SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /__/
Check the appropriate box:
/_/ Preliminary Proxy Statement /_/ Confidential, for
/X/ Definitive Proxy Statement use of the
/_/ Definitive Additional Materials Commission Only (as
/_/ Soliciting Material Pursuant to permitted by Rule
Rule 14a-113(c) or Rule 14a-12 14a-6(e)(2))
NEWELL RUBBERMAID INC.
(Name of Registrant as Specified in its Charter)
______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/_/ Fee paid previously with preliminary materials.
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form
or schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1999
To the Stockholders of NEWELL RUBBERMAID INC.:
You are cordially invited to attend the annual meeting of
stockholders of NEWELL RUBBERMAID INC. to be held on Wednesday, May
26, 1999, at 10:00 a.m. Central Daylight Savings Time, at The Northern
Trust Company, 50 South LaSalle Street, Chicago, Illinois.
At the annual meeting, we will:
1. elect five directors of the Company to serve for a term of
three years;
2. vote on an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock from 400,000,000 to 800,000,000;
3. vote on the ratification of the appointment of Arthur
Andersen L.L.P. as the Company's independent accountants for
the year 1999; and
4. transact other business as may properly come before the
annual meeting and any adjournment or postponement of the
annual meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
THREE PROPOSALS OUTLINED IN THIS PROXY STATEMENT.
Only stockholders of record at the close of business on April 16,
1999 may vote at the annual meeting or any adjournment or postponement
thereof.
The Company's annual report for the year 1998 is enclosed for
your convenience.
Whether or not you plan to attend the annual meeting, please act
promptly to vote your shares with respect to the proposals described
above. You may vote your shares by marking, signing and dating the
enclosed proxy card and returning it in the postage paid envelope
provided. You may also vote your shares through the Internet by
following the instructions set forth on the proxy card. If you attend
the meeting, you may vote your shares in person, even if you have
previously submitted a proxy in writing or through the Internet.
By Order of the Board of Directors,
[SIGNATURE]
RICHARD H. WOLFF
SECRETARY
April 19, 1999
NEWELL RUBBERMAID INC.
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
__________________
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 26, 1999
You are receiving this proxy statement and proxy card from us
because you own shares of common stock in Newell Rubbermaid Inc. This
proxy statement describes issues on which we would like you to vote.
It also gives you information so that you can make an informed
decision. We will mail this proxy statement and the form of proxy to
stockholders beginning on or about April 19, 1999.
VOTING AT THE MEETING
DATE, TIME AND PLACE OF THE MEETING
We will hold the annual meeting at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois, at 10:00 a.m., local time, on
May 26, 1999.
WHO CAN VOTE
Record holders of the Company's common stock at the close of
business on April 16, 1999 are entitled to notice of and to vote at
the meeting. On the record date, 281,756,188 shares of common stock
were issued and outstanding and held by 28,659 holders of record.
QUORUM FOR THE MEETING
A quorum of stockholders is necessary to take action at the
annual meeting. A majority of the outstanding shares of common stock
of the Company, represented in person or by proxy, will constitute a
quorum. Votes cast by proxy or in person at the annual meeting will
be tabulated by the inspectors of election appointed for the annual
meeting. The inspectors of election will determine whether a quorum
is present at the annual meeting. The inspectors of election will
treat directions to withhold authority, abstentions and broker non-
votes as present and entitled to vote for purposes of determining the
presence of a quorum. A broker non-vote occurs when a broker holding
shares for a beneficial owner does not have authority to vote the
shares. In the event that a quorum is not present at the meeting, we
expect that the meeting will be adjourned or postponed to solicit
additional proxies.
1
VOTES REQUIRED
The five nominees for director who receive the greatest number
of votes cast in person or by proxy at the annual meeting will be
elected directors of the Company. The vote required for the proposed
increase in authorized shares is the affirmative vote of a majority of
the shares of common stock entitled to vote at the annual meeting.
The vote required for ratification of the appointment of Arthur
Andersen L.L.P. as independent accountants for the year 1999 is the
affirmative vote of a majority of the shares of common stock present
in person or by proxy at the annual meeting.
You are entitled to one vote for each share you own on the record
date on each matter to be considered at the meeting. A broker or
other nominee may have discretionary authority to vote certain shares
of common stock if the beneficial owner or other person entitled to
vote those shares has not provided instructions.
Directions to withhold authority to vote will have no effect on
the election of directors, because directors are elected by a
plurality of votes cast. Any proxy marked "abstain" with respect to
the proposed increase in authorized shares or the ratification of the
appointment of Arthur Andersen L.L.P. as independent accountants for
the year 1999 will have the effect of a vote against the proposal. On
all other matters, an abstention will have no effect. Shares
represented by a proxy as to which there is a broker non-vote or a
proxy in which authority to vote for any matter considered is withheld
will have no effect on the vote for any matter.
HOW YOU CAN VOTE
You may submit your proxies by attending the annual meeting and
voting your shares in person. You also may choose to submit your
proxies by either of the following methods:
- VOTING BY MAIL. If you choose to vote by mail, simply complete
the enclosed proxy card, date and sign it, and return it in the
postage-paid envelope provided. If you sign your proxy card and
return it without marking any voting instructions, your shares
will be voted in favor of each of the proposals presented at the
annual meeting.
- VOTING BY INTERNET. You can also vote via the Internet by
signing on to the web site identified on the proxy card.
Internet voting is available 24 hours a day, and the procedures
are designed to authenticate votes cast by using a personal
identification number. The procedures allow you to appoint a
proxy to vote your shares and to confirm that your instructions
have been properly recorded. If you vote by Internet, you should
not return your proxy card.
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- VOTING BY STREET NAME HOLDERS. Stockholders whose shares are
held in "street name" (i.e., in the name of a broker, bank or
other record holder) must either direct the record holder of
their shares how to vote their shares or obtain a proxy from the
record holder to vote at the annual meeting.
