SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant _X_
Filed by a party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
_X_ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
NEWELL CO.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
_X__ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
___ $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:___________________________________________________
(2) Aggregate number of securities to which transactionapplies:
___________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined): _______________________________________
(4) Proposed maximum aggregate value of transaction: __________
(5) Total fee paid: ___________________________________________
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form orSchedule
and the date of its filing.
(1) Amount Previously Paid: ___________________________________
(2) Form, Schedule or Registration Statement: _________________
(3) Filing Party: _____________________________________________
(4) Date Filed: _______________________________________________
2
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 8, 1996
To the Stockholders of NEWELL CO.:
The Annual Meeting of Stockholders of NEWELL CO. will be held on
Wednesday, May 8, 1996 at 10:00 A.M., Central Daylight Savings Time,
at the Miller Room, Miller Pavilion, Milwaukee, Wisconsin, for the
following purposes:
1. To elect three directors of the Company to serve for a term
of three years;
2. To consider and vote upon the ratification of the
appointment of Arthur Andersen L.L.P. as the Company's
independent accountants for the year 1996; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournment or postponement
thereof.
Stockholders of record at the close of business on March 11, 1996
are entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
Newell Co.'s Annual Report for the year 1995 is enclosed for your
convenience.
Please sign and date the enclosed proxy card and return it
promptly in the accompanying envelope (no postage required if mailed
in the United States) to ensure that your shares will be represented
at the Annual Meeting. If you attend the Annual Meeting, you may vote
your shares in person even if you have previously submitted a proxy.
By Order of the Board of Directors,
[SIGNATURE]
RICHARD H. WOLFF
Secretary
March 15, 1996
3
NEWELL CO.
Newell Center
29 East Stephenson Street
Freeport, Illinois 61032
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 8, 1996
This proxy statement and the accompanying proxy card are being
furnished in connection with the solicitation of proxies by the Board
of Directors of NEWELL CO., a Delaware corporation (the "Company"),
from holders of the Company's outstanding shares of Common Stock, par
value $1.00 per share (the "Common Stock"), for the Annual Meeting of
Stockholders to be held on Wednesday, May 8, 1996 for the purposes set
forth in the accompanying notice (the "Annual Meeting"). The Company
will bear the costs of soliciting proxies from its stockholders. In
addition to soliciting proxies by mail, directors, officers and
employees of the Company, without receiving additional compensation
therefor, may solicit proxies by telephone, by telegram or in person.
Arrangements also will be made with brokerage firms and other
custodians, nominees and fiduciaries to forward solicitation materials
to the beneficial owners of Common Stock held of record by such
persons, and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith. The Company has
engaged Morrow & Co. to assist in the solicitation of proxies in
connection with the Annual Meeting and has agreed to pay such firm
$8,000, plus out-of-pocket costs and expenses. This proxy statement
is first being mailed to stockholders of the Company on or about March
15, 1996.
VOTING AT THE MEETING
At the close of business on March 11, 1996, the record date for
determining stockholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"), there were outstanding and
entitled to vote approximately 158,681,447 shares of Common Stock.
All of the outstanding shares of Common Stock are entitled to vote on
all matters which properly come before the Annual Meeting, and each
stockholder will be entitled to one vote for each share of Common
Stock held.
Each proxy that is properly signed and received prior to the
Annual Meeting will, unless revoked, be voted in accordance with the
instructions on such proxy. If no instruction is indicated, the
shares will be voted FOR the election of the three nominees for
director listed in this proxy statement and FOR ratification of the
appointment of Arthur Andersen L.L.P. A stockholder who has given a
proxy may revoke such proxy at any time before it is voted at the
Annual Meeting by delivering a written notice of revocation or a duly
executed proxy bearing a later date to the Secretary of the Company or
by attending the meeting and voting in person.
4
A quorum of stockholders is necessary to take action at the
Annual Meeting. A majority of the outstanding shares of Common Stock
of the Company, represented in person or by proxy, will constitute a
quorum. Votes cast by proxy or in person at the Annual Meeting will
be tabulated by the inspectors of election appointed for the Annual
Meeting. The inspectors of election will determine whether or not a
quorum is present at the Annual Meeting. Under certain circumstances,
a broker or other nominee may have discretionary authority to vote
certain shares of Common Stock if instructions have not been received
from the beneficial owner or other person entitled to vote. The
inspectors of election will treat directions to withhold authority,
abstentions and broker non-votes (which occur when a broker or other
nominee holding shares for a beneficial owner does not vote on a
particular proposal, because such broker or other nominee does not
have discretionary voting power with respect to that item and has not
received instructions from the beneficial owner) as present and
entitled to vote for purposes of determining the presence of a quorum
for the transaction of business at the Annual Meeting. Directions to
withhold authority will have no effect on the election of directors,
because directors are elected by a plurality of votes cast. Broker
non-votes are not counted in the vote totals and will have no effect
on any proposal scheduled for consideration at the Annual Meeting,
because they are not considered votes cast. For purposes of
determining stockholder approval, abstentions will be treated as
shares of Common Stock voted against ratification of the appointment
of Arthur Andersen L.L.P. as independent accountants for the year
1996.
