UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 9, 1998
NEWELL CO.
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(Exact name of registrant as specified in its charter)
Delaware 1-9608 36-3514169
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
29 East Stephenson Street, Freeport, Illinois 61032
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (815) 235-4171
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2
ITEM 5. OTHER EVENTS
On July 9, 1998 the Company entered into a Terms Agreement in
connection with a public offering of a series of Medium -Term Notes
(the "Note") under the Company's shelf Registration Statement on Form
S-3 (Registration No. 33-64225).
A copy of the Terms Agreement and the Note are filed as Exhibits
1.1 and 4.1, respectively, to this Report on Form 8-K, and hereby are
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits.
(1.1) Terms Agreement, dated as of July 9, 1998, among
Newell Co., Morgan Stanley Dean Witter, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Chase
Securities Inc., and First Chicago Capital
Markets, Inc.
(4.1) Medium-Term Fixed Rate Note, Series A dated
July 14, 1998 in the original principal amount of
$250,000,000 in favor of Cede & Co.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: July 9, 1998 NEWELL CO.
By: /s/ Dale L. Matschullat
---------------------------------
Dale L. Matschullat
Vice President - General Counsel
4
EXHIBIT INDEX
Exhibit No. Description
----------- ------------
1.1 Terms Agreement, dated as of July 9, 1998,
among Newell Co., Morgan Stanley Dean
Witter, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities Inc., and
First Chicago Capital Markets, Inc.
4.1 Medium-Term Fixed Rate Note, Series A dated
July 14, 1998 in the original principal
amount of $250,000,000 in favor of Cede & Co.
EXHIBIT 1.1
-----------
NEWELL CO.
MEDIUM-TERM NOTES, SERIES A
U.S. $250,000,000 OF 6.35% RESET PUT SECURITIES
TERMS AGREEMENT
July 9, 1998
Each of the Agents
named on Schedule 1 hereto
c/o Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, New York 10036
Ladies and Gentlemen:
Newell Co., a Delaware corporation (the "Company"), proposes to
issue and sell to each of the persons named in Schedule 1 hereto (the
"Agents"), subject in all respects to the terms and conditions of the
Distribution Agreement dated May 3, 1996 (the "Agreement"), U.S.
$200,000,000 aggregate principal amount of its Medium-Term Notes,
Series A described in the Pricing Supplement (as defined below) in the
respective principal amounts set forth in the aforementioned
Schedule. This agreement (this "Terms Agreement") is supplemental to
the Agreement. The notes to be issued pursuant to this Terms
Agreement are referred to herein as the "Notes". All terms used
herein have the meanings given to them in the Agreement except as
otherwise indicated.
The following terms and conditions of the Notes are more
extensively described in the Company's Pricing Supplement, dated July
10, 1998, relating to the Notes (the "Pricing Supplement"):
Title: 6.35% REset Put Securities
("REPS{sm}")<*>
Trade Date: July 9, 1998
Original Issue Date: July 14, 1998
Principal Amount: $250,000,000
Price to Public: 100% of Principal Amount
<*>REPS is a service mark of Morgan Stanley Dean Witter & Co.
6
Purchase Price: 99.350% of Principal Amount
Interest Rate: To but excluding July 15, 2008,
6.35%. From and including July 15,
2008, as described in the Pricing
Supplement under "ADDITIONAL
TERMS - INTEREST RATE AND INTEREST
PAYMENT DATES"
Form: Book-Entry Only
Interest Payment Dates: January 15 and July 15 of each
year, commencing January 15, 1999
Maturity Date: July 15, 2028, subject to the Call
Option and Put Option referred to
below
Callholder: The Company or its assignee.
Pursuant to a Securities Purchase
Option Agreement, the Company will
assign all its rights as Callholder
to Morgan Stanley & Co.