HOW YOU MAY REVOKE OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the
annual meeting by any of the following methods:
- Submitting a later-dated proxy by mail or Internet
- Sending a written notice, including by telegram or telecopy, to
the Corporate Secretary of the Company. You must send any
written notice of a revocation of a proxy so as to be delivered
before the taking of the vote at the meeting to:
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 101
Rockford, Illinois 61108
Telecopy: 1-815-381-8160
Attention: Corporate Secretary
- Attending the annual meeting and voting in person. Your
attendance at the annual meeting will not in and of itself revoke
your proxy. You must also vote your shares at the meeting. If
your shares are held in the name of a bank, broker or other
holder of record, you must obtain a proxy, executed in your
favor, from the holder of record to be able to vote at the annual
meeting.
If you require assistance in changing or revoking your proxy,
please contact the Company's proxy solicitor, Morrow & Co., Inc., at
the following address:
Morrow & Co., Inc.
445 Park Avenue, 5th Floor
New York, New York 10022
Phone Number: 1-800-566-9061
COSTS OF SOLICITATION
The Company will pay the costs of soliciting proxies. The
Company has retained Morrow & Co., Inc. to aid in the solicitation of
proxies and to verify certain records related to the solicitations.
The Company will pay Morrow & Co., Inc. a fee of $8,000 as
compensation for its services and will reimburse it for its related
out-of-pocket expenses.
In addition to solicitation by mail, the directors, officers and
employees of the Company may also solicit proxies from stockholders by
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telephone, telecopy, telegram or in person. Upon request, the Company
will also reimburse brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expenses in sending the proxy
materials to beneficial owners.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of fifteen
directors who are divided into three classes. One class is elected
each year for a three-year term. The Board of Directors has nominated
Alton F. Doody, Thomas J. Falk, Daniel C. Ferguson, Thomas A.
Ferguson, Jr. and William D. Marohn to serve in Class III until the
annual meeting of stockholders to be held in 2002 and until their
successors have been duly elected and qualified. Proxies will be
voted, unless otherwise indicated, for the election of the five
nominees for director. Proxies will be voted in a discretionary
manner should any nominee be unable to serve. All of the nominees are
currently serving as directors of the Company and have consented to
serve.
The dates shown for service as a director of the Company include
service as a director of the predecessor of the Company prior to July
1987. The nominees, and certain information about them and the
directors serving in Class I and Class II whose terms expire in future
years, are set forth below. Please note that Daniel C. Ferguson and
Thomas A. Ferguson, Jr. are not related.
Director
Name and Background Since
-------------------- -------
NOMINEES FOR CLASS III DIRECTORS FOR TERM EXPIRING IN 2002
Alton F. Doody, age 64, has been President and Chief Executive Officer of The Alton F. Doody
Co. (a marketing consulting company) since 1984. Dr. Doody was co-founder of
Management Horizons, Inc., now a division of PriceWaterhouseCoopers. For 12 years,
Dr. Doody served as a Professor of Marketing and Business Strategy at The Ohio State
University . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1976
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Director
Name and Background Since
-------------------- -------
Thomas J. Falk, age 40, has been the Group President, Tissue, Pulp and Paper of Kimberly-Clark
Corporation (a producer of consumer, paper and personal care products) since January
1996. From 1993 through January 1996, Mr. Falk was the Group President Infant and
Child Care Products, Group President North American Consumer Products and Group
President North American Tissue Products of Kimberly-Clark. Mr. Falk has been with
Kimberly-Clark since 1983 and has served in numerous management, financial and
administrative roles. Mr. Falk, a former director of Rubbermaid Incorporated
("Rubbermaid"), was appointed a director of the Company on March 24, 1999 pursuant to
the merger agreement between Rubbermaid and the Company. . . . . . . . . . . . . . . . 1999
Daniel C. Ferguson, age 71, was Chairman of the Board of the Company from May 1992 through
December 1997. Mr. Ferguson was Chief Executive Officer of the Company from 1966
through May 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1965
Thomas A. Ferguson, Jr., age 51, has been President and Chief Operating Officer of the Company
since May 1992. Prior thereto, Mr. Ferguson was President-Operating Companies of the
Company from January 1989 through May 1992. He was Vice President-Controller of the
Company from February 1988 through December 1988. . . . . . . . . . . . . . . . . . . 1992
William D. Marohn, age 59, retired in December 1998 as Vice Chairman of the Board of Whirlpool
Corporation (a manufacturer and marketer of major home appliances), a post he held
since February 1997. From October 1992 through January 1997, Mr. Marohn served as the
President and Chief Operating Officer of Whirlpool Corporation. From January through
October 1992, he was President of Whirlpool Europe, B.V. From April 1989 through
December 1991, Mr. Marohn served as Executive Vice President of Whirlpool's North
American Operations and from 1987 through March 1989 he was President of Whirlpool's
Kenmore Appliance Group. Prior to retirement, Mr. Marohn had been associated with
Whirlpool since 1964. Mr. Marohn, a former director of Rubbermaid, was appointed a
director of the Company on March 24, 1999 pursuant to the merger agreement between
Rubbermaid and the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999
CLASS II DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING IN 2001
DIRECTOR
NAME AND BACKGROUND SINCE
------------------- -------
Scott S. Cowen, age 52, has been the President of Tulane University and Seymour S Goodman
Memorial Professor of Business since July 1998. From 1984 through July 1998, Mr.
Cowen served as Dean and Albert J. Weatherhead, III Professor of Management,
Weatherhead School of Management, Case Western Reserve University. Prior to his
departure in 1998, Mr. Cowen had been associated with Case Western Reserve University
in various capacities since 1976. Mr. Cowen is currently a director of American
Greetings Corp. (a manufacturer of greeting cards and related merchandise), Forest
City Enterprises (a real estate developer) and Jo-Ann Stores (an operator of retail
fabric shops). Mr. Cowen, a former director of Rubbermaid, was appointed a director
of the Company on March 24, 1999 pursuant to the merger agreement between Rubbermaid
and the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999
5
DIRECTOR
NAME AND BACKGROUND SINCE
------------------- -------
Elizabeth Cuthbert Millett, age 42, has been the owner and operator of Plum Creek Ranch,
located in Newcastle, Wyoming (a commercial cattle production company) for more than
five years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1995
Cynthia A. Montgomery, age 46, has been a Professor of Business Administration at the Harvard
University Graduate School of Business since 1989. Prior thereto, Professor
Montgomery was a Professor at the Kellogg School of Management at Northwestern
University from 1985 to 1989. She is also a director of UNUM Corporation (an
insurance company) and 28 mutual funds managed by Merrill Lynch & Co. or one of its
subsidiaries (investment companies). . . . . . . . . . . . . . . . . . . . . . . . . 1995
Allan P. Newell, age 53, has been a private investor for more than five years. . . . . . . . 1982
Gordon R. Sullivan, age 61, General, U.S. Army (Ret.), has been President of the Association
of the United States Army since February 1998. From 1995 through 1997, Mr. Sullivan
served as President of Coleman Federal, a division of Coleman Research Corporation (a
systems engineering company and a subsidiary of Thermo Electron Corporation). From
1991 through 1995, Mr. Sullivan served as the 32nd Chief of Staff of the United
States Army and as a member of the Joint Chiefs of Staff. Prior thereto, Mr.
