SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file
number December 31, 1995 1-9608
NEWELL CO.
(Exact name of Registrant as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) (Identification No.)
Newell Center
29 East Stephenson Street, Freeport, Illinois 61032-0943
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (815) 235-4171
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, $1 par value per share, and
associated Preferred Stock Purchase Rights New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes x No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (x)
2
There were 158.7 million shares of the Registrant's common stock
outstanding as of January 31, 1996. The aggregate market value of the
shares of common stock (based upon the closing price on the New York
Stock Exchange on that date) beneficially owned by nonaffiliates of
the Registrant was approximately $3,960.3 million. For purposes of
the foregoing calculation only, which is required by Form 10-K, the
Registrant has included in the shares owned by affiliates those shares
owned by directors and officers of the Registrant, and such inclusion
shall not be construed as an admission that any such person is an
affiliate for any purpose.
Documents Incorporated by Reference
Part III
Portions of the Registrant's Definitive Proxy Statement for its
Annual Meeting of Stockholders to be held May 8, 1996, which will be
filed March 15, 1996.
3
PART I
Item 1. Business
- -----------------
"Newell" or the "Company" refers to Newell Co. alone or with its
wholly-owned subsidiaries, as the context requires.
GENERAL
- -------
Newell is a manufacturer and full-service marketer of high-volume
consumer products serving the needs of volume purchasers. The
Company's basic strategy is to merchandise a multi-product offering of
brand-name consumer products, with an emphasis on excellent customer
service, in order to achieve maximum results for its stockholders.
Each group of the Company's products is manufactured and sold by a
subsidiary or division (each referred to herein as a "division," even
if separately incorporated).
The Company manages the activities of its divisions through
executives at the corporate level, to whom the divisional managers
report, and controls financial activities through centralized
accounting, capital expenditure reporting, cash management, order
processing, billing, credit, accounts receivable and data processing
operations. The production and marketing functions of each division,
however, are conducted with substantial independence. Each division
is managed by employees who make day-to-day operating and sales
decisions and participate in an incentive compensation plan that ties
a significant part of their compensation to their division's return on
assets and sales and income growth. The Company believes that this
allocation of responsibility and system of incentives fosters an
entrepreneurial approach to management that has been important to the
Company's success.
This 1995 Annual Report on Form 10-K contains forward looking
statements that are made in reliance upon the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such forward
looking statements are subject to risks and uncertainties. Exhibit 99
to this 1995 10-K Report identifies important risk factors which could
cause the Company's actual financial results to differ materially from
results forecast or estimated by the Company in forward looking
statements.
INDUSTRY SEGMENTS
- -----------------
The Company operates in a single industry segment consisting of
Consumer Products sold through a variety of retail and wholesale
distribution channels.
4
PRODUCTS
HOUSEWARES
Glassware and Plasticware
- -------------------------
The Company's glassware and plasticware business is conducted by
the Anchor Hocking and Newell Europe divisions. Anchor Hocking and
Newell Europe design, manufacture, package and distribute glass and
plastic products. These products include glass ovenware, servingware,
cookware and dinnerware products and plastic microwave cookware and
food storage products. Anchor Hocking also produces foodservice
products and glass lamp parts, lighting components, meter covers and
appliance covers for the foodservice and specialty markets. Newell
Europe also produces glass components for appliance manufacturers and
its products are marketed in Europe, the Middle East and Africa only.
Anchor Hocking products are sold primarily under the brand names
of ANCHOR HOCKING (R) and PLASTICS INC. (R), and the trade names of
OVEN BASICS (R) and STOWAWAYS (R). Newell Europe's products are sold
primarily under the brand names of PYREX (R), PYROFLAM (R), VISION (R)
and VITRI (R).
Anchor Hocking markets its products directly to mass merchants,
warehouse clubs, grocery/drug stores, department/specialty stores,
hardware distributors and select contract customers, using a network
of manufacturers' representatives, as well as regional zone and
market-specific sales managers. Newell Europe markets its products to
mass merchants, industrial manufacturers and buying groups using a
direct sales force.
Principal facilities are located in Lancaster, Ohio; Monaca,
Pennsylvania; St. Paul and Coon Rapids, Minnesota; Sunderland, Great
Britain; Muhtal, Germany and Chateauroux, France.
Aluminum Cookware and Bakeware
- -------------------------------
The Company's aluminum cookware and bakeware business is
conducted by the Mirro division. Mirro primarily manufactures aluminum
cookware and bakeware for the retail marketplace. Mirro also
manufactures various specialized aluminum cookware and bakeware items
for the food service industry. It also produces aluminum contract
stampings and components for other manufacturers and makes aluminum
and plastic kitchen tools and utensils.
Mirro products are sold primarily under the brand names of MIRRO
(R) and WEAREVER (R), and the trade names of AIRBAKE (R), CUSHIONAIRE
(R), CONCENTRIC AIRE (R) and CHANNELON (R).
Mirro markets its products directly to mass merchants, warehouse
clubs, grocery/drug stores, department/specialty stores, hardware
5
distributors, cable TV networks, and select contract customers, using
a network of manufacturers' representatives, as well as regional zone
and market-specific sales managers.
Mirro manufacturing operations are highly integrated, rolling its
own sheet stock from aluminum ingot, and producing phenolic handles
and knobs at its own plastics molding facility. Principal facilities
are located in Manitowoc and Chilton, Wisconsin and Salina, Kansas.
Other
- -----
Goody - personal consumer products including hair accessories and
beauty organizers.
HOME FURNISHINGS
Window Treatments
- -----------------
The Company's window treatments business is conducted by the
Levolor Home Fashions and Newell Window Furnishings divisions.
Levolor Home Fashions and Newell Window Furnishings primarily
manufacture made-to-order and stock horizontal and vertical blinds;
pleated, cellular and pull shades; and window hardware for the retail
marketplace. Levolor Home Fashions also produces window treatment
components for custom window treatment fabricators.
Levolor Home Fashions and Newell Window Furnishings products are
sold primarily under the brand names of NEWELL (R), LEVOLOR (R),
LOUVERDRAPE (R), DEL MAR (R), and JOANNA (R), and the trade names
SPECTRIM (R), MAGIC FIT (R) and RIVIERA (R).
Levolor Home Fashions and Newell Window Furnishings market their
products directly and through distributors to mass merchants, home
centers, department/specialty stores, hardware distributors, custom
shops and select contract customers, using a network of manufacturers'
representatives, as well as regional zone and market-specific sales
managers.
Levolor Home Fashions and Newell Window Furnishings design,
manufacture, package and distribute their window treatments products.
Principal facilities are located in Freeport, Illinois and High Point,
North Carolina. Levolor Home Fashions and Newell Window Furnishings
have a total of 15 facilities in the U.S. and Canada.
Other
- -----
Lee Rowan and System Works - coated wire storage, home storage,
shelving systems and organization products; Intercraft, Decorel and
Holson Burnes - ready-made picture frames.
6
OFFICE PRODUCTS
Markers and Writing Instruments
- -------------------------------
The Company's Markers and Writing Instruments business is
conducted by the Sanford division. Sanford primarily manufactures
permanent/waterbase markers, dry erase markers, overhead projector
pens, highlighters and wood-cased pencils, and distributes other
writing instruments including rolling ball pens, ball-point pens and
mechanical pencils for the retail marketplace.
Sanford markets its products directly and through distributors to
mass merchants, warehouse clubs, grocery/drug stores, office
superstores, office supply stores, contract stationers, and hardware
distributors, using a network of manufacturers' representatives, as
well as regional zone and market-specific sales managers.
Sanford manufactures its own inks and designs, manufactures,
packages and distributes markers and wood-cased pencils. Sanford also
packages and distributes pens and mechanical pencils. Principal
facilities are located in Bellwood, Illinois; and Lewisburg and
Shelbyville, Tennessee. Principal foreign facilities are located in
Tlalnepantla, Mexico, Bogota, Colombia and King's Lynn, Great Britain.
Other
- -----
Stuart Hall - school supplies, stationery and office supplies;
and Newell, Rogers and Keene Office Products - desktop and computer
accessories.
7
HARDWARE AND TOOLS
Hardware
- --------
The Company's hardware business is conducted by the Amerock and
Bulldog divisions. Amerock primarily manufactures cabinet hardware for
the retail marketplace. Amerock also manufactures window hardware for
window manufacturers. Bulldog packages and distributes hardware which
includes bolts, screws and mechanical fasteners.
Amerock and Bulldog products are sold primarily under the brand
names of AMEROCK (R), ALLISON (R) and BULLDOG (R).
Amerock and Bulldog market their products directly and through
distributors to mass merchants, home centers, hardware distributors,
cabinet shops and window manufacturers, using a network of
manufacturers' representatives, as well as regional zone and market-
specific sales managers.
Amerock designs, manufactures, packages and distributes its
hardware products. Bulldog packages and distributes its products.
Principal facilities are located in Rockford, Illinois and Memphis,
Tennessee.
Tools
- -----
EZ Paintr - manual paint applicator products; BernzOmatic -
propane and propane/oxygen hand torches.
MARKETING AND DISTRIBUTION
- --------------------------
Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to
approximately 14% of consolidated sales in 1995, 15% in 1994 and 14%
in 1993. Sales to each of the Company's other customers,
individually, amounted to less than 10% of consolidated net sales.
Most of the Company's customers are retailers who rely on a
single or principal source for each of the consumer products that they
sell. Accordingly, the divisions focus their marketing effort not on
the ultimate consumer, but on the retailer, and compete with other
suppliers for business. The Company's strategy is to emphasize
excellent customer service, innovative merchandising programs and a
quality multi-product offering. The Company's computerized order
processing system allows it to receive orders from its customers on a
computer-to-computer basis. This system, and the ability to fill and
ship orders promptly, are important competitive factors since they
reduce a customer's order processing costs and allow the customer to
minimize the inventory it must carry. The divisions maintain sales
and service organizations to be responsive to the needs of their
customers.
8
BACKLOG
- -------
The dollar value of unshipped factory orders is not material.
SEASONAL VARIATIONS
- -------------------
The divisions are only moderately affected by seasonal trends.
Housewares products typically have higher sales in the second half of
the year due to retail stocking related to the holiday season, Home
Furnishings and Hardware products have higher sales in the second and
third quarters due to an increased level of do-it-yourself projects
completed in the summer months and Office Products have higher sales
in the second and third quarters due to the back-to-school season.
The Company's consolidated quarterly sales do not fluctuate
significantly because these seasonal trends are moderate.
9
NET SALES BY PRODUCT CLASS
- --------------------------
The following table sets forth the amounts and percentages of the
Company's net sales for the three years ended December 31, 1995
(including sales of acquired companies only from the time of
acquisition), for the classes of similar products described
previously.
Year Ended December 31,
1995 % 1994 % 1993 %
---- ---- ----
(In millions, except percentages)
Housewares:
Glassware and Plasticware $ 397.6 16% $ 256.3 12% $ 245.0 15%
Alum. Cookware and Bakeware 261.9 11 280.9 14 264.7 16
Other * 160.1 6 154.6 8 19.1 1
----- ----- ----
Total Housewares 819.6 33 691.8 34 528.8 32
----- ----- -----
Home Furnishings:
Window Treatments 392.0 16 317.8 15 222.7 13
Other * 340.3 13 325.0 16 202.8 13
----- ----- -----
Total Home Furnishings 732.3 29 642.8 31 425.5 26
----- ----- -----
Office Products:
Markers and Writing
Instruments 402.4 16 212.6 10 156.0 10
Other * 179.8 7 170.6 8 184.7 11
----- ----- ----
Total Office Products 582.2 23 383.2 18 340.7 21
----- ------ -----
Hardware & Tools
Hardware 202.7 8 208.8 10 198.7 12
Tools 161.6 7 148.3 7 136.6 8
----- ----- -----
Total Hardware & Tools 364.3 15 357.1 17 335.3 20
----- ----- -----
Sold Businesses:
Counselor Bath Scales - - - - 14.7 1
----- ----- -----
Total Sold Businesses - - - - 14.7 1
----- ----- ------
Newell Consolidated $2,498.4 100% $2,074.9 100% $1,645.0 100%
======= === ======= === ======= ===
* This category is comprised of many different product classes, each
representing less than 10% of net sales.
Certain 1993 and 1994 amounts have been reclassified to conform
with the 1995 presentation.
10
ACQUISITIONS AND DIVESTITURES OF BUSINESSES
- -------------------------------------------
At the foundation of the Company's growth strategy is
acquisitions. Since the late 1960s, acquisitions have been the
Company's primary vehicle for growth. Over the last twenty-five
years, the Company has acquired more than 50 companies. In the last
five years alone, the Company has completed over 10 major
acquisitions, representing nearly $2 billion in additional sales.
From a small manufacturer of drapery hardware with about $20
million in sales and $2 million in net income in the late 1960's,
Newell has grown almost 20% per year and is now an international
consumer goods supplier with annualized sales approaching $3 billion
and net income exceeding $220 million. This dramatic growth is
largely the result of acquisitions, supplemented by internal growth
from existing and acquired product lines, as the vehicle to execute a
multi-product offering strategy.
In its acquisition planning, the Company looks for branded,
staple product lines sold to volume purchasers. These product lines
must have the potential to reach the Company's high standard of
profitability, have a low technology level and a long product life
cycle. In addition to adding entirely new product lines, acquisitions
can be beneficial in rounding out existing businesses by filling gaps
in the product offering, adding new customers and distribution
channels and improving operational efficiency through shared
resources.
The Company has typically acquired companies that it believes
have unrealized profit potential. "Newellization" is the profit
improvement and productivity enhancement process that is applied to
newly acquired product lines to bring them up to the Company's
standards of profitability.
Elements of the Newellization process at newly acquired companies
include establishing a focused business strategy, improving customer
service, building partnerships with customers, reducing corporate
overhead through centralization of administrative functions, trimming
excess costs, tightening financial controls, improving manufacturing
efficiency, pruning nonproductive product lines and reducing
inventories, increasing trade receivable turnover and improving sales
mix profitability through the application of program merchandising
techniques.
As part of the Newellization process to improve profitability,
sales can often decline as unprofitable product lines are reduced or
eliminated. In the Newell strategy, once a company has been
Newellized (the process usually takes about two years), it is expected
to begin building profitable sales and contribute to the Company's
internal sales growth.
11
Additional information regarding acquisitions and divestitures of
businesses is included in note 2 to the consolidated financial
statements.
FOREIGN OPERATIONS
- ------------------
Prior to the November 1994 acquisition of Newell Europe and the
November 1995 acquisition of Berol, the Company operated almost
entirely in the United States and Canada. Following these
acquisitions, the Company operates in several non-U.S. locations,
including England, France, Germany, Mexico and Colombia. Summary
financial information by geographic area included in the consolidated
financial statements is as follows:
1995
----------------------
$ % of Total
----------------------
(In millions)
Net sales:
- U.S. $2,214.0 88.6%
- Non-U.S. 284.4 11.4
-------- -----
Total $2,498.4 100.0%
======= =====
Operating income:
- U.S. $ 395.5 94.2%
- Non-U.S. 24.0 5.8
-------- -----
Total $ 419.5 100.0%
======== =====
Total assets at December 31:
- U.S. (including corporate
assets of $972.7 million) $2,517.2 85.9%
- Non-U.S. 414.0 14.1
-------- -----
Total $2,931.2 100.0%
======= =====
Sales between geographic areas are not material.
The Company's international division (financial information
included in the U.S. category in the above table) coordinates export
sales of consumer products from the U.S. to all other foreign
countries. These export sales were approximately 2.2% of 1995 total
net sales.
12
RAW MATERIAL
- ------------
The Company expects to have multiple foreign and domestic sources
of supply for substantially all of its material requirements. The raw
materials and various purchased components required for its products
have generally been available in sufficient quantities.
PATENTS AND TRADEMARKS
- ----------------------
The Company has a number of patents, trademarks and trade names,
none of which is considered material to the consolidated operations.
COMPETITION
- -----------
The markets in which the Company competes are highly competitive,
with a number of well-established domestic and foreign manufacturers.
In addition, many of the Company's products compete with a number of
substitute products. The Company believes, however, that it has a
significant share in many of its markets.
The Company's principal methods of competition are customer
service, price, brand name identification, merchandising programs,
domestic manufacturing resources and breadth of product line
offerings. The Company believes that its customer service programs,
which include computer-to-computer EDI capabilities and Quick Response
programs, are superior to programs offered by many of its competitors.
The Company also believes customers are positively influenced by
previous experience with the Company, which includes delivery of
quality products on time and complete and innovative good-better-best
merchandising programs. The Company's principal customers are
sophisticated volume purchasers, which consider a combination of all
of these factors in determining where to purchase products.
ENVIRONMENT
- -----------
The Company is subject to various laws regulating the discharge
of materials into the environment or otherwise relating to the
protection of the environment. Regulation in this area is still
developing, including changes in the standards of enforcement of
existing laws and enactment of new laws. Although the Company, like
other companies engaged in similar businesses, is a party to various
proceedings relating to environmental matters and makes capital
expenditures for environmental projects, it does not believe it will
have material capital expenditures for environmental control
facilities during the current or succeeding fiscal year. See note 14
to the notes to consolidated financial statements for a discussion of
the environmental matters in which the Company has been identified as
a potentially responsible party, which is hereby incorporated by
reference.
13
EMPLOYEES
- ---------
The Company has approximately 23,000 employees, of whom
approximately 6,300 are covered by collective bargaining agreements.
14
Item 2. Properties
- -------------------
The following table shows the location and general character of the
principal operating facilities owned or leased by the Company. The executive
offices are located in Beloit, Wisconsin, which is an owned facility occupying
approximately 9,000 square feet. Other Corporate offices are located in owned
facilities in Freeport, Illinois (occupying 59,000 square feet) and in Rockford,
Illinois (occupying 7,000 square feet). Most of the idle facilities, which are
excluded from the following list, are subleased while being held pending sale or
lease expiration. The Company considers its properties to be in generally good
condition and well-maintained, and are generally suitable and adequate to carry
on the Company's business.
