As filed with the Securities and Exchange Commission on March 23,
1999.
REGISTRATION NO. 333-71747
======================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-3
TO
FORM S-4
Registration Statement
under
The Securities Act of 1933
-------------------------
NEWELL CO.
(Exact name of registrant as specified in its charter)
Delaware 36-3514169
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Newell Center
29 East Stephenson Street
Freeport, Illinois 61032
(Address of principal executive offices, including zip code)
Dale L. Matschullat
Vice President-General Counsel
6833 Stalter Drive, Suite 101
Rockford, Illinois 61108
(Name and address of agent for service)
(815) 381-8110
(Telephone number, including area code, of agent for service)
--------------------------
Approximate Date of Commencement of Proposed Sale to the Public:
From time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
2
statement number of the earlier effective registration statement for
the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount maximum maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered per share (1) offering price (1) registration fee
--------------------------- ---------- ------------- ------------------ ----------------
Common Stock, $1.00 par value (including 1,000,000 (1) (1) (1)
Common Stock Purchase Rights)
(1) Registration fee with respect to these shares was previously paid
in connection with the filing of Newell Co.'s Registration
Statement on Form S-4 (File No. 333-71747) which was declared
effective February 4, 1999. See Explanatory Note below.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement will thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until
this Registration Statement shall become effective on such date as the
Commission acting pursuant to said Section 8(a) may determine.
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EXPLANATORY NOTE
Newell Co. hereby amends its Registration Statement on Form S-4 (File
No. 333-71747), effective February 4, 1999 by filing this Post-
Effective Amendment No. 1 on Form S-3 relating to 1,000,000 shares of
common stock, $1.00 par value per share (including associated common
stock purchase rights) of Newell issuable under the Rubbermaid
Incorporated Amended and Restated 1989 Stock Incentive and Option
Plan.
On March 24, 1999, by virtue of a merger of Rooster Company, a
wholly owned subsidiary of Newell, with and into Rubbermaid
Incorporated, each outstanding share of common stock of Rubbermaid
will be converted into .7883 shares of common stock of Newell.
Pursuant to the merger agreement, Rubbermaid and Newell have
taken the necessary actions to cause the common stock of Newell to be
issuable under the Option Plan when the merger is effective.
Accordingly, Rubbermaid's common stock will be no longer issuable
under the Option Plan.
This Registration Statement relates to 1,000,000 shares of common
stock of Newell registered on the Form S-4 that will not be issued at
the time of the merger and that are issuable under the Option Plan on
and after the merger.
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SUBJECT TO COMPLETION - DATED MARCH 23, 1999
PROSPECTUS
NEWELL CO.
1,000,000 Shares
Common Stock, $1.00 Par Value
RUBBERMAID INCORPORATED AMENDED AND RESTATED
1989 STOCK INCENTIVE AND OPTION PLAN
This Prospectus relates to shares of common stock of Newell Co.
which may be offered and sold upon the exercise of stock options and
stock appreciation rights or the grant of stock awards under the
Rubbermaid Incorporated Amended and Restated 1989 Stock Incentive and
Option Plan.
Our common stock is traded on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "NWL." On March 19, 1999, the
closing sale price of the common stock on the New York Stock Exchange
was $47.25 per share.
The mailing address and telephone number of Newell's principal
executive offices are: 29 East Stephenson Street, Freeport, Illinois
61032; telephone: (815) 235-4171.
This Prospectus should be retained for future reference.
--------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
--------------------
The date of this Prospectus is March ___, 1999
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
5
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
You should rely only on the information provided or incorporated by
reference in this Prospectus. The information in this Prospectus is
accurate as of the dates on these documents, and you should not assume
that it is accurate as of any other date.
TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . 6
NEWELL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE RUBBERMAID INCORPORATED AMENDED AND RESTATED
1989 STOCK INCENTIVE AND STOCK OPTION PLAN . . . . 7
LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . 16
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . 16
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 16
DESCRIPTION OF COMMON SHARES . . . . . . . . . . . . . . . . . . 16
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any document
we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-
SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this
prospectus the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until our offering is completed:
1. Annual Report on Form 10-K for the year ended December 31, 1998;
2. Current Report on Form 8-K filed with the SEC on March 11, 1999;
3. The description of our common stock contained in Newell's
Registration Statement on Form 8-B filed with the Securities and
Exchange Commission on June 30, 1987; and
4. The description of Newell's Rights contained in our Registration
Statement on Form 8-A12B dated August 28, 1998.
You may request a copy of these filings at no cost, by writing to
or telephoning us at the following address:
Newell Co.
6833 Stalter Drive
Suite 101
Rockford, Illinois 61108
Tel: 1-800-424-1941
Attn: Office of Investor Relations
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to
provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate
as of any date other than the date on the front of the document.
NEWELL
Newell is a manufacturer and full-service marketer of staple consumer
products sold to high-volume purchasers, including home centers and
hardware stores, office superstores and contract stationers, discount
stores and warehouse clubs, department and specialty stores, and drug
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and grocery stores. Newell's basic business strategy is to merchandise
a multi-product offering of brand name consumer products, which are
concentrated in product categories with relatively steady demand not
dependent on changes in fashion, technology or season, and to
differentiate itself by emphasizing superior customer service.
Newell's multi-product offering consists of staple consumer products
in three major product groups: Hardware and Home Furnishings, Office
Products, and Housewares.
Newell believes that its primary competitive strengths are
superior customer service, innovative marketing and merchandising
programs, a broad multi-product offering, market leadership in
virtually all product categories, decentralized manufacturing and
marketing, centralized administration, and experienced management.
Newell uses industry leading technology which contributes to its
consistent on time delivery of products to its customers.
Newell's principal corporate offices are located at the Newell
Center, 29 East Stephenson Street, Freeport, Illinois 61032, and its
telephone number at these offices is 1-815-235-4171.
On March 24, 1999, Rubbermaid Incorporated was merged with
Newell. Rubbermaid and its subsidiaries manufacture, market, sell and
distribute products for resale in the consumer, commercial,
industrial, institutional, specialty, agricultural and contract
markets. The items produced and marketed by Rubbermaid are principally
in the home, juvenile, infant and commercial products categories, and
include such product lines as: housewares, hardware, storage and
organizational products, seasonal items, leisure and recreational
products, infant furnishings, children's toys and products, commercial
and industrial maintenance products, home health care products,
sanitary maintenance items, and food service products. Rubbermaid's
broad range of products are sold and distributed through its own
sales personnel and manufacturers' agents to a variety of retailers
and wholesalers, including discount stores and warehouse clubs, toy
stores, home centers and hardware stores, supermarkets, catalog
showrooms and distributors serving institutional markets.
Rubbermaid's basic strategy is to market branded, high-quality
products that offer high value to customers and consumers. Value is
that best combination of quality, service, timeliness, innovation and
price as perceived by the user.
THE RUBBERMAID INCORPORATED AMENDED AND RESTATED
1989 STOCK INCENTIVE AND STOCK OPTION PLAN
The following is a description of the Plan. This description
summarizes certain material provisions of the Plan, and is qualified
in its entirety by reference to the Plan. Any term used in the
description and not otherwise defined will have the meaning set forth
in the Plan.
8
GENERAL
The Plan was originally adopted by the Board of Directors (the
"Board") and shareholders of Rubbermaid (the "Company") on April 25,
1989. The Plan was most recently amended and restated effective April
22, 1997 pursuant to approval by the Board and shareholders of the
Company. The Plan provides for the grant to eligible participants of
incentive or non-qualified stock options ("Stock Options") to purchase
Common Shares, stock appreciation rights ("SARs"), awards of Common
Shares subject to restrictions on transfer ("Restricted Stock") and
performance awards ("Performance Awards") Stock Options, SARs,
Restricted Stock and Performance Awards are collectively referred to
as "Stock Incentives". Each grant of a Stock Incentive will be
evidenced by an agreement between the Company and the Plan
participant.
The total number of Common Shares that may be issued in
connection with Stock Incentives granted under the Plan in any
calendar year is equal to 1% of the total outstanding Common Shares as
of the first day of such year. With respect to incentive stock
options granted under the Plan, the maximum number of Common Shares
that may be issued under the Plan is 5,000,000. The Common Shares
issuable under the Plan may be unissued or treasury shares.
The Plan is not subject to the Employee Retirement Income
Security Act of 1974, as amended.
EFFECT OF MERGER OF THE COMPANY INTO NEWELL
In connection with the merger of the Company into Newell on March
24, 1999, each Stock Incentive outstanding under the Plan at the time
of the merger will be converted into the same instrument, but with the
right to receive Newell common stock.
Under this conversion process, therefore, each Stock Option will
be converted into an option to purchase the number of shares of Newell
common stock equal to .7883 multiplied by the number of shares of
Rubbermaid Common Shares which could have been obtained prior to the
merger upon the exercise of the Rubbermaid Stock Option. The
converted option will have an exercise price per share equal to the
exercise price for each Rubbermaid Common Share subject to the
converted option divided by .7883.
Each outstanding SAR, Restricted Stock and Performance Award will
be converted into the same instrument of Newell. The awards will be
converted, in each case, only with those adjustments to the terms of
the awards as are necessary to preserve the value inherent in the
awards with no detrimental effects on the holders of the awards.
After the merger date, the terms of the Plan as described in this
Prospectus and each participant's stock incentive agreement will
continue to apply in all other respects.
9
PURPOSE OF THE PLAN
The purpose of the Plan is to reward performance and build each
participant's equity interest in the stock of the Company by providing
long term incentives and rewards to directors and officers and other
key employees of the Company and its subsidiaries who contribute to
its continuing success by their innovation, ability, industry, loyalty
and exceptional service.
TERM OF THE PLAN
The Plan, as amended and restated, became effective on April 22,
1997 and will remain in effect until all shares authorized to be
issued under the Plan have been exhausted or until the Plan is sooner
terminated by the Board. The Plan will continue in effect with
respect to any Stock Incentives outstanding at the time of such
termination.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Compensation and Management
Development Committee of the Board (the "Committee") consisting of
three or more directors appointed by the Board. Unless the Board
determines otherwise, each member of the Committee must be an "outside
directors" as defined under Section 16.2(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), and a "non-employee" director
as defined under Rule 16b-3 of the 1934 Act.