Sullivan served as Vice Chief of Staff and Deputy Chief of Staff for Operations and
Plans of the United States Army. Mr. Sullivan is also a director of Shell Oil
Company (a worldwide petrochemical manufacturer and marketer) and Army National Bank.
Mr. Sullivan, a former director of Rubbermaid, was appointed a director of the
Company on March 24, 1999 pursuant to the merger agreement between Rubbermaid and the
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999
DIRECTOR
NAME AND BACKGROUND SINCE
------------------- --------
CLASS I DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING IN 2000
Tom H. Barrett, age 68, has been a partner of American Industrial Partners, an investment
partnership, since 1991. From 1989 through 1991, Mr. Barrett served as the Chairman
and Chief Executive Officer of The Goodyear Tire & Rubber Company (a manufacturer of
tires, chemicals, plastic film and other rubber products). From 1988 through 1989,
Mr. Barrett served as President and Chief Operating Officer of Goodyear. Mr. Barrett
is also a director of Air Products and Chemicals Inc. (a manufacturer of industrial
and specialty gases and chemicals), MONY Inc. (an insurance and financial products
company) and A.O. Smith Corporation (a diversified manufacturer of home heating,
agricultural and electrical products). Mr. Barrett, a former director of Rubbermaid,
was appointed a director of the Company on March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company. . . . . . . . . . . . . . . . . . . . 1999
Robert L. Katz, age 73, has been President of Robert L. Katz & Associates (consultants in
corporate strategy) for more than five years. For 16 years, Dr. Katz taught Business
Policy and Organizational Behavior at the Stanford, Harvard and Dartmouth Graduate
Schools of Business. He is also a director of HON Industries Inc. (an office
furniture manufacturing company). . . . . . . . . . . . . . . . . . . . . . . . . . 1975
6
DIRECTOR
NAME AND BACKGROUND SINCE
------------------- -------
John J. McDonough, age 62, has been Vice Chairman of the Board and Chief Executive Officer of
the Company since January 1, 1998. He has been President and Chief Executive Officer
of McDonough Capital Company LLC (an investment management company) since April 1995.
Prior thereto, he was Vice Chairman and a director of Dentsply International Inc. (a
manufacturer and distributor of dental and medical x-ray equipment and other dental
products) from 1983 through October 1995, and was Chief Executive Officer from April
1983 through February 1995. He was Senior Vice President-Finance of the Company from
November 1981 through April 1983. He is also a director of Applied Power, Inc. (a
manufacturer and distributor of tools, equipment, systems and consumable items to the
OEM industry). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1992
Wolfgang R. Schmitt, age 55, was appointed Vice Chairman of the Board on March 24, 1999
pursuant to the merger agreement between Rubbermaid and the Company. He was Chief
Executive Officer of Rubbermaid from November 1992 until March 23, 1999. From May
1991 through November 1992, Mr. Schmitt served as President and Chief Operating
Officer of Rubbermaid. Mr. Schmitt served as Executive Vice President of Rubbermaid
from 1987 through May 1991, and President of the Home Products Division of Rubbermaid
from 1984 through 1990. From 1966 to 1984, Mr. Schmitt was employed by Rubbermaid in
various marketing and research and development assignments. Mr. Schmitt is also a
director of Kimberly-Clark Corporation (a producer of consumer, paper and personal
care products) and Parker-Hannifin Corporation (a manufacturer of motion control
products and related components for industrial and aerospace uses) . . . . . . . . . 1999
William P. Sovey, age 65, has been Chairman of the Board of the Company since January 1, 1998.
He was Vice Chairman and Chief Executive Officer of the Company from May 1992 through
December 1997. Mr. Sovey was President and Chief Operating Officer of the Company
from January 1986 through May 1992. He was President and Chief Operating Officer of
AMF Inc. (an industrial and consumer leisure products company) from March 1982
through July 1985, and Executive Vice President from August 1979 through March 1982.
He is also a Director of Acme Metals Incorporated (a fully integrated producer of
steel and steel products) and TECO Energy Incorporated (an energy production and
distribution company) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1986
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held eight meetings during 1998.
The Board of Directors has an Audit Committee and an Executive
Compensation Committee. The Board as a whole operates as a committee
to nominate directors.
AUDIT COMMITTEE. The Audit Committee, whose chairman is Dr. Katz
and whose other current member is Mr. Newell, met two times in 1998.
The committee's duties are to:
- review with management and the independent accountants the
Company's accounting policies and practices and the adequacy
of internal controls
7
- review the scope and results of the annual examination
performed by the independent accountants
- make recommendations to the Board of Directors regarding the
appointment of the independent accountants and approval of
the services performed by the independent accountants and
the related fees
EXECUTIVE COMPENSATION COMMITTEE. The Executive Compensation
Committee (the "Compensation Committee"), whose chairman is Mr. D.
Ferguson and whose other current member is Dr. Katz, met four times in
1998. This committee is responsible for establishing the Company's
executive officer compensation policies and for administering these
policies. SEE "Executive Compensation-Executive Compensation
Committee Report on Executive Compensation."
NOMINATING COMMITTEE. The Board of Directors, acting as a
nominating committee, will consider candidates for director
recommended by stockholders. A stockholder who wishes to submit a
candidate for consideration at the annual meeting of stockholders to
be held in 2000 must notify the Secretary of the Company in writing no
later than February 26, 2000. The stockholder's written notice must
include appropriate biographical information about each proposed
nominee and other information required in proxy solicitations. A
candidate must be highly qualified, as well as willing and able to
serve as a director.