The three nominees for director who receive the greatest number
of votes cast in person or by proxy at the Annual Meeting shall be
elected directors of the Company. The vote required for ratification
of the appointment of Arthur Andersen L.L.P. as independent
accountants for the year 1996 is the affirmative vote of a majority of
the shares of Common Stock present in person or represented by proxy
at the Annual Meeting.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of eleven
directors who are divided into three classes. One class is elected
each year for a three-year term. At the Annual Meeting, Alton F.
Doody, Daniel C. Ferguson and Henry B. Pearsall will be nominated to
serve in Class III until the Annual Meeting of Stockholders to be held
in 1999 and until their successors have been duly elected and
qualified. Proxies will be voted, unless otherwise indicated, for the
election of the three nominees for director. Proxies will be voted in
a discretionary manner should any nominee be unable to serve. All of
the nominees are currently serving as directors of the Company.
The dates shown for service as a director of the Company include
service as a director of the predecessor of the Company prior to July
1987. The nominees, and certain information about them and the
directors serving in Class I and Class II whose terms expires in
future years, are set forth below. Please note that Daniel C.
Ferguson and Thomas A. Ferguson, Jr. are not related.
5
Director
Name and Background Since
------------------- --------
Nominees for Class III Directors for Term Expiring in 1999
Alton F. Doody, age 61, has been President and Chief
Executive Officer of The Alton F. Doody Co. (a
marketing consulting company) since 1984 . . . . . . 1976
Daniel C. Ferguson, age 68, has been Chairman of the
Board of the Company since May 1992. Mr. Ferguson
was Chief Executive Officer of the Company from 1966
through May 1992 . . . . . . . . . . . . . . . . . . 1965
Henry B. Pearsall, age 61, was Chairman of the Board
of Sanford Corporation (an office supplies
manufacturer acquired by the Company in February
1992) from January 1988 through his retirement in
November 1994, and was Chief Executive Officer from
January 1988 through February 1992. He is a Director
of Ariel Capital Management, Inc. (an investment
management company) . . . . . . . . . . . . . . . . 1992
Class I Directors Continuing in Office - Term Expires in 1997
Gary H. Driggs, age 61, has been Chairman of
Camelback Investment and Management Co. (an
investment management firm) and Camelback Hotel
Corporation (a hotel management firm) since August
1989. Dr. Driggs has also been Chairman of Covid,
Inc. (an electronic product manufacturing company)
since July 1993. He was President and Chief
Executive Officer of Western Savings and Loan
Association ("WS&L") (a saving and loan association)
from 1973 through 1988 and was a Director from 1981
through 1989 <1> . . . . . . . . . . . . . . . . . . 1982
Robert L. Katz, age 70, has been President of Robert
L. Katz & Associates (consultants in corporate
strategy) for more than five years. For sixteen
years Dr. Katz taught Business Policy and
Organizational Behavior at the Stanford, Harvard and
Dartmouth Graduate Schools of Business. He is also a
Director of Inmac Corp. (a computer supplies
manufacturer and distribution company) and HON
Industries Inc. (an office furniture manufacturing
company) . . . . . . . . . . . . . . . . . . . . . . 1975
6
Director
Name and Background Since
------------------- --------
John J. McDonough, age 59, has been President and
Chief Executive Officer of McDonough Capital Company
LLC (an investment management company) since April
1995. Prior thereto, he was Vice Chairman and a
Director of Dentsply International Inc. (a
manufacturer of dental and medical x-ray equipment
and other dental instruments) from 1983 through
October 1995, and was Chief Executive Officer from
April 1983 through February 1995. Mr. McDonough was
Senior Vice President-Finance of the Company from
March 1981 through June 1983. He is also a Director
of Bank-One Chicago (a bank holding company),
AMRESCO, Inc. (an asset management, commercial
mortgage banking and investment income company), CGW
Southeast Fund (an investment company), INMET
Systems, Inc. (an image processing company) and
Softnet Systems, Inc. (an electronic information and
document management systems company) . . . . . . . 1992
William P. Sovey, age 62, has been Vice Chairman and
Chief Executive Officer of the Company since May
1992. Mr. Sovey was President and Chief Operating
Officer of the Company from January 1986 through May
1992. He was President and Chief Operating Officer
of AMF Inc. (an industrial and consumer leisure
products concern) from March 1982 through July 1985,
and Executive Vice President from August 1979 through
March 1982. He is also a Director of Acme Metals
Incorporated (a fully integrated producer of steel
and steel products) and TECO Energy Incorporated (an
energy production and distribution company) . . . . 1986
Class II Directors Continuing in Office - Term Expiring in 1998
Thomas A. Ferguson, Jr., age 48, has been President
and Chief Operating Officer of the Company since May
1992. Prior thereto, Mr. Ferguson was President-
Operating Companies of the Company from January 1989
through May 1992. He was Vice President-Controller
of the Company from February 1988 through December
1988. He is also a Director of Northwest Illinois
Bancorp Incorporated (a bank holding company) . . .