Subject to the terms of the Plan, the Committee is authorized to
interpret and administer the Plan, select participants in the Plan,
determine the type and amount of Stock Incentives to be granted to
each participant, and determine the terms and conditions of Stock
Incentives granted under the Plan. Decisions by the Committee are
final, binding and conclusive on the Company, its shareholders and the
participants in the Plan.
PARTICIPANTS
All directors, officers, and other employees of the Company or
its subsidiaries are eligible to participate in the Plan.
Participation in the Plan is limited to those selected by the
Committee.
TERMS OF STOCK INCENTIVES UNDER THE PLAN
RESTRICTED STOCK. The Committee may grant Restricted Stock under
the Plan to such participants and in such amounts as it determines.
Restricted Stock awards shall specify the applicable restrictions on
the shares, the duration of any such restrictions and the conditions
under which the Restricted Stock may be forfeited to the Company.
Notwithstanding the foregoing, the Committee may modify or accelerate
the vesting of shares of Restricted Stock. In addition, Restricted
Stock will be forfeited to the Company of the participant terminates
10
employment with the Company (for any reason other than death,
disability or retirement) prior to the lapse of restrictions on the
award.
Recipients of Restricted Stock become shareholders of the Company
with full dividend and voting rights unless the Committee provides
otherwise at the time of grant or until such Restricted Stock is
forfeited. Certificates evidencing the Restricted Stock will be held
by the Company. Upon the expiration of the restricted period and the
satisfaction of any other restrictions specified by the Committee at
the time of grant, the Company will deliver to the participant stock
certificates representing the number of Common Shares on which all
restrictions have lapsed.
The Plan limits the number of shares of Restricted Stock that may
be granted to each participant during any calendar year to that number
of shares with a value at the time of grant equal to the lesser of
500% of the participant's base salary or $2,000,000.
A recipient of Restricted Stock cannot pledge, assign or transfer
the Restricted Stock prior to the lapse of restrictions on the award
during such participant's lifetime. Any such attempted transfer is
null and voice and will result in the forfeiture of the Restricted
Stock to the Company.
PERFORMANCE AWARDS. The Committee may grant to participants
Performance Awards that may be earned over a specified period of time
and that are contingent upon the attainment of performance goals by
the Company or its subsidiaries. The Committee has discretion to
determine the period of time over which performance is measured and to
establish the performance goals. At the time of grant, the Committee
shall fix the number of Common Shares that can be earned by a
participant by achieving the performance goals. The level of
performance goals attained will determine the number of Common Shares
earned over the performance period by the participant. With respect
to Performance Awards that qualify as "performance based" as defined
in Section 162(m) of the Code, the Committee cannot increase the
amount of the award upon attainment of the applicable performance
goals. The Plan does not preclude the Committee from exercising
negative discretion with respect to any Performance Award (i.e., to
reduce or eliminate the award payable).
The Committee establishes performance goals on the basis of one
or more of the following factors: return on net assets, return on
capital employed, economic value added, level of sales, earnings per
share, income before taxes and cumulative effect of accounting
changes, net income, return on equity, total shareholder return,
market valuation, cash flow and completion of acquisitions.
The Committee, in its discretion, may elect to make the payment
of Performance Awards in Restricted Shares, Common Shares, cash or any
combination of the foregoing. The Committee may delay payment of a
Performance Award, in whole or in part, until such payment is
11
deductible by the Company based on Section 162(m) of the Code.
Recipients of Performance Awards payable in Common Shares or
Restricted Shares become shareholders of the Company at the time of
grant with full dividend and voting rights except to the extent the
Committee provides otherwise.
In addition to any specific provisions on forfeiture provided for
at the time of grant by the Committee, Performance Awards will be
forfeited to the Company if the participant terminates employment
(other than upon death, disability or retirement) with the Company or
any of its subsidiaries prior to completion of the performance period.
The Committee may provide for full or partial payment of the
Performance Award that would have been payable if the participant had
continued employment for the entire performance period as long as the
Performance Award qualifies as "performance based" within the meaning
of Section 162(m).
The Plan limits the number of Performance Awards that may be
granted during any calendar year to each participant to that number of
shares with a value at the time of grant equal to the lesser of 500%
of the participant's base salary or $2,000,000.
A participant cannot pledge, assign or transfer Performance
Awards prior to the lapse of restrictions on such awards during such
participant's lifetime. Any such attempted transfer is mull and void
and will result in the forfeiture of the Performance Award to the
Company.
STOCK OPTIONS. The Committee may grant eligible participants
Stock Options that either qualify as incentive stock options
("Incentive Stock Options") under Section 422 of the Code or do not so
qualify ("Non-qualified Stock Options"). Options may be granted for
such lawful consideration as the Committee may determine. Such
consideration may consist of money or other property, tangible or
intangible, or labor or services received or to be received by the
Company.
The price of each Common Share purchasable under a Stock Option
will be not less than the fair market value of a Common Share on the
date the Stock Option is granted. In the case of a participant who at
the date of grant is an Incentive Stock Option owns more than 10% of
the total combined voting power of all classes of stock of the Company
or its subsidiaries (as determined under Section 425(d) of the Code),
the exercise price will not be less than 110% of the fair market value
of the Common Share on the date the Incentive Stock Option is granted.
A Stock Option is not exercisable after the tenth anniversary of
the date of grant or, the fifth anniversary after the date of grant of
an Incentive Stock Option in the case of a participant who at the date
of grant owned more than 10% of the total combined voting power of all
classes or stock of the Company or its subsidiaries. Stock Options
may be exercised during such periods before and after the participant
terminates employment or ceases to serve as a director, as the
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Committee may provide. The Committee may, at any time and without
additional consideration, accelerate the date on which a Stock Option
becomes exercisable.
Each Stock Option may be exercised during the holder's lifetime,
only by the holder or the holder's guardian or legal representatives,
and after death only by the holder's beneficiary or, absent a
beneficiary, by the estate or by a person who acquired the right to
exercise the Stock Option by will or the laws of descent and
distribution. Stock Options may become exercisable in full at the
time of grant or at such other times and in such installments as the
Committee may determine.
A participant can exercise a Stock Option in whole or in part by
providing written notice of exercise on a proper form to the Company
specifying the number of shares to be purchased. Such notice shall be
accompanied by full payment of the purchase price. The purchase price
may be paid in cash, in Common Shares or other property, by the
surrender of all or part of the Stock Option being exercised, by the
immediate sale through a broker of that number of shares being
acquired sufficient to pay the purchase price, or by a combination of
these methods, as and to the extent permitted by the Committee.
The aggregate fair market value of the shares to be purchased in
connection with the first exercise of Incentive Stock Options granted
to any employee during any calendar year (under all stock option plans
of Rubbermaid and its subsidiaries) may not exceed $100,000. The
maximum number of Common Shares subject to Stock Options that can be
granted to a participate during each calendar year is 500,000.
Under the Plan, the Committee may permit participants to transfer
Stock Options to eligible transferees (as such eligibility is
determined by the Committee).
STOCK APPRECIATION RIGHTS. An SAR may be granted alone or in
tandem with options, either at the time the options are granted or at
any time thereafter while the options are outstanding. Tandem SARs
may supplement the options to which they relate, in which case the
holder may exercise the SAR if and when the holder exercises the
related option. They may also be alternatives to the options to which
they relate, in which case upon exercise of the SAR, the holder must
surrender the related option unexercised, or upon exercise of the
option, the holder must surrender the related SAR.
Under the Plan, the Committee may permit participants to transfer
SARs to eligible transferees (as such eligibility is determined by the
Committee). SARs may be granted for such lawful consideration as the
Committee may determine when the SARs are granted. Such consideration
may consist of money or other property, tangible or intangible, or
labor or services received or to be received by the Company.
SARs may become exercisable in full at the time of grant or in
one or more installments, and at such time or times as determined by
13
the Committee. The Committee may accelerate the date on which an SAR
is exercisable. SARs, to the extent they become exercisable, may be
exercised at any time until they expire or terminate. No free
standing SAR is exercisable after the tenth anniversary of the date of
grant, and no tandem SAR is exercisable after the related option
ceases to be exercisable. Unless otherwise determined by the
Committee, each SAR may be exercised, during the holder's lifetime,
only by the holder or the holder's guardian or legal representatives
and after death only by the holder's beneficiary or, absent a
beneficiary, by the estate or by a person who acquired the right to
exercise the SAR by will or the laws of descent and distribution.
Upon exercise of SARs, the holder will receive cash, Common
Shares or a combination of each, as the Committee may determine, equal
in value to the difference between the fair market value per Common
Share on the date of exercise of the SARs and the exercise price of
the SARs, multiplied by the number of shares subject to the SARs or
related option. However, the Committee may provide if any holder
exercises SARs during the thirty-day period following a Change in
Control (as defined in the Plan), the holder will receive the
difference between the highest fair market value of the Common Share
during such thirty-day period and the exercise price of the SARs,
multiplied by the number of shares subject to the SARs or related
option. In the case of tandem SARs, the exercise price is the price
at which shares may be purchased under the related option. In the
case of SARs that are not granted in tandem with an option, the
exercise price will be the fair market value of the Common Share on
the date the SAR is granted.
The maximum number of Common Shares subject to SARs that can be
granted to a participant during each calendar year is 500,000.
EFFECT OF CHANGE IN CONTROL
In the event of a change in control (as such term is defined
pursuant to the terms of the Plan), each outstanding Restricted Stock
award and Performance Award will become fully vested as of the day
before such event occurs. This will result in the lapse of all
restrictions on such Restricted Stock awards and Performance Awards,
regardless, in the case of Performance Awards, of any unachieved
performance goal. Any option or SAR which is outstanding but not yet
exercisable at the time of a Change in Control will become exercisable
and remain exercisable until it expires or terminates pursuant to its
terms and conditions. In addition, the Plan authorizes the Committee
to grant options and SARs which become exercisable only in the event
of a Change in Control, to provide for SARs to be exercised
automatically and only in case of such an event, and to provide for
cash to be paid in settlement of any Stock Incentive in such event.
