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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

¨		Preliminary Proxy Statement
¨		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x		Definitive Proxy Statement
¨		Definitive Additional Materials
¨		Soliciting Material Pursuant to §240.14a-12
ENERGIZER HOLDINGS, INC.
(Name of the Registrant as Specified in its Charter)   (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x		No fee required.
¨		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
		1.		Title of each class of securities to which transaction applies:
		2.		Aggregate number of securities to which transaction applies:
		3.		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
		4.		Proposed maximum aggregate value of transaction:
		5.		Total fee paid:
¨		Fee paid previously with preliminary materials.
¨		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		1.		Amount Previously Paid:
		2.		Form, Schedule or Registration Statement No.:
		3.		Filing Party:
		4.		Date Filed:

 

 

 

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ENERGIZER HOLDINGS, INC.

533 Maryville University Drive

St. Louis, Missouri 63141

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of Energizer Holdings, Inc. to be held at 8:30 a.m. Central Time on Monday, January 26, 2015 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.

In connection with the Annual Meeting, we have prepared a Notice of Annual Meeting of Shareholders, a Proxy Statement, and our 2014 Annual Report. On or about December 11, 2014, we began mailing to our shareholders these materials or a Notice of Availability of Proxy Materials containing instructions on how to access these materials online.

If you plan to attend the Annual Meeting, please bring the 2015 Annual Meeting Admission Ticket and proof of identification (such as a driver’s license or other photo identification).

Whether you plan to attend the Annual Meeting or not, we encourage you to read the Proxy Statement and vote your shares. You may vote over the Internet, as well as by telephone, or, if you received or requested to receive printed proxy materials, by signing, dating and returning the proxy card enclosed with the proxy materials as soon as possible in the postage-paid envelope provided. However you decide to vote, we would appreciate you voting as soon as possible.

 

WARD M. KLEIN

Chief Executive Officer

December 11, 2014

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ENERGIZER HOLDINGS, INC.

533 Maryville University Drive

St. Louis, Missouri 63141

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders:

The Annual Meeting of Shareholders of Energizer Holdings, Inc. will be held at 8:30 a.m. Central Time on Monday, January 26, 2015 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.

The purpose of the meeting is:

 

1)	to elect two directors to serve one-year terms ending at the Annual Meeting held in 2016, or until their respective successors are elected and qualified;

 

2)	to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2015;

 

3)	to cast an advisory vote on executive compensation;

 

4)	to vote on a shareholder proposal if properly presented at the meeting;

and to act upon such other matters as may properly come before the meeting.

Important Notice Regarding the Internet Availability of Proxy Materials for the 2015 Annual Meeting. We are mailing to many of our shareholders a notice of availability over the Internet of the proxy materials, rather than mailing the proxy materials. The notice of availability contains instructions on how to access our proxy materials on the Internet, as well as instructions on obtaining a paper copy. All shareholders who do not receive such a notice of availability, and any shareholders who request to receive a paper copy of the proxy materials, will receive a full set of paper proxy materials by U.S. mail. This process will reduce our costs to print and distribute our proxy materials.

You may vote if you are a shareholder of record on November 26, 2014. It is important that your shares be represented and voted at the Annual Meeting. Please vote in one of the following ways:

 

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USE THE FOLLOWING TOLL-FREE TELEPHONE NUMBER: 1-866-894-0537, using the identification number indicated on the notice of availability or proxy card mailed to you;

 

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VISIT www.cstproxyvote.com to vote via the Internet, using the identification number indicated on the notice of availability or proxy card mailed to you;

 

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MARK, SIGN, DATE AND PROMPTLY RETURN the proxy card in the postage-paid envelope if you received or requested a paper copy of the proxy materials; OR

 

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VOTE BY WRITTEN BALLOT at the Annual Meeting.

This Notice, the Proxy Statement, and the Company’s 2014 Annual Report to Shareholders have also been posted at www.cstproxy.com/energizer/2014.

By Order of the Board of Directors,

 

 

Mark S. LaVigne

Vice President, General Counsel & Secretary

December 11, 2014

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TABLE OF CONTENTS

 

		Page
2014 Proxy Summary			ii
Proxy Statement—Voting Procedures			1
Item 1. Election of Directors			4
Information about Nominees and other Directors			4
The Board of Directors and Energizer’s Corporate Governance			9
Standing Committees and Meetings			9
Corporate Governance, Risk Oversight and Director Independence			10
Director Compensation			17
Item 2. Ratification of Appointment of Independent Auditor			21
Audit Committee Report			23
Executive Compensation			24
Compensation Discussion and Analysis			24
Compensation Policies and Practices as They Relate to Risk Management			37
Nominating and Executive Compensation Committee Report			37
Equity Compensation Plan Information			38
Summary Compensation Table			39
Grants of Plan-Based Awards			42
Outstanding Equity Awards at Fiscal Year End			43
Option Exercises and Stock Vested			45
Pension Benefits			47
Non-Qualified Deferred Compensation			48
Potential Payments upon Termination or Change in Control			52
Item 3. Advisory Vote on Executive Compensation			57
Item 4. Shareholder Proposal regarding Palm Oil Sourcing			58
Stock Ownership Information			60
Additional Information			62
Certain Relationships and Related Transactions			62
Information Regarding the Spin-Off			62
Other Business			63
Delivery of Documents			63
Shareholder Proposals for 2016 Annual Meeting			64

 

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PROXY STATEMENT—VOTING PROCEDURES

 

 

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ITEM 1. ELECTION OF DIRECTORS

Our Board of Directors currently consists of ten members, and two directors are nominated for election at the 2015 Annual Meeting. At the 2014 Annual Meeting, the shareholders voted to approve and adopt amended and restated Articles of Incorporation that resulted in a phased-in elimination of the classified board. Our Board of Directors currently consists of three classes: one class consisting of four directors whose terms of service expire at the 2017 Annual Meeting, one class containing four directors whose terms of service expire at the 2016 Annual Meeting, and one class consisting of two directors, as a result of the retirement of Pamela M. Nicholson in March 2014, nominated for election at the 2015 Annual Meeting. If elected, following this Annual Meeting, six directors will have terms expiring at the 2016 Annual Meeting.

Two directors will be elected at the 2015 Annual Meeting to serve for a one-year term expiring at our Annual Meeting in 2016. The Board has nominated Bill G. Armstrong and J. Patrick Mulcahy for election as directors at this meeting. Each nominee is currently serving as a director and has consented to serve for the one-year term. Each nominee elected as a director will continue in office until his or her successor has been elected and qualified. As discussed below under “Additional Information—Information Regarding the Spin-Off”, we are pursuing a plan to spin-off our Household Products business and thereby create two independent, publicly traded companies. In connection with the spin-off, we anticipate that some of our directors may become directors of the household products company, and therefore will resign from our Board of Directors. We may, at any time and for any reason until the proposed spin-off is complete, abandon the spin-off or modify or change its terms. We can make no assurance that any spin-off transaction will ultimately occur, or if one does occur, the terms or timing of a transaction.

We do not know of any reason why any of the nominees for director named herein would be unable to serve; however, if any nominee is unable to serve as a director at the time of the Annual Meeting, your proxy may be voted for the election of another person the Board may nominate in his or her place, unless you indicate otherwise.

Vote Required.    The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for the election of each director.

The Board of Directors recommends a vote FOR the election of these nominees as directors of the Company.

INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS

Please review the following information about the nominees and other directors continuing in office. The ages shown are as of December 31, 2014.

 

		BILL G. ARMSTRONG, Director Since 2005, Age 66 (Standing for election at this meeting for a term expiring in 2016)   Mr. Armstrong is a private equity investor and is also a former director of Ralcorp Holdings, Inc.   Mr. Armstrong served as Executive Vice President and Chief Operating Officer, Cargill Animal Nutrition (animal feed products), from 2001 to 2004. Prior to his employment with Cargill, Mr. Armstrong served as Chief Operating Officer of Agribrands International, Inc., an international agricultural products business, and as Executive Vice President of Operations of the international agricultural products business of Ralston Purina Company. He also served as managing director of Ralston’s Philippine operations, and during his tenure there, was a director of the American Chamber of Commerce. As a result of his international and operational experience, as well as his extensive experience with corporate transactions, he provides a global perspective to the Board, which has become increasingly important as our international operations have grown to account for approximately half of our annual sales.

 

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		J. PATRICK MULCAHY, Director Since 2000, Age 70 (Standing for election at this meeting for a term expiring in 2016)   Mr. Mulcahy has served as Chairman of the Board of Energizer Holdings, Inc. since 2007. Mr. Mulcahy served as Vice Chairman of the Board from January 2005 to January 2007, and prior to that time served as Chief Executive Officer, Energizer Holdings, Inc. from 2000 to 2005, and as Chairman of the Board and Chief Executive Officer of Eveready Battery Company, Inc. from 1987 until his retirement in 2005. He is also a director of Hanesbrands Inc. and was formerly a director of Ralcorp Holdings, Inc. and Solutia, Inc. Solutia and certain subsidiaries filed voluntary petitions for bankruptcy in 2003, and emerged from bankruptcy in 2008.   Mr. Mulcahy has over forty years of experience in consumer products industries, including almost twenty years as chief executive of our battery business. He was our first chief executive officer, and managed and directed the acquisition of our Schick-Wilkinson Sword business in 2003. He is very knowledgeable about the dynamics of our various businesses and the categories in which they compete. His experience with the complex financial and operational issues of consumer products businesses brings critical financial, operational and strategic expertise to our Board of Directors.
		DANIEL J. HEINRICH, Director Since 2012, Age 58 (Continuing in Office—Term expiring in 2016)   Mr. Heinrich served as Executive Vice President and Chief Financial Officer of The Clorox Company, a consumer products company, from June 2009 through November 2011 and as Senior Vice President and Chief Financial Officer from August 2003 through June 2009. Prior to serving in this role, he was Vice President, Controller and Chief Accounting Officer of The Clorox Company.   Mr. Heinrich has extensive experience in financial management. Prior to his employment with The Clorox Company, he was Senior Vice President and Treasurer of Transamerica Finance Corporation. Prior to that, he served in the financial services group of the Ford Motor Company, including as Senior Vice President-Controller of Ford Motor Company’s banking subsidiary and as Senior Vice President-Treasurer and Controller of Granite Management Corporation. He began his career at Ernst & Young LLP where he spent over eight years in both audit and tax roles. Mr. Heinrich is a director of ARAMARK Holdings Corporation and serves on its finance and audit committees. Mr. Heinrich previously served on the board and was a member of the audit & finance committee of Advanced Medical Optics Inc. from 2007 until its acquisition by Abbott Labs in 2009. He is also a board member of E&J Gallo Winery.   Mr. Heinrich’s extensive knowledge of strategy, business development, operations, financial management, accounting principles and financial reporting rules and regulations provides an invaluable expertise to our Board and Audit Committee, and his understanding of incentive structures that can effectively drive performance in the consumer products industry provides an important perspective on our Nominating and Executive Compensation Committee.

 

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		R. DAVID HOOVER, Director Since 2000, Age 69 (Continuing in Office—Term expiring in 2016)   Mr. Hoover served as Chairman of Ball Corporation (beverage and food packaging and aerospace products and services) from January 2011 to April 2013. He is now retired. He served as the Chairman and Chief Executive Officer of Ball Corporation from January 2010 to January 2011; Chairman, President and Chief Executive Officer, April 2002 to January 2010 and President and Chief Executive Officer, January 2001 to April 2002. Also a director of Ball Corporation, Eli Lilly and Company and Steelcase, Inc. and formerly a director of Qwest Communications International, Inc. Mr. Hoover is a member of the finance committee and nominating and governance committee of Ball Corporation (as an ex-officio member), the audit committee of Eli Lilly and Company, and the nominating committee, executive committee, and compensation committee (currently serving as chair) of Steelcase, Inc.   Mr. Hoover began his employment at Ball Corporation in 1970, and has served in numerous finance and administration, treasury and operational capacities during his tenure at Ball, including service as chief financial officer, chief operating officer and chief executive officer. His broad and extensive experience provides our Board with valuable insight into complex business, operational and financial issues. His chairmanship of our Finance and Oversight Committee has been significant, particularly during the recent global recession, as that committee directly advises management on financial and economic issues and strategies.
		JOHN C. HUNTER, III, Director Since 2005, Age 67 (Continuing in Office—Term expiring in 2016)   Mr. Hunter served as Chairman, President and Chief Executive Officer of Solutia, Inc. (chemical products) from 1999 to 2004. He is now retired. Solutia and certain subsidiaries filed voluntary petitions for bankruptcy in 2003, and emerged from bankruptcy in 2008. Also a director of Penford Corporation, KMG Chemicals, Inc. and formerly a director of Hercules, Inc.   Mr. Hunter has a degree in chemical engineering and a Masters in business administration. During his career with Solutia and its former parent, Monsanto Company, he obtained many years of experience in the specialty chemicals business, as well as an in-depth knowledge of environmental issues. As a result, he provides insightful risk management experience to our Board, and a practical perspective and understanding as we deal with environmental, regulatory and sustainability issues. Mr. Hunter’s extensive experience as a director also provides him with insight into effective compensation plan design and a thorough understanding of current issues, trends and concerns in executive compensation design that makes him an effective chairman of our Nominating and Executive Compensation Committee.

