SCHEDULE 14A
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
/X/ Definitive Proxy Statement use of the
/_/ Definitive Additional Materials Commission Only (as
/_/ Soliciting Material Pursuant to permit-ted by Rule
Rule 14a-113(c) or Rule 14a-12 14a-6(e)(2))
NEWELL CO.
(Name of 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:
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
To the Stockholders of NEWELL CO.:
The Annual Meeting of Stockholders of NEWELL CO. will be held on
Wednesday, May 13, 1998 at 10:00 A.M., Central Daylight Savings Time,
at Northern Illinois University, Rockford Education Center, 8500 East
State Street, Rockford, Illinois, for the following purposes:
1. To elect four directors of the Company to serve for a term
of three years;
2. To consider and vote upon the ratification of the
appointment of Arthur Andersen L.L.P. as the Company's
independent accountants for the year 1998; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournment or postponement
thereof.
Stockholders of record at the close of business on March 16, 1998
are entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
Newell Co.'s Annual Report for the year 1997 is enclosed for your
convenience.
Stockholders of record may vote their proxies by signing, dating
and returning the enclosed proxy card or by calling the toll-free
number listed on the enclosed proxy card. If your shares are held in
the name of a bank or broker, you may be able to vote by telephone.
Please follow the instructions on the form you receive from your bank
or broker. The method by which you decide to vote will not limit your
right to vote at the Annual Meeting. If you later decide to the
attend the Annual Meeting in person, you may vote your shares even if
you have submitted a proxy in writing or by telephone.
By Order of the Board of Directors,
[SIGNATURE]
RICHARD H. WOLFF
SECRETARY
March 19, 1998
NEWELL CO.
NEWELL CENTER
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
-------------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 13, 1998
This proxy statement and the accompanying proxy card are being
furnished in connection with the solicitation of proxies by the Board
of Directors of NEWELL CO., a Delaware corporation (the "Company"),
from holders of the Company's outstanding shares of Common Stock, par
value $1.00 per share (the "Common Stock"), for the Annual Meeting of
Stockholders to be held on Wednesday, May 13, 1998 for the purposes
set forth in the accompanying notice (the "Annual Meeting"). The
Company will bear the costs of soliciting proxies from its
stockholders. In addition to soliciting proxies by mail, directors,
officers and employees of the Company, without receiving additional
compensation therefor, may solicit proxies by telephone, by telegram
or in person. Arrangements also will be made with brokerage firms and
other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of Common Stock held of record by
such persons, and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith. The Company has
engaged Morrow & Co. to assist in the solicitation of proxies in
connection with the Annual Meeting and has agreed to pay such firm
$8,000, plus out-of-pocket costs and expenses. This proxy statement
is first being mailed to stockholders of the Company on or about March
19, 1998.
VOTING AT THE MEETING
At the close of business on March 16, 1998, the record date for
determining stockholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"), there were outstanding and
entitled to vote 159,306,204 shares of Common Stock. All of the
outstanding shares of Common Stock are entitled to vote on all matters
which properly come before the Annual Meeting, and each stockholder
will be entitled to one vote for each share of Common Stock held.
Each proxy that is properly received, whether by mail or by
telephone, prior to the Annual Meeting will, unless revoked, be voted
in accordance with the instructions relating thereto. The telephone
voting procedures described on the proxy card are designed to
authenticate stockholders by use of a control number and to allow
stockholders to stay on the line to confirm that their instructions
have been properly recorded. If no instruction is indicated, the
shares will be voted FOR the election of the four nominees for
director listed in this proxy statement and FOR ratification of the
appointment of Arthur Andersen L.L.P. A stockholder who has given a
proxy in writing or by telephone may revoke such proxy at any time
before it is voted at the Annual Meeting by voting again by telephone
at a later date, by delivering a written notice of revocation or a
duly executed proxy bearing a later date to the Secretary of the
Company or by attending the meeting and voting in person.
A quorum of stockholders is necessary to take action at the
Annual Meeting. A majority of the outstanding shares of Common Stock
of the Company, represented in person or by proxy, will constitute a
quorum. Votes cast by proxy or in person at the Annual Meeting will
be tabulated by the inspectors of election appointed for the Annual
Meeting. The inspectors of election will determine whether or not a
quorum is present at the Annual Meeting. Under certain circumstances,
a broker or other nominee may have discretionary authority to vote
certain shares of Common Stock if instructions have not been received
from the beneficial owner or other person entitled to vote. The
inspectors of election will treat directions to withhold authority,
abstentions and broker non-votes (which occur when a broker or other
nominee holding shares for a beneficial owner does not vote on a
particular proposal, because such broker or other nominee does not
have discretionary voting power with respect to that item and has not
received instructions from the beneficial owner) as present and
entitled to vote for purposes of determining the presence of a quorum
for the transaction of business at the Annual Meeting. Directions to
withhold authority will have no effect on the election of directors,
because directors are elected by a plurality of votes cast. Broker
non-votes are not counted in the vote totals and will have no effect
on any proposal scheduled for consideration at the Annual Meeting,
because they are not considered votes cast. For purposes of
determining stockholder approval, abstentions will be treated as
shares of Common Stock voted against ratification of the appointment
of Arthur Andersen L.L.P. as independent accountants for the year
1998.