COMPENSATION OF DIRECTORS
During 1998, directors of the Company who are not also employees
were paid a retainer ($20,000 per annum) plus a $1,000 fee for each
Board meeting attended and a $1,000 fee for each committee meeting
attended, unless such meetings were conducted telephonically, in which
case the fee was $500 for each meeting. Non-employee directors of the
Company are eligible to receive options to purchase shares of common
stock under the Newell Co. 1993 Stock Option Plan (the "1993 Option
Plan"). Each non-employee director receives an automatic grant of an
option to purchase 5,000 shares of common stock at the time he or she
is first elected as director of the Company and again on the fifth
anniversary of the initial grant. All options are granted at the
market value of the common stock on the date of the grant and become
exercisable in annual cumulative installments of 20%, commencing one
year from the date of grant, with full vesting occurring on the fifth
anniversary of the date of grant. No options were granted to non-
employee directors in 1998.
The Company has a consulting agreement with Dr. Katz which
provides that the Company will pay Dr. Katz $5,000 per month for
corporate strategy consulting services plus travel expenses and other
reasonable out-of-pocket costs incurred on the Company's behalf.
Unless canceled prior to 90 days before its expiration, the consulting
8
agreement renews automatically each year. Dr. Katz received a
consulting fee of $60,000 in 1998.
EXECUTIVE COMPENSATION
SUMMARY
The following table shows the compensation of the Company's chief
executive officer and six other most highly compensated officers
during 1998 (the "Named Officers") for the fiscal years ended December
31, 1998, 1997 and 1996.
9
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
---------------------------------------- ------------
Awards
------
Name and Principal Other Annual All Other
Position Compensation Securities Underlying Compensation
in 1998 Year Salary ($) Bonus ($) ($) (1) Options (#) ($) (2)
------------------ ---- ---------- --------- ------------ --------------------- ------------
John J. McDonough, 1998 $800,000 $804,000 $14,884 68,365 $1,000
Vice Chairman and 1997 N/A N/A N/A N/A N/A
Chief Executive Officer(3) 1996 N/A N/A N/A N/A N/A
Thomas A. Ferguson, Jr., 1998 $600,000 $603,000 $9,620 13,775 $5,000
President and Chief 1997 565,000 462,735 12,355 25,300 7,210
Operating Officer 1996 525,000 429,975 10,552 3,000 4,750
Donald L. Krause, 1998 $367,000 $368,835 $9,895 8,425 $5,000
Senior Vice President - 1997 350,000 286,650 13,497 18,400 5,930
Corporate Controller 1996 324,000 265,356 12,139 5,500 4,750
William T. Alldredge, 1998 $357,000 $358,785 $7,879 18,095 $5,000
Vice President - Finance 1997 340,000 278,460 10,171 1,800 6,810
1996 315,000 257,985 8,117 1,000 4,750
William J. Denton, 1998 $357,000 $125,271 $8,897 8,195 $5,000
Group President 1997 340,000 321,300 11,263 10,700 6,890
1996 315,000 309,015 11,016 3,000 4,750
Richard C. Dell, 1998 $357,000 $321,157 $11,052 10,395 $5,000
Group President 1997 340,000 304,640 10,473 9,900 6,450
1996 315,000 199,805 9,931 2,000 4,750
Robert S. Parker, 1998 $312,625 $250,256 $8,987 8,300 $5,000
Group President(4) 1997 N/A N/A N/A N/A N/A
1996 N/A N/A N/A N/A N/A
---------------------------------------
(1) The amounts shown for 1998 consist of costs to the Company for
expenses associated with use of Company cars.
10
(2) The compensation reported represents Company matching
contributions made to the Newell Co. Long-Term Savings and
Investment Plan (the "Newell 401(k) Plan").
(3) Appointed Vice Chairman and Chief Executive Officer effective
January 1, 1998.
(4) Appointed Group President effective August 12, 1998.
OPTION GRANTS IN 1998
The following table sets forth certain information as to options
to purchase common stock granted to the Named Officers under the 1993
Option Plan during the fiscal year ended December 31, 1998, and the
potential realizable value of each grant of options, assuming that the
market price of the underlying common stock appreciates in value
during the ten-year option term at annualized rates of 5% and 10%.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
-----------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation for
Underlying Granted to Exercise or Option Term
Options Granted Employees in a Base Price Expiration ----------------------------
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ---------------- -------------- ----------- ---------- ------ -------
John J. McDonough 50,000 8.58% $ 42.63 01/02/08 $3,474,345 $5,520,585
18,365 3.15 43.56 02/09/08 1,274,031 2,024,381
Thomas A. Ferguson, Jr. 13,775 2.36 43.56 02/09/08 978,063 1,554,101
Donald L. Krause 8,425 1.44 43.56 02/09/08 598,198 950,512
William T. Alldredge 8,296 1.42 43.56 02/09/08 589,039 935,958
9,900 1.70 49.13 08/06/08 792,810 1,259,742
William J. Denton 8,195 1.41 43.56 02/09/08 581,867 924,563
Richard C. Dell 8,195 1.41 43.56 02/09/08 581,867 924,563
2,200 0.38 47.00 05/13/08 168,542 267,806
Robert S. Parker 7,000 1.20 43.56 02/09/08 497,020 789,742
1,300 0.22 49.13 08/06/08 104,106 165,420
------------------------------
(1) All options granted in 1998 become exercisable in annual
cumulative installments of 20%, commencing one year from date of
grant, with full vesting occurring on the fifth anniversary date
of the date of grant. Vesting may be accelerated as a result of
certain changes in control of the Company.
(2) All options were granted at market value on the date of grant,
based on the closing price of the common stock on the New York
Stock Exchange as reported in The Wall Street Journal.
11
(3) Potential realizable value is reported net of the option exercise
price but before taxes associated with exercise. These amounts
assume annual compounding results in total appreciation of
approximately 63% (5% per year) and approximately 159% (10% per
year). Actual gains, if any, on stock option exercises and
common stock are dependent on the future performance of the
common stock, overall market conditions and the continued
employment of the Named Officer. There can be no assurance that
the amounts reflected in this table will be achieved.