1992
Allan P. Newell, age 50, has been a private investor
for more than five years . . . . . . . . . . . . . . 1982
Elizabeth Cuthbert Millett, age 39, has been the
owner and operator of Plum Creek Ranch, located in
Newcastle, Wyoming (a commercial cattle production
company) for more than five years . . . . . . . . . 1995
7
Director
Name and Background Since
------------------- --------
Cynthia A. Montgomery, age 43, has been a Professor
of Business Administration at the Harvard University
Graduate School of Business since 1989. Professor
Montgomery was a Professor at the Kellogg School of
Management at Northwestern University from 1985 to
1989. She is also a Director of UNUM Corporation (an
insurance company) and 24 mutual funds managed by
Merrill Lynch & Co. or one of its subsidiaries
(investment companies) . . . . . . . . . . . . . . . 1995
_____________
<1> Dr. Driggs resigned as President and Chief Executive Officer of
WS&L in December 1988 and as a Director in March 1989. Later in
1989, WS&L was declared insolvent and taken over by the Federal
Deposit Insurance Corporation. The federal government filed a
civil suit in 1992 and issued an indictment in 1994 against him,
alleging conspiracy, fraud and other acts relating to the
insolvency. In 1995, all civil actions were settled for an
aggregate amount of up to $1.5 million, and he agreed not to
affiliate with an insured depositary institution without prior
approval. Subsequently, he pled guilty to two felony counts
relating to approving false federal financial filings. In
October 1995, he was fined $10,000 and sentenced to probation and
community service. Dr. Driggs cooperated in the investigation of
this matter.
Information Regarding Board of Directors and Committees
The Company's Board of Directors held four meetings during 1995.
The Board of Directors has an Audit Committee and an Executive
Compensation Committee, and the Board as a whole operates as a
committee to nominate directors.
The Audit Committee, whose current members are Drs. Driggs and
Katz and Messrs. McDonough and Newell, met two times in 1995. The
committee's duties are to (1) review with management and the
independent accountants the Company's accounting policies and
practices and the adequacy of internal controls; (2) review the scope
and results of the annual examination performed by the independent
accountants; and (3) make recommendations to the Board of Directors
regarding the appointment of the independent accountants and approval
of the services performed by the independent accountants, and fees
related thereto.
The Executive Compensation Committee (the "Compensation
Committee"), whose current members are Messrs. D. Ferguson and
McDonough and Dr. Katz, met four times in 1995. This committee is
responsible for establishing the Company's executive officer
8
compensation policies and for administration of such policies. See
"Executive Compensation-Executive Compensation Committee Report on
Executive Compensation."
The Board of Directors, acting as a nominating committee, will
consider candidates for director recommended by stockholders. A
stockholder who wishes to submit a candidate for consideration at the
Annual Meeting of Stockholders to be held in 1997 must notify the
Secretary of the Company in writing no later than February 7, 1997.
The stockholder's written notice must include information about each
proposed nominee, including name, age, business address, principal
occupation, shares beneficially owned and other information required
in proxy solicitations. The nomination notice must also include the
nominating stockholder's name and address and the number of shares of
the Common Stock beneficially owned by the stockholder. The
stockholder must also furnish a statement from the candidate
indicating that the candidate wishes and is able to serve as a
director. These procedures, and a statement that the stockholder
intends to make the nomination, are prerequisites under the Company's
Restated Certificate of Incorporation to a stockholder nominating a
candidate at the meeting.
Compensation of Directors
During 1995, directors of the Company who are not also employees
were paid a retainer ($20,000 per annum) plus a $1,000 fee for each
Board meeting attended and a $1,000 fee for each committee meeting
attended. Under the terms of the Newell Co. 1993 Stock Option Plan
(the "1993 Option Plan"), each director of the Company is
automatically granted options to purchase 5,000 shares of Common Stock
every five years. All options are granted at the market value of the
Common Stock on the date of the grant and become exercisable in annual
cumulative installments of 20%, commencing one year from the date of
grant, with full vesting occurring on the fifth anniversary date of
the date of grant.
The Company has a consulting agreement with Dr. Katz which
provides that the Company will pay Dr. Katz $5,000 per month for
corporate strategy consulting services plus travel expenses and other
reasonable out-of-pocket costs incurred on the Company's behalf.
Unless canceled prior to 90 days before its expiration, the consulting
agreement is automatically renewed each year. Dr. Katz received a
consulting fee of $60,000 in 1995.
