ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. |
Name of Registrant, State of Incorporation, Address of Principal Offices and Telephone No. |
IRS Employer Identification No. | ||||||
(a ( www.spectrumbrands.com |
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(a ( |
Registrant |
Title of each class |
Name of each exchange on which registered | ||||||
Spectrum Brands Holdings, Inc. | Common Stock, Par Value $0.01 | New York Stock Exchange | ||||||
SB/RH Holdings, LLC | None | None |
Spectrum Brands Holdings, Inc. | No ☐ | |||||
SB/RH Holdings, LLC | Yes ☐ |
Spectrum Brands Holdings, Inc. | Yes ☐ | |||||
SB/RH Holdings, LLC | Yes ☐ |
Spectrum Brands Holdings, Inc. | No ☐ | |||||
SB/RH Holdings, LLC | No ☐ |
Spectrum Brands Holdings, Inc. | No ☐ | |||||
SB/RH Holdings, LLC | No ☐ |
Registrant |
Filer |
Accelerated Filer |
Smaller Reporting Company |
Emerging Growth Company |
||||||||||||||||
Spectrum Brands Holdings, Inc. |
X | |||||||||||||||||||
SB/RH Holdings, LLC |
X |
Spectrum Brands Holdings, Inc. | ||||
SB/RH Holdings, LLC |
Spectrum Brands Holdings, Inc. | Yes ☐ | No |
||||
SB/RH Holdings, LLC | Yes ☐ | No |
Page |
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2 | ||||||
4 | ||||||
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 4 | ||||
ITEM 11. |
22 | |||||
ITEM 12. |
53 | |||||
ITEM 13. |
55 | |||||
60 | ||||||
ITEM 15. |
60 | |||||
60 | ||||||
63 |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Director Skills and Experiences | ||
✓100%: International Business Experience |
✓100%: Business Operations | |
✓86%: Consumer Products |
✓86%: Corporate Governance | |
✓100%: Corporate Strategy & Business Development |
✓100%: Ethics/Corporate Social Responsibility | |
✓86%: Executive Leadership & Management |
✓71%: Finance/Capital Management & Allocation | |
✓100%: Mergers & Acquisitions |
✓71%: Public Company Executive Experience | |
✓71%: Marketing/Sales or Brand Management |
✓71%: Human Resources & Compensation | |
✓86%: Accounting/Auditing |
✓100%: Public Company Board Experience |
Committee Membership*** |
||||||||||||||
Name |
Class* |
Age |
Tenure** |
A |
C |
NCG |
||||||||
Sherianne James Independent Director |
I | 52 | 2018 | o | ● | |||||||||
Leslie L. Campbell Independent Director |
I | 61 | 2021 | o | ||||||||||
Joan Chow Independent Director |
I | 61 | 2021 | o | ||||||||||
Hugh R. Rovit Independent Director |
II | 61 | 2018 | o | o | |||||||||
Gautam Patel Independent Director |
II | 49 | 2020 | ● | o | |||||||||
David M. Maura Executive Chairman |
III | 49 | 2018 | |||||||||||
Terry L. Polistina Lead Independent Director |
III | 58 | 2018 | ● | o |
* | The term of our Class I directors expires at our 2022 annual stockholders meeting, our Class II directors expires at our 2023 annual stockholders meeting, and our Class III directors expires at our 2024 annual stockholders meeting. |
** | Tenure represents service on the Board of the Company following the |
*** | Committee membership: A = Audit Committee, C = Compensation Committee, NCG = NCG Committee; • indicates committee Chair, o indicates committee member. |
Sherianne James Independent Director since October 2018 Age: 52 Race/Ethnicity: African American Gender: Female |
||||
Independence & Committees: ● Independent Director ● Chair of our NCG Committee ● Compensation Committee |
Key Skills/Experience: ● Business Operations ● Consumer Products ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● International Business Experience ● Marketing/Sales or Brand Management ● Mergers & Acquisitions ● Public Company Executive Experience ● Public Company Board Experience |
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Sherianne James was appointed to our Board in October 2018. Ms. James has served as Chief Marketing Officer of Essilor of America since August 2017 and SVP of Customer Engagement since March 2020, and previously was Vice President, Consumer Marketing for the company since July 2016. From February 2011 to July 2016, she held positions of increasing responsibility in marketing and operations for Transitions Optical, a division of Essilor of America, culminating in her role as Vice President of Transitions Optical from April 2014 to July 2016. From July 2005 through December 2010, Ms. James was Senior Marketing Manager for Russell Hobbs/Applica. She previously held a number of key project manager, research manager and brand manager positions with Kraft Foods, Inc. and, later, Kraft/Nabisco Foods from June 1995 to June 2005. Ms. James earned a B.S. degree in chemical engineering from the University of Florida in 1994 and an MBA from Northwestern University’s Kellogg Graduate School of Management in 2002. Ms. James currently serves as Chair of our NCG Committee and is a member of our Compensation Committee. |
Leslie L. Campbell Independent Director since April 2021 Age: 61 Race/Ethnicity: African American Gender: Male | ||
Independence & Committees: ● Independent Director ● Audit Committee |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Consumer Products ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● Finance/Capital Management & Allocation ● International Business Experience ● Marketing/Sales or Brand Management ● Mergers & Acquisitions ● Public Company Board Experience ● Supply Chain/Logistics ● Technology/Cyber-Security | |
Leslie L. Campbell was appointed to our Board in April 2021. Since 2015, Mr. Campbell has been the owner and Chief Executive Officer of Campbell & Associates LLC, a product development and engineering company. From 2013 to 2015, he served as Executive Vice President at AAMP Global, a vehicle technology company where he was responsible for engineering, research and development, new product development and operations. From 2002 to 2013, Mr. Campbell served in various senior roles of increasing responsibility in the engineering department for Applica Consumer Products, including serving the last six years of his tenure as Vice President of Engineering Quality and Regulatory where he was responsible for the design and development of new products and the maintenance of existing core product lines. From 1999 to 2002, Mr. Campbell served as Chief Engineer for B/E Aerospace where he was responsible for the design and development of galley products for commercial airlines. From 1995 to 1999, Mr. Campbell served as a Senior Research Engineer for Baker Hughes. From 1990 to 1995, he served as Senior Engineer at the Johnson Space Center (NASA) and from 1989 to 1990 he was a Senior Engineer at General Electric – Aerospace Division. Mr. Campbell has extensive experience in product development and product design and product quality and safety standards. Mr. Campbell received an undergraduate degree in engineering from the University of Florida. Mr. Campbell currently serves as a member of our Audit Committee. |
Joan Chow Independent Director since April 2021 Age: 61 Race/Ethnicity: Asian Gender: Female | ||
Independence & Committees: ● Independent Director ● Audit Committee |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Consumer Products ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● Human Resources & Compensation ● International Business Experience ● Marketing/Sales or Brand Management ● Mergers & Acquisitions ● Public Company Board Experience ● Public Company Executive Experience | |
Joan Chow was appointed to our Board in April 2021. From February 2016 until October 2021, Ms. Chow served as Chief Marketing Officer of the Greater Chicago Food Depository. From 2007 to August 2015, Ms. Chow was the Executive Vice President and Chief Marketing Officer at ConAgra Foods, Inc. ConAgra Foods, now known as Conagra Brands, is one of North America’s leading packaged food companies. Prior to joining ConAgra in 2007, Ms. Chow was employed for nine years with Sears Holdings Corporation in various marketing positions of increasing responsibility, having served as Senior Vice President/Chief Marketing Officer of Sears Retail immediately prior to taking the position with ConAgra. Prior to that, she served in executive positions with Information Resources Inc. and Johnson & Johnson Consumer Products, Inc. Ms. Chow currently serves as Chair of the Compensation Committee and a member of the Governance Committee at Welbilt Inc. and is also a director at Energy Recovery, Inc. as well as High Liner Foods, where she is on the Human Resources Committee. She has previously served as a director of The Manitowoc Company, RC2 Corporation, and Feeding America. Ms. Chow has extensive leadership experience in retail and consumer packaged goods marketing, advertising, branding, consumer insights, and digital/social marketing and human resources matters. Ms. Chow has an M.B.A. from the Wharton School of the University of Pennsylvania and a B.A. with distinction from Cornell University. Ms. Chow currently serves as a member of our Audit Committee. |
Hugh R. Rovit Independent Director since July 2018 Age: 61 Race/Ethnicity: Caucasian Gender: Male | ||
Independence & Committees: ● Independent Director ● Audit Committee ● NCG Committee |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Consumer Products ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● Finance/Capital Management & Allocation ● Human Resources & Compensation ● International Business Experience ● Marketing/Sales or Brand Management ● Mergers & Acquisitions ● Public Company Board Experience ● Public Company Executive Experience ● Supply Chain/Logistics | |
Hugh R. Rovit was appointed to our Board in July 2018. From June 2010 until July 2018, Mr. Rovit served as one of the directors of Spectrum Legacy. Prior to that time, he served as a director of SBI from August 2009 to June 2010. Mr. Rovit is currently Chief Executive Officer of S’well, Inc., a global manufacturer and marketer of reusable stainless-steel bottles and accessories. He previously served as Chief Executive Officer of Ellery Homestyles, a leading supplier of branded and private label home fashion products to major retailers, offering curtains, bedding, throws and specialty products, from May 2013 until its sale in September 2018 to a strategic competitor. Previously, Mr. Rovit served as Chief Executive Officer of Sure Fit Inc., a marketer and distributor of home furnishing products from 2006 through 2012 and was a Principal at turnaround management firm Masson & Company from 2001 through 2005. Previously, Mr. Rovit held the positions of Chief Financial Officer of Best Manufacturing, Inc., a manufacturer and distributor of institutional service apparel and textiles, from 1998 through 2001 and Chief Financial Officer of Royce Hosiery Mills, Inc., a manufacturer and distributor of men’s and women’s hosiery, from 1991 through 1998. Mr. Rovit is also a director of GSC Technologies, Inc. and previously served as a director of PlayPower, Inc., Nellson Nutraceuticals, Inc., Kid Brands Inc., Atkins Nutritional, Inc., Oneida, Ltd., Cosmetic Essence, Inc., Xpress Retail and Twin Star International. Mr. Rovit received his B.A. degree from Dartmouth College and has an MBA from Harvard Business School. Mr. Rovit is a member of our Audit Committee and NCG Committee. |
Gautam Patel Independent Director since October 2020 Age: 49 Race/Ethnicity: Asian Gender: Male | ||