 

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		JOHN E. KLEIN, Director Since 2003, Age 69 (Continuing in Office—Term expiring in 2016)   Mr. Klein served as President of Randolph College (education) from 2007 to 2013. He is now retired. Prior to that, Mr. Klein served as Executive Vice Chancellor for Administration, Washington University in St. Louis (education) from 2004 to August 2007. From 1985 to 2004, he served as President and Chief Executive Officer, Bunge North America, Inc. (agribusiness), and formerly served as a director of Embrex, Inc.   Mr. Klein obtained a law degree and practiced law with a firm in New York City for several years before joining Bunge Ltd. He had a number of international postings in Europe and South America and senior positions in the United States before being named chief executive of Bunge’s North American operations. He has also obtained significant administrative experience in the field of higher education. He brings the benefits of his diverse legal, international, operational and administrative background and experience to our Board, Audit Committee, and Finance and Oversight Committee.
		JAMES C. JOHNSON, Director Since 2013, Age 62 (Continuing in Office—Term expiring in 2017)   Mr. Johnson served as General Counsel of Loop Capital Markets LLC (financial services firm) from November 2010 until his retirement in January, 2014. From 1998 until 2009, Mr. Johnson served in a number of responsible positions at The Boeing Company, an aerospace and defense firm, including serving as Vice President, Corporate Secretary and Assistant General Counsel from 2003 until 2007, and as Vice President and Assistant General Counsel, Commercial Airplanes from 2007 to his retirement in March 2009. Also a director of Ameren Corporation and Hanesbrands Inc.   Mr. Johnson has extensive executive management and leadership experience as the General Counsel of a financial services firm and the former Vice President, Corporate Secretary and Assistant General Counsel of an aerospace and defense firm; and strong legal, compliance, risk management, corporate governance and compensation skills and experience.
		WARD M. KLEIN, Director Since 2005, Age 59 (Continuing in Office—Term expiring in 2017)   Mr. Klein has served as Chief Executive Officer, Energizer Holdings, Inc. since 2005. Prior to that time, he served as President and Chief Operating Officer from 2004 to 2005, as President, International from 2002 to 2004, and as Vice President, Asia Pacific and Latin America from 2000 to 2002. Also is lead independent director of Brown Shoe Company, Inc. and Chairman of Civic Progress St. Louis. Formerly a director of AmerUs Group Co. and formerly served on the Board of Directors as Chairman of the Federal Reserve Bank of St. Louis.   Mr. Klein has over 20 years of service with Energizer, in international as well as domestic leadership positions, and has obtained extensive knowledge of our business operations and industry dynamics. In his capacity as chief executive officer, and the only management member of the Board of Directors, Mr. Klein provides a necessary and unique perspective to the Board.

 

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		W. PATRICK MCGINNIS, Director Since 2002, Age 67 (Continuing in Office—Term expiring in 2017)   Mr. McGinnis has served as Chief Executive Officer and President, Nestlé Purina PetCare Company (pet foods and related products) since 2001. Mr. McGinnis has announced his plan to retire from Nestlé Purina PetCare Company effective January 1, 2015. Also a director of Brown Shoe Company, Inc.   Mr. McGinnis has almost forty years of experience in consumer products industries, including almost twenty years as chief executive of the Purina pet food business. As a result, he has expertise with respect to marketing and other commercial issues, competitive challenges, and long-term strategic planning, as well as valuable perspectives with respect to potential acquisitions of consumer products businesses.
		JOHN R. ROBERTS, Director Since 2003, Age 73 (Continuing in Office—Term expiring in 2017)   Mr. Roberts served as Executive Director, Civic Progress St. Louis (civic organization) from 2001 through 2006. He is now retired. From 1993 to 1998, he served as Managing Partner, Mid-South Region, Arthur Andersen LLP (public accountancy). Also a director of Centene Corporation and serving as chairman of its audit committee. Formerly a director of Regions Financial Corporation with membership on the audit and nominating and corporate governance committees.   Mr. Roberts brings many years of experience as an audit partner at Arthur Andersen to our Board. His extensive knowledge of financial accounting, accounting principles, and financial reporting rules and regulations, and his experience in evaluating financial results and generally overseeing the financial reporting process of large public companies from an independent auditor’s perspective, provides invaluable expertise to our Board and Audit Committee. His service as a board member and audit committee chair for other public companies reinforces the knowledge and insight he provides to our Board.

 

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THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE

STANDING COMMITTEES AND MEETINGS

 

Board Member		Board		Audit		Executive		Nominating and Executive Compensation		Finance  and Oversight
Bill G. Armstrong		ü		ü				ü
Daniel J. Heinrich		ü		ü				ü
R. David Hoover		ü								ü*
John C. Hunter		ü						ü*
James C. Johnson		ü						ü
John E. Klein		ü		ü						ü
Ward M. Klein		ü				ü				ü
W. Patrick McGinnis		ü				ü				ü
J. Patrick Mulcahy		ü*				ü*				ü
John R. Roberts		ü		ü*		ü		ü
Meetings held in fiscal 2014		7		6		0		5		5

 

 

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DIRECTOR COMPENSATION TABLE

 

Name		Fees Earned or  Paid in Cash (3)				Stock Awards (4)(5)(6)				Option Awards  (7)				Non-Equity Incentive Plan Compensation				Change in Pension Value and Non- Qualified Deferred Compensation Earnings				All Other Compensation (8)(9)				Total
B.G. Armstrong		$	100,250			$	110,000			$	0			$	0			$	0			$	0			$	210,250
D.J. Heinrich		$	100,250			$	110,000			$	0			$	0			$	0			$	0			$	210,250
R.D. Hoover		$	114,500			$	110,000			$	0			$	0			$	0			$	0			$	224,500
J.C. Hunter		$	116,000			$	110,000			$	0			$	0			$	0			$	0			$	226,000
James C. Johnson(1)		$	89,972			$	210,000			$	0			$	0			$	0			$	0			$	299,972
J.E. Klein		$	98,750			$	110,000			$	0			$	0			$	0			$	0			$	208,750
W.P. McGinnis		$	95,750			$	110,000			$	0			$	0			$	0			$	0			$	205,750
J.P. Mulcahy		$	142,000			$	110,000			$	0			$	0			$	0			$	0			$	252,000
P.M. Nicholson(2)		$	39,185			$	110,000			$	0			$	0			$	0			$	0			$	149,185
J.R. Roberts		$	119,000			$	110,000			$	0			$	0			$	0			$	0			$	229,000

 

 

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ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

Our Audit Committee, in accordance with authority granted in its charter by the Board, appointed PricewaterhouseCoopers LLP (“PwC”) as independent auditor for the current fiscal year. PwC has served as our independent auditor for every fiscal year since 2000, and PwC has begun certain work related to the 2015 audit as approved by the Audit Committee. Information on independent auditor fees for the last two fiscal years is set forth below. The Board and the Audit Committee believe that the retention of PwC to serve as independent auditor is in the best interests of the Company and its shareholders. In making this determination, the Board and the Audit Committee considered a number of factors, including:

 

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Audit Committee members’ assessment of PwC’s performance

 

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Management’s assessment of PwC’s performance

 

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PwC’s independence and integrity

 

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PwC’s fees and the quality of services provided to the Company

 

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PwC’s global capabilities and knowledge of our global operations

A representative of PwC will be present at the 2015 Annual Meeting and will have an opportunity to make a statement, if desired, as well as to respond to appropriate questions.

Although NYSE listing standards require that the Audit Committee be directly responsible for selecting and retaining the independent auditor, we are providing shareholders with the means to express their views on this issue. Although this vote will not be binding, in the event the shareholders fail to ratify the appointment of PwC, the Audit Committee will reconsider its appointment. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.

Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for ratification.

The members of the Audit Committee and the Board of Directors recommend a vote FOR ratification of the appointment of PwC as the Company’s independent auditor for fiscal year 2015.

Fees Paid to PricewaterhouseCoopers LLP

(in thousands)

 

		FY 13				FY 14
Audit Fees		$	4,383			$	4,852
Audit-Related Fees			31				950	(1)
Tax Fees:
Tax Compliance/preparation			104				72
Other Tax Services			1,363				937
Total Tax Fees			1,467				1,009
All Other Fees			0				0
Total Fees		$	5,881			$	6,811

 

(1)	This category also includes fees associated with the audit and review of carve-out financial statements by PwC related to the proposed spin-off of the Household Products business.

 

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Audit Fees Paid to Other Firms

(in thousands)

 

		FY 13				FY 14
Audit Fees		$	578			$	644

 

 

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AUDIT COMMITTEE REPORT

The Audit Committee of the Company’s Board of Directors consists entirely of non-employee directors that are independent, as defined in Section 303A.02 of the New York Stock Exchange Listed Company Manual.

Management is responsible for the Company’s internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and issuing a report thereon. The committee’s responsibility is to monitor and oversee these processes.

With respect to the Company’s audited financial statements for the Company’s fiscal year ended September 30, 2014, management of the Company has represented to the committee that the financial statements were prepared in accordance with generally accepted accounting principles and the committee has reviewed and discussed those financial statements with management and PricewaterhouseCoopers LLP, the Company’s independent accountants. The Audit Committee has also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Auditing Standard No. 16, as adopted by the PCAOB.

In fulfilling its oversight responsibilities for reviewing the services performed by Energizer’s independent registered public accountants, the Audit Committee retains sole authority to select, evaluate and replace the outside auditors, discusses with the independent registered public accountants the overall scope of the annual audit and the proposed audit fees, and annually evaluates the qualifications, performance and independence of the independent registered public accountants and its lead audit partner.

The Audit Committee has received the written disclosures from PricewaterhouseCoopers LLP required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), as modified or supplemented, and has discussed the independence of PricewaterhouseCoopers LLP with members of that firm. In doing so, the committee considered whether the non-audit services provided by PricewaterhouseCoopers LLP were compatible with its independence. The Audit Committee met with the internal auditors and PricewaterhouseCoopers LLP, with and without management present, to discuss the results of their examination, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting.

Based on the review and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements for the fiscal year ended September 30, 2014 be included in the Company’s Annual Report on Form 10-K for that year and has selected PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for fiscal year 2015, subject to shareholder ratification.

 

John R. Roberts—Chairman		Bill G. Armstrong
Daniel J. Heinrich		John E. Klein

No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.

 

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EXECUTIVE COMPENSATION

The following narratives and tables discuss the compensation paid in fiscal 2014 to our chief executive officer, chief financial officer and our other three most highly compensated executive officers, whom we refer to collectively as our “named executive officers”. Our named executive officers for 2014 were:

 

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Ward M. Klein, Chief Executive Officer;

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Daniel J. Sescleifer, Executive Vice President and Chief Financial Officer;

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David P. Hatfield, President and Chief Executive Officer, Energizer Personal Care;

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Alan R. Hoskins, President and Chief Executive Officer, Energizer Household Products; and

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Mark S. LaVigne, Vice President, General Counsel & Secretary

COMPENSATION DISCUSSION AND ANALYSIS

Principles of the Energizer Compensation Program

Our commitment to maintaining competitive compensation practices has resulted in strong shareholder support of our compensation philosophy, with over 93% of the votes cast in favor of the advisory resolution on executive compensation at our 2014 Annual Meeting. The principles we follow are:

Pay for Performance

Our primary goal is to instill a “pay for performance” culture throughout our organization, with a significant portion of targeted compensation for our named executive officers dependent upon achievement of performance goals, and forfeited if goals are not achieved.

Competitive Total Compensation Packages

We strive to attract and retain strong executive leaders, with competitive total compensation opportunities near the 50th percentile of our peer group. Our compensation program is designed to motivate these leaders with objectives aligned with operating results and execution of significant initiatives.

Alignment with Shareholder Interests

A substantial portion of the named executive officers’ total compensation is in the form of restricted stock equivalents and we have stock ownership guidelines for executive officers and prohibitions on the hedging of Company stock, in order to align the compensation received by executives with the returns received by our shareholders.