9
EXECUTIVE COMPENSATION
Summary
The following table summarizes all compensation for services to
the Company and its subsidiaries for the fiscal years ended December
31, 1995, 1994 and 1993 earned by or awarded or paid to the persons
who were the chief executive officer and the five other most highly
compensated executive officers of the Company (the "Named Officers")
during 1995.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------------------------------ -----------
Awards
-----------
Other Annual Securities All Other
Name and Principal Compensation Underlying Compensation
Position Year Salary ($) Bonus($) ($) <1> Options (#) ($) <2>
----------------------- ---- --------- -------- ---------------- ----------- -----------
William P. Sovey, 1995 $ 650,000 $526,500 $ 8,818 0 $ 4,620
Vice Chairman and 1994 600,000 496,800 12,011 0 4,620
Chief Executive Officer 1993 550,000 415,800 14,660 0 2,750
Thomas A. Ferguson, Jr., 1995 490,000 396,900 10,878 7,500 4,620
President and Chief 1994 440,000 364,320 11,745 11,000 4,620
Operating Officer 1993 383,333 289,800 15,477 0 4,497
Donald L. Krause, 1995 310,000 251,100 10,022 1,000 4,620
Senior Vice President - 1994 295,000 244,260 11,293 3,000 4,620
Corporate Controller 1993 280,000 211,680 12,788 0 2,688
William T. Alldredge, 1995 300,000 243,000 8,445 1,000 4,620
Vice President - Finance 1994 285,000 235,980 12,350 7,000 4,620
1993 270,000 204,120 15,381 13,500 2,688
William J. Denton, 1995 285,000 278,303 12,367 7,500 4,620
Group President 1994 248,000 236,939 12,117 7,000 4,620
1993 231,999 167,782 14,373 0 4,497
Richard C. Dell, 1995 285,000 110,837 9,533 7,000 4,620
Group President 1994 245,000 143,227 11,335 2,000 4,620
1993 225,000 157,883 13,056 4,500 4,497
- ------------
<1> The amounts shown for 1995 include costs to the Company for
expenses associated with use of Company cars as follows: Mr.
Sovey, $6,718; Mr. T. Ferguson, $9,298; Mr. Krause, $8,562; Mr.
Alldredge, $6,865; Mr. Denton, $10,507;and Mr. Dell, $7,413.
<2> The compensation reported represents Company matching
contributions to the Newell Co. Long-Term Savings and Investment
Plan (the "Newell 401(k) Plan").
10
Option Grants in 1995
The following table sets forth certain information as to options
to purchase Common Stock granted to the Named Officers under the 1993
Option Plan during the fiscal year ended December 31, 1995, and the
potential realizable value of each grant of options, assuming that the
market price of the underlying Common Stock appreciates in value
during the ten-year option term at annualized rates of 5% and 10%.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Individual Grants Value at Assumed
------------------------------------------------------------------------------------- Annual Rates of Stock
Number of Percent of Price Appreciation for
Securities Total Options Exercise Option Term <3>
Underlying Granted to or Base ---------------------
Options Granted Employees in Price Expiration
Name (#) <1> a Fiscal Year ($/Sh) <2> Date 5% ($) 10% ($)
----------------------- --------------- ------------ --------- --------- ---------- -------
William P. Sovey 0 0 % $0 -- $0 $0
Thomas A. Ferguson, Jr. 3,000 1.16 23.25 2-7-05 43,943 110,903
4,500 1.74 23.75 5-10-05 67,331 169,931
Donald L. Krause 1,000 .39 23.75 5-10-05 14,963 37,763
William T. Alldredge 1,000 .39 23.75 5-10-05 14,963 37,763
William J. Denton 7,500 2.89 23.75 5-10-05 112,219 283,219
Richard C. Dell 3,500 1.35 23.25 2-7-05 51,266 129,386
3,500 1.35 23.75 5-10-05 52,369 132,169
- -------------
<1> All options granted in 1995 become exercisable in annual
cumulative installments of 20%, commencing one year from date of
grant, with full vesting occurring on the fifth anniversary date
of the date of grant. Vesting may be accelerated as a result of
certain changes in control of the Company.
<2> All options were granted at market value (the closing price of
the Common Stock on the New York Stock Exchange as reported in
the Midwest Edition of The Wall Street Journal) on the date of
grant.
<3> Potential realizable value is reported net of the option exercise
price but before taxes associated with exercise. These amounts
assume annual compounding results in total appreciation of 63%
(5% per year) and 159% (10% per year). Actual gains, if any, on
stock option exercises and Common Stock are dependent on the
future performance of the Common Stock and overall market
conditions. There can be no assurance that the amounts reflected
in this table will be achieved.
11
Option Exercises in 1995
The table below sets forth certain information for fiscal year
1995 concerning the exercise of options to purchase shares of Common
Stock granted under the Newell Co. 1984 Amended and Restated Stock
Option Plan (the "1984 Option Plan") by each of the Named Officers and
the value of unexercised options granted under the 1984 Option Plan
and the 1993 Option Plan held by each of the Named Officers as of
December 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at Fiscal Money Options at Fiscal
Year-End (#) Year-End ($) <2>
Shares Value ----------------------------- --------------------------
Acquired on Realized
Name Exercise (#) ($) <1> Exercisable Unexercisable Exercisable Unexercisable
---------------------- ----------- ------- ------------ ------------- ---------- -------------
William P. Sovey 0 $ 0 82,000 28,000 $ 788,125 $238,750
Thomas A. Ferguson, Jr. 0 0 26,200 28,300 193,450 130,675
Donald L. Krause 0 0 18,400 13,600 116,350 75,338
William T. Alldredge 0 0 12,200 22,800 105,725 179,963
William J. Denton 3,200 27,400 13,200 17,900 82,975 59,900
Richard C. Dell 0 0 13,600 18,000 100,775 75,888
- -------------
<1> Represents the difference between the average of the high and low
prices of the Common Stock on the New York Stock Exchange as
reported in the Midwest Edition of The Wall Street Journal on the
date of exercise and the option exercise price.