Exp. Date
Location City Owned If Leased General Character
------------- -------------------- ---------------- --------- ---------------------------------------
Alabama Phoenix City 08/96 Distribution
Arizona Bisbee 05/96 Distribution
Belgium Zellick 10/98 Distribution and Administrative Office
California Beaumont 11/97 Distribution
Garden Grove 03/97 Manufacturing
Los Angeles 10/96 Manufacturing
Santa Fe 08/96 Distribution
San Fernando 06/96 Manufacturing and Administrative Office
Santa Monica 10/96 Manufacturing
Vista 06/03 Manufacturing and Distribution
Westminster 09/96 Manufacturing, Distribution and
Administrative Office
Canada Brampton, ON 09/96 Manufacturing and Distribution
Calgary, AB 07/96 Manufacturing
Drummondville, PQ Owned Distribution
Mississauga, ON Owned Manufacturing and Distribution
Montreal 12/96 Administrative Office
Oakville, ON 10/96 Distribution and Administrative Office
Pickering, ON 03/07 Distribution
Prescott, ON Owned Manufacturing
Richmond Hills, ON 10/00 Administrative Office
Toronto, ON 08/00 Manufacturing, Distribution and
Administrative Office
Watford, ON 01/04 Manufacturing, Distribution and
Administrative Office
Weston, ON M-T-M Administrative Office
15
Exp. Date
Location City Owned If Leased General Character
------------- -------------------- ---------------- --------- ---------------------------------------
Colombia Bogota Owned Manufacturing, Distribution and
Administrative Office
Barrarquilla 05/96 Administrative
Medellin 11/96 Distribution
France Avon 11/96 Administrative Office
Chateauroux Owned Manufacturing, Distribution and
Administrative Office
Georgia Athens 03/96 Manufacturing
Columbus Owned Distribution
Manchester Owned Manufacturing
Peachtree City Owned Administrative Office
Germany Muhltal Owned Manufacturing
Great Britain Dunstable 02/05 Distribution and Administrative Office
King's Lynn Owned Manufacturing, Distribution and
Administrative Office
Slough 06/07 Administrative Office
Sunderland 11/99 Distribution
Sunderland 12/00 Distribution
Sunderland Owned Manufacturing
Hawaii Kapolei 06/00 Manufacturing
Illinois Bedford Park 08/96 Manufacturing, Distribution and
Administrative Office
Bellwood 11/99 Distribution and Administrative Office
Bellwood Owned Manufacturing
Freeport Owned Distribution and Administrative Office
Freeport 12/96 Distribution and Administrative Office
Mundelein 12/98 Manufacturing and Administrative Office
Rockford M-T-M Manufacturing, Distribution and
Administrative Office
Rockford Owned Manufacturing
South Holland 12/96 Manufacturing
Vernon Hills 02/97 Manufacturing
Waukegan 07/98 Distribution
Indiana Lowell Owned Manufacturing, Distribution and
Administrative Office
Italy Milan 12/01 Distribution and Administrative Office
Kansas Salina 06/96 Manufacturing and Distribution
Kentucky Georgetown Owned Manufacturing, Distribution and
Administrative Office
16
Exp. Date
Location City Owned If Leased General Character
------------- -------------------- ---------------- --------- ---------------------------------------
Mexico Durango M-T-M Manufacturing, Distribution and
Administrative Office
Tlalnepantla M-T-M Manufacturing, Distribution and
Administrative Office
Michigan St. Joseph Owned Manufacturing, Distribution and
Administrative Office
Minnesota Coon Rapids Owned Manufacturing
Eagan 01/99 Distribution
St. Paul Owned Manufacturing and Administrative Office
Missouri Fenton 12/99 Administrative Office
Jackson Owned Manufacturing and Administrative Office
Kansas City 12/05 Manufacturing, Distribution and
Administrative Office
Nebraska Omaha 09/96 Distribution
New Jersey Newark Owned Manufacturing, Distribution and
Administrative Office
Parsippany 08/97 Administrative Office
Rockaway 03/97 Manufacturing
New York Medina Owned Manufacturing, Distribution and
Administrative Office
Ogdensburg Owned Manufacturing and Distribution
Orangeburg 01/98 Manufacturing and Distribution
North Carolina High Point Owned Manufacturing and Administrative Office
Statesville Owned Manufacturing and Distribution
Ohio Bremen Owned Manufacturing
Lancaster M-T-M Manufacturing, Distribution and
Administrative Office
Pennsylvania Ambridge M-T-M Distribution
Monaca Owned Manufacturing and Administrative Office
Puerto Rico Carolina 06/98 Distribution and Administrative Office
Clinton 05/97 Manufacturing and Distribution
Greenwood M-T-M Distribution
South Carolina Joanna 06/96 Manufacturing and Distribution
Spain Las Rozas, Madrid 12/96 Administrative Office
Tennessee Brentwood 12/97 Administrative Office
Johnson City M-T-M Manufacturing and Distribution
17
Exp. Date
Location City Owned If Leased General Character
------------- -------------------- ---------------- --------- ---------------------------------------
Tennessee Lewisburg Owned Manufacturing, Distribution and
Administrative Office
Memphis 01/98 Distribution and Administrative Office
Shelbyville Owned Manufacturing, Distribution and
Administrative Office
Tullahoma 09/96 Distribution
Texas Taylor Owned Manufacturing, Distribution and
Administrative Office
Laredo M-T-M Distribution
Utah Ogden Owned Manufacturing
Salt Lake City 04/98 Manufacturing
est Virginia Weirton Manufacturing
Wisconsin Beloit Owned Administrative Office
Chilton Owned Manufacturing
Madison 07/96 Manufacturing, Distribution and
Administrative Office
Manitowoc 04/97 Distribution and Administrative Office
Manitowoc Owned Manufacturing
South Milwaukee 06/97 Distribution
St. Francis Owned Manufacturing, Distribution and
Administrative Office
18
Item 3. Legal Proceedings
- --------------------------
Information regarding legal proceedings is included in note 14 to
the consolidated financial statements and is hereby incorporated by
reference herein.
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
There were no matters submitted to a vote of the Company's
security holders during the fourth quarter of fiscal year 1995.
Supplementary Item - Executive Officers of the Registrant as of
12/31/95
NAME AGE PRESENT POSITION WITH THE COMPANY
- ----- --- ---------------------------------
William P. Sovey 62 Vice Chairman and Chief Executive
Officer
Thomas A. Ferguson, Jr. 48 President and Chief Operating
Officer
Donald L. Krause 56 Senior Vice President-Corporate
Controller
William T. Alldredge 55 Vice President-Finance
Richard C. Dell 49 Group President
William J. Denton 51 Group President
William K. Doppstadt 63 Vice President-Personnel Relations
William P. Sovey has been Vice Chairman and Chief Executive Officer
since July 1992. From January 1986 through July 1992, he had been
President and Chief Operating Officer.
Thomas A. Ferguson, Jr. has been President and Chief Operating Officer
since May 1992. From January 1989 to May 1992, he was President-
Operating Companies.
Donald L. Krause was appointed Senior Vice President-Corporate
Controller in March 1990. He was President-Industrial Companies from
February 1988 to March 1990.
William T. Alldredge has been Vice President-Finance of the Company
since August 1983.
19
Richard C. Dell has been Group President since June 1992. He was
President of Amerock from November 1989 to June 1992. He was
President of EZ Paintr from September 1987 to November 1989.
William J. Denton has been Group President since March 1990. From
April 1989 to March 1990, he was Vice President-Corporate Controller.
He was President of Anchor Hocking Glass from August 1987 to April
1989.
William K. Doppstadt has been Vice President-Personnel Relations of
the Company since 1974.
20
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
-------------------------------------------------
The Company's common stock is listed on the New York and Chicago
Stock Exchanges (symbol: NWL). The following table sets forth the
high and low sales prices of the common stock on the New York Stock
Exchange Composite Tape (as published in the Wall Street Journal) for
the calendar periods indicated as adjusted for the two-for-one stock
split discussed below.
Year Ended December 31,
1995 1994
-------------- --------------
High Low High Low
---- --- ---- ----
Quarters:
First $25 1/2 $20 5/8 $21 13/16 $19 1/8
Second 25 22 1/4 23 1/4 19
Third 26 1/4 23 5/8 23 7/8 21 7/8
Fourth 27 1/4 23 43/64 22 3/8 20 1/2
On December 31, 1995 there were 12,518 record holders of the
Company's common stock.
The Company has paid regular cash dividends on its common stock
since 1947. On May 12, 1994, the quarterly cash dividend was
increased to $0.10 per share from the $0.09 per share that had been
paid since May 13, 1993. The quarterly cash dividend was again
increased to $0.12 per share on May 11, 1995.
In August 1994, the Company's Board of Directors declared a two-
for-one common stock split in the form of a 100% stock distribution of
the Company's common stock, which was paid on September 1, 1994 to
stockholders of record on August 15, 1994. All per share data was
adjusted to reflect the two-for-one stock split.
21
Item 6. Selected Financial Data
- --------------------------------
The following is a summary of certain consolidated financial
information relating to the Company. The summary has been derived in
part from, and should be read in conjunction with, the consolidated
financial statements of the Company included elsewhere in this report
and the schedules thereto.
Year Ended December 31,
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(In millions, except per share data)
INCOME STATEMENT DATA
Net sales $2,498.4 $2,074.9 $1,645.0 $1,451.7 $1,259.0
Cost of products sold 1,715.6 1,403.8 1,101.7 997.3 845.6
-------- -------- -------- -------- --------
Gross income 782.8 671.1 543.3 454.4 413.4
Selling, general
and administrative
expenses 363.3 313.2 257.2 201.1 182.2
Restructuring costs - - - 20.9 -
------- -------- ------- ------- -------
Operating income 419.5 357.9 286.1 232.4 231.2
Nonoperating expenses
(income):
Interest expense 49.8 30.0 19.1 20.4 13.2
Other (1.1) (1.4) (8.5) (65.6) (6.0)
------- ------- ------- ------- ------
Net 48.7 28.6 10.6 (45.2) 7.2
------- ------- ------- ------- ------
Income before income
taxes and cumulative
effect of accounting
change 370.8 329.3 275.5 277.6 224.0
Income taxes 148.3 133.7 110.2 114.3 88.4
------- ------- ------- ------- --------
Net income before
cumulative effect
of accounting
change 222.5 195.6 165.3 163.3 135.6
Cumulative effect of
accounting change - - - (44.2) -
------- ------- ------- ------- --------
Net income $ 222.5 $ 195.6 $ 165.3 $ 119.1 $ 135.6
======= ======= ======= ======= ========
22
Item 6. Selected Financial Data (Cont.)
Year Ended December 31,
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
EARNINGS PER SHARE DATA
Before cumulative
effect of
accounting change $1.41 $1.24 $1.05 $ 1.05 $0.89
Cumulative effect of
accounting change - - - (0.29) -
------- ------- ------- ------- -------
Earnings per share $1.41 $1.24 $1.05 $0.76 $0.89
======= ======= ======= ======= =======
Cash dividends per
share $0.46 $0.39 $0.35 $0.30 $0.30
======= ======= ======= ======= =======
WEIGHTED AVERAGE SHARES 158.2 157.8 157.3 155.8 151.5
BALANCE SHEET DATA
Inventories $ 509.2 $ 420.7 $ 301.0 $ 226.2 $ 215.3
Working Capital 452.6 133.6 76.7 219.5 187.9
Total assets 2,931.2 2,488.3 1,952.9 1,569.6 1,187.5
Short-term debt 163.0 309.1 247.2 97.1 2.1
Long-term debt, net of
current maturities 761.6 409.0 218.1 176.8 176.6
Stockholders' equity 1,300.1 1,125.3 979.1 859.4 728.8
23
1992
_____
On February 14, 1992, the Company acquired Sanford Corporation
("Sanford"), a designer, manufacturer and marketer of marking and
writing instruments, plastic desk accessories, file storage boxes and
other office and school supplies. The Company issued approximately
13.8 million shares of common stock for all the common stock of
Sanford. This transaction was accounted for as a pooling of
interests; therefore, prior financial statements were restated to
reflect this merger.
On July 8, 1992, the Company acquired Stuart Hall Company, Inc.
("Stuart Hall"), a manufacturer of school supplies, stationery and
office supplies. The Company issued 1.6 million shares of common
stock for all the common stock of Stuart Hall. On October 1, 1992,
the Company acquired substantially all of the assets of Intercraft
Industries, L.P., and all of the capital stock of Intercraft
Industries of Canada, Inc. (collectively, "Intercraft"), manufacturers
of ready-made picture frames. The purchase price was $175.0 million
in cash. These transactions were accounted for as purchases;
therefore, the results of operations for Stuart Hall and Intercraft
are included in the accompanying consolidated financial statements
since their respective dates of acquisition. The cost of these 1992
acquisitions was allocated to the fair market value of assets acquired
and liabilities assumed and resulted in trade names and goodwill of
approximately $161.9 million.
1993
- ----
On April 30, 1993, the Company acquired substantially all of the
assets of Levolor Corporation ("Levolor"), a manufacturer and
distributor of decorative window coverings. The purchase price was
$72.5 million in cash. On September 22, 1993, the Company acquired
Lee Rowan Co. ("Lee Rowan"), a manufacturer and marketer of coated
wire storage and organization products. The purchase price was $73.5
million in cash. On November 9, 1993, the Company acquired Goody
Products, Inc. ("Goody"), a manufacturer and marketer of personal
consumer products including hair accessories and beauty organizers.
The purchase price, excluding the cost of Goody common stock that the
Company owned prior to the acquisition, was $147.1 million in cash.
These transactions were accounted for as purchases. The results
are included in the accompanying consolidated financial statements
since their respective dates of acquisition. The cost of the 1993
acquisitions was allocated to the fair market value of assets acquired
and liabilities assumed and resulted in trade names and goodwill of
approximately $208.2 million.
24
1994
- ----
On August 29, 1994, the Company acquired Home Fashions,
Inc.("HFI"), a manufacturer and marketer of decorative window
coverings, including vertical blinds and pleated shades sold under the
Del Mar and LouverDrape brand names. The purchase price was $130.4
million in cash. This company was combined with Levolor and together
they are operated as a single entity called Levolor Home Fashions. On
October 18, 1994, the Company acquired Faber-Castell Corporation, a
maker and marketer of markers and writing instruments, including wood-
cased pencils and rolling ball pens, whose products are marketed under
the Eberhard Faber brand name ("Eberhard Faber"). The purchase price
was $137.3 million in cash. This company was combined with Sanford
and together they are operated as single entity called Sanford. On
November 30, 1994, the Company acquired the European consumer products
business of Corning Incorporated (now known as "Newell Europe"). This
acquisition included Corning's consumer products manufacturing
facilities in England, France and Germany, the European trademark
rights and product lines for Pyrex, Pyroflam and Visions brands in
Europe, the Middle East and Africa, and Corning's consumer
distribution network throughout these areas (Pyrex and Visions are
registered trademarks of Corning Incorporated). Additionally, the
Company became the distributor in Europe, the Middle East and Africa
for Corning's U.S.-manufactured cookware and dinnerware brands. The
purchase price was $87.8 million in cash.
These transactions were accounted for as purchases. The results
of operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1994 acquisitions was allocated to the fair market value of assets
acquired and liabilities assumed and resulted in trade names and
goodwill of approximately $197.8 million. The allocations of cost
were completed in 1995 with no material adjustments to the financial
statements.
1995
- ----
On September 29, 1995, the Company acquired Decorel Incorporated
("Decorel"), a manufacturer and marketer of ready-made picture frames.
The purchase price was $29.6 million in cash. On November 2, 1995,
the Company acquired Berol Corporation ("Berol"), a designer,
manufacturer and marketer of markers and writing instruments. The
purchase price was $118.8 million in cash. This company will be
combined into Sanford.
These transactions were accounted for as purchases. The results
of operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1995 acquisitions was allocated on a preliminary basis to the fair
market value of assets acquired and liabilities assumed and resulted
in trade names and goodwill of approximately $188.3 million. The
25
final adjustments to the purchase price allocations are not expected
to be material to the financial statements.
The unaudited consolidated results of operations for the years
ended December 31, 1995 and 1994 on a pro forma basis, as though
Berol, Decorel, Eberhard Faber, HFI and Newell Europe each had been
acquired on
January 1, 1994, are as follows:
Year Ended December 31,
-----------------------
1995 1994
---- ----
(In millions, except per share data)
Net sales $2,732.3 $2,767.7
Net income 218.3 195.1
Earnings per share 1.38 1.24
(1) In August 1994, the Company's Board of Directors declared a two-
for-one common stock split in the form of a 100% stock distribution of
the Company's common stock, which was paid on September 1, 1994 to
stockholders of record on August 15, 1994. All per share data was
adjusted to reflect the two-for-one stock split.
(2) In 1992, the Company adopted SFAS No. 106, "Employers" Accounting
for Postretirement Benefits Other than Pensions." Adoption of this
standard did not have a material effect on the annual expense for
postretirement benefits. As part of adopting this standard, the
Company recorded, in the first quarter of 1992, a one-time, non-cash
charge against earnings of $71.7 million before taxes and $44.1
million after taxes, or $0.29 per share. The effect of the charge on
1992 net income before cumulative effect of accounting change was not
material to the consolidated financial statements.
(3) On December 31, 1992, the Company sold its closures business for
a $210.0 million note receivable due and paid January 4, 1993. The
Company recognized a net pre-tax gain of $82.9 million on the sale.
Sales for this business totaled $160.6 million in 1992.
26
QUARTERLY SUMMARIES
Summarized quarterly data for the last three years are as follows
(unaudited):
Calendar Year 1st 2nd 3rd 4th Year
- ------------- ------ ------- ------- ------- -----
(In millions, except per share data)
1995
----
Net sales $ 556.6 $ 621.3 $ 651.3 $ 669.2 $2,498.4
Gross income 166.8 189.5 207.2 219.3 782.8
Net income 36.1 54.9 65.1 66.4 222.5
Earnings per share .23 .35 .41 .42 1.41
1994
----
Net sales $ 443.5 $ 493.5 $ 553.2 $ 584.7 $2,074.9
Gross income 134.8 159.9 179.2 197.2 671.1
Net income 31.5 44.0 58.0 62.1 195.6
Earnings per share .20 .28 .37 .39 1.24
1993
----
Net sales $ 334.2 $ 372.7 $ 456.7 $ 481.4 $1,645.0
Gross income 104.5 121.7 149.1 168.0 543.3
Net income 27.7 34.5 47.6 55.5 165.3
Earnings per share .18 .22 .30 .35 1.05
27
Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition
- ------------------------------------------------------------
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of
the Company's consolidated results of operations and financial
condition. The discussion should be read in conjunction with the
consolidated financial statements and notes thereto.
RESULTS OF OPERATIONS
The following table sets forth for the period indicated items
from the Consolidated Statements of Income as a percentage of net
sales.
Year Ended December 31,
1995 1994 1993
---- ---- ----
Net sales 100.0% 100.0% 100.0%
Cost of products sold 68.7 67.7 67.0
----- ----- -----
Gross income 31.3 32.3 33.0
Selling, general
and administrative expenses ("SG&A") 14.5 15.1 15.6
----- ----- -----
Operating income 16.8 17.2 17.4
Nonoperating expenses (income):
Interest expense 2.0 1.4 1.1
Other - (0.1) (0.5)
----- ----- -----
Net 2.0 1.3 0.6
----- ----- -----
Income before income taxes 14.8 15.9 16.8
Income taxes 5.9 6.5 6.7
----- ----- -----
Net income 8.9% 9.4% 10.1%
===== ===== =====
28
1995 vs. 1994
Net sales for 1995 were $2,498.4 million, representing an
increase of $423.5 million or 20.4% from 1994. Net sales for each of
the Company's product groups (and the primary reasons for the
increases) were as follows, in millions:
Year Ended December 31, Primary Reasons
1995 1994 % Change for Increases
---- ---- -------- ---------------
Housewares $ 819.6 $ 691.8 18.5% Newell Europe November
1994 acquisition
Home Furnishings 732.3 642.8 13.9 Decorel September
1995 acquisition
HFI August 1994
acquisition
Office Products 582.2 383.2 51.9 Berol November
1995 acquisition
Eberhard Faber October
1994 acquisition
9% internal sales growth
Hardware & Tools 364.3 357.1 2.0 Internal sales growth
-------- -------- ----
$2,498.4 $2,074.9 20.4%
======== ======== ====
The overall increase in net sales was primarily attributable to
the 1995 acquisitions of Decorel and Berol, and the 1994 acquisitions
of HFI, Eberhard Faber and Newell Europe (all of which are described
in note 2 to the consolidated financial statements). Internal sales
growth is defined as growth from continuing businesses owned more than
two years ("core businesses"), including minor acquisitions. Internal
sales growth was lower than expected in 1995 due to a sluggish retail
environment.
Gross income as a percent of net sales for 1995 was 31.3% versus
32.3% in 1994. The decrease was due to lower than average gross
margins from the businesses acquired in 1994 and 1995.
SG&A as a percent of net sales in 1995 was 14.5% versus 15.1% in
1994. The decrease was due to lower spending at the Company's core
businesses and low levels of SG&A at Eberhard Faber.
29
Net nonoperating expenses for 1995 were $48.7 million in 1995
versus $28.6 million in 1994. Net nonoperating expenses are
summarized as follows, in millions:
Year Ended December 31,
----------------------------------
1995 1994 Change
----- ---- ------
Interest expense (1) $49.8 $30.0 $ 19.8
Interest income (1.9) (1.0) (0.9)
Trade names and
goodwill amortization 19.3 15.4 3.9
Dividend income (12.8) (12.6) (0.2)
Equity earnings in American Tool
Companies, Inc. (the Company
has a 49% ownership interest) (6.0) (5.7) (0.3)
Write-down in carrying value
of a long-term foreign
investment accounted for
under the equity method (2) 16.0 - 16.0
Net gain on marketable
equity securities (15.8) (0.4) (15.4)
Other 0.1 2.9 (2.8)
----- ------ ------
$48.7 $28.6 $20.1
===== ===== =====
(1) Increase was due to the 1994 and 1995 cash acquisitions which
were funded with increased debt.