Key Elements of Executive Compensation in Fiscal 2014

In the beginning of fiscal 2013, our Nominating and Executive Compensation Committee (the “NECC” or the “committee”) made several significant changes to executive officer compensation in order to improve its linkage to shareholder value and streamline executive compensation programs.

Continued enhancements to the long-term incentive program

Beginning in fiscal 2013, the NECC adopted three metrics for the long-term incentive program, replacing the Adjusted EPS metric used in past years. At the start of fiscal 2014, the NECC reviewed the compensation elements and determined that the compensation elements adopted in fiscal 2013 continued to be consistent with our compensation philosophy and approved the same metrics for fiscal 2014:

 

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adjusted return on invested capital (ROIC), to support the Company’s focus on cash flow, including improved working capital performance, and to emphasize the importance of capital allocation decisions;

 

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cumulative adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), to emphasize growth in core operating earnings; and

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relative total shareholder return to further ensure that realized results are aligned with shareholder value creation results from ROIC and EBITDA can be further impacted by relative total shareholder return.

For fiscal 2014, to continue to enhance the emphasis on Company performance, the NECC adjusted the mix of restricted stock equivalents by increasing the performance-based portion to 75% of the restricted stock equivalents available to be earned at target. This is an increase from 54% of the restricted stock equivalents at target in fiscal 2013.

Multiple metrics of the short-term incentive program

Beginning in fiscal 2013, the NECC also approved four metrics to measure performance in the short-term incentive program, replacing the Adjusted EPS metric used in past years. At the start of fiscal 2014, the NECC reviewed the compensation elements and determined that the compensation elements adopted in fiscal 2013 continued to be consistent with our compensation philosophy and approved the same metrics for fiscal 2014:

 

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Company-wide cost savings associated with restructurings, which constitutes 20% of the weighting, to focus on delivering the three-year global cost savings to investors announced by the Company, to be paid annually as cost savings for the multi-year restructuring project are achieved;

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adjusted earnings per share (EPS), which constitutes 30% of the weighting, to encourage executives to deliver on bottom-line results;

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Company-wide pre-tax adjusted operating profit, which constitutes 30% of the weighting, to reward operating performance; and

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adjusted net working capital as a percentage of sales (NWC), which constitutes 20% of the weighting, to encourage improved management of working capital.

 

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Elements of Compensation

The elements of our fiscal 2014 executive compensation program as well as the purpose of each item are shown in the following table:

 

Compensation Element		Description		Purpose
Base Salary		Annual fixed salary, payable in cash.		Helps attract and retain key individuals.
Annual Cash Bonus		Bonuses are payable in cash upon achievement of the pre-determined Company-wide metrics: • Adjusted EPS target (30%) • Adjusted Operating Profit (30%) • Three-Year global Cost Savings (20%) • Adjusted Net Working Capital (20%)		Promotes achievement of Company-wide performance goals.
Three Year Equity Awards		75% of the restricted stock equivalents available to be awarded at target vest based on performance targets of three metrics: (i) adjusted return on invested capital, (ii) cumulative adjusted EBITDA and (iii) results from (i) and (ii) above can be further impacted by the Company’s relative total shareholder return. The remaining portion vests on the third anniversary of the grant if the recipient remains employed with the Company.		Promotes achievement of long- term Company-wide earnings performance goals.   Provides a direct link to shareholder interests by tying a significant portion of executive’s personal wealth to the performance of our common stock.   Vesting requirements help to retain key employees.
Supplemental Retirement Plans		Executives participate in the retirement plans available for all employees; the supplemental retirement plans restore retirement benefits otherwise limited by federal statute.		Ensures that the executives receive the same relative value compared to other employees who are not subject to these limits.
Change of Control Severance Agreements		Executives are entitled to benefits in the event of a change of control only if they are involuntarily terminated (or they resign for good cause) following a change of control of our Company.		Allows executives to make decisions focusing on the interests of shareholders while using a “double trigger” (a change of control plus termination) to avoid a windfall.

 

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Objectives

The key objective of our compensation philosophy is to reward management based upon their success in increasing shareholder value. With a focus on achieving this overarching goal, the overall executive compensation program is designed to provide a compensation package that will enable us to attract and retain highly talented executives and maintain a performance-oriented culture.

Pay for Performance

Our goal is to instill a “pay for performance” culture throughout our operations, with total compensation opportunities targeted near the 50^th percentile of our peer group.

In 2014, a significant portion of targeted compensation for our named executive officers, consisting of the annual cash bonus and three-year equity awards, was variable—not fixed—compensation, rewarding the named executive officers for the achievement of outstanding and sustained Company performance, which builds shareholder value. We believe this compensation structure offers high potential rewards for superior performance, and significantly lower compensation for results below target.

Competitive Total Compensation Package

Our executive officers are highly experienced, with average industry experience of over 20 years, and have been successful in diversifying our businesses, improving operating results and sustaining long-term adjusted EPS growth. Because of management’s level of experience and successful track record, as well as the value of maintaining continuity in senior executive positions, we view retention of key executives as critical to the ongoing success of our operations. Consequently, we:

 

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target total compensation packages near the 50th percentile of our peer group of companies to help retain key executives and remain competitive in attracting new employees; and

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establish vesting periods for our time-based equity-based awards, to provide additional retention incentives.

Our executive compensation program also includes features to address other compensation-related issues such as retirement concerns of employees, which we believe have played an important role in our executive compensation structure.

Alignment with Shareholder Interests

A significant portion of our compensation program consists of equity grants that align our officers’ interests with those of shareholders by tying a significant portion of the officers’ personal wealth to the performance of our common stock.

Our incentive compensation program focuses on a combination of short- and long-term profitability metrics and other metrics which motivate the achievement of significant corporate project goals. Specifically, in the short-term incentive plan, we use two profitability metrics, with a combined weighing at 60% of the total annual bonus opportunity, and two project metrics, with a combined weighting at 40% of the total bonus opportunity.

Profitability Metrics

Adjusted EPS (30% weighting), aligned with overall performance

Adjusted Operating Profit (30% weighting), aligned with underlying operational performance

Project Metrics

Company-Wide Three-Year Global Cost Savings (20% weighting), supporting our 2013 restructuring

Net Working Capital as a Percentage of Sales (20% weighting), supporting our net working capital initiative

 

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During fiscal 2014, the long-term incentive plan performance restricted stock equivalents, approved in November 2011, vested based on compound annual growth in adjusted EPS over the three year performance period, which aligned with shareholder interests in adjusted EPS growth and stock price appreciation during the performance period.

Implementation of the Compensation Program

Our Board of Directors has delegated authority to the NECC to approve all compensation and benefits for our executive officers. The committee sets executive salaries and bonuses, reviews executive benefit programs, including change in control severance agreements, and grants cash bonus awards to our executive officers under our cash bonus program, as well as equity awards to executives under our Amended and Restated 2009 Incentive Stock Plan.

To assist the NECC in evaluating our executive and director compensation programs on a competitive market basis, the committee has directly retained an outside consultant, Meridian Compensation Partners LLC, which is asked to:

 

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provide comparative market data for our peer group (and other companies, as needed) with respect to the compensation of the named executive officers and the directors;

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analyze our compensation and benefit programs relative to our peer group; and

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advise the committee on trends in compensation and governance practices and on management proposals with respect to executive compensation.

The NECC has reviewed the independence of Meridian and has determined that Meridian has no conflicts of interest. In particular:

 

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Meridian does not provide any other services to the Company.

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The committee has sole authority to retain or replace Meridian in its role as its consultant.

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The committee regularly reviews the performance and independence of Meridian, as well as fees paid.

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Management has retained a separate consultant, Towers Watson, which advises management (but not the committee) on market trends in executive compensation, provides ad hoc analysis and recommendations, and reviews and comments on compensation proposals.

We believe that having separate consultants promotes Meridian’s independence.

A representative of Meridian attends committee meetings as requested to serve as a resource on executive and director compensation matters. In order to encourage independent review and discussion of executive compensation matters, the committee meets with Meridian in executive session.

Meridian, with input from the committee, has developed a customized peer group of 24 companies based on a variety of criteria, including consumer products businesses, businesses with a strong brand focus, competitors for executive talent, and similarly-sized businesses in terms of revenues and market capitalization.

Meridian uses data provided by that peer group to determine a market comparison for our executive compensation program. Total compensation opportunities are targeted at the 50th percentile of the peer group. The market comparison is made for each key component of compensation, including base pay, target annual bonus, target total cash compensation and grant-date value of long-term incentives. Meridian also analyzes the aggregate equity utilization as compared to the peer group. In addition, Meridian reviews the terms of our change-in-control program for our executives for consistency with market practices.

 

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The peer group utilized by Meridian, and approved by the NECC, for its review of fiscal 2014 executive compensation consists of the following companies. The industries in which the companies are engaged are noted: (1) household products; (2) personal care; (3) food and beverage; and (4) apparel.

 

Avery Dennison(1)		Del Monte Foods Company(3)		Hasbro(1)		NuSkin Enterprises(2)
Avon Products(2)		Elizabeth Arden(2)		The Hershey Company(3)		Revlon(2)
Brown-Forman(3)		Estee Lauder Companies, Inc.(2)		Masco Corporation(1)		S.C. Johnson & Son(1)
Church & Dwight(1)(2)		Fortune Brands Home & Security, Inc.(1)		Mattel, Inc.(1)		The Scott’s Miracle-Gro  Company(1)
The Clorox Company(1)		Hallmark Cards(1)		Mead Johnson Nutrition Co.(3)		The Sherwin-Williams Company(1)
Colgate-Palmolive Company(2)		Hanesbrands(4)		Newell Rubbermaid(1)		Tupperware Brands Company(1)

The following table provides an overview of how we compared to our peer group companies based on revenue:

 

(in millions of dollars)		Revenue
75th Percentile			6,808
50th Percentile			4,307
25th Percentile			2,898
Energizer Holdings, Inc.			4,600

Results of 2014 Advisory Vote to Approve Executive Compensation

At our 2014 Annual Meeting of Shareholders on January 27, 2014, we submitted a proposal to our shareholders for an advisory vote on our fiscal year 2013 compensation awarded to our named executive officers. Our shareholders approved the proposal with approximately 93.7% of the votes cast in favor of the proposal. We believe that the outcome of our say-on-pay vote signals our shareholders’ support of the NECC’s approach to executive compensation, specifically our efforts to attract, retain, and motivate our named executive officers.

We were pleased with our shareholders’ support of our fiscal 2013 compensation program, and the committee continues to review our executive compensation practices to further align our compensation practices with our pay-for-performance philosophy and shareholder interests. We value the opinions of our shareholders and will continue to consider the outcome of future say-on-pay votes, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.

Elements of Compensation

Base Pay

We benchmark base pay against our peer group annually as a guide to setting compensation for key positions, including the named executive officers, in the context of prevailing market practices. Our management and the committee believe an important benchmark for base salaries is the 50th percentile for the peer group, but also that it is important to consider the interplay of all of the benchmarked components of total compensation as well as the individual’s performance.

At the beginning of each fiscal year the committee establishes the salaries of the executive officers (other than the chief executive officer) based on recommendations of the chief executive officer. These recommendations are based on an assessment of the individual’s responsibilities, experience, and individual performance. Where the recommendations of the chief executive officer and the compensation consultant for the salaries of executives remain within the targeted range relative to the peer group, and the NECC concurs with the assessment of performance, the NECC has historically approved the recommendations made by the chief executive officer.

The salary of the chief executive officer is set by the NECC, taking into account the recommendation of the committee’s compensation consultant. In connection with that review, Meridian, without input from management, provides the NECC with a range of possible salary and long-term incentive award levels. The NECC uses this information, along with its analysis of the performance and contributions of the chief executive officer against performance goals, to determine an appropriate salary.

 

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The NECC evaluated the base salaries of the named executive officers at its November 2013 meeting and set the base salaries of the named executive officers for fiscal 2014 as follows: Mr. Klein—$1,100,000; Mr. Sescleifer—$550,000; Mr. Hatfield—$550,000; Mr. Hoskins—$460,000 and Mr. LaVigne—$440,000.

Incentive Programs

The NECC has annually approved a two-tier incentive compensation structure for our key executives, consisting of an annual performance program, paid in cash, and a three-year performance program, paid in restricted stock equivalents. Consistent with the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”), awards to officers under our annual performance program are made under the terms of our shareholder-approved executive officer bonus plan, and the three-year performance awards are granted under the terms of our Amended and Restated 2009 Incentive Stock Plan.