Independence & Committees: ● Independent Director ● Chair of our Audit Committee ● Compensation Committee |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Finance/Capital Management & Allocation ● Human Resources & Compensation ● International Business Experience ● Mergers & Acquisitions ● Public Company Board Experience | |
Gautam Patel was appointed to our Board in October 2020. Mr. Patel has served as Managing Director of Tarsadia Investments, a private investment firm based in Newport Beach, California, since 2012. In that role, Mr. Patel has led a team of investment professionals to identify, evaluate and execute principal control equity investments across sectors including life sciences, financial services and technology. Prior to joining Tarsadia, Mr. Patel served as Managing Director at Lazard from 2008 to 2012, where he led financial and strategic advisory efforts in sectors including transportation and logistics, private equity and healthcare. Prior to that, Mr. Patel served in a variety of advisory roles at Lazard from 1999 to 2008, including restructuring, bankruptcy and corporate reorganization assignments in 2001 and 2008. From 1994 to 1997, Mr. Patel was an Analyst at Donaldson, Lufkin & Jenrette, where he worked on mergers and acquisitions as well as high-yield and equity financings. Mr. Patel is currently a Board Member of Amneal Pharmaceuticals (NYSE: AMRX). Mr. Patel also serves on the board of Casita Maria Center for Arts and Education, a New York-based nonprofit organization which aims to empower children through arts-based education. Mr. Patel received a B.A. from Claremont McKenna College, a B.S. from Harvey Mudd College, an MSc from the London School of Economics and an MBA from the University of Chicago. Mr. Patel currently serves as Chair of our Audit Committee and as a member of our Compensation Committee. |
David M. Maura Director since July 2018 Age: 49 Race/Ethnicity: Caucasian Gender: Male | ||
Independence & Committees: ● None |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Consumer Products ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● Finance/Capital Management & Allocation ● Human Resources & Compensation ● International Business Experience ● Mergers & Acquisitions ● Public Company Board Experience ● Public Company Executive Experience ● Risk Management & Oversight | |
David M. Maura was appointed our Executive Chairman and our Chief Executive Officer in July 2018. Previously, he had served as the Executive Chairman, effective as of January 2016, and as Chief Executive Officer, effective as of April 2018, of SPB Legacy. Prior to such appointment, Mr. Maura served as non-executive Chairman of the board of directors of SPB Legacy since July 2011 and served as interim Chairman and as one of the directors of SPB Legacy since June 2010. Mr. Maura was a Managing Director and the Executive Vice President of Investments at HRG Group, Inc. (now known as Spectrum Brands Holdings, Inc.) (“HRG Group”) from October 2011 until November 2016 and had been a member of HRG Group’s board of directors from May 2011 until December 2017. Mr. Maura previously served as a Vice President and Director of Investments of Harbinger Capital Partners LLC (“Harbinger Capital”) from 2006 until 2012. Prior to joining Harbinger Capital in 2006, Mr. Maura was a Managing Director and Senior Research Analyst at First Albany Capital, Inc., where he focused on distressed debt and special situations, primarily in the consumer products and retail sectors. Prior to First Albany, Mr. Maura was a Director and Senior High Yield Research Analyst in Global High Yield Research at Merrill Lynch & Co. Previously, Mr. Maura was a Vice President and Senior Analyst in the High Yield Group at Wachovia Securities, where he covered various consumer product, service, and retail companies. Mr. Maura began his career at ZPR Investment Management as a Financial Analyst.Mr. Maura served as Chairman, President and Chief Executive Officer of Mosaic Acquisition Corp., a special purpose acquisition company, from October 2017 to January 2020, when the company merged with Vivint Smart Home, Inc. (“Vivint”). Mr. Maura served as an outside director on Vivint’s board until March 2020 when he resigned from the board of Vivint. He previously served on the boards of directors of Ferrous Resources, Ltd., Russell Hobbs, and Applica. Mr. Maura received a B.S. degree in business administration from Stetson University and is a CFA charterholder. |
Terry L. Polistina Lead Independent Director since July 2018 Age: 58 Race/Ethnicity: Caucasian Gender: Male | ||
Independence & Committees: ● Independent Director ● Chair of our Compensation Committee ● NCG Committee |
Key Skills/Experience: ● Accounting/Auditing ● Business Operations ● Consumer Products ● Corporate Governance ● Corporate Strategy & Business Development ● Ethics/Corporate Social Responsibility ● Executive Leadership & Management ● Finance/Capital Management & Allocation ● Government Relations / Public Policy ● Human Resources & Compensation ● International Business Experience ● Marketing/Sales or Brand Management ● Mergers & Acquisitions ● Public Company Board Experience ● Public Company Executive Experience ● Risk Management & Oversight ● Supply Chain/Logistics | |
Terry L. Polistina was appointed to our Board in July 2018. From June 2010 until July 2018, Mr. Polistina served as one of the directors of SPB Legacy. Since July 2018, Mr. Polistina has also served as the Lead Independent Director of the Board. Prior to that, he served as a director of SBI from August 2009 to June 2010. Mr. Polistina served as the President, Small Appliances of SPB Legacy beginning in June 2010 and became President - Global Appliances of SPB Legacy in October 2010 until September 2013. Prior to that, Mr. Polistina served as the Chief Executive Officer and President of Russell Hobbs from 2007 until 2010. Mr. Polistina served as Chief Operating Officer at Applica from 2006 to 2007 and Chief Financial Officer from 2001 to 2007, at which time Applica combined with Russell Hobbs. Mr. Polistina previously served as a director of privately held Entic, Inc. Mr. Polistina received an undergraduate degree in finance from the University of Florida and holds an MBA from the University of Miami. Mr. Polistina is the Chair of our Compensation Committee, is a member of our NCG Committee, and serves as the Lead Independent Director of the Board. |
Randal D. Lewis Executive Vice President, Chief Operating Officer since October 2018 Age: 55 Race/Ethnicity: Caucasian Gender: Male |
Randal D. Lewis was appointed our Chief Operating Officer in October 2018 and Executive Vice President in September 2019. He has direct responsibility for all operating divisions. Mr. Lewis was previously the President of our Global Consumer Division from March 2018, which included our Global Auto Care, Global Pet Care and Home & Garden business unit. Prior to that, he was President of our Pet, Home & Garden business unit since November 2014. Previous to that, he was Senior Vice President and General Manager of our Home & Garden business since January 2011. From April 2005 to January 2011, Mr. Lewis served as our Home & Garden business’s Vice President, Manufacturing and Vice President, Operations. Prior to that, Mr. Lewis held various leadership roles from October 1997 to April 2005 with the former owners of United Industries Corporation, which is now owned by the Company and from January 1989 to October 1997 Mr. Lewis worked at Unilever. Mr. Lewis earned a B.S. degree in mechanical engineering from the University of Illinois, Urbana-Champaign. |
Rebeckah Long Senior Vice President and Chief Human Resources Officer since November 2021 Age: 47 Race/Ethnicity: Caucasian Gender: Female |
Rebeckah Long was appointed our Senior Vice President, Global Human Resources in September 2019 and was promoted to Senior Vice President and Chief Human Resources Officer in November 2021 and has direct responsibility for consistent delivery and execution of the Human Resources function globally. Ms. Long previously served as Vice President of Global Human Resources of Spectrum Brands since April 2019. Prior to that, she was Human Resource Business Partner for several business divisions within Spectrum Brands since March 2008, with a focus on talent strategy and organizational effectiveness. Prior to joining Spectrum Brands, she was the Regional Human Resources Manager for United Rentals, Inc. from June 2000 to February 2008 and was responsible for the integration of over 25 businesses into the United Rentals portfolio. Ms. Long earned a B.S. degree in economics from Illinois State University. |
Jeremy W. Smeltser Executive Vice President, Chief Financial Officer since November 2019 Age: 47 Race/Ethnicity: Caucasian Gender: Male |
Jeremy W. Smeltser was appointed our Executive Vice President on October 1, 2019 and was appointed our Chief Financial Officer on November 17, 2019. He previously served as Vice President and Chief Financial Officer of SPX Flow, Inc. (“SPX Flow”). Prior to his role at SPX Flow, he served as Vice President and Chief Financial Officer of SPX Corporation, where he served in various roles, including as Vice President and Chief Financial Officer, Flow Technology and became an officer of SPX Corporation in April 2009. Mr. Smeltser joined SPX Corporation in 2002 from Ernst & Young LLP, where he was an audit manager in Tampa, Florida. Prior to that, he held various positions with Arthur Andersen LLP in Tampa, Florida and Chicago, Illinois, focused primarily on assurance services for global manufacturing clients. Mr. Smeltser earned a B.S. degree in accounting from Northern Illinois University. |
Ehsan Zargar Executive Vice President, General Counsel and Corporate Secretary since October 2018 Age: 44 Race/Ethnicity: Asian (Middle Eastern) Gender: Male |
Ehsan Zargar was appointed our Executive Vice President, General Counsel and Corporate Secretary on October 1, 2018. Mr. Zargar is responsible for the Company’s legal, environmental, social and governance (“ESG”), health and safety, insurance, and real estate functions. In addition, Mr. Zargar takes a leading role in setting, negotiating and implementing the Company’s M&A, capital markets and other strategic activities. Previously, Mr. Zargar also led the Company’s executive compensation program. From June 2011 until July 2018, Mr. Zargar held a number of increasingly senior positions with HRG Group, a publicly-listed acquisition company, including serving as its Executive Vice President and Chief Operating Officer from January 2017 until July 2018, as its General Counsel since April 2015 and as Corporate Secretary since February 2012. During his time at HRG Group, Mr. Zargar took a leading role in setting, negotiating and implementing HRG Group’s M&A, capital markets and other strategic activities. Mr. Zargar has extensive experience serving on private and public boards and committees of portfolio companies, including setting and overseeing senior management compensation programs. From August 2017 until July 2018, Mr. Zargar served as a director of SPB Legacy. From November 2006 to June 2011, Mr. Zargar worked in the New York office of Paul, Weiss, Rifkind, Wharton & Garrison LLP. Previously, Mr. Zargar practiced law at another major law firm focusing on general corporate matters. Mr. Zargar received a law degree from Faculty of Law at the University of Toronto and a B.A. from the University of Toronto. |
