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_ No fee required.
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:___________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined): _______________________________________
(4) Proposed maximum aggregate value of transaction: __________
(5) Total fee paid: ___________________________________________
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid: ___________________________________
(2) Form, Schedule or Registration Statement: _________________
(3) Filing Party: _____________________________________________
(4) Date Filed: _______________________________________________
2
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 7, 1997
To the Stockholders of NEWELL CO.:
The Annual Meeting of Stockholders of NEWELL CO. will be
held on Wednesday, May 7, 1997 at 10:00 A.M., Central Daylight
Savings Time, at The Northern Trust Company, Chicago, Illinois,
for the following purposes:
1. To elect four directors of the Company to serve for a
term of three years;
2. To consider and vote upon the ratification of the
appointment of Arthur Andersen L.L.P. as the Company's
independent accountants for the year 1997; 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 10,
1997 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 1996 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,
/s/ Richard H. Wolff
------------------------------
RICHARD H. WOLFF
Secretary
March 13, 1997
3
NEWELL CO.
Newell Center
29 East Stephenson Street
Freeport, Illinois 61032
__________________
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 7, 1997
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 7, 1997 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 13, 1997.
VOTING AT THE MEETING
At the close of business on March 10, 1997, 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 158,983,365 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 four nominees
for director listed in this proxy statement and FOR ratification
of the appointment of Arthur Andersen L.L.P. A stockholder who
has given a proxy may revoke such proxy at any time before it is
voted at the Annual Meeting by delivering a written notice of
4
revocation or a duly executed proxy bearing a later date to the
Secretary of the Company or by attending the meeting and voting
in person.
A quorum of stockholders is necessary to take action at the
Annual Meeting. A majority of the outstanding shares of Common
Stock of the Company, represented in person or by proxy, will
constitute a quorum. Votes cast by proxy or in person at the
Annual Meeting will be tabulated by the inspectors of election
appointed for the Annual Meeting. The inspectors of election
will determine whether or not a quorum is present at the Annual
Meeting. Under certain circumstances, a broker or other nominee
may have discretionary authority to vote certain shares of Common
Stock if instructions have not been received from the beneficial
owner or other person entitled to vote. The inspectors of
election will treat directions to withhold authority, abstentions
and broker non-votes (which occur when a broker or other nominee
holding shares for a beneficial owner does not vote on a
particular proposal, because such broker or other nominee does
not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner) as
present and entitled to vote for purposes of determining the
presence of a quorum for the transaction of business at the
Annual Meeting. Directions to withhold authority will have no
effect on the election of directors, because directors are
elected by a plurality of votes cast. Broker non-votes are not
counted in the vote totals and will have no effect on any
proposal scheduled for consideration at the Annual Meeting,
because they are not considered votes cast. For purposes of
determining stockholder approval, abstentions will be treated as
shares of Common Stock voted against ratification of the
appointment of Arthur Andersen L.L.P. as independent accountants
for the year 1997.
The four nominees for director who receive the greatest
number of votes cast in person or by proxy at the Annual Meeting
shall be elected directors of the Company. The vote required for
ratification of the appointment of Arthur Andersen L.L.P. as
independent accountants for the year 1997 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, Gary H. Driggs, Robert L. Katz, John J. McDonough and
William P. Sovey, will be nominated to serve in Class I until the
Annual Meeting of Stockholders to be held in 2000 and until their
successors have been duly elected and qualified. Proxies will be
voted, unless otherwise indicated, for the election of the four
nominees for director. Proxies will be voted in a discretionary
5
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 II and Class III whose
terms expire in future years, are set forth below. Please note
that Daniel C. Ferguson and Thomas A. Ferguson, Jr. are not
related.