The four nominees for director who receive the greatest number of
votes cast in person or by proxy at the Annual Meeting shall be
elected directors of the Company. The vote required for ratification
of the appointment of Arthur Andersen L.L.P. as independent
accountants for the year 1998 is the affirmative vote of a majority of
the shares of Common Stock present in person or represented by proxy
at the Annual Meeting.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of eleven
directors who are divided into three classes. One class is elected
each year for a three-year term. At the Annual Meeting, Thomas A.
Ferguson, Jr., Allan P. Newell, Elizabeth Cuthbert Millett and Cynthia
A. Montgomery will be nominated to serve in Class II until the Annual
Meeting of Stockholders to be held in 2001 and until their successors
have been duly elected and qualified. Proxies will be voted, unless
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otherwise indicated, for the election of the four nominees for
director. Proxies will be voted in a discretionary manner should any
nominee be unable to serve. All of the nominees are currently serving
as directors of the Company.
Effective January 1, 1998, Daniel C. Ferguson stepped down as
Chairman of the Board of Directors of the Company, a position he held
since May 1992, and William P. Sovey assumed this position. At the
same time, Mr. Sovey retired as Chief Executive Officer and Vice
Chairman of the Board of Directors, a position he held since May 1992,
and John J. McDonough took over these duties. All three will continue
as directors, and the Board of Directors and the Company will continue
to benefit from their counsel, guidance and experience and are
grateful for their contributions.
The dates shown for service as a director of the Company include
service as a director of the predecessor of the Company prior to July
1987. The nominees, and certain information about them and the
directors serving in Class I and Class III whose terms expire in
future years, are set forth below. Please note that Daniel C.
Ferguson and Thomas A. Ferguson, Jr. are not related.
Name and Background Director
------------------- Since
--------
NOMINEES FOR CLASS II DIRECTORS FOR TERM EXPIRING
IN 2001
Thomas A. Ferguson, Jr., age 50, has been President
and Chief Operating Officer of the Company since
May 1992. Prior thereto, Mr. Ferguson was
President-Operating Companies of the Company from
January 1989 through May 1992. He was Vice
President-Controller of the Company from February
1988 through December 1988 . . . . . . . . . . . . 1992
Allan P. Newell, age 52, has been a private
investor for more than five years . . . . . . . . 1982
Elizabeth Cuthbert Millett, age 41, has been the
owner and operator of Plum Creek Ranch, located in
Newcastle, Wyoming (a commercial cattle production
company) for more than five years . . . . . . . . 1995
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Name and Background Director
------------------- Since
--------
Cynthia A. Montgomery, age 45, has been a Professor
of Business Administration at the Harvard
University Graduate School of Business since 1989.
Prior thereto, Professor Montgomery was a Professor
at the Kellogg School of Management at Northwestern
University from 1985 to 1989. She is also a
Director of UNUM Corporation (an insurance company)
and 28 mutual funds managed by Merrill Lynch & Co.
or one of its subsidiaries (investment companies) 1995
CLASS III DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING
IN 1999
Alton F. Doody, age 63, has been President and
Chief Executive Officer of The Alton F. Doody Co.
(a marketing consulting company) since 1984 . . . 1976
Daniel C. Ferguson, age 70, was Chairman of the
Board of the Company from May 1992 through December
1997. Mr. Ferguson was Chief Executive Officer of
the Company from 1966 through May 1992. He is a
Director of the Northern Trust Co. of Florida (a
financial institution) . . . . . . . . . . . . . . 1965
Henry B. Pearsall, age 63, was Chairman of the
Board of Sanford Corporation (an office supplies
manufacturer acquired by the Company in February
1992) from January 1988 through his retirement in
November 1994, and was Chief Executive Officer from
January 1988 through February 1992. He is a
Director of Ariel Capital Management, Inc. (an
investment management company) and Oak Park River
Forest Bancshares Inc. (a bank holding company) . 1992
CLASS I DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING
IN 2000
Gary H. Driggs, age 63, has been Chairman of
Camelback Investment and Management Co. (an
investment management firm) and Camelback Hotel
Corporation (a hotel management firm) since August
1989. Dr. Driggs has also been Chairman of Covid,
Inc. (an electronic product manufacturing company)
since July 1993. He was President and Chief
Executive Officer of Western Savings and Loan
Association ("WS&L") (a saving and loan
association) from 1973 through 1988 and was a
Director from 1981 through 1989(1) . . . . . . . . 1982
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Name and Background Director
------------------- Since
--------
Robert L. Katz, age 72, has been President of
Robert L. Katz & Associates (consultants in
corporate strategy) for more than five years. For
sixteen years, Dr. Katz taught Business Policy and
Organizational Behavior at the Stanford, Harvard
and Dartmouth Graduate Schools of Business. He is
also a Director of HON Industries Inc. (an office
furniture manufacturing company) . . . . . . . . 1975
John J. McDonough, age 61, has been Vice Chairman
of the Board and Chief Executive Officer of the
Company since January 1, 1998(2). He has been
President and Chief Executive Officer of McDonough
Capital Company LLC (an investment management
company) since April 1995. Prior thereto, he was
Vice Chairman and a Director of Dentsply
International Inc. (a manufacturer and distributor
of dental and medical x-ray equipment and other
dental products) from 1983 through October 1995,
and was Chief Executive Officer from April 1983
through February 1995. He was Senior Vice
President Finance of the Company from November 1981
through April 1983. He is a Director of Applied
Power, Inc. (a manufacturer and distributor of
tools, equipment, systems and consumable items to
the OEM industry). . . . . . . . . . . . . . . . . 1992
William P. Sovey, age 64, has been Chairman of the
Board of the Company since January 1, 1998. He was
Vice Chairman and Chief Executive Officer of the
Company from May 1992 through December 1997. Mr.
