SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7,
1996].
For the fiscal year ended December 31, 1996
OR
| | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
Commission file number 333-17895
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Rayovac Profit Sharing and Savings Plan
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Rayovac Corporation
601 Rayovac Drive
Madison, Wisconsin 53711-2497
REQUIRED INFORMATION
RAYOVAC PROFIT SHARING AND SAVINGS PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
AND FOR THE YEAR ENDED DECEMBER 31, 1996
Rayovac Profit Sharing and Savings Plan
Contents
Pages
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits,
December 31, 1996 and 1995 3
Statement of Changes in Net Assets Available for Plan
Benefits, for the year ended December 31, 1996 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Schedule I - Line 27a - Schedule of Assets Held for
Investment Purposes, at December 31, 1996 11
Schedule II - Line 27d - Schedule of Reportable
Transactions, for the year ended December 31, 1996 12
Report of Independent Accountants
To the Participants and Administrator
of the Rayovac Profit Sharing and Savings Plan
We have audited the financial statements of the Rayovac Profit Sharing and
Savings Plan as listed on the accompanying index. These financial statements are
the responsibility of the Plan Administrator. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1996 and 1995, and the changes in net assets available for plan benefits for
the year ended December 31, 1996 in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules as listed on
the accompanying index are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under Employee Retirement Income Security Act of 1974.
The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
/s/Coopers & Lybrand L.L.P.
Milwaukee, Wisconsin
October 14, 1997
2
Rayovac Profit Sharing and Savings Plan
Statements of Net Assets Available for Plan Benefits
December 31, 1996 and 1995
1996 1995
----------- -----------
Assets:
Fixed investment account:
Insurance contracts $ 9,644,221 $ 5,037,098
Bank investment contract 2,434,824 17,884,161
----------- -----------
12,079,045 22,921,259
Debt investment account:
Bank sponsored common trust fund 1,902,191 --
Interest receivable 9,198 --
Cash and cash equivalents 5,597 --
----------- -----------
1,916,986 --
Debt indexed fund account:
Mutual fund 1,715,240 --
Interest receivable 9,777 --
----------- -----------
1,725,017 --
Equity investment account:
Mutual fund 23,918,472 --
Bank sponsored common trust fund -- 14,149,655
Cash and cash equivalents -- 33,649
----------- -----------
23,918,472 14,183,304
Equity indexed fund account:
Mutual fund 8,246,703 4,913,696
----------- -----------
Net assets available for plan benefits $47,886,223 $42,018,259
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
Rayovac Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 1996
Additions:
Contributions:
Employee $ 2,739,986
Employer 681,329
Investment income:
Interest 1,139,751
Dividends 1,379,913
Net appreciation in fair value of:
Debt indexed fund account 19,805
Equity investment account:
Mutual fund 1,143,391
Bank sponsored common trust fund 1,190,850
Equity indexed fund account 1,199,984
-----------
Total additions 9,495,009
Deductions:
Participant withdrawals 3,613,699
Administrative expenses 13,346
-----------
Total deductions 3,627,045
-----------
Net increase 5,867,964
Net assets available for plan benefits:
Beginning of year 42,018,259
-----------
End of year $47,886,223
===========
The accompanying notes are an integral part of these financial statements.
4
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements
1. Description of the Plan:
a. General: The Rayovac Profit Sharing and Savings Plan (the Plan) is a
defined contribution plan covering all salaried and select hourly
employees of Rayovac Corporation (the Company). The Company adopted the
Plan effective July 1, 1983. The purpose of the Plan is to provide
supplemental support for participants upon their retirement. It is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
b. Contributions: Active participants may make contributions to the Plan in
a whole percentage of not more than 15% of their pretax annual
compensation, as defined in the Plan. Participant contributions are
limited to $9,500 (adjusted annually).
The Company makes semi-monthly contributions equal to 1% of the
participant's compensation, as defined in the Plan. Additional amounts
may be contributed at the option of the Company's board of directors.