Annual Cash Bonus Program

Annual cash bonuses to our named executive officers are based on a percentage of the executive’s annual salary, and adjusted based on performance on metrics determined by the NECC. The 2014 annual bonus program was designed to measure performance against four metrics:

 

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Adjusted EPS (30% of the named executive officer’s bonus target)

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Adjusted Operating Profit (30% of the named executive officer’s bonus target)

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Company-wide Three-Year Global Cost Savings (20% of the named executive officer’s bonus target)

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Adjusted NWC (20% of the named executive officer’s bonus target)

The performance goals for each metric were set by the NECC at the beginning of the fiscal year. The committee assigned individual “bonus targets” to each of the officers, based upon individual performance and prevailing market practice information provided by the committee’s consultant. For fiscal 2014, the following “bonus targets,” defined as a percentage of the individual’s base pay, were assigned to the named executive officers:

 

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Mr. Klein - 115%

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Mr. Sescleifer - 80%

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Mr. Hatfield - 80%

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Mr. Hoskins - 80%

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Mr. LaVigne - 65%

Under the annual cash bonus program, our named executive officers receive overall bonus payouts, if any, under the company performance metrics described below, and there is no individual performance component of the payout. Due to changes in the compensation of the named executives for the period covered by the Cost Savings pool (one of the performance metrics), however, the calculation of the overall bonus payouts differed slightly for each named executive. For fiscal 2014, the following combined weighted payout ratio for each of the executives was:

 

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Mr. Klein - 171%

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Mr. Sescleifer - 167%

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Mr. Hatfield - 167%

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Mr. Hoskins - 167%

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Mr. LaVigne - 156%

These payouts are based on outcomes under the following performance metrics.

Adjusted EPS

Adjusted EPS means diluted earnings per share, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), subject to adjustment for certain limited matters, including the effects of

 

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acquisitions, divestitures, extraordinary dividends, stock splits or stock dividends, recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, unusual or non-recurring non-cash accounting impacts and costs associated with restructurings.

The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:

 

FY14 Annual Bonus   (30% of Bonus Target)		Threshold   35% Payout		Target   100% Payout		Stretch   200% Payout
Adjusted EPS		$6.90		$7.30		$7.70

Bonuses indicated increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to the Company performance are paid for results below the Threshold goal.

The NECC, in consultation with management, considered whether to adjust for the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the following events when determining the achievement of targets: (i) costs associated with restructuring operations, (ii) costs associated with our efforts to effect our previously announced spin-off of our household products business, and (iii) various integration and transaction costs. The NECC reviewed the adjustments and, through the use of its negative discretion, reduced the adjusted EPS we reported of $7.32 to $7.26, which reduced the amount of the awards payable under the annual bonus plan to 93.5% of target.

Adjusted Operating Profit

Adjusted Operating Profit means net earnings plus taxes and interest expense, subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures, extraordinary dividends, stock splits or stock dividends, recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, unusual or non-recurring non-cash accounting impacts and costs associated with restructuring.

The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:

 

(30% of Bonus Target)		Threshold   35% Payout		Target   100% Payout		Stretch   200% Payout
Adjusted Operating Profit		748.2M		$783.5M		819.5M

Bonuses indicated increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to the Company performance are paid for results below the Threshold goal.

The NECC, in consultation with management, considered whether to adjust for the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the following events when determining the achievement of targets: (i) costs associated with restructuring operations, (ii) costs associated with our efforts to effect our previously announced spin-off of our household products business, and (iii) various integration and transaction costs. The NECC reviewed the adjustments and, through the use of its negative discretion, reduced the amount of the awards and amounts payable under the annual bonus plan from $764.1 to $753.6 resulting in a payout of 44.9% of target.

Company-wide Three-Year Global Cost Savings

Our Company-wide Three-Year Global Cost Savings bonus metric was adopted by the NECC in support of Energizer’s multi-year restructuring program, under which we expected to realize gross annualized pre-tax cost savings of approximately $200 million by fiscal 2015.

 

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Because the restructuring program encompasses a three-year period, the cost savings bonus metric is a pool comprised of 20% of each named executive officer’s total bonus for the three years of the restructuring program. For fiscal 2014, no bonus payment would have been made unless cost savings generated by the restructuring program exceeded $45 million. To the extent cost savings exceeded $45 million; the cost savings generated by the restructuring program would be divided by $200 million, and then multiplied by 100 to give the percentage payout of the three-year pool. In order to encourage performance beyond the initial program targets, if cost savings generated by the program was greater than $200 million but less than $250 million, the portion of the individual’s bonus target attributable to cost savings will be equal to the stretch payout factor (cost savings minus $200 million, divided by $50 million), multiplied by 20% of the individual’s annual bonus target multiplied by 3 (the number of years in the pool), in addition to the amount above. Payout under this program was approved at stretch. In fiscal 2014, the restructuring program generated cost savings of $255 million. Accordingly, the 20% portion of the annual bonus program attributable to Cost Savings paid out 148.4% of the three year pool target, which comprised the remainder of the pool following the initial payout of the pool in fiscal 2013.

Adjusted NWC

Our Adjusted NWC metric was adopted by the NECC in support of Energizer’s working capital management initiative, under which we are committed to improving working capital as a percent of sales in excess of 400 basis points, over the fiscal 2011 baseline metric of 22.9% which we estimate would result in a reduction of more than $200 million of working capital.

“Adjusted NWC” means Average Net Working Capital divided by net sales for the performance period, as adjusted for the effect of restructuring events such as plant closings, sales of facilities or operations and business restructurings; and expressed as a percentage.

“Average Net Working Capital” means, as of the end of the performance period, the average of the last four quarter end balances for each of (i) receivables, as reported, less the portion of accrued liabilities representing trade allowance, plus (ii) Inventories, as reported, minus (iii) accounts payable.

The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:

 

FY14 Annual Bonus Proposed   Metric (20% of Bonus Target)		Threshold   35% Payout		Target   100% Payout		Stretch   200% Payout
Adjusted NWC		17.5%		16.5%		15.0%

The NECC, in consultation with management, considered whether to adjust for the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the effect of restructuring events when determining the achievement of targets. The NECC reviewed the adjustments and determined that the 15% adjusted NWC as reported should not be reduced and the payout under the Adjusted NWC metric was 200% of target.

Equity Awards

Our Amended and Restated 2009 Incentive Stock Plan authorizes the NECC to grant various types of equity awards. Since 2005, the NECC has granted to key executives primarily restricted stock equivalent awards, with achievement of Company performance targets over three years as a condition to vesting of the majority of the award, and continued employment with the Company over the same period as a condition to vesting of the remainder of the award. See “Executive Compensation—Potential Payments Upon Termination of Change in Control.” In November 2013, the NECC continued this practice, awarding three-year incentive awards with a performance based component constituting 75% of the restricted stock equivalents available to be awarded at target and a time-vesting component constituting 25% at target of the award.

 

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Timing and Procedures for Grants

Other than in exceptional cases, such as promotions or new hires, long-term incentive awards are generally granted in the first quarter of the fiscal year (October through December), at the time when salary levels and bonus programs for the new fiscal year are determined. The NECC and management have agreed that it is also an appropriate time to review and consider additional awards as part of the total compensation packages.

The size of equity awards for the executive officers granted in November 2013 was based in part upon benchmarked data from our peer group provided by Meridian valued on the date of grant. The size of awards also reflects other factors, such as officers’ individual performance, current dilution rates, and the market run-rate for equity grants among the peer group. The number of restricted stock equivalents awarded, as well as the mix between time-based and performance-based awards, are based on the amounts targeted to be delivered after three years, and the corresponding grant date value of the restricted stock equivalents. The restricted stock equivalent awards are stock-settled at the end of the three-year period, when they convert into unrestricted shares of our common stock if and to the extent that the vesting requirements are met. Performance shares are earned based on performance over the 3-year performance cycle against pre-established goals. In addition to the earned award fluctuating with performance against these goals, the value of the shares also may fluctuate based on performance of the Company’s common stock over time. This combination of financial performance and stock price performance enhances the alignment with shareholders.

The chief executive officer recommends to the committee the number of shares or share units to be awarded for each named executive officer (other than the chief executive officer). With respect to awards to the chief executive officer, Meridian, without input from the chief executive officer or other members of management, provides a range of potential awards to the NECC. However, the NECC considers alternatives outside the range and determines the award considering the competitive posture, performance of the Company, returns to shareholders and experience and effectiveness of the chief executive officer’s leadership, as well as the input from Meridian.

Performance Awards Vesting in 2014

In fiscal 2014, the three-year vesting period for performance awards granted in November 2011 ended. The committee exercised its discretion to adjust the fiscal 2014 adjusted EPS result down from a reported amount of $7.32 to $7.26 per share, representing a compound adjusted EPS growth for that period of 8.3%. This resulted in vesting of 126% of the awards granted at target.

Grants During Fiscal 2014

The NECC approved the grant of two types of restricted stock equivalent awards to the named executive officers in fiscal 2014, time-based awards, which vest three years from the date of grant and can increase in value if Energizer’s stock price rises, and performance-based awards. The performance-based awards granted in 2014 measure performance against two metrics:

 

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adjusted ROIC, to support the Company’s focus on cash flow, including improved working capital performance, and to emphasize the importance of capital allocation decisions; and

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cumulative adjusted EBITDA, to reward growth in core operating earnings.

Once the initial award amount is determined, the performance equivalent awards will then be subject to adjustment based on a third metric, the Company’s relative total shareholder return during the three-year performance period based on a relevant group of industrial and consumer goods companies.

The number of units granted to each named executive officer is shown in the “Grants of Plan-Based Awards” table.

 

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Other Equity Awards

The NECC has, from time to time, and most recently in 2009, granted non-qualified stock options as well as restricted stock equivalent awards which vest over time. No such grants were made to named executive officers in fiscal 2014.

Supplemental Retirement Plans

In fiscal 2014, our named executive officers were covered, like other employees, by our defined benefit pension plan. As a qualified plan, it is subject to maximum pay and benefit limits under the tax rules. The pension restoration plan (the executive supplemental retirement plan) provides a supplement to an executive’s pension benefit equal to the amount that the executive would have received but for the tax limitations. Details of pension benefits under the pension restoration plan are set forth in the “Pension Benefits Table,” including the accompanying narrative.

Our named executive officers were also covered by our qualified defined contribution 401(k) plan, and entitled to a Company match on a portion of their deferrals to the plan. The amounts which may be deferred on a tax preferred basis into the qualified plan, as well as the amount of the matching contributions, are also subject to IRS limitations. We have also established supplemental plans to compensate executives for these limits. The excess 401(k) plan permits executives to defer any excess contributions and matching payments not permitted into the qualified 401(k) plan. According to market data provided by Meridian, these types of benefits are generally offered by our peer group described above, often with enhanced benefit formulas (which we do not provide).

Details of the excess 401(k) plan, including the contributions, earnings, and year-end balances, are set forth in the “Non-qualified Deferred Compensation Table.”

Effective January 1, 2014, the pension benefit earned to date by active participants under the legacy Energizer U.S. pension plan was frozen and future retirement service benefits are no longer accrued. The elimination of the U.S. pension benefit was partially offset by an increase in the Company match to contributions made by participants into our defined contribution and excess contribution 401(k) plans. When the pension plan was frozen, the pension restoration plan for executives was similarly frozen. Account balances in the pension plans are credited with interest based on the 30 year treasury rate measured in August of each year for the next plan year.

Severance and Other Benefits Following a Change of Control

Unlike many other public companies, we have not offered employment agreements to our executives. However, we have ongoing change of control agreements with each of our executive officers, as discussed under “Potential Payments upon Termination or Change of Control.”

The change of control agreements are designed to provide executives with increased security in the event of a change of control, and allow them to weigh alternative future courses for the Company focused on the interests of shareholders. The NECC annually reviews the cost and the terms of the agreements in light of advice provided by Meridian, based upon surveys of Fortune 500 companies as well as our peer group, and its own internal data and expertise. We believe that the retention value provided by the agreements, and the benefit to us when the executive is provided the opportunity to focus on the interests of shareholders and not the executive’s own personal financial interests, outweighs the potential cost given that:

 

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such protections are common among companies of our size, and allow us to offer a competitive compensation package;

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Meridian has advised that the aggregate projected cost of the agreements is at the lower end of prevailing practice;

 

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such costs will only be triggered if the new controlling entity involuntarily terminates the protected executives, or the executives are able to resign for good reason, during the protected period;

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the agreements include non-compete and non-solicitation covenants binding on the executives, which can provide significant benefit to the new controlling entity; and

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the individuals with the agreements are carefully selected by the Board of Directors, and we believe they are critical to the process of evaluating or negotiating a potential change of control transaction or in the operation of our business during the negotiations or integration process, so that their retention would be critical to the success of any such transaction.