<2> Represents the difference between $25.50 (the average of the high
and low prices of the Common Stock on the New York Stock Exchange
as reported in the Midwest Edition of The Wall Street Journal on
December 31, 1995) and the option exercise price.
Pension and Retirement Plans
The Pension Plan Table set forth below shows total estimated
annual benefits payable upon retirement (based on the benefit formulas
in effect and calculated on a straight life annuity basis, as
described below) to persons covered under the non-contributory defined
benefit pension plan for salaried and clerical employees (the "Pension
Plan") and the Supplemental Retirement Plan established in 1982 (the
"Supplemental Retirement Plan"), including the Named Officers, in
specified compensation and years of credited service classifications,
assuming employment until age 65 and that Social Security benefits
remain at the current level.
12
PENSION PLAN TABLE
Years of service
-------------------------------------------------------
25 or
Remuneration 5 10 15 20 more
---------------------------------------------------- ------- -------- -------- -------- ---------
$ 200,000 . . . . . . . . . . . . . . . . . . . . . $12,200 $39,000 $65,800 $ 92,600 $119,400
300,000 . . . . . . . . . . . . . . . . . . . . . 25,600 65,800 106,000 146,200 186,400
400,000 . . . . . . . . . . . . . . . . . . . . . 39,000 92,600 146,200 199,800 253,400
500,000 . . . . . . . . . . . . . . . . . . . . . 52,400 119,400 186,400 253,400 320,400
600,000 . . . . . . . . . . . . . . . . . . . . . 65,800 146,200 226,600 307,000 387,400
700,000 . . . . . . . . . . . . . . . . . . . . . 79,200 173,000 266,800 360,600 454,400
800,000 . . . . . . . . . . . . . . . . . . . . . 92,600 199,800 307,000 414,200 521,400
900,000 . . . . . . . . . . . . . . . . . . . . . 106,000 226,600 347,200 467,800 588,400
1,000,000 . . . . . . . . . . . . . . . . . . . . . 119,400 253,400 387,400 521,400 655,400
1,100,000 . . . . . . . . . . . . . . . . . . . . . 132,800 280,200 427,600 575,000 722,400
1,200,000 . . . . . . . . . . . . . . . . . . . . . 146,200 307,000 467,800 628,600 789,400
1,300,000 . . . . . . . . . . . . . . . . . . . . . 159,600 333,800 508,000 682,200 856,400
1,400,000 . . . . . . . . . . . . . . . . . . . . . 173,000 360,600 548,200 735,800 923,400
1,500,000 . . . . . . . . . . . . . . . . . . . . . 186,400 387,400 588,400 789,400 990,400
The Pension Plan covers full-time salaried and clerical employees
of the Company and its subsidiaries who have completed one year of
service. A participant is eligible for normal retirement benefits
under the Pension Plan if his or her employment terminates at or after
age 65. For service years prior to 1982, benefits accrued on a
straight life annuity basis, using a formula that takes into account
the five highest consecutive years of compensation in the ten years
before retirement, actual years of service and actual years of service
less than possible years of service, reduced by a portion of expected
primary social security payments. For service years from and after
1982 and before 1989, benefits accumulated at the rate of 1.1% of
compensation for each year plus 1.2% of compensation in excess of
$25,000. For service years from and after 1989, benefits accumulate
at the rate of 1.37% of compensation not in excess of $25,000 for each
year plus 1.85% of compensation in excess of $25,000. Under the
Pension Plan, compensation includes salary or wages (unreduced for
amounts deferred pursuant to the Newell 401(k) Plan and the Flexible
Benefits Account Plan), the first $3,000 in bonuses and 100% of
commissions, but excludes Bonuses included in the Summary Compensation
Table above. If a participant has completed 15 years of service, upon
attainment of age 60, the Pension Plan also provides for an early
retirement benefit equal to the benefits described above, reduced by
.5% for each month the benefits commence before age 65.
In 1982, the Supplemental Retirement Plan was established, funded
by cost recovery life insurance, which covers 115 current officers and
key executives, including the Named Officers. The Supplemental
Retirement Plan adds to retirement benefits under the Pension Plan so
that at age 65, a covered employee receives a maximum aggregate
pension equal to 67% of his or her average compensation for the five
consecutive years in which it was highest (multiplied by a fraction,
the numerator of which is the participant's credited service (not to
exceed 25) and the denominator of which is 25). The benefit is
13
reduced by primary Social Security. Both the Pension Plan and the
Supplemental Retirement Plan provide a death benefit for surviving
spouses and dependent children. The Supplemental Retirement Plan also
provides for an early retirement benefit upon attainment of age 60
equal to the benefits described above, reduced by .5% for each month
the benefits commence before age 65.
In 1995, Mr. Sovey had 10 years of credited service, Mr. T.
Ferguson had 23 years, Mr. Krause had 22 years, Mr. Alldredge had 12
years, Mr. Denton had 19 years and Mr. Dell had 21 years.