Our Practices | ||||
✓ Diverse Board and executive team ✓ Majority voting and a director resignation policy ✓ Stock ownership guidelines ✓ Anti-hedging policy ✓ Board Diversity Policy ✓ Global Environmental, Social and Governance Policy ✓ Global Energy and Greenhouse Gas Policy ✓ Environmental Policy ✓ Human Rights Policy |
|
✓ Independent lead director ✓ Majority of the Board composed of independent directors ✓ All committees composed entirely of independent directors ✓ Board declassifying process underway ✓ Related person transactions policy ✓ Anti-pledging policy ✓ Robust clawback policy ✓ All members of our Audit Committee are financial experts |
• | presides at all meetings of the Board at which the Chairman of the Board is not present; |
• | presides at all executive sessions of the independent members of the Board and has the authority to call meetings of the independent members of the Board; |
• | serves as liaison between the management and the independent members of the Board and provides our Chief Executive Officer (“CEO”) and other members of management with feedback from executive sessions of the independent members of the Board; |
• | reviews and approves the information to be provided to the Board; |
• | reviews and approves meeting agendas and coordinates with management to develop such agendas; |
• | approves meeting schedules to assure there is sufficient time for discussion of all agenda items; |
• | if requested by major shareholders, ensures that he is available for consultation and direct communication; |
• | interviews, along with the Chair of our NGC Committee, Board and senior management candidates and makes recommendations with respect to Board candidates and hiring of senior management; |
• | consults with other members of our Compensation Committee with respect to the performance review of our CEO and other member of our senior management team; and |
• | performs such other functions and responsibilities as requested by the Board from time to time. |
Position |
$ Value of Stock to be Retained (Multiple of Base Salary or Cash Retainer) |
Years to Achieve | ||
Board Members |
5x Cash Retainer | 5 years | ||
Executive Chairman and CEO |
5x Base Salary | 5 years | ||
Chief Operating Officer, CFO, General Counsel and Presidents of our Business Units |
3x Base Salary | 5 years | ||
Senior Vice Presidents |
2x Base Salary | 5 years | ||
Vice Presidents |
1x Base Salary | 5 years |
● | As required by Section 304 of the Sarbanes Oxley Act of 2002, which generally provides that if the Company is required to prepare an accounting restatement due to material noncompliance as a result of misconduct with financial reporting requirements under the securities laws, then the CEO and CFO must reimburse the Company for any incentive-based compensation or equity compensation and profits from the sale of the Company’s securities during the 12-month period following initial publication of the financial statements that had been restated; |
● | As required by Section 954 of the Dodd-Frank Act and Rule 10D-1of the Exchange Act, which generally require that, in the event the Company is required to prepare an accounting restatement due to its material noncompliance with financial reporting requirements under the securities laws, the Company may recover from any of its current or former executive officers who received incentive compensation, including stock options, during the three-year period preceding the date on which the Company is required to prepare a restatement based on the erroneous financial reporting, any amount that exceeds what would have been paid to the executive officer after giving effect to the restatement; and |
● | As required by any other applicable law, regulation or regulatory requirement. |
● | If the Company suffers significant financial loss, reputational damage or similar adverse impact as a result of actions taken or decisions made by the executive officer in circumstances constituting illegal or intentionally wrongful conduct or gross negligence; or |
● | If the executive officer is awarded or is paid out under any incentive compensation plan of the Company on the basis of a material misstatement of financial calculations or information or if events coming to light after the award disclose a material misstatement which would have significantly reduced the amount of the award or payout if known at the time of the award or payout. |
● | Product & Content Safety |
● | Environmental Sustainability |
● | Human Rights & Ethical Sourcing |
● | Diversity & Inclusion |
Committee |
Chair Annual Retainer |
Member Annual Retainer | ||||
Audit | $ | 20,000 | None | |||
Compensation | $ | 15,000 | None | |||
NCG | $ | 15,000 | None |
Name (1) |
Fees Earned or Paid in Cash (2) |
Stock Awards (3)(4) |
All Other Compensation (5) |
Total |
||||||||
Leslie L. Campbell | $36,894 | $ | 70,825 | $644 | $ | 108,363 | ||||||
Joan Chow | $49,192 | $ | 58,544 | $533 | $ | 108,268 | ||||||
Sherianne James | $ - | $ | 279,666 | $4,741 | $ | 284,408 | ||||||
Norman S. Matthews | $ - | $ | 262,573 | $4,452 | $ | 267,024 | ||||||
Gautam Patel | $ - | $ | 262,573 | $4,452 | $ | 267,024 | ||||||
Terry L. Polistina | $180,000 | $ | 165,511 | $2,806 | $ | 348,317 | ||||||
Hugh R. Rovit | $ - | $ | 262,573 | $4,452 | $ | 267,024 | ||||||
Anne Ward (6) |
$ - | $ | 262,573 | $4,452 | $ | 267,024 |
(1) | This table includes only directors who received compensation during Fiscal 2021. |
(2) | Amounts reflected in this column include the annual retainer fees and committee Chair fees paid in cash to the applicable director during Fiscal 2021. Mses. James and Ward and Messrs. Matthews, Patel and Rovit elected to take all of their retainer in stock in lieu of cash. |
(3) | Amounts in this column represent the aggregate grant date fair value of each award computed in accordance with FASB ASC Topic 718. The value was computed by multiplying the number of shares underlying the stock award by the closing price per share of the Company’s common stock on each grant date (or, as applicable, the last trading date immediately prior to the grant date if the grant date fell on a date when the New York Stock Exchange was closed), which was $74.32 for grants made on December 22, 2020 and $92.34 for grants made on May 11, 2021. The directors received the following number of RSUs, which vested on October 1, 2021: Mr. Campbell, 767; Ms. Chow, 634; Ms. James, 3,763; Mr. Mathews, 3,533; Mr. Patel, 3,533; Mr. Polistina, 2,227; Mr. Rovit, 3,533; and Ms. Ward, 3,533. |
(4) | As of September 30, 2021, Mses. Chow, James and Ward held 634, 3,763 and 3,533 outstanding unvested RSUs, respectively, and Messrs. Campbell, Matthews, Patel, Polistina and Rovit held 767, 3,533, 3,533, 2,227 and 3,533 outstanding unvested RSUs, respectively. |
(5) | Reflects dividend equivalents paid on RSUs which vested during Fiscal 2021 and which were not factored into the grant date fair value of the RSUs. |
(6) | As of August 2021, Ms. Ward ceased to serve as a director of the Company. |
ITEM 11. |
EXECUTIVE COMPENSATION |
David M. Maura |
Chief Executive Officer and Executive Chairman | |
Jeremy W. Smeltser |
Executive Vice President and Chief Financial Officer | |
Randal D. Lewis |
Executive Vice President and Chief Operating Officer | |
Ehsan Zargar |
Executive Vice President, General Counsel and Corporate Secretary | |
Rebeckah Long |
Senior Vice President and Chief Human Resources Officer |
● | In a year marked by significant headwinds, including supply chain disruptions and inflationary pressures, we delivered impressive financial results, stock price performance and returns to shareholders, as described below. |
● | We continued to focus on long-term strategy and growth in support of our strategic shift to a consumer staples business, including through the planned $4.3 billion sale of our Hardware and Home Improvement (“HHI”) division, the closing of which is subject to receipt of regulatory approvals which are expected in 2022. |
● | We continued our transformational changes in corporate governance practices, as shown through increased Board diversity representation on our Board, our implementation of a diversity, equity, and inclusion program for employees, and our continued advancement of ESG initiatives. |
● | Investing internally for organic growth, which generates our highest return on investment |
● | Strengthening our brands through consumer insights, research and development, innovation and advertising and marketing to drive vitality and profitable organic growth |
● | Returning capital to our shareholders via dividends and opportunistic share repurchases |
● | Disciplined M&A activity as we pursue accretive strategic acquisitions that are synergistic and/or help drive additional value creation |
● | We completed a number of strategic transactions, including the acquisitions of Armitage Pet Care in our Global Pet Care segment and Rejuvenate cleaning products in our Home & Garden segment. |
● | We entered into a purchase agreement to sell our HHI segment for $4.3 billion to ASSA ABLOY, the closing of which is subject to receipt of regulatory approvals which are expected in 2022, with the anticipated transaction to close in Fiscal 2022. With the planned divestiture, our HHI business has been classified as discontinued operations. This transaction is expected to give us $3.5 billion in after-tax proceeds, which we intend to use to reduce our debt, return capital to shareholders via share repurchases, and invest strategically for organic growth and acquisitions. |
● | We continue to make incremental and meaningful investments in consumer insights, new product innovation and marketing in our brands to raise awareness and drive future organic growth across each of the businesses. |
● | We remain focused on our ongoing Global Productivity Improvement Program as we complete our global operating model transformation to create a better, faster, and stronger company. |
● | We achieved and exceeded our Fiscal 2021 operating plan and delivering on commitments while navigating a challenging supply chain environment with continued supply interruptions and inflationary pressures growing during the year across all business units. |
● | Our net sales from continuing operations increased $376.0 million or 14.3% and our organic net sales increased 7.8%. Including our HHI business, net sales growth was $650 million or 16.4%. |
● | Our net income from continuing operations increased to $15.3 million with diluted earnings per share of $0.35, with combined net income including discontinued operations of $189.6 million and diluted earnings per share of $4.39. |
● | We achieved Adjusted EBITDA of $391.8 million, representing an increase of 21.0% from Fiscal 2020, with combined Adjusted EBITDA of $689.2 million, including HHI discontinued operations, representing an increase of 18.8%. |
● | We had full year cash flow from operations of $288.4 million, including HHI discontinued operations. |