AMENDMENT AND TERMINATION
Subject to any applicable shareholder approval requirements of
applicable law or the rules of the New York Stock Exchange, the Plan
14
may be amended by the Board, without shareholder approval, provided
that no such amendment may increase the number of shares which may be
issued under Incentive Stock Options or change the material terms of a
performance goal that were previously approved by shareholders unless
the Board determines such approval is not necessary to avoid loss of a
deduction under Section 162(m), will not avoid such loss of deduction,
or is not advisable. In addition, the Board may terminate the Plan at
any time. No amendment or termination shall adversely affect any
Stock Incentive granted prior to the date of such amendment or
termination without the written consent of the participant.
The Committee may amend any outstanding Stock Incentive as it
deems appropriate, provided that if the amendment is adverse to the
holder, the holder's consent to such amendment is required.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following brief description of the tax consequences of awards
under the Plan is based on federal income tax laws currently in effect
and does not purport to be a complete description of such federal
income tax consequences.
RESTRICTED STOCK AWARDS AND PERFORMANCE AWARDS
A participant who has been awarded Restricted Stock or shares
pursuant to a Performance Award ("Performance Shares") and does not
make an election under Section 83(b) of the Code will not recognize
taxable income at the time of the award. At the time any transfer or
forfeiture restrictions applicable to the Restricted Stock award or
Performance Award lapse, the recipient will recognize ordinary income
and the Company will be entitled to a corresponding deduction equal to
the excess of the fair market value of such stock at such time over
the amount paid therefor. Any dividends paid to the recipient on the
Restricted Stock or Performance Award at or prior to such time will be
ordinary compensation income to the recipient and deductible as such
by the Company.
An employee who has been awarded Restriction Stock or Performance
Shares and makes an election under Section 83(b) of the Code will
recognize ordinary income at the time of the award and the Company
will be entitled to a corresponding deduction equal to the fair market
value of such stock at such time over the amount paid therefor. Any
dividends subsequently paid to the recipient on the Restricted Stock
or Performance Award will be dividend income to the recipient and not
deductible by the Company. If an election under Section 83(b) has
been made, there are no further federal income tax consequences either
to the recipient or the Company at the time any transfer or forfeiture
restrictions applicable to the Restricted Stock award or Performance
Award lapse.
15
OPTIONS
There are no federal income tax consequences either to the
optionee or to the Company upon the grant of an Incentive Stock Option
or a Non-qualified Stock Option.
On the exercise of an Incentive Stock Option during employment or
within three months thereafter (twelve months in the case of death or
disability), the optionee will not recognize any income and the
Company will not be entitled to a deduction, although the excess of
the fair market value of the shares on the date of exercise over the
option price is includible in the optionee's alternative minimum
taxable income, which may give rise to alternative minimum tax
liability for the optionee. Generally, if the optionee disposes of
share acquired upon exercise of an Incentive Stock Option within two
years of the date of grant or one year of the date of exercise, the
optionee will recognize ordinary income, and the Company will be
entitled to a deduction, equal to the excess of the fair market value
of the shares on the date of exercise over the option price (limited
generally to the gain on the sale). The balance of any gain or loss
will be treated as a capital gain or loss to the optionee. If the
shares are disposed of after the two year and one year periods
mentioned above, the Company will not be entitled to any deduction,
and the entire gain or loss for the optionee will be treated as a
capital gain or loss.
On exercise of a Non-qualified Stock Option, the excess of the
date-of-exercise fair market value of the shares acquired over the
option price will generally be taxable to the optionee as ordinary
income and deductible by the Company, and the Company is required to
withhold taxes in respect of the exercise. A subsequent disposition
of shares acquired upon the exercise of a Non-qualified Stock Option
will generally result in a capital gain or loss for the optionee, but
will have no tax consequences for the Company.
STOCK APPRECIATION RIGHTS
There are no federal income tax consequences either to the
grantee or the Company upon the grant of SARs. The amount of any cash
(or the fair market value of any Common Shares) received by the holder
upon the exercise of SARs under the Plan will be subject to ordinary
income tax in the year of receipt and the Company will be entitled to
a deduction of such amount.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH IN THIS SECTION IS
INCLUDED FOR GENERAL INFORMATION ONLY AND DOES NOT PURPORT TO BE A
COMPLETE ANALYSIS OR LISTING OF ALL POTENTIAL TAX CONSEQUENCES. THE
DISCUSSION DOES NOT ADDRESS THE TAX CONSEQUENCES ARISING UNDER THE
LAWS OF ANY STATE, LOCALITY OR FOREIGN JURISDICTION. THE DISCUSSION
IS BASED UPON THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, TREASURY
REGULATIONS THEREUNDER AND ADMINISTRATIVE RULINGS AND COURT DECISIONS
AS OF THE DATE HEREOF. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND
16
ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THE
DISCUSSION. PLAN PARTICIPANTS SHOULD CONSULT THEIR OWN TAX ADVISORS
AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM, INCLUDING THE EFFECT OF
FOREIGN, STATE AND LOCAL TAXES.
LIMITATION OF LIABILITY
Neither Newell, Rubbermaid, its agent (including Newell or Rubbermaid
if it is acting as such) in administering the Plan, nor the agent
shall be liable for any act done in good faith or for the good faith
omission to act in connection with the Plan. However, nothing
contained herein shall affect a Participant's right to bring a cause
of action based on alleged violations of federal securities laws.
USE OF PROCEEDS
Newell intends to use any net proceeds from the issuance of its common
stock in connection with a participant's exercise of an option under
the Plan for general corporate purposes.
PLAN OF DISTRIBUTION
The common stock being offered hereby is offered pursuant to the Plan,
the terms of which provide for the issuance of common stock in
connection with the exercise of a stock option or stock appreciation
right or the attainment of certain pre-established performance goals.
DESCRIPTION OF COMMON SHARES
Newell's certificate of incorporation authorizes the issuance of
400,000,000 shares of Common Stock, of which 162,728,371 were issued and
outstanding on February 8, 1999. The description of the Common Stock is
incorporated by reference into this Prospectus. See "Incorporation of
Information by Reference" for information on how to obtain a copy of
this description.
EXPERTS
The consolidated financial statements of Newell set forth in Newell's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998
have been audited by Arthur Andersen LLP, independent accountants, as
stated in their report dated January 27, 1999 included in the Form
10-K and incorporated by reference in this document. Those consolidated
financial statements have been incorporated by reference in this
document and in reliance upon Arthur Andersen LLP's report given
upon the authority of that firm as experts in accounting and auditing.
17
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered
hereby have been passed upon for Newell by Schiff Hardin & Waite,
Chicago, Illinois. Schiff Hardin & Waite has advised Newell that a
member of the firm participating in the representation of Newell owns
approximately 3,900 shares of Newell common stock.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the offering are as
follows:
Registration fee under the Securities Act . . . . . . . $ 0
Legal fees and expenses . . . . . . . . . . . . . . . . $25,000
Accounting fees and expenses . . . . . . . . . . . . . . $ 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . $15,000
Total . . . . . . . . . . . . . . . . . . $45,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware law allows a corporation to eliminate
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, except in cases where the director breached his or her duty
of loyalty to the corporation or its stockholders, failed to act in
good faith, engaged in intentional misconduct or a knowing violation
of the law, willfully or negligently authorized the unlawful payment
of a dividend or approved an unlawful stock redemption or repurchase
or obtained an improper personal benefit. Newell's Charter contains a
provision which eliminates directors' personal liability as set forth
above.
The Charter and the Bylaws of Newell provide in effect that
Newell shall indemnify its directors and officers to the extent
permitted by the Delaware law. Section 145 of the Delaware law
provides that a Delaware corporation has the power to indemnify its
directors, officers, employees and agents in certain circumstances.
Subsection (a) of Section 145 of the Delaware law empowers a
corporation to indemnify any director, officer, employee or agent, or
former director, officer, employee or agent, who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit or proceeding
provided that such director, officer, employee or agent acted in good
faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, provided that such director,
officer, employee or agent had no reasonable cause to believe that his
or her conduct was unlawful.
19
Subsection (b) of Section 145 of the Delaware law empowers a
corporation to indemnify any director, officer, employee or agent, or
former director, officer, employee or agent, who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person
acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit
provided that such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests
of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery shall determine that despite the
adjudication of liability such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem
proper.
Section 145 further provides that to the extent that a director
or officer or employee of a corporation has been successful in the
defense of any action, suit or proceeding referred to in subsections
(a) and (b) or in the defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection
therewith; that indemnification provided by Section 145 shall not be
deemed exclusive of any other rights to which the party seeking
indemnification may be entitled; and the corporation is empowered to
purchase and maintain insurance on behalf of a director, officer,
employee or agent of the corporation against any liability asserted
against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the
corporation would have the power to indemnify him or her against such
liabilities under Section 145; and that, unless indemnification is
ordered by a court, the determination that indemnification under
subsections (a) and (b) of Section 145 is proper because the director,
officer, employee or agent has met the applicable standard of conduct
under such subsections shall be made by (1) a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, or
if such directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders.
Newell has in effect insurance policies for general officers' and
directors' liability insurance covering all of Newell's officers and
directors. Newell also has entered into indemnification agreements
with each of its officers and directors that provide that the officers
and directors will be entitled to their indemnification rights as they
existed at the time they entered into the agreements, regardless of
subsequent changes in Newell's indemnification policy.