Annual contributions to the participant's account are generally limited
to the lesser of $30,000 or 25% of the participant's compensation for
the Plan year.
c. Participant Accounts: Each participant's account is credited with the
participant's contribution and an allocation of (a) the Company's
contribution, (b) Plan earnings, and (c) charged with an allocation of
administrative expenses. Allocations are based on participant's
compensation or account balances, as defined.
d. Vesting: A participant is fully vested in his or her account at all
times.
e. Investment Options: Upon enrollment in the Plan, a participant may
direct participant contributions in any of the following investment
options. All investments are maintained by Marshall and Ilsley Trust
Company (M&I).
Fixed Investment Account - Funds are invested in insurance contracts,
and bank investment contracts, which yield a fixed rate of return
(currently at rates from 6.12% to 8.05%), and are invested with
Principal Mutual Life Insurance Company, Continental Assurance Company,
Allstate Life Insurance Company and New York Life Insurance Company (the
Insurance Companies), and LaSalle National Bank.
Debt Investment Account - Funds are invested in a segregated account of
debt investments and money market funds which are maintained by M&I.
Debt Indexed Fund - Funds are invested in the Vanguard Bond Index mutual
fund.
Equity Investment Account - Funds are invested in the AIM Equity
Constellation Fund, the Neuberger and Berman Guardian Equity Trust, the
Templeton Foreign Equity Fund and the Fidelity Puritan Balanced Equity
Fund.
Equity Indexed Fund Account - Funds are invested in the Vanguard Index
Trust-500 Portfolio mutual fund.
5
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements, Continued
1. Description of the Plan, Continued:
f. Payment of Benefits: On termination of service due to death, retirement
or other reasons, the participant will receive an amount equal to the
value of his or her vested account balance in a lump sum amount.
Participants may be eligible for a hardship withdrawal from their pretax
participant account under certain circumstances and with the Plan
Administrator's approval.
2. Summary of Significant Accounting Policies:
The financial statements of the Plan are prepared on an accrual basis in
accordance with the following accounting policies:
a. Investment Valuation and Income: Investments in money market funds are
carried at cost, which approximates market. Investments in the bank
sponsored common trust fund are carried at values established by the
bank, which approximate fair market value. Investments in the fixed
investment account are stated at contract value (Note 2b). Investments
in mutual funds are carried at fair market value. Purchases and sales of
securities are reflected on a trade-date basis.
The Plan's investments are exposed to various risks, such as interest
rate, market and credit risks. Due to the level of risk associated with
certain investments and the level of uncertainty related to changes in
the values of investments, it is at least reasonably possible that
changes in risks in the near term would materially affect participants'
account balances and the amounts reported in the statements of net
assets available for plan benefits and the statements of changes in net
assets available for plan benefits.
b. Investments in the Fixed Investment Account: The fixed investment
account consists of both insurance and bank contracts. These contracts
are recorded at contract value. Contract value represents contributions
received plus income earned, less Plan withdrawals and administrative
fees.
The average yield for the fixed investment account was 7.54% for the
year ended December 31, 1996. The crediting interest rate for this
account was 7.10% and 7.54% at December 31, 1996 and December 31, 1995,
respectively.
c. Net Appreciation in Fair Value of Assets: The Plan presents in the
statement of changes in net assets available for plan benefits the net
appreciation in the fair value of its investments which consists of the
realized gains or losses and the unrealized appreciation on those
investments.
d. Contributions: Employer and employee contributions are recognized when
made.