The NECC has, from time to time in the last several years, initiated further limitations on the benefits provided. In November 2011, the Board of Directors, upon the recommendation of the committee, adopted a policy pursuant to which we will not include tax gross-up payments relating to severance payments, and instead adopt the “best-of-net” approach for change in control employment agreements entered into with executive officers after that date. Of the named executive officers, Mr. Klein, Mr. Sescleifer, Mr. Hatfield and Mr. LaVigne have agreements including the prior tax gross-up treatment, and Mr. Hoskins has an agreement providing the “best-of-net” treatment.

A description of the projected cost, if a change of control were to have occurred on the last day of fiscal 2014 and all of the named executive officers were terminated on that date, is provided under “Potential Payments upon Termination or Change of Control.”

Strategic Transaction Incentive Agreements.

In connection with the previously announced plan to spin-off household products and thereby create two independent, publicly traded companies, the NECC approved Strategic Transaction Incentive Agreements for each of Mr. LaVigne and Mr. Sescleifer due to the leadership role each individual will have in the execution of the spin-off of our household products business. The agreements provide that upon the completion of the spin-off, Mr. LaVigne and Mr. Sescleifer will be entitled to receive a special cash bonus equal to $660,000 and $550,000, respectively; provided, that each of them completes performance objectives related to leadership of the execution of the spin-off.

The agreements contain non-compete provisions that prohibit Mr. LaVigne and Mr. Sescleifer from competing against the Company for one year after termination. The agreements also contain non-solicitation, non-interference and confidentiality obligations. The agreements also provide that if the Company is subject to a change of control or if the recipient is terminated without cause prior to the completion of the spin-off, the recipient will be entitled to receive a pro-rated portion of the payment.

Perquisites

We offer a limited number of perquisites for our executive officers. Our Board of Directors has authorized the personal use of our Company-owned aircraft for up to 40 flight hours per year by the chief executive officer, but does not permit reimbursement of taxes associated with the chief executive officer’s personal use of the aircraft. In fiscal 2014, the value of this perquisite to Mr. Klein was $141,675. The Board has also authorized individuals to bring family members and guests along on business flights. The remaining perquisites or executive benefits consist of the executive financial planning program, executive long-term disability plan, and executive excess liability plan. In addition, Mr. Hatfield is reimbursed for commuting expenses as a result of his assignment to our office in Connecticut, but he is not reimbursed for taxes associated with that reimbursement. We regularly review the benefits provided to our executives and make appropriate modifications based on peer group analysis and the committee’s evaluation of the retentive value of these benefits.

 

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Stock Ownership Requirements

Our stock ownership guidelines provide that the chief executive officer must maintain ownership of our common stock with a value of at least five times his base salary, and other executive officers must maintain common stock ownership with a value of at least three times their base salaries. New executive officers are given a period of five years to attain full compliance with the guidelines.

For purposes of this determination, stock ownership includes shares of our common stock which are owned directly or by family members residing with the executive or by family trusts, as well as vested options, vested and deferred restricted stock equivalents, unvested restricted stock equivalents (other than equivalents subject to achievement of performance targets), and common stock or stock equivalents credited to an officer under our defined contribution 401(k) plan, our excess 401(k) plan, or our deferred compensation plan. As of September 30, 2014, each of our named executive officers was in compliance with the guidelines.

Trading in Energizer Stock

Under our insider trading policy, directors, officers and employees or their designees are prohibited from engaging in speculative trading or hedging transactions in Energizer securities, including prohibitions on:

 

•

Investing or trading in market-traded options on Energizer securities—i.e., puts and calls; or

•

Purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to profit from, hedge or offset any change in the market value of equity securities (1) granted to the director, officer or employee by Energizer as part of the compensation of the employee or member of the Board of Directors; or (2) held, directly or indirectly, by the director, officer or employee; or

•

Engaging in “short-sales” of Energizer securities—i.e., selling Energizer stock not owned at the time of the sale; or

•

Speculating on relatively short-term price movements of Energizer securities—i.e., engage in a purchase and sale of Energizer stock within a short period of time.

The policy also prohibits the transfer of funds into or out of Energizer stock equivalent funds in Energizer’s benefit plans while in possession or aware of material non-public information; or engaging in any other transaction involving Energizer securities that suggests the misuse of information that is unavailable to the general public.

Deductibility of Certain Executive Compensation

U.S. tax laws set a limit on deductible compensation of $1,000,000 per year per person for the chief executive officer and the next three highest paid officers (other than the chief financial officer). Performance-based awards, which meet certain requirements, are excluded when determining whether such an executive has received compensation in excess of this limit. The applicable plan provisions give the NECC authority to require the deferral of certain bonus and salary payments to such officers in order to preserve the deductibility of those payments. By making payments under the annual cash bonus program and annual restricted stock equivalent grants contingent upon achievement of shareholder-approved performance goals, such payments may be deductible under the U.S. tax laws. We believe a significant portion of the compensation paid to the named executive officers may remain deductible as performance-based awards under shareholder-approved plans in the future. However, the NECC reserves the flexibility to approve compensation arrangements that are not fully tax deductible where the NECC considers such arrangements to be appropriate and in the best interests of the Company.

The committee intends to continue to review and monitor its policy with respect to the deductibility of compensation.

 

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COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT

As stated above under “Corporate Governance, Risk Oversight and Director Independence—Risk Oversight and Risk Management—Compensation Policies and Practices Risk,” as part of its responsibilities, the Nominating and Executive Compensation Committee annually reviews the Company’s compensation policies and practices for all employees, including executive officers, to determine whether, in its judgment, our compensation programs encourage risk-taking likely to have a material adverse effect on the Company. In particular, there are several design features of those programs that the committee believes reduces the likelihood of excessive risk-taking:

 

•

the executive compensation program design provides a balanced mix of cash and equity, annual and longer-term incentives;

•

for the executive compensation program, maximum payout levels for bonuses and performance awards are capped;

•

the Company does not grant stock options on a regular basis; and

•

executive officers are subject to share ownership and retention guidelines.

The committee determined that, for all employees, the Company’s compensation programs do not encourage excessive risk and instead encourage behavior that supports sustainable value creation.

NOMINATING AND EXECUTIVE COMPENSATION COMMITTEE REPORT

The Nominating and Executive Compensation Committee of the Company’s Board of Directors consists entirely of non-employee directors that are independent under the NYSE listing standards. The Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis with management. Based on these reviews and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014.

 

John C. Hunter—Chairman Daniel J. Heinrich John R. Roberts		Bill G. Armstrong James C. Johnson

No portion of this Nominating and Executive Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act, the Exchange Act, or through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.

 

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EQUITY COMPENSATION PLAN INFORMATION

The following table gives information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing compensation plans as of September 30, 2014:

 

Plan Category		(1) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights				(2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				(3) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (1), and as Noted Below)
Equity compensation plans approved by security holders			1,725,602			$	65.14				6,219,613
Equity compensation plans not approved by security holders			None				N/A				None
Total			1,725,602			$	65.14				6,219,613

 

 

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SUMMARY COMPENSATION TABLE

 

Name and Principal Position		Year				Salary				Bonus (1)				Stock Awards (2)				Option Awards				Non-Equity Incentive Plan Comp. (1)(3)				Change in Pension Value and Nonqual’d Deferred Comp. Earnings (4)				All Other Compensation (5)				Total ($)
Ward M. Klein			2014			$	1,100,000			$	0			$	4,565,157			$	0			$	2,157,584			$	1,473,804			$	333,893			$	9,630,438
Chief Executive Officer			2013			$	1,100,000			$	0			$	4,150,822			$	0			$	1,839,943			$	0			$	387,537			$	7,478,302
			2012			$	1,091,667			$	0			$	4,000,049			$	0			$	1,676,125			$	2,563,614			$	282,197			$	9,613,652
Daniel J. Sescleifer			2014			$	547,909			$	0			$	1,245,052			$	0			$	732,652			$	104,429			$	82,982			$	2,713,024
Executive Vice President			2013			$	525,002			$	0			$	1,037,726			$	0			$	610,892			$	93,464			$	86,973			$	2,354,057
& Chief Financial Officer			2012			$	523,752			$	0			$	971,014			$	0			$	556,502			$	77,188			$	50,412			$	2,178,868
David P. Hatfield			2014			$	547,897			$	0			$	881,949			$	0			$	732,666			$	156,892			$	91,120			$	2,410,524
President & CEO,			2013			$	525,036			$	0			$	830,231			$	0			$	610,932			$	153,189			$	90,444			$	2,209,832
Energizer Personal Care			2012			$	523,787			$	0			$	986,318			$	0			$	556,538			$	144,681			$	59,273			$	2,270,597
Alan R. Hoskins			2014			$	458,350			$	0			$	830,001			$	0			$	613,425			$	155,681			$	65,710			$	2,123,167
President & CEO, Energizer			2013			$	435,832			$	0			$	933,581			$	0			$	511,982			$	133,291			$	1,323,927			$	3,338,613
Household Products			2012			$	367,076			$	0			$	450,064			$	0			$	413,400			$	119,167			$	692,171			$	2,041,878
Mark S. LaVigne			2014			$	436,665			$	0			$	778,159			$	0			$	446,858			$	32,540			$	56,881			$	1,751,103
Vice President, General Counsel & Secretary

 

 

 

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GRANTS OF PLAN-BASED AWARDS

Awards to the named executive officers, and to other key executives, were made in fiscal 2014 under two separate plans or programs:

 

•

potential cash awards under our annual cash bonus program, dependent upon achievement of Company performance measures established at the beginning of the fiscal year, as described in more detail in “Compensation Discussion and Analysis—Elements of Compensation—Incentive Programs—Annual Cash Bonus Program;”

•

three-year restricted stock equivalent awards under the terms of our Amended and Restated 2009 Incentive Stock Plan, which include a performance component and a time-vesting component, as described in more detail in “Compensation Discussion and Analysis—Elements of Compensation—Incentive Programs—Equity Awards;” and

•

Company-matching deferrals (payable in cash at retirement) under our deferred compensation plan, as described in more detail in the narrative to the “Non-qualified Deferred Compensation Table” below.

GRANTS OF PLAN-BASED AWARDS TABLE

 

								Estimated Future Payouts Under Non-Equity Incentive Plan Awards												Estimated Future Payouts Under Equity Incentive Plan Awards (#)
Name		Type of Award		Grant Date		Committee Action Date		Threshold				Target				Maximum				Threshold				Target				Maximum				All Other Stock Awards: Number of  Shares of Stock(#)				All Other Option Awards: Number of  Shares Underlying Options (#)		Exercise or Base Price of  Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards(4)
W.M. Klein		Bonus: Annl.Perf.(1)						$	442,750			$	1,265,000			$	2,530,000
		Perf.Awd.		11/6/13(2)		11/4/13															12,998				32,494				64,988											$	3,465,160
		Perf.Awd.: Time Vest		11/6/13(3)		11/4/13																											10,831							$	1,099,996
D.J. Sescleifer		Bonus: Annl.Perf.(1)						$	154,000			$	440,000			$	880,000
		Perf.Awd.		11/6/13(2)		11/4/13															3,545				8,862				17,724											$	945,044
		Perf.Awd.: Time Vest		11/6/13(3)		11/4/13																											2,954							$	300,008
D.P. Hatfield		Bonus: Annl.Perf. (1)						$	154,000			$	440,000			$	880,000
		Perf.Awd.		11/6/13(2)		11/4/13															2,511				6,278				12,556											$	669,486
		Perf.Awd.: Time Vest		11/6/13(3)		11/4/13																											2,092							$	212,464
A.R. Hoskins		Bonus: Annl.Perf. (1)						$	128,800			$	368,000			$	736,000
		Perf.Awd.		11/6/13(2)		11/4/13															2,363				5,908				11,816											$	630,029
		Perf.Awd.: Time Vest		11/6/13(3)		11/4/13																											1,969							$	199,972
M.S. LaVigne		Bonus: Annl.Perf. (1)						$	100,100			$	286,000			$	572,000
		Perf.Awd.		11/6/13(2)		11/4/13															2,216				5,539				11,078											$	590,679
		Perf.Awd.: Time Vest		11/6/13(3)		11/4/13																											1,846							$	187,480

 

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

 

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

 

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#)  Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
W. M. Klein			38,000				0			$	65.63				10/11/19				59,804	(1)		$	7,368,451				179,258	(6)		$	22,086,378
D. J. Sescleifer			0				0				-				-				14,705	(2)		$	1,811,803				45,142	(7)		$	5,561,946
D. P. Hatfield			10,000				0			$	65.63				10/11/19				13,576	(3)		$	1,672,699				37,330	(8)		$	4,599,429
A. R. Hoskins			0				0				-				-				9,463	(4)		$	1,165,936				29,300	(9)		$	3,610,053
M. S. LaVigne			0				0				-				-				10,260	(5)		$	1,264,135				28,774	(10)		$	3,545,245