Employment Security Agreements
The Company has entered into Employment Security Agreements
("Agreements") with the Named Officers which provide for the
continuation of salary, bonus and certain employee benefits for a
period (the "Severance Period") of twenty-four months (but not beyond
age 65) following the termination of employment of the Named Officer
within twelve months (but prior to age 65) after certain changes in
control of the Company. In the event of such termination of
employment, the Named Officer will continue to receive his base salary
and bonus (based upon his average bonus for the three full fiscal
years preceding the change in control) during the Severance Period.
The Named Officer also will receive all benefits accrued under the
incentive and retirement plans of the Company to the date of
termination of employment and will be given service credit for all
purposes of these plans during the Severance Period. All options held
by the Named Officer with respect to Common Stock will become
immediately exercisable upon the date of termination of employment and
remain exercisable for a period of 90 days thereafter.
During the Severance Period, the Named Officer and his spouse
will continue to be covered by all welfare plans of the Company, and
the Company will continue to reimburse the Named Officer for
automobile expenses, but the amount of any benefits or reimbursement
the Named Officer or his spouse receives will be reduced by the
amounts received from another employer or from any other source. If
the Named Officer dies during the Severance Period, all amounts
payable during the remainder of the Severance Period shall be paid to
his surviving spouse, and his spouse will continue to be covered under
all applicable welfare plans. No amounts are payable if the
employment of the Named Officer is terminated by the Company for Good
Cause (as defined in the Agreements) or if the Named Officer
voluntarily terminates his employment without Good Reason (as defined
in the Agreements).
14
Executive Compensation Committee Report on Executive Compensation
The Compensation Committee has furnished the following report on
executive compensation to the stockholders of the Company.
Compensation Procedures and Policies. The Compensation Committee
determines the compensation of all of the executive officers of the
Company, including the Named Officers and the one other executive
officer of the Company. All decisions by the Compensation Committee
relating to the compensation of the Company's executive officers,
other than decisions relating to stock options, are reviewed and
approved by the full Board of Directors.
The Company's executive compensation philosophy and specific
compensation plans tie a significant portion of executive compensation
to the Company's success in meeting specified profit and growth and
performance goals and to appreciation in the Company's stock price.
The Company's compensation objectives include attracting and retaining
the best possible executive talent, motivating executive officers to
achieve the Company's performance objectives, rewarding individual
performance and contributions, and linking executive and stockholder
interests through equity based plans.
The Company's executive compensation consists of three key
components: base salary, annual incentive compensation and stock
options, each of which is intended to complement the others and, taken
together, to satisfy the Company's compensation objectives. The
Compensation Committee's policies with respect to each of the three
components, including the bases for the compensation awarded to
William P. Sovey, the Company's Chief Executive Officer, are discussed
below.
The Compensation Committee has considered the effect of the
limitations on the deductibility of executive compensation in excess
of $1 million under Section 162(m) of the Internal Revenue Code on the
Company's compensation policies and practices and has determined not
to make any changes in such policies and practices for 1996. The
Internal Revenue Service regulations interpreting the provisions of
Section 162(m) provide that stock option plans that comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934,
like the Company's 1993 Option Plan, need not comply with the
requirements of Section 162(m) until 1997. As a result, the
Compensation Committee anticipates that the Company will pay an
immaterial amount of non-deductible executive compensation in 1996.
Base Salary. In the early part of each fiscal year, the
Compensation Committee reviews the recommendation of the Chairman of
the Compensation Committee with regard to the base salary of Mr.
Sovey, the recommendation of Mr. Sovey with regard to the base salary
of Thomas A. Ferguson, Jr., the Company's Chief Operating Officer, and
the recommendations of Mr. T. Ferguson, with regard to all other
executive officers of the Company and approves, with any modifications
it deems appropriate, annual base salaries for each of the executive
officers.
15
Recommended base salaries of the executive officers are based
upon the base salary ranges recommended annually by the personnel
relations department of the Company. National survey data available
to the personnel relations department regarding salaries of those
persons holding comparable positions at comparably sized nondurable
consumer goods companies is reviewed by the Compensation Committee to
establish base salary ranges. The nondurable consumer goods companies
are not the companies which make up the Dow Jones Consumer, Non-
Cyclical Industry Group Index in the Common Stock Price Performance
Graph included in this Proxy Statement. The base salary range is
based upon the midpoint of the comparative compensation group, plus or
minus twenty-five percent. The base salary of each of the executive
officers is established in relation to the midpoint of the base salary
ranges based upon an evaluation of the individual performance of the
executive officer, including satisfaction of such officer's annual
objectives. The base salary of the Chief Executive Officer is also
established in relation to the midpoint of his base salary range,
based on achievement of the Company's annual goals relating to
earnings per share, sales growth and return on investment and on an
evaluation of the individual performance of the Chief Executive
Officer. The base salaries paid in 1995 to each of the executive
officers, including the Chief Executive Officer, were within the range
recommended by the personnel relations department.
The base salary of Mr. Sovey was reviewed at the February 1995
meeting of the Compensation Committee. In setting Mr. Sovey's salary
for 1995, the Compensation Committee considered that the Company's
annual goals relating to earnings per share, sales growth and return
on investment were met in 1994. In evaluating Mr. Sovey's
performance, the Compensation Committee primarily considered these
Company financial goals. In consideration of these factors, the
Compensation Committee approved an increase in Mr. Sovey's base salary
of $50,000, approximately 8.3%, for 1995.