Director
NAME AND BACKGROUND Since
------------------- --------
NOMINEES FOR CLASS I DIRECTORS FOR TERM EXPIRING IN 2000
Gary H. Driggs, age 62, 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 71, has been President of
Robert L. Katz & Associates (consultants in
corporate strategy) for more than five years. For
sixteen years Dr. Katz taught Business Policy and
Organizational Behavior at the Stanford, Harvard
and Dartmouth Graduate Schools of Business. He is
also a Director of HON Industries Inc. (an office
furniture manufacturing company) . . . . . . . . . 1975
6
Director
NAME AND BACKGROUND Since
--------
John J. McDonough, age 60, has been Chairman of
Softnet Systems, Inc. (an electronic information
and document management systems company) since July
1995, and Chief Executive Officer since September
1996. Mr. McDonough has also been President and
Chief Executive Officer of McDonough Capital
Company LLC (an investment management company)
since April 1995. Prior thereto, he was Vice
Chairman and a Director of Dentsply International
Inc. (a manufacturer and distributor of dental and
medical x-ray equipment and other dental products)
from 1983 through October 1995, and was Chief
Executive Officer from April 1983 through February
1995. He was Senior Vice President-Finance of the
Company from March 1981 through June 1983. He is
also a Director of AMRESCO, Inc. (an asset
management, commercial mortgage banking and
investment company), Applied Power, Inc. (a
manufacturer and distributor of tools, equipment,
systems and consumable items to the OEM industry),
Lunar Corporation (a manufacturer and marketer of
bone densitometers) and Plexus Corporation (a
designer, manufacturer and tester of electronic
products). . . . . . . . . . . . . . . . . . . . . 1992
William P. Sovey, age 63, 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 49, has been President
and Chief Operating Officer of the Company since
May 1992. Prior thereto, Mr. Ferguson was
President-Operating Companies of the Company from
January 1989 through May 1992. He was Vice
President-Controller of the Company from February
1988 through December 1988. . . . . . . . . . . . 1992
7
Director
NAME AND BACKGROUND Since
--------
Allan P. Newell, age 51, has been a private
investor for more than five years . . . . . . . . 1982
Elizabeth Cuthbert Millett, age 40, 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
Cynthia A. Montgomery, age 44, has been a Professor
of Business Administration at the Harvard
University Graduate School of Business since 1989.
Prior thereto, Professor Montgomery was a Professor
at the Kellogg School of Management at Northwestern
University from 1985 to 1989. She is also a
Director of UNUM Corporation (an insurance company)
and 24 mutual funds managed by Merrill Lynch & Co. . 1995
or one of its subsidiaries (investment companies)
CLASS III DIRECTORS CONTINUING IN OFFICE -- TERM
EXPIRING IN 1999
Alton F. Doody, age 62, has been President and
Chief Executive Officer of The Alton F. Doody Co.
(a marketing consulting company) since 1984 . . . 1976
Daniel C. Ferguson, age 69, 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
- ---------------------------
(1) Dr. Driggs resigned as President and Chief Executive Officer
of WS&L in December 1988 and as a Director in March 1989.
Later in 1989, WS&L was declared insolvent and taken over by
the Federal Deposit Insurance Corporation. In 1995, Dr.
Driggs settled civil actions alleging conspiracy, fraud and
other acts relating to the insolvency for an aggregate
amount of $650,000 and agreed not to affiliate with an
insured depositary institution without prior approval.
He also pled guilty to two felony counts relating to
omissions in regulatory filings and was fined $10,000,
placed on probation and required to perform community
service. Dr. Driggs cooperated in the investigation of this
matter.
8
Henry B. Pearsall, age 62, was Chairman of the
Board of Sanford Corporation (an office supplies
manufacturer acquired by the Company in February
1992) from January 1988 through his retirement in
November 1994, and was Chief Executive Officer from
January 1988 through February 1992. He is a
Director of Ariel Capital Management, Inc. (an
investment management company) and Oak Park River
Forest Bancshares Inc. (a bank holding company) . . 1992
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held four meetings during
1996. The Board of Directors has an Audit Committee and an
Executive Compensation Committee, and the Board as a whole
operates as a committee to nominate directors.
The Audit Committee, whose chairman is Dr. Katz and whose
other current members are Dr. Driggs and Messrs. McDonough and
Newell, met two times in 1996. The committee's duties are to (1)
review with management and the independent accountants the
Company's accounting policies and practices and the adequacy of
internal controls; (2) review the scope and results of the annual
examination performed by the independent accountants; and (3)
make recommendations to the Board of Directors regarding the
appointment of the independent accountants and approval of the
services performed by the independent accountants, and fees
related thereto.
The Executive Compensation Committee (the "Compensation
Committee"), whose chairman is Mr. D. Ferguson and whose other
current members are Mr. McDonough and Dr. Katz, met four times in
1996. This committee is responsible for establishing the
Company's executive officer compensation policies and for
administration of such policies. SEE "Executive
Compensation-Executive Compensation Committee Report on Executive
Compensation."
The Board of Directors, acting as a nominating committee,
will consider candidates for director recommended by
stockholders. A stockholder who wishes to submit a candidate for
consideration at the Annual Meeting of Stockholders to be held in
1998 must notify the Secretary of the Company in writing no later
than February 6, 1998. 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.