Sovey was President and Chief Operating Officer of
the Company from January 1986 through May 1992. He
was President and Chief Operating Officer of AMF
Inc. (an industrial and consumer leisure products
company) from March 1982 through July 1985, and
Executive Vice President from August 1979 through
March 1982. He is also a Director of Acme Metals
Incorporated (a fully integrated producer of steel
and steel products) and TECO Energy Incorporated
(an energy production and distribution company) . 1986
------------------
(1) Dr. Driggs resigned as President and Chief Executive Officer of
WS&L in December 1988 and as a Director in March 1989. Later in
1989, WS&L was declared insolvent and taken over by the Federal
Deposit Insurance Corporation. In 1995, Dr. Driggs settled civil
actions alleging conspiracy, fraud and other acts relating to the
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insolvency for an aggregate amount of $650,000 and agreed not to
affiliate with an insured depositary institution without prior
approval. He also pled guilty to two felony counts relating
to omissions in regulatory filings and was fined $10,000,
placed on probation and required to perform community service.
Dr. Driggs cooperated in the investigation of this matter.
(2) Mr. McDonough's annual salary has been set at $800,000, and he has
been granted options to purchase 50,000 shares of Common Stock
under the Newell Co. 1993 Stock Option Plan at an exercise price
of $42.625 per share.
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held four meetings during 1997.
The Board of Directors has an Audit Committee and an Executive
Compensation Committee, and the Board as a whole operates as a
committee to nominate directors.
The Audit Committee, whose chairman is Dr. Katz and whose other
current members are Dr. Driggs and Mr. Newell, met two times in 1997.
The committee's duties are to (1) review with management and the
independent accountants the Company's accounting policies and
practices and the adequacy of internal controls; (2) review the scope
and results of the annual examination performed by the independent
accountants; and (3) make recommendations to the Board of Directors
regarding the appointment of the independent accountants and approval
of the services performed by the independent accountants, and fees
related thereto.
The Executive Compensation Committee (the "Compensation
Committee"), whose chairman is Mr. D. Ferguson and whose other current
member is Dr. Katz, met four times in 1997. This committee is
responsible for establishing the Company's executive officer
compensation policies and for administration of such policies. SEE
"Executive Compensation-Executive Compensation Committee Report on
Executive Compensation."
The Board of Directors, acting as a nominating committee, will
consider candidates for director recommended by stockholders. A
stockholder who wishes to submit a candidate for consideration at the
Annual Meeting of Stockholders to be held in 1999 must notify the
Secretary of the Company in writing no later than February 12, 1999.
The stockholder's written notice must include information about each
proposed nominee, including name, age, business address, principal
occupation, shares beneficially owned and other information required
in proxy solicitations. The nomination notice must also include the
nominating stockholder's name and address and the number of shares of
the Common Stock beneficially owned by the stockholder. The
stockholder must also furnish a statement from the candidate
indicating that the candidate wishes and is able to serve as a
director. These procedures, and a statement that the stockholder
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intends to make the nomination, are prerequisites under the Company's
Restated Certificate of Incorporation to a stockholder nominating a
candidate at the meeting.
COMPENSATION OF DIRECTORS
During 1997, directors of the Company who are not also employees
were paid a retainer ($20,000 per annum) plus a $1,000 fee for each
Board meeting attended and a $1,000 fee for each committee meeting
attended. Directors of the Company are eligible to receive options to
purchase shares of Common Stock under the Newell Co. 1993 Stock Option
Plan, as amended on November 6, 1997 (the "1993 Option Plan"). All
options are granted at the market value of the Common Stock on the
date of the grant and become exercisable in annual cumulative
installments of 20%, commencing one year from the date of grant, with
full vesting occurring on the fifth anniversary of the date of grant.
On November 6, 1997, each non-employee director was granted options to
purchase 5,000 shares of Common Stock at an exercise price of $39.9375
per share. Continuing non-employee directors will automatically
receive additional options to purchase 5,000 shares of Common Stock on
the fifth anniversary of November 6, 1997 and the fifth anniversary of
the date such director otherwise received options under the 1993
Option Plan.
The Company has a consulting agreement with Dr. Katz which
provides that the Company will pay Dr. Katz $5,000 per month for
corporate strategy consulting services plus travel expenses and other
reasonable out-of-pocket costs incurred on the Company's behalf.
Unless canceled prior to 90 days before its expiration, the consulting
agreement is automatically renewed each year. Dr. Katz received a
consulting fee of $60,000 in 1997.
EXECUTIVE COMPENSATION
SUMMARY
The following table summarizes all compensation for services to
the Company and its subsidiaries for the fiscal years ended December
31, 1997, 1996 and 1995 earned by or awarded or paid to the persons
who were the chief executive officer and the five other most highly
compensated executive officers of the Company (the "Named Officers")
during 1997.