6
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements, Continued
2. Summary of Significant Accounting Policies, Continued:
e. Administrative Expenses: Expenses incurred in the administration of the
Plan are paid both by the Plan and by the Company. Administrative
expenses for 1996 totaled $148,401. The Company incurred fees were
$135,055. The Plan incurred fees were $13,346, which consisted of
investment management fees.
f. Estimates: The preparation of the financial statements requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
7
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements, Continued
3. Investment Fund Activity:
Participants direct which investment vehicle will receive their
contributions. The following tables summarize the activity of the Plan's
funds for the year ended December 31, 1996:
FIXED INVESTMENT ACCOUNT
-----------------------------------------------------------------------------------------
New York Life Lasalle National Principal Mutual New York Life Lasalle National
Insurance Co. Bank #311-0044685 Life Insurance Co. Insurance Co. Bank #311-0045278
#6137 Fund Fund Fund #6610 Fund Fund
------------ ------------ ------------ ------------ --------------
Contributions $ -- $ -- $ -- $ -- $ --
Investment income 38,770 35,608 83,587 105,417 170,635
Transfers between accounts (1,818,505) (969,085) (880,653) (704,638) (1,598,898)
Participant withdrawals (41,525) (50,303) (80,671) (109,180) (189,373)
Administrative fees -- -- (298) (480) (858)
------------ ------------ ------------ ------------ --------------
Net increase (decrease) (1,821,260) (983,780) (878,035) (708,881) (1,618,494)
Net assets available for plan benefits:
Beginning of year 1,821,260 983,780 1,713,441 2,097,935 4,053,318**
------------ ------------ ------------ ------------ --------------
End of year $ -- $ -- $ 835,406 $ 1,389,054 $ 2,434,824**
============ ============ ============ ============ ==============
New York Life Allstate Life Continental TOTAL
Insurance Co. Insurance Co. Assurance Co. FIXED
#6918 Fund Fund Fund INVESTMENTS
------------ ------------ ------------ ------------
Contributions $ -- $ -- $ 295,890 $ 295,890
Investment income 148,216 184,879 290,327 1,057,439
Transfers between accounts (1,485,959) (1,111,116) (2,452,175) (11,021,029)
Participant withdrawals (161,384) (290,833) (242,666) (1,165,935)
Administrative fees (4,964) (850) (1,129) (8,579)
------------ ------------ ------------ ------------
Net increase (decrease) (1,504,091) (1,217,920) (2,109,753) (10,842,214)
Net assets available for plan benefits:
Beginning of year 3,369,168** 3,556,842** 5,325,515** 22,921,259
------------ ------------ ------------ ------------
End of year $ 1,865,077 $ 2,338,922 $ 3,215,762** $ 12,079,045
============ ============ ============ ============
** Investments exceeding 5% of net assets as of December 31, 1996 and 1995.
8
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements, Continued
3. Investment Fund Activity, Continued:
The following tables summarize the activity of the Plan's funds for the year
ended December 31, 1996:
DEBT DEBT INDEXED
INVESTMENT FUND EQUITY INDEXED
ACCOUNT ACCOUNT ACCOUNT
----------- ----------- -----------
Stable Vanguard Vanguard
Principal Bond Index Index Trust-500
Fund Fund Portfolio
----------- ----------- -----------
Contributions $ 196,532 $ 121,553 $ 662,890
Investment income 73,168 94,897 165,798
Net appreciation in fair value of investments -- 19,805 1,199,984
Transfers between accounts 1,860,837 2,113,666 1,594,619
Participant withdrawals (210,501) (623,448) (302,539)
Administrative fees (3,050) (1,456) 12,255
----------- ----------- -----------
Net increase 1,916,986 1,725,017 3,333,007
Net assets available for plan benefits:
Beginning of year -- -- 4,913,696**
----------- ----------- -----------
End of year $ 1,916,986 $ 1,725,017 $ 8,246,703**
=========== =========== ===========
EQUITY INVESTMENT ACCOUNT
---------------------------------------------------------------------
AIM Equity Neuberger Templeton Fidelity
Constellation Berman Foreign Puritan
Fund Fund Fund Fund
------------ ------------ ------------ ------------
Contributions $ 835,734 $ 344,180 $ 178,274 $ 472,726
Investment income 463,054 78,232 94,411 482,981
Net appreciation in fair value of investments 672,560 400,409 152,838 (82,416)
Transfers between accounts 11,941,967 3,287,240 2,043,213 3,691,518