Annual Incentive Compensation. The Company's executive officers
(other than the Group Presidents) are entitled to participate in an
incentive bonus plan which provides for the payment of cash bonuses
based on the Company's return on investment (the "ROI Plan"). Awards
are made under the ROI Plan if the Company's annual after-tax return
on beginning of the year stockholders equity exceeds 11% and are
determined by multiplying each executive officer's base salary by
percentages established in the ROI Plan reflecting the actual return
achieved.
The annual after-tax return on beginning of the year
stockholder's equity for 1995 was 20%. Based on these results, Mr.
Sovey was awarded a bonus of $526,500 for 1995.
The Group Presidents are entitled to participate in an incentive
bonus plan which provides for the payment of cash bonuses based on
return on assets used in, and sales and income growth by, the
divisions for which the Group President is responsible (the "ROA
Plan"). Awards are made under the ROA Plan if the return on assets
used during the year in the divisions for which the Group President is
responsible exceeds 10% on a pre-tax basis and sales growth exceeds
the prior year sales level, and are determined by multiplying each
16
Group President's base salary by percentages established in the ROA
Plan reflecting the actual results achieved. Actual return on assets
and sales growth in 1995 exceeded the goals established for payment of
a bonus in the divisions for which each of the Group Presidents was
responsible.
Stock Options. The Company's executive officers are also
entitled to participate in the 1993 Option Plan. Under the 1993
Option Plan, incentive stock options and nonqualified stock options to
purchase Common Stock of the Company may be granted at prices not less
than fair market value of the Common Stock at the date of grant.
Options granted under the 1993 Option Plan become exercisable in
annual cumulative installments of 20% of the number of options granted
over a five-year period and have a maximum term of ten years. The
Compensation Committee has adopted a formula, which takes into account
outstanding options, for determining, on a quarterly basis, whether an
executive officer of the Company should be awarded an option. The
grant of options is considered if the option exercise price of the
options held by an executive officer for five years or more is less
than a variable multiple of the executive officer's base salary. The
Compensation Committee also has the discretion, in circumstances such
as a promotion, to grant options otherwise than in accordance with the
formula. Based upon the formula, Mr. Sovey did not receive any
options in 1995.
This report is submitted on behalf of the Compensation Committee:
Daniel C. Ferguson, Chairman
Robert L. Katz
John J. McDonough
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Messrs. D.
Ferguson and McDonough and Dr. Katz. Daniel C. Ferguson, Chairman of
the Board of Directors of the Company and Chairman of the Compensation
Committee, and John J. McDonough, a Director of the Company and member
of the Compensation Committee, are former employees of the Company.
CERTAIN BENEFICIAL OWNERS
The Company does not know of any person who is the beneficial
owner of more than five percent of the outstanding Common Stock.
The following table sets forth information as to the beneficial
ownership of shares of Common Stock of each director, each nominee for
director, and each Named Officer, individually, and all directors and
executive officers of the Company, as a group.
17
Common Stock Beneficially
Owned on January 16, 1996
--------------------------------------
Number Percent of
of Class
Name of Beneficial Owner Shares Outstanding
-------------------------------------------- ---------- -----------
Alton F. Doody . . . . . . . . . . . . . . . 68,000 <1> .04%
Gary H. Driggs . . . . . . . . . . . . . . . 34,000 <1> .02
Daniel C. Ferguson . . . . . . . . . . . . . 3,257,732 <1><2> 2.05
Thomas A. Ferguson, Jr. . . . . . . . . . . . 168,686 <1><3><4> .11
Robert L. Katz . . . . . . . . . . . . . . . 169,124 <1><5> .11
John J. McDonough . . . . . . . . . . . . . . 56,405 <1><6> .04
Elizabeth Cuthbert Millett . . . . . . . . . 237,846 <1><7> .15
Cynthia A. Montgomery . . . . . . . . . . . . 0 0
Allan P. Newell . . . . . . . . . . . . . . . 2,188,091 <8> 1.38
Henry B. Pearsall . . . . . . . . . . . . . . 884,064 <1><9> .56
William P. Sovey . . . . . . . . . . . . . . 441,873 <1><3> .28
William T. Alldredge . . . . . . . . . . . . 211,881 <3><10> .13
William J. Denton . . . . . . . . . . . . . . 78,519 <1><3> .05
Richard C. Dell . . . . . . . . . . . . . . . 82,568 <1><3><11> .05
Donald L. Krause . . . . . . . . . . . . . . 407,813 <1><12> .26
All directors and executive
officers as a group (15 persons) . . . . . 8,286,602 5.22 %
- -------------
<1> Includes shares issuable pursuant to stock options exercisable
within 60 days of March 11, 1996 as follows: Dr. Doody, 10,000
shares; Dr. Driggs, 10,000 shares; Mr. D. Ferguson, 8,400 shares;
Mr. T. Ferguson, 29,900 shares; Dr. Katz, 10,000 shares; Mr.