9
COMPENSATION OF DIRECTORS
During 1996, 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 $60,000 in 1996.
EXECUTIVE COMPENSATION
SUMMARY
The following table summarizes all compensation for services
to the Company and its subsidiaries for the fiscal years ended
December 31, 1996, 1995 and 1994 earned by or awarded or paid to
the persons who were the chief executive officer and the five
other most highly compensated executive officers of the Company
(the "Named Officers") during 1996.
10
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Other Annual Awards All Other
Compensation Securities Underlying Compensation
Name and Principal Position Year Salary ($) Bonus($) ($) (1) Options (#) ($) (2)
William P. Sovey, 1996 $700,000 $573,300 $10,214 35,000 $4,750
Vice Chairman and 1995 650,000 526,500 8,818 0 4,620
Chief Executive Officer 1994 600,000 496,800 12,011 0 4,620
Thomas A. Ferguson, Jr., 1996 525,000 429,975 10,552 3,000 4,750
President and Chief 1995 490,000 396,900 10,878 7,500 4,620
Operating Officer 1994 440,000 364,320 11,745 11,000 4,620
Donald L. Krause, 1996 324,000 265,356 12,139 5,500 4,750
Senior Vice President - 1995 310,000 251,100 10,022 1,000 4,620
Corporate Controller 1994 295,000 244,260 11,293 3,000 4,620
William T. Alldredge, 1996 315,000 257,985 8,117 1,000 4,750
Vice President - Finance 1995 300,000 243,000 8,445 1,000 4,620
1994 285,000 235,980 12,350 7,000 4,620
William J. Denton, 1996 315,000 309,015 11,016 3,000 4,750
Group President 1995 285,000 278,303 12,367 7,500 4,620
1994 248,000 236,939 12,117 7,000 4,620
Richard C. Dell, 1996 315,000 199,805 9,931 2,000 4,750
Group President 1995 285,000 110,837 9,533 7,000 4,620
1994 245,000 143,227 11,335 2,000 4,620
- ----------------------------
(1) The amounts shown for 1996 include costs to the Company for
expenses associated with use of Company cars as follows:
Mr. Sovey, $8,814; Mr. T. Ferguson, $8,872; Mr. Krause,
$10,699; Mr. Alldredge, $6,997; Mr. Denton, $8,876; and Mr.
Dell, $8,811.
(2) The compensation reported represents Company matching
contributions to the Newell Co. Long-Term Savings and
Investment Plan (the "Newell 401(k) Plan").
OPTION GRANTS IN 1996
The following table sets forth certain information as to
options to purchase Common Stock granted to the Named Officers
under the 1993 Option Plan during the fiscal year ended
December 31, 1996, and the potential realizable value of each
grant of options, assuming that the market price of the
11
underlying Common Stock appreciates in value during the ten-year
option term at annualized rates of 5% and 10%.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
-------------------------------------------------------------------------------------- Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to Exercise or for Option Term(3)
Options Granted Employees in a Base Price Expiration --------------------------
Name (#) (1) Fiscal Year ($/Sh) (2) Date 5% ($) 10% ($)
William P. Sovey 35,000 1.16% $26.000 2-7-06 $573,300 $1,446,900
Thomas A. Ferguson, Jr. 3,000 .99 28.250 5-7-06 53,393 134,753
Donald L. Krause 5,500 1.82 28.250 5-7-06 97,886 247,046
William T. Alldredge 1,000 .33 28.250 5-7-06 17,798 44,918
William J. Denton 1,500 .50 28.250 5-7-06 26,696 67,376
1,500 .50 28.625 10-28-06 27,051 68,271
Richard C. Dell 2,000 .66 28.250 5-7-06 35,595 89,835
- -----------------------------
(1) All options granted in 1996 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.