(2) During the second quarter, the Company initiated a plan to
dispose of the foreign investment and has reduced its investment
to the net realizable value.
The effective tax rate was 40.0% in 1995 and 40.6% in 1994. See
note 11 to the consolidated financial statements for an explanation of
the effective tax rate.
Net income for 1995 was $222.5 million, representing an increase
of $26.9 million or 13.8% from 1994. Earnings per share for 1995 were
up 13.7% to $1.41 versus $1.24 in 1994. The increases in net income
and earnings per share were primarily attributable to contributions
from the 1994 and 1995 acquisitions and increased operating margins at
core businesses, net of increases in net nonoperating expenses.
30
1994 vs. 1993:
Net sales for 1994 were $2,074.9 million, representing an
increase of $429.9 million or 26.1% from 1993. Net sales for each
of the Company's product groups (and the primary reasons for the
increases) were as follows, in millions:
Year Ended December 31, Primary Reasons
1994 1993 %Change for Increases
---- ---- ------ ---------------
Housewares $ 691.8 $ 528.8 30.8% Goody November 1993
acquisition
5% internal sales growth
Home Furnishings 642.8 425.5 51.1 Levolor April 1993
acquisition
Lee Rowan September
1993 acquisition
HFI August 1994
acquisition
10% internal sales
growth
Office Products 383.2 340.7 12.5 Eberhard Faber October
1994 acquisition
6% internal sales growth
Hardware & Tools 357.1 335.3 6.5 Internal sales growth
Sold Businesses - 14.7 N/A
-------- -------- ------
$2,074.9 $1,645.0 26.1%
======= ======= ====
The overall increase in net sales was primarily attributable to
the 1993 acquisitions of Levolor, Lee Rowan and Goody and the 1994
acquisitions of HFI and Eberhard Faber (all of which are described in
note 2 to the consolidated financial statements), and internal sales
growth. "Sold Businesses" represents the sales in 1993 of Counselor,
which was divested in October 1993.
Gross income as a percent of net sales for 1994 was 32.3% versus
33.0% in 1993. The decrease was due to lower than average gross
margins from the businesses acquired in 1993 and 1994.
SG&A as a percent of net sales in 1994 was 15.1% versus 15.6% in
1993. The decrease was due to internal sales growth, with only slight
increases in spending.
Net nonoperating expenses for 1994 were $28.6 million versus
$10.6 million in 1993. Net nonoperating expenses are summarized as
follows, in millions:
31
Year Ended December 31,
----------------------------------
1994 1993 Change
----- ----- -------
Interest expense (1) $30.0 $19.1 $10.9
Interest income (1.0) (0.9) (0.1)
Trade names and
goodwill amortization 15.4 10.1 5.3
Dividend income (12.6) (12.9) 0.3
Equity earnings in American Tool
Companies, Inc. (5.7) (3.8) (1.9)
Net gain on marketable
equity security (0.4) (0.4)
Other 2.9 (1.0) 3.9
----- ----- -----
$28.6 $10.6 $18.0
===== ===== =====
(1) Increase was due to the 1993 and 1994 cash acquisitions which were
funded primarily with debt.
The effective tax rate was 40.6% in 1994 and 40.0% in 1993. See
note 11 to the consolidated financial statements for an explanation of
the effective tax rate.
Net income for 1994 was $195.6 million, representing an increase
of $30.3 million or 18.3% from 1993. Earnings per share for 1994 were
up 18.1% to $1.24 versus $1.05 in 1993. The increases in net income
and earnings per share were primarily attributable to contributions
from the 1993 acquisitions and internal sales growth, net of increases
in net nonoperating expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources
include cash provided from operations and use of available borrowing
facilities.
Operating activities provided net cash of $276.7 million during
1995, an increase of $38.3 million from $238.4 million in 1994. This
change was primarily due to the increase in net income and
depreciation and amortization.
The Company has short-term foreign and domestic lines of credit
with various banks and a commercial paper program which are available
for short-term financing. Under the line of credit arrangements, the
Company may borrow up to $280.2 million (of which $170.7 million was
available at December 31, 1995) based upon such terms as the Company
and the respective banks have mutually agreed upon. Committed lines
of credit compose $134.5 million of the total line of credit
32
arrangements. Borrowings under the Company's uncommitted lines of
credit are subject to the discretion of the lender.
At December 31, 1995 the Company had outstanding $345.0 million
(principal amount) of medium-term notes with maturities ranging from
one to five years at an average rate of interest equal to 6.3%. The
Company had outstanding $186.0 million on December 31, 1994 and $153.0
million of medium-term notes on December 31, 1993.
In June 1995, the Company entered into a five-year $550.0 million
revolving credit agreement and a $200.0 million, 364-day revolving
credit agreement (and terminated its existing revolving credit
agreements). Under these agreements, the Company may borrow, repay
and reborrow funds in an aggregate amount up to $750.0 million, at a
floating interest rate. At December 31, 1995, there were no
borrowings under the revolving credit agreements.
In lieu of borrowings under the revolving credit agreements, the
Company may issue up to $750.0 million of commercial paper. The
Company's revolving credit agreements referred to above provide the
committed backup liquidity required to issue commercial paper.
Accordingly, commercial paper may only be issued up to the amount
available under the Company's revolving credit agreements. At
December 31, 1995, $448.6 million (face or principal amount) of
commercial paper was outstanding, all of which was supported by the
five-year revolving credit agreements. The entire amount is
classified as long-term debt.
As of January 23, 1996, the Company has a universal shelf
registration statement under which the Company may issue up to $500
million of debt and equity securities, subject to market conditions.
The Company's primary uses of liquidity and capital resources
include capital expenditures, dividend payments and acquisitions.
Capital expenditures were $82.6 million, $66.0 million and $58.9
million in 1995, 1994 and 1993, respectively.
The Company has paid regular cash dividends on its common stock
since 1947. On May 11, 1995, the quarterly cash dividend was
increased to $0.12 per share from the $0.10 per share that had been
paid since May 12, 1994. Dividends paid during 1995, 1994 and 1993
were $72.8 million, $61.5 million and $54.3 million, respectively. In
August 1994, the Company's Board of Directors declared a two-for-one
common stock split in the form of a 100% stock distribution of the
Company's common stock, which was paid on September 1, 1994 to
stockholders of record on August 15, 1994. All per share data has
been adjusted to reflect the two-for-one stock split.
Retained earnings increased in 1995, 1994 and 1993 by $149.7
million, $134.0 million and $111.1 million, respectively. The average
dividend payout ratio to common stockholders in 1995, 1994 and 1993
was 33%, 31% and 33%, respectively.
33
In 1995, the Company acquired Decorel, Berol and completed other
minor acquisitions for $203.9 million. In 1994 and 1993, the Company
completed acquisitions with a total cost of $362.8 million and $332.1
million, respectively. All of these acquisitions were accounted for
as purchases and were paid for with proceeds obtained from the
issuance of commercial paper, medium-term notes, notes payable under
the Company's lines of credit or shares of the Company's common
stock.
The increases in current assets, current liabilities, property,
plant and equipment and trade names and goodwill during 1995, 1994 and
1993 were primarily due to the acquisitions occurring in those years.
Working capital at December 31, 1995 was $452.6 million compared
to $133.6 million at December 31, 1994 and $76.7 million at December
31, 1993. The current ratio at December 31, 1995 was 1.67:1 compared
to 1.17:1 at December 31, 1994 and 1.13:1 at December 31, 1993. The
working capital and current ratio increased in 1995 as a result of
increased current assets related to acquired businesses coupled with
lower levels of short-term debt. Total debt to total capitalization
(net of cash and cash equivalents) was .40:1 at December 31, 1995,
.38:1 at December 31, 1994 and .32:1 at December 31, 1993.
The Company believes that cash provided from operations and
available borrowing facilities will continue to provide adequate
support for the cash needs of existing businesses; however, certain
events, such as significant acquisitions, could require additional
external financing.
In 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of." This statement has not been
adopted by the Company and management believes that the adoption of
this statement in 1996 will not be material to the consolidated
financial statements.
In 1995, the FASB also issued SFAS No. 123, "Accounting for Stock
Based Compensation". The Company will adopt this statement in 1996
which will require additional disclosures in the footnotes to the
consolidated financial statements. Management believes the adoption
of this statement will not be material to the consolidated financial
statements.
Environmental Matters
- ---------------------
The Company is involved in various environmental remediation and
other compliance activities, including activities arising under the
federal Comprehensive Environmental Response, Compensation and
Liability Act ("Superfund") and similar state statutes. Certain
information regarding these activities is included in note 14 to the
consolidated financial statements. Based on information currently
available to it, the Company has estimated that remediation costs
34
associated with these activities will be between $11.0 million and
$15.6 million. As of December 31, 1995, the Company had a reserve
equal to $13.8 million for such remediation costs in the aggregate.
Because of the uncertainties associated with environmental assessment
and remediation activities, the possibility that sites could be
identified in the future that require environmental remediation and
the possibility of additional sites as a result of businesses
acquired, actual costs to be incurred by the Company may vary from the
Company's estimates. Subject to difficulties in estimating future
environmental costs, the Company does not expect that any sums it may
have to pay in connection with environmental matters in excess of
amounts reserved will have a material adverse effect on its
consolidated financial statements.
Outlook
- -------
The Company's primary financial goals are to maintain return on
beginning equity at 20% or above and increase earnings per share
("EPS") an average of 15% per year, while maintaining a prudent ratio
of total debt to total capital ("leverage"). The Company has achieved
these goals over the last ten years, averaging 21% ROE, increasing EPS
20% and averaging 26% leverage. The factors affecting the Company's
ability to achieve these goals in the future will be the rates of
internal and acquisition growth.
In terms of internal growth, the Company has achieved an average
of 5% internal sales growth over the last five years, and at the same
time, has improved its core business operating margins. Internal
sales growth has been under pressure recently, however, as a result of
a sluggish retail environment and continuing competition and
consolidation among the Company's volume purchasers. Over the longer
term, economic trends will continue to affect the Company's internal
growth prospects.
In terms of acquisition growth, since 1990 the Company has more
than doubled its size, acquiring businesses with annual sales of
almost $2 billion. The rate at which the Company can integrate these
recent acquisitions, in order to meet the Company's high standards of
profitability, may affect near-term EPS growth. Over the longer term,
the Company's ability to make and integrate strategic acquisitions
will impact the EPS growth rate.
35
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
Report of Independent Public Accountants
- ----------------------------------------
To the Stockholders and Board of Directors of Newell Co.:
We have audited the accompanying consolidated balance sheets of Newell
Co. (a Delaware corporation) and subsidiaries as of December 31, 1995,
1994 and 1993, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1995. These consolidated financial
statements are the responsibility of Newell Co.'s management. Our
responsibility is to express an opinion on these consolidated
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 financial position of Newell Co.
and subsidiaries as of December 31, 1995, 1994 and 1993, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Part IV
Item 14(a)(2) of this Form 10-K is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not a part
of the basic financial statements. This schedule has been subjected
to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
January 27, 1996.
36
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1995 1994 1993
---- ---- ----
(In thousands, except per share amounts)
Net sales $2,498,414 $2,074,934 $1,645,036
Cost of products sold 1,715,585 1,403,786 1,101,720
---------- --------- ---------
GROSS INCOME 782,829 671,148 543,316
Selling, general and
administrative expenses 363,356 313,283 257,186
---------- ---------- ---------
OPERATING INCOME 419,473 357,865 286,130
Nonoperating expenses (income):
Interest expense 49,812 29,970 19,062
Other (1,124) (1,397) (8,488)
----------- --------- ---------
Net 48,688 28,573 10,574
----------- --------- ---------
Income before income taxes 370,785 329,292 275,556
Income taxes 148,314 133,717 110,222
----------- --------- --------
NET INCOME $ 222,471 $ 195,575 $ 165,334
========= ========= =========
Earnings per share $1.41 $1.24 $1.05
==== ==== ====
Weighted average shares outstanding 158,212 157,774 157,269
======= ======= =======
See notes to consolidated financial statements.
37
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
1995 1994 1993
---- ---- ----
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 58,771 $ 14,892 $ 2,866
Accounts receivable, net 390,296 335,806 256,468
Inventories, net 509,245 420,654 301,016
Deferred income taxes 107,499 90,063 73,461
Prepaid expenses and other 67,063 56,256 42,217
---------- --------- ----------
TOTAL CURRENT ASSETS 1,132,874 917,671 676,028
MARKETABLE EQUITY SECURITIES 53,309 64,740 48,974
OTHER LONG-TERM INVESTMENTS 203,857 214,044 208,563
OTHER ASSETS 122,702 133,652 116,119
PROPERTY, PLANT AND EQUIPMENT, NET 530,285 454,597 370,382
TRADE NAMES AND GOODWILL 888,215 703,572 532,881
---------- --------- ----------
TOTAL ASSETS $2,931,242 $2,488,276 $1,952,947
========== ========== ==========
See notes to consolidated financial statements.
38
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT.)
December 31,
1995 1994 1993
----- ----- ----
(In thousands, except per share amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 104,017 $ 209,720 $ 189,003
Accounts payable 113,927 112,269 72,832
Accrued compensation 73,057 57,785 49,550
Other accrued liabilities 317,184 296,554 209,483
Income taxes 13,043 8,271 20,244
Current portion of long-term debt 59,031 99,425 58,200
--------- -------- -------
TOTAL CURRENT LIABILITIES 680,259 784,024 599,312
LONG-TERM DEBT 761,578 408,986 218,090
OTHER NONCURRENT LIABILITIES 158,321 152,697 156,400
DEFERRED INCOME TAXES 30,987 17,243 -
STOCKHOLDERS' EQUITY
Par value of common stock issued ($1 par) 158,626 157,844 78,793
Additional paid-in capital 190,860 175,218 249,588
Retained earnings 938,567 788,862 654,819
Net unrealized gain on securities
available for sale 15,912 9,868 N/A
Cumulative translation adjustment (3,868) (6,466) (4,055)
-------- -------- ---------
TOTAL STOCKHOLDERS' EQUITY 1,300,097 1,125,326 979,145
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,931,242 $2,488,276 $1,952,947
========= ========= =========
See notes to consolidated financial statements.
39
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
---- ---- -----
(In thousands)
OPERATING ACTIVITIES:
Net income $ 222,471 $ 195,575 $ 165,334
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation and amortization 101,722 72,485 64,262
Deferred income taxes 40,747 30,673 19,757
Net gains(losses) on:
Sale of businesses - - (1,233)
Marketable equity securities (15,819) (373) -
Write-off of investment 16,000 - -
Equity earnings of investment (5,993) (5,661) (3,811)
Changes in current accounts, excluding
the effects of acquisitions and sale
of businesses:
Accounts receivable 16,380 (254) (129,562)
Inventories (4,444) (13,798) (6,328)
Other current assets (4,629) 4,187 (860)
Accounts payable (14,941) (5,626) (4,508)
Accrued liabilities and other (74,752) (38,782) (72,920)
-------- ------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 276,742 238,426 30,131
-------- ------- --------
INVESTING ACTIVITIES:
Acquisitions, net (187,788) (345,392) (309,846)
Expenditures for property, plant
and equipment (82,562) (66,026) (58,898)
Sale of businesses - - 219,638
Sale of marketable equity securities 37,324 1,053 -
Purchase of other investments - - (1,660)
Disposals of noncurrent assets and other 1,227 2,628 (16,141)
--------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (231,799) (407,737) (166,907)
--------- -------- --------
40
NEWELL CO. AND SUBSIDIARIES (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
---- ---- -----
(In thousands)
FINANCING ACTIVITIES:
Proceeds from issuance of debt 315,191 402,708 232,852
Proceeds from exercised stock options
and other 7,100 2,799 5,216
Payments on notes payable and
long-term debt (250,589) (162,638) (72,154)
Cash dividends (72,766) (61,532) (54,280)
--------- -------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (1,064) 181,337 111,634
--------- -------- --------
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 43,879 12,026 (25,142)
Cash and cash equivalents at beginning of year 14,892 2,866 28,008
--------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 58,771 $ 14,892 $ 2,866
========= ========= ========
Supplemental cash flow disclosures:
Cash paid during the year for:
Income taxes $ 129,300 $ 115,900 $ 144,700
Interest 44,800 31,100 18,900
See notes to consolidated financial statements.
41
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Net
Unrealized
Gain on
Add'l Securities Cumulative
Common Paid-In Retained Available Translation
Stock Capital(1) Earnings for Sale Adjustment
-------- -------- -------- ---------- ------------
(In thousands, except per share amounts)
Balance at December 31, 1992 $ 78,338 $239,483 $543,765 $ N/A $ (2,208)
Net income 165,334
Cash dividends:
Common stock $0.35 per share (54,280)
Stock issued for acquisition 44 1,715
Exercise of stock options 445 8,374
Foreign currency translation
and other (34) 16 (1,847)
-------- -------- -------- ---------- ------------
Balance at December 31, 1993 78,793 249,588 654,819 N/A (4,055)
Net income 195,575
Fair value adjustment for
securities available for
sale at January 1, 1994 3,353
Cash dividends:
Common stock $0.39 per share (61,532)
Stock split, form of 100%
stock dividend 78,910 (78,910)
Exercise of stock options 155 4,604
Change in net unrealized
gain on securities
available for sale 6,515
Foreign currency translation
and other (14) (64) (2,411)
-------- -------- -------- ---------- ------------
Balance at December 31, 1994 157,844 175,218 788,862 9,868 (6,466)
42
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Net
Unrealized
Gain on
Add'l Securities Cumulative
Common Paid-In Retained Available Translation
Stock Capital(1) Earnings for Sale Adjustment
-------- -------- -------- ---------- ------------
(In thousands, except per share amounts)
Net income 222,471
Cash dividends:
Common stock $0.46 per share (72,766)
Stock issued for acquisitions 381 8,943
Exercise of stock options 412 6,759
Change in net unrealized
gain on securities
available for sale 6,044
Foreign currency translation
and other (11) (60) 2,598
-------- -------- -------- ---------- ------------
Balance at December 31, 1995 $158,626 $190,860 $938,567 $ 15,912 $ (3,868)
======== ======= ======= ======= =======
(1) Net of treasury stock (at cost) of $37, $134 and $161 as of December 31, 1993, 1994 and 1995, respectively.
See notes to consolidated financial statements.
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1) SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial
statements include the accounts of Newell and its majority owned
subsidiaries ("the Company") after elimination of intercompany
accounts and transactions.
Use of estimates: The preparation of these financial statements
required the use of certain estimates by management in determining the
Company's assets, liabilities, revenue and expenses and related
disclosures.
Revenue Recognition: Sales of merchandise are recognized upon
shipment to customers.
Disclosures about Fair Value of Financial Instruments: The
following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
Long-term Investments: The fair value of the investment in
convertible preferred stock of the Black & Decker Corporation
("Black & Decker") was based on an independent appraisal.
Long-term Debt: The fair value of the Company's long-term debt
issued under the medium-term note program is estimated based on
quoted market prices which approximate cost. All other
significant long-term debt are floating rate instruments whose
carrying amounts approximate fair value.
Derivatives: Premiums paid related to interest rate swap
agreements are amortized into interest expense over the terms of the
agreements. Unamortized premiums are included in other assets in the
consolidated balance sheets.
Gains and losses relating to qualifying hedges of firm
commitments are deferred and are recognized in income as adjustments
of carrying amounts when the hedged transaction occurs.
Allowances for Doubtful Accounts: Allowances for doubtful
accounts at December 31, totalled $11.0 million in 1995, $10.9 million
in 1994 and $6.2 million in 1993.
Inventories: Inventories are stated at the lower of cost or
market value. Cost of certain domestic inventories (approximately
89%, 87% and 83% of total inventories at December 31, 1995, 1994 and
1993, respectively) was determined by the "last-in, first-out"
("LIFO") method; for the balance, cost was determined using the
"first-in" first-out"("FIFO") method.
44
If the FIFO inventory valuation method had been used exclusively,
inventories would have been increased by $29.0 million, $12.3 million
and $9.2 million at December 31, 1995, 1994 and 1993, respectively.