Pursuant to an Agreement and Plan of Merger by and between Newell
Co., Rooster Company and Rubbermaid Incorporated dated as of October
20
20, 1998 (the "Merger Agreement"), Newell will, to the fullest extent
not prohibited by applicable law, indemnify, defend and hold harmless
each person who is now, or has been at any time prior to the date of
the merger agreement, or who becomes prior to the Effective Time (as
defined in the Merger Agreement), an officer, director of employee of
Rubbermaid or any of its subsidiaries against any losses, expenses,
claims, damages or liabilities (1) arising out of acts or omissions
occurring at or prior to the Effective Time that are based on or
arising out of the fact that such person is or was a director, officer
or employee of Rubbermaid or any of its subsidiaries or served as a
fiduciary under or with respect to any Rubbermaid employee benefit
plan and (2) to the extent they are based on or arise out of the
transactions contemplated by the Merger Agreement. In addition, from
and after the Effective Time, directors and officers of Rubbermaid who
become directors or officers of Newell will be entitled to
indemnification under the Charter and the Bylaws of Newell, as the
same may be amended from time to time in accordance with their terms
and applicable law, and to all other indemnity rights and protections
as are afforded to other directors and officers of Newell.
Additionally, for six years after the Effective Time, Newell will
maintain in effect Rubbermaid's current directors' and officers'
liability insurance covering acts or omissions occurring prior to the
Effective Time with respect to those persons who are currently covered
by Rubbermaid's directors' and officers' liability insurance policy on
terms with respect to such coverage and amount no less favorable than
those of such policy in effect on the date of the Merger Agreement;
provided that Newell may substitute policies of Newell or its
subsidiaries containing terms with respect to coverage and amount no
less favorable to such directors or officers. Newell will not be
required to pay aggregate premiums for the insurance described in this
paragraph in excess of 200% of the aggregate premiums paid by
Rubbermaid in 1998, except that if the annual premiums of such
insurance coverage exceed such amount, Newell will be obligated to
obtain a policy with the best coverage available, in the reasonable
judgment of Newell's Board, for a cost up to but not exceeding such
amount.
For six years after the Effective Time, Newell will also maintain
in effect Rubbermaid's current fiduciary liability insurance policies
for employees who serve or have served as fiduciaries under any
Rubbermaid benefit plan with coverages and in amounts no less
favorable than those of such policy in effect on the date of the
Merger Agreement.
ITEM 16. EXHIBITS.
The Exhibits filed herewith are set forth on the Exhibit Index
filed as part of this Registration Statement.
21
ITEM 17. UNDERTAKINGS.
(a) Newell hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering rang may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 242(b) if, in the aggregate, the
changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on form s-3,
form s-8 or form f-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by Newell pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
22
(b) Newell hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of
Newell's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15 (d) of the
Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of Newell pursuant to the foregoing provisions, or otherwise,
Newell has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by Newell of expenses incurred or paid by a director, officer
or controlling person of Newell in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
Newell will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant hereby certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rockford, State
of Illinois, on the 10th day of March, 1999.
NEWELL CO.
By: /s/ Dale L. Matschullat
------------------------------
Dale L. Matschullat
Vice President - General
23
Counsel
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
*John J. McDonough Vice Chairman and Chief
------------------------------- Executive Officer (Principal
John J. McDonough Executive Officer) and Director
*Thomas A. Ferguson, Jr. President and Chief
------------------------------- Operating Officer and Director
Thomas A. Ferguson, Jr.
*Donald L. Krause Senior Vice President - Corporate
------------------------------- Controller (Principal Accounting
Donald L. Krause Officer)
*William T. Alldredge Vice President - Finance
------------------------------- (Principal Financial Officer)
William T. Alldredge
*William P. Sovey Chairman of the Board of
------------------------------- Directors
William P. Sovey
*Alton F. Doody Director
-------------------------------
Alton F. Doody
24
*Gary H. Driggs Director
-------------------------------
Gary H. Driggs
*Daniel C. Ferguson Director
-------------------------------
Daniel C. Ferguson
*Robert L. Katz Director
-------------------------------
Robert L. Katz
*Elizabeth Cuthbert Millett Director
----------------------------------
Elizabeth Cuthbert Millett
*Cynthia A. Montgomery Director
--------------------------------
Cynthia A. Montgomery
*Allan P. Newell Director
--------------------------------
Allan P. Newell
*Henry B. Pearsall Director
--------------------------------
Henry B. Pearsall
*By: /s/ Dale L. Matschullat March 10, 1999
-------------------------------
Dale L. Matschullat
Attorney-in-Fact
25
INDEX TO EXHIBITS
Exhibit
Number Exhibit
------ -------
2* Agreement and Plan of Merger dated as of
October 20, 1998, among Newell, Rubbermaid
and Rooster Company (incorporated by
reference to Annex A to the joint proxy
statement/prospectus contained in Newell's
Registration Statement on Form S-4 (File No.
333-71747) effective February 4, 1999.
4.1 Rubbermaid Incorporated Amended and Restated
1989 Stock Incentive and Option Plan.
4.2* Rights Agreement, dated as of August 6,
1998, between Newell and First Chicago Trust
Company of New York (incorporated by
reference to Exhibit I to Newell's
Registration Statement on Form 8-A12B (Reg.
No. 1-09608), filed with the Commission on
August 28, 1998).
5.1* Opinion of Schiff Hardin & Waite.
5.2 Supplemental Opinion of Schiff Hardin &
Waite.
23.1* Consent of Arthur Andersen LLP.
23.2 Supplemental Consent of Arthur Andersen LLP.
23.3* Consent of Schiff Hardin & Waite (included
in its opinion filed as Exhibit 5.1 in this
Registration Statement).
23.4 Supplemental Consent of Schiff Hardin &
Waite (included in its opinion filed as
Exhibit 5.2 in this Registration Statement).
24* Power of Attorney (set forth on the
signature page of the S-4 Registration
Statement).
-------------------
* Previously filed.
EXHIBIT 4.1
-----------
RUBBERMAID INCORPORATED
AMENDED AND RESTATED
1989 STOCK INCENTIVE AND OPTION PLAN
PREAMBLE
The purpose of this Plan is to reward performance and to build
each Participant's equity interest in the stock of Rubbermaid
Incorporated by providing long term incentives and rewards to
directors and officers and other key employees of the Company and its
subsidiaries who contribute to its continuing success by their
innovation, ability, industry, loyalty and exceptional service. This
Plan was originally approved by shareholders at the 1989 Annual
Meeting and subsequently amended and approved by shareholders at the
1994 Annual Meeting.
SECTION I
DEFINITIONS
BENEFICIARY
1.01 "Beneficiary" means a person or entity (including a trust or
estate), designated in writing by a Holder on such forms and in
accordance with such terms and conditions as the Committee may
prescribe, to whom the Holder's Stock Incentives and related
rights and privileges under the Plan shall pass in the event of
the death of the Holder.
BOARD OR BOARD OF DIRECTORS
1.02 "Board" or "Board of Directors" means the Board of Directors of
Rubbermaid Incorporated, as constituted from time to time.
CHANGE IN CONTROL
1.03 "Change in Control" means the occurrence of any of the
following events:
(i) The Company is merged, consolidated or reorganized into
or with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization less
than two-thirds of the combined voting power of the then-
outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by
the holders of the combined voting power of the then-
outstanding securities entitled to vote generally in the
election of directors ("Voting Stock") of the Company
immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other
legal entity, and as a result of such sale or transfer less
29
than two-thirds of the combined voting power of the then-
outstanding securities of such corporation or entity
immediately after such sale or transfer is held in the
aggregate by the holders of Voting Stock of the Company
immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Exchange Act, disclosing that any
person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing 15% or more of the
Voting Stock of the Company;
(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a
Change in Control of the Company has occurred or will occur in
the future pursuant to any then-existing contract or
transaction; or
(v) If, during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Directors of the Company cease for any reason to constitute
at least a majority thereof; provided, however, that for
purposes of this clause (v) each Director who is first elected,
or first nominated for election by the holders of the Voting
Stock, by a vote of at least two-thirds of the Directors of the
Company (or a committee thereof) then still in office who were
Directors of the Company at the beginning of any such period
will be deemed to have been a Director of the Company at the
beginning of such period.
Notwithstanding the foregoing provisions of Sections
1.03(iii) or 1.03(iv), unless otherwise determined in a
specific case by majority vote of the Board, a Change in
Control shall not be deemed to have occurred for purposes of
Sections 1.03(iii) or 1.03(iv) solely because (1) the Company,
(2) a Subsidiary, or (3) any employee stock ownership plan or
any other employee benefit plan of the Company or any
Subsidiary either files or becomes obligated to file a report
or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange
Act disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of 15% or otherwise, or because the
Company reports that a change in control of the Company has
occurred or will occur in the future by reason of such
beneficial ownership.
30
CODE
1.04 "Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time. References to a particular Section
of the Code shall include references to any related Treasury
Regulations and to successor Sections of the Code.
COMMITTEE
1.05 "Committee" means the Compensation and Management Development
Committee of the Board of Directors or such other committee or
subcommittee designated by the Board of Directors to administer
the Plan.
COMMON SHARES
1.06 "Common Shares" means common stock of the Company, par value
$1.00 per share.
COMPANY
1.07 "Company" means Rubbermaid Incorporated, an Ohio corporation,
its successors and assigns.
DIRECTOR
1.08 "Director" means a director of the Company.
EMPLOYEE
1.09 "Employee" means a key employee of the Company or a Subsidiary,
regularly employed on a full-time basis, including an officer
or Director if he is such an employee.
EXCHANGE ACT
1.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
FAIR MARKET VALUE
1.11 "Fair Market Value" on a particular date means the mean between
the high and low sales price of a Common Share on the New York
Stock Exchange on such date as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange. If there were no sales on such date reported as
provided above, the respective prices on the most recent prior
day on which a sale was so reported.
In the case of an Incentive Stock Option, if the foregoing
method of determining fair market value should be inconsistent
with Section 422 of the Code, "Fair Market Value" shall be
31
determined by the Committee in a manner consistent with such
Section of the Code and shall mean the value as so determined.
HOLDER
1.12 "Holder" means the Participant or eligible transferee (as such
eligibility may be determined from time to time by the
Committee) who holds a Stock Incentive.