International Limited
Notes Call Option: The Call Option set forth in the
Notes. The Notes may be called by
the Callholder prior to the
Maturity Date, as described in the
Pricing Supplement under
"ADDITIONAL TERMS - CALL OPTION;
PUT OPTION"
Repayment/Put Option: The Notes are to be subject to
repayment by the Company prior to
the Maturity Date, pursuant to the
Put Option described in the Pricing
Supplement under "ADDITIONAL
TERMS - CALL OPTION; PUT OPTION"
Purchase Date and Time: 10:00 a.m., New York time, on
July 14, 1998
Place for Delivery of Notes and New York, New York
Payment Therefor:
7
Method of Payment: Wire transfer of immediately
available funds to:
The Chase Manhattan Bank
New York, New York
ABA No.: 021-000-021
Account No.: 910-2-504074
Account Name: Newell Co.
Address for notices: c/o Morgan Stanley & Co.
Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
Period during which additional debt securities may not be sold
pursuant to Section 4(k) of the Agreement: From the date hereof
through and including the Purchase Date.
1. On the terms and subject to the conditions of the Agreement
and this Terms Agreement, the Company hereby agrees to issue the
Notes, and each of the Agents agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 99.350% of principal
amount of the Notes, plus accrued interest, if any, from and including
July 14, 1998 (the "Purchase Price"), the entire principal amount of
Notes. Each of the Agents further agrees, severally and not jointly,
promptly to reimburse the Company for certain of its expenses in
connection with issuance of the Notes such reimbursement to be in an
amount equal to .025% of the principal amount of the Notes purchased
by such Agent hereunder.
2. As a condition precedent to each Agent's obligation to
consummate the transaction referred to above, each Agent shall have
received the following: (1) a letter from Schiff Hardin & Waite,
counsel for the Company, as to such legal matters as such Agent shall
reasonably request; (2) a certificate of the Company dated as of the
Trade Date to the effect set forth in Section 5(b) of the Agreement;
and (3) a comfort letter from Arthur Andersen LLP as to such matters
as such Agent shall reasonably request.
3. This Terms Agreement is subject to termination by the Agents
as set forth in Section 12(b) of the Agreement. In the event of such
termination, no party shall have any liability to any other party
hereto, except as provided in Sections 12(c) of the Agreement and
except for any direct liability arising before or in relation to such
termination.
4. If at any time when a Prospectus is required by the Act to
be delivered in connection with sales of the Notes (including any sale
of the Notes by the Callholder or an Agent or any of their affiliates
following any exercise of the Notes Call Option), any event shall
occur or condition shall exist as a result of which it is necessary,
in the reasonable opinion of counsel for the Agents or for the
8
Company, to amend any Registration Statement or amend or supplement
any Prospectus, Prospectus Supplement or Pricing Supplement in order
that such Prospectus, Prospectus Supplement or Pricing Supplement will
not include any untrue statements of a material fact or omit to state
a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend any Registration
Statement or file a new registration statement or amend or supplement
any Prospectus or issue a new prospectus, prospectus supplement or
pricing supplement in order to comply with the requirements of the Act
or the Commission's interpretations of the Act, the Company shall
prepare and file with the Commission such amendment or supplement as
may be necessary to correct such statement or omission or to make any
such Registration Statement or any such Prospectus, Prospectus
Supplement or Pricing Supplement comply with such requirements, or
prepare and file any such new registration statement and prospectus as
may be necessary for such purpose, and furnish to such Agents such
number of copies of such amendment, supplement, prospectus or other
document as they may reasonably request. In addition, the Company
shall, in connection with any such sale of the applicable principal
amount of Notes by an Agent or any of its affiliates following the
exercise by the Callholder of its Notes Call Option in which a
Prospectus is required by the Act to be delivered, (i) execute and
deliver or cause to be executed and delivered legal documentation
(including a purchase agreement or underwriting agreement and
registration rights agreement with customary indemnities, covenants,
representations and warranties, comfort letters and legal opinions) in
form and substance reasonably satisfactory to such Agent, (ii) provide
promptly upon request updated consolidated financial statements to the
date of its latest report filed with the Commission, and (iii) to the
extent the Company and such Agent deem reasonably necessary for
successful completion of the Coupon Reset Process, make available
senior management of the Company for road show and one-on-one
presentations.