The components of inventories at the end of each year, net of the
LIFO reserve, were as follows:
December 31,
1995 1994 1993
------ ------ ------
(In millions)
Materials and supplies $147.7 $ 81.7 $ 71.3
Work in process 87.5 98.9 49.6
Finished products 274.0 240.1 180.1
------ ------ ------
$509.2 $420.7 $301.0
===== ===== =====
Reserves for excess and obsolete inventories at December 31
totalled $37.5 million in 1995, $27.0 million in 1994 and $19.3
million in 1993.
Long-term Marketable Equity Securities: Long-term marketable
equity securities at the end of each year are summarized as follows:
December 31,
1995 1994 1993
------ ------ ------
(In millions)
Aggregate market value $ 53.3 $ 64.7 $ 54.6
Aggregate cost 26.8 48.3 49.0
------ ------ ------
Unrealized gain $ 26.5 $ 16.4 $ 5.6
====== ====== ======
Beginning January 1, 1994, long-term marketable equity securities
are carried at fair value with adjustments for fair value reported
separately as a component of stockholders' equity and excluded from
earnings.
During 1995, the Company received proceeds of $37.3 million from
the sale of long-term marketable securities and recorded a gain of
$15.8 million on the sale. Gains and losses on the sales of long-term
marketable securities are based upon the average cost of securities
sold.
Other Long-Term Investments: The Company owns 150,000 shares of
privately placed Black & Decker convertible preferred stock, Series B,
purchased at a cost of $150.0 million. The Series B preferred shares
pay a 7 3/4% cumulative dividend, are convertible into Black & Decker
common stock at $23.62 per share, and have voting rights equivalent to
45
the common stock into which they are convertible. These shares have
restrictions on disposition by the Company, and Black & Decker has the
option during the 90-day period beginning September 15, 2001, to
repurchase the remaining preferred shares and any common stock issued
upon conversion then held by the Company. The estimated fair value of
this investment was $244.5 million at December 31, 1995.
The Company has a 49% ownership interest in American Tool
Companies, Inc., a manufacturer of hand tools and power tool accessory
products marketed primarily under the VISE-GRIP and IRWIN trademarks.
This investment is accounted for on the equity method with a net
investment of $39.2 million included in Other Long-Term Investments at
December 31, 1995.
Accounting Principles to be Adopted: In 1995, the Financial
Accounting standards Board ("FASB") issued SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of." This statement has not been adopted by the Company
and management believes that the adoption of this statement in 1996
will not be material to the consolidated financial statements.
In 1995, the FASB also issued SFAS No. 123, "Accounting for Stock
Based Compensation." The Company will adopt this statement in 1996
which will require additional disclosures in the footnotes to the
consolidated financial statements. Management believes the adoption
of this statement will not be material to the consolidated financial
statements.
46
Property, Plant and Equipment: Property, plant and equipment at
the end of each year consisted of the following:
December 31,
1995 1994 1993
----- ---- -----
(In millions)
Land $ 16.2 $ 9.6 $ 7.1
Buildings and improvements 194.8 164.8 136.5
Machinery and equipment 647.8 515.8 419.1
------ ------ ------
858.8 690.2 562.7
Allowance for depreciation (328.5) (235.6) (192.3)
------ ------ ------
$ 530.3 $ 454.6 $ 370.4
====== ====== ======
The components of depreciation are provided by annual charges to
income calculated to amortize, principally on the straight-line basis,
the cost of the depreciable assets over their depreciable lives.
Estimated useful lives determined by the Company are as follows:
Buildings and improvements 20-40 years
Machinery and equipment 5-12 years
Replacements and improvements are capitalized. Expenditures for
maintenance and repairs are charged to expense.
Trade Names and Goodwill: Trade names and the excess of cost
over identifiable net assets of businesses acquired are being
amortized over 40 years on a straight-line basis. Accumulated
amortization of trade names and goodwill was $76.3 million, $57.0
million and $42.1 million at December 31, 1995, 1994 and 1993,
respectively.
Subsequent to an acquisition, the Company periodically evaluates
whether later events and circumstances have occurred that indicate the
remaining estimated useful life of goodwill may warrant revision or
that the remaining balance of goodwill may not be recoverable. When
factors indicate that goodwill should be evaluated for possible
impairment, the Company uses an estimate of the relevant business
unit's undiscounted net income over the remaining life of the goodwill
in measuring whether the goodwill is recoverable.
47
Accrued Liabilities: Accrued liabilities at the end of each year
included the following:
December 31,
1995 1994 1993
----- ---- -----
(In millions)
Promotion accruals $ 82.6 $ 74.9 $ 53.4
Accrued self-insurance liability 39.7 38.7 36.1
The self-insurance accrual is primarily for workers' compensation
and is estimated based upon historical claim experience.
Foreign Currency Translation: Foreign currency translation gains
and losses were insignificant in 1995, 1994 and 1993.
Reclassification: Certain 1993 and 1994 amounts have been
reclassified to conform with the 1995 presentation.
2) ACQUISITIONS AND DIVESTITURES OF BUSINESSES
1993
- -----
On April 30, 1993, the Company acquired substantially all of the
assets of Levolor Corporation ("Levolor"), a manufacturer and
distributor of decorative window coverings. The purchase price was
$72.5 million in cash. On September 22, 1993, the Company acquired
Lee Rowan Co. ("Lee Rowan"), a manufacturer and marketer of coated
wire storage and organization products. The purchase price was $73.5
million in cash. On November 9, 1993, the Company acquired Goody
Products, Inc. ("Goody"), a manufacturer and marketer of personal
consumer products including hair accessories and beauty organizers.
The purchase price, excluding the cost of Goody common stock that the
Company owned prior to the acquisition, was $147.1 million in cash.
These transactions were accounted for as purchases. The results
of operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1993 acquisitions was allocated to the fair market value of assets
acquired and liabilities assumed and resulted in trade names and
goodwill of approximately $208.2 million.
48
1994
- -----
On August 29, 1994, the Company acquired Home Fashions, Inc.
("HFI"), a manufacturer and marketer of decorative window coverings,
including vertical blinds and pleated shades sold under the Del Mar
and LouverDrape brand names. The purchase price was $130.4 million in
cash. This company was combined with Levolor and together they are
operated as a single entity called Levolor Home Fashions. On October
18, 1994, the Company acquired Faber-Castell Corporation, a maker and
marketer of markers and writing instruments, including wood-cased
pencils and rolling ball pens, whose products are marketed under the
Eberhard Faber brand name ("Eberhard Faber"). The purchase price was
$137.3 million in cash. This company was combined with Sanford and
together they are operated as a single entity called Sanford. On
November 30, 1994, the Company acquired the European consumer products
business of Corning Incorporated (now known as "Newell Europe"). This
acquisition included Corning's consumer products manufacturing
facilities in England, France and Germany, the European trademark
rights and product lines for Pyrex, Pyroflam and Visions brands in
Europe, the Middle East and Africa, and Corning's consumer
distribution network throughout these areas (Pyrex and Visions are
registered trademarks of Corning Incorporated). Additionally, the
Company became the distributor in Europe, the Middle East and Africa
for Corning's U.S.-manufactured cookware and dinnerware brands. The
purchase price was $87.8 million in cash.
These transactions were accounted for as purchases. The results
of operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1994 acquisitions was allocated to the fair market value of assets
acquired and liabilities assumed and resulted in trade names and
goodwill of approximately $197.8 million. The allocations of cost
were completed in 1995 with no material adjustments to the financial
statements.
1995
- -----
On September 29, 1995, the Company acquired Decorel Incorporated
("Decorel"), a manufacturer and marketer of ready-made picture frames.
The purchase price was $29.6 million in cash. On November 2, 1995,
the Company acquired Berol Corporation ("Berol"), a designer,
manufacturer and marketer of markers and writing instruments. The
purchase price was $118.8 million in cash. This company will be
combined into Sanford.
These transactions were accounted for as purchases. The results
of operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1995 acquisitions was allocated on a preliminary basis to the fair
market value of assets acquired and liabilities assumed and resulted
in trade names and goodwill of approximately $188.3 million. The
49
total adjustments to the purchase price allocation are not expected to
be material to the financial statements.
The unaudited consolidated results of operations for the years
ended December 31, 1995 and 1994 on a pro forma basis, as though
Berol, Decorel, HFI, Eberhard Faber and Newell Europe each had been
acquired on January 1, 1994, are as follows:
Year Ended December 31,
---------------------------------------
1995 1994
---- -----
(In millions, except per share amounts)
Net sales $2,732.3 $2,767.7
Net income 218.3 195.1
Earnings per share 1.38 1.24
3) CREDIT ARRANGEMENTS
The Company has short-term foreign and domestic lines of credit
with various banks. Under the line of credit arrangements, the
Company may borrow U.S. or foreign currencies up to $280.2 million (of
which $170.7 million was available at December 31, 1995) based upon
such terms as the Company and the respective banks have mutually
agreed upon. Committed lines of credit compose $134.5 million of the
total line of credit arrangements. Borrowings under the Company's
uncommitted lines of credit are subject to the discretion of the
lender. Compensating balances on the Company's foreign and domestic
lines of credit are not material.
50
The following is a summary of borrowings under foreign and
domestic lines of credit:
1995 1994 1993
------ ------ ------
(In millions)
Notes payable to banks:
Outstanding at year-end
- borrowing $104.0 $ 92.6 $ 50.3
- average interest rate 6.6% 6.0% 3.3%
Average for the year
- borrowing 102.4 21.5 37.3
- average interest rate 6.7% 4.9% 3.3%
Maximum borrowing outstanding
during the year 137.8 119.3 138.0
The Company can also issue $750 million of commercial paper. The
revolving credit facilities, as described in note 4 to the
consolidated financial statements, provide the committed backup
liquidity required to issue commercial paper. The entire amount of
commercial paper is classified as long-term under the five-year
revolving credit agreement. The following is a summary of commercial
paper:
1995 1994 1993
------ ------ ------
(In millions)
Commercial paper:
Outstanding at year-end
- borrowing $448.6 $417.1 $138.7
- average interest rate 5.8% 6.0% 3.3%
Average for the year
- borrowing 410.4 324.8 4.4
- average interest rate 6.0% 4.4% 3.3%
Maximum borrowing outstanding
during the year 500.0 479.0 138.7
51
4) LONG-TERM DEBT
The following is a summary of long-term debt:
December 31,
1995 1994 1993
------ ------ ------
(In millions)
Medium-term notes $345.0 $186.0 $153.0
Revolving Credit Agreement:
Commercial paper 448.6 300.0 -
Loans payable to banks - - 100.0
Other long-term debt 27.0 22.4 23.3
------ ------ ------
820.6 508.4 276.3
Current portion (59.0) (99.4) (58.2)
------ ------ ------
$761.6 $409.0 $218.1
====== ====== ======
At December 31, 1995, the Company had outstanding $345.0 million
(principal amount) of medium-term notes with maturities ranging from
one to five years at an average rate of interest equal to 6.3%.
In June 1995, the Company entered into a five-year $550.0 million
revolving credit agreement and a $200.0 million, 364-day revolving
credit agreement (and terminated its existing revolving credit
agreements). Under these agreements, the Company may borrow, repay
and reborrow funds in an aggregate amount up to $750.0 million, at a
floating interest rate. At December 31, 1995, there were no
borrowings under the revolving credit agreements.
In lieu of borrowings under the revolving credit agreements, the
Company may issue up to $750.0 million of commercial paper. The
Company's revolving credit agreements referred to above provide the
committed backup liquidity required to issue commercial paper.
Accordingly, commercial paper may only be issued up to the amount
available under the Company's revolving credit agreements. At
December 31, 1995, $448.6 million (face or principal amount) of
commercial paper was outstanding, all of which was supported by the
five-year revolving credit agreement. The entire amount is classified
as long-term debt.
The revolving credit agreements permit the Company to borrow
funds using Syndicated loans (Base Rate loans or Eurodollar loans),
52
Money Market loans (LIBOR Market loans or Set Rate loans) or
Acceptance liabilities, as selected by the Company. The terms of
these agreements require, among other things, that the Company
maintain a certain Total Debt to Total Capital Ratio and a minimum
Operating Income to Interest Expense Ratio, all capitalized terms as
defined in these agreements. As of December 31, 1995, the Company was
in compliance with these agreements.
The aggregate maturities of long-term debt outstanding at
December 31, 1995, are as follows:
Year Aggregate Maturities
---- --------------------
(In millions)
1996 $59.0
1997 3.3
1998 1.3
1999 8.3
2000 596.9
Thereafter 121.8
-----------------
$820.6
=====
As of January 23, 1996, the Company has a universal shelf
registration statement under which the Company may issue up to $500
million of debt and equity securities, subject to market conditions.
5) DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative
financial instruments and does not use them for trading purposes.
They are used to manage certain interest rate and foreign currency
risks.
Interest rate swap agreements are utilized to convert certain
floating rate debt instruments into fixed rate debt or to convert
certain floating rate debt based on federal funds rates to floating
rate debt based upon commercial paper rates. As of December 31, 1995,
the Company was party to two interest rate swap agreements which
terminate in June 1996 and June 1998, respectively. The first
agreement requires the Company to pay on a monthly basis the amounts
by which the commercial paper rate exceeds the Federal Funds rate on
$50.0 million of debt. The second agreement has a principal value of
$100.0 million and converts one month LIBOR rate debt into fixed rate
debt with a rate of 5.5%.
The Company uses forward exchange contracts to hedge certain
purchase commitments denominated in currencies other than the domestic
currency (primarily Japanese yen and U.S. dollar for the Company's
53
Canadian subsidiary). As of December 31, 1995, the Company had no
forward exchange contracts outstanding.
The Company does not obtain collateral or other security to
support financial instruments subject to credit risk but monitors the
credit standing of the counterparties. The market value of all the
Company's derivatives approximates their carrying values.
6) LEASES
The Company has minimum rental payments through the year 2007
under noncancellable operating leases as follows:
Year Minimum Payments
---- ----------------
(In millions)
1996 $25.1
1997 18.5
1998 11.8
1999 7.5
2000 4.7
Thereafter 17.5
-----
$85.1
=====
Total rental expense for all operating leases was approximately
$38.3 million, $31.8 million and $26.0 million in 1995, 1994 and 1993,
respectively.
7) EMPLOYEE BENEFIT RETIREMENT PLANS
The Company and its subsidiaries have noncontributory pension and
profit sharing plans covering substantially all of its foreign and
domestic employees. Pension plan benefits are generally based on
years of service and/or compensation. The Company's funding policy is
to contribute not less than the minimum amounts required by the
Employee Retirement Income Security Act of 1974 or local statutes to
assure that plan assets will be adequate to provide retirement
benefits. Due to the overfunded status of most of the pension plans,
contributions to these plans were insignificant during the past three
years.
54
The net periodic pension cost components for the pension plans
are as follows:
Year Ended December 31,
---------------------------
1995 1994 1993
---- ---- ----
(In millions)
Service cost-benefits earned
during the year $ 14.3 $ 13.4 $ 8.3
Interest cost on projected
benefit obligation 35.0 31.3 27.3
Actual return on assets (64.0) (31.3) (42.7)
Net amortization and
other components 17.5 (9.4) 6.8
----- ----- -----
Total pension plan
expense (income) $ 2.8 $ 4.0 $ (.3)
===== ===== =====
The principal actuarial assumptions used are as follows:
1995 1994 1993
---- ---- ----
(In percent)
Measurement of projected
benefit obligation:
Discount rate 7.75% 8% 7.25%
Long-term rate of
compensation increase 5% 5% 5%
Long-term rate of return on
plan assets 9% 9% 9%
55
The following table sets forth the funded status of the pension
plans and the amount recognized in the Company's consolidated balance
sheets:
Plans Whose Plans Whose
Assets Accumulated
Exceed Benefits
Accumulated Exceed
Benefits Assets
-------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
(In millions)
Actuarial present value of
benefit obligations:
Vested $329.0 $347.1 $ 89.2 $ 21.1
Nonvested 10.1 12.0 10.5 4.8
------ ------ ------ ------
Accumulated benefit
obligation 339.1 359.1 99.7 25.9
Effect of projected future
salary increases 15.2 20.9 17.9 5.7
------ ------ ------ ------
Projected benefit obligation 354.3 380.0 117.6 31.6
Plan assets at market value
(primarily common stock and
fixed income investments) 463.1 469.2 75.9 6.1
------ ------ ------ ------
Plan assets in excess of (less
than) projected benefit obligation 108.8 89.2 (41.7) (25.5)
Unrecognized transition (net asset)
obligation (4.5) (13.5) (3.1) 1.7
Unrecognized prior service cost (3.0) - 1.1 -
Unrecognized net (gain)loss (21.9) (7.5) 11.3 5.1
------ ------ ------ ------
Net pension asset (liability)
recognized in the consolidated
balance sheets $ 79.4 $ 68.2 $(32.4) $(18.7)
===== ===== ===== =====
Total expense under all profit sharing plans were $5.5 million,
$4.5 million and $3.5 million for the years ended December 31, 1995,
1994 and 1993, respectively.
56
8) RETIREE HEALTH CARE
Several of the Company's subsidiaries currently provide retiree
health care benefits for certain employee groups.
The components of the net postretirement health care cost are as
follows:
Year Ended December 31,
1995 1994 1993
---- ---- ----
(In millions)
Service cost-benefits attributed
to service during the period $ 1.7 $ 2.0 $ 1.1
Interest cost on accumulated
postretirement benefit obligation 7.5 7.3 8.1
Net amortization and deferral ( .5) - -
---- ---- ----
Net postretirement health care cost $ 8.7 $ 9.3 $ 9.2
===== ==== ====
A reconciliation of the accumulated postretirement benefit
obligation to the liability recognized in the consolidated balance
sheets is as follows:
December 31,
1995 1994 1993
------- ------- -------
(In millions)
Accumulated postretirement
benefit obligation:
Retirees $ (67.4) $ (65.2) $ (73.0)
Fully eligible active plan participants (5.6) (6.0) (5.2)
Other active plan participants (23.4) (21.1) (22.8)
------- ------- -------
Accumulated postretirement benefit
obligation (96.4) (92.3) (101.0)
Market value of assets - - -
------- ------- -------
Funded status (96.4) (92.3) (101.0)
Unrecognized net(gain) (13.0) (16.7) (8.4)
------- ------- -------
Other Noncurrent Liability $(109.4) $(109.0) $(109.4)
======= ======= =======
The actuarial calculation assumes an 11% increase in the health
care cost trend rate for fiscal year 1995. The assumed rate decreases
one percent every year through the sixth year to six percent and
remains constant beyond that point. The health care cost trend rate
has a significant effect on the amounts reported. For example, a one
percentage point increase in the health care cost trend rate would
increase the accumulated postretirement benefit obligation by $6.2
million and increase net periodic cost by $.8 million. The discount
57
rate used in determining the accumulated postretirement benefit
obligation was 7.75% in 1995, 8% in 1994 and 7.25% in 1993.
9) STOCKHOLDERS' EQUITY AND PER SHARE DATA
The Company's common stock consists of 400.0 million authorized
shares, with a par value of $1 per share. Of the total unissued
common shares at December 31, 1995, total shares in reserve included
8.9 million shares for issuance under the Company's stock option
plans.
Each share of common stock includes a preferred stock purchase
right (a "Right"). Each Right will entitle the holder, until the
earlier of October 31, 1998 or the redemption of the Rights, to buy
one four-hundredth of a share of a new series of preferred stock,
denominated "Junior Participating Preferred Stock, Series B," at a
price of $25 per one four-hundredth of a share (as adjusted to reflect
stock splits since the issuance of the Rights). This preferred stock
is nonredeemable and will have 100 votes per share. The Company has
reserved 500,000 Series B preferred shares for issuance upon exercise
of such Rights. The Rights will be exercisable only if a person or
group acquires 20% or more of voting power of the Company or announces
a tender offer following which it would hold 30% or more of the
Company's voting power.