● | We continue to maintain a strong balance sheet with over $760 million of total liquidity at year end, including a $187.9 million cash balance and approximately $575 million available on our cash flow revolver as of September 30, 2021, and a net debt to Adjusted EBITDA leverage ratio of 3.5 times for the combined Company, including HHI discontinued operations. |
● | We returned $197.3 million to shareholders by repurchasing 1.6 million shares of common stock for $125.8 million and paying $71.5 million in dividends. |
● | We advanced our ESG efforts by promoting diversity, inclusion and equity at our Board and with our employees, enhanced our corporate structure in line with best practices and adopted a number of policies and practices to further enhance our environmental and sustainability efforts. |
✓ Our NEOs’ base salaries and annual bonus targets remained the same as in Fiscal 2020. ✓ Our NEOs’ compensation is in line with market. ✓ Our 2021 LTIP equity grants, consistent with our 2020 LTIP equity grants, provided for three performance metrics weighted equally (Adjusted Return on Equity, Adjusted EBITDA and Adjusted Free Cash Flow). |
What We Do | ||||||
✓ | We maintain an independent Compensation Committee with an ongoing review of our compensation philosophy and practices. | ✓ |
We provide reasonable post-employment provisions and have post-employment restrictive and executive cooperation covenants. | |||
✓ | We consider the voting results of our annual advisory vote on executive compensation, and in the most recent annual advisory vote, approximately 97% voted in favor. | ✓ |
We strongly align pay and performance by placing 87.9% of our CEO’s ongoing compensation opportunity and 78.7% (on average) of our other current NEOs’ ongoing compensation opportunities at risk and earned on the basis of Company performance. | |||
✓ | We continue to engage in robust shareholder outreach to understand shareholder feedback and input on a variety of matters, including business strategy, compensation programs and corporate governance. | ✓ |
We have a robust clawback policy that requires forfeiture or recoupment upon an accounting or financial restatement or certain other acts resulting in financial loss, reputation damage or other similar adverse impacts to the Company, a described in greater detail under the section titled “ Compensation Clawback Policy | |||
✓ | We annually assess our compensation program and have determined that the risks associated with our compensation policies are not reasonably likely to result in a material adverse effect on the Company and its subsidiaries taken as a whole. | ✓ |
For new employment agreements entered into during Fiscal 2019 and thereafter, we have provided that upon termination of employment any performance-based awards are forfeited. | |||
✓ | We maintained our robust compensation alignment policies through our (i) stock ownership guidelines that require 50% of the net after-tax portion of our directors’, NEOs’ and other Covered Officers’ shares must be retained to satisfy our stock ownership requirements; (ii) robust anti-pledging policy; and (iii) robust anti-pledging policy. |
✓ |
70% of our equity-based awards and 74% to 80% of our regular incentive compensation are based on achievement of performance. The remainder is time-based equity that is still subject to market risk. |
What We Don’t Do | ||||||
X |
We do not provide any gross-ups for golden parachutes. |
X |
We do not provide for accelerated vesting of equity upon retirement for our NEOs. | |||
X |
We do not make loans to executive officers or directors. | X |
We do not provide for single-trigger vesting of equity. | |||
X |
We do not allow our NEOs to purchase stock of the Company on margin, enter into short sales or buy or sell derivatives in respect of securities of the Company. | X |
We do not provide excessive perquisites and our NEOs do not participate in defined benefit pension plans or nonqualified deferred compensation plans. | |||
X |
We do not provide immediate vesting on equity based awards and have committed to one-year minimum vesting requirement for all awards granted under the Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan (the “2020 Equity Plan”), subject to limited exceptions. |
X |
We do not guarantee minimum bonuses to our NEOs. | |||
X |
We do not grant discounted options and we do not reprice stock options without shareholder approval. | X |
We do not pay any dividends on unearned and unvested equity awards, unless and until earned and vested. Our 2020 Equity Plan further enhanced this practice by explicitly prohibiting the payment of dividends on unvested equity awards. |
● | We engage the proxy solicitation firm, Okapi Partners, to (i) assist in a robust shareholder outreach process to discuss our go-forward strategies and (ii) facilitate the opportunity for shareholders to individually and directly engage with certain members of management. |
● | We engage in discussions with a major proxy advisory firm as necessary to understand its perspective on our compensation programs and best practices generally in executive compensation programs. |
● | We reach out to our top 20 shareholders to discuss and engage in dialogue with our shareholders with respect to our Company, including our corporate governance and compensation practices. |
What We Heard |
How We Responded | |||
● Shareholders raised concern on our use of Adjusted EBITDA and Adjusted Cash Flow on both MIP and LTIP. |
✓ We introduced a third performance metric (Adjusted Return on Equity), which is weighted equally with Adjusted EBITDA and Adjusted Free Cash Flow for our LTIP equity performance program. ✓ Additionally, for the Fiscal 2021 annual MIP, we added a Net Sales measure (weighted at 20% for Fiscal 2021) to our existing measures of Adjusted Free Cash Flow and Adjusted EBITDA (each weighted at 40% for Fiscal 2021). ✓ For Fiscal 2022, our Compensation Committee modified the weighting of the three performance metrics under the annual MIP, such that Adjusted EBITDA, Adjusted Free Cash Flow and Net Sales will all be equally weighted. | |||
● Shareholders told us that the size of our NEO salaries and annual bonus targets were appropriate. |
✓ Our NEOs’ base salaries and annual bonus targets remained the same in Fiscal 2021 as in Fiscal 2020. | |||
● Shareholders asked us to enhance our stock ownership guidelines. |
✓ We strengthened our stock ownership guidelines by increasing, as of January 1, 2020, to 50% the net after-tax portion of our directors’, NEOs’ and other Covered Officers’ shares that they must retain to satisfy our stock ownership requirements. | |||
● Shareholders did not express concern with our perquisites program and other compensation practices |
✓ Nonetheless, at his own initiative, our CEO voluntarily eliminated his tax planning, financial assistance benefit and his executive automobile allowance. | |||
● A proxy advisory firm raised concerns regarding our anti-hedging policy |
✓ We further strengthened our anti-hedging policy. In addition, on our initiative, we adopted a robust policy prohibiting the pledging of our stock. | |||
● Shareholders expressed interest in the declassification of our Board |
✓ We began to declassify the Board, a process which will be completed by 2024. | |||
● Shareholders supported our commitments to diversity |
✓ We continued our efforts to promote diversity and inclusion through implementing a diversity, equity, and inclusion program for employees and enhancing diversity at our Board and executive team. |
● | Shareholders were generally supportive of our compensation structure and our compensation consultant, Willis Towers Watson (“WTW”). |
● | Shareholders commended us on deleveraging our balance sheet and noted that they would prefer we continue to operate with less leverage. |
● | Shareholders noted that they focus on our ESG efforts and that they would welcome continued advancement of our ESG efforts. |
● | As described on page 20 herein, in order to promote our ESG efforts, we have also adopted a number of new policies and procedures and intend to continue to review and enhance our ESG processes, procedures and disclosures. |
● | Shareholders told us they appreciate the declassification of the Board. |
● | Shareholders told us they appreciate the diversity of our Board, both in terms of gender diversity and racial/ethnic diversity, and the advancement of our Company’s diversity, equity and inclusion initiative. |
● | To attract and retain highly qualified executives for the Company and in each of our business segments. |
● | To align the compensation paid to our executives with our overall corporate business strategies while leaving the flexibility necessary to respond to changing business priorities and circumstances. |
● | To align the interests of our executives with those of our shareholders and to reward our executives when they perform in a manner that creates value for our shareholders. |
● | Considered the advice of WTW on executive compensation issues and program design, including advice on the corporate compensation program as it compared to our peer group companies. |
● | Conducted an annual review of total compensation for each NEO, including the compensation and benefit values offered to each executive and other compensation factors. |
● | Consulted with our CEO and other members of senior management with regard to compensation matters and met in executive session without management to evaluate management’s input. |
● | Solicited comments and concurrence from other Board members regarding its recommendations and actions. |
● | Considered the feedback of our shareholders and the Say on Pay vote results. |
● | Provide comparative market data for our peer group and other groups on request, with respect to compensation matters. |
● | Analyze our compensation and benefit programs relative to our peer group, including our mix of performance-based compensation, non-variable compensation and the retentive features of our compensation plans in light of the Company’s strategies and prospects. |
● | Review the plan designs, including the performance metrics selected, for our various incentive plans and make recommendations to our Compensation Committee on appropriate plan designs to support the overall corporate strategic objectives. |
● | Advise our Compensation Committee on compensation matters and management proposals with respect to compensation matters. |
● | Assist in the preparation of our Compensation Discussion and Analysis disclosure and related matters. |
● | On request, participate in meetings of our Compensation Committee. |
✓ Central Garden and Pet Company |
✓ Fortune Brands Home & Security, Inc. |
✓ Newell Brands, Inc. | ||
✓ Church & Dwight Co., Inc. |
✓ Hanesbrands, Inc. |
✓ Nu Skin Enterprises, Inc. | ||
✓ The Clorox Company |
✓ Hasbro, Inc. |
✓ The Scotts Miracle-Gro Company | ||
✓ Edgewell Personal Care Company |
✓ Helen of Troy Limited |
✓ Tupperware Brands Corporation | ||
✓ Energizer Holdings, Inc. |
✓ Mattel, Inc. |
Element |
Purpose |
Operation |
Performance Measures | |||
Base Salary |
● Forms basis for competitive compensation package |
● Base salary reflects competitive market conditions, individual performance and internal parity |
● Performance of the individual is considered by the Compensation Committee, which is advised by its independent compensation consultant, when setting and reviewing base salary levels and continued employment | |||