5. All notices to the Agents pursuant to Section 13 of the
Agreement relating to the matters contemplated herein shall be sent
c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, 3rd Floor, New
York, New York 10036, Attention: DPG, Telephone: 212-761-2566,
Telecopy: 212-761-0580.
6. This Agreement is a Terms Agreement referred to in the
Agreement and shall be governed by and construed in accordance with
the laws of the State of New York and shall be binding upon the
parties hereto and their respective successors.
9
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement between the Company and the Agents.
Very truly yours,
NEWELL CO.
By: /s/ C.R. Davenport
--------------------------------
Name: C.R. Davenport
Title: Vice President-Treasurer
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Accepted as of the date hereof:
MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Michael Fusco
---------------------------------
Name: Michael Fusco
Title: Vice President
CHASE SECURITIES INC.
By: /s/ Ernest R.J. Zellweger, Jr.
---------------------------------
Name: Ernest R.J. Zellweger, Jr.
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ Evonne W. Taylor
---------------------------------
Name: Evonne W. Taylor
Title: Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Lynn Alexander
---------------------------------
Name: Lynn Alexander
Title: Vice President
11
SCHEDULE 1
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PRINCIPAL AMOUNT TO BE
AGENT PURCHASED
---- ----------------------
Morgan Stanley & Co. Incorporated $160,000,000
Chase Securities Inc. 30,000,000
First Chicago Capital Markets, Inc. 30,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 30,000,000
-----------
TOTAL $250,000,000
============
EXHIBIT 4.1
-----------
CUSIP NO.: 65119QBE2 PRINCIPAL AMOUNT: $250,000,000
REGISTERED NO.: A-1
NEWELL CO.
MEDIUM-TERM FIXED RATE NOTE, SERIES A
Due Nine Months or More From Date of Issue
IXI Check this box if the Note is a Global Note.
Applicable if the Note is a Global Note:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation, to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company (and any payment is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of The Depository Trust Company), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.
ORIGINAL ISSUE DATE: July 14, 1998 INTEREST RATE PER ANNUM: To but MATURITY DATE: July 15, 2028, subject
excluding July 15, 2008, 6.35%. From to mandatory repayment of principal
and including July 15, 2008, as to the existing Holder hereof
described under "INTEREST RATE AND pursuant to the Call Option and Put
INTEREST PAYMENT DATES" on the Option described on the reverse of
reverse of this Note. this Note
ISSUE PRICE: 100% (as a percentage SPECIFIED CURRENCY: U.S. dollars
of principal amount)
DEPOSITARY: The Depository Trust
Company
13
INTEREST PAYMENT DATES: January 15
and July 15 of each year,
commencing January 15, 1998
CALL OPTION: The Notes may be REPAYMENT/PUT OPTION: The Notes are
called by the Callholder prior to subject to repayment by the Company
the Maturity Date, as described on prior to the Maturity Date pursuant
the reverse of this Note under to the Put Option, as described on
"CALL OPTION; PUT OPTION" the reverse of this Note under "CALL
OPTION; PUT OPTION"
CALLHOLDER: The Company or its
assignee.
Newell Co., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of U.S.$250,000,000 on the Maturity Date, and to pay
interest on said principal sum at the rate per annum (computed on the
basis of a 360-day year of twelve 30-day months) shown above, semi-
annually on each Interest Payment Date set forth above from and
including the immediately preceding Interest Payment Date in respect
of which interest has been paid or duly made available for payment (or
from and including the date of issue, if no interest has been paid or
duly made available for payment) to but excluding the applicable
Interest Payment Date or Maturity Date, as the case may be.
The interest payable, and punctually paid or duly provided for,
on any Interest Payment Date will be paid to the Person in whose name
this Security is registered at the close of business on the fifteenth
calendar day next preceding such Interest Payment Date (each such date
a "Record Date"). Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the holder on such
Record Date and may either be paid to the Person in whose name this
14
Note is registered at the close of business on a special Record Date
for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to holders of Securities of this series
not less than 10 days prior to such special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of
this series may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
Additional provisions of this Note are contained on the reverse
hereof, and such provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed
by an authorized officer of the Trustee or its duly authorized agent
under the Indenture referred to hereinbelow.