In the event that any person becomes the beneficial owner of 30%
or more of the Company's voting power, the Rights (other than Rights
held by the 30% stockholder) would become exercisable for that number
of shares of the Company's common stock having a market value of two
times the exercise price of the Right. Furthermore, if, following the
acquisition by a person or group of 20% or more of the Company's
voting power, the Company were acquired in a merger or other business
combination or 50% or more of its assets were sold, or in the event of
certain types of self-dealing transactions by a 20% stockholder, each
Right (other than Rights held by the 20% stockholder) would become
exercisable for that number of shares of common stock of the Company
(or the surviving company in a business combination) having a market
value of two times the exercise price of the Right.
The Company may redeem the Rights at one cent per Right prior to
the occurrence of an event that causes the Rights to become
exercisable for common stock. The Board of Directors may terminate
the Company's right to redeem the Rights under certain circumstances
at any time after a group or person acquires 20% or more of the
Company's voting power.
The earnings per share amounts are computed based on the weighted
average monthly number of shares outstanding during the year.
58
10) STOCK OPTIONS
All options are granted at prices at least equal to the market
value on the date of grant and expire five years to ten years and one
day thereafter.
The following summarizes the changes in number of shares of
common stock under option:
Range of
Number of Per Share
Shares Option Prices
-------- -------------
Outstanding at December 31, 1992 2,552,880 3.84 - 24.44
Granted 431,860 16.44 - 19.38
Goody Grants Assumed 53,210 8.63 - 15.16
Exercised (881,428) 3.88 - 16.44
Cancelled (74,322) 10.35 - 10.35
---------
Outstanding at December 31, 1993 2,082,200 3.84 - 24.44
Granted 454,400 19.88 - 22.38
Exercised (273,196) 3.84 - 19.19
Cancelled (107,646) 7.34 - 21.75
---------
Outstanding at December 31, 1994 2,155,758 3.84 - 24.44
Granted 284,250 23.25 - 26.00
Exercised (411,528) 3.84 - 24.44
Cancelled (82,750) 16.44 - 26.00
---------
Outstanding at December 31, 1995 1,945,730 3.88 - 26.00
==========
Options outstanding on December 31, 1995, are exercisable at an
average price of $18.72 and expire on various dates from January 25,
1996 to November 9, 2005.
59
11) INCOME TAXES
The Company utilizes SFAS No. 109, "Accounting for Income Taxes,"
for computing its income tax provision. The provision for income
taxes consists of the following:
Year Ended December 31,
1995 1994 1993
---- ---- ----
(In millions)
Current:
Federal $ 88.5 $ 82.3 $ 70.5
State 16.7 19.1 19.0
Foreign 2.4 1.6 0.9
------- ------- ------
107.6 103.0 90.4
Deferred 40.7 30.7 19.8
------- ------- ------
Total $ 148.3 $ 133.7 $ 110.2
====== ====== ======
The components of the net deferred tax asset are as follows:
December 31,
----------------------------
1995 1994 1993
---- ---- ----
(In millions)
Deferred tax assets:
Accruals, not currently
deductible for tax purposes $ 105.1 $ 79.5 $ 65.1
Postretirement liabilities 43.6 44.9 48.0
Inventory reserves 16.5 6.2 2.1
Self-insurance liability 13.2 14.1 11.3
Other .8 3.0 2.2
------ ------ -------
179.2 147.7 128.7
Deferred tax liabilities:
Accelerated depreciation (45.5) (37.1) (26.3)
Prepaid pension asset (31.6) (24.2) (24.5)
Unrealized gain on securities
available for sale (10.6) (6.5) -
Other (15.0) (7.0) (1.6)
------ ----- ------
(102.7) (74.8) (52.4)
------ ------- -------
Net deferred tax asset $ 76.5 $ 72.9 $ 76.3
====== ====== ======
60
The net deferred tax asset is classified in the consolidated
balance sheets as follows:
December 31,
1995 1994 1993
---- ---- -----
(In millions)
Current net deferred income
tax asset $ 107.5 $ 90.1 $ 73.5
Noncurrent deferred income taxes:
Included in Other Assets - - 2.8
Liability (31.0) (17.2) -
_______ ______ _______
$ 76.5 $ 72.9 $ 76.3
====== ====== ======
A reconciliation of the U.S. statutory rate to the effective
income tax rate is as follows:
Year Ended December 31,
-----------------------------
1995 1994 1993
---- ---- ----
(In percent)
Statutory rate 35.0% 35.0% 35.0%
Add (deduct) effect of:
State income taxes, net of
federal income tax effect 4.3 4.5 4.5
Nondeductible trade names
and goodwill amortization 1.4 1.3 0.9
---- ----- -----
Other (0.7) (0.2) (0.4)
Effective rate 40.0% 40.6% 40.0%
==== ==== ====
No U.S. deferred taxes have been provided on undistributed non-
U.S. subsidiary earnings of $28.1 million, which are considered to be
permanently invested.
The non-U.S. component of income before income taxes was $19.3
million in 1995, $3.5 million in 1994 and $1.8 million in 1993.
61
12) OTHER NONOPERATING EXPENSES(INCOME)
Total other nonoperating expenses (income) consist of the
following:
Year Ended December 31,
1995 1994 1993
---- ---- -----
(In millions)
Interest income $ (1.9) $ (1.0) $ (.9)
Trade names and goodwill amortization 19.3 15.4 10.1
Dividend income (12.8) (12.6) (12.9)
Equity in earnings of
American Tool Companies, Inc. (6.0) (5.7) (3.8)
Write-downs in carrying value
of a long-term foreign
investment accounted for under
the equity method 16.0 - -
Net gain on marketable
equity securities (15.8) (0.4) -
Other 0.1 2.9 (1.0)
----- ---- -----
$ (1.1) $ (1.4) $ (8.5)
===== ===== =====
13) OTHER OPERATING INFORMATION
INDUSTRY SEGMENT INFORMATION
The Company operates in a single industry segment; the Company is
a manufacturer and full-service marketer of high-volume, brand-name,
staple consumer products sold to volume purchasers. The Company's
consumer products are sold through a variety of retail and wholesale
distribution channels.
62
The Company's consumer products and the primary brand names under
which they are sold include:
Primary
Product Group Product Class Brand Names
- ------------- ------------- ---------------
Housewares Glassware & Plasticware Anchor Hocking(R)
Pyrex(R) (1)
Aluminum Cookware & Mirro(R)
Bakeware WearEver(R)
Hair Accessories Goody(R)
Ace(R)
Home Furnishings Window Treatments Newell(R)
Levolor(R)
LouverDrape(R)
Del Mar(R)
Joanna(R)
Home Storage Products Lee Rowan(R)
System Works(R)
Picture Frames Intercraft(R)
Decorel(R)
Holson Burnes(TM)
Office Products Markers & Writing Sanford(R)
Instruments Eberhard Faber(R)
Berol(R)
School Supplies & Stuart Hall(R)
Stationery
Desktop & Computer Newell(R)
Accessories Rogers(R)
Keene(R)
Hardware & Hardware Amerock(R)
Tools Bulldog(R)
Paint Applicators EZ Paintr(R)
Hand Torches BernzOmatic(R)
(1) Marketed in Europe, the Middle East and Africa.
Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to
approximately 14% of consolidated sales in 1995, 15% in 1994 and 14%
in 1993. Sales to each of the Company's other customers,
individually, amounted to less than 10% of consolidated net sales.
63
GEOGRAPHIC SEGMENT INFORMATION
Prior to the November 1994 acquisition of Newell Europe and the
November 1995 acquisition of Berol, the Company operated principally
in the United States and Canada. Following these acquisitions, the
Company operates in several non-U.S. locations including England,
France, Germany, Mexico and Colombia. Summary financial information
by geographic area included in the consolidated financial statements
is as follows.
1995
-------------
(In millions)
Net sales:
U.S. $2,214.0
Non-U.S. 284.4
--------
Total $2,498.4
=======
Operating Income:
U.S. $ 395.5
Non-U.S. 24.0
--------
Total $ 419.5
=======
Total assets at December 31
U.S. (including corporate assets
of $972.7 million) $2,517.2
Non-U.S. 414.0
--------
Total $2,931.2
=======
Sales between geographic areas are not material.
14) LITIGATION
The Company and its subsidiaries are subject to certain legal
proceedings and claims, including the environmental matters described
below, that have arisen in the ordinary conduct of its business.
Although management of the Company cannot predict the ultimate outcome
of these matters with certainty, it believes that their ultimate
resolution will not have a material effect on the Company's
consolidated financial statements.
The Company and its subsidiaries are involved in various matters
concerning federal and state environmental laws and regulations,
including seventeen matters in which they have been identified by the
U.S. Environmental Protection Agency and certain state environmental
agencies as potentially responsible parties ("PRPs") at hazardous
waste disposal sites under the Comprehensive Environmental Response,
64
Compensation and Liability Act ("Superfund") and equivalent state
laws. In assessing its remediation costs, the Company has considered
several factors, including: the extent of the Company's volumetric
contribution at each site relative to that of other PRPs; the kind of
waste; where applicable, the terms of existing cost sharing and other
agreements; the ability of other PRPs to share in the payment of
requisite costs; the Company's prior experience with environmental
remediation; environmental studies and cost estimates available to the
Company; the effects of inflation on cost estimates; and the extent to
which the Company's and other party's status as a PRP is disputed.
Based on information currently available to it, the Company's estimate
of remediation costs associated with these matters ranges between
$11.0 million and $15.6 million. As of December 31, 1995, the Company
had a reserve equal to $13.8 million for such remediation costs in the
aggregate. No insurance recovery was taken into account in
determining the Company's cost estimates or reserve nor do the
Company's cost estimates or reserve reflect any discounting for
present value purposes.
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
- ------- -----------------------------------------------------------
None.
65
PART III
Item 10. Directors and Executive Officers of the Registrant
- -------- --------------------------------------------------
Information regarding executive officers of the Company is
included as a Supplementary Item at the end of Part I of this Form 10-
K.
Information regarding directors of the Company is included in the
Company's Definitive Proxy Statement for the Annual Meeting of
Stockholders to be held May 8, 1996 ("Proxy Statement") under the
caption "Proposal 1 - Election of Directors," which information is
hereby incorporated by reference herein.
Information regarding compliance with Section 16(a) of the
Exchange Act is included in the Proxy Statement under the caption
"Compliance with Forms 3, 4 and 5 Reporting Requirements," which
information is hereby incorporated by reference herein.
Item 11. Executive Compensation
- -------- ----------------------
Information regarding executive compensation is included in the
Proxy Statement under the caption "Proposal 1 - Election of Directors
- - Information Regarding Board of Directors and Committees," the
captions "Executive Compensation - Summary; - Option Grants in 1995; -
Option Exercises in 1995; - Pension and Retirement Plans; - Employment
Security Agreements," and the caption "Executive Compensation
Committee Interlocks and Insider Participation," which information is
hereby incorporated by reference herein.
Item 12. Security Ownerships of Certain Beneficial Owners and Management
- -------- ---------------------------------------------------------------
Information regarding security ownership is included in the Proxy
Statement under the caption "Certain Beneficial Owners," which
information is hereby incorporated by reference herein.
Item 13. Certain Relationships and Related Transactions
- ------- ------------------------------------------------
Not Applicable.
66
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
- -------- -------------------------------------------------------
(a) (1) The following is a list of the financial
statements of Newell Co. included in this report
on Form 10-K which are filed herewith pursuant to
Item 8:
Report of Independent Public Accountants
Consolidated Statements of Income - Years Ended
December 31, 1995, 1994 and 1993
Consolidated Balance Sheets - December 31, 1995,
1994 and 1993
Consolidated Statements of Cash Flows - Year Ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Stockholders' Equity -
Years Ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements -
December 31, 1995, 1994 and 1993
(2) The following is a list of the consolidated
financial statement schedules of the Company
included in this report on Form 10-K which are
filed herewith pursuant to Item 14(d) and appear
immediately preceding the Exhibit Index:
Schedule VIII - Valuation and Qualifying Accounts
(3) The exhibits filed herewith are listed on the
Exhibit Index filed as part of this report on Form
10-K. Each management contract or compensatory
plan or arrangement of the Company listed on the
Exhibit Index is separately identified by an
asterisk.
(b) Reports on Form 8-K
(1) Registrant filed a Report on Form 8-K dated
November 14, 1995 reporting the filing of an
unallocated shelf registration statement on Form
S-3.
67
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEWELL CO.
Registrant
By /s/ William T. Alldredge
----------------------------
William T. Alldredge
Vice President-Finance
Date March 12, 1996
-------------------------------
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on March 12, 1996, by the
following persons on behalf of the Registrant and in the capacities
indicated.
Signature Title
--------- ----------
/s/ Daniel C. Ferguson Chairman of the Board and Director
- ----------------------------
Daniel C. Ferguson
/s/ William P. Sovey Vice Chairman of the Board, Chief Executive
- ----------------------------
William P. Sovey Officer and Director
(Principal Executive Officer)
/s/ Thomas A. Ferguson, Jr. President and Chief Operating Officer
- ----------------------------
Thomas A. Ferguson, Jr. and Director
/s/ Donald L. Krause Senior Vice President-Corporate Controller
- ----------------------------
Donald L. Krause (Principal Accounting Officer)
/s/ William T. Alldredge Vice President-Finance
- ----------------------------
William T. Alldredge (Principal Financial Officer)
68
/s/ Alton F. Doody Director
- ----------------------------
Alton F. Doody
/s/ Gary H. Driggs Director
- ----------------------------
Gary H. Driggs
/s/ Robert L. Katz Director
- ----------------------------
Robert L. Katz
/s/ John J. McDonough Director
- ----------------------------
John J. McDonough
/s/ Elizabeth Cuthbert Millett Director
- ----------------------------
Elizabeth Cuthbert Millett
/s/ Cynthia A. Montgomery Director
- ----------------------------
Cynthia A. Montgomery
/s/ Allan P. Newell Director
- ----------------------------
Allan P. Newell
Director
- ----------------------------
Henry B. Pearsall
69
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
NEWELL CO. AND SUBSIDIARIES
- -----------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- -------- --------- -------- -------- --------
- -----------------------------------------------------------------------------------
Additions
----------------------------------------------------
Balance at Charged to Charged to Balance at
Beginning costs and other accounts Deductions end
Description of Period expenses (A) (B) of period
----------- --------- ---------- ------------- ------------ ------------
Allowance for
doubtful accounts:
Year ended
December 31, 1995 $10,886 $2,838 $1,990 $(4,700) $11,014
Year ended
December 31, 1994 6,226 2,780 3,996 (2,116) 10,886
Year ended
December 31, 1993 5,577 2,068 1,420 (2,839) 6,226
Note A - Represents recovery of accounts previously written off, along with
reserves of acquired businesses.
Note B - Represents accounts charged off.
Balance at
Beginning of Balance at
Period Provision Write-offs End of Period
----------- --------- ---------- -------------
Reserve for excess
and obsolete inventories:
Year ended
December 31, 1995 $(26,987) $(14,205) $ 3,700 $(37,492)
Year ended
December 31, 1994 (19,297) (12,096) 4,406 (26,987)
Year ended
December 31, 1993 (17,605) (3,062) 1,370 (19,297)
70
(C) EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- -------------------------
Item 3. Articles of 3.1 Restated Certificate of Incorporation
Incorporation of Newell Co., as amended as of
and By-Laws September 7, 1995.
3.2 By-Laws of Newell Co., as amended
through November 9, 1995 (incorporated
by reference to Exhibit 4.2 to Pre-
effective Amendment No. 1 to the
Company's Registration Statement on Form
S-3, Reg. No. 33-64225, filed
January 23, 1996).
Item 4. Instruments 4.1 Restated Certificate of Incorporation of
defining the Newell Co., as amended as of May 10,
rights of 1995 is included in Item 3.1.
security
holders, 4.2 By-Laws of Newell Co., as amended
including through November 9, 1995, are included
indentures in Item 3.2.
4.3 Rights Agreement dated as of October 20,
1988 between the Company and First
Chicago Trust Company of New York
(formerly known as Morgan Shareholders
Services Trust Company)(incorporated by
reference to Exhibit 4 to the Company's
Current Report on Form 8-K dated
October 25, 1988).
4.4 Indenture dated as of April 15, 1992,
between the Company and The Chase
Manhattan Bank (National Association).
Trustee (incorporated by reference to
Exhibit 4.4 to the Company's Report on
Form 8 amending the Company's Quarterly
Report on Form 10-Q for the period ended
March 31, 1992).
Pursuant to item 601(b)(4)(iii)(A) of
Regulation S-K, the Company is not
filing certain documents. The Company
agrees to furnish a copy of each such
document upon the request of the
Commission.
71
Exhibit
Number Description of Exhibit
-------- -------------------------
Item 10. Material *10.1 The Newell Long-Term Savings and
Contracts Investment Plan, as amended and restated
effective May 1, 1993 (incorporated by
reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30,
1993 (the "June 1993 Form 10-Q").
*10.2 The Company's Amended and Restated 1984
Stock Option Plan, as amended through
February 14, 1990 (incorporated by
reference to Exhibit 10.2 to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1990 (the
"1990 Form 10-K")).
*10.3 Newell Co. Deferred Compensation Plan,
as amended, effective October 23, 1986.
*10.4 Newell Operating Company's ROA Cash
Bonus Plan, effective January 1, 1977,
as amended (incorporated by reference to
Exhibit 10.8 to the 1981 Form S-14).
*10.5 Newell Operating Company's ROI Cash
Bonus Plan, effective July 1, 1966, as
amended (incorporated by reference to
Exhibit 10.9 to the 1981 Form S-14).
*10.6 Newell Operating Company's Pension Plan
for Salaried and Clerical Employees, as
amended and restated, effective
January 1, 1989 (incorporated by
reference to Exhibit 10.2 to the June
1993 Form 10-Q).
*10.7 Newell Operating Company's Pension Plan
for Factory and Distribution Hourly-Paid
Employees, as amended and restated,
effective January 1, 1984 (incorporated
by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1985 (File
No. 0-7843) (the "1985 Form 10-K")).
72
Exhibit
Number Description of Exhibit
------- -------------------------
*10.8 Newell Operating Company's Supplemental
Retirement Plan for Key Executives,
effective January 1, 1982, as amended
(incorporated by reference to Amendment
No. 2 to the Company's Registration
Statement on Form S-14, File No. 2-
71121, filed February 2, 1982).
10.9 Securities Purchase Agreement dated June
21, 1985 between American Tool
Companies, Inc. and the Company (incor-
porated by reference to Exhibit 10.13 to
the 1985 Form 10-K).
*10.10 Form of Employment Security Agreement
with six executive officers (incorpor-
ated by reference to Exhibit 10.10 to
the 1990 Form 10-K).
10.11 Letter Agreement dated as of August 13,
1991 between The Black & Decker Corpora-
tion and the Company (incorporated by
reference to Exhibit 1 to the Company's
Statement on Schedule 13D dated August
22, 1991).
10.12 Standstill Agreement dated as of
September 24, 1991 between The Black &
Decker Corporation and the Company
(incorporated by reference to Exhibit 3
to Amendment No. 1 to the Company's
Statement on Schedule 13D dated
September 26, 1991 (the "Schedule 13D
Amendment")).
*10.13 Newell Co. 1993 Stock Option Plan,
effective February 9, 1993 (incorporated
by reference to the Company's
Registration Statement on Form S-8, File
No. 33-67632, filed August 19, 1994).
10.14 Form of Placement Agency Agreement
relating to private placement to
accredited investors of unsecured notes
of the Company (incorporated by
reference to Exhibit 10.20 to the 1993
Form 10-K).
73
Exhibit
Number Description of Exhibit
------- -------------------------
10.15 364-Day Credit Agreement dated as of
June 12, 1995 among the Company, certain
of its affiliates, The Chase Manhattan
Bank (National Association), as Agent
and the banks whose names appear on the
signature pages thereto (incorporated by
reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1995 (the
"June 1995 Form 10-Q")).