 

 

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OPTION EXERCISES AND STOCK VESTED

 

		Option Awards								Stock Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)				Number of Shares Acquired on Vesting (#)(1)(2)				Value Realized on Vesting ($)
W. M. Klein			45,000			$	2,941,925				42,774			$	4,219,194
D. J. Sescleifer			25,000			$	1,281,103				10,607			$	1,046,265
D. P. Hatfield			25,000			$	1,435,537				10,607			$	1,046,265
A. R. Hoskins			12,500			$	594,089				6,489			$	628,702
M. S. LaVigne			0			$	0				7,917			$	766,381

 

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PENSION BENEFITS

 

 

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PENSION BENEFITS TABLE

 

Name		Plan Name		Number of Years Credited Service (#)(1)				Present Value of Accumulated Benefit ($)(2)				Payments During Last Fiscal Year ($)
W.M. Klein		Energizer Retirement Plan			35			$	1,552,610			$	0
		Supplemental Executive Retirement Plan			34			$	11,983,350			$	0
D.J. Sescleifer		Energizer Retirement Plan			14			$	439,976			$	0
		Supplemental Executive Retirement Plan			13			$	761,034			$	0
D.P. Hatfield		Energizer Retirement Plan			29			$	813,656			$	0
		Supplemental Executive Retirement Plan			28			$	1,878,833			$	0
A.R. Hoskins		Energizer Retirement Plan			31			$	974,240			$	0
		Supplemental Executive Retirement Plan			30			$	1,153,322			$	0
M. S. LaVigne		Energizer Retirement Plan			4			$	74,769			$	0
		Supplemental Executive Retirement Plan			4			$	73,212			$	0

 

 

NON-QUALIFIED DEFERRED COMPENSATION

We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is not tax-qualified. Deferred Compensation Plan

 

 

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NON-QUALIFIED DEFERRED COMPENSATION TABLE

 

Name		Plan		Executive Contributions in Last FY ($)(1)				Registrant Contributions in Last FY ($)(2)				Aggregate Earnings in Last FY ($)(3)				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at Last FYE ($)(5)
W. M. Klein		Def’d Comp. Plan		$	0			$	0			$	5,307,194			$	0			$	24,839,550
		Exec. S.I.P.		$	32,000			$	39,400			$	546,506			$	0			$	3,903,240
		Vested Stock Equivs.(4)		$	0			$	0			$	4,479,707			$	0			$	16,734,139
		Total		$	32,000			$	39,400			$	10,333,407			$	0			$	45,476,929
D.J. Sescleifer		Def’d Comp. Plan		$	0			$	0			$	238,945			$	1,090,994			$	3,521,057
		Exec. S.I.P.		$	215,651			$	45,864			$	188,987			$	0			$	2,331,775
		Vested Stock Equivs.(4)		$	0			$	0			$	1,337,059			$	0			$	4,995,098
		Total		$	215,651			$	45,864			$	1,764,991			$	1,090,994			$	10,847,930
D. P. Hatfield		Def’d Comp. Plan		$	0			$	0			$	1,160,093			$	0			$	9,005,363
		Exec. S.I.P.		$	52,030			$	37,164			$	71,120			$	0			$	895,515
		Vested Stock Equivs.(4)		$	0			$	0			$	1,325,138			$	0			$	4,946,518
		Total		$	52,030			$	37,164			$	2,556,351			$	0			$	14,847,396
A.R. Hoskins		Def’d Comp. Plan		$	0			$	0			$	476,714			$	6,084			$	4,116,277
		Exec. S.I.P.		$	43,212			$	29,342			$	16,646			$	0			$	543,640
		Vested Stock Equivs.(4)		$	0			$	0			$	0			$	0			$	0
		Total		$	43,212			$	29,342			$	493,360			$	6,084			$	4,659,917
M.S. LaVigne		Def’d Comp. Plan		$	0			$	0			$	107,356			$	0			$	485,244
		Exec. S.I.P.		$	72,363			$	18,356			$	20,378			$	0			$	225,808
		Vested Stock Equivs.(4)		$	0			$	0			$	0			$	0			$	0
		Total		$	72,363			$	18,356			$	127,734			$	0			$	711,052

 

 

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

We have not entered into general employment agreements with any of our named executive officers, nor do we have executive severance plans or programs. However, equity awards under our 2009 Incentive Stock Plan, as amended and restated, and our deferred compensation plan provide for acceleration of vesting of certain awards in the event of certain terminations of employment. In addition, we have entered into change of control employment agreements with our named executive officers and certain of our other key employees which provide for severance compensation, acceleration of vesting, tax reimbursement and continuation of benefits upon qualified termination of employment following a change of control.

The information below reflects the value of acceleration or incremental compensation which each officer would receive upon the termination of his or her employment or upon a change in control. Because the value of awards and incremental compensation depend on several factors, actual amounts can only be determined at the time of the event.

The information is based on the following assumptions:

 

•

the event of termination (death, permanent disability, involuntary termination without cause, or voluntary termination), or a change of control of the Company, occurred on September 30, 2014, the last day of our fiscal year;

 

•

the market value of our common stock on that date was $123.21 (the actual closing price on September 30, 2014);

 

•

each of the officers were terminated on that date; and

 

•

corporate and individual federal tax rates were 39.6%, Missouri state tax rate was 6% and FICA was 2.35%.

The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried employees—such as amounts accrued under our savings investment plan, accumulated and vested benefits under our retirement plans (including our pension restoration plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay.

The information below also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, or vested stock equivalents that would be issued, all as described in the “Non-qualified Deferred Compensation Table,” except to the extent that an officer is entitled to an accelerated benefit as a result of the termination.

 

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Death, Disability or Termination of Employment (Other Than Upon a Change of Control)

Upon an officer’s death, permanent disability, involuntary termination other than for cause (defined as termination for gross misconduct), and, in some cases, retirement, the following plans or programs provide for acceleration of certain awards. Awards are accelerated for retirement after attainment of age 55 with 10 years of service if granted 12 or more months prior to retirement date. No awards are accelerated upon other voluntary termination or involuntary termination for cause. Performance awards vesting upon retirement are paid when results for the Performance Period are met.

 

		Involuntary Termination		Death		Disability		Retirement After Age 55 with 10 years of service
Three-year restricted stock awards granted 11/7/11 and 11/6/13		Forfeited		Accelerated		Accelerated		Pro Rata Vesting
Three-year restricted stock awards granted 12/10/12		Forfeited		Accelerated		Forfeited		Pro Rata Vesting
Three-year performance awards granted 11/7/11 and 11/6/13		Forfeited		Accelerated		Accelerated		Pro Rata Vesting
Three-year performance awards granted 12/10/12		Forfeited		Accelerated		Forfeited		Pro Rata Vesting
Unvested 25% Company match		Accelerated		Accelerated		Accelerated		Accelerated

Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five or ten year period, commencing six months from the date of termination.

In the event an officer’s employment is terminated due to permanent disability, he or she may also be entitled to benefits under our executive long-term disability plan, which pays a supplemental benefit equal to 66 2/3% of the amount by which the officer’s previous year’s salary and bonus exceeded $240,000. (Amounts below that figure are covered by our long-term disability plan, available generally to salaried U.S. employees.) As noted in the “Summary Compensation Table,” the Company pays the premiums for $40,000 of term life insurance for all U.S. employees, including the named executive officers.

Previously, upon retirement or death, the officer, or his or her surviving spouse, may have also been entitled to continued coverage under our executive health plan, which generally covers medical/dental/vision expenses and deductibles and co-pays not otherwise covered by our underlying medical insurance plan. However, in order to qualify for continued coverage under the executive health plan, the covered person must pay for retiree coverage under our underlying medical and dental insurance plans. Effective December 31, 2012, the Energizer Holdings, Inc. Executive Health Plan was terminated. As such, current and former executives no longer have the opportunity to participate in this plan.

 

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The value of awards which would be accelerated for our named executive officers upon death, disability or retirement as of September 30, 2014 is shown in the following chart. The value of accelerated restricted stock equivalents (both performance- and time-based) and 25% Company match for deferred annual bonus amounts reflects a stock price of $123.21. Stock market changes since September 30, 2014 are not reflected in these valuations.

 

		Accelerated Awards
Officer Termination Events		Restricted Stock Equivalents, Including Three-Year Performance Awards				Unvested 25% Company Match				Total
W. M. Klein: 1		$	18,411,640			$	0			$	18,411,640
W. M. Klein: 2		$	12,360,674			$	0			$	12,360,674
W.M. Klein: 3		$	0			$	0			$	0
W.M. Klein: 4		$	10,525,341			$	0			$	10,525,341
D. J. Sescleifer: 1		$	4,592,776			$	75,443			$	4,668,219
D. J. Sescleifer: 2		$	3,080,004			$	75,443			$	3,155,447
D. J. Sescleifer: 3		$	0			$	75,443			$	75,443
D. P. Hatfield: 1		$	3,865,714			$	105,912			$	3,971,626
D. P. Hatfield: 2		$	2,655,422			$	105,912			$	2,761,334
D. P. Hatfield: 3		$	0			$	105,912			$	105,912
A.R. Hoskins: 1		$	2,970,963			$	156,011			$	3,126,974
A.R. Hoskins: 2		$	1,760,671			$	156,011			$	1,916,682
A.R. Hoskins: 3		$	0			$	156,011			$	156,011
M.S. LaVigne: 1		$	2,934,616			$	98,708			$	3,033,324
M.S. LaVigne: 2		$	1,875,626			$	98,708			$	1,974,334
M.S. LaVigne: 3		$	0			$	98,708			$	98,708

Termination Events:

1—Death;

2—Permanent disability;

3—Involuntary termination of employment other than for cause;

4—Retirement following attainment of age 55 with 10 years of service, 12 months after date of grant.

Change of Control of the Company

Our change of control employment agreements with each of the named executive officers have a term of three years from their effective date (which term is automatically extended every year beginning the first year for an additional year unless our Nominating and Executive Compensation Committee elects to terminate an agreement at least 90 days prior to renewal). Each of these agreements provides that the officer will receive severance compensation in the event of his or her involuntary termination (including voluntary termination for “good reason”), other than for cause, within three years following a change in control of the Company.

“Termination for cause” means a termination for willful breach of, or failure to perform, employment duties.

“Good reason” means, among other things, certain changes in the officer’s status or duties, failure to pay certain compensation or awards or benefits, relocation of his or her office, or improper termination.

“Change of control” includes, among other things, acquisition of specified amounts of shares by any person, certain changes in the composition of our incumbent Board of Directors, approval of business combinations under certain circumstances, or other matters approved by our Board.

 

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Under the agreements, upon a change of control, each officer, even if not terminated, will receive a pro rata annual bonus (equal to the greater of either the target bonus for the year in which the change of control occurred, or the actual bonus for the preceding year) for the portion of the year occurring prior to a change of control.

The agreements also provide that upon a change of control, outstanding equity awards held by each officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a “change of control”. Our equity awards generally define a “change of control” as an acquisition of 50% or more of the outstanding shares of our common stock. The terms of our outstanding equity awards vary as to the portion of the unvested award that will accelerate and vest upon a change of control, as indicated below:

 

Three-year performance awards granted 11/7/11		If the change of control occurs within 18 months of the date of grant, 100% of the equivalents granted at target vest. If the change of control occurs after 18 months of the date of grant, awards will vest at the greater of (i) 100% of the equivalents granted at target or (ii) the percentage of total equivalents which would have vested had the performance period ended as of the last fiscal quarter prior to the change of control and the performance been calculated on that period.
Three-year performance awards granted 12/10/12 and 11/6/13		If a change of control occurs, awards will vest at the greater of (i) 100% of the performance equivalents granted at target or (ii) the percentage of total performance equivalents which would have vested had the performance period ended on the date the change of control occurs and the extent to which performance goals have been met.
Three-year time based awards granted 11/7/11, 12/10/12 and 11/6/13		100% vest upon change of control

If the officer is terminated within 36 months of the change of control, the severance compensation payable under the agreements consists of:

•

a lump sum payment in an amount equal to three times the officer’s annual base salary and target bonus (defined as the most recent five-year actual bonus percentages multiplied by the greater of base salary at either termination or change of control);

•

a pro rata portion of the officer’s target annual bonus for the year of termination;

•

lump-sum retirement plan payments representing the additional years of age and service credits equal to the severance period;

•

the continuation of other health, dental and welfare benefits for a period of three years following the officer’s termination; and

•

Company match on retirement plan payments for the severance period.

No severance payments under the agreements would be made in the event that an officer’s termination is voluntary (other than for good reason), is due to death, disability or normal retirement, or is for cause. For a period of three years following termination of employment, the officers are each bound by a covenant not to compete, a non-solicitation covenant, and a covenant of confidentiality.