IN WITNESS WHEREOF, Newell Co. has caused this instrument to be
signed by its duly authorized officer, and has caused a facsimile of
its corporate seal to be affixed hereto or imprinted hereon.
Dated: July 14, 1998
NEWELL CO.
By: ______________________________
Name: C. R. Davenport
Title: Vice President -
Treasurer
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ATTEST:
[SEAL]
By: ___________________________
Name: Richard H. Wolff
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series
designated therein referred
to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: ___________________________
Authorized Officer
16
(REVERSE OF NOTE)
-----------------
NEWELL CO.
MEDIUM-TERM FIXED RATE NOTE, SERIES A
Due Nine Months or More From Date of Issue
This Note is one of a duly authorized issue of debentures, notes
or other evidences of indebtedness of the Company (the "Debt
Securities"), all issued or to be issued under and pursuant to an
indenture dated as of November 1, 1995, (the "Indenture"), duly
executed and delivered by the Company to The Chase Manhattan Bank, as
trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, duties and immunities thereunder of the Trustee and the rights
thereunder of the holders of the Debt Securities. All capitalized
terms used in this Note and defined in the Indenture shall have the
meaning ascribed to such terms in the Indenture unless otherwise
defined herein. This Note is one of a series of the Debt Securities
designated as the Medium-Term Notes, Series A (the "Series A Notes"),
of the Company. This Note represents 6.35% REset Put Securities
("REPS{SM}") (the "Notes") constituting a tranche of the Series A
Notes.
17
INTEREST RATE AND INTEREST PAYMENT DATES
The Notes will bear interest at the rate of 6.35% from and
including July 14, 1998 to but excluding July 15, 2008 (the "First
Coupon Reset Date"). The First Coupon Reset Date and July 15, 2018
are each referred to herein as a "Coupon Reset Date." To the extent
that the Company has not purchased the aggregate amount of the Notes,
in whole, the nearest Coupon Reset Date is referred to herein as the
"Applicable Coupon Reset Date." Interest on the Notes will be
payable semi-annually on January 15 and July 15 of each year,
commencing January 15, 1999 (each, an "Interest Payment Date").
Interest will be calculated based on a 360-day year consisting of
twelve 30-day months. "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City
of New York are authorized or required by law or regulation to be
closed.
If the Callholder elects to purchase the Notes pursuant to the
Call Option (as defined below), the Calculation Agent (as defined
below) will reset the interest rate for the Notes effective on the
Applicable Coupon Reset Date, pursuant to the Coupon Reset Process
described below. In such circumstance, (i) this Note will be
purchased by the Callholder at 100% of the principal amount hereof on
the Applicable Coupon Reset Date, on the terms and subject to the
conditions described herein (interest accrued to but excluding the
Applicable Coupon Reset Date will be paid by the Company on such date
to the Holder hereof on the most recent Record Date), and (ii) from
18
and including the Applicable Coupon Reset Date, the Notes will bear
interest at the rate determined by the Calculation Agent in accordance
with the procedures set forth under "Coupon Reset Process if Notes are
Called" below.
MATURITY DATE
The Notes will mature on July 15, 2028 (the "Maturity Date").
On the Applicable Coupon Reset Date, the Holder hereof will be
entitled to receive 100% of the principal amount hereof from either
(i) the Callholder, if the Callholder purchases this Note pursuant to
the Call Option, or (ii) the Company, by exercise of the Put Option
(as defined below) by the Trustee for and on behalf of the Holder
hereof, if the Callholder does not purchase this Note pursuant to the
Call Option.