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SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Awards
Name and Principal Other Annual All Other
Position Compensation Securities Underlying Compensation
in 1997 Year Salary ($) Bonus ($) ($) (1) Options (#) ($) (2)
William P. Sovey, 1997 $750,000 $614,250 $11,689 23,600 $8,080
Vice Chairman and 1996 700,000 573,300 10,214 35,000 4,750
Chief Executive Officer 1995 650,000 526,500 8,818 0 4,620
until December 31, 1997
Thomas A. Ferguson, Jr., 1997 565,000 462,735 12,355 25,300 7,210
President and Chief 1996 525,000 429,975 10,552 3,000 4,750
Operating Officer 1995 490,000 396,900 10,878 7,500 4,620
Donald L. Krause, 1997 350,000 286,650 13,497 18,400 5,930
Senior Vice President - 1996 324,000 265,356 12,139 5,500 4,750
Corporate Controller1995 1995 310,000 251,100 10,022 1,000 4,620
William T. Alldredge, 1997 340,000 278,460 10,171 1,800 6,810
Vice President - Finance 1996 315,000 257,985 8,117 1,000 4,750
1995 300,000 243,000 8,445 1,000 4,620
William J. Denton, 1997 340,000 321,300 11,263 10,700 6,890
Group President 1996 315,000 309,015 11,016 3,000 4,750
1995 285,000 278,303 12,367 7,500 4,620
Richard C. Dell, 1997 340,000 304,640 10,473 9,900 6,450
Group President 1996 315,000 199,805 9,931 2,000 4,750
1995 285,000 110,837 9,533 7,000 4,620
--------------------
(1) The amounts shown for 1997 include costs to the Company for
expenses associated with use of Company cars as follows: Mr.
Sovey, $8,359; Mr. T. Ferguson, $9,895; Mr. Krause, $12,317; Mr.
Alldredge, $8,111; Mr. Denton, $9,123; and Mr. Dell, $8,773.
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(2) The compensation reported represents Company matching
contributions made to the Newell Co. Long-Term Savings and
Investment Plan (the "Newell 401(k) Plan").
OPTION GRANTS IN 1997
The following table sets forth certain information as to options
to purchase Common Stock granted to the Named Officers under the 1993
Option Plan during the fiscal year ended December 31, 1997, and the
potential realizable value of each grant of options, assuming that the
market price of the underlying Common Stock appreciates in value
during the ten-year option term at annualized rates of 5% and 10%.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(3)
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#)(1) a Fiscal Year ($/Sh)(2) Date 5% ($) 10% ($)
William P. Sovey 23,600 5.97% $35.50 5/7/07 $1,364,675 $2,173,021
Thomas A. Ferguson, Jr. 25,300 6.40 35.50 5/7/07 1,462,979 2,329,554
Donald L. Krause 18,400 4.65 35.50 5/7/07 1,063,981 1,694,217
William T. Alldredge 1,800 0.46 35.50 5/7/07 104,074 165,724
William J. Denton 10,700 2.70 35.50 5/7/07 618,223 985,217
Richard C. Dell 9,900 2.50 35.50 5/7/07 572,462 911,555
(1) All options granted in 1997 become exercisable in annual
cumulative installments of 20%, commencing one year from date of
grant, with full vesting occurring on the fifth anniversary date
of the date of grant. Vesting may be accelerated as a result of
certain changes in control of the Company.
(2) All options were granted at market value (the closing price of
the Common Stock on the New York Stock Exchange as reported in
the Midwest Edition of THE WALL STREET JOURNAL) on the date of
grant.
(3) Potential realizable value is reported net of the option exercise
price but before taxes associated with exercise. These amounts
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assume annual compounding results in total appreciation of
approximately 63% (5% per year) and approximately 159% (10% per
year). Actual gains, if any, on stock option exercises and
Common Stock are dependent on the future performance of the
Common Stock and overall market conditions. There can be no
assurance that the amounts reflected in this table will be
achieved.
OPTION EXERCISES IN 1997
The table below sets forth certain information for fiscal year
1997 concerning the exercise of options to purchase shares of Common
Stock granted under the Newell Co. 1984 Amended and Restated Stock
Option Plan (the "1984 Option Plan") and the 1993 Option Plan by each
of the Named Officers and the value of unexercised options granted
under the 1984 Option Plan and 1993 Option Plan held by each of the
Named Officers as of December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($) (2)
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
William P. Sovey 33,890 $754,053 83,110 51,600 $2,056,344 $617,525
5,214 151,858
Thomas A. Ferguson, Jr. 9,700 205,519 31,286 36,000 690,700 389,162
Donald L. Krause 0 0 31,300 24,600 707,168 225,212
William T. Alldredge 6,000 112,125 17,636 11,664 437,439 243,073
William J. Denton 2,800 66,150 21,600 20,400 454,962 248,475
3,600 109,239
Richard C. Dell 1,703 36,349 19,897 18,300 428,479 228,481
(1) Represents the difference between the average of the high and low
prices of the Common Stock on the New York Stock Exchange as
reported in the Midwest Edition of THE WALL STREET JOURNAL on the
date of exercise and the option exercise price multiplied by the
number of shares acquired on exercise.
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(2) Represents the difference between $42.3125 (the average of the
high and low prices of the Common Stock on the New York Stock
Exchange as reported in the Midwest Edition of THE WALL STREET
JOURNAL on December 31, 1997) and the option exercise price.
PENSION AND RETIREMENT PLANS
The Pension Plan Table set forth below shows total estimated
annual benefits payable upon retirement (based on the benefit formulas
in effect and calculated on a straight life annuity basis, as
described below) to persons covered under the non-contributory defined
benefit pension plan for salaried and clerical employees (the "Pension
Plan") and the Supplemental Retirement Plan established in 1982 (the
"Supplemental Retirement Plan"), including the Named Officers, in
specified compensation and years of credited service classifications,
assuming employment until age 65 and that Social Security benefits
remain at the current level.