Participant withdrawals (734,237) (95,911) (50,885) (244,900)
Administrative fees (6,694) (2,037) (1,347) (2,438)
------------ ------------ ------------ ------------
Net increase (decrease) 13,172,384 4,012,113 2,416,504 4,317,471
Net assets available for plan benefits:
Beginning of year -- -- -- --
------------ ------------ ------------ ------------
End of year $ 13,172,384** $ 4,012,113** $ 2,416,504** $ 4,317,471**
============ ============ ============ ============
Total
Firstar Equity TOTAL
Fund Investments FUNDS
------------ ------------ ------------
Contributions $ 313,536 $ 2,144,450 $ 3,421,315
Investment income 9,684 1,128,362 2,519,664
Net appreciation in fair value of investments 1,190,850 2,334,241 3,554,030
Transfers between accounts (15,512,031) 5,451,907 --
Participant withdrawals (185,343) (1,311,276) (3,613,699)
Administrative fees -- (12,516) (13,346)
------------ ------------ ------------
Net increase (decrease) (14,183,304) 9,735,168 5,867,964
Net assets available for plan benefits:
Beginning of year 14,183,304** 14,183,304 42,018,259
------------ ------------ ------------
End of year $ -- $ 23,918,472 $ 47,886,223
============ ============ ============
** Investments exceeding 5% of net assets as of December 31, 1996 and 1995.
9
Rayovac Profit Sharing and Savings Plan
Notes to Financial Statements, Continued
4. Tax Status of the Plan:
The Plan obtained its latest determination letter dated July 1, 1996, in
which the Internal Revenue Service stated that the Plan is in compliance
with the applicable requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. However, the plan
administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code. Therefore, no provision for income taxes has
been included in the Plan's financial statements.
5. Party-in-Interest Transactions:
All transactions involving the investments administered by the trustee are
considered party-in-interest transactions. These transactions are not,
however, considered prohibited transactions under Section 408(b) of the
ERISA regulations.
6. Plan Termination:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
10
Rayovac Profit Sharing and Savings Plan
Form 5500, Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1996
Column B
Identity of Issuer, Column E
Borrower, Lessor Column C Column D Current
Column A or Similar Party Description of Investment Cost Value
- -------- ----------------------- ---------------------------------- ----------- -----------
1 Principal Mutual Life Group Annuity Contract 4-03111-01,
Insurance Company interest credited at 8.05% (gross),
contract matures March 30, 1997 $ 835,406 $ 835,406
2 New York Life Insurance Group Annuity Contract GAO-6610,
Company interest credited at 7.35% (gross),
contract matures June 30, 1997 1,389,054 1,389,054
3 LaSalle National Bank Bank Investment Contract Account
311-0045278, interest credited at
6.12% (gross), contract matures
March 31, 1998 2,434,824 2,434,824
4 The Vanguard Group, Inc. 119,241 shares, Vanguard Index
Trust-500 Portfolio 7,550,863 8,246,703
5 New York Life Insurance Group Annuity Contract GAO-6918,
Company interest credited at 6.55% (net),
contract matures March 31, 1999 1,865,077 1,865,077
6 Allstate Life Insurance Group Annuity Contract GA-5621,
Company interest credited at 6.95% (net),
contract matures June 30, 1999 2,338,922 2,338,922
7 Continental Assurance Group Annuity Contract GP 13102,
Company interest credited at 7.60% (net),
contract matures March 31, 2000 3,215,762 3,215,762
8 The Vanguard Group, Inc. 174,313 shares, Vanguard Bond
Index Fund 1,699,904 1,725,017
9* Marshall and Ilsley 1,911,389 shares, Marshall and
Ilsley Stable Principal Fund, $1 net
asset value 1,911,389 1,911,389
10* Marshall and Ilsley 5,172 shares, Marshall Money
Market Fund, $1 net asset value 5,172 5,172
11* Marshall and Ilsley Non-interest bearing cash 425 425
12 AIM 521,472 shares, AIM Equity
Constellation Fund 13,026,438 13,172,384
13 Fidelity Investments 250,433 shares, Fidelity Puritan
Balanced Equity Fund 4,375,121 4,317,471
14 Neuberger and 252,811 shares, Neuberger and
Berman Funds Berman Guardian Equity Trust 3,641,721 4,012,113
15 Franklin Templeton 233,253 shares, Templeton
Foreign Equity Fund 2,336,190 2,416,504
----------- -----------
$46,626,268 $47,886,223
=========== ===========
*Party-in-interest transactions (see Note 5 to the financial statements).