10.16 Five Year Credit Agreement dated as of
June 12, 1995 among the Company, certain
of its affiliates, The Chase Manhattan
Bank (National Association), as Agent,
and the banks whose names appear on the
signature pages thereto (incorporated by
reference to Exhibit 10.2 to the June
1995 Form 10-Q).
Item 21. Subsidiaries 21.1 Subsidiaries of the Company.
of the
Registrant
Item 23. Consent of 23.1 Consent of Arthur Andersen LLP.
experts and
counsel
Item 27. Financial 27 Financial Data Schedule.
Data Schedule
Item 99. Additional 99 Safe Harbor Statement.
Exhibits
* Management contract or compensatory plan or arrangement of the
Company.
EXHIBIT 3.1
Filed May 18, 1987 at 3:00 p.m.
Delaware Secretary of State
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW NEWELL CO.
NEW NEWELL CO., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is NEW NEWELL CO. (the
"Corporation"). The date of filing the Corporation's original
Certificate of Incorporation with the Secretary of State of the
State of Delaware was February 23, 1987.
2. The text of the Certificate of Incorporation of the
Corporation as amended or supplemented heretofore and herewith is
hereby restated to read as herein set forth in full:
FIRST: the name of the Corporation is NEW NEWELL CO.
SECOND: The address of the Corporation's registered office in
the State of Delaware is 229 South State Street in the City of Dover,
County of Kent. The name of the Corporation's registered agent at
such address is United States Corporation Company.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH: The total number of shares which the Corporation shall
have authority to issue is 56,000,000, consisting of 50,000,000 shares
of Common Stock of the par value of $1.00 per share and 6,000,000
shares of Preferred Stock, consisting of 10,000 shares without par
value and 5,990,000 shares of the par value of $1.00 per share. The
designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, of each of the
classes of stock of the Corporation are as follows:
A. Common Stock. Each holder of Common Stock shall be entitled
to one (1) vote for each such share of Common Stock.
B. Preferred Stock. The Preferred Stock shall be issued from
time to time in one or more series with such distinctive serial
designations and (a) may have such voting powers, full or limited, or
may be without voting powers; (b) may be subject to redemption at such
time or times and at such price or prices; (c) may be entitled to
receive dividends (which may be cumulative or noncumulative) at such
rate or rates, on such conditions, and at such times, and payable in
preference to, or in such relation to, the dividends payable on any
75
other class or classes of stock; (d) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the
Corporation; (e) may be made convertible into, or exchangeable for,
shares of any other class or classes or of any other series of the
same or any other class or classes of stock of the Corporation, at
such price or prices or at such rates of exchange and with such
adjustments; and (f) shall have such other relative, participating,
optional or other special rights, qualifications, limitations or
restrictions thereof, all as shall hereafter be stated and expressed
in the resolution or resolutions providing for the issue of such
Preferred Stock from time to time adopted by the Board of Directors
pursuant to authority so to do which is hereby expressly vested in the
Board.
C. Increase in Authorized Shares. The number of authorized
shares of any class of stock of the Corporation may be increased by
the affirmative vote of a majority of the stock of the Corporation
entitled to vote thereon, without a vote by class or by series.
FIFTH: The name and mailing address of the incorporator of the
Corporation is as follows:
Name Address
------------------------ -------------------------
Lori E. Simon . . . . . . Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
SIXTH: A. The Board of Directors shall be divided into three
classes (which at all times shall be as nearly equal in number as
possible). The initial term of office of the first class ("Class I")
shall expire at the 1988 annual meeting of stockholders, the initial
term of office of the second class ("Class II") shall expire at the
1989 annual meeting of stockholders, and the initial term of office of
the third class ("Class III") shall expire at the 1990 annual meeting
of stockholders. At each annual meeting of stockholders following
such initial classification, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders after
their election. The foregoing notwithstanding, each director shall
serve until his successor shall have been duly elected and qualified,
unless he shall cease to serve by reason of death, resignation or
other cause. If the number of directors is changed, any increase or
decease shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible, but in
no case shall a decrease in the number of directors shorten the term
of any incumbent director.
76
B. The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors, and the Board of
Directors shall determine the rights, powers, duties, rules and
procedures that shall affect the power of the Board of Directors to
manage and direct the business and affairs of the Corporation.
C. Newly created directorships resulting from any increase in
the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation or other cause may be
filled only by a majority vote of the directors then in office, though
less than a quorum, or by a sole remaining director. Any director so
chosen shall hold office for a term expiring at the annual meeting of
stockholders at which the term of office of the class to which he has
been elected expires.
D. The provisions set forth in paragraphs A and C of this
Article SIXTH are subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances as set forth in this Restated Certificate of
Incorporation or in a resolution providing for the issuance of such
stock adopted by the Board of Directors pursuant to authority vested
in it by this Restated Certificate of Incorporation.
E. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article SIXTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article SIXTH be
adopted, unless such action is approved by the affirmative vote of the
holders of at least 75% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors
generally, considered for purposes of this Article SIXTH as one class.
SEVENTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized
to make, alter or repeal the By-Laws of the Corporation.
EIGHTH: A. Subject to the rights of holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances as set forth in this Restated Certificate of
Incorporation or in a resolution providing for the issuance of such
stock adopted by the Board of Directors pursuant to authority vested
in it by this Restated Certificate of Incorporation, nominations for
the election of directors may be made by the Board of Directors or by
a committee appointed by the Board of Directors, or by any stockholder
entitled to vote in the election of directors generally provided that
such stockholder has given actual written notice of such stockholders'
intent to make such nomination or nominations to the Secretary of the
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Corporation not later than (1) with respect to an election to be held
at an annual meeting of stockholders, 90 days prior to the anniversary
date of the immediately preceding annual meeting of stockholders, and
(2) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on
the seventh day following (a) the date on which notice of such meeting
is first given to stockholders or (b) the date on which public
disclosure of such meeting is made, whichever is earlier.
B. Each such notice shall set forth: (1) the name and address
of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (2) a representation that the
stockholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice;
(3) a description of all arrangements or understandings involving any
two or more of the stockholders, each such nominee and any other
person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the stockholder or
relating to the Corporation or its securities or to such nominee's
service as a director if elected; (4) such other information regarding
each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and (5) the
consent of each nominee to serve as a director of the Corporation if
so elected. The chairman of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing
procedure.
C. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article EIGHTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article EIGHTH
be adopted, unless such action is approved by the affirmative vote of
the holders of at least 75% of the total voting powers of all shares
of stock of the Corporation entitled to vote in the election of
directors generally, considered for purposes of this Article EIGHTH as
one class.
NINTH: A. Any action required or permitted to be taken by
the stockholders of the Corporation must be effected at a duly called
annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing by such stockholders.
B. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article NINTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article NINTH be
78
adopted, unless such action is approved by the affirmative vote of the
holders of at least 75% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors
generally, considered for purposes of this Article NINTH as one class.
TENTH: A. Notwithstanding any other provision of this
Restated Certificate of Incorporation and in addition to any
affirmative vote which may be otherwise required, no Business
Combination shall be effected or consummated except as expressly
provided in paragraph B of this Article TENTH, unless such Business
Combination has been approved by the affirmative vote of the holders
of at least 75% of the Voting Shares.
B. The provisions of Article TENTH shall not apply to any
Business Combination if:
1. The Business Combination has been approved by a
resolution adopted by a majority of those members of the Board of
Directors who are not Interested Directors with respect to the
Business Combination; or
2. All of the following conditions have been met: (a) the
aggregate amount of the cash and the Fair Market Value of Other
Consideration to be received for each share of Common Stock in
the Business Combination by holders thereof is not less than the
higher of: (i) the highest per share price (including any
brokerage commissions, transfer taxes, soliciting dealer's fees,
dealer-management compensation and similar expenses) paid or
payable by an Interested Party with an interest in the Business
Combination to acquire beneficial ownership of any shares of
Common Stock within the two-year period immediately prior to the
first public announcement of the proposed Business Combination
(the "Announcement Date"), or (ii) the highest market price per
share of the Common Stock on the Announcement Date or on the date
on which the Interested Party became an Interested Party,
whichever is higher; (b) the consideration to be received in the
Business Combination by holders of Common Stock other than an
Interested Party with an interest in the Business Combination
shall be either in cash or in the same form used by an Interested
Party with an interest in the Business Combination to acquire the
largest number of shares of Common Stock acquired by all
Interested Parties with an interest in the Business Combination
from one or more persons who are not Interested Parties with an
interest in the Business Combination; and (c) at the record date
for the determination of stockholders are entitled to vote on the
proposed Business Combination, there shall be one or more
directors of the Corporation who are not Interested Directors
with respect to the Business Combination.
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C. For purposes of this Article TENTH.
1. An "Associate" of a specified person is (a) a person
that, directly or indirectly (i) controls, is controlled by, or
is under common control with, the specified person, (ii) is the
beneficial owner of 10% or more of any class of the equity
securities of the specified person, or (iii) has 10% or more of
any class of its equity securities beneficially owned, directly
or indirectly, by the specified person; (b) any person (other
than the Corporation or a Subsidiary) of which the specified
person is an officer, director, partner or other official and any
officer, director, partner or other official of the specified
person; (c) any trust or estate in which the specified person
serves as trustee or in a similar fiduciary capacity, or any
trustee or similar fiduciary of the specified person; and (d) any
relative or spouse who has the same home as the specified person
or who is an officer or director of any person (other than the
Corporation or a Subsidiary), directly or indirectly,
controlling, controlled by or under common control with the
specified person. No director of the Corporation, however, shall
be deemed to be an Associate of any other director of the
Corporation by reason of such service as a director or by
concurrence in any action of the Board of Directors.
2. "Beneficial Ownership" of any Voting Shares shall be
determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934 as in effect on the date on which this Article TENTH
is approved by the stockholders of the Corporation, provided,
however, that a person shall in any event, be the beneficial
owner of any Voting Shares; (a) which such person, or any of such
person's Associates, beneficially owns, directly or indirectly;
(b) which such person or any of such person's Associates,
directly or indirectly, (i) has the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding;
or upon the exercise of conversion rights, exchange rights,
warrants or options; or pursuant to the power to revoke a trust,
discretionary account or other arrangement; or (ii) has or shares
the power, or has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) the
exclusive or shared power, to vote or direct the vote pursuant to
any agreement, arrangement, relationship or understanding; or
pursuant to the power to revoke a trust, discretionary account or
other arrangement; or (c) which are beneficially owned, directly
or indirectly, by any other person with which such first-
mentioned person or any of its Associates has any agreement,
arrangement or understanding, or is acting in concert with
respect to acquiring, holding, voting or disposing of any Voting
Shares; provided, however, that no director of the Corporation
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shall be deemed to be acting in concert with any other director
of the Corporation by reason of such service as a director or by
concurrence in any action of the Board of Directors.
3. "Business Combination" shall mean: (a) any merger or
consolidation of the Corporation or any Subsidiary with or into
any Interested Party or any Associate or an Interested Party; (b)
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one or a series of related transactions) of all
or any Substantial Part of the Consolidated Assets of the
Corporation to or with any Interested Party or any Associate of
an Interested Party; (c) any issuance, sale, exchange, transfer
or other disposition by the Corporation or any Subsidiary (in one
or a series of related transactions) of any securities of the
Corporation or any Subsidiary to or with any Interested Party or
any Associate of an Interested Party; or (d) any spin-off, split-
up, reclassification of securities (including any reverse stock
split), recapitalization, reorganization, liquidation or
dissolution of the Corporation with any Subsidiary or any other
transaction involving the Corporation or any Subsidiary (whether
or not with or otherwise involving an Interested Party) that has
the effect, directly or indirectly, of increasing the
proportionate interest of any Interested Party or any Associate
of an Interested Party in the equity securities or assets of the
Corporation or any Subsidiary.
4. "Fair Market Value" means: (a) in the case of stock, the
average closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for the New York Stock Exchange Listed Stocks, or,
if such stock is not quoted on the Composite Tape on the New York
Stock Exchange, or, if such stock is not listed on such exchange,
on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the
average closing bid quotation with respect to a share of such
stock during the 30-day period immediately preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotation System or any system then in use, provided
that, if no such prices or quotations are available, or if a
majority of those members of the Board of Directors who are not
Interested Directors with respect to the Business Combination
determine that such prices or quotations do not represent fair
market value, the Fair Market Value of such stock shall be
determined pursuant to clause (b) below; and (b) in the case of
property other than cash or stock, or in the case of stock as to
which Fair Market Value is not determined pursuant to clause (a)
above, the Fair Market Value on the date in question as
determined by a majority of those members of the Board of
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Directors who are not Interested Directors with respect to the
Business Combination. In making any such determination, the
Board of Directors may, but shall not be required to, engage the
services of an Investing Banking Firm.
5. "Interested Director" shall mean each director of the
Corporation who (a) is an Interested Party or an Associate of an
Interested Party; (b) has an Associate who is an Interested
Party; (c) was nominated or proposed to be elected as a director
of the Corporation by an Interested Party or an Associate of an
Interested Party; or (d) is, or has been nominated or proposed to
be elected as, an officer, director or employee of an Interested
Party or of an Associate of an Interested Party.
6. "Interested Party" shall mean any person (other than
the Corporation or a Subsidiary) that is the beneficial owner,
directly or indirectly, of 5% or more of the Voting Shares (a) in
connection with determining the required vote by stockholders on
any Business Combination, as of any of the following dates: the
record date for the determination of stockholders entitled to
notice of or to vote on such Business Combination or immediately
prior to the consummation of any such Business Combination or the
adoption by the Corporation of any plan or proposal with respect
thereto; (b) in connection with determining the required vote by
stockholders on any amendment, alteration or repeal of, or
adoption of a provision inconsistent with, this Article TENTH
pursuant to paragraph E of this Article TENTH, as of the record
date for the determination of stockholders entitled to notice and
to vote on such amendment, alteration, repeal or inconsistent
provision; and (c) in connection with determining whether a
director is an "Interested Director" in respect of any
determination made by the Board of Directors pursuant to
paragraph D of this Article TENTH, as of the date at which the
vote on such recommendation or determination is being undertaken,
or as close as is reasonably practicable to such date.
7. An "Investment Banking Firm" shall mean an investment
banking firm that has not previously been associated with any
Interested Party with an interest in the Business Combination,
which is selected by a majority of the directors of the
Corporation who are not Interested Directors with respect to the
Business Combination, engaged solely on behalf of the holders of
Common Stock other than Interested Parties with an interest in
the Business Combination, and paid a reasonable fee for its
services.
8. "Other Consideration" shall include (without
limitation) Common Stock and/or any other class or series of
stock of the Corporation retained by stockholders of the
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Corporation in the event of a Business Combination in which the
Corporation is the surviving corporation.
9. A "Person" shall include (without limitation) any
natural person, corporation, partnership, trust or other entity,
organization or association, or any two or more persons acting in
concert or as a syndicate, joint venture or group.
10. "Subsidiary" shall mean any corporation of which a
majority of any class of equity securities is owned, directly or
indirectly, by the Corporation; provided, however, that for
purposes of paragraph C.6 of this Article TENTH, the term
"Subsidiary" shall mean only a corporation of which a majority of
each class of equity securities is owned, directly or indirectly,
by the Corporation.
11. "Substantial Part of the Consolidated Assets" of the
Corporation shall mean assets of the Corporation and/or any
Subsidiary having a book value (determined in accordance with
generally accepted accounting principles) in excess of 10% of the
book value (determined in accordance with generally accepted
accounting principles) of the total consolidated assets of the
Corporation and all Subsidiaries which are consolidated for
public financial reporting purposes, at the end of its most
recent quarterly fiscal period ending prior to the time the
determination is made for which financial information is
available.
12. "Voting Shares" shall mean the outstanding shares of
all classes of stock of the Corporation entitled to vote for the
election of directors generally, considered for purposes of this
Article TENTH as one class. "Voting Shares" shall include shares
deemed owned by any Interested Party or any Associate of an
Interested Party through application of paragraph C.2 of this
Article TENTH, but shall not include any other shares which may
be issuable based upon a right to acquire such shares (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, exchange rights,
warrants or options, or pursuant to the power to revoke a trust,
discretionary account, or other arrangement or otherwise.
D. A majority of those members of the Board of Directors who
are not Interested Directors with respect to the Business Combination
shall have the power and duty to interpret the provisions of this
Article TENTH and to make all determinations to be made under this
Article TENTH. Any such interpretation or determination shall be
conclusive and binding for all purposes of this Article TENTH.
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E. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation, the
provisions set forth in this Article TENTH may not be amended, altered
or repealed in any respect, nor may any provision inconsistent with
this Article TENTH be adopted, unless such action is approved by the
affirmative vote of the holders of at least 75% of the Voting Shares.
F. Nothing contained in this Article TENTH shall be construed
to relieve any Interested Party from any fiduciary obligation imposed
by law.
ELEVENTH: Except as otherwise provided in this Restated
Certificate of Incorporation, the Board of Directors shall have
authority to authorize the issuance, from time to time without any
vote or other action by the stockholders, of any or all shares of
stock of the Corporation of any class at any time authorized, any
securities convertible into or exchangeable for any such shares so
authorized, and any warrant, option or right to purchase, subscribe
for or otherwise acquire, shares of stock of the Corporation of any
class at any time authorized, in each case to such persons and for
such consideration and on such terms as the Board of Directors from
time to time in its discretion lawfully may determine; provided,
however, that the consideration for the issuance of shares of stock of
the corporation having par value shall not be less than such par
value. Stock so issued, for which the consideration has been paid to
the Corporation, shall be fully paid stock, and the holders of such
stock shall not be liable to any further call or assessments thereon.
TWELFTH: No holder of stock of any class of the Corporation or
of any security convertible into, or of any warrant, option or right
to purchase, subscribe for or otherwise acquire, stock of any class of
the Corporation, whether now or hereafter authorized, shall, as such
holder, have any pre-emptive right whatsoever to purchase, subscribe
for or otherwise acquire, stock of any class of the Corporation or any
security convertible into, or any warrant, option or right to
purchase, subscribe for or otherwise acquire, stock of any class of
the Corporation, whether now or hereafter authorized.
THIRTEENTH: Anything herein contained to the contrary
notwithstanding, any and all right, title, interest, and claim in or
to any dividends declared, or other distributions made, by the
Corporation, whether in cash, stock or otherwise, which are unclaimed
by the stockholder entitled thereto for a period of six years after
the close of business on the payment date, shall be and be deemed to
be extinguished and abandoned; and such unclaimed dividends or other
distributions in the possession of the Corporation, its transfer
agents or other agents or depositaries, shall at such time become the
absolute property of the Corporation, free and clear of any and all
claims of any persons whatsoever.
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FOURTEENTH: A. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he
is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as a director or officer of another
Corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such
capacity, against costs, charges and other expenses (including
attorneys' fees) ("Expenses"), judgments, fines and amount paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding and any appeal thereof if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful. For purposes of this Article, "serving or has agreed to
serve at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise" shall include any service by a director or officer of the
Corporation as a director, officer, employee, agent or fiduciary of
such other Corporation, partnership, joint venture, trust or other
enterprise, or with respect to any employee benefit plan (or its
participants or beneficiaries) of the Corporation or any such other
enterprise.
B. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or
was or has agreed to become a director or officer of the Corporation
or is or was serving or has agreed to serve at the request of the
Corporation as a director or officer of another Corporation,
partnership, joint venture, trust or other enterprise or by reason of
any action alleged to have been taken or omitted in such capacity
against Expenses actually and reasonably incurred by him in connection
with the investigation, defense or settlement of such action or suit
and any appeal thereof if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
85
have been adjudged to be liable to the Corporation unless and only to
the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such Expenses which the Court of Chancery of
Delaware or such other court shall deem proper.
C. To the extent that any person referred to in paragraphs (A)
or (B) of this Article has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to
therein or in defense of any claim, issue or matter therein, he shall
be indemnified against Expenses actually and reasonably incurred by
him in connection therewith.
D. Any indemnification under paragraphs (A) or (B) of this
Article (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct
set forth in paragraphs (A) or (B). Such determination shall be made
(i) by the board of directors by a majority vote of a quorum (as
defined in the By-Laws of the Corporation) consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such
quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders.