MIP Bonus |
● Motivate achievement of strategic priorities relating to key annual financial metrics |
● Target bonus opportunities are determined by competitive market practices and internal parity ● Actual bonus payouts, which can range from 0-250% of target for the CEO and 0-200% of target for our other NEOs are determined based on achievement of financial metrics established at the beginning of the performance period |
● For Fiscal 2021, 80% is equally weighted between Adjusted EBITDA and Adjusted Free Cash Flow and the remaining 20% is based on Net Sales. For Fiscal 2022, Adjusted EBITDA, Adjusted Free Cash Flow and Net Sales will all be equally weighted | |||
LTIP: Restricted Stock Units (majority is performance-based and remainder is time-based) |
● Align compensation with key drivers of the business ● Encourage focus on long-term shareholder value creation |
● Size of award determined by competitive market practices, corporate and individual performance and internal parity and retention considerations |
● Long-term incentive awards focusing on cumulative performance over three-year period ending Fiscal 2023, based on equally weighted Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Return on Equity ● The majority of each of the new long-term incentive awards (70%) are performance-based |
● | 70% of the award vests based on three-year cumulative performance against the following three equally weighted measures: Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Return on Equity. The relatively large performance component of these awards is believed to serve as a valuable incentive to drive long-term outcomes for our Company and shareholders. There is an opportunity to earn up to 125% of target PSUs if superior performance is achieved. |
● | 30% will vest at the end of the three-year service period. The relatively small time-based component of these awards as part of our overall compensation mix is believed to serve as an important long-term retention and risk mitigation feature. |
Named Executive |
Annual Base Salary at the end of Fiscal 2021 | |
David M. Maura |
$ 900,000 | |
Jeremy W. Smeltser |
$ 500,000 | |
Randal D. Lewis |
$ 550,000 | |
Ehsan Zargar |
$ 400,000 | |
Rebeckah Long |
$ 300,000 |
Named Executive |
MIP Target as % of Annual Base Salary | |
David M. Maura |
125% | |
Jeremy W. Smeltser |
80% | |
Randal D. Lewis |
90% | |
Ehsan Zargar |
60% | |
Rebeckah Long |
60% |
● | 40% Adjusted EBITDA |
● | 40% Adjusted Free Cash Flow |
● | 20% Net Sales |
Performance Required to Achieve Bonus % as Indicated ($ in millions) | ||||||||||||
Performance Metric |
Weight (% of Target Bonus) |
Threshold (0%) |
Target (100%) |
Maximum (200%) (1) |
Actual |
Calculated 2021 Payout Factor (% of Target Bonus) | ||||||
Adjusted EBITDA |
40% | $560.71 | $623.01 | $685.31 | $689.30 | 200% | ||||||
Adjusted Free Cash Flow |
40% | $234.00 | $260.00 | $286.00 | $260.00 | 100% | ||||||
Net Sales |
20% | $3,991.42 | $4,201.49 | $4,411.56 | $4,614.00 | 200% |
(1) | Mr. Maura is eligible to receive a maximum MIP equal to 250% of target if we achieve Adjusted EBITDA, Adjusted Free Cash Flow and Net Sales of $716.462 million, $299.000 million and $4,516.691 million, respectively, and achieved Fiscal 2021 Payout Factors of 206.40%, 100.00% and 250.00%, respectively with respect to the target amount. |
Name |
70% Performance- Based (at Target) |
30% Time Based |
Potential Upside Performance -Based |
|||||||||
David M. Maura |
|
58,064 |
|
|
24,885 |
|
|
14,516 |
| |||
Jeremy W. Smeltser |
|
10,753 |
|
|
4,608 |
|
|
2,688 |
| |||
Randal D. Lewis |
|
23,656 |
|
|
10,138 |
|
|
5,914 |
| |||
Ehsan Zargar |
|
17,205 |
|
|
7,373 |
|
|
4,301 |
| |||
Rebeckah Long |
|
3,763 |
|
|
1,613 |
|
|
941 |
|
Performance Measure (in $ millions) |
Threshold (0% of PSUs vest) |
Target (100% of PSUs vest) |
Maximum (125% of PSUs vest) |
|||||||||
Adjusted EBITDA |
$ |
1,869.0 |
|
$ |
1,953.0 |
|
$ |
1,974.5 |
| |||
Adjusted Free Cash Flow |
$ |
780.0 |
|
$ |
874.1 |
|
$ |
898.7 |
| |||
Adjusted Return on Equity |
|
13.50% |
|
|
14.80% |
|
|
15.20% |
|
Name and Principal Position |
Year |
Salary |
Bonus |
Stock Awards (1) |
Non-Equity Incentive Plan Compensation (2) |
All Other Compensation (3) |
Total |
|||||||||||||||||||||
David M. Maura |
2021 | $ | 900,000 | $ | – | $ | 5,399,980 | $ | 1,941,300 | $ | 365,045 | $ | 8,606,325 | |||||||||||||||
Executive Chairman and |
2020 | $ | 900,000 | $ | – | $ | 8,411,326 | $ | 1,442,813 | $ | 194,219 | $ | 10,948,358 | |||||||||||||||
Chief Executive Officer |
2019 | $ | 900,000 | $ | – | $ | 13,588,411 | $ | 5,000,000 | $ | 199,711 | $ | 19,688,122 | |||||||||||||||
Jeremy W. Smeltser |
2021 | $ | 500,000 | $ | – | $ | 1,000,001 | $ | 640,000 | $ | 203,184 | $ | 2,343,185 | |||||||||||||||
Executive Vice President and |
2020 | $ | 500,000 | $ | – | $ | 1,000,030 | $ | 513,000 | $ | 136,699 | $ | 2,149,729 | |||||||||||||||
Chief Financial Officer |
– | |||||||||||||||||||||||||||
Randal D. Lewis |
2021 | $ | 550,000 | $ | – | $ | 2,199,989 | $ | 792,000 | $ | 231,422 | $ | 3,773,411 | |||||||||||||||
Executive Vice President and |
2020 | $ | 550,000 | $ | – | $ | 3,161,022 | $ | 634,838 | $ | 173,120 | $ | 4,518,980 | |||||||||||||||
Chief Operating Officer |
2019 | $ | 447,788 | $ | – | $ | 4,075,662 | $ | 500,000 | $ | 145,954 | $ | 5,169,404 | |||||||||||||||
Ehsan Zargar |
2021 | $ | 400,000 | $ | – | $ | 1,600,028 | $ | 384,000 | $ | 229,191 | $ | 2,613,219 | |||||||||||||||
Executive Vice President, General Counsel, and |
2020 | $ | 400,000 | $ | – | $ | 2,881,385 | $ | 307,800 | $ | 156,598 | $ | 3,745,783 | |||||||||||||||
Corporate Secretary |
2019 | $ | 400,000 | $ | – | $ | 4,691,949 | $ | 500,000 | $ | 114,538 | $ | 5,706,487 | |||||||||||||||
Rebeckah Long |
2021 | $ | 300,000 | $ | – | $ | 349,978 | $ | 458,000 | $ | 22,998 | $ | 1,130,976 | |||||||||||||||
Senior Vice President and |
2020 | $ | 300,000 | $ | – | $ | 382,050 | $ | 230,850 | $ | 21,326 | $ | 934,226 | |||||||||||||||
Chief Human Resources Officer |
2019 | $ | 231,607 | $ | – | $ | 626,206 | $ | 53,750 | $ | 18,602 | $ | 930,165 |
(1) | This column reflects the aggregate grant date fair value of the awards computed in accordance with ASC Topic 718. For a discussion of the relevant ASC 718 valuation assumptions, see Note 2, Significant Accounting Policies and Practices, of the Notes to Consolidated Financial Statements, included in our Annual Report on Form 10-K for Fiscal 2021. For Fiscal 2021, this column reflects grants under the LTIP. If the maximum performance under the LTIP was achieved then the value of the awards in Fiscal 2021 would have been as follows: Mr. Maura ($6,344,972); Mr. Smeltser ($1,174,990); Mr. Lewis ($2,584,991); Mr. Zargar ($1,880,023); and Ms. Long ($411,237) in each case based on the stock price on the date of grant. At the lowest level of performance, the performance-based restricted stock unit awards are forfeited. The amounts shown in this column do not reflect the actual payout. |
(2) | For Fiscal 2021, this column represents cash amounts earned under the Company’s 2021 MIP. For additional detail on the 2021 MIP and the determination of the awards thereunder, please refer to the discussion under the heading “Compensation Discussion and Analysis-Fiscal 2021 Compensation Component Pay-Outs-Management Incentive Plan” and the table entitled “Grants of Plan-Based Awards Table for Fiscal 2021” and its accompanying footnotes. The incentive awards payable under the 2019 MIP to our NEOs were settled in shares of common stock in lieu of cash and so are reported under Stock Awards. For Ms. Long, this amount also includes a cash bonus payment of $170,000 made in Fiscal 2021 pursuant to an election Ms. Long made prior to becoming an executive officer to receive a portion of an earlier incentive award opportunity in the form of a future fixed cash payment. Ms. Long is not entitled to any remaining payments in respect of such award. |
(3) | Please see the following table for the details of the amounts that comprise the All Other Compensation column. |
Name |
Financial Planning Services Provided to Executive (2) |
Life Insurance Premiums Paid on Executives Behalf (3) |
Car Allowance/ Personal Use of Company Car (4) |
Company Contributions to Executive’s Qualified Retirement Plan (5) |
Company Contributions to Executive’s Supplemental Life Insurance Policy (6) |
Dividends (7) |
Other (8) |
Total |
||||||||||||||||||||||||
David M. Maura (1) |
$ | — | $ | 9,659 | $ | — | $ | 9,750 | $ | 75,606 | $ | 270,030 | $ | — | $ | 365,045 | ||||||||||||||||
Jeremy W. Smeltser |
$ | 20,000 | $ | 4,564 | $ | 23,066 | $ | 4,712 | $ | 75,000 | $ | — | $ | 75,842 | $ | 203,184 | ||||||||||||||||
Randal D. Lewis |
$ | 20,000 | $ | 11,158 | $ | 19,746 | $ | 11,837 | $ | 82,500 | $ | 86,181 | $ | — | $ | 231,422 | ||||||||||||||||
Ehsan Zargar |
$ | 20,000 | $ | 3,057 | $ | 21,479 | $ | 9,750 | $ | 60,000 | $ | 114,905 | $ | — | $ | 229,191 | ||||||||||||||||
Rebeckah Long |
$ | — | $ | 1,826 | $ | 12,000 | $ | 6,300 | $ | — | $ | 2,873 | $ | — | $ | 22,998 |
(1) | Mr. Maura voluntarily eliminated his financial planning and car allowance payments beginning in Fiscal 2020. |
(2) | The Company provides an allowance for expenses related to financial planning and tax preparation services, up to $20,000 annually, to Messrs. Smeltser, Lewis and Zargar. For Fiscal 2021, these allowances were paid out to Messrs. Smeltser, Lewis and Zargar in April 2021. |
(3) | The amount represents the life insurance premium paid for Fiscal 2021. The Company provides life insurance coverage equal to three times (two times, for Ms. Long) base salary for each executive officer. |
(4) | The Company sponsors a leased car or car allowance program. Under the leased car program, costs associated with using a vehicle are provided, which also include maintenance, insurance and license and registration. Under the car allowance program, the executive receives a fixed monthly allowance. As noted above, beginning with Fiscal 2020, Mr. Maura has given up his car allowance. |
(5) | Represents amounts contributed under the Company-sponsored 401(k) retirement plan. |
(6) | This amount reflects the premium paid by the Company equal to 15% of base salary toward individual supplemental life insurance policies. |
(7) | This amount reflects dividend equivalents paid in respect of RSUs held by NEOs which vested during Fiscal 2021 and were not factored into the grant date fair value of the RSUs. |
(8) | This amount reflects the relocation expenses paid by the Company to Mr. Smeltser in Fiscal 2021. |
Name |
Grant Date |
Threshold $ |
Target $ |
Maximum $ |
Threshold # |
Target # |
Maximum # |
All Other Stock Awards: Number of Shares of Stock or Units # |
Grant Date Fair Value of Stock Awards $ (3) |
|||||||||||||||||||||||||
David M. Maura |
11/10/2020 (1) |
$ | 0 | $ | 1,125,000 | $ | 2,812,500 | |||||||||||||||||||||||||||
12/16/2020 (2) |
$ | 0 | $ | 0 | $ | 0 | — | 58,064 | 72,580 | 24,885 | $ | 5,399,980 | ||||||||||||||||||||||
Jeremy W. Smeltser |
11/10/2020 (1) |
$ | 0 | $ | 400,000 | $ | 800,000 | |||||||||||||||||||||||||||
12/16/2020 (2) |
$ | 0 | $ | 0 | $ | 0 | — | 10,753 | 13,441 | 4,608 | $ | 1,000,001 | ||||||||||||||||||||||
Randal D. Lewis |
11/10/2020 (1) |