Other than for Mr. Hoskins, in the event that it is determined that a “golden parachute” excise tax is due under the IRC, we will, if total benefits payable to the officer are within 10% of the threshold for benefits at which the excise tax is triggered, reduce benefits to the point at which the tax will no longer be due, or, if total benefits are in excess of 10% of the threshold, reimburse the officer for the amount of such tax, including any excise or income taxes associated with such reimbursement. For Mr. Hoskins, in the event that it is determined that a “golden parachute” excise tax is due under the IRC, we will reduce the aggregate amount of the payments payable to an amount such that no such excise tax will be paid if the resulting amount would be greater than the after-tax amount if the payments were not so reduced.

 

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Payments of cash would be made in a lump sum no sooner than six months following termination of employment, and benefits would be provided for a three-year period following termination, or if such continuation of benefits would not be possible under our benefit programs, the value of such benefits would also be paid in lump sum no sooner than six months following termination.

Estimated Payments and Benefits

Based on the assumptions set out above, the following chart sets forth estimated payments to our named executive officers upon termination following a change of control. If a change of control occurs but their employment is not terminated, the agreements provide a more limited value, as shown in the second chart below. The value of accelerated restricted stock equivalents, performance awards and 25% Company match reflects a stock price of $123.21 (the closing price of our common stock on September 30, 2014). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 2014 are not reflected in these valuations.

 

		Accelerated or Additional Benefits—Termination following Change of Control
		Cash Severance				Retirement Benefits				25% Company Match				Restricted Stock Equivs., Three-Year Performance Awards				Pro Rata Transaction Bonus				Benefits				Excise Tax Gross-Up/ Reduction				Total
W. M. Klein		$	10,451,775			$	445,910			$	0			$	18,411,640				0			$	85,209			$	8,163,596			$	37,558,130
D. J. Sescleifer		$	4,126,276			$	204,906			$	75,443			$	4,592,776				130,021			$	85,209			$	2,846,407			$	12,061,038
D. P. Hatfield		$	4,217,084			$	206,681			$	105,912			$	3,865,714				0			$	85,209			$	2,776,838			$	11,257,438
A. R. Hoskins		$	3,390,100			$	173,163			$	156,011			$	2,970,963				0			$	65,477			$	-626,061	(1)		$	6,129,653
M. S. LaVigne		$	2,833,782			$	139,895			$	98,708			$	2,934,616				156,025			$	40,024			$	2,124,900			$	8,327,950

 

(1)	It was determined that a “golden parachute” excise tax would be due under the Internal Revenue Code for Mr. Hoskins and therefore we reduced the aggregate amount of the payments payable to an amount such that no excise tax would be due.

For purposes of the calculation of the excise tax gross-up in these charts, the ascribed value of accelerated vesting is based on three assumptions:

 

•

Lapse-of-further-service portion is equal to the gain at the change of control date multiplied by 1% for each full month vesting is accelerated;

 

•

Early receipt portion is equal to the difference between the gain at normal vesting and the present value of the gain at the time vesting is accelerated (present value based on 120% of the IRS Applicable Federal Rates, compounded semi-annually: 0.46% for short-term and 2.21% for mid-term, using October 1, 2014 rates); and

 

•

Performance restricted stock equivalents, under which vesting is contingent upon achievement of certain performance goals and continued employment, have been valued assuming a 100% parachute value for the portions of awards that will vest.

 

		Accelerated Awards Upon a Change of Control (No Termination of Employment)
		Restricted Stock Equivalents, Three-Year Performance Awards				Excise Tax Gross-Up		Total
W. M. Klein		$	18,411,640			$0		$	18,411,640
D. J. Sescleifer		$	4,592,776			$0		$	4,592,776
D. P. Hatfield		$	3,865,714			$0		$	3,865,714
A. R. Hoskins		$	2,970,963			$0		$	2,970,963
M. S. LaVigne		$	2,934,616			$0		$	2,934,616

 

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ITEM 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION

As required by Section 14A of the Exchange Act, we are asking our shareholders to provide non-binding advisory approval of the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC. We encourage shareholders to review the Compensation Discussion and Analysis for details regarding our executive compensation programs. Our 2014 shareholder advisory vote on executive compensation was approved by a significant majority of shareholders, with approximately 93.7% of the votes cast in favor of the advisory resolution at our 2014 Annual Meeting.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices that we use. We believe that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our shareholders’ interests. Our compensation programs are designed to enable and reinforce our Company’s overall business strategy by aligning pay with achievement of short and long term financial and strategic objectives, while providing a competitive level of compensation which is needed to recruit, retain and motivate talented executives critical to our success. In particular:

 

•

For the 2014 fiscal year, the Nominating and Executive Compensation Committee approved multiple metrics in the long-term performance incentive program, including:

¡

adjusted return on invested capital, to support the Company’s focus on cash flow, including improved working capital performance, and to emphasize the importance of capital allocation decisions;

¡

cumulative adjusted EBITDA, to reward growth in core operating earnings; and

¡

once the initial award amount is determined, the performance equivalent awards will then be subject to adjustment based on a third new metric, the Company’s relative total shareholder return during the three year performance period based on a relevant group of industrial and consumer goods companies.

•

The Nominating and Executive Compensation Committee also approved multiple metrics in the fiscal 2014 short-term performance incentive program:

¡

Company-wide cost savings associated with restructurings, which constitutes 20% of the weighting, to focus on delivering the cost savings to investors announced by the Company, which will be paid annually as cost savings for the multi-year restructuring project are achieved;

¡

adjusted earnings per share, which constitutes 30% of the weighting, to encourage the executives to deliver on bottom-line results;

¡

Company-wide pre-tax operating profit, which constitutes 30% of the weighting, to reward operating performance; and

¡

net working capital as a percentage of sales, which constitutes 20% of the weighting, to encourage improved management of working capital.

•

For the 2014 fiscal year, the Nominating and Executive Compensation Committee approved:

¡

elimination of all investment funds in the deferred compensation plan other than the Prime Rate Fund;

¡

adjustment to the mix of restricted stock equivalents by increasing the performance-based portion to 75% of the restricted stock equivalents available to be earned at target from 54% in 2013;

¡

revising the treatment of unvested equity at retirement from complete forfeiture to pro rata forfeiture of awards held more than 12 months prior to the executive’s retirement date after age 55 with at least 10 years of service; and

¡

effective January 1, 2014, the Energizer U.S. pension plan was frozen and future retirement service is no longer accrued. Elimination of the U.S. pension benefit was partially offset by an increase in the Company match to contributions made by participants into our defined contribution and excess contribution 401(k) plans.

 

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The Board believes the Company’s overall compensation process effectively implements its compensation philosophy and achieves its goals. Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:

RESOLVED, that the shareholders of Energizer approve, on an advisory basis, the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the accompanying footnotes and narratives.

Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for approval of the executive compensation.

The Board of Directors recommends a vote FOR the approval of the executive compensation of our named executive officers as described in this proxy statement under “Executive Compensation”.

ITEM 4. SHAREHOLDER PROPOSAL

A shareholder has informed the Company that it intends to present the following proposal at the meeting. The proposal, together with the supporting statement, is presented as received from the shareholder in accordance with SEC rules, and the Company and its Board of Directors disclaim any responsibility for its content. The Company will furnish the name, address and claimed share ownership position of the proponent of this proposal promptly upon written or oral request directed to the Corporate Secretary of the Company, 533 Maryville University Drive, St. Louis, Missouri 63141. The shareholder proposal is required to be voted upon at the annual meeting only if properly presented at the meeting by the shareholder or a qualified representative.

Shareholder Proposal

Concerning Sustainable Palm Oil Sourcing Policy

Whereas: As a leading shave and skin care company in North America, many of Energizer Holdings’ products contain palm oil derivatives. However, the environmental and social impacts of palm oil production make it highly controversial.

Approximately 90% of palm oil is grown in Indonesia and Malaysia. This has led to significant deforestation. Such deforestation and conversion of carbon-rich peatlands contributed to the World Bank ranking Indonesia as the 3^rd largest global emitter of greenhouse gases (GHGs). Peatland and forest conversion accounts for more than half of Indonesia’s GHG emissions. In addition to climate change, palm oil plantations that are not sustainably developed and managed devastate habitats of endangered species, such as the orangutan, and cause massive biodiversity loss. Finally, the U.S. Department of Labor lists the palm oil industry as notorious for using child and forced labor. In the Philippines it is estimated almost 25% of palm oil production is linked to child labor. A July, 2013 Bloomberg Businessweek exposé documented detailed evidence of slavery on palm plantations by a company that sells palm oil to some of America’s largest palm oil importers.

To address these social and environmental concerns associated with palm oil production, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004. Many companies, including some of our company’s competitors, such as Unilever have committed to source 100% certified sustainable palm oil (CSPO) by 2015 or sooner. CSPO is readily available. According to the RSPO website, the supply of CSPO exceeds demand by approximately 50%.

Shareholders are concerned that, absent a comprehensive policy and transparent management system for tracing palm oil sourcing to legally licensed suppliers verified as not contributing to deforestation or human rights abuses, Energizer Holdings may be exposed to significant brand and reputational risks related to its supply chain impacts. Major companies such as Nestle and Kellogg have pledged to develop such traceable, deforestation-free palm oil supply chains. This raises the bar for all companies, heightening the risk of inaction to those failing to take responsibility for their supply chain impacts.

 

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Resolved: Shareholders request that Energizer Holdings develop and implement a comprehensive sustainable palm oil sourcing policy. This policy should be communicated publicly within six months of the 2015 annual meeting.

Supporting Statement: We recommend the palm oil sourcing policy include goals to:

 

•

source 100% CSPO (or derivatives, where feasible) through a certification program at least as rigorous as RSPO’s by 2016;

•

trace the supply chain from the grower level (where feasible) to understand potential risks and impacts;

•

source all palm oil from plantations which have independent verification they have not contributed to the degradation of peatlands, High Carbon Stock forests or High Conservation Value areas;

•

respect and support the United Nations’ Guiding Principles on Business and Human Rights, including no forced or child labor, slavery or human trafficking, and the protection of indigenous rights throughout our palm oil supply chain;

•

avoid palm oil from plantations having significant conflicts related to land tenure.

Company Statement in Opposition to Shareholder Proposal

Concerning Sustainable Palm Oil Sourcing Policy

As a global citizen, the Company demonstrates an ongoing commitment to use all environmental resources wisely through responsible sourcing, including with respect to resources like palm oil. We support the development of sustainable sources for palm oil.

We have engaged and will continue to engage with our suppliers and industry organizations to increase the sustainability of our palm oil sourcing. For example, a 2014 survey that we conducted of our suppliers of palm oil and palm oil derivatives found that a significant majority of those suppliers are members of the Roundtable on Sustainable Palm Oil and have sustainability programs in place regarding palm oil sourcing.

We also maintain a Supplier Code of Conduct which sets forth our expectations that all of our suppliers must meet in order to do business with us. Our Supplier Code of Conduct applies to all third parties that provide goods to our Company or any of its subsidiaries, divisions, affiliates or agents. Our Supplier Code of Conduct includes provisions mandating supplier compliance with all environmental laws as well as a list of environmentally conscious practices. The Supplier Code of Conduct also contains prohibitions on supplier use of discrimination, child labor, forced labor, and other human rights violations. The Company also maintains and regularly exercises the right to audit suppliers for compliance with these requirements.

The Board does not believe that it would be an efficient use of Company resources to adopt the palm oil policy suggested by the shareholder proponent. As explained above, the Company has demonstrated that it has a comprehensive approach regarding sustainability across our supply chain. We are committed to acting responsibly and will continue to work with our suppliers to find the best ways to encourage and support the development of sustainable palm oil sources. However, implementation of the proponent’s resolution would entail the commitment of significant resources and incurrence of significant costs to create a program whose benefits are unclear and remote.

Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for approval of the shareholder proposal.

The Board of Directors recommends a vote AGAINST the approval of the shareholder proposal.

 

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STOCK OWNERSHIP INFORMATION

Five Percent Owners of Common Stock. The following table shows, as of October 31, 2014, the holdings of the Company’s common stock by any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock:

 

Name and Address of Beneficial Owner		Amount and Nature of Beneficial  Ownership				Percent of Class Outstanding(1)
BlackRock, Inc. 40 East 52nd Street, New York, New York 10022(2)			6,438,491	(2)			10.4	%
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355(3)			3,566,274	(3)			5.8	%

 

 

Ownership of Directors and Executive Officers. The table below contains information regarding beneficial common stock ownership of directors and executive officers as of November 14, 2014. It does not reflect any changes in ownership that may have occurred after that date. In general, “beneficial ownership” includes those shares a director or executive officer has the power to vote or transfer, as well as shares owned by immediate family members that reside with the director or officer. Unless otherwise indicated, directors and executive officers named in the table below have sole voting and investment power with respect to the shares set forth in the table and none of the stock included in the table is pledged. The table also indicates shares that may be obtained within 60 days upon the exercise of options, or upon the conversion of vested stock equivalents into shares of common stock.