E. Expenses incurred in defending a civil or criminal action,
suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding and appeal upon
receipt by the Corporation of an undertaking by or on behalf of the
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Corporation.
F. The determination of the entitlement of any person to
indemnification under paragraphs (A), (B) or (C) or to advancement of
Expenses under paragraph (E) of this Article shall be made promptly,
and in any event within 60 days after the Corporation has received a
written request for payment from or on behalf of a director or officer
and payment of amounts due under such sections shall be made
immediately after such determination. If no disposition of such
request is made within said 60 days or if payment has not been made
within 10 days thereafter, or if such request is rejected, the right
to indemnification or advancement of Expenses provided by this Article
shall be enforceable by or on behalf of the director or officer in any
court of competent jurisdiction. In addition to the other amounts due
86
under this Article, Expenses incurred by or on behalf of a director or
officer in successfully establishing his right to indemnification or
advancement of Expenses, in whole or in part, in any such action (or
settlement thereof) shall be paid by the Corporation.
G. The indemnification and advancement of Expenses provided by
this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of Expenses may be
entitled under any law (common or statutory), By-Law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, or while employed by or acting as a
director or officer of the Corporation or as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise, and shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Notwithstanding the
provisions of this Article, the Corporation shall indemnify or make
advancement of Expenses to any person referred to in paragraphs (A) or
(B) of this Article to the full extent permitted under the laws of
Delaware and any other applicable laws, as they now exist or as they
may be amended in the future.
H. All rights to indemnification and advancement of Expenses
provided by this Article shall be deemed to be a contract between the
Corporation and each director or officer of the Corporation who
serves, served or has agreed to serve in such capacity, or at the
request of the Corporation as director or officer of another
corporation, partnership, joint venture, trust or other enterprise, at
any time while this Article and the relevant provisions of the
Delaware General Corporation Law or other applicable law, if any, are
in effect. Any repeal or modification of this Article, or any repeal
or modification of relevant provisions of the Delaware General
Corporation Law or any other applicable law, shall not in any way
diminish any rights to indemnification of or advancement of Expenses
to such director or officer or the obligations of the Corporation.
I. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was or has agreed to
become a director or officer of the Corporation, or is or was serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of this Article.
J. The Board of Directors may, by resolution, extend the
provisions of this Article pertaining to indemnification and
87
advancement of Expenses to any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that he is or was or
has agreed to become an employee, agent or fiduciary of the
Corporation or is or was serving or has agreed to serve at the request
of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust or
other enterprise or with respect to any employee benefit plan (or its
participants or beneficiaries) of the corporation or any such other
enterprise.
K. The invalidity or unenforceability of any provision of this
Article shall not affect the validity or enforceability of the
remaining provisions of this Article.
FIFTEENTH: No person who was or is a director of this
Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for breach of the duty of loyalty
to the Corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing
violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General
Corporation Law is amended after the effective date of this Article to
further eliminate or limit, or to authorize further elimination or
limitation of, the personal liability of directors for breach of
fiduciary duty as a director, then the personal liability of a
director to this Corporation or its stockholders shall be eliminated
or limited to the full extent permitted by the Delaware General
Corporation Law, as so amended. For purposes of this Article,
"fiduciary duty as a director" shall include any fiduciary duty
arising out of serving at the request of this Corporation as a
director of another corporation, partnership, joint venture, trust or
other enterprise, and "personally liable to the Corporation" shall
include any liability to such other Corporation, partnership, joint
venture, trust or other enterprise, and any liability to this
Corporation in its capacity as a security holder, joint venturer,
partner, beneficiary, creditor or investor of or in any such other
corporation, partnership, joint venture, trust or other enterprise.
Any repeal or modification of the foregoing paragraph by the
stockholders of this Corporation shall not adversely affect the
elimination or limitation of the personal liability of a director for
any act or omission occurring prior to the effective date of such
repeal or modification. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring prior to
the effective date of this Article.
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SIXTEENTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this Corporation or of any
creditor or stockholder thereof or on the application of any receiver
or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for
this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case
may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders of
this Corporation, as the case may be, and also this Corporation.
SEVENTEENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate
of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon the stockholders herein are
granted subject to this reservation.
Notwithstanding the foregoing, the provisions set forth in
Articles SIXTH, EIGHTH, NINTH, and TENTH may not be amended, altered
or repealed in any respect nor may any provision inconsistent with any
of such Articles be adopted unless such amendment, alteration, repeal
or inconsistent provision is approved as specified in each such
respective Article.
3. This Restated Certificate of Incorporation was duly
authorized by a resolution duly adopted and approved by consent of the
sole Director, dated as of May 1, 1987, the Corporation not yet having
received payment for any of its stock, in accordance with the
provisions of Section 241 and Section 245 of the General Corporation
Law of the State of Delaware.
89
IN WITNESS WHEREOF, New Newell Co. has caused this Restated
Certificate of Incorporation to be signed by William T. Alldredge, its
Vice President-Finance, and attested by Roland E. Knecht, its
Secretary this 18th day of May, 1987.
NEW NEWELL CO.
William T. Alldredge
Vice President-Finance
ATTEST:
Roland E. Knecht
Secretary
90
Filed June 23, 1987 at 9:01 a.m.
877174060 Delaware Secretary of State
CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR THE
POWERS DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED CERTIFICATE
OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
CUMULATIVE PREFERRED STOCK
($2,000 Stated Value)
of
--
NEW NEWELL CO.
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------
The undersigned DOES HEREBY CERTIFY that the following resolution
was duly adopted by the written consent of the sole director of New
Newell Co., a Delaware corporation, on May 18, 1987:
RESOLVED by the Board of Directors of New Newell Co., a Delaware
corporation (the "Corporation"), that, pursuant to authority expressly
granted to it by the Restated Certificate of Incorporation of the
Corporation, a total of 7,500 shares of the preferred stock without
par value, of the Corporation are hereby respectively constituted as
Series 1 Cumulative Preferred Stock, Series 2 Cumulative Preferred
Stock, Series 3 Cumulative Preferred Stock, Series 4 Cumulative
Preferred Stock and Series 5 Cumulative Preferred Stock, with an
aggregate stated value of $15,000,000 (hereinafter called "Cumulative
Preferred Stock"). Each series of such Cumulative Preferred Stock
shall consist of 1,500 shares, with a stated value of $2,000 per
share. Shares of Cumulative Preferred Stock shall be issued only upon
effectiveness of the merger of Newell Co., a Delaware corporation, and
Newell Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Corporation (the "Merger"). The preferences and the
relative, participating, optional and other special rights of the
shares of Cumulative Preferred Stock and the qualifications,
limitations or restrictions thereof, shall be as follows:
1. CUMULATIVE DIVIDENDS. (a) The holders of record of shares of
each series of Cumulative Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds
91
Legally available for the payment thereof, cumulative cash dividends
at the rate specified in subsection (b) below, and no more. The
holders of shares of Cumulative Preferred Stock shall not be entitled
to any dividends other than the cash dividends provided for in this
section. Dividends shall accrue daily from the date of issuance,
whether or not earned or declared, and shall be payable quarterly on
such dates as the Board of Directors may from time to time determine.
The dividends shall be in preference to dividends upon any stock
(including common stock) of the Corporation ranking junior to the
Cumulative Preferred Stock as to dividends. If the Corporation has
not paid full dividends upon the shares of Cumulative Preferred Stock
for any preceding quarter, the Corporation shall declare and pay the
amount for payment, before declaring or paying any cash dividends on
the common stock of the Corporation. Accrued dividends on Cumulative
Preferred Stock shall not bear interest.
(b) The dividend rate for each series of Cumulative Preferred
Stock is as follows:
(i) For Series 1, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1989, after which
time the rate shall be $160 per share per annum.
(ii) For Series 2, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1990, after which
time the rate shall be $160 per share per annum.
(iii) For Series 3, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1991, after which
time the rate shall be $160 per share per annum.
(iv) For Series 4, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1992, after which
time the rate shall be $160 per share per annum.
(v) For Series 5, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1993, after which
time the rate shall be $160 per share per annum.
2. LIQUIDATION. (a) In the event of a voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation, the
holders of shares of Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation an amount equal to the
stated value per share plus an amount equal to any accrued and unpaid
dividends thereon to the date fixed for distribution. This
distribution shall be in preference to any such distribution upon any
stock (including common stock) of the Corporation ranking junior to
Cumulative Preferred Stock as to liquidation preferences, but subject
to the prior rights of the holders of shares of all stock ranking
92
senior to Cumulative Preferred Stock as to liquidation preferences.
If the assets of the Corporation are not sufficient to pay the full
amounts to the holders of Cumulative Preferred Stock and all other
series of preferred stock of the Corporation ranking equally with the
shares of Cumulative Preferred Stock as to liquidation preferences,
then the holders of Cumulative Preferred Stock and of such other
series shall share ratably in the distribution of any assets remaining
after distribution to holders of stock ranking senior to Cumulative
Preferred Stock as to liquidation preferences.
(b) Nothing in this section, however, shall be deemed to prevent
the Corporation from redeeming or purchasing Cumulative Preferred
Stock as permitted by Section 3.
(c) A merger or consolidation of the Corporation with any other
corporation or a sale, lease, or conveyance of assets or a business
combination involving the Corporation or any related or similar
transaction shall not be considered a liquidation, dissolution, or
winding up the Corporation within the meaning of this section.
3. REDEMPTION. (a) The Corporation may redeem any or all
shares of one or more series of Cumulative Preferred Stock at its
option by resolution of the Board of Directors, at any time and from
time to time on or after issuance, in cash, at the stated value of the
shares plus an amount equal to any accrued and unpaid dividends
thereon to the date fixed for redemption. In the event that the
Corporation redeems less than the entire number of shares of any
series of Cumulative Preferred Stock outstanding at any one time, the
Corporation shall select the shares to be redeemed by lot or pro rata
or by any other manner that the Board of Directors deems equitable.
No less than 20 nor more than 120 days prior to the date fixed for any
entire or partial redemption of Cumulative Preferred Stock, the
Corporation shall mail a notice of the redemption to the holders of
record of the shares to be redeemed at their addresses as they appear
on the books of the Corporation. The notice shall state the time and
place of redemption and shall identify the particular shares to be
redeemed if less than all of the outstanding shares are to be
redeemed. Failure to mail a notice or a defect in a notice or its
mailing shall not affect the validity of the redemption proceedings.
(b) On or before the date fixed for redemption each holder of
shares of Cumulative Preferred Stock called for redemption shall
surrender his certificate representing his shares to the Corporation
or its agent at the place designated in the redemption notice. If the
Corporation redeems less than all of the shares represented by a
surrendered certificate, the Corporation shall issue a new certificate
representing the unredeemed shares. If the Corporation has duly given
notice of redemption and if funds necessary for the redemption are
available on the redemption date, then notwithstanding that any holder
93
has not surrendered his certificate representing shares called for
redemption, all rights with respect to those shares shall cease and
determine immediately after the redemption date, except that such a
holder shall have the right to receive the redemption price without
interest upon surrender of his certificate.
(c) The Corporation may, at its option at any time after giving
a notice of redemption, deposit a sum sufficient to redeem the shares
called for redemption, plus any accrued and unpaid dividends thereon
to the redemption date, with any bank or trust company in the City of
Chicago, Illinois, or in the City of Minneapolis, Minnesota, having
capital, surplus, and undivided profits aggregating at least
$50,000,000 as a trust fund with irrevocable instructions and
authority to the bank or trust company to mail notice of redemption if
the Corporation has not begun or completed such mailing at the time of
the deposit and to pay, on and after the date fixed for redemption or
prior thereto, the redemption price of the shares to their respective
holders upon the surrender of their share certificates. From the date
the Corporation makes such a deposit, the shares designated for
redemption shall be treated as redeemed and no longer outstanding, and
no dividends shall accrue on the shares after the date fixed for
redemption. The deposit shall be deemed to constitute full payment of
the shares to their holders. From the date of the deposit, the
holders of the shares shall cease to be stockholders with respect to
the shares; they shall have no interest in or claim against the
Corporation by virtue of the shares; and they shall have no rights
with respect to the shares except the right to receive from the bank
or trust company payment of the redemption price of the shares,
without interest, upon surrender of their certificates. At the
expiration of five years after the redemption date, the bank or trust
company shall pay over to the Corporation any funds then remaining on
deposit, free of trust. Thereafter the holders of certificates for
the shares shall have no claims against the bank or trust company, but
only claims as unsecured creditors against the Corporation for amounts
equal to their pro rata portions of the funds paid over, without
interest, subject to compliance by the holders with the terms of the
redemption. Any interest on or other accretions to funds deposited
with the bank or trust company shall belong to the Corporation.
(d) Nothing in this Resolution shall prevent or restrict the
Corporation from purchasing, from time to time, at public or private
sale, any or all of the Cumulative Preferred Stock at whatever prices
the Corporation may determine, but at prices not exceeding those
permitted by Delaware law.
(e) Nothing in this Resolution shall give any holder of
Cumulative Preferred Stock the right to require the Corporation to
redeem any or all shares of the Stock.
94
4. CONVERSION. The Cumulative Preferred Stock is not
convertible into any other class or series of common or preferred
stock of the Corporation.
5. STATUS OF REACQUIRED STOCK. The Corporation shall retire
and cancel any shares of Cumulative Preferred Stock that it redeems,
purchases, or acquires. Such shares thereafter shall have the status
of authorized but unissued shares of preferred stock. Subject to the
limitations in this Resolution or in any resolutions adopted by the
Board of Directors providing for the reissuance of the shares, the
Corporation may reissue the shares as shares of Cumulative Preferred
Stock or may reclassify and reissue them as preferred stock of any
class or series other than Cumulative Preferred Stock.
6. VOTING RIGHTS. (a) Except as otherwise provided herein or
as may be required by law, the holders of Cumulative Preferred Stock
shall be entitled to one vote per share on every question submitted to
holders of record of the common stock of the Corporation, voting
together with the common stock of the Corporation as a single class.
(b) Notwithstanding the foregoing, (i) without the affirmative
vote or consent of at least a majority of the shares of Cumulative
Preferred Stock then outstanding voting as a separate class, the
Corporation shall not amend the Restated Certificate of Incorporation
if the amendment would alter or change the powers, preferences, or
special rights of the shares of Cumulative Preferred Stock so as to
affect them adversely, provided that this clause "(i)" shall not apply
to an increase or decrease (but not below the number of shares thereof
then outstanding) in the number of authorized shares of any class or
classes of stock; and (ii) so long as at least 3,100 shares of
Cumulative Preferred Stock are outstanding, without the affirmative
vote or consent of the holders of at least a majority of the shares of
Cumulative Preferred Stock then outstanding voting as a separate
class, the Corporation shall not issue any stock ranking senior to the
Cumulative Preferred Stock with respect to the payment of dividends or
the distribution of assets upon liquidation, except that the
Corporation may issue such stock if the consideration therefor
consists of cash. For purposes of any vote required pursuant to
clause (i) of this subsection (b) if any proposed amendment would
alter or change the powers, preferences, or special rights of one or
more of Series 1, 2, 3, 4, or 5 of Cumulative Preferred Stock so as to
affect them adversely but shall not so affect the entire class, then
only the shares of the series so affected by the amendment shall be
considered a separate class.
7. NO OTHER RIGHTS. The shares of Cumulative Preferred Stock
shall not have any relative, participating, optional or other special
rights or powers other than as set forth above and in the Restated
Certificate of Incorporation of the Corporation.
95
IN WITNESS WHEREOF, New Newell Co. has caused this resolution to
be signed by William T. Alldredge, its Vice President - Finance, and
attested by Roland E. Knecht, its Secretary, this 22nd day of June,
1987.
NEW NEWELL CO.
William T. Alldredge,
Vice President - Finance
ATTEST:
Roland E. Knecht,
Secretary
96
Filed July 2, 1987 at 9:29 a.m.
877183082 Delaware Secretary of State
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW NEWELL CO.
-----------------------------------------------------------
Adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware
------------------------------------------------------------
New Newell Co., a corporation existing under the laws of the
State of Delaware, does hereby certify as follows:
FIRST: That Article First of the Restated Certificate of
Incorporation of the Corporation has been amended in its entirety to
read as follows:
FIRST: The name of the Corporation is NEWELL CO.
SECOND: That the foregoing amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the written consent of the holder of all outstanding
shares entitled to vote.
97
IN WITNESS WHEREOF, New Newell Co. has caused this Certificate to
be signed and attested by its duly authorized officers this 30th day
of June 1987.
NEW NEWELL CO.
By: /s/ William T. Alldredge
-----------------------
Vice President - Finance
Attest:
/s/ Roland E. Knecht
-----------------------------
Secretary
98
Filed October 31, 1988 at 9:00 a.m.
688305050 Delaware Secretary of State
CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR THE
POWERS, DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED CERTIFICATE
OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES B
of
NEWELL CO.
----------------------------------------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
----------------------------------------
NEWELL CO., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called
and held on October 20, 1988:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance with the
provisions of the Corporation's Restated Certificate of Incorporation,
the Board of Directors hereby creates a series of Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the
relative rights, preferences and limitations of such series, as
follows:
Junior Participating Preferred Stock, Series B:
Section 1. Designation and Amounts. The shares of such
series shall be designated as "Junior Participating Preferred Stock,
Series B" (the "Series B Preferred Stock") and the number of shares
constituting the Series B Preferred Stock shall be 500,000. Such
number of shares may be increased or decreased by resolution of the
Board; provided, that no decrease shall reduce the number of shares of
Series B Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation
convertible into Series B Preferred Stock.
99
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series B Preferred Stock with respect
to dividends, the holders of shares of Series B Preferred Stock,
in preference to the holders of Common Stock, par value $1.00 per
share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $15 or
(b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend
100
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $15 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series B
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares
of Series B Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of shares of Series B Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of
Series B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
101
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series
B Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series B Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred
Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series B Preferred Stock; or
102
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock,
or any shares of stock ranking on a parity with the
Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject
to the conditions and restrictions on issuance set forth herein, in
the Corporation's Restated Certificate of Incorporation or in any
other Certificate of Designations creating a series of Preferred Stock
or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall
have received $10,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of
Series B Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (B) to the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred
Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation
103
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series B Preferred Stock
shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series B Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series B Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Corporation's
Preferred Stock.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or
104
special rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board and
attested by its Secretary this 20th day of October 1988.
William T. Alldredge
Vice President - Finance
Attest:
Roland E. Knecht
Secretary
105
Filed September 13, 1989
Delaware Secretary of State
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NEWELL CO.
------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------
We, William T. Alldredge, Vice President, and Roland E.
Knecht, Secretary, of Newell Co., a corporation existing under the
laws of the State of Delaware, do hereby certify as follows:
FIRST: That the name of the corporation is Newell Co.,
formerly known as New Newell Co.
SECOND: That the date of filing the corporation's original
Certificate of Incorporation by the Secretary of State of Delaware was
the 23rd day of February, 1987, and that the Restated Certificate of
Incorporation of the corporation was filed by the Secretary of State
of Delaware on the 18th day of May, 1987.
THIRD: That the first sentence of Article Fourth of the
Restated Certificate of Incorporation of said Corporation has been
amended as follows:
FOURTH: The total number of shares which the
Corporation shall have authority to issue is
110,000,000, consisting of 100,000,000 shares of
Common Stock of the par value of $1.00 per share
and 10,00,000 shares of Preferred Stock,
consisting of 10,000 shares without par value and
106
9,990,000 shares of the par value of $1.00 per
share.
FOURTH: That said amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the affirmative vote of the holders of a majority of
all outstanding common and preferred stock entitled to vote at a
meeting of stockholders.
IN WITNESS WHEREOF, we have signed this certificate this
28th day of June, 1989.
NEWELL CO.
William T. Alldredge
Vice President - Finance
ATTEST:
Roland E. Knecht
Secretary
107
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 05/15/1991
911355135 - 2118347
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
NEWELL CO.
------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------
We, William T. Alldredge, Vice President and Roland E.
Knecht, Secretary, of Newell Co., a corporation existing under the
laws of the State of Delaware, do hereby certify as follows:
FIRST: That the name of the corporation is Newell Co.