INCENTIVE STOCK OPTION
1.13 "Incentive Stock Option" means an Option intended to meet the
requirements of Section 422 of the Code.
NON-STATUTORY STOCK OPTION
1.14 "Non-Statutory Stock Option" means an Option which is not
intended to be an Incentive Stock Option.
OPTION
1.15 "Option" means an option granted under this Plan to purchase
Common Shares. Options may be Incentive Stock Options or Non-
Statutory Stock Options.
PARTICIPANT
1.16 "Participant" means a Director, officer or other Employee
selected by the Committee to participate in this Plan.
PERFORMANCE AWARD
1.17 "Performance Award" means an award of Performance Shares to a
Participant, which is contingent upon the attainment of
performance objectives determined in the discretion of the
Committee as more fully set forth in Section VI hereof.
PERFORMANCE GOALS
1.18 "Performance Goals" shall have the meaning ascribed to it at
Section 6.02.
PLAN
1.19 "Plan" means the Rubbermaid Incorporated Amended and Restated
1989 Stock Incentive and Option Plan set forth in these pages,
as amended from time to time.
RESTRICTED STOCK AWARD
1.20 "Restricted Stock Award" means an award of Common Shares to a
Participant with restrictions as to disposition and subject to
32
a risk of forfeiture until certain conditions have been met.
SEC RULE 16b-3
1.21 "SEC Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission promulgated under the Exchange Act, as such
rule or any successor rule may be in effect with respect to
Section 16 Persons from time to time.
SECTION 16 PERSON
1.22 "Section 16 Person" means a person subject to potential
liability under Section 16(b) of the Exchange Act with respect
to transactions involving equity securities of the Company.
STOCK APPRECIATION RIGHT
1.23 "Stock Appreciation Right" means a right granted under Section
VIII below.
STOCK INCENTIVE
1.24 "Stock Incentive" means a Performance Award, Restricted Stock
Award, Option or Stock Appreciation Right.
SUBSIDIARY
1.25 "Subsidiary" means a corporation or other form of business
association of which shares (or other ownership interests)
having more than 50% of the voting power are owned or
controlled, directly or indirectly, by the Company; provided,
however, that in the case of an Incentive Stock Option, the
term "Subsidiary" shall mean a Subsidiary (as defined by the
preceding clause) which is also a "subsidiary corporation" as
defined in Section 424(f) of the Code.
SECTION II
PLAN ADMINISTRATION
ADMINISTRATOR
2.01 The Plan shall be administered by the Committee, which shall
consist of three or more directors appointed from time to time
by the Board. Unless the Board determines otherwise, the
Committee shall be comprised solely of "outside directors"
within the meaning of Section 162(m) of the Code. In addition,
the Committee will be constituted in a manner that satisfies
the "non-employee" director standard in SEC Rule 16b-3.
Notwithstanding the requirements contained in the two
immediately preceding sentences, the Board may, in its
discretion, delegate to a committee or subcommittee of the
Board that does not meet the foregoing requirements any or all
of the authority and responsibility of the Committee with
33
respect to awards of Stock Incentives to employees who are not
Section 16 Persons or "covered employees" for purposes of
Section 162(m) of the Code at the time any such delegated
authority or responsibility is exercised. Such other committee
or subcommittee may consist of three or more directors who may,
but need not, be officers or employees of the Company or of any
of its Subsidiaries. To the extent that the Board has delegated
to such other committee or subcommittee the authority and
responsibility of the Committee pursuant to the foregoing, all
references to the Committee in the Plan shall be to such other
committee or subcommittee.
ADMINISTRATIVE POWERS
2.02 The Committee shall have full power to interpret and administer
the Plan and full authority to act in selecting the
Participants to whom Stock Incentives will be granted, in
determining the type and amount of Stock Incentives to be
granted to each such Participant, the terms and conditions of
Stock Incentives granted under the Plan, including any
applicable Performance Goals, and the terms of agreements which
will be entered into with Participants. The Committee shall
have the power to make regulations for carrying out the Plan
and to make changes in such regulations as it from time to time
deems proper. Any interpretation by the Committee of the terms
and provisions of the Plan and any instrument issued thereunder
and its administration thereof, and all action taken by the
Committee, shall be final, binding and conclusive on the
Company, its shareholders, Subsidiaries, affiliates, all
Holders, their respective legal representatives, successors and
assigns and upon all other persons claiming under or through
any of them.
LIMITATION ON LIABILITY
2.03 Members of the Board of Directors and members of the Committee
acting under the Plan shall be fully protected in relying in
good faith upon information supplied by the management of the
Company and the advice of counsel and shall incur no liability
except for acts or omissions undertaken with deliberate intent
to cause injury or undertaken with reckless disregard.
SECTION III
PLAN SHARES
SHARES SUBJECT TO THE PLAN; MAXIMUM NUMBER -- AGGREGATE
3.01 Subject to adjustments as provided in Section X and the
provisions of Sections 3.03 and 8.07 hereof, the total number
of Common Shares as to which Stock Incentives may be granted
under the Plan in each calendar year during any part of which
the Plan is effective shall be one percent (1%) of the total
outstanding Common Shares as of the first day of such year;
34
provided that the maximum number of Common Shares that may be
issued or transferred in respect of Incentive Stock Options
granted under this Plan shall be 5,000,000 Common Shares. In
addition, any shares issued by the Company through the
assumption or substitution of outstanding grants from an
acquired company shall not reduce the shares available for
grants under the Plan. Any shares issued hereunder may consist,
in whole or in part, of authorized and unissued shares,
treasury shares, or shares to be purchased, as the Committee
may from time to time determine.
SHARES SUBJECT TO THE PLAN; MAXIMUM NUMBER -- PER PARTICIPANT 3.02
Subject to Sections 3.03, 8.07 and 10.01 hereof, the maximum number of
Stock Incentives that may be granted to each Participant in each
calendar year during any part of which the Plan is in effect shall be
as follows:
(a) With respect to Common Shares subject to Options,
500,000 Common Shares;
(b) With respect to Common Shares subject to Stock
Appreciation Rights, 500,000 Common Shares;
(c) With respect to Restricted Stock (not issued in payment
of Performance Awards), that number of Common Shares whose
value equals the lesser of (i) 500% of such Participant's base
salary for such year or (ii) $2,000,000 (based on the Fair
Market Value of Common Shares on the date the award is granted,
not the date the award vests or is paid);
(d) With respect to Performance Awards, that number of
Common Shares whose value equals the lesser of (i) 500% of such
Participant's base salary for such year or (ii) $2,000,000
(based on the Fair Market Value of Common Shares on the date
the award is granted, not the date the award is earned or
paid).
CHARGING OF SHARES
3.03 Subject to the provisions of Section 8.07, Common Shares
subject to a Stock Incentive that are forfeited, terminated, or
canceled without having been exercised (other than Common
Shares subject to an Option that is canceled upon the exercise
of a related Stock Appreciation Right) will again be available
for grant under this Plan, without reducing the number of
Common Shares available in any calendar year for grant of Stock
Incentives. If a Holder pays all or part of the exercise price
associated with a Stock Incentive by the transfer of Common
Shares or the surrender (including by attestation) of all or
part of a Stock Incentive (including the Stock Incentive being
exercised) such Common Shares will also be available for grant
under this Plan, without reducing the number of Common Shares
available in any calendar year for grant of Stock Incentives.
35
SECTION IV
GRANTS OF STOCK INCENTIVES
TYPE OF AWARDS
4.01 Subject to the provisions of the Plan, the Committee may at any
time, or from time to time, grant Performance Awards,
Restricted Stock Awards, Options, or Stock Appreciation Rights,
or any combination thereof, to any Participant.
TANDEM AWARDS
4.02 The Committee may (but need not) grant any Stock Incentive in
tandem with another Stock Incentive. Tandem Stock Incentives
may be granted as either alternatives or supplements to one
another. The terms and conditions of any such Tandem Stock
Incentives shall be determined by the Committee subject to the
provisions of the Plan.
SECTION V
RESTRICTED STOCK AWARDS
RESTRICTED STOCK AGREEMENTS
5.01 Restricted Stock Awards shall be evidenced by Restricted Stock
agreements. Such agreements shall conform to the requirements
of the Plan and may contain such other provisions (including
provisions for the protection of Restricted Stock Awards in the
event of a Change in Control) as the Committee shall deem
advisable.
RIGHTS OF PARTICIPANTS
5.02 Subject to the restrictions on transfer and the risk of
forfeiture, and except to the extent the Committee provides
otherwise at the time of grant of a Restricted Stock Award, a
Participant who has been granted a Restricted Stock Award will
thereafter have all the rights of a shareholder, including the
right to receive dividends paid on such shares and to vote such
shares unless and until any such shares are forfeited.
Certificates or other evidence of Restricted Stock Awards will
be held by the Company or other designee of the Committee.
DELIVERY OF SHARES
5.03 The Restricted Stock Award agreement shall specify the duration
of the restricted period and the employment conditions under
which the Restricted Stock may be forfeited to the Company. If,
at the end of the restricted period, the restrictions imposed
hereunder lapse as provided in the Restricted Stock Award
agreement, a certificate representing the number of Common
Shares on which restrictions have lapsed as well as any other
36
form of compensation provided for in the agreement will be
delivered to the Participant or his Beneficiary upon compliance
by the Participant with any requirements provided for in the
agreement. The Committee may, in its sole discretion, modify or
accelerate the vesting of shares of Restricted Stock.
FORFEITURE
5.04 In addition to any specific provisions on forfeiture provided
for in any Restricted Stock Award agreement, Restricted Stock
Awards will be forfeited if the Participant terminates
employment with the Company, a Subsidiary or an affiliate for
any reason other than death, disability or retirement, except
that the Committee shall have the authority to provide for
their continuation in whole or in part whenever in its judgment
it shall determine that such continuation is in the best
interests of the Company.
NONASSIGNABILITY
5.05 Restricted Stock Awards may not be pledged, assigned or
transferred for any reason during the Participant's lifetime,
and any attempt to do so shall be void and the relevant Award
shall be forfeited.