See Report of Independent Accountants.
11
Rayovac Profit Sharing and Savings Plan
Form 5500, Item 27(d) - Schedule of Reportable Transactions
for the year ended December 31, 1996
Column A Column C Column D Column G Column I
Identity of Column B Purchase Selling Cost of Net
Party Involved Description of Asset Price Price Asset Gain (loss)
- ------------------ --------------------- --------------- ----------- ----------- -----------
Firstar Bank Special Equity Fund B
Madison, N.A. Employee Benefit
Investment Fund $ 228,579 (9) $15,444,008 $ 7,892,050 $7,551,958
Continental Group Annuity Contract
Assurance GP 13102 766,984 (10) 2,831,272 2,831,272 --
Company
The Vanguard Vanguard Index
Group, Inc. Trust-500 Portfolio 2,806,090(104) 692,454 667,187 25,267
The Vanguard Vanguard Bond Index
Group, Inc. Fund 2,633,235 (87) 937,800 930,762 7,038
Marshall and Stable Principal
Ilsley* Fund 3,247,982 (90) 1,345,792 1,345,792 --
Marshall and Marshall Money
Ilsley* Market Fund 28,299,251(177) 28,294,079 28,294,079 --
AIM AIM Equity
Constellation Fund 14,508,464(111) 2,008,637 2,015,271 (6,634)
Neuberger and Neuberger and Berman
Berman Funds Guardian Equity Fund 3,553,846 (16) 3,567,794 3,553,846 13,948
Neuberger and Neuberger and Berman
Berman Funds Guardian Equity Trust 3,984,366 (79) 351,286 330,266 21,020
Franklin Templeton Foreign
Templeton Equity Fund 2,649,591 (92) 385,930 392,344 (6,414)
Fidelity Fidelity Puritan
Investments Balanced Equity Fund 4,959,666 (94) 559,778 571,000 (11,222)
NOTES:
(A) Figures in parentheses indicate number of individual transactions in total
series.
(B) Column E, Lease Rental, is omitted as it is not applicable.
(C) Column F, Expense Incurred With Transactions is omitted as the selling price
is reported net of commission or other expense, if any.
(D) Column H, Current Value of Asset on Transaction Date is omitted as there are
no deviations of purchase price and selling price from the current value at
the transaction date.
(E) A single transaction is reported as part of a series of transactions,
whenever applicable.
*Party-in-interest transactions (see Note 5 to the financial statements).
See Report of Independent Accountants.
12
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAYOVAC PROFIT SHARING AND
SAVINGS PLAN
By: RAYOVAC CORPORATION,
Plan Administrator
Date: October 31, 1997 By:/s/ Russell E. Lefevre
----------------------
Russell E. Lefevre
Vice President, Human
Resources
CONSENT OF INDEPENDENT AUDITORS ACCOUNTANTS
We consent to the inclusion in this Annual Report on Form 11-K of Rayovac
Corporation of our report dated October 14, 1997, on our audits of the financial
statements and supplemental schedules of the Rayovac Profit Sharing and Savings
Plan as of December 31, 1996 and 1995 and for the year ended December 31, 1996.
/s/ Coopers & Lybrand L.L.P.
Milwaukee, Wisconsin
October 30, 1997