12
OPTION EXERCISES IN 1996
The table below sets forth certain information for fiscal
year 1996 concerning the exercise of options to purchase shares
of Common Stock granted under the 1993 Option Plan by each of the
Named Officers and the value of unexercised options granted under
the Newell Co. 1984 Amended and Restated Stock Option Plan and
the 1993 Option Plan held by each of the Named Officers as of
December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-
END OPTION VALUES
Number of Securities Value of Unexercised
Shares Underlying Unexercised Options In-the-Money Options at
Acquired on Value at Fiscal Year-End (#) Fiscal Year-End ($) (2)
Exercise Realized ------------------------------ ---------------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
William P. Sovey 0 $ -- 104,000 41,000 $1,650,000 $274,688
Thomas A. Ferguson, Jr. 0 -- 35,900 21,600 468,694 210,150
Donald L. Krause 0 -- 24,800 12,700 311,238 102,044
William T. Alldredge 2,500 36,094 16,524 16,976 243,524 228,226
William J. Denton 0 -- 18,700 15,400 221,944 127,375
Richard C. Dell 0 -- 19,200 14,400 247,588 135,675
- -----------------
(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 $31.813 (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, 1996) 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
13
clerical employees (the "Pension Plan") and the Supplemental
Retirement Plan established in 1982 (the "Supplemental Retirement
Plan"), including the Named Officers, in specified compensation
and years of credited service classifications, assuming
employment until age 65 and that Social Security benefits remain
at the current level.
PENSION PLAN TABLE
Years of service
Remuneration 5 10 15 20 25 or
more
$ 200,000 . . $10,900 $ 37,700 $ 64,500 $91,300 $118,100
300,000 . . 24,300 64,500 104,700 144,900 185,100
400,000 . . 37,700 91,300 144,900 198,500 252,100
500,000 . . 51,100 118,100 185,100 252,100 319,100
600,000 . . 64,500 144,900 225,300 305,700 386,100
700,000 . . 77,900 171,700 265,500 359,300 453,100
800,000 . . 91,300 198,500 305,700 412,900 520,100
900,000 . . 104,700 225,300 345,900 466,500 587,100
1,000,000 . . 118,100 252,100 386,100 520,100 654,100
1,100,000 . . 131,500 278,900 426,300 573,700 721,100
1,200,000 . . 144,900 305,700 466,500 627,300 788,100
1,300,000 . . 158,300 332,500 506,700 680,900 855,100
1,400,000 . . 171,700 359,300 546,900 734,500 922,100
1,500,000 . . 185,100 386,100 587,100 788,100 989,100
1,600,000 . . 198,500 412,900 627,300 841,700 1,056,100
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 not in excess of $25,000 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
14
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 94 current
officers and key executives, including the Named Officers, and 18
former officers and key executives. The Supplemental Retirement
Plan adds to retirement benefits under the Pension Plan so that
at age 65, a covered employee receives a maximum aggregate
pension equal to 67% of his or her average compensation for the
five consecutive years in which it was highest (multiplied by a
fraction, the numerator of which is the participant's credited
service (not to exceed 25) and the denominator of which is 25).
The benefit is reduced by primary Social Security. 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 1996, Mr. Sovey had 11 years of credited service, Mr. T.
Ferguson had 24 years, Mr. Krause had 23 years, Mr. Alldredge had
13 years, Mr. Denton had 20 years and Mr. Dell had 22 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
15
Period, all amounts payable during the remainder of the Severance
Period shall be paid to his surviving spouse, and his spouse will
continue to be covered under all applicable welfare plans. No
amounts are payable if the employment of the Named Officer is
terminated by the Company for Good Cause (as defined in the
Agreements) or if the Named Officer voluntarily terminates his
employment without Good Reason (as defined in the Agreements).
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following
report on executive compensation to the stockholders of the
Company.
COMPENSATION PROCEDURES AND POLICIES. The Compensation
Committee determines the compensation of all of the executive
officers of the Company, including the Named Officers and the one
other executive officer of the Company. All decisions by the
Compensation Committee relating to the compensation of the
Company's executive officers, 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 considered the effect of the
limitations on the deductibility of executive compensation in
excess of $1 million under Section 162(m) of the Internal Revenue
Code on the Company's compensation policies and practices and did
not make any changes in such policies and practices for 1996. As
a result, the Company paid an immaterial amount of non-deductible
executive compensation in 1996. The Compensation Committee
currently does not anticipate that changes will be made to the
Company's policies and practices for 1997 and, accordingly, the
Company may pay non-deductible compensation in 1997.
16
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.
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 1996 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
1996 meeting of the Compensation Committee. In setting Mr.
Sovey's salary for 1996, the Compensation Committee considered
his base salary in relation to the midpoint of his salary range
and that the Company's annual goals relating to earnings per
share, sales growth and return on investment were met in 1995.
In evaluating Mr. Sovey's performance, the Compensation Committee
primarily considered these Company financial goals. In
consideration of these factors, the Compensation Committee
approved an increase in Mr. Sovey's base salary of $50,000,
approximately 7.7%, for 1996.
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
17
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 1996 was approximately 20%. Based on
these results, Mr. Sovey was awarded a bonus of $573,300 for
1996.