CHANGES IN CONTROL
5.06 In the event of a Change in Control each outstanding Restricted
Stock Award will become fully vested in each Participant as of
the day before such event occurs. This will result in the lapse
of all restrictions on such Restricted Stock Awards.
SECTION VI
PERFORMANCE AWARDS
PERFORMANCE AWARD AGREEMENTS
6.01 Performance Awards shall be evidenced by Performance Award
agreements. Such agreements shall conform to the requirements
of the Plan and may contain such other provisions (including
Performance Goals (as defined below) and provisions for the
protection of Performance Awards in the event of a Change in
Control) as the Committee shall deem advisable.
AWARD PERIOD AND PERFORMANCE GOALS
6.02 The Committee shall determine and include in a Performance
Award the period of time during which a Performance Award may
be earned ("Award Period").
The Committee shall also establish performance objectives
("Performance Goals") to be met by the Company, Subsidiary or
affiliate during the Award Period as a condition to payment of,
37
and/or the lapse of any applicable restrictions relating to,
the Performance Award. The Performance Goals may include
minimum and optimum objectives or a single set of objectives.
With respect to Performance Awards that are intended to qualify
as "performance based" within the meaning of Code Section
162(m)(4)(C), the Committee shall (i) select the Participants
for such Performance Awards, (ii) establish in writing the
applicable Performance Goals and all related terms no later
that 90 days after the commencement of the period of service to
which the Performance Goals relate (or such earlier or later
date as may be the applicable deadline for compensation payable
hereunder to qualify as "performance based" within the meaning
of Code Section 162(m)(4)(C)), and (iii) designate the
Performance Awards that are to qualify as "performance based"
within the meaning of Code Section 162(m)(4)(C).
The Committee shall establish in writing the Performance Goals
for each Award Period which shall be based on any of the
following performance criteria, either alone or in any
combination, on either a consolidated or business unit or
divisional level, and which shall include or exclude
discontinued operations and acquisition expenses (e.g., pooling
of interests), as the Committee may determine: return on net
assets, return on capital employed, economic value added, level
of sales, earnings per share, income before income taxes and
cumulative effect of accounting changes, net income, return on
equity, total shareholder return, market valuation, cash flow
and completion of acquisitions. The foregoing criteria shall
have any reasonable definitions that the Committee may specify
at the time the Performance Goal is established, which may
include or exclude any or all of the following items, as the
Committee may specify: extraordinary, unusual, or non-recurring
items; effects of accounting changes; effects of currency
fluctuations; effects of financing activities (e.g., effect on
earnings per share of issuing convertible debt securities);
expenses for restructuring or productivity initiatives; non-
operating items; acquisition expenses (e.g., pooling of
interests); and effects of divestitures. Any such performance
criterion or combination of such criteria may apply to the
Participant's award opportunity in its entirety or to any
designated portion or portions of the opportunity, as the
Committee may specify.
NO DISCRETION
6.03 With respect to Performance Awards that are intended to qualify
as "performance based" within the meaning of Code Section
162(m)(4)(C), the Committee has no discretion to increase the
amount of the award due upon attainment of the applicable
Performance Goals. No provision of this Plan shall preclude the
Committee from exercising negative discretion with respect to
any Performance Award (i.e., to reduce or eliminate the award
payable) within the meaning of Treasury Regulation Section
38
1.162-27(e)(2)(iii)(A).
PERFORMANCE AWARD EARNED
6.04 The Performance Awards shall be expressed in terms of Common
Shares and referred to as "Performance Shares." With respect to
each Performance Award, the Committee shall fix the number of
allocable Performance Shares. The level of Performance Goals
attained will determine the percentage of Performance Shares
earned for an Award Period. After completion of the Award
Period, the Committee shall certify in writing the extent to
which the Performance Goals and other material terms applicable
to such award are attained. Unless and until the Committee so
certifies, the Performance Award shall not be paid.
FORFEITURE
6.05 In addition to any specific provisions on forfeiture provided
for in any Performance Award agreement, Performance Awards will
be forfeited if the Participant terminates employment (other
than upon death, disability or retirement) with the Company, a
Subsidiary or an affiliate prior to the completion of the Award
Period; provided that the Committee shall have the authority to
provide for a partial or full payment of the Performance Award
that would have been payable if the Participant had continued
employment for the entire Award Period, which shall be paid at
the same time as it would have been paid if no such termination
of employment occurred, but only if and to the extent the
exercise of such discretion by the Committee does not prevent
any Performance Award from qualifying as "performance based"
within the meaning of Code Section 162(m)(4)(C).
PERFORMANCE AWARD PAYMENT
6.06 The Committee, in its discretion, may elect to make the payment
of Performance Awards in Restricted Shares, Common Shares, cash
or any combination of the foregoing. If the Performance Award
is paid in Restricted Shares or Common Shares, the Company
shall issue one Restricted Share or Common Share for each
Performance Share earned. If the Performance Award is paid in
cash, the cash payable shall be equal to the Fair Market Value
of the Performance Shares earned as of the last day of the
Award Period.
DELAYED PAYMENT
6.07 To the extent that the Committee, in its sole discretion,
determines that the payment of any Performance Award is not
deductible by the Company based on Code Section 162(m), the
Company shall delay the payment of such Performance Award. The
unpaid portion of a Performance Award that is subject to this
Section 6.07 shall be paid (in whole or in part), at the
discretion of the Committee, when such payment is deductible in
39
accordance with Code Section 162(m). The delayed payment of a
Performance Award payable in Common Shares or Restricted Shares
shall be equal to the number of Performance Shares earned but
unpaid. The delayed payment of a Performance Award payable in
cash shall be equal to the Fair Market Value of the earned but
unpaid Performance Shares as of the appropriate date selected
by the Committee.
RIGHTS OF PARTICIPANTS
6.08 Subject to the restrictions on transfer and the risk of
forfeiture, and except to the extent the Committee provides
otherwise at the time of grant of a Performance Award, a
Participant who has been granted a Performance Award payable in
Common Shares or Restricted Shares will thereafter have all the
rights of a shareholder, including the right to receive
dividends paid on such shares and to vote such shares unless
and until any such shares are forfeited. Certificates or other
evidence of Performance Awards will be held by the Company or
other designee of the Committee.
NONASSIGNABILITY
6.09 Performance Awards may not be pledged, assigned or transferred
for any reason during the Participant's lifetime, and any
attempt to do so shall be void and the relevant Award shall be
forfeited.
CHANGE IN CONTROL
6.10 In the event of a Change in Control each outstanding
Performance Award will become fully vested in each Participant
as of the day before such event occurs. This will result in the
lapse of all restrictions on such Performance Awards,
regardless of any unachieved Performance Goal.
SECTION VII
OPTIONS
TERMS AND CONDITIONS OF OPTIONS
7.01 Except as otherwise provided in Section 12.07, Options shall be
subject to the provisions set forth in this Section.
PURCHASE PRICE
7.02 Subject to the provisions of Section X, the price at which each
Common Share may be purchased under an Option shall be not less
than 100% of the Fair Market Value of a Common Share on the
date the Option is granted (or in the case of any optionee who,
at the time an Incentive Stock Option is granted, owns,
directly or indirectly within the meaning of Section 424(d) of
the Code, stock possessing more than 10% of the total combined
40
voting power of all classes of stock of his employer
corporation or of its parent or subsidiary corporation, not
less than 110% of the Fair Market Value of a Common Share on
the date the Incentive Stock Option is granted).
PAYMENT OF PURCHASE PRICE
7.03 The purchase price of shares subject to an Option may be paid
in whole or in part (a) in cash, (b) by bank, certified,
cashier's or personal check subject to collection, (c) if so
provided in the Option and subject to such terms and conditions
as the Committee may impose, by delivering to the Company a
properly executed exercise notice and instructions to deliver
the resulting stock to a stockbroker that are intended to
satisfy the provisions of Section 220.3(e)(4) of Regulation T
issued by the Board of Governors of the Federal Reserve System
as in effect from time to time, and (d) if so provided in the
Option and subject to such terms and conditions as are
specified in the Option, (i) in Common Shares (including
through an attestation procedure) or other property surrendered
to the Company or (ii) by the surrender of all or part of the
Option being exercised, or by a combination of the foregoing
methods, as and to the extent permitted by the Committee.
Property for purposes of this paragraph shall include an
obligation of the Company unless prohibited by applicable law.
Common Shares thus surrendered shall be valued at their Fair
Market Value on the date of exercise. Any such other property
thus surrendered shall be valued at its fair market value on
any reasonable basis established or approved by the Committee.
Any Common Shares surrendered to the Company in payment of an
Option's purchase price pursuant to Section 7.03(d) (including
by attestation) will again be available for grant under this
Plan, without reducing the number of Common Shares available in
any calendar year for grant of Stock Incentives.
CONSIDERATION FOR GRANT OF OPTIONS
7.04 Options may be granted for such lawful consideration, including
money or other property, tangible or intangible, or labor or
services received or to be received by the Company, as the
Committee may determine when the Option is granted. Property
for purposes of the preceding sentence shall include an
obligation of the Company unless prohibited by applicable law.
Subject to the foregoing and the other provisions of this
Section VII, each Option may be exercisable in full at the time
of grant or may become exercisable in one or more installments,
and at such time or times, as the Committee may determine. The
Committee may at any time accelerate the date on which an
Option becomes exercisable, and no additional consideration
need be received by the Company in exchange for such
acceleration. Unless otherwise provided in the Option, an
Option, to the extent it becomes exercisable, may be exercised
41
at any time in whole or in part until the expiration or
termination of the Option.