OPTION EXERCISES IN 1998
The table below sets forth certain information for fiscal year 1998
concerning the exercise of options to purchase shares of common stock
granted under the Newell 1984 Amended and Restated Stock Option Plan
(the "1984 Option Plan") and the 1993 Option Plan by each of the Named
Officers and the value of unexercised options granted under the 1984
Option Plan and 1993 Option Plan held by each of the Named Officers as
of December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Fiscal Year-End (#) Fiscal Year-End ($) (2)
---------------------------- ---------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
John J. McDonough 0 $ 0 10,000 86,965 $231,250.00 $ 0
Thomas A. Ferguson, Jr. 9,090 183,644.38 31,556 55,886 575,980.88 241,557.50
Donald L. Krause 7,000 150,412.50 29,880 33,684 562,023.00 148,516.25
William T. Alldredge 4,500 99,141.75 20,608 33,173 478,509.00 60,766.00
William J. Denton 4,300 146,510.45 22,940 30,809 417,101.25 153,592.50
Richard C. Dell 4,500 76,360.50 21,377 31,891 407,222.31 120,135.00
Robert S. Parker 27,900 1,002,896.19 19,860 44,231 404,979.60 87,761.40
---------------------------------
(1) Represents the difference between the average of the high and low
prices of the common stock on the New York Stock Exchange as
reported in THE WALL STREET JOURNAL on the date of exercise and
the option exercise price multiplied by the number of shares
acquired on exercise.
12
(2) Represents the difference between $41.3125 (the average of the
high and low prices of the common stock on the New York Stock
Exchange as reported in THE WALL STREET JOURNAL on December 31,
1998) and the option exercise price multiplied by the number of
shares of common stock covered by the options held.
PENSION AND RETIREMENT PLANS
The Pension Plan Table set forth below shows total estimated
annual benefits payable upon retirement (based on the benefit formulas
in effect and calculated on a straight life annuity basis, as
described below) to persons covered under the Non-Contributory Defined
Benefit Pension Plan for Salaried and Clerical Employees (the "Pension
Plan") and the Supplemental Retirement Plan established in 1982 (the
"Supplemental Retirement Plan"), including the Named Officers, in
specified compensation and years of credited service classifications,
assuming employment until age 65 and that Social Security benefits
remain at the current level.
PENSION PLAN TABLE
Years of service
-----------------------------------------------------
Remuneration 5 10 15 20 25 or more
------------ ------- ------- ------- ------- ----------
$ 200,000 . . . . $10,900 $37,700 $64,500 $91,300 $118,100
300,000 . . . . 24,300 64,500 104,700 144,900 185,100
400,000 . . . . 37,700 91,300 144,900 198,500 252,100
500,000 . . . . 51,100 118,100 185,100 252,100 319,100
600,000 . . . . 64,500 144,900 225,300 305,700 386,100
700,000 . . . . 77,900 171,700 265,500 359,300 453,100
800,000 . . . . 91,300 198,500 305,700 412,900 520,100
900,000 . . . . 104,700 225,300 345,900 466,500 587,100
1,000,000 . . . . 118,100 252,100 386,100 520,100 654,100
1,100,000 . . . . 131,500 278,900 426,300 573,700 721,100
1,200,000 . . . . 144,900 305,700 466,500 627,300 788,100
1,300,000 . . . . 158,300 332,500 506,700 680,900 855,100
1,400,000 . . . . 171,700 359,300 546,900 734,500 922,100
1,500,000 . . . . 185,100 386,100 587,100 788,100 989,100
1,600,000 . . . . 198,500 412,900 627,300 841,700 1,056,100
1,700,000 . . . . 211,900 439,700 667,500 895,300 1,123,100
The Pension Plan covers full-time salaried and clerical employees
of the Company and its subsidiaries who have completed one year of
service. A participant is eligible for normal retirement benefits
13
under the Pension Plan if his or her employment terminates at or after
age 65. For service years prior to 1982, benefits accrued on a
straight life annuity basis, using a formula that takes into account
the five highest consecutive years of compensation in the ten years
before 1982 and years of service, reduced by a portion of expected
primary Social Security payments. For service years from and after
1982 and before 1989, benefits accumulated at the rate of 1.1% of
compensation not in excess of $25,000 for each year plus 2.3% of
compensation in excess of $25,000. For service years from and after
1989, benefits accumulate at the rate of 1.37% of compensation not in
excess of $25,000 for each year plus 1.85% of compensation in excess
of $25,000. No more than 30 years of service is taken into account in
determining benefits. Under the Pension Plan, compensation includes
regular or straight-time salary or wages (unreduced for amounts
deferred pursuant to the Newell 401(k) Plan and the Flexible Benefits
Account Plan), the first $3,000 in bonuses and 100% of commissions.
If a participant has completed 15 years of service, upon attainment of
age 60, the Pension Plan also provides for an early retirement benefit
equal to the benefits described above, reduced by .5% for each month
the benefits commence before age 65.
In 1982, the Supplemental Retirement Plan was established, funded
by cost recovery life insurance, which covers 130 current officers and
key executives, including the Named Officers, and four former officers
and key executives. The Supplemental Retirement Plan adds to
retirement benefits under the Pension Plan so that at age 65, a
covered employee receives a maximum aggregate pension equal to 67% of
his or her average compensation for the five consecutive years in
which it was highest (multiplied by a fraction, the numerator of which
is the participant's credited service (not to exceed 25) and the
denominator of which is 25). The benefit is reduced by primary Social
Security. Compensation includes salary and bonus (unreduced for
amounts deferred pursuant to the Newell 401(k) Plan and the Flexible
Benefits Accounts Plan). Both the Pension Plan and the Supplemental
Retirement Plan provide a death benefit for surviving spouses and
dependent children. The Supplemental Retirement Plan also provides
for an early retirement benefit upon attainment of age 60 equal to the
benefits described above, reduced by .5% for each month the benefits
commence before age 65.
As of year end 1998, Mr. McDonough had one year of credited
service, Mr. T. Ferguson had 27 years, Mr. Krause had 26 years, Mr.
Alldredge had 16 years, Mr. Denton had 23 years, Mr. Dell had 25 years
and Mr. Parker had 15 years.