PENSION PLAN TABLE
YEARS OF SERVICE
REMUNERATION 5 10 15 20 25 or
more
$ 200,000 . . . . . . . . . . . . . . . . . $10,900 $37,700 $64,500 $91,300 $118,100
300,000 . . . . . . . . . . . . . . . . . 24,300 64,500 104,700 144,900 185,100
400,000 . . . . . . . . . . . . . . . . . 37,700 91,300 144,900 198,500 252,100
500,000 . . . . . . . . . . . . . . . . . 51,100 118,100 185,100 252,100 319,100
600,000 . . . . . . . . . . . . . . . . . 64,500 144,900 225,300 305,700 386,100
700,000 . . . . . . . . . . . . . . . . . 77,900 171,700 265,500 359,300 453,100
800,000 . . . . . . . . . . . . . . . . . 91,300 198,500 305,700 412,900 520,100
900,000 . . . . . . . . . . . . . . . . . 104,700 225,300 345,900 466,500 587,100
1,000,000 . . . . . . . . . . . . . . . . . 118,100 252,100 386,100 520,100 654,100
1,100,000 . . . . . . . . . . . . . . . . . 131,500 278,900 426,300 573,700 721,100
1,200,000 . . . . . . . . . . . . . . . . . 144,900 305,700 466,500 627,300 788,100
1,300,000 . . . . . . . . . . . . . . . . . 158,300 332,500 506,700 680,900 855,100
1,400,000 . . . . . . . . . . . . . . . . . 171,700 359,300 546,900 734,500 922,100
1,500,000 . . . . . . . . . . . . . . . . . 185,100 386,100 587,100 788,100 989,100
1,600,000 . . . . . . . . . . . . . . . . . 198,500 412,900 627,300 841,700 1,056,100
1,700,000 . . . . . . . . . . . . . . . . . 211,900 439,700 667,500 895,300 1,123,100
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The Pension Plan covers full-time salaried and clerical employees
of the Company and its subsidiaries who have completed one year of
service. A participant is eligible for normal retirement benefits
under the Pension Plan if his or her employment terminates at or after
age 65. For service years prior to 1982, benefits accrued on a
straight life annuity basis, using a formula that takes into account
the five highest consecutive years of compensation in the ten years
before 1982 and years of service, reduced by a portion of expected
primary Social Security payments. For service years from and after
1982 and before 1989, benefits accumulated at the rate of 1.1% of
compensation not in excess of $25,000 for each year plus 2.3% of
compensation in excess of $25,000. For service years from and after
1989, benefits accumulate at the rate of 1.37% of compensation not in
excess of $25,000 for each year plus 1.85% of compensation in excess
of $25,000. No more than 30 years of service is taken into account in
determining benefits. Under the Pension Plan, compensation includes
regular or straight-time salary or wages (unreduced for amounts
deferred pursuant to the Newell 401(k) Plan and the Flexible Benefits
Account Plan), the first $3,000 in bonuses and 100% of commissions.
If a participant has completed 15 years of service, upon attainment of
age 60, the Pension Plan also provides for an early retirement benefit
equal to the benefits described above, reduced by .5% for each month
the benefits commence before age 65.
In 1982, the Supplemental Retirement Plan was established, funded
by cost recovery life insurance, which covers 92 current officers and
key executives, including the Named Officers, and 18 former officers
and key executives. The Supplemental Retirement Plan adds to
retirement benefits under the Pension Plan so that at age 65, a
covered employee receives a maximum aggregate pension equal to 67% of
his or her average compensation for the five consecutive years in
which it was highest (multiplied by a fraction, the numerator of which
is the participant's credited service (not to exceed 25) and the
denominator of which is 25). The benefit is reduced by primary Social
Security. Compensation includes salary and bonus (unreduced for
amounts deferred pursuant to the Newell 401(k) Plan and the Flexible
Benefits Accounts Plan). Both the Pension Plan and the Supplemental
Retirement Plan provide a death benefit for surviving spouses and
dependent children. The Supplemental Retirement Plan also provides
for an early retirement benefit upon attainment of age 60 equal to the
benefits described above, reduced by .5% for each month the benefits
commence before age 65.
In 1997, Mr. Sovey had 12 years of credited service, Mr. T.
Ferguson had 25 years, Mr. Krause had 24 years, Mr. Alldredge had 14
years, Mr. Denton had 21 years and Mr. Dell had 23 years.
EMPLOYMENT SECURITY AGREEMENTS
The Company has entered into Employment Security Agreements
("Agreements") with the Named Officers which provide for the
continuation of salary, bonus and certain employee benefits for a
-12-
period (the "Severance Period") of twenty-four months (but not beyond
age 65) following the termination of employment of the Named Officer
within twelve months (but prior to age 65) after certain changes in
control of the Company. In the event of such termination of
employment, the Named Officer will continue to receive his base salary
and bonus (based upon his average bonus for the three full fiscal
years preceding the change in control) during the Severance Period.
The Named Officer also will receive all benefits accrued under the
incentive and retirement plans of the Company to the date of
termination of employment and will be given service credit for all
purposes of these plans during the Severance Period. All options held
by the Named Officer with respect to Common Stock will become
immediately exercisable upon the date of termination of employment and
remain exercisable for a period of 90 days thereafter.