CERTAIN LIMITATIONS ON EXERCISE
7.05 Unless otherwise determined by the Committee, each Option may
be exercised, during the Holder's lifetime, only by the Holder
or the Holder's guardian or legal representative, and after
death only by the Holder's Beneficiary or, absent a
Beneficiary, by his estate or by a person who acquired the
right to exercise the Option by will or the laws of descent and
distribution. Notwithstanding any other provision of this
Plan, (a) no Option shall be exercisable after the tenth
anniversary of the date the Option was granted, and (b) no
Incentive Stock Option which is granted to any optionee who, at
the time such Option is granted, owns stock, directly or
indirectly within the meaning of Section 424(d) of the Code,
possessing more than 10% of the total combined voting power of
all classes of stock of his employer corporation or of its
parent or subsidiary corporation, shall be exercisable after
the expiration of five (5) years from the date such Option is
granted. The Company may but need not provide for an Option to
be exercisable after termination of employment or cessation of
service as a Director, as the case may be, until its fixed
expiration date (or until an earlier date or specified event
occurs).
INCENTIVE STOCK OPTIONS
7.06 An Option may, but not need, be an Incentive Stock Option. The
aggregate Fair Market Value (determined as of the time the
Option is granted) of the stock with respect to which Incentive
Stock Options may be exercisable for the first time by any
Employee during any calendar year (under all plans, including
this Plan, of his employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000 or such
other maximum amount permitted by the Code.
OPTION INSTRUMENTS
7.07 Each Option shall be evidenced by a written instrument, signed
by an officer of the Company duly authorized to do so, which
shall contain such terms and conditions, and shall be in such
form, as the Committee shall determine, provided the instrument
is consistent with this Plan and incorporates it by reference.
An Option, if so approved by the Committee, may include terms,
conditions, restrictions and limitations in addition to those
provided for in this Plan including, without limitation, terms
and conditions providing for the transfer or issuance of
shares, on exercise of an Option, which may be non-transferable
and forfeitable to the Company in designated circumstances.
42
PROVISION APPLICABLE TO CERTAIN HARDSHIP DISTRIBUTIONS
7.08 No Participant shall make any elective contribution or employee
contribution (within the meaning of Treasury Regulation Section
1.401(k)-l(d)(2)(iv)(B)(4)) (i.e., exercise an Option with cash
or check) to the Plan during the twelve-month period after the
Participant's receipt of a deemed hardship distribution (within
the meaning of Treasury Regulation Section 1.401(k)-
1(d)(2)(iv)) from a plan of the Company (or a related party
within the provisions of Code Section 414(b), (c), (m) or (o))
containing a cash or deferred arrangement under Section 401(k)
of the Code. The preceding sentence shall not apply if and to
the extent that the Committee determines it is not necessary to
qualify any such plan as a cash or deferred arrangement under
Section 401(k) of the Code.
CERTAIN CONDITIONS TO EXERCISE
7.09 No Option shall be exercisable unless and until the Company (a)
obtains the approval of all regulatory bodies whose approval
the Committee may deem necessary or desirable, and (b) complies
with all legal requirements deemed applicable by the Committee.
DATE OF EXERCISE
7.10 An Option shall be considered exercised if and when written
notice, signed by the person exercising the Option and stating
the number of shares with respect to which the Option is being
exercised, is received by the Company on a properly completed
form approved for this purpose by the Committee, accompanied by
full payment of the Option purchase price in one or more of the
forms authorized by the Committee and described in Section 7.03
above for the number of shares to be purchased. No Option may
at any time be exercised with respect to a fractional share.
SECTION VIII
STOCK APPRECIATION RIGHTS
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
8.01 Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the Plan, as shall from time
to time be determined by the Committee and to the terms and
conditions set forth in this Section VIII.
TANDEM AND FREE-STANDING RIGHTS
8.02 Stock Appreciation Rights may be granted in connection with all
or any part of an Option, either at the time of the grant of
such Option or at any time thereafter during the term of the
Option (in either case, "Tandem Stock Appreciation Rights"), or
may be granted without reference to an Option ("Free-Standing
Stock Appreciation Rights").
43
TANDEM RIGHTS
8.03 Tandem Stock Appreciation Rights may be granted either as an
alternative or a supplement to a specified Option (the
"related" Option). Each Tandem Stock Appreciation Right that is
granted as an alternative to an Option shall entitle the holder
to receive the amount determined pursuant to Section 8.06 below
if and when a related Option to purchase one Common Share that
is then exercisable is surrendered. Each Tandem Stock
Appreciation Right that is granted as a supplement to an Option
shall entitle the Holder to receive the amount determined
pursuant to Section 8.06 below if and when the Holder purchases
a share under the related Option.
CONSIDERATION FOR GRANT OF RIGHTS
8.04 Stock Appreciation Rights may be granted for such lawful
consideration, including money or other property, tangible or
intangible, or labor or services received or to be received by
the Company, as the Committee may determine when the Rights are
granted. Property for purposes of the preceding sentence shall
include an obligation of the Company unless prohibited by
applicable law. Subject to the foregoing and the other
provisions of this Section VIII, Stock Appreciation Rights may
be exercisable in full at the time of grant or may become
exercisable in one or more installments, and at such time or
times, as the Committee may determine. The Committee may at any
time accelerate the date on which Stock Appreciation Rights
become exercisable, and no additional consideration need be
received by the Company in exchange for such acceleration.
Unless otherwise provided in the Rights, Stock Appreciation
Rights, to the extent they become exercisable, may be exercised
at any time in whole or in part until they expire or terminate.
TERM OF RIGHTS
8.05 No Free-Standing Stock Appreciation Right shall be exercisable
after the tenth anniversary of the date it was granted, and no
Tandem Stock Appreciation Right shall be exercisable after the
related Option ceases to be exercisable. The Committee may but
need not provide for Stock Appreciation Rights to be
exercisable after termination of employment or cessation of
service as a Director, as the case may be, until they expire
pursuant to the first sentence of this Section 8.05 (or until
an earlier date or specified event occurs).
PAYMENT UPON EXERCISE
8.06 Upon exercise of Stock Appreciation Rights, the Holder thereof
shall be entitled to receive cash or Common Shares or a
combination of each, as the Committee in its sole discretion
may determine, equal to the amount by which the Fair Market
44
Value of a Common Share on the date of such exercise exceeds
the Base Price of the Stock Appreciation Rights, multiplied by
the number of Stock Appreciation Rights exercised provided that
in no event shall a fractional share be issued. In the case of
Tandem Stock Appreciation Rights, the Base Price shall be the
price at may be purchased under the related Option. In the case
of Free-Standing Stock Appreciation Rights, the Base Price
shall be the Fair Market Value of a Common Share on the date
the Rights were granted. The Committee may provide that,
notwithstanding the foregoing, upon exercise of Stock
Appreciation Rights at any time during the thirty-day period
following a Change in Control (a "Change in Control Period"),
including, without limitation, upon exercise of Stock
Appreciation Rights which expire before the end of the Change
in Control Period in which they are exercised, the amount of
cash or shares which a Holder shall be entitled to receive
shall equal the amount by which the highest Fair Market Value
of a Common Share during such Change in Control Period exceeds
the Base Price of the Stock Appreciation Rights multiplied by
the number of Stock Appreciation Rights exercised but, in the
case of Stock Appreciation Rights that relate to an Incentive
Stock Option, not in excess of the maximum amount that may be
paid under Code Section 422 without disqualifying such Option
as an Incentive Stock Option.
CHARGING OF SHARES FOR RIGHTS
8.07 The maximum number of shares available for use under the Plan
shall be charged only for the number of shares which are
actually issued or transferred in settlement of Stock
Appreciation Rights and for that number of Common Shares having
a Fair Market Value on the date of exercise equal to the cash
payable in settlement of such Rights. In the case of an
exercise of a Tandem Stock Appreciation Right that is
alternative to an Option, if the number of Common Shares
previously charged against the maximum number of shares
available for use under the Plan on account of the surrendered
portion of the Option exceeds the number of shares (if any)
actually issued or transferred pursuant to such surrender and
that number of Common Shares having a Fair Market Value on the
date of exercise equal to any cash payable pursuant to such
surrender, the excess may be added back to the number of shares
available for use under the Plan.
CERTAIN LIMITATIONS ON EXERCISE OF RIGHTS
8.08 Unless otherwise determined by the Committee, each Stock
Appreciation Right may be exercised, during the Holder's
lifetime, only by the Holder or the Holder's guardian or legal
representative, and after death only by the Holder's
Beneficiary or, absent a Beneficiary, by his estate or by a
person who acquired the right to exercise the Right by will or
the laws of descent and distribution.
45
STOCK APPRECIATION RIGHT INSTRUMENTS
8.09 Each Stock Appreciation Right shall be evidenced by a written
instrument, which shall contain such terms and conditions, and
shall be in such form, as the Committee shall determine,
provided the instrument is consistent with the Plan and
incorporates it by reference.
SECTION IX
CERTAIN CHANGE IN CONTROL, TERMINATION OF EMPLOYMENT
AND DISABILITY PROVISIONS
9.01 Notwithstanding any provision of the Plan to the contrary, any
Option or Stock Appreciation Right which is outstanding but not
yet exercisable at the time of a Change in Control shall become
exercisable at that time. Any Option affected by the preceding
sentence shall remain exercisable until it expires or
terminates pursuant to its terms and conditions. The Committee
may at any time, and subject to such terms and conditions as it
may impose:
(a) authorize the Holder of an Option or Stock Appreciation
Right to exercise the Option or Stock Appreciation Right
following the termination of the Participant's employment with,
or service as a Director of, the Company and its Subsidiaries,
or following the Participant's disability, whether or not the
Option or Stock Appreciation Right would otherwise be
exercisable following such event, provided that in no event may
an Option or Right be exercised after the expiration of
its term;
(b) grant Options and Stock Appreciation Rights which become
exercisable only in the event of a Change in Control;
(c) provide for Stock Appreciation Rights to be exercised
automatically and only for cash in the event of a Change in
Control; and
(d) provide in advance or at the time of a Change in Control
for cash to be paid in settlement of any Option, Stock
Appreciation Right, Performance Award or Restricted Stock Award
in the event of a Change in Control, either at the election of
the Participant or at the election of the Committee.