EMPLOYMENT SECURITY AGREEMENTS
The Company has entered into Employment Security Agreements with
the Named Officers which provide for the continuation of salary, bonus
and certain employee benefits for a severance period of 24 months (but
not beyond age 65) following the termination of employment of the
Named Officer within 12 months (but prior to age 65) after certain
14
changes in control of the Company. In the event of such termination
of employment, the Named Officer will continue to receive his base
salary and bonus (based upon his average bonus for the three full
fiscal years preceding the change in control) during the severance
period. The Named Officer also will receive all benefits accrued
under the incentive and retirement plans of the Company to the date of
termination of employment and will be given service credit for all
purposes of these plans during the severance period. All options held
by the Named Officer with respect to common stock will become
immediately exercisable upon the date of termination of employment and
remain exercisable for a period of 90 days thereafter.
During the severance period, the Named Officer and his spouse
will continue to be covered by all welfare plans of the Company, and
the Company will continue to reimburse the Named Officer for
automobile expenses. However, the amount of any benefits or
reimbursement the Named Officer or his spouse receives will be reduced
by the amounts received from another employer or from any other
source. If the Named Officer dies during the severance period, all
amounts payable during the remainder of the severance period shall be
paid to his surviving spouse, and his spouse will continue to be
covered under all applicable welfare plans. No amounts are payable if
the employment of the Named Officer is terminated by the Company for
good cause (as defined in the agreements) or if the Named Officer
voluntarily terminates his employment without good reason (as defined
in the agreements).
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on
executive compensation to the stockholders of the Company. This
report is not and will not be incorporated by reference into any
filing of the Company under the Securities Act of 1933 or the
Securities Exchange Act of 1934.
COMPENSATION PROCEDURES AND POLICIES. The Compensation Committee
determines the compensation of all of the executive officers of the
Company, including the Named Officers and the one other executive
officer of the Company. The full Board of Directors reviews and
approves all decisions of the Compensation Committee relating to
compensation of the Company's executive officers.
The Company's executive compensation philosophy and specific
compensation plans tie a significant portion of executive compensation
to the Company's success in meeting specified profit and growth and
performance goals and to appreciation in the Company's stock price.
The Company's compensation objectives include:
- attracting and retaining the best possible executive talent
- motivating executive officers to achieve the Company's
performance objectives
- rewarding individual performance and contributions
15
- linking executive and stockholder interests through equity
based plans
The Company's executive compensation consists of four key
components:
- base salary
- annual incentive compensation
- stock options
- supplemental retirement benefits
Each component is intended to complement the others and, taken
together, to achieve the Company's compensation objectives. The
Compensation Committee's policies with respect to these components,
including the bases for the compensation awarded to John J. McDonough,
as the Company's Chief Executive Officer, are discussed below.
Section 162(m) of the Internal Revenue Code limits the
deductibility of executive compensation paid to the chief executive
officer and the four other most highly compensated officers of a
public company to $1,000,000 per year, but contains an exception for
certain performance-based compensation. The Compensation Committee
considered the tax deductibility of executive compensation as one
factor to be considered in the context of its overall compensation
philosophy and objectives. The Company paid an immaterial amount of
non-deductible executive compensation in 1998. The Compensation
Committee currently does not expect to change the Company's
compensation policies and practices for 1999. Accordingly, the
Company may pay non-deductible compensation in 1999.
BASE SALARY. In the early part of each fiscal year, the
Compensation Committee reviews the base salary of the Company's Chief
Executive Officer and the recommendation of the Chief Executive
Officer with regard to the base salaries of the Chief Operating
Officer and all other executive officers of the Company and approves,
with any modifications it deems appropriate, annual base salaries for
each of the executive officers.
Base salaries of the executive officers (other than the Chief
Executive Officer) are set using ranges recommended annually by the
Chief Executive Officer of the Company. The Compensation Committee
reviews national survey data available regarding salaries of those
persons holding comparable positions at comparably sized consumer
goods companies to establish base salary ranges. A majority of these
consumer goods companies are not included in the Dow Jones Consumer,
Non-Cyclical Industry Group Index in the Common Stock Price
Performance Graph included in this Proxy Statement. The base salary
range is based upon the midpoint of the comparative compensation
group, plus or minus twenty-five percent. The Compensation Committee
establishes the base salary of each of the executive officers within
the applicable base salary range based upon an evaluation of the
individual performance of the executive officer, including
16
satisfaction of the officer's annual objectives. The Compensation
Committee establishes the base salary of the Chief Executive Officer
within the applicable salary range based on:
- achievement of the Company's annual goals relating to
earnings per share, sales growth and return on investment
- an evaluation of the individual performance of the Chief
Executive Officer
The base salaries paid in 1998 to each of the executive officers,
including the Chief Executive Officer, were within the prescribed base
salary ranges.
Mr. McDonough became Chief Executive Officer of the Company on
January 1, 1998. His base salary for 1998 was set at the February
1998 meeting of the Compensation Committee. In setting Mr.
McDonough's salary for 1998, the Compensation Committee set his base
salary based upon the midpoint of his salary range and his prior
experience and accomplishments. In consideration of these factors,
the Compensation Committee approved a base salary for Mr. McDonough of
$800,000, approximately 6.7% higher than the base salary of his
predecessor for 1997.
ANNUAL INCENTIVE COMPENSATION. The Company's executive officers
(other than the Group Presidents) are eligible to participate in an
incentive bonus plan which provides for the payment of cash bonuses
based on the Company's return on investment (the "ROI Plan"). The
Compensation Committee may select participants in the ROI Plan and
make awards if the Company's annual after-tax return on beginning of
the year stockholder's equity exceeds 11%. The Compensation Committee
determines the amount of awards for executive officer participants by
multiplying each executive officer's base salary by percentages
established in the ROI Plan reflecting the actual return achieved.
The annual after-tax return on beginning of the year
stockholder's equity for 1998 was approximately 23%. Based on these
results, the Compensation Committee awarded Mr. McDonough a bonus of
$804,000 for 1998.
The Group Presidents are eligible to participate in an incentive
bonus plan which provides for the payment of cash bonuses based on
return on assets used in, and sales and income growth by, the
divisions for which the Group President is responsible (the "ROA
Plan"). The Compensation Committee may select participants in the ROA
Plan and make awards if the return on assets used during the year in
the divisions for which the Group President is responsible exceeds 10%
on a pre-tax basis and sales growth exceeds the prior year sales
level. The Compensation Committee determines the amount of awards by
multiplying each Group President's base salary by percentages
established in the ROA Plan reflecting the actual results achieved.