During the Severance Period, the Named Officer and his spouse
will continue to be covered by all welfare plans of the Company, and
the Company will continue to reimburse the Named Officer for
automobile expenses, but the amount of any benefits or reimbursement
the Named Officer or his spouse receives will be reduced by the
amounts received from another employer or from any other source. If
the Named Officer dies during the Severance Period, all amounts
payable during the remainder of the Severance Period shall be paid to
his surviving spouse, and his spouse will continue to be covered under
all applicable welfare plans. No amounts are payable if the
employment of the Named Officer is terminated by the Company for Good
Cause (as defined in the Agreements) or if the Named Officer
voluntarily terminates his employment without Good Reason (as defined
in the Agreements).
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on
executive compensation to the stockholders of the Company.
COMPENSATION PROCEDURES AND POLICIES. The Compensation Committee
determines the compensation of all of the executive officers of the
Company, including the Named Officers and the one other executive
officer of the Company. All decisions by the Compensation Committee
relating to the compensation of the Company's executive officers,
including decisions relating to stock options, are reviewed and
approved by the full Board of Directors.
The Company's executive compensation philosophy and specific
compensation plans tie a significant portion of executive compensation
to the Company's success in meeting specified profit and growth and
performance goals and to appreciation in the Company's stock price.
The Company's compensation objectives include attracting and retaining
the best possible executive talent, motivating executive officers to
achieve the Company's performance objectives, rewarding individual
performance and contributions, and linking executive and stockholder
interests through equity based plans.
-13-
The Company's executive compensation consists of three key
components: base salary, annual incentive compensation and stock
options, each of which is intended to complement the others and, taken
together, to satisfy the Company's compensation objectives. The
Compensation Committee's policies with respect to each of the three
components, including the bases for the compensation awarded to
William P. Sovey, as the Company's Chief Executive Officer, are
discussed below.
The Compensation Committee considered the effect of the
limitations on the deductibility of executive compensation in excess
of $1 million under Section 162(m) of the Internal Revenue Code on the
Company's compensation policies and practices and did not make any
changes in such policies and practices for 1997. As a result, the
Company paid an immaterial amount of non-deductible executive
compensation in 1997. The Compensation Committee currently does not
anticipate that changes will be made to the Company's policies and
practices for 1998 and, accordingly, the Company may pay non-
deductible compensation in 1998.
BASE SALARY. In the early part of each fiscal year, the
Compensation Committee reviews the base salary of the Company's Chief
Executive Officer, the recommendation of the Chief Executive Officer
with regard to the base salary of the Chief Operating Officer and all
other executive officers of the Company and approves, with any
modifications it deems appropriate, annual base salaries for each of
the executive officers.
Recommended base salaries of the executive officers are based
upon the base salary ranges recommended annually by the Chief
Executive Officer of the Company. National survey data available
regarding salaries of those persons holding comparable positions at
comparably sized nondurable consumer goods companies is reviewed by
the Compensation Committee to establish base salary ranges. A
majority of the nondurable consumer goods companies are not the
companies which make up the Dow Jones Consumer, Non-Cyclical Industry
Group Index in the Common Stock Price Performance Graph included in
this Proxy Statement. The base salary range is based upon the
midpoint of the comparative compensation group, plus or minus twenty-
five percent. The base salary of each of the executive officers is
established in relation to the midpoint of the base salary ranges
based upon an evaluation of the individual performance of the
executive officer, including satisfaction of such officer's annual
objectives. The base salary of the Chief Executive Officer is also
established in relation to the midpoint of his base salary range,
based on achievement of the Company's annual goals relating to
earnings per share, sales growth and return on investment and on an
evaluation of the individual performance of the Chief Executive
Officer. The base salaries paid in 1997 to each of the executive
officers, including the Chief Executive Officer, were within the
recommended ranges.
-14-
The base salary of Mr. Sovey was reviewed at the February 1997
meeting of the Compensation Committee. In setting Mr. Sovey's salary
for 1997, the Compensation Committee considered his base salary in
relation to the midpoint of his salary range and that the Company's
annual goals relating to earnings per share, sales growth and return
on investment were met in 1996. In evaluating Mr. Sovey's
performance, the Compensation Committee primarily considered these
Company financial goals. In consideration of these factors, the
Compensation Committee approved an increase in Mr. Sovey's base salary
of $50,000, approximately 7.3%, for 1997.
ANNUAL INCENTIVE COMPENSATION. The Company's executive officers
(other than the Group Presidents) are entitled to participate in an
incentive bonus plan which provides for the payment of cash bonuses
based on the Company's return on investment (the "ROI Plan"). Awards
are made under the ROI Plan if the Company's annual after-tax return
on beginning of the year stockholder's equity exceeds 11% and are
determined by multiplying each executive officer's base salary by
percentages established in the ROI Plan reflecting the actual return
achieved.
The annual after-tax return on beginning of the year
stockholder's equity for 1997 was approximately 19.5%. Based on these
results, Mr. Sovey was awarded a bonus of $614,250 for 1997.
The Group Presidents are entitled to participate in an incentive
bonus plan which provides for the payment of cash bonuses based on
return on assets used in, and sales and income growth by, the
divisions for which the Group President is responsible (the "ROA
Plan"). Awards are made under the ROA Plan if the return on assets
used during the year in the divisions for which the Group President is
responsible exceeds 10% on a pre-tax basis and sales growth exceeds
the prior year sales level, and are determined by multiplying each
Group President's base salary by percentages established in the ROA
Plan reflecting the actual results achieved. Actual return on assets
and sales growth in 1997 exceeded the goals established for payment of
a bonus in the divisions for which each of the Group Presidents was
responsible.