The Group Presidents are entitled to participate in an
incentive bonus plan which provides for the payment of cash
bonuses based on return on assets used in, and sales and income
growth by, the divisions for which the Group President is
responsible (the "ROA Plan"). Awards are made under the ROA Plan
if the return on assets used during the year in the divisions for
which the Group President is responsible exceeds 10% on a pre-tax
basis and sales growth exceeds the prior year sales level, and
are determined by multiplying each Group President's base salary
by percentages established in the ROA Plan reflecting the actual
results achieved. Actual return on assets and sales growth in
1996 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
received 35,000 options in 1996.
This report is submitted on behalf of the Compensation
Committee:
Daniel C. Ferguson, Chairman
Robert L. Katz
John J. McDonough
18
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 only person or group which is known to the Company to be
the beneficial owner of more than five percent of the outstanding
Common Stock is:
Amount and nature Percent of
Name and Address of of beneficial class
Beneficial Owner ownership outstanding
--------------------------- ----------------- --------------
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 15,861,636 9.99%(1)
- ------------------------
(1) As reported in a Statement on Schedule 13-G filed with the
Securities and Exchange Commission by FMR Corp. FMR Corp.
reported that it has sole power to (a) vote or direct the
vote with respect to 511,056 shares and (b) dispose or
direct the disposition of 15,861,636 shares.
The following table sets forth information as to the
beneficial ownership of shares of Common Stock of each director,
each nominee for director, and each Named Officer, individually,
and all directors and executive officers of the Company, as a
group. Except as otherwise indicated in the footnotes to the
table, each individual has sole investment and voting power with
respect to the shares of Common Stock set forth.
19
Common Stock Beneficially
Owned on January 17, 1997
-------------------------
Percent of
Number of Class
Name of Beneficial Owner Shares Outstanding
------------------------------ ----------------------- -------------
Alton F. Doody . . . . . . . . 61,500 (1) .040%
Gary H. Driggs . . . . . . . . 35,000 (1) .020
Daniel C. Ferguson . . . . . . 3,255,532 (1)(2) 2.050
Thomas A. Ferguson, Jr. . . . . 176,486 (1)(3)(4) .110
Robert L. Katz . . . . . . . . 157,924 (1) .100
John J. McDonough . . . . . . . 60,300 (1)(5) .040
Elizabeth Cuthbert Millett . . 168,243 (1)(6) .110
Cynthia A. Montgomery . . . . . 1,100 (1) .001
Allan P. Newell . . . . . . . . 2,170,691 (1)(7) 1.370
Henry B. Pearsall . . . . . . . 744,864 (1)(8) .470
William P. Sovey . . . . . . . 454,310 (1)(3) .290
William T. Alldredge . . . . . 218,281 (1)(3)(9) .140
William J. Denton . . . . . . . 81,919 (1)(3) .050
Richard C. Dell . . . . . . . . 88,828 (1)(3)(10) .060
Donald L. Krause . . . . . . . 308,900 (1)(11) .190
All directors and executive
officers as a group
(15 persons) . . . . . . . . . 7,983,878 5.040%
- --------------
(1) Includes shares issuable pursuant to stock options
exercisable within 60 days of March 10, 1997 as follows:
Dr. Doody, 11,000 shares; Dr. Driggs, 11,000 shares; D.
Ferguson, 9,400 shares; Mr. T. Ferguson, 37,900 shares; Dr.
Katz, 11,000 shares; Mr. McDonough, 8,000 shares; Ms.
Millett, 1,000 shares; Ms. Montgomery, 1,000 shares; Mr.
Newell, 1,000 shares; Mr. Pearsall, 6,000 shares; Mr. Sovey,
111,000 shares; Mr. Alldredge, 17,700 shares; Mr. Denton,
18,700 shares; Mr. Dell, 19,900 shares; and Mr. Krause,
24,800 shares.
(2) Includes 3,400 shares beneficially owned of record by his
wife, 140,906 shares held in charitable trusts of which Mr.
D. Ferguson is trustee, 694,384 shares held in a trust of
which Mr. D. Ferguson is beneficiary and 1,037,368 shares
held by a partnership of which Mr. D. Ferguson is managing
partner.
20
(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) Excludes 200 shares beneficially owned of record by his son
with respect to which he disclaims beneficial ownership.
(5) Includes 5,200 shares held in his wife's individual
retirement account and 4,000 shares beneficially owned of
record by his daughter with respect to which he disclaims
beneficial ownership, but excludes 14,200 shares
beneficially owned of record by, and 33,000 shares held in
trusts for, relatives of Mr. McDonough with respect to which
he disclaims beneficial ownership.