$ | 0 | $ | 495,000 | $ | 990,000 | |||||||||||||||||||||||||||
12/16/2020 (2) |
$ | 0 | $ | 0 | $ | 0 | — | 23,656 | 29,570 | 10,138 | $ | 2,199,989 | ||||||||||||||||||||||
Ehsan Zargar |
11/10/2020 (1) |
$ | 0 | $ | 240,000 | $ | 480,000 | |||||||||||||||||||||||||||
12/16/2020 (2) |
$ | 0 | $ | 0 | $ | 0 | — | 17,205 | 21,506 | 7,373 | $ | 1,600,028 | ||||||||||||||||||||||
Rebeckah Long |
11/10/2020 (1) |
$ | 0 | $ | 180,000 | $ | 360,000 | |||||||||||||||||||||||||||
12/16/2020 (2) |
$ | 0 | $ | 0 | $ | 0 | — | 3,763 | 4,704 | 1,613 | $ | 349,978 |
(1) | Represents the threshold, target and maximum payouts under the Fiscal 2021 MIP. The actual amounts earned under the plan for Fiscal 2021 are disclosed in the Summary Compensation Table above as part of the column entitled “ Non-Equity Incentive Plan AwardsCompensation Discussion and Analysis-Fiscal 2021 Compensation Component Pay-Outs-Management Incentive Plan |
(2) | Represents the number of RSUs and PSUs awarded under the Fiscal 2021 LTIP grants and shows (a) the threshold, target and maximum payouts, denominated in the number of shares of stock, in respect of PSUs and (b) the number of shares of stock underlying the RSUs. See “ Compensation Discussion and Analysis-Fiscal 2021 Compensation Components Pay-Outs-LTIP |
(3) | Except as otherwise noted, reflects the value at the grant date value based upon the probable outcome of the relevant performance conditions. This amount is consistent with the estimate of aggregate compensation costs to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of any estimated forfeitures. |
Name |
Number of Securities Underlying Unexercised Options Exercisable |
Option Exercise Price |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested(1) |
Market Value of Shares or Units of Stock That Have Not Vested(2) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested(3) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) |
|||||||||||||||||||||
David M. Maura |
64,142 | $ | 72.92 | 11/29/2023 | – | $ | – | – | $ | – | ||||||||||||||||||
26,743 | $ | 82.85 | 11/25/2024 | – | $ | – | – | $ | – | |||||||||||||||||||
1,164 | $ | 86.38 | 11/24/2025 | – | $ | – | – | $ | – | |||||||||||||||||||
51,309 | $ | 95.43 | 11/28/2026 | – | $ | – | – | $ | – | |||||||||||||||||||
35,817 | (4) |
$ | 3,426,612 | 104,466 | (5) |
$ | 9,994,262 | |||||||||||||||||||||
26,012 | (6) |
$ | 2,488,568 | 60,693 | (7) |
$ | 5,806,499 | |||||||||||||||||||||
24,885 | (8) |
$ | 2,380,748 | 58,064 | (9) |
$ | 5,554,983 | |||||||||||||||||||||
Jeremy W. Smeltser |
– | – | – | 4,817 | (6) |
$ | 460,842 | 11,240 | (7) |
$ | 1,075,331 | |||||||||||||||||
4,608 | (8) |
$ | 440,847 | 10,753 | (9) |
$ | 1,028,740 | |||||||||||||||||||||
Randal D. Lewis |
– | – | – | 9,949 | (4) |
$ | 951,821 | 29,019 | (5) |
$ | 2,776,248 | |||||||||||||||||
– | – | – | 10,597 | (6) |
$ | 1,013,815 | 24,727 | (7) |
$ | 2,365,632 | ||||||||||||||||||
– | – | – | 10,138 | (8) |
$ | 969,902 | 23,656 | (9) |
$ | 2,263,170 | ||||||||||||||||||
Ehsan Zargar |
3,958 | $ | 72.92 | 11/29/2023 | – | – | – | – | ||||||||||||||||||||
5,009 | $ | 82.86 | 11/25/2024 | – | – | – | – | |||||||||||||||||||||
– | – | – | 10,613 | (4) |
$ | 1,015,346 | 30,953 | (5) |
$ | 2,961,274 | ||||||||||||||||||
– | – | – | 7,707 | (6) |
$ | 737,329 | 17,983 | (7) |
$ | 1,720,434 | ||||||||||||||||||
– | – | – | 7,373 | (8) |
$ | 705,375 | 17,205 | (9) |
$ | 1,646,002 | ||||||||||||||||||
Rebeckah Long |
– | – | – | 1,658 | (4) |
$ | 158,621 | 4,836 | (5) |
$ | 462,660 | |||||||||||||||||
– | – | – | 1,686 | (6) |
$ | 161,300 | 3,934 | (7) |
$ | 376,366 | ||||||||||||||||||
– | – | – | 1,613 | (8) |
$ | 154,316 | 3,763 | (9) |
$ | 360,006 |
(1) | This column shows the number of outstanding RSUs subject to time-based vesting. |
(2) | The market value is based on the per share closing price of our common stock on September 30, 2021 ($95.67). |
(3) | This column shows the number of Fiscal 2019, 2020 and 2021 LTIP PSUs subject to performance-based vesting. For the FY19 PSU grants, we have shown the actual shares that become vested based on performance through fiscal 2021 year-end. For the FY20 and FY21 PSU grants, because the performance metrics have not been satisfied as of the date of this report, we have shown the number of PSUs that would be payable upon the target level of performance. |
(4) | These Fiscal 2019 LTIP RSUs cliff vested on December 3, 2021. |
(5) | These Fiscal 2019 LTIP PSUs cliff vested on December 3, 2021. |
(6) | These Fiscal 2020 LTIP RSUs cliff vest on December 2, 2022, subject to continued employment. |
(7) | These Fiscal 2020 LTIP PSUs cliff vest on December 2, 2022, subject to continued employment and achievement of the applicable performance metrics. |
(8) | These Fiscal 2021 LTIP RSUs cliff vest on December 4, 2023, subject to continued employment. |
(9) | These Fiscal 2021 LTIP PSUs cliff vest on December 4, 2023, subject to continued employment and achievement of the applicable performance metrics. |
Stock Awards |
Option Awards |
|||||||||||||||
Name |
Number of Shares Acquired on Vesting |
Value Realized on Vesting |
Number of Shares Acquired on Exercise |
Value Realized on Exercise |
||||||||||||
David M. Maura |
80,366 | $ | 5,231,827 | (1) |
60,294 | $ | 2,381,613 | (2) | ||||||||
Jeremy W. Smeltser |
– | $ | – | – | – | |||||||||||
Randal D. Lewis |
25,649 | $ | 1,669,750 | (3) |
– | – | ||||||||||
Ehsan Zargar |
34,198 | $ | 2,226,290 | (4) |
– | – | ||||||||||
Rebeckah Long |
855 | $ | 55,661 | (5) |
– | – |
(1) | The amount for Mr. Maura in this column represents the value realized upon the vesting of 80,366 RSUs on November 21, 2020. The value was computed by multiplying the number of shares vested by the closing price per share of the Company’s common stock on such vesting date, which was $65.10 on November 21, 2020. |
(2) | The amount for Mr. Maura in this column represents the value realized upon exercising 60,294 options on September 10, 2021. The value was computed by multiplying the number of shares exercised by the closing price per share of the Company’s common stock on such exercise date of $92.33 minus the per share exercise price of $52.83. |
(3) | The amount for Mr. Lewis in this column represents the value realized upon the vesting of 25,649 RSUs on November 21, 2020. The value was computed by multiplying the number of shares vested by the closing price per share of the Company’s common stock on such vesting date, which was $65.10 on November 21, 2020. |
(4) | The amount for Mr. Zargar in this column represents the value realized upon the vesting of 34,198 RSUs on November 21, 2020. The value was computed by multiplying the number of shares vested by the closing price per share of the Company’s common stock on such vesting date, which was $65.10 on November 21, 2020. |
(5) | The amount for Ms. Long in this column represents the value realized upon the vesting of 855 RSUs on November 21, 2020. The value was computed by multiplying the number of shares vested by the closing price per share of the Company’s common stock on such vesting date, which was $65.10 on November 21, 2020. |
(i) | the acquisition, by any individual, entity or group of beneficial ownership of more than 50% of the combined voting power of the Applicable Company’s then outstanding securities; |
(ii) | individuals who constituted our Board at the effective time of the plan and directors who are nominated and elected as their successors from time to time cease for any reason to constitute at least a majority of our Board; |
(iii) | consummation of a merger or consolidation of the Applicable Company or any direct or indirect subsidiary of the Applicable Company with any other entity, other than (A) a merger or consolidation which results in the voting securities of the Applicable Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) more than 50% of the combined voting power of the voting securities of the Applicable Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, (B) a merger or consolidation effected to implement a recapitalization of the Applicable Company (or similar transaction) in which no individual, entity or group is or becomes the beneficial owner, directly or indirectly, of voting securities of the Applicable Company (not including in the securities beneficially owned by such individual, entity or group any securities acquired directly from the Applicable Company or any of its direct or indirect subsidiaries) representing 50% or more of the combined voting power of the Applicable Company’s then outstanding voting securities or (C) a merger or consolidation affecting the Applicable Company as a result of which a Designated Holder (as defined below) owns after such transaction more than 50% of the combined voting power of the voting securities of the Applicable Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or |
(iv) | approval by the shareholders of the Applicable Company of either a complete liquidation or dissolution of the Applicable Company or the sale or other disposition of all or substantially all of the assets of the Applicable Company, other than a sale or disposition by the Applicable Company of all or substantially all of the assets of the Applicable Company to an entity, more than 50% of the combined voting power of the voting securities of which are owned by shareholders of the Applicable Company in substantially the same proportions as their ownership of the Applicable Company immediately prior to such sale; provided that, in each case, it shall not be a change in control if, immediately following the occurrence of the event described above (i) the record holders of the common stock of the Applicable Company immediately prior to the event continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following the event or (ii) the Harbinger Master Fund, the Harbinger Special Situations Fund, HRG and their respective affiliates and subsidiaries (the “Designated Holders”) beneficially own, directly or indirectly, more than 50% of the combined voting power of the Applicable Company or any successor. |
David Maura |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Cash Severance (1) |
$ | – | $ | 2,425,000 | $ | 2,425,000 | $ | 2,425,000 | ||||||||
Annual Bonus (2) |
$ | – | $ | 1,941,300 | $ | 1,941,300 | $ | 1,941,300 | ||||||||
Equity Awards (Intrinsic Value) (3) |
$ | – | $ | $ | – | $ | – | |||||||||
Unvested Restricted Stock |
$ | – | $ | 8,295,928 | (4) |
$ | 8,295,928 | (4) |
$ | 27,652,839 | (5) | |||||
Other Benefits |
$ | – | $ | – | $ | – | $ | – | ||||||||
Health and Welfare (6) |
$ | – | $ | 10,589 | $ | 10,589 | $ | 10,589 | ||||||||
Car allowance (7) |
$ | – | $ | 24,000 | $ | 24,000 | $ | 24,000 | ||||||||
Accrued, Unused Vacation (8) |
$ | – | $ | 18,639 | $ | 18,639 | $ | 18,639 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
– |
$ |
12,715,456 |
$ |
12,715,456 |
$ |
32,072,367 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
(1) | Reflects cash severance payment, under the applicable termination scenarios, of $500,000 for termination of the role of CEO, plus 1.5x Executive Chairman base salary and 1.0x the Fiscal 2021 Executive Chairman target bonus. Payments are to be made in monthly installments over 12 or 18 months (for the CEO and Executive Chairman payments, respectively) subject to the requirements of Section 409A of the Internal Revenue Code. |