STOCK OPTIONS. The Company's executive officers are also
entitled to participate in the 1993 Option Plan. Under the 1993
Option Plan, incentive stock options and nonqualified stock options to
purchase Common Stock of the Company may be granted at prices not less
than fair market value of the Common Stock at the date of grant.
Options granted under the 1993 Option Plan become exercisable in
annual cumulative installments of 20% of the number of options granted
over a five-year period and have a maximum term of ten years. The
Compensation Committee has adopted a formula, which takes into account
outstanding options, for determining, on a quarterly basis, whether an
executive officer of the Company should be awarded an option. The
grant of options is considered if the option exercise price of the
options held by an executive officer is less than a variable multiple
-15-
of the executive officer's base salary. The Compensation Committee
also has the discretion, in circumstances such as a promotion, to
grant options otherwise than in accordance with the formula. Based
upon the formula, Mr. Sovey received 23,600 options in 1997.
This report is submitted on behalf of the Compensation Committee:
Daniel C. Ferguson, Chairman
Robert L. Katz
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. D.
Ferguson and Dr. Katz. Daniel C. Ferguson, Chairman of the
Compensation Committee, is a former employee of the Company.
-16-
CERTAIN BENEFICIAL OWNERS
No person or group is known to the Company to be the beneficial
owner of more than five percent of the outstanding shares of Common
Stock of the Company.
The following table sets forth information as to the beneficial
ownership of shares of Common Stock of each director, each nominee for
director, and each Named Officer, individually, and all directors and
executive officers of the Company, as a group. Except as otherwise
indicated in the footnotes to the table, each individual has sole
investment and voting power with respect to the shares of Common Stock
set forth.
Common Stock Beneficially
Owned on January 19, 1998
-------------------------
Percent of
Number of Class
Name of Beneficial Owner Shares Outstanding
------------------------ --------- -----------
Alton F. Doody . . . . . . . . . . 62,500(1) .04%
Gary H. Driggs . . . . . . . . . . 36,000(1) .02
Daniel C. Ferguson . . . . . . . . 3,256,532(1)(2) 2.04
Thomas A. Ferguson, Jr. . . . . . . 187,894(1)(3) .12
Robert L. Katz . . . . . . . . . . 139,524(1) .09
John J. McDonough . . . . . . . . . 64,617(1)(5) .04
Elizabeth Cuthbert Millett . . . . 242,243(1)(6) .15
Cynthia A. Montgomery . . . . . . . 2,100(1) .001
Allan P. Newell . . . . . . . . . . 2,171,691(1)(7) 1.36
Henry B. Pearsall . . . . . . . . . 743,514(1)(8) .47
William P. Sovey . . . . . . . . . 401,152(1)(3) .25
William T. Alldredge . . . . . . . 216,170(1)(3)(4) .14
William J. Denton . . . . . . . . . 88,154(1)(3) .06
-17-
Richard C. Dell . . . . . . . . . . 96,163(1)(3)(10) .06
Donald L. Krause . . . . . . . . . 311,364(1)(9) .20
All directors and executive
officers as a group (15 persons) . 8,019,618 5.04%
---------------------
(1) Includes shares issuable pursuant to stock options exercisable
within 60 days of March 16, 1998 as follows: Dr. Doody, 12,000
shares; Dr. Driggs, 12,000 shares; D. Ferguson, 10,400 shares;
Mr. T. Ferguson, 33,286 shares; Dr. Katz, 2,000 shares; Mr.
McDonough, 10,000 shares; Ms. Millett, 2,000 shares; Ms.
Montgomery, 2,000 shares; Mr. Newell, 2,000 shares; Mr. Pearsall,
8,000 shares; Mr. Sovey, 90,110 shares; Mr. Alldredge, 18,548
shares; Mr. Denton, 21,600 shares; Mr. Dell, 20,597 shares; and
Mr. Krause, 31,300 shares.
(2) Includes 3,400 shares beneficially owned of record by his wife,
140,906 shares held in charitable trusts of which Mr. D. Ferguson
is trustee, 694,384 shares held in a trust of which Mr. D.
Ferguson is beneficiary and 1,037,368 shares held by a
partnership of which Mr. D. Ferguson is managing partner.
(3) Includes shares held by the Newell 401(k) Plan over which each of
the following persons has voting power: Mr. T. Ferguson, 6,694
shares; Mr. Sovey, 6,675 shares; Mr. Alldredge, 1,438 shares; Mr.
Denton, 3,354 shares; and Mr. Dell, 6,033 shares.
(4) Includes 50,764 shares owned of record by his wife.
(5) Includes 5,200 shares held in his wife's individual retirement
account and 4,500 shares in trusts in which Mr. McDonough is
trustee but excludes 18,200 shares owned of record by his
children with respect to which Mr. McDonough disclaims beneficial
ownership and 33,000 shares in trusts in which Mr. McDonough is
not trustee with respect to which Mr. McDonough disclaims
beneficial ownership.
(6) Includes 39,793 shares beneficially owned of record by her two
children of which Ms. Millett is custodian and includes 70,860
shares held in a trust of which Ms. Millett is trustee.
(7) Includes 24,000 shares held in trusts of which Mr. Newell is co-
trustee and beneficiary and over which he has shared investment
and voting power and 2,144 shares beneficially owned of record by
his wife.
-18-
(8) Includes 612,564 shares held in trusts of which Mr. Pearsall is
trustee.