CALL OPTION; PUT OPTION
(i) CALL OPTION. The Callholder, by giving notice to the
Trustee (the "Call Notice"), has the right to purchase the aggregate
principal amount of this Note, in whole but not in part (the "Call
Option"), on the Applicable Coupon Reset Date, at a price equal to
100% of the principal amount hereof (the "Call Price") (interest
accrued to but excluding the Applicable Coupon Reset Date will be paid
by the Company on such date to the Holder hereof on the most recent
Record Date). The Call Notice is required to be given to the Trustee,
in writing, prior to 4:00 p.m., New York time, no later than fifteen
calendar days prior to the Applicable Coupon Reset Date for the Notes.
19
The Call Notice must contain the requisite delivery details, including
the identity of the Callholder's Depositary account. The Call Notice
may not be revoked by the Callholder.
If the Callholder exercises the Call Option, unless terminated in
accordance with its terms, (i) not later than 2:00 p.m., New York
time, on the Business Day prior to the Applicable Coupon Reset Date,
the Callholder will deliver the Call Price in immediately available
funds to the Trustee for payment of the Call Price on the Applicable
Coupon Reset Date and (ii) the Holder hereof will be required to
deliver and will be deemed to have delivered this Note to the
Callholder against payment therefor on the Applicable Coupon Reset
Date through the facilities of the Depositary. No holder of any Notes
or any interest in such Notes will have any right or claim against the
Callholder as a result of the Callholder's decision whether or not to
exercise the Call Option or performance or nonperformance of its
obligations with respect thereto.
The Callholder may at any time assign its rights and obligations
under its Call Option; PROVIDED, HOWEVER, that (i) such rights and
obligations are assigned in whole and not in part and (ii) it provides
the Trustee and the Company with notice of such assignment
contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee will treat the assignee as Callholder for all
purposes hereunder. The Callholder may assign its rights under the
Call Option without notice to, or consent of, the holders of the Notes
(including, if applicable, the Holder hereof).
20
Except for the events specified in clauses (i) through (iii)
below, with respect to which termination of the Call Option is at the
Callholder's option, the Call Option will automatically and
immediately terminate, no payment will be due hereunder from the
Callholder, and the Coupon Reset Process will terminate, if any of the
following occurs: (i) an Event of Default (as defined in the
Indenture) occurs under Sections 501(1) or (2) under the Indenture,
(ii) a default, event of default or other similar condition or event
(however described) in respect of the Counterparty or any of its
material subsidiaries has occurred under one or more agreements or
instruments relating to indebtedness of the Counterparty or any of its
material subsidiaries (individually or collectively) in an aggregate
amount of not less than $25,000,000, which has resulted in such
indebtedness becoming due and payable under such agreements or
instruments, before it would otherwise have been due and payable and
such acceleration has not been rescinded or the indebtedness so
accelerated remains unpaid; (iii) the Counterparty or any of its
material subsidiaries has defaulted in making one or more payments on
the due date thereof in an aggregate amount of not less than
$25,000,000 under such agreements or instruments (after giving effect
to any applicable notice requirement or grace period) and such
defaulted payments remain unpaid; (iv) an Event of Default has
occurred and is continuing under Sections 501(5) or 501(6) under the
Indenture; (v) the Callholder fails to deliver the Call Notice to the
Trustee prior to 4:00 p.m., New York time, on the fifteenth calendar
day prior to the Applicable Coupon Reset Date; (vi) on the Bid Date
21
(as defined below), fewer than two Dealers (as defined below) submit
timely Bids (as defined below) substantially as provided below; (vii)
the Callholder fails to pay the Call Price by 2:00 p.m., New York
time, on the Business Day prior to the Applicable Coupon Reset Date;
or (viii) a Defeasance (as defined in the Indenture) or a Covenant
Defeasance (as defined in the Indenture) has occurred pursuant to
Sections 1402 or 1403, respectively, of the Indenture with respect to
the Notes.
If the Call Option is terminated by the Callholder, notice of
such termination will be immediately given in writing to the Trustee
by the Callholder. If the Call Option so terminates or is
automatically terminated, the Trustee will exercise the Put Option
described below with respect to the Notes.