(2) | Reflects annual MIP bonus for Fiscal 2021 payable at 173% of target. Payment is subject to Section 409A of the Internal Revenue Code. |
(3) | Reflects value of accelerated vesting of equity awards, if any, using a stock price of $95.67 which was the Company’s closing price on September 30, 2021. |
(4) | Upon a termination without cause or due to death or disability or for resignation with good reason, all time-based RSUs would be payable. |
(5) | Upon a termination in connection with a change in control that occurs between 60 days prior to the change in control and the one-year anniversary of the change in control, all RSUs and PSUs would be subject to accelerated vesting at target. |
(6) | Reflects 18 months of insurance and other benefits continuation for the Executive and any dependents. |
(7) | Reflects 12 months of car allowance continuation, which Mr. Maura is currently electing not to receive. |
(8) | Represents compensation for 43.1 hours of unused vacation time in Fiscal 2021. |
Jeremy W. Smeltser |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Cash Severance (1) |
$ | – | $ | 1,150,000 | $ | 1,150,000 | $ | 1,150,000 | ||||||||
Annual Bonus (2) |
$ | – | $ | 640,000 | $ | 640,000 | $ | 640,000 | ||||||||
Equity Awards (Intrinsic Value) (3) |
$ | – | $ | – | $ | – | $ | – | ||||||||
Unvested Restricted Stock |
$ | – | $ | 280,878 | (4) | $ | 280,878 | (4) | $ | 280,878 | (4) | |||||
Other Benefits |
$ | – | $ | – | $ | – | $ | – | ||||||||
Health and Welfare (5) |
$ | – | $ | 10,589 | $ | 10,589 | $ | 10,589 | ||||||||
Car allowance (6) |
$ | – | $ | 22,684 | $ | 22,684 | $ | 22,684 | ||||||||
Accrued, Unused Vacation (7) |
$ | – | $ | 10,355 | $ | 10,355 | $ | 10,355 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
– |
$ |
2,114,506 |
$ |
2,114,506 |
$ |
2,114,506 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
(1) | Reflects cash severance payment, under the applicable termination scenarios, of 1.5x base salary and 1.0x the Fiscal 2021 target bonus. Payments are to be made in monthly installments over 18 months subject to the requirements of Section 409A of the Internal Revenue Code. |
(2) | Reflects annual MIP bonus for Fiscal 2021 payable at 160% of target. Payment is subject to Section 409A of the Internal Revenue Code. |
(3) | Reflects value of accelerated vesting of equity awards, if any, using a stock price of $95.67 which was the Company’s closing price on September 30, 2021. |
(4) | Upon a termination without cause or due to death or disability, for resignation with good reason or termination in connection with a change in control, all PSUs will be forfeited. In addition, RSUs will vest pro rata based on days worked during the vesting period (December 2, 2019 through December 2, 2022 for the 2020 LTIP RSUs and December 4, 2020 through December 4, 2023 for the 2021 LTIP RSUs). |
(5) | Reflects 18 months of insurance and other benefits continuation for the Executive and any dependents. |
(6) | Reflects 12 months of car allowance continuation. |
(7) | Represents compensation for 43.1 hours of unused vacation time in Fiscal 2021. |
Randal D. Lewis |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Cash Severance (1) |
$ | – | $ | 1,320,000 | $ | 1,320,000 | $ | 1,320,000 | ||||||||
Annual Bonus (2) |
$ | – | $ | 792,000 | $ | 792,000 | $ | 792,000 | ||||||||
Equity Awards (Intrinsic Value) (3) |
$ | – | $ | – | $ | – | $ | – | ||||||||
Unvested Restricted Stock |
$ | – | $ | 1,781,160 | (4) |
$ | 1,781,160 | (4) |
$ | 1,781,160 | (4) | |||||
Other Benefits |
$ | – | $ | – | $ | – | $ | – | ||||||||
Health and Welfare (5) |
$ | – | $ | 10,589 | $ | 10,589 | $ | 10,589 | ||||||||
Car allowance (6) |
$ | – | $ | 27,228 | $ | 27,228 | $ | 27,228 | ||||||||
Accrued, Unused Vacation (7) |
$ | – | $ | 814 | $ | 814 | $ | 814 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
– |
$ |
3,931,791 |
$ |
3,931,791 |
$ |
3,931,791 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
(1) | Reflects cash severance payment, under the applicable termination scenarios, of 1.5x the Executive’s current base salary plus 1.0x the Fiscal 2021 target bonus. Payments are to be made in monthly installments over 18 months, subject to the requirements of Section 409A of the Internal Revenue Code. |
(2) | Reflects annual MIP bonus for Fiscal 2021 payable at 160% of target. Payment is subject to the requirements of Section 409A of the Internal Revenue Code. |
(3) | Reflects value of accelerated vesting of equity awards, if any, using a stock price of $95.67 which was the Company’s closing price on September 30, 2021. |
(4) | Upon a termination without cause or due to death or disability, for resignation with good reason or termination in connection with a change in control, all PSUs will be forfeited. In addition, RSUs will vest pro rata based on days worked during the vesting period (December 3, 2018 through December 3, 2021 for the 2019 LTIP RSUs, December 2, 2019 through December 2, 2022 for the 2020 LTIP RSUs and December 4, 2020 through December 4, 2023 for the 2021 LTIP RSUs). |
(5) | Reflects 18 months of insurance and other benefits continuation for the Executive and any dependents. |
(6) | Reflects 12 months of car lease payment continuation. |
(7) | Represents compensation for 3.1 hours of unused vacation time in Fiscal 2021. |
Ehsan Zargar |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Cash Severance (1) |
$ | – | $ | 1,556,000 | $ | 1,556,000 | $ | 1,556,000 | ||||||||
Annual Bonus (2) |
$ | – | $ | 384,000 | $ | 384,000 | $ | 384,000 | ||||||||
Equity Awards (Intrinsic Value) (3) |
$ | – | $ | – | $ | – | $ | |||||||||
Unvested Restricted Stock |
$ | – | $ | 8,193,466 | (4) |
$ | 8,193,466 | (4) |
$ | 8,193,466 | (4) | |||||
Other Benefits |
$ | – | $ | – | $ | – | $ | – |
Ehsan Zargar |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Health and Welfare (5) |
$ | – | $ | 10,589 | $ | 10,589 | $ | 10,589 | ||||||||
Car allowance(6) |
$ | – | $ | 25,093 | $ | 25,093 | $ | 25,093 | ||||||||
Accrued, Unused Vacation (7) |
$ | – | $ | 23,669 | $ | 23,669 | $ | 23,669 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
– |
$ |
10,192,817 |
$ |
10,192,817 |
$ |
10,192,817 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
(1) | Reflects cash severance payment, under the applicable termination scenarios, of 2.99x the Executive’s current base salary plus 1.5x the Fiscal 2021 target bonus. Payments are to be made in monthly installments over 18 months, subject to the requirements of Section 409A of the Internal Revenue Code. |
(2) | Reflects annual MIP bonus for Fiscal 2021 payable at 160% of target. Payment is subject to the requirements of Section 409A of the Internal Revenue Code. |
(3) | Reflects value of accelerated vesting of equity awards, if any, using a stock price of $95.67 which was the Company’s closing price on September 30, 2021. |
(4) | Upon a termination without cause or in connection with a change in control or for resignation with good reason or for death or disability, all RSUs and PSUs would be subject to accelerated vesting at target. |
(5) | Reflects 18 months of insurance and other benefits continuation for the Executive and any dependents. |
(6) | Reflects 12 months of car allowance continuation. |
(7) | Represents compensation for 123.1 hours of unused vacation time in Fiscal 2021. |
Rebeckah Long |
Termination Scenarios (Assumes Termination on 9/30/2021) |
|||||||||||||||
Component |
Without Good Reason or For Cause |
With Good Reason or Without Cause |
Upon Death or Disability |
Change in Control & Termination |
||||||||||||
Cash Severance (1)(2) |
$ | – | $ | 300,000 | $ | 300,000 | $ | 300,000 | ||||||||
Annual Bonus (3) |
$ | – | $ | – | $ | – | $ | – | ||||||||
Equity Awards (Intrinsic Value) (4) |
$ | – | $ | – | $ | – | $ | – | ||||||||
Unvested Restricted Stock |
$ | – | $ | – | (5) |
$ | – | (5) |
$ | – | (5) | |||||
Other Benefits |
$ | – | $ | – | $ | – | $ | – | ||||||||
Health and Welfare (6) |
$ | – | $ | 10,589 | $ | 10,589 | $ | 10,589 | ||||||||
Car allowance (7) |
$ | – | $ | 12,000 | $ | 12,000 | $ | 12,000 | ||||||||
Accrued, Unused Vacation (8) |
$ | – | $ | 5,348 | $ | 5,348 | $ | 5,348 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ |
– |
$ |
327,937 |
$ |
327,937 |
$ |
327,937 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
(1) | Should the executive resign with good reason, the severance payment will not be payable. |
(2) | Reflects cash severance payment, under the applicable termination scenarios, of 52 weeks of weekly salary. |
(3) | No payment would be required under existing agreements. |
(4) | Reflects value of accelerated vesting of equity awards, if any, using a stock price of $95.67 which was the Company’s closing price on September 30, 2021. |
(5) | Upon a termination without cause or due to death or disability, for resignation with good reason or termination in connection with a change in control, all RSUs and PSUs would be forfeited. |
(6) | Reflects 18 months of insurance and other benefits continuation for the Executive and any dependents. |
(7) | Reflects 12 months of car allowance continuation. |
(8) | Represents compensation for 37.1 hours of unused vacation time in Fiscal 2021. |
• | each person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock (each, a “5% Stockholder”); |
• | our NEOs for Fiscal 2021; |
• | each of our directors; and |
• | all directors and executive officers as a group. |
Name and Address of Beneficial Owner |
Number of Shares Beneficially Owned |
Percent of Outstanding Shares |
||||||
5% Stockholders |
||||||||
FMR LLC (1) |
5,621,827 | 13.7 | % | |||||
Vanguard Group Inc. (2) |
3,766,026 | 9.2 | % | |||||
Our Directors and Named Executive Officers |
||||||||
Leslie L. Campbell (3) |
2,295 | * | ||||||
Joan Chow (3) |
1,854 | * | ||||||
Sherianne James |
9,996 | * | ||||||
Randal D. Lewis |
68,341 | * | ||||||
Rebeckah Long |
8,777 | * | ||||||
David M. Maura (4) |
732,756 | 1.8 | % | |||||
Gautam Patel |
5,974 | * | ||||||
Terry L. Polistina |
36,632 | * | ||||||
Hugh R. Rovit |
37,693 | * | ||||||
Jeremy W. Smeltser |
16,369 | * | ||||||
Ehsan Zargar (5) |
102,058 | * | ||||||
All Directors and Executive Officers as a Group |
1,022,745 | 2.5 | % |
* | Indicates less than 1% of our outstanding common stock. |
(1) | Based solely on a Schedule 13G/A, filed with the SEC on February 8, 2021. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. |
(2) | Based solely on a Schedule 13G/A, filed with the SEC on February 10, 2021. The address of Vanguard Group Inc. is 100 Vanguard Blvd, Malvern, Pennsylvania 19355. |
(3) | Mr. Campbell and Ms. Chow were appointed to the Board in April 2021. |
(4) | Includes shares of common stock underlying options that have vested for Mr. Maura totaling 143,358. |
(5) | Includes shares of common stock underlying options that have vested for Mr. Zargar totaling 8,967. |
September 30, 2021 |
||||||||||||||||||||||||||||||||
(in millions, except %) |
Net Sales |
Effect of Changes in Currency |
Net Sales Excluding Effect of Changes in Currency |
Effect of Acquisitions |
Organic Net Sales |
Net Sales September 30, 2020 |
Variance |
|||||||||||||||||||||||||
HPC |