SECOND: That the date of filing the corporation's original
Certificate of Incorporation by the Secretary of State of Delaware was
the 23rd day of February, 1987, that the Restated Certificate of
Incorporation of the corporation was filed by the Secretary of State
of Delaware on the 18th day of May, 1987, a Certificate of Amendment
was filed by the Secretary of State of Delaware on the second day of
July, 1987, and a Certificate of Amendment was filed by the Secretary
of State of Delaware on 13th day of September, 1989.
THIRD: That the first sentence of Article Fourth of the
Restated Certificate of Incorporation of said Corporation has been
amended as follows:
FOURTH: The total number of shares which the
Corporation shall have authority to issue is
108
310,000,000, consisting of 300,000,000 shares of
Common Stock of the par value of $1.00 per share
and 10,000,000 shares of Preferred Stock,
consisting of 10,000 shares without par value, and
9,990,000 shares of the par value of $1.00 per
share.
FOURTH: That said amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the affirmative vote of the holders of a majority of
all outstanding common and preferred stock entitled to vote at a
meeting of stockholders.
IN WITNESS WHEREOF, we have signed this certificate this 9th
day of May, 1991.
NEWELL CO.
William T. Alldredge
Vice President - Finance
ATTEST:
Roland E. Knecht
Secretary
109
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 06/11/1991
911625086 - 2118347
AMENDED CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR
THE POWERS, DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED
CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES B
of
NEWELL CO.
------------------------------
Pursuant to Section 151 of the General
Corporation Law of the
State of Delaware
------------------------------
NEWELL CO., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called
and held on February 14, 1991:
RESOLVED, that the first sentence of Section 1 of the
Certificate of Designations as to the resolution providing for the
powers, designation, preferences and relative, participating, optional
or other rights, and the qualifications, limitations or restrictions
thereof, as are not stated and expressed in the Restated Certificate
of Incorporation or in any amendment thereto, of the Junior
Participating Preferred Stock, Series B of Newell Co. (the
"Certificate of Designations") which was filed in the Office of the
Secretary of State of Delaware on October 31, 1988, is hereby amended
to read as follows:
The shares of such series shall be designated as
"Junior Participating Preferred Stock, Series B"
(the "Series B Preferred Stock") and the number of
shares constituting the Series B Preferred Stock
shall be 5,000,000.
110
IN WITNESS WHEREOF, this Amended Certificate of Designations
is executed on behalf of the Corporation by its Vice President-Finance
and attested by its Secretary this 5th day of June, 1991.
William T. Alldredge
Vice President - Finance
Attest:
Roland E. Knecht
Secretary
111
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 11/03/1994
944211670 - 2118347
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
* * * * *
Newell Co., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
The present registered agent of the corporation is United States
Corporation Company and the present registered office of the
corporation is in the county of Kent.
The Board of Directors of
adopted the following resolution on the 2nd day of November, 1994.
Resolved, that the registered office of Newell Co. in the
state of Delaware be and it hereby is changed to Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle, and the authorization of the present
registered agent of this corporation be and the same is
hereby withdrawn, and THE CORPORATION TRUST COMPANY, shall
be and is hereby constituted and appointed the registered
agent of this corporation at the address of its registered
office.
112
IN WITNESS WHEREOF, Newell Co. has caused this statement to be
signed by Richard H. Wolff, its Secretary*, this 25th day of October
1994.
/s/ Richard H. Wolff
-------------------------------
Secretary
_______________________________
(Title)
* Any authorized officer of the Chairman or Vice-Chairman of the
Board of Directors may execute this certificate.
113
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED MAY 11, 1995
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
NEWELL CO.
------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------
I, William T. Alldredge, Vice President-Finance of
Newell Co., a corporation existing under the laws of the State of
Delaware, do hereby certify as follows:
FIRST: That the name of the corporation is Newell Co.,
formerly known as New Newell Co.
SECOND: That the first sentence of Article Fourth of the
Restated Certificate of Incorporation of said Corporation has been
amended as follows:
FOURTH: The total number of shares which the
Corporation shall have authority to issue is
410,000,000, consisting of 400,000,000 shares of
Common Stock of the par value of $1.00 per share
and 10,00,000 shares of Preferred Stock,
consisting of 10,000 shares without par value and
114
9,990,000 shares of the par value of $1.00 per
share.
THIRD: That said amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the affirmative vote of the holders of a majority of
all outstanding common and preferred stock entitled to vote at a
meeting of stockholders.
IN WITNESS WHEREOF, we have signed this certificate this
10th day of May, 1995.
NEWELL CO.
/s/ Dale L. Matschullat
-------------------------------
Dale L. Matschullat
Vice President
_______________________________
(Title)
115
Filed September 11, 1995 at 9:00 p.m.
Delaware Secretary of State
CERTIFICATE OF ELIMINATION
OF NEWELL CO.
I, Dale L. Matschullat, Vice President - General Counsel of
Newell Co., a corporation organized and existing under the General
Corporation Law of the State of Delaware, do hereby certify as
follows:
FIRST: That the Board of Directors of Newell Co. (the
"Corporation"), by resolutions adopted at a meeting on August 9, 1995,
determined to eliminate all of the Cumulative Preferred Stock,
Series 1, 2, 3, 4 and 5, of the Corporation, said resolutions being as
follows:
WHEREAS, the Corporation redeemed all of the
outstanding shares of Cumulative Preferred Stock,
Series 1, of the Corporation on November 8, 1989;
WHEREAS, the Corporation redeemed all of the
outstanding shares of Cumulative Preferred Stock,
Series 2, of the Corporation on September 24,
1990;
WHEREAS, the Corporation redeemed all of the
outstanding shares of Cumulative Preferred Stock,
Series 3, 4 and 5, of the Corporation on
September 24, 1991; and
WHEREAS, no shares of the Preferred Stock are
issued and outstanding and no shares will be
issued.
NOW, THEREFORE, BE IT RESOLVED, that the Preferred
Stock be returned to the status of "authorized but
not issued," and that the proper officers, or any
one of them acting alone, be, and each of them
hereby is, authorized and directed, in the name
and on behalf of the Corporation, to execute and
116
cause to filed with the Secretary of State of
Delaware, a Certificate of Elimination, and to
execute all other instruments and documents and to
do and cause to be done all such further acts and
things, as may be necessary or advisable to
eliminate the Preferred Stock and that all actions
of said officers are hereby ratified, approved and
confirmed in all respects.
SECOND: None of the authorized shares of the Preferred
Stock are outstanding and none will be issued.
THIRD: In accordance with the provisions of Section 151 of
the General Corporation Law of the State of Delaware, the Restated
Certificate of Incorporation is hereby amended to eliminate all
reference to the Preferred Stock, and the Preferred Stock shall be
returned to the status of "authorized but not issued."
IN WITNESS WHEREOF, I have signed this Certificate, this 7th
day of September, 1995.
NEWELL CO.
By: /s/ Dale L. Matschullat
-------------------------
Dale L. Matschullat
Vice President - General Counsel
EXHIBIT 10.3
NEWELL CO.
DEFERRED COMPENSATION PLAN
SECTION 1. INTRODUCTION
Effective August 1, 1980, Newell Co. has established a
Deferred Compensation Plan for members of the Board of
Directors and for certain key executives of the
Company.
SECTION 2. PLAN PARTICIPANTS
Each member of the Board of Directors and employees of
the Company who have been approved as members of the
Cash Bonus Plan shall be a Participant of this plan.
SECTION 3. DEFERRAL ELECTIONS AND TIMING OF PAYMENTS
3.1 Effective January 1, 1981, and each year thereafter,
each member of the Board of Directors may be entitled
to defer the established retainer and meeting fee or
portion thereof for each month that such a member holds
such office with Newell.
Each eligible executive shall be entitled to defer
their cash bonus award or any other earnings above
their base salary.
3.2 The Vice President Personnel Relations shall send to
each eligible participant an election form under which
they may elect to defer all or a portion of their
compensation. Base salary may not be deferred by
regular employees. Deferral elections shall remain in
effect from year to year unless notice to change a
deferral is submitted to the Vice President Personnel
Relations prior to December 31, in the year prior to
the year in which the change is to take place.
3.3 After termination of service, payments will be made in
cash in approximately equal annual installments over
such period of years, not exceeding fifteen, as
Participant elects.
3.4 Each deferred account shall earn interest at a rate
based on the yield rate of U.S. Treasury Bills as
quoted in the Midwest Edition of the Wall Street
Journal. Interest rates shall be accrued and
compounded quarterly based on the weighted average for
the quarter.
118
3.5 During his period of service with Newell, a Participant
will acquire knowledge of the affairs of Newell.
Therefore, notwithstanding any other provision of this
Plan, if, without the express consent of Newell, a
Participant or former Participant accepts employment
with or renders other services to any entity which is
engaged in substantial competition with Newell, such
individual's deferred account shall be paid as soon as
practicable in a lump sum and Section 3.3 shall not
apply.
SECTION 4. GENERAL PROVISIONS
4.1 Each Participant may designate a beneficiary or
beneficiaries and may change such designation from time
to time by filing a written designation of
beneficiaries with the Vice President Personnel
Relations on a form provided by the Company. In the
absence of any such designation, any amounts remaining
unpaid at a Participant's death shall be paid to his
estate.
4.2 Establishment of the Plan and coverage of any person
shall not be construed to confer upon any person any
legal right to be continued in the employ of the
Company.
4.3 Deferred amounts hereunder are not in any way subject
to the debts or other obligations of persons entitled
thereto, and may not be voluntarily or involuntarily
sold, transferred, or assigned. When a person entitled
to a payment under the plan is under legal disability,
or, in Newell's opinion is in any way incapacitated so
as to be unable to manage his financial affairs, Newell
may direct that payment be made to such person's legal
representative. Any payment made in accordance with
the preceding sentence shall be in complete discharge
of Newell's obligation to make such payment under the
plan.
4.4 Any action required or permitted to be taken by Newell
under the terms of the plan shall be by affirmative
vote of a majority of the members of the Board of
Directors then in office.
4.5 Notwithstanding any provisions of the Plan, or of the
Cash Bonus Plan, from and after the date of a Change in
Control of the Company, each Participant may at any
time prior to his termination of service with the
Company and all subsidiaries thereof as an employee, or
as a member of the Board of Directors of the Company,
elect to receive payment in a lump sum of the entire
balance of his deferred account held hereunder,
119
including interest thereon credited as of the last day
of the calendar month prior to the date of
distribution. Any such election shall be made by a
Participant pursuant to written notice delivered to the
Company at least 10 days prior to the requested date of
distribution. For purposes of this paragraph, a Change
in Control of the Company shall be deemed to occur on
the earliest of:
(i) The acquisition of beneficial ownership, as that
term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, by any entity,
person or group, of more than 50% of the
outstanding capital stock of the Company entitled
to vote for the election of directors ("voting
stock");
(ii) The effective time of (A) a merger or
consolidation of the Company with one or more
other corporations as a result of which the
holders of the outstanding voting stock of the
Company immediately prior to such merger or
consolidation (other than those who are affiliates
of such other corporation) hold less than 80% of
the voting stock of the surviving or resulting
corporation, or (B) a transfer of substantially
all of the property of the Company other than to
an entity of which the Company owns at least 80%
of the voting stock; or
(iii) The election to the Board of Directors of the
Company, without the recommendation or
approval of the incumbent Board of Directors
of the Company, of the lesser of (A) three
directors or (B) directors constituting a
majority of the number of directors of the
Company then in office.
SECTION 5. AMENDMENT AND DISCONTINUANCE
The Board of Directors hereby reserves the right to
amend or discontinue the Plan at any time; provided,
however, that any amendment or discontinuance of the
Plan shall be prospective in operation only and shall
not affect the payment of any deferred fees theretofore
earned by a Participant or former Participant or the
conditions under which any such fees are to be paid or
forfeited under the plan, unless the person affected
shall expressly consent thereto.
Approved by action of the Board of Directors, effective
October 23, 1980 and amended effective October 23, 1986.
EXHIBIT 21.1
SUBSIDIARIES
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Ammak Manufacturing Corp. New York 100% of stock owned by DAX Manufacturers, Inc.
Anchor Hocking Consumer Delaware 100% of stock owned by Anchor Hocking Corporation
Glass Corporation
Anchor Hocking Corporation Delaware 100% of stock owned by Newell Operating Company
Ashland Products, Inc. Delaware 100% of stock owned by Newell Co.
Berol Blue Ribbon Corp. Kentucky 100% of stock owned by Berol Corporation
Berol Canada Inc. Ontario, Canada 100% of stock owned by Berol Corporation
Berol Corporation Delaware 100% of stock owned by Newell Co.
Berol Corporation Massachusetts 100% of stock owned by Berol Corporation (Delaware)
Berol Corporation Nevada 100% of stock owned by Berol Corporation (Delaware)
Berol Corporation Puerto Rico 100% of stock owned by Berol Corporation (Delaware)
Berol Limited United Kingdom 99.99% of stock owned by Kingdom Berol Corporation; remaining
.01% owned by nominee as required by statute
Berol Pen Company North Carolina 100% of stock owned by Berol Corporation
Berol S.A. Colombia 43.41% of stock owned by Berol Pen Corporation; 14.00% of stock
owned by Ember Investment Company; 16.91% of stock owned by Furth
Corporation; 13.00% of stock owned by Loral Corporation; 12.68% of
stock owned by Terbal Corporation
Berol, S.A. de C.V. Mexico 81.35% of stock owned by Berol Corporation; 18.65% of stock owned
by other individual shareholders in Mexico
Berol Trademarks Inc. Delaware 100% of stock owned by Berol Corporation
DAX Manufacturers, Inc. New York 100% of stock owned by Decorel Incorporated
DeComex USA, Inc. Delaware 100% of stock owned by Decorel Incorporated
121
EXHIBIT 21.1
SUBSIDIARIES
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Decorel Canada, Inc. Ontario, Canada 100% of stock owned by Decorel Incorporated
Decorel, S.A. de C.V. Mexico .002% (1 share) of Series B of the fixed portion of capital stock
and 1.03% of the variable portion of capital stock owned by Decorel
Incorporated; 99.998% of Series B of the fixed portion of capital
stock and 98.97% of Series B of the variable portion of capital
stock owned by Decomex USA, Inc.
Decorel Incorporated Illinois 100% of stock owned by Newell Operating Company
Ember Investment Corp. Delaware 100% of stock owned by Berol Corporation
Empire Enterprises, Inc. Tennessee 100% of stock owned by Berol Corporation
Empire Leasing Company Delaware 75% of stock owned by Berol Corporation; 25% of stock owned by
Berol Canada Inc.
Faber-Castell Corporation New Jersey 100% of stock owned by Newell Co.
Furth Corporation Delaware 100% of stock owned by Berol Corporation
Goody Products, Inc. Delaware 100% of stock owned by Newell Co.
Intercraft Company Delaware 100% of stock owned by Newell Co.
Lee Rowan Company Missouri 100% of stock owned by Newell Co.
Loral Corporation Delaware 100% of stock owned by Berol Corporation
Newell Consumer Products Germany 100% of stock owned by Newell Investments Inc.
GmbH
Newell Finance Company Delaware 100% of stock owned by Newell Operating Company
Newell Holdings France S.A.S. France 1% of stock owned by Newell Operating Company; 99% of stock owned
by Newell Investments Inc.
Newell Holdings U.K. Limited United Kingdom 100% of stock owned by Newell Investments Inc.
Newell Consumer Iberica S.A. Spain 100% of stock owned by Newell S.A.
Newell Industries Ontario, Canada 87.2% of stock owned by Newell Operating Company; 12.8% of stock
Canada, Inc. owned by Goody Products, Inc.
Newell International Jamaica 100% of stock owned by Newell Co.
Corporation, Limited
122
EXHIBIT 21.1
SUBSIDIARIES
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Newell Investment Co. Ontario, Canada 100% of stock owned by Newell Co.
Newell Investments Inc. Delaware 100% of stock owned by Newell Operating Company
Newell Limited United Kingdom 100% of stock owned by Newell Holdings U.K. Limited
Newell Operating Company Delaware 77.5% of stock owned by Newell Co.; 22.5% of stock owned by Anchor
Hocking Corporation
Newell Puerto Rico, Ltd. Delaware 100% of stock owned by Anchor Hocking Corporation
Newell S.A. France 99% of stock owned by Newell Holdings France S.A.S.; remaining 1%
owned by nominees as required by statute
Newell S.p.A. Italy 100% of stock owned by Newell S.A.
Newell Window Furnishings, Inc. Delaware 100% of stock owned by Newell Operating Company
NSM Industries, Inc. New Jersey 100% of stock owned by Faber-Castell Corporation
N.V. Newell Benelux S.A. Belgium 99% of stock owned by Newell S.A.; Remaining 1% owned by nominees
as required by statute
Philips Canada, Inc. Ontario, Canada 100% of stock owned by Philips Industries, Inc.
Philips Industries, Inc. New York 100% of stock owned by Newell Co.
Plastics, Inc. Delaware 100% of stock owned by Anchor Hocking Corporation
Sanford Corporation Illinois 100% of stock owned by Newell Co.
Sterling Plastics Co. New Jersey 100% of stock owned by Sanford Corporation
Stuart Hall Company, Inc. Missouri 100% of stock owned by Newell Co.
Terbal Corporation Delaware 100% of stock owned by Berol Corporation
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated January 27, 1996 included in Form
10-K, into the Company's previously filed Form S-8 Registration
Statements File Nos. 33-24447, 33-25196, 33-40641, 33-67620, 33-67632,
33-51063, 33-51961 and 33-62047, Form S-3 Registration Statement File
No. 33-64225, Post-Effective Amendment No. 1 on Form S-8 to Form S-4
Registration Statements File Nos. 33-49282 and 33-44957.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
March 12, 1996.
5
EXHIBIT 99
NEWELL SAFE HARBOR STATEMENT
Information provided by the Company may contain certain forward-
looking information, which, as defined by the Private Securities
Litigation Reform Act of 1995 (the "Act"), may relate to such matters
as sales, income, earnings per share, return on equity, capital
expenditures, dividends, capital structure, free cash flow, debt to
capitalization ratios, internal growth rates, future economic
performance, management's plans and objectives for future operations
or the assumptions relating to any of the forward-looking information.
This Safe Harbor Statement is being made pursuant to the Act and with
the intention of obtaining the benefits of the so-called "safe-harbor"
provisions of the Act. The Company cautions that forward-looking
statements are not guarantees since there are inherent difficulties in
predicting future results, and that actual results could differ
materially from those expressed or implied in the forward-looking
statements. Factors that could cause actual results to differ
include, but are not necessarily limited to, the following:
Retail Economy. The Company's business depends on the strength
of the retail economies in various parts of the world, primarily in
the U.S. and to a lesser extent in Canada, Latin and South America,
and Europe, which are affected by such factors as consumer demand, the
condition of the retail industry and weather conditions. Recently,
the retail industry has been characterized by lackluster consumer
demand, intense competition and consolidation, which has resulted in
financial weakness and the bankruptcy of a number of retailers.
126
Nature of the Marketplace. The Company competes with numerous
other manufacturers and distributors, many of which are large and
well-established. In addition, the Company's principal customers are
volume purchasers, many of which are much larger than the Company and
have significant bargaining power. The combination of these market
influences creates a very competitive marketplace, resulting in
difficulty in raising prices and the need to provide superior services
to customers. These competitive pressures increase the risk of losing
substantial customers.
Growth by Acquisition. The acquisition of companies that sell
branded, staple product lines to volume purchasers is one of the
foundations of the Company's growth strategy. The Company's ability
to continue to make strategic acquisitions at reasonable prices and to
integrate the acquired businesses within a reasonable period of time
are important factors in the Company's future growth.
Foreign Operations. Foreign operations, currently in Canada,
Mexico, Colombia and Europe and sourcing from the Far East, are of
increasing importance to the Company's business. Foreign operations
can be affected by factors such as devaluation and other currency
fluctuations, tariffs, nationalization and other political and
regulatory risks.