 

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Directors And Executive Officers		Shares Beneficially Owned				Shares held in Savings Investment Plan(A)				Options Exercisable Within 60 Days				Stock Equivalents held in the Deferred Compensation Plan				% of Shares Outstanding (B) (*denotes less than 1%)
Bill G. Armstrong			11,027(D)				0				0				19,830			*
Daniel J. Heinrich			3,057(D)				0				0				2,276			*
R. David Hoover			18,027(D)				0				0				30,751			*
John C. Hunter			3,927(D)				0				0				12,288			*
James C. Johnson			1,027(D)				0				0				166			*
John E. Klein			11,027(D)				0				0				20,706			*
W. Patrick McGinnis			19,382(D)				0				0				8,845			*
J. Patrick Mulcahy			547,458(C)(D)				0				0				21,959			*
John R. Roberts			21,027(D)				0				0				9,123			*
Ward M. Klein			247,958(D)				0				38,000				101,231			*
David P. Hatfield			52,525(D)				410				10,000				5,528			*
Alan R. Hoskins			4,269(D)				0				0				0			*
Daniel J. Sescleifer			56,227(D)				0				0				15			*
Mark S. LaVigne			7,151(D)				0				0				1,090			*
All Executive Officers and Directors as a Group (17 persons)			1,019,417(D)				410				48,000				233,808			2.1%

 

 

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ADDITIONAL INFORMATION

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

 

INFORMATION REGARDING THE SPIN-OFF

On April 28, 2014, the Board of Directors authorized management to pursue a plan to spin-off the Company’s Household Products business and thereby create two independent, publicly traded companies. The spin-off is planned as a tax-free spin-off to the Company’s shareholders and is expected to be completed by July 1, 2015. The proposed spin-off is subject to further due diligence as appropriate and customary conditions, including receipt of regulatory approvals, an opinion of counsel regarding the tax-free nature of the proposed spin-off transaction, the effectiveness of a Form 10 filing with the SEC, and final approval by the Board of Directors. The Company may, at any time and for any reason until the proposed spin-off is complete, abandon the spin-off or modify or change its terms. The Company can make no assurance that any spin-off transaction will ultimately occur, or if one does occur, the terms or timing of a transaction.

 

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OTHER BUSINESS

The Board knows of no business which will be presented at the 2015 Annual Meeting other than that described above. Our bylaws provide that shareholders may nominate candidates for directors or present a proposal or bring other business before an annual meeting only if they give timely written notice of the nomination or the matter to be brought not less than 90 nor more than 120 days prior to the first anniversary of the prior year’s meeting, as described under “Shareholder Proposals for 2016 Annual Meeting.”

DELIVERY OF DOCUMENTS

Householding of Annual Meeting Materials. The SEC has approved a rule permitting the delivery of a single Notice Regarding the Availability of Proxy Materials, and set of Annual Reports and Proxy Statements (if paper copies of such documents have been delivered or requested), to any household at which two or more shareholders reside, unless we have received contrary instructions from one or more of the shareholders residing in such household. Each shareholder will continue to receive a separate proxy card. This procedure, referred to as “householding”, reduces the volume of duplicate information you receive, as well as our expenses. In order to take advantage of this opportunity, we will deliver only one copy of the Notice Regarding the Availability of Proxy Materials, and this Proxy Statement and related Annual Report (if paper copies of such documents have been delivered or requested) to multiple shareholders who share an address, unless we receive contrary instructions from the impacted shareholders prior to the mailing date. If you prefer to receive separate copies of our Notice Regarding the Availability of Proxy Materials, our Proxy Statement or Annual Report, either now or in the future, we will promptly deliver, upon your written or oral request submitted as set forth below, a separate copy of the Notice Regarding the Availability of Proxy Materials, Proxy Statement or Annual Report, as applicable and as requested, to any shareholder at your address to which a single copy was delivered. If you and other shareholders in your household are currently receiving multiple copies of the Notice Regarding the Availability of Proxy Materials, and this Proxy Statement and our Annual Report (if paper copies of such documents have been delivered or requested) and would like only one copy to be sent to your household, upon your written request, we will discontinue delivering multiple copies of such document(s) to your household and only deliver one copy. Notice should be given to the Corporate Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis, Missouri 63141 (Tel. No. (314) 985-2000).

 

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SHAREHOLDER PROPOSALS FOR 2016 ANNUAL MEETING

Any proposals to be presented at the 2016 Annual Meeting of Shareholders, which is expected to be held on January 25, 2016, must be received by the Company, directed to the attention of the Secretary, no later than August 13, 2015 in order to be included in the Company’s Proxy Statement and form of proxy for that meeting under Rule 14a-8 of the Exchange Act. Upon receipt of any proposal, the Company will determine whether or not to include the proposal in the Proxy Statement and proxy card in accordance with regulations governing the solicitation of proxies. The proposal must comply in all respects with the rules and regulations of the SEC and our bylaws.

In order for a shareholder to nominate a candidate for director under our bylaws, timely notice of the nomination must be received by us in advance of the meeting. Ordinarily, such notice must be received not less than 90, nor more than 120, days before the first anniversary of the prior year’s meeting. For the 2016 Annual Meeting, the notice would have to be received between September 28, 2015 and October 28, 2015. However, in the event that (i) no annual meeting is held in 2015 or (ii) the date of the 2016 Annual Meeting is more than 30 days before or more than 60 days after the first anniversary of the 2015 Annual Meeting, notice must be received no earlier than the 120th day prior to the date of the 2016 Annual Meeting and not later than the close of business on the later of the 90th day prior to the date of 2016 Annual Meeting, or the seventh day following the day on which notice of the date of the meeting was mailed or on which public notice of the meeting was given. The notice of nomination must include, as to each person whom the shareholder proposes to nominate for election, information required by our bylaws, including:

 

•

the nominee’s name, age, business and residential address;

•

the nominee’s principal occupation for the previous five years;

•

the nominee’s consent to being named as a nominee and to serving on the Board;

•

the nominee’s “disclosable interests” as of the date of the notice (which information shall be supplemented by such person, if any, not later than ten days after the record date of the Annual Meeting to disclose such ownership as of the record date), which includes:

 

¡

shares of common stock; options, warrants, convertible securities, stock appreciation rights, or similar rights with respect to our common stock; any proxy, contract, arrangement, understanding, or relationship conveying a right to vote common stock;

¡

any short interest with respect to common stock;

¡

any derivative instruments held by a partnership in which the nominee has a partnership interest; and

¡

rights to any performance-related fee based on any increase or decrease in the value of common stock or any related derivative instrument; and

 

•

a description of all monetary or other material agreements, arrangements or understandings between the nominating shareholder and the nominee during the prior three years.

In addition, the nominating shareholder must provide their name and address and disclosable interests (as such term is described above). The shareholder must be present at the Annual Meeting of Shareholders at which the nomination is to be considered, and must provide a completed questionnaire regarding the nominee’s background and qualification and compliance with our corporate governance, conflict of interest, and other pertinent policies and guidelines. To assist in the evaluation of shareholder-recommended candidates, the Nominating and Executive Compensation Committee may request that the shareholder provide certain additional information required to be disclosed in the Company’s proxy statement under Regulation 14A of the Exchange Act. The shareholder nominating the candidate must also include his or her name and address, and the number of shares of common stock beneficially owned.

In order for a shareholder to bring other business before a shareholder meeting, timely notice must be received by the Company during the same period as director nominations described above. Such notice must include a description of the proposed business and the reasons for the proposal, the name and address of the shareholder making the proposal, any financial or other interests of the shareholder in the proposal made, and the shareholder’s disclosable interests. These requirements are separate from the requirements a shareholder must meet to have a proposal included in the Company’s Proxy Statement.

 

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In each case, the notice must be given to the Secretary of the Company, whose address is 533 Maryville University Drive, St. Louis, Missouri 63141. A copy of our bylaws will be provided without charge upon written request to the Secretary.

 

December 11, 2014

 

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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.

 

 

Vote by Internet or Telephone – QUICK ««« EASY

IMMEDIATE – 24 Hours a Day, 7 Days a Week or by Mail

 

 

p FOLD HERE AND SEPARATE IF ATTENDING MEETING — INSERT IN ENVELOPE PROVIDED p

 

PROXY		Please mark your votes like this		x

 

 

Signature                                                                Signature, if held jointly                                                  Date                          .

Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.

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2015 ANNUAL MEETING ADMISSION TICKET

ENERGIZER HOLDINGS, INC.

2015 ANNUAL MEETING OF SHAREHOLDERS

January 26, 2015

8:30 a.m. local time

Energizer World Headquarters

533 Maryville University Drive

St. Louis, Missouri 63141

Please present this ticket and photo identification for admittance to the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting:

The Notice of Annual Meeting of Shareholders, Proxy Statement

and our 2014 Annual Report are available at:

www.cstproxy.com/energizer/2014.

p FOLD HERE AND SEPARATE IF ATTENDING MEETING — INSERT IN ENVELOPE PROVIDED p

ENERGIZER HOLDINGS, INC.

PROXY

This Proxy is Solicited on Behalf of the Board of Directors for the Annual

Meeting of Shareholders on January 26, 2015

This proxy when properly executed will be voted in the manner directed herein by the undersigned Shareholder. If no direction is made, this Proxy will be voted “FOR” all nominees in Item 1, “FOR” Items 2 and 3, and “AGAINST” Item 4 and in the discretion of the proxies on any other business that may properly come before the meeting. The undersigned hereby appoints W.M. Klein and M.S. LaVigne, or either of them, as true and lawful attorneys-in-fact, agents and proxies, with the power of substitution and revocation, to represent and to vote, as designated on the reverse side hereof, all the shares of the undersigned held of record on November 26, 2014, at the Annual Meeting of Shareholders to be held on January 26, 2015 and any adjournments or postponement thereof.

As described more fully in the proxy statement, if shares of Energizer Common Stock are credited to the account of the undersigned in the Energizer Holdings, Inc. Savings Investment Plan as of November 19, 2014, this proxy card will also serve as voting instructions to the trustee for that plan, Vanguard Fiduciary Trust Company, an affiliate of The Vanguard Group of Investment Companies, for such shares. If the trustee does not receive directions with respect to the shares of Energizer Common Stock credited to the undersigned’s account by January 23, 2015, it will vote those shares in the same proportion as it votes shares for which directions were received.

(continued and to be marked, dated and signed, on the other side)

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December 11, 2014

Dear Savings Investment Plan Participant:

Enclosed are a proxy statement, a proxy card and an Annual Report for the Annual Meeting of Shareholders of Energizer Holdings, Inc. to be held on January 26, 2015. The enclosed proxy card relates to shares of Energizer Common Stock of which you are the record holder and to shares of Energizer Common Stock credited to your account in the Energizer Holdings, Inc. Savings Investment Plan (the “Plan”).

The Trustee of the Plan will vote all shares of Energizer Common Stock held in the Plan as of November 26, 2014. Shares credited to your account as of November 19, 2014 will be voted in accordance with your instructions on the enclosed proxy card. Any credited shares for which no instructions are received by the Trustee, and any shares in the Plan that were credited between November 20, 2014 and November 26, 2014, will be voted by the Trustee in the same proportion as the shares for which instructions were received from all participants in that Plan.

Please complete, sign and date the enclosed proxy card, which also serves as a voting instruction form for the Trustee. It should be returned, in the postage-paid envelope provided, to Continental Stock Transfer & Trust Company, which acts as tabulator. Alternatively, you may vote by telephone or via Internet. However you decide to vote, in order to provide the tabulator sufficient time to tabulate the votes, it has been requested that all proxy cards be returned, or votes be cast, as promptly as possible, but no later than January 23, 2015.

You may also have received (i) a Notice Regarding the Availability of Proxy Materials with instructions about how to access the proxy statement and Annual Report with respect to other shares of Energizer Common Stock held by you and/or (ii) additional proxy statements and proxy cards relating to other shares of Energizer Common Stock held by you. If you received a Notice Regarding the Availability of Proxy Materials, please use that notice to access the proxy statement, Annual Report and instructions regarding how to vote your other shares. If you received additional proxy cards, please be advised that these proxies are not duplicates of the one enclosed and we ask that those other shares also be voted as described in the instructions enclosed with such proxies.

WARD M. KLEIN

Chief Executive Officer