Actual return on assets and sales growth in 1998 exceeded the goals
17
established for payment of a bonus in the divisions for which each of
the Group Presidents was responsible.
STOCK OPTIONS. The Company's executive officers are also
eligible to participate in the 1993 Option Plan. Under this Plan, the
Compensation Committee may grant incentive stock options and
nonqualified stock options to purchase common stock of the Company at
prices not less than fair market value of the common stock at the date
of grant. Options granted under the 1993 Option Plan become
exercisable in annual cumulative installments of 20% of the number of
options granted over a five-year period and have a maximum term of ten
years. The Compensation Committee has adopted guidelines that take
into account outstanding options for determining, on a quarterly
basis, whether an executive officer of the Company should be awarded
an option. If the total option exercise price of the options held by
an executive officer is less than a multiple of the executive
officer's base salary, the Compensation Committee will consider a
grant of options. The Compensation Committee also has the discretion,
in circumstances such as a promotion, to grant options otherwise than
in accordance with the guidelines. Based upon the guidelines, in 1998
the Compensation Committee granted Mr. McDonough options to purchase
68,365 shares of common stock at fair market value at the date of
grant.
This report is submitted on behalf of the Compensation Committee:
Daniel C. Ferguson, Chairman
Robert L. Katz
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Daniel C.
Ferguson and Robert L. Katz. Mr. D. Ferguson, Chairman of the
Compensation Committee, is a former employee of the Company.
18
CERTAIN BENEFICIAL OWNERS
The only person or group which is known to the Company to be the
beneficial owner of more than five percent of the outstanding Common
Stock is:
Amount and Nature of Percent of Class
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
------------------------------------ -------------------- ----------------
FMR Corp.
Edward C. Johnson 3d
Abigail P. Johnson
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109 . . . . . . . 10,014,487 6.16%(1)
________________
(1) As reported in a statement on Schedule 13-G filed with the
Securities and Exchange Commission on February 1, 1999 by FMR
Corp., Edward C. Johnson 3d, Abigail P. Johnson and Fidelity
Management & Research Company. According to the filing, FMR Corp.
has sole voting power with respect to 567,817 shares and
dispositive power with respect to 10,014,487 shares. Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR
Corp., serves as an investment advisor to various investment
companies and is the beneficial owner of 9,144,270 shares.
Through their ownership of voting common stock and the execution
of a shareholders' agreement with respect to FMR Corp., members
of the Johnson family may be deemed to form a controlling group
with respect to FMR Corp, and thus each is deemed to have
beneficial ownership of 10,014,487 shares.
The following table sets forth information as to the beneficial
ownership of shares of common stock of each director, each nominee for
director, and each Named Officer, individually, and all directors and
executive officers of the Company, as a group. Except as otherwise
indicated in the footnotes to the table, each individual has sole
investment and voting power with respect to the shares of common stock
set forth.
19
Common Stock Beneficially
Owned on March 24, 1999
-------------------------------
Percent of
Number of Class
Name of Beneficial Owner Shares Outstanding
------------------------ --------- -----------
Tom H. Barrett . . . . . . . . . . . 23,302(1)(2) 0.008 %
Scott S. Cowen . . . . . . . . . . . 2,376(1)(3) 0.001
Alton F. Doody . . . . . . . . . . . 64,500(4) 0.023
Thomas J. Falk . . . . . . . . . . . 2,118(1) 0.001
Daniel C. Ferguson . . . . . . . . . 3,153,532(4)(5) 1.119
Thomas A. Ferguson, Jr. . . . . . . . 200,478(4)(6) 0.071
Robert L. Katz . . . . . . . . . . . 124,544(4) 0.044
William D. Marohn . . . . . . . . . . 4,328(1)(7) 0.002
John J. McDonough . . . . . . . . . . 127,146(4)(6)(8) 0.045
Elizabeth Cuthbert Millett . . . . . 1,347,522(4)(9) 0.478
Cynthia A. Montgomery . . . . . . . . 4,100(4) 0.001
Allan P. Newell . . . . . . . . . . . 2,159,596(4)(10) 0.767
Wolfgang R. Schmitt . . . . . . . . . 928,087(1)(4)(11) 0.329
William P. Sovey . . . . . . . . . . 418,300(4)(6) 0.149
Gordon R. Sullivan . . . . . . . . . 2,647(1)(12) 0.001
William T. Alldredge . . . . . . . . 223,740(4)(6)(13) 0.079
William J. Denton . . . . . . . . . . 82,353(4)(6) 0.029
Richard C. Dell . . . . . . . . . . . 100,371(4)(6)(14) 0.036
Donald L. Krause . . . . . . . . . . 318,652(4)(15) 0.113
Robert S. Parker. . . . . . . . . . . 23,280(4)(6) 0.008
All directors and executive officers
as a group (21 persons) . . . . . 9,323,295 3.309%
------------------------------
(1) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company.
(2) Includes 5,804 shares acquired in exchange for shares of
Rubbermaid common stock that were previously acquired in exempt
transactions pursuant to Rubbermaid's 1993 Deferred Compensation
Plan and 63 shares owned of record by his wife.
20
(3) Includes 1,075 shares acquired in exchange for shares of
Rubbermaid common stock that were previously acquired in exempt
transactions pursuant to Rubbermaid's 1993 Deferred Compensation
Plan.
(4) Includes shares issuable pursuant to stock options exercisable
within 60 days of April 16, 1999 as follows: Dr. Doody, 14,000
shares; Mr. D. Ferguson, 12,400 shares; Mr. T. Ferguson, 36,311
shares; Dr. Katz, 4,000 shares; Mr. McDonough, 23,673 shares; Ms.
Millett, 4,000 shares; Ms. Montgomery, 4,000 shares; Mr. Newell,
4,000 shares; Mr. Schmitt, 700,898 shares; Mr. Sovey, 101,830
shares; Mr. Alldredge, 23,599 shares; Mr. Denton, 24,579 shares;
Mr. Dell, 23,716 shares; Mr. Krause, 31,565 shares; and Mr.
Parker, 21,260 shares.
(5) Includes 3,400 shares beneficially owned of record by his wife,
100,906 shares held in charitable trusts of which Mr. D. Ferguson
is trustee, 694,384 shares held in a trust of which Mr. D.