(ii) PUT OPTION. If the Call Option is not exercised or if the
Call Option otherwise terminates, the Trustee will exercise the right
of the holders of the Notes (including, if applicable, the Holder
hereof) to require the Company to purchase the aggregate principal
amount of Notes, in whole but not in part (the "Put Option"), on the
Applicable Coupon Reset Date at a price equal to 100% of the principal
amount thereof (the "Put Price"), plus accrued but unpaid interest to
but excluding the Applicable Coupon Reset Date, in each case, to be
paid by the Company to the Holders of the Notes (including, if
applicable, the Holder hereof) in immediately available funds on the
Applicable Coupon Reset Date. If the Trustee exercises the Put Option
then the Company will deliver the Put Price in immediately available
funds to the Trustee by no later than 12:00 noon, New York time, on
22
the Applicable Coupon Reset Date and the holders of the Notes will be
required to deliver and will be deemed to have delivered the Notes to
the Company against payment therefor on the Applicable Coupon Reset
Date through the facilities of the Depositary. By its purchase of
Notes, each Holder irrevocably agrees that the Trustee shall exercise
the Put Option relating to such Notes for or on behalf of the Notes as
provided herein. No holder of any Notes or any interest therein has
the right to consent or object to the exercise of the Trustee's duties
under the Put Option.
NOTICE TO HOLDERS BY TRUSTEE
In anticipation of the exercise of the Call Option or the Put
Option on the Applicable Coupon Reset Date, the Trustee will notify
the Holder hereof, not less than 30 days nor more than 60 days prior
to the Applicable Coupon Reset Date, that all Notes will be delivered
on the Applicable Coupon Reset Date through the facilities of the
Depositary against payment of the Call Price by the Callholder under
the Call Option or payment of the Put Price by the Company under the
Put Option. The Trustee will notify the Holder hereof once it is
determined whether the Call Price or the Put Price will be delivered
in accordance with the provisions hereof.
COUPON RESET PROCESS IF NOTES ARE CALLED
The following steps shall be taken in order to determine the
interest rate to be paid on the Notes on and after the Applicable
23
Coupon Reset Date in the event the Call Option has been exercised with
respect to the Notes.
Pursuant to and subject to the terms of a Calculation Agency
Agreement, dated July 14, 1998, between the Company and Morgan Stanley
& Co. Incorporated, Morgan Stanley & Co. Incorporated has been
appointed the calculation agent for the Notes (in such capacity as
calculation agent, the "Calculation Agent"). If the Callholder has
exercised the Call Option, then the following steps (the "Coupon Reset
Process") will be taken in order to determine the interest rate to be
paid on the Notes from and including the Applicable Coupon Reset Date
to but excluding the next Applicable Coupon Reset Date, or if there
are no more Applicable Coupon Reset Dates, the Maturity Date. The
Company and the Calculation Agent will use reasonable efforts to cause
the actions contemplated below to be completed in as timely a manner
as possible.
(a) The Company will provide the Calculation Agent with (i) a
list (the "Dealer List"), no later than five Business Days prior to
the Applicable Coupon Reset Date, containing the names and addresses
of five dealers, one of which shall be Morgan Stanley & Co.
Incorporated, from whom the Company desires the Calculation Agent to
obtain the Bids for the purchase of such Notes and (ii) such other
material as may reasonably be requested by the Calculation Agent to
facilitate a successful Coupon Reset Process.
(b) Within one Business Day following receipt by the Calculation
Agent of the Dealer List, the Calculation Agent shall provide to each
dealer ("Dealer") on the Dealer List (i) a copy of the Pricing
24
Supplement dated July 10, 1998, together with the Prospectus
Supplement dated June 9, 1997 and Prospectus dated June 9, 1997 ,
relating to the offering of the Notes (collectively, the "Pricing
Supplement"), (ii) a copy of the form of Notes and (iii) a written
request that each Dealer submit a Bid to the Calculation Agent by
12:00 noon, New York time, on the third Business Day prior to the
Applicable Coupon Reset Date (the "Bid Date"). "Bid" means an
irrevocable written offer given by a Dealer for the purchase of all
the Notes, settling on the Applicable Coupon Reset Date, and shall be
quoted by such Dealer as a stated yield to maturity on the Notes
("Yield to Maturity"). Each Dealer will also be provided with (i) the
name of the Company, (ii) an estimate of the Purchase Price (which
shall be stated as a US Dollar amount and be calculated by the
Calculation Agent in accordance with paragraph (c) below), (iii) the
principal amount and maturity of the Notes and (iv) the method by
which interest will be calculated on the Notes.
