefits and the disclosure of contingent
liabilities at the date of the financial statements and the reported amounts
of
changes in assets available for plan benefits during the reporting period to
prepare these financial statements in conformity with accounting principles
generally accepted in the United States of America. Actual results could differ
from those estimates.
(h)
Participant
Loans
Participants
may receive loans from their accounts up to the lesser of 50% of the individual
participant’s vested account balance or $50,000. If the participant has received
a loan in the past, however, the $50,000 limit is reduced by the highest
outstanding loan balance during the preceding 12-month period. Loan terms must
not exceed five years, except in the case of loans used for purchase of a
primary residence, in which case the loan period must not exceed ten years.
Loans are secured by the vested balance in the participant’s account and bear
interest at the Prime Rate plus 150 basis points. Principal and interest
payments are due on a quarterly basis or more often and are reinvested in the
investment option(s) selected by the participant.
(3)
Federal
Income Tax Status
The
Internal Revenue Service has determined and informed the Company by a letter
dated October 2, 2001, that the Plan and related Trust are designed in
accordance with applicable sections of the Internal Revenue Code. The Plan
Administrator believes that the Plan is currently designed and being operated
in
compliance with the applicable requirements of the Internal Revenue Code and,
therefore, the plan continues to qualify under Section 401(k) and the related
trust continues to be
tax-exempt as of December 31, 2004. Therefore, no provision for income taxes
is
included in the Plan’s financial statements.
8
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
|
(4)
|
Party-in-interest
Transactions
|
The
Plan
has not considered Company contributions to the Plan or benefits paid by the
Plan for participants as party-in-interest transactions.
Fees
incurred by the Plan for investment management services amounted to
approximately $12,000 for the year ended December 31, 2004.
Fees
paid
during the year for legal, accounting, actuarial and other professional services
rendered by parties-in-interest were based on customary and reasonable rates
for
such services.
(5)
Plan
Termination
The
Company has the right under the Plan agreement to reduce or cease contributions
at the discretion of the Board of Directors, or to amend the Plan at any time
and in any respect. However, no such action may deprive any participant or
beneficiary under the Plan of any vested right. In the event the Plan is wholly
or partially terminated, or upon the complete discontinuance of contributions
under the Plan by any entity that is a part of the Company, each participant’s
interest in their account shall be nonforfeitable on the date of such
termination or discontinuance.
(6)
Master Trust for Rayovac Corporation
At
December 31, 2004, the Plan’s investment assets were held in a trust account at
New York Life and consist of an interest in a Master Trust. The Master Trust
also includes the investment assets of the Rayovac 401(k) Savings Plan for
Hourly Employees.
A
summary
of investments in the Master Trust as of December 31, 2004 is as
follows:
|
|
|
2004
|
|
|
|
Assets:
|
|
|
|
|
|
Investments,
at fair value:
|
|
|
|
|
|
Mutual
funds
|
|
$
|
66,084,412
|
|
|
Participant
loans, interest rates of Prime plus 150 basis points
|
|
|
322,094
|
|
|
Accrued
Receivable (Remington Merger)
|
|
|
2,735,304
|
|
|
Rayovac
Corporation common stock
|
|
|
3,340,636
|
|
|
Total
assets
|
|
$
|
72,482,446
|
|
|
|
9
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
The
changes in assets of the Master Trust during the year ended December 31,
2004 are as follows:
|
2004
|
||||
|
Increases
in assets:
|
||||
|
Investment
income:
|
||||
|
Net
appreciation in fair value of investments:
|
||||
|
Mutual
funds
|
$
|
4,543,119
|
||
|
Rayovac
Corporation common stock
|
1,261,284
|
|||
|
5,804,403
|
||||
|
Interest
and dividends
|
1,118,150
|
|||
|
6,922,553
|
||||
|
Participant
contributions
|
4,095,254
|
|||
|
Employer
contributions
|
1,870,679
|
|||
|
Rollovers
|
250,745
|
|||
|
Other
deposits (Remington merger)
|
4,675,865
|
|||
|
17,815,096
|
||||
|
Deductions
from assets:
|
||||
|
Distributions
and benefits paid
|
5,318,038
|
|||
|
Administrative
expenses
|
14,908
|
|||
|
Total
Deductions
|
5,332,946
|
|||
|
Net
increase in assets
|
12,482,150
|
|||
|
Assets,
beginning of year
|
60,000,296
|
|||
|
Assets,
end of year
|
$
|
72,482,446
|
As
of
December 31, 2004, the Plan has an allocated share of approximately 94.5%
of the total Master Trust investments. The Plan has an allocated share of
investment income of approximately 94.2% for 2004.