$ | 1,260.1 | $ | (31.1 | ) | $ | 1,229.0 | $ | — | $ | 1,229.0 | $ | 1,107.6 | $ | 121.4 | 11.0 | % | |||||||||||||||
GPC |
1,129.9 | (18.4 | ) | 1,111.5 | (99.5 | ) | 1,012.0 | 962.6 | 49.4 | 5.1 | % | |||||||||||||||||||||
H&G |
608.1 | — | 608.1 | (23.2 | ) | 584.9 | 551.9 | 33.0 | 6.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total |
$ | 2,998.1 | $ | (49.5 | ) | $ | 2,948.6 | $ | (122.7 | ) | $ | 2,825.9 | $ | 2,622.1 | $ | 203.8 | 7.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
• | Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity-based compensation based upon achievement of long-term performance metrics under the Company’s LTIP; and generally consist of non-cash, stock-based compensation. During the year ended September 30, 2021, other incentive compensation also includes incentive bridge awards issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but does not qualify for share-based compensation. All bridge awards fully vested in November 2020; |
• | Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company’s segments; |
• | Transaction related charges that consist of (1) transaction costs from acquisitions or subsequent project costs directly associated with integration of an acquired business with the consolidated group; and (2) transaction costs from divestitures and subsequent project costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred, and exiting of transition service arrangements (TSAs) and reverse TSAs; |
• | Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions supporting the Company’s business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations. Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs or re-allocation or absorption by existing continuing operations following the completed sale of the discontinued operations; |
• | Gains and losses attributable to the Company’s investment in Energizer common stock. During the year ended September 30, 2021, the Company sold its remaining shares in Energizer common stock; |
• | Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations; |
• | Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations after an acquisition; |
• | Incremental reserves for non-recurring litigation or environmental remediation activity including the proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the year ended September 30, 2021; |
• | Incremental costs realized under a three-year tolling agreement entered into with the buyer in consideration with the divestiture of the Coevorden Operations on March 29, 2020, for the continued production of dog and cat food products purchased to support GPC commercial operations and distribution in Europe; |
• | Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the year ended September 30, 2020; |
• | Foreign currency gains and losses attributable to multicurrency loans for the year ended September 30, 2020, that were entered into with foreign subsidiaries in exchange for the receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures; and |
• | Other adjustments primarily consisting of costs attributable to (1) incremental fines and penalties realized for delayed shipments following the transition of a third-party logistics service provider in GPC during the year ended September 30, 2021; (2) costs associated with Salus operations during the years ended September 30, 2021 and 2020 as they are not considered a component of continuing commercial products company; (3) expenses and cost recovery for flood damage at the Company’s facilities in Middleton, Wisconsin recognized during the year ended September 30, 2020; and (4) incremental costs for separation of a key executives during the year ended September 30, 2020 |
SPECTRUM BRANDS HOLDINGS, INC. (in millions) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
||||||
Net income (loss) from continuing operations |
$ | 15.3 | $ | (52.4 | ) | |||
Income tax (benefit) expense |
(26.4 | ) | 27.3 | |||||
Interest expense |
116.5 | 93.7 | ||||||
Depreciation and amortization |
117.0 | 114.7 | ||||||
|
|
|
|
|||||
EBITDA |
222.4 | 183.3 | ||||||
Share and incentive based compensation |
29.4 | 36.1 | ||||||
Restructuring and related charges |
40.3 | 71.6 | ||||||
Transaction related charges |
56.3 | 23.1 | ||||||
Unallocated share costs |
26.9 | 17.4 | ||||||
(Gain) loss on Energizer investment |
(6.9 | ) | 16.8 | |||||
Loss on sale of Coevorden operations |
– | 26.8 | ||||||
Write-off from impairment of intangible assets |
– | 24.2 | ||||||
SPECTRUM BRANDS HOLDINGS, INC. (in millions) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
||||||
Foreign currency loss on multicurrency divestiture loans |
– | 3.8 | ||||||
Salus CLO debt extinguishment |
– | (76.2 | ) | |||||
Inventory acquisition step-up |
7.3 | – | ||||||
Legal and environmental remediation reserves |
6.0 | – | ||||||
Coevorden tolling related charges |
6.2 | – | ||||||
Other |
3.9 | (3.0 | ) | |||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 391.8 | $ | 323.9 | ||||
|
|
|
|
|||||
Net Sales |
$ | 2,998.1 | $ | 2,622.1 | ||||
|
|
|
|
|||||
Adjusted EBITDA Margin |
13.1 | % | 12.4 | % | ||||
|
|
|
|
|||||
Twelve Month Period Ended September 30, 2021 (in millions) |
Continuing Operations |
HHI |
Proforma including HHI |
|||||||||
Net income |
$ | 15.3 | $ | 180.5 | $ | 195.8 | ||||||
Income tax (benefit) expense |
(26.4 | ) | 63.2 | 36.8 | ||||||||
Interest expense |
116.5 | 47.9 | 164.4 | |||||||||
Depreciation and amortization |
117.0 | 31.1 | 148.1 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA |
222.4 | 322.7 | 545.1 | |||||||||
Share and incentive based compensation |
29.4 | 0.9 | 30.3 | |||||||||
Restructuring and related charges |
40.3 | 0.7 | 41.0 | |||||||||
Transaction related charges |
56.3 | – | 56.3 | |||||||||
Unallocated shared costs |
26.9 | (26.9 | ) | – | ||||||||
Gain on Energizer investment |
(6.9 | ) | – | (6.9 | ) | |||||||
Inventory acquisition step-up |
7.3 | – | 7.3 | |||||||||
Legal and environmental remediation reserves |
6.0 | – | 6.0 | |||||||||
Coevorden tolling related charges |
6.2 | – | 6.2 | |||||||||
Other |
3.9 | – | 3.9 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ | 391.8 | $ | 297.4 | $ | 689.2 | ||||||
|
|
|
|
|
|
|||||||
Net Sales |
$ | 2,998.1 | $ | 1,615.8 | $ | 4,613.9 | ||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA Margin |
13.1 | % | 18.4 | % | 14.9 | % | ||||||
|
|
|
|
|
|
|||||||
Twelve Month Period Ended September 30, 2020 (in millions) |
Continuing Operations |
HHI |
Proforma including HHI |
|||||||||
Net income |
$ | (52.4 | ) | $ | 136.9 | $ | 84.5 | |||||
Income tax expense |
27.3 | 43.6 | 70.9 | |||||||||
Interest expense |
93.7 | 50.8 | 144.5 | |||||||||
Depreciation and amortization |
114.7 | 33.9 | 148.6 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA |
183.3 | 265.2 | 448.5 | |||||||||
Share and incentive based compensation |
36.1 | 7.5 | 43.6 | |||||||||
Restructuring and related charges |
71.6 | 1.0 | 72.6 | |||||||||
Transaction related charges |
23.1 | – | 23.1 | |||||||||
Unallocated shared costs |
17.4 | (17.4 | ) | – | ||||||||
Loss on Energizer investment |
16.8 | – | 16.8 | |||||||||
Loss on sale of Coevorden operations |
26.8 | – | 26.8 | |||||||||
Write-off from impairment of intangible assets |
24.2 | – | 24.2 | |||||||||
Foreign currency loss on multicurrency divestiture loans |
3.8 | – | 3.8 | |||||||||
Salus CLO debt extinguishment |
(76.2 | ) | – | (76.2 | ) | |||||||
Other |
(3.0 | ) | $ | – | (3.0 | ) | ||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ | 323.9 | $ | 256.3 | $ | 580.2 | ||||||
|
|
|
|
|
|
|||||||
Net Sales |
$ | 2,622.1 | $ | 1,342.1 | $ | 3,964.2 | ||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA Margin |
12.4 | % | 19.1 | % | 14.6 | % | ||||||
|
|
|
|
|
|
|||||||
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES |
(b) | List of Exhibits. |
Exhibit 2.1 |
| |
Exhibit 2.2 |
| |
Exhibit 2.3 |
| |
Exhibit 2.4 |
| |
Exhibit 2.5 |
| |
Exhibit 3.1 |
| |
Exhibit 3.2 |
| |
Exhibit 3.3 |
| |
Exhibit 3.4 |
| |
Exhibit 3.5 |
| |
Exhibit 3.6 |
| |
Exhibit 4.1 |
| |
Exhibit 4.2 |
| |
Exhibit 4.3 |
| |
Exhibit 4.4 |
| |
Exhibit 4.5 |
|
Exhibit 4.6 |
Indenture governing the 3.875% Senior Notes due 2031, dated as of March 3, 2021, among Spectrum Brands, Inc., the guarantors party thereto and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on March 3, 2021 (File No. 001-4219). | |
Exhibit 4.7 |
| |
Exhibit 4.8 |
| |
Exhibit 10.1 |
| |
Exhibit 10.2 |
| |
Exhibit 10.3 |
| |
Exhibit 10.4 |
| |
Exhibit 10.5+ |
| |
Exhibit 10.6+ |
| |
Exhibit 10.7+ |
| |
Exhibit 10.8+ |
| |
Exhibit 10.9+ |
| |
Exhibit 10.10+ |
| |
Exhibit 10.11+ |
| |
Exhibit 10.12+ |
| |
Exhibit 10.13+ |
| |
Exhibit 10.14+ |
| |
Exhibit 10.15+ |
| |
Exhibit 10.16+ |
| |
Exhibit 10.17+ |
| |
Exhibit 10.18+ |
|
Exhibit 21.1@ |
| |
Exhibit 21.2@ |
| |
Exhibit 23.1@ |
| |
Exhibit 31.1* |
| |
Exhibit 31.2* |
| |
Exhibit 31.3* |
| |
Exhibit 31.4* |
| |
Exhibit 32.1@ |
| |
Exhibit 32.2@ |
| |
Exhibit 32.3@ |
| |
Exhibit 32.4@ |
|
* | Filed herewith |
@ | Included as an exhibit to the Original Form 10-K. |
+ | Denotes a management contract or compensatory plan or arrangement. |
SPECTRUM BRANDS HOLDINGS, INC. |
||||||||
By: | /s/ Jeremy W. Smeltser |
|||||||
Name: | Jeremy W. Smeltser | |||||||
Title: | Executive Vice President | |||||||
and Chief Financial Officer |
SB/RH HOLDINGS, LLC |
||||||||
By: | Spectrum Brands Holdings, Inc., | |||||||
its sole member | ||||||||
By: | /s/ Jeremy W. Smeltser |
|||||||
Name: | Jeremy W. Smeltser | |||||||
Title: | Executive Vice President | |||||||
and Chief Financial Officer |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) or 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, David M. Maura, Chief Executive Officer, certify that:
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Spectrum Brands Holdings, Inc. for the fiscal year ended September 30, 2021; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: January 21, 2022
/s/ David M. Maura |
David M. Maura |
Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) or 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jeremy W. Smeltser, Chief Financial Officer, certify that:
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Spectrum Brands Holdings, Inc. for the fiscal year ended September 30, 2021; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: January 21, 2022
/s/ Jeremy W. Smeltser |
Jeremy W. Smeltser |
Chief Financial Officer |
EXHIBIT 31.3
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) or 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, David M. Maura, Chief Executive Officer, certify that:
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of SB/RH Holdings, LLC for the fiscal year ended September 30, 2021; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: January 21, 2022
/s/ David M. Maura |
David M. Maura |
Chief Executive Officer |
EXHIBIT 31.4
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) or 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jeremy W. Smeltser, Chief Financial Officer, certify that:
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of SB/RH Holdings, LLC for the fiscal year ended September 30, 2021; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: January 21, 2022
/s/ Jeremy W. Smeltser |
Jeremy W. Smeltser |
Chief Financial Officer |