(c) The purchase price for the Notes in connection with the
Coupon Reset Process after the exercise of the Call Option (the
"Purchase Price") shall be equal to the sum of (i) the principal
amount of the Notes, and (ii) an amount (the "Notes Difference") which
shall be equal to the difference, if any, on the Applicable Coupon
Reset Date of (A) the discounted present value to the Applicable
Coupon Reset Date of a bond with a maturity of ten (10) years from
the Applicable Coupon Reset Date which has an interest rate of 5.485%,
semi-annual interest payments on each January 15 and July 15
commencing on January 15 following the Applicable Coupon Reset Date,
25
and a principal amount equal to the principal amount of the Notes, and
assuming a discount rate equal to the Treasury Rate minus (B) such
principal amount of Notes. The "Treasury Rate" means the per annum
rate equal to the offer side yield to maturity of the current on-the-
run ten-year United States Treasury Security per Telerate page 500, or
any successor page, at 12:00 noon, New York time, on the Bid Date (or
such other time or date, or reference for such information, that may
be agreed upon by the Company and the Calculation Agent).
(d) The Calculation Agent will provide written notice to the
Company as soon as practicable on the Bid Date, setting forth (i) the
names of each of the Dealers from whom the Calculation Agent received
Bids on the Bid Date, (ii) the Bid submitted by each such Dealer and
(iii) the Purchase Price as determined pursuant to paragraph (c)
above. The Calculation Agent will thereafter select from the Bids
received the Bid with the lowest Yield to Maturity (the "Selected
Bid"); PROVIDED, HOWEVER, that (i) if the Calculation Agent has not
received a timely Bid from a Dealer on or before the Bid Date, the
Selected Bid shall be the lowest of all Bids received by such time;
and (ii) if any two or more of the lowest Bids submitted are
equivalent, the Company shall in its sole discretion select any of
such equivalent Bids (and such selected Bid shall be the Selected
Bid). The Calculation Agent will set the interest rate payable on the
Notes equal to the interest rate that would amortize the Notes
Difference fully over the term of the Notes at the Yield to Maturity
indicated by the Selected Bid (the "Coupon Reset Rate"). The
Calculation Agent will notify the Dealer that submitted the Selected
26
Bid by 4:00 p.m., New York time, on the Bid Date that its Bid was
determined to be the Selected Bid.
(e) Immediately after calculating the Coupon Reset Rate for the
Notes, the Calculation Agent will provide written notice to the
Company and the Trustee, setting forth the Coupon Reset Rate. The
Coupon Reset Rate for the Notes will be effective from and including
the Applicable Coupon Reset Date to but excluding the next Applicable
Coupon Reset Date or, if there are no more Applicable Coupon Reset
Dates, the Maturity Date.
(f) The Callholder shall sell the Notes to the Dealer that made
the Selected Bid at the Purchase Price; such sale to be settled on the
Applicable Coupon Reset Date in immediately available funds.
GENERAL MATTERS
Terms used herein which are defined in the Indenture shall have
the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
27
_______________________
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM --as tenants in common UNIF GIFT MIN ACT--______CUSTODIAN_______
TEN ENT --as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common _________________________________
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
________________
/_________/___________________________________________________________
_____________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
______________________________________________________________________
______________________________________________________________________
the within Series A Note of Newell Co. and does hereby irrevocably
constitute and appoint
_______________________________________________________ attorney to
transfer said Series A Note on the books of the Company, with full
power of substitution in the premises.
Dated:__________________ ______________________________
______________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.