10
Rayovac
401(k) Retirement Savings Plan
Notes
to
Financial Statements
December 31,
2004
(7)
Reconciliation of Financial Statements to Form 5500
The
following is a reconciliation of net assets available for benefits as of
December 31, 2004 and net increase in net assets available for benefits for
the
year ended December 31, 2004 per the financial statements to Form
5500:
|
2004
|
||||
|
Net
assets available for benefits per the financial statements
|
$
|
68,460,849
|
||
|
Difference
in assets transferred receivable
|
$
|
2,735,304
|
||
|
Net
Assets available for benefits per the Form 5500
|
$
|
65,725,545
|
||
|
Net
increase in net assets available for benefits
|
||||
|
per
the financial statements
|
$
|
11,756,679
|
||
|
Difference
in assets transferred receivable
|
$
|
2,735,304
|
||
|
Net
increase in assets available for benefits
|
||||
|
per
the Form 5500
|
$
|
9,021,375
|
||
(8)
Assets
transferred from another plan
During
the year ended December 31, 2004 assets of the Remington Products Company,
LLC
401K plan were merged into the plan. Assets in the amount of $1,919,044, $13,266
and $604 were transferred into the plan, in April, June, and August, 2004
respectively. Assets in the amount of $2,735,304 were transferred from Remington
Products Company, LLC 401(k) plan effective December 31, 2004, but were not
received into the plan until January 2005. They have been accounted for as
a
receivable as at December 31, 2004. A merger conversion asset of $7,647 was
also
recorded by the plan in 2004 as a result of the transfers from
Remington.
(9)
Subsequent
Event
Effective
May 2, 2005 Rayovac Corporation, the Plan Sponsors changed its name to Spectrum
Brands.
11
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
RAYOVAC
401(K) RETIREMENT SAVINGS PLAN
June
29,
2006 BY
/s/ Joseph
B. Wickman
Name: Joseph B. Wickman
Title: Member of Retirement Plan Committee
EXHIBIT
23.1
Consent
of Independent Registered Public Accounting Firm
Rayovac
401(k) Retirement Savings Plan:
We
consent to the incorporation by reference in the registration statement
(No. 333-39239) on Form S-8 for the Rayovac 401(k) Retirement Savings Plan
of our report dated June 9, 2006, with respect to the financial statements
and related supplemental schedule of the Rayovac 401(k) Retirement Savings
Plan
as of and for the year ended December 31, 2005, which report appears in the
December 31, 2005, Annual Report on Form 11-K of the Rayovac 401(k)
Retirement Savings Plan.
/s/
Kiesling Associates LLP
Kiesling
Associates LLP
Madison,
Wisconsin
June
29,
2006
EXHIBIT
23.2
Consent
of Independent Registered Public Accounting Firm
The
Board
of Directors
Spectrum
Brands, Inc.:
We
consent to the incorporation by reference in the registration statement (No.
333-39239) on Form S-8 for the Rayovac 401(k) Retirement Savings Plan of
our report dated June 27, 2005, with respect to the statement of assets
available for plan benefits of the Rayovac 401(k) Retirement Savings Plan as
of
December 31, 2004, and the related statement of changes in assets available
for
plan benefits for the year then ended, which report appears in the December
31,
2005 Annual Report on Form 11-K of the Rayovac 401(k) Retirement Savings
Plan.
/s/
KPMG
LLP
KPMG
LLP
Atlanta,
Georgia
June
29,
2006