SECTION X
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
ADJUSTMENTS TO BE MADE
10.01 In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger,
consolidation or any other change in the corporate structure of
46
the Company affecting Common Shares, or a sale by the Company
of all or part of its assets other than in the normal course of
business, or any distribution to shareholders other than a
normal cash dividend, the Committee shall make appropriate
adjustments in the number and kind of shares authorized by the
Plan and to outstanding Restricted Stock Awards, Performance
Awards, any adjustments Options and Stock Appreciation Rights
(including adjustments in the purchase price or Base Price
thereof and in the number and kind of shares issuable
thereunder) as it determines appropriate; provided that any
such adjustments affecting Incentive Stock Options shall comply
with Sections 422 and 424 of the Code.
SECTION XI
PLAN EXISTENCE; PLAN AMENDMENTS
EFFECTIVE DATE AND TERMINATION
11.01 The Plan shall become effective on April 22, 1997, subject to
shareholder approval that meets the applicable requirements of
Section 162(m)(4)(C)(ii) of the Code and the New York Stock
Exchange. If not so approved, the Plan and any Stock Incentive
granted thereunder and contingent upon such approval, shall be
null and void. If so approved, the Plan shall remain in full
force and effect until all shares authorized to be issued or
transferred hereunder have been exhausted or until the Plan is
sooner terminated by the Board of Directors, and shall continue
in effect thereafter with respect to any Stock Incentives
outstanding at the time of such termination. In no event shall
an Incentive Stock Option be granted under the Plan more than
ten (10) years from the date the Plan is adopted by the Board,
or the date the Plan is approved by the shareholders of the
Company, whichever is earlier.
AMENDMENT AND TERMINATION
11.02 Subject to any applicable shareholder approval requirements of
applicable law or the rules of the New York Stock Exchange, the
Plan may be amended by the Board of Directors at any time and
in any respect, including without limitation to qualify Stock
Incentives hereunder as performance-based compensation under
Code Section 162(m)(4)(C) and to permit or facilitate
qualification of Options therefore or thereafter granted as
Incentive Stock Options under the Code, provided that, without
shareholder approval, no amendment shall (a) increase the
aggregate number of shares which may be issued under Incentive
Stock Options under the Plan within the meaning of Proposed
Treasury Regulation Section 1.422A-2(b)(3)(iv) or its
successor, or (b) change the material terms of a Performance
Goal that were previously approved by shareholders within the
meaning of Treasury Regulation Section 1.162-27(e)(4)(vi) or a
successor provision, unless the Board shall determine that such
47
approval is not necessary to avoid loss of a deduction under
Section 162(m) of the Code, will not avoid such a loss of
deduction or is not advisable. The Plan may also be terminated
at any time by the Board of Directors. No amendment or
termination of this Plan shall adversely affect any Stock
Incentive granted prior to the date of such amendment or
termination without the written consent of the Participant.
SECTION XII
GENERAL
GENERAL PROVISIONS
12.01 Unless otherwise determined by the Committee, no Stock
Incentive granted under this Plan may be transferred or
assigned by the Holder other than to a Beneficiary, as provided
hereunder, or, if none, by will, pursuant to the laws of
descent and distribution, or pursuant to a qualified domestic
relations order; except that no Incentive Stock Option may be
transferred or assigned pursuant to a qualified domestic
relations order.
12.02 Nothing contained in the Plan, nor in any instrument issued
pursuant to the Plan, shall confer upon any Participant any
right with respect to continuance of employment by, or service
as a Director of, as the case may be, the Company, a Subsidiary
or affiliate, nor interfere in any way with the right of the
Company, a Subsidiary or affiliate, to terminate the employment
of, or service as a Director of, any Participant at any time or
without assigning any reason therefor.
12.03 For purposes of this Plan, transfer of employment between the
Company and its Subsidiaries and affiliates shall not be deemed
termination of employment subject, in the case of Incentive
Stock Options and any Rights tandem thereto, to any applicable
provisions of Sections 422 and 424 of the Code.
12.04 The Company and its Subsidiaries may make such provisions as
they may deem appropriate for the withholding of any taxes
which they determine are required to be withheld in connection
with any Stock Incentive. Without limiting the foregoing, the
Committee may, subject to such terms and conditions as it may
impose, permit or require any withholding tax obligation
arising in connection with the grant, exercise, vesting,
distribution or payment of any Stock Incentive to be satisfied
in whole or in part, with or without the consent of the Holder,
by having the Company withhold all or any part of the Common
Shares that vest or would otherwise be distributed at such
time. Any shares so withheld shall be valued at their Fair
Market Value on the date of such withholding.
12.05 No person (individually or as a member of a group), and no
Beneficiary or other person claiming under or through him,
48
shall have any right, title or interest in or to any Common
Shares allocated or reserved for the purposes of this Plan, or
subject to any Stock Incentive, except as to such Common
Shares, if any, as shall have been issued or transferred to
him.
12.06 Unless this Section 12.06 prevents an Option from qualifying as
an Incentive Stock Option under Section 422 of the Code or
prevents a Stock Incentive from qualifying as performance based
compensation under Section 162(m) of the Code, if any day on
which action under the Plan must be taken falls on a Saturday,
Sunday or legal holiday, such action may be taken on the next
succeeding day not a Saturday, Sunday or legal holiday.
12.07 Without amending the Plan, Stock Incentives may be granted to
Participants who are foreign nationals or employed outside the
United States or both, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the
Committee, be necessary or desirable to further the purpose of
the Plan.
12.08 Except as provided in Section 6.03, the Committee may amend any
outstanding Stock Incentive to the extent it deems appropriate.
Such amendment may be unilateral by the Company, except in the
case of amendments adverse to the Holder, in which case the
Holder's consent is required to any such amendment.
12.09 Any provision of the Plan to the contrary notwithstanding, and
except to the extent that the Committee determines otherwise:
(a) transactions with respect to persons whose remuneration is
subject to the provisions of Section 162(m) of the Code shall
conform to the requirements of Section 162(m)(4)(C) of the
Code, and (b) every provision of the Plan shall be
administered, interpreted and construed to carry out (a)
hereof.
12.10 Notwithstanding any provision of the Plan to the contrary, the
Plan is intended to give the Committee the authority to grant
Stock Incentives hereunder that qualify as performance-based
compensation under Code Section 162(m)(4)(C) and that do not so
qualify. Every provision of the Plan shall be administered,
interpreted and construed to carry out such intention and any
provision that cannot be so administered, interpreted and
construed shall to that extent be disregarded; and any
provision of the Plan that would prevent a Stock Incentive that
the Committee intends to qualify as performance-based pay under
Code Section 162(m)(4)(C) from so qualifying shall be
administered, interpreted and construed to carry out such
intention and any provision that cannot be so administered,
interpreted and construed shall to that extent be disregarded.
12.11 The validity, construction, interpretation and administration
of the Plan and of any determinations or decisions made
49
thereunder, and the rights of all persons having or claiming to
have any interest therein or thereunder, shall be governed by,
and determined exclusively in accordance with, the laws of the
State of Ohio, but without giving effect to the principles of
conflicts of laws thereof. Without limiting the generality of
the foregoing, the period within which any action arising under
or in connection with the Plan must be commenced, shall be
governed by the laws of the State of Ohio, without giving
effect to the principles of conflicts of laws thereof,
irrespective of the place where the act or omission complained
of took place and of the residence of any party to such action
and irrespective of the place where the action may be brought.
12.12 The use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall include
within its meaning the plural and vice versa.
EXHIBIT 5.2
-----------
SCHIFF HARDIN & WAITE
6600 Sears Tower, Chicago, IL 60606
(312) 258-5669)
-------------------------------------
March 22, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: Newell Co. Post-Effective Amendment on Form S-3
to Registration Statement on Form S-4
(Registration No. 333-71747)
-------------------------------------------------
Ladies and Gentlemen:
We are acting as counsel for Newell Co. (the "Company") in
connection with the Company's filing with the Securities and Exchange
Commission of Post-Effective Amendment No. 1 on Form S-3 (the
"Amendment") to its Registration Statement on Form S-4 (Registration
No.333-71747), which was declared effective on February 4, 1999 (the
"Registration Statement"). The Registration Statement covers the
shares of common stock, par value $1.00 per share, of the Company
(including the related common stock purchase rights) (the "Shares") to
be issued in connection with the merger of a wholly owned subsidiary
of the Company with Rubbermaid Incorporated, which will occur on March
24, 1999 and will result in Rubbermaid Incorporated becoming a wholly
owned subsidiary of the Company. The Amendment covers the Shares that
are issuable under the Rubbermaid Incorporated 1989 Amended and
Restated Stock Incentive and Option Plan (the "Option Plan") to
participants who are former employees of Rubbermaid Incorporated as of
the merger date. The Shares are issuable upon (i) the exercise of
stock options under the Option Plan that were not exercised prior to
the merger date (the "Outstanding Options"); and (ii) the attainment
after the merger date of certain pre-established performance goals
(the "Performance Shares"). This opinion letter supplements our
opinion which was filed as Exhibit 5 to the Registration Statement.
In connection with this supplemental opinion, we have examined
such corporate records, certificates and other documents and have made
such other factual and legal investigations as we have deemed
necessary or appropriate for the purposes of this opinion. Based on
the foregoing, it is our opinion that the Shares covered by the
Amendment have been duly authorized and, when issued upon the valid
exercise of the Outstanding Options or when issued as Performance
Shares in accordance with the provisions of the Option Plan, will be
legally issued, fully paid and nonassessable (except as may be limited
by Section 180.0622 of the Wisconsin Business Corporation law, which
27
SECURITIES AND EXCHANGE COMMISION
March 22, 1999
Page 2
provides that shareholders may be liable for an amount equal to the
par value of their shares for certain debts owing to employees of the
Company).
We hereby consent to the filing of this supplemental opinion as
Exhibit 5.2 to the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Frederick L. Hartmann
--------------------------
Frederick L. Hartmann
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated January 27, 1999, included in Newell Co.'s Form 10-K for
the year ended December 31, 1998 and to all references to our Firm
included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
----------------------------
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
March 19, 1999