McDonough, 6,000 shares; Ms. Millett, 1,000 shares; Mr. Pearsall,
4,000 shares; Mr. Sovey, 98,000 shares; Mr. Alldredge, 13,800
shares; Mr. Denton, 15,300 shares; Mr. Dell, 15,400 shares; and
Mr. Krause, 20,200 shares.
<2> Includes 3,400 shares beneficially owned of record by his wife,
140,906 shares held in a charitable trust of which Mr. D.
Ferguson is trustee, 694,384 shares held in a trust of which Mr.
D. Ferguson is beneficiary and 1,037,368 shares held by a
partnership of which Mr. D. Ferguson is managing partner.
<3> Includes shares held by the Newell 401(k) Plan over which each of
the following persons has voting power: Mr. T. Ferguson, 5,586
shares; Mr. Sovey, 5,568 shares; Mr. Alldredge, 1,397 shares; Mr.
Denton, 2,819 shares; and Mr. Dell, 4,968 shares.
<4> Includes 133,000 shares held in joint tenancy over which Mr. T.
Ferguson has shared investment and voting power and 200 shares
beneficially owned of record by his son.
18
<5> Includes 64,324 shares held in a trust of which Dr. Katz is
beneficiary and over which he has sole investment and voting
power.
<6> Includes 5,100 shares held in his wife's individual retirement
account and 10,400 shares beneficially owned of record by his
daughter with respect to which he disclaims beneficial ownership,
but excludes 41,000 shares held in trusts for relatives of Mr.
McDonough with respect to which he disclaims beneficial
ownership.
<7> Includes 2,720 shares over which Ms. Millett has shared
investment and voting power, 17,400 shares beneficially owned of
record by each of her two children and 70,860 shares held in
trust of which Ms. Millett is beneficiary, but excludes 7,900
shares owned of record by her husband with respect to which she
disclaims beneficial ownership.
<8> Includes 24,000 shares held in trusts of which Mr. Newell is co-
trustee and beneficiary and over which he has shared investment
and voting power and 2,144 shares beneficially owned of record by
his wife.
<9> Includes 618,564 shares held in a trust of which Mr. Pearsall is
trustee and 130,000 shares held in a family charitable trust.
<10> Includes 50,764 shares owned of record by his wife.
<11> Includes 24,000 shares held in joint tenancy over which Mr. Dell
has shared investment and voting power.
<12> Includes 12,000 shares held in joint tenancy over which Mr.
Krause has shared investment and voting power and 6,813 shares
held in trusts of which Mr. Krause is custodian or trustee.
19
COMMON STOCK PRICE PERFORMANCE GRAPH
The following Common Stock price performance graph compares the
yearly change in the Company's cumulative total stockholder returns on
its Common Stock during the years 1991 through 1995, with the
cumulative total return of the Standard & Poor's 500 Index and the Dow
Jones Consumer, Non-Cyclical Industry Group Index, assuming the
investment of $100 on December 31, 1990 and the reinvestment of
dividends (rounded to the nearest dollar).
December 31,
1990 1991 1992 1993 1994 1995
------- ---- ---- ---- ---- ----
Newell $ 100 $187 $169 $171 $181 $227
DJ Consumer,
Non Cyclical 100 148 141 136 151 220
S&P 500 Index 100 129 139 153 154 214
20
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of
Directors has reappointed Arthur Andersen L.L.P. as independent
accountants to audit the consolidated financial statements of the
Company for the year 1996. The Board of Directors recommends a vote
in favor of ratification of the appointment. If the stockholders
should fail to ratify the appointment of the independent accountants,
the Board of Directors would reconsider the appointment.
It is expected that representatives of Arthur Andersen L.L.P.
will be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so and will be available to
answer appropriate questions.
COMPLIANCE WITH FORMS 3, 4 AND 5 REPORTING REQUIREMENTS
Based solely upon a review of Reports on Forms 3, 4 and 5 and any
amendments thereto furnished to the Company pursuant to Section 16 of
the Securities Exchange Act of 1934, as amended, and written
representations from the executive officers and directors that no
other Reports were required, the Company believes that all of such
Reports were filed on a timely basis by executive officers and
directors during 1995, except that Professor Montgomery filed a single
initial ownership report on Form 3 late, Ms. Millett filed a single
Form 4 late in connection with one sale of Common Stock, and Mr.
McDonough filed a single Form 4 late in connection with eight
purchases of Common Stock.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
To be considered for inclusion in next year's proxy materials,
stockholder proposals to be presented at of Company's 1997 Annual
Meeting must be in writing and be received by the Company no later
than November 15, 1996.
21
OTHER BUSINESS
The Board of Directors does not know of any business to be
brought before the Annual Meeting other than the matters described in
the Notice of Annual Meeting. However, if any other matters are
properly presented for action, it is the intention of each person
named in the accompanying proxy to vote said proxy in accordance with
his judgment on such matters.
By Order of the Board of
Directors,
RICHARD H. WOLFF
Secretary
March 15, 1996
A COPY OF THE COMPANY'S 1995 ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K WILL BE FURNISHED TO STOCKHOLDERS
FREE OF CHARGE UPON WRITTEN REQUEST TO THE OFFICE OF THE VICE
PRESIDENT-FINANCE OF THE COMPANY.