(9) Includes 1,539 shares held in trusts of which Mr. Krause is
trustee and 12,000 shares held in joint tenancy over which Mr.
Krause has shared investment and voting power.
(10) Includes 25,365 shares held in joint tenancy over which Mr. Dell
has shared investment and voting power.
-19-
COMMON STOCK PRICE PERFORMANCE GRAPH
The following Common Stock price performance graph compares the yearly
change in the Company's cumulative total stockholder returns on its
Common Stock during the years 1993 through 1997, with the cumulative
total return of the Standard & Poor's 500 Index and the Dow Jones
Consumer, Non-Cyclical Industry Group Index, assuming the investment
of $100 on December 31, 1992 and the reinvestment of dividends
(rounded to the nearest dollar).
December 31,
1992 1993 1994 1995 1996 1997
Newell $100 100.79 106.78 133.93 165.91 227.21
DJ Consumer, Non Cyclical 100 95.94 106.85 155.73 194.40 266.54
S&P 500 Index 100 109.92 111.34 152.66 187.28 249.28
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of
Directors has reappointed Arthur Andersen L.L.P. as independent
accountants to audit the consolidated financial statements of the
Company for the year 1998. The Board of Directors recommends a vote
in favor of ratification of the appointment. If the stockholders
should fail to ratify the appointment of the independent accountants,
the Board of Directors would reconsider the appointment.
It is expected that representatives of Arthur Andersen L.L.P.
will be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so and will be available to
answer appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Based solely upon a review of Reports on Forms 3, 4 and 5 and any
amendments thereto furnished to the Company pursuant to Section 16 of
the Securities Exchange Act of 1934, as amended, and written
representations from the executive officers and directors that no
other Reports were required, the Company believes that all of such
Reports were filed on a timely basis by executive officers and
directors during 1997.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
To be considered for inclusion in next year's proxy materials,
stockholder proposals to be presented at the Company's 1999 Annual
Meeting must be in writing and be received by the Company no later
than November 19, 1998.
-20-
OTHER BUSINESS
The Board of Directors does not know of any business to be
brought before the Annual Meeting other than the matters described in
the Notice of Annual Meeting. However, if any other matters are
properly presented for action, it is the intention of each person
named in the accompanying proxy to vote said proxy in accordance with
his judgment on such matters.
By Order of the Board of
Directors,
RICHARD H. WOLFF
Secretary
March 19, 1998
A COPY OF THE COMPANY'S 1997 ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K WILL BE FURNISHED TO STOCKHOLDERS
FREE OF CHARGE UPON WRITTEN REQUEST TO THE OFFICE OF THE VICE
PRESIDENT-FINANCE OF THE COMPANY.
APPENDIX
Form of proxy card for holders of Common Stock of the Company
PROXY
-----
NEWELL CO.
Annual Meeting of Stockholders May 13, 1998
Proxy Solicited by the Board of Directors
for Annual Meeting May 13, 1998
The undersigned hereby appoints William P. Sovey and William T.
Alldredge, and each of them, as proxies, with the powers the
undersigned would possess if personally present, and with full power
of substitution, to vote at the Annual Meeting of Stockholders of
NEWELL CO. to be held on May 13, 1998, and at any adjournments
thereof, on all matters coming before said meeting.
(1) Election of Directors.
Nominees: Thomas A. Ferguson, Jr., Elizabeth Cuthbert
Millett, Cynthia A. Montgomery and Allan P. Newell
(2) Ratification of the appointment of Arthur Andersen L.L.P.
as independent accountants for the year 1998.
(3) In their discretion, upon such other matters as may
properly come before this Annual Meeting.
You are encouraged to specify your choices by /////////////////
marking the appropriate boxes, SEE REVERSE SIDE, / /
but you need not mark any boxes if you wish to / SEE REVERSE /
vote in accordance with the Board of Directors / SIDE /
recommendations. Your shares cannot be voted / /
unless you sign and return this card. /////////////////
X Please mark
___ your votes as
in this example.
When this Proxy is properly executed, the shares to which it relates
will be voted in the manner directed herein. If no direction is made,
the shares will be voted FOR election of directors and FOR proposal 2.
The Board of Directors recommends a vote FOR election of directors and FOR proposal 2.
--------------------------------------------------------------------------------------------------------------------
FOR WITHHOLD For, except withhold vote from the following nominee(s)
1. Election of Directors _____ _____ __________________________________________________________
2. Ratification of independent accountants. FOR AGAINST ABSTAIN
_____ _____ _____
SIGNATURE(S)__________________________DATE________________________
NOTE: Please sign exactly as name appears hereon. Joint owners The signer hereby revokes all proxies
should each sign. When signing as attorney, executor, heretofore given by the signer to vote at
administrator, trustee or guardian, please give full said meeting or any adjournments thereof.
title as such.
--------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
[Map setting forth location of Annual Meeting.]
NEWELL CO.
Annual Meeting on Stockholders May 13, 1998
Dear Stockholder,
Newell Co. encourages you to take advantage of a new and convenient
way by which you can vote your shares--electronically through the
telephone. This eliminates the need to return the proxy card.
To vote your shares electronically through the telephone:
-- On a touch-tone telephone call 1-800-OK2-VOTE
(1-800-652-8683)
-- 24 hours a day, 7 days a week
-- Listen to the recording for instructions
-- Use the control number printed in the box above to access
the system
-- Use your phone key pad to vote
Your electronic vote authorizes the named proxies in the same manner
as if you marked, signed, dated and returned the proxy card. If you
choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