(6) Includes 2,720 shares over which Ms. Millett has shared
investment and voting power, 38,152 shares beneficially
owned of record by her two children of which Ms. Millett is
custodian, but excludes 8,525 shares owned of record by her
husband with respect to which she disclaims beneficial
ownership.
(7) Includes 24,000 shares held in trusts of which Mr. Newell is
co-trustee and beneficiary and over which he has shared
investment and voting power and 2,144 shares beneficially
owned of record by his wife.
(8) Includes 612,564 shares held in a trust of which Mr.
Pearsall is trustee.
(9) Includes 50,764 shares owned of record by his wife.
(10) Includes 30,849 shares held in joint tenancy over which Mr.
Dell has shared investment and voting power.
(11) Includes 12,000 shares held in joint tenancy over which Mr.
Krause has shared investment and voting power and 4,500
shares held in trusts of which Mr. Krause is trustee.
21
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 1992 through 1996,
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, 1991 and
the reinvestment of dividends (rounded to the nearest dollar).
December 31,
1991 1992 1993 1994 1995 1996
Newell $100 $90 $91 $96 $120 $147
DJ Consumer, Non Cyclical 100 96 92 102 149 186
S&P 500 Index 100 107 118 119 160 194
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 1997. The Board of Directors recommends a
vote in favor of ratification of the appointment. If the
stockholders should fail to ratify the appointment of the
independent accountants, the Board of Directors would reconsider
the appointment.
It is expected that representatives of Arthur Andersen
L.L.P. will be present at the Annual Meeting, will have an
opportunity to make a statement if they desire to do so and will
be available to answer appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Based solely upon a review of Reports on Forms 3, 4 and 5
and any amendments thereto furnished to the Company pursuant to
Section 16 of the Securities Exchange Act of 1934, as amended,
and written representations from the executive officers and
directors that no other Reports were required, the Company
believes that all of such Reports were filed on a timely basis by
executive officers and directors during 1996.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
To be considered for inclusion in next year's proxy
materials, stockholder proposals to be presented at of Company's
1998 Annual Meeting must be in writing and be received by the
Company no later than November 7, 1997.
22
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 13, 1997
A COPY OF THE COMPANY'S 1996 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.
23
APPENDIX
Form of proxy card for holders of Common Stock of the Company
24
PROXY
-----
NEWELL CO.
Proxy Solicited by the Board of Directors
for Annual Meeting May 7, 1997
The undersigned hereby appoints Thomas A. Ferguson, Jr. and William T.
Alldredge, and each of them, as proxies, with the powers the
undersigned would possess if personally present, and with full power
of substitution, to vote at the Annual Meeting of Stockholders of
NEWELL CO. to be held on May 7, 1997, and at any adjournments
thereof, on all matters coming before said meeting.
(1) Election of Directors.
Nominees: Gary H. Driggs, Robert L. Katz
John P. McDonough and William P. Sovey
(2) Ratification of the appointment of Arthur Andersen L.L.P.
as independent accountants for the year 1997.
(3) In their discretion, upon such other matters as may
properly come before this Annual Meeting.
You are encouraged to specify your choices by /////////////////
marking the appropriate boxes, SEE REVERSE SIDE, / /
but you need not mark any boxes if you wish to / SEE REVERSE /
vote in accordance with the Board of Directors / SIDE /
recommendations. Your shares cannot be voted / /
unless you sign and return this card. /////////////////
25
X Please mark
___ your votes as
in this example.
When this Proxy is properly executed, the shares to which it relates
will be voted in the manner directed herein. If no direction is made,
the shares will be voted FOR election of directors and FOR proposal 2.
The Board of Directors recommends a vote FOR election of directors and FOR proposal 2.
--------------------------------------------------------------------------------------------------------------------
FOR WITHHOLD For, except withhold vote from the following nominee(s)
1. Election of Directors _____ _____ __________________________________________________________
2. Ratification of independent accountants. FOR AGAINST ABSTAIN
_____ _____ _____
SIGNATURE(S)__________________________DATE________________________
NOTE: Please sign exactly as name appears hereon. Joint owners The signer hereby revokes all proxies
should each sign. When signing as attorney, executor, heretofore given by the signer to vote at
administrator, trustee or guardian, please give full said meeting or any adjournments thereof.
title as such.
--------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
[Map setting forth location of Annual Meeting.]