Ferguson is beneficiary and 1,280,240 shares held by a
partnership of which Mr. D. Ferguson is managing partner.
(6) Includes shares held by the Newell 401(k) Plan over which each of
the following persons has voting power: Mr. T. Ferguson, 7,163
shares; Mr. J. McDonough, 256 shares; Mr. Sovey, 7,103 shares;
Mr. Alldredge, 1,457 shares; Mr. Denton, 3,574 shares; Mr. Dell,
6,475 shares; and Mr. Parker, 2,020 shares.
(7) Consists of shares which were acquired in exchange for shares of
Rubbermaid common stock that were previously acquired in exempt
transactions pursuant to Rubbermaid's Retirement Plan.
(8) Includes 5,200 shares held in his wife's individual retirement
account, but excludes 5,500 shares owned of record by his
children with respect to which Mr. McDonough disclaims beneficial
ownership and 33,000 shares in trusts of which Mr. McDonough is
not trustee with respect to which Mr. McDonough disclaims
beneficial ownership.
(9) Includes 41,211 shares beneficially owned of record by her two
children of which Ms. Millett is custodian, 70,860 shares held in
a trust of which Ms. Millett is trustee and 1,101,460 shares held
in trusts over which Ms. Millet has voting power by proxy.
(10) Includes 24,000 shares held in trusts of which Mr. Newell is co-
trustee and beneficiary and over which he has shared investment
and voting power and 2,144 shares beneficially owned of record by
his wife.
(11) Includes 15,494 shares owned of record by his wife and 4,259
shares owned of record by his wife as custodian for his son.
21
(12) Includes 2,383 shares acquired in exchange for shares of
Rubbermaid common stock previously acquired in exempt
transactions pursuant to Rubbermaid's 1993 Deferred Compensation
Plan.
(13) Includes 50,764 shares owned of record by his wife.
(14) Includes 41,443 shares held in joint tenancy over which Mr. Dell
has shared investment and voting power.
(15) Includes 1,562 shares held in trusts of which Mr. Krause is
trustee and 12,000 shares held in joint tenancy over which Mr.
Krause has shared investment and voting power.
COMMON STOCK PRICE PERFORMANCE GRAPH
The following common stock price performance graph compares the
yearly change in the Company's cumulative total stockholder returns on
its common stock during the years 1994 through 1998, with the
cumulative total return of the Standard & Poor's 500 Index and the Dow
Jones Consumer, Non-Cyclical Industry Group Index, assuming the
investment of $100 on December 31, 1993 and the reinvestment of
dividends (rounded to the nearest dollar).
December 31,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Newell Rubbermaid $100.00 $105.94 $132.88 $164.62 $225.44 $222.63
DJ Consumer, Non Cyclical 100.00 111.37 162.32 202.61 277.80 355.11
S&P 500 Index 100.00 101.28 138.88 170.38 226.78 291.48
This performance graph is presented in accordance with
requirements of the Securities and Exchange Commission, but is not
incorporated by reference in any filing of the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934. We
caution you not to draw any conclusions from the data in the graph, as
past results do not necessarily indicate future performance.
PROPOSAL 2 - AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously approved, and recommends
that stockholders adopt, an amendment to Article FOURTH of the
Restated Certificate of Incorporation to increase the number of
22
authorized shares of common stock from 400,000,000 to 800,000,000. If
the Company's stockholders adopt the proposed amendment, the first
sentence of Article FOURTH would read as follows:
FOURTH: The total number of shares which the Corporation
shall have authority to issue is 810,000,000, consisting
of 800,000,000 shares of Common Stock of the par value of
$1.00 per share and 10,000,000 shares of Preferred Stock,
consisting of 10,000 shares without par value and
9,990,000 shares of the par value of $1.00 per share.
The Company currently is authorized to issue 400,000,000 shares
of common stock, of which 281,756,188 shares of common stock were
issued and outstanding as of April 16, 1999. In addition, as of April
16, 1999, there were 11,333,603 shares of common stock reserved for
issuance under the Company's stock option plans, 9,865,000 shares
reserved for issuance upon conversion of convertible quarterly income
preferred securities issued by a wholly owned subsidiary business
trust of the Company, and 19,212 shares of common stock held in the
Company's treasury, leaving 97,025,979 shares of authorized common
stock available for issuance. If adopted, the proposed amendment
would increase the number of authorized shares of common stock to
800,000,000, of which 497,025,997 would be available for issuance.
The additional shares of common stock for which authorization
is sought would be part of the existing class of common stock, if and
when issued. These shares would have also the same rights and
privileges as the shares of common stock presently outstanding.
Holders of the Company's common stock do not have preemptive rights to
subscribe for and purchase any new or additional issue of common stock
or securities convertible into common stock.
The Board of Directors believes that the increase in the number
of authorized shares of common stock is in the best interests of the
Company and its stockholders. The purpose of increasing the number of
authorized shares of common stock is to have shares available for
issuance for such corporate purposes as the Board of Directors may
determine in its discretion, including, without limitation:
- future acquisitions
- investment opportunities
- stock splits
- stock dividends or other distributions
- conversion of convertible securities
- future financings and other corporate purposes
Except for certain stock option plans and the share purchase rights
plan (the "Rights Plan") discussed below, the Company has no
agreements or understandings regarding the issuance of additional
shares of common stock.
23
Under the provisions of the Delaware General Corporation Law, a
board of directors generally may issue authorized but unissued shares
of common stock without stockholder approval. A substantial number of
authorized but unissued shares of common stock not reserved for
specific purposes will allow the Company to take prompt action with
respect to corporate opportunities that develop, without the delay and
expense of convening a special meeting of stockholders. The issuance
of additional shares of common stock may reduce stockholders' equity
per share and may reduce the percentage of ownership of common stock
of existing stockholders. It is not the present intention of the
Board of Directors to seek stockholder approval prior to any issuance
of additional shares of common stock unless required by law or the
rules of the New York Stock Exchange, the Chicago Stock Exchange or
any other stock exchanges on which the common stock may be listed.
The New York Stock Exchange currently requires stockholder approval as
a prerequisite to listing shares in several instances, including
acquisition transactions where the present or potential issuance of
shares could result in an increase in the number of shares of common
stock outstanding by 20% or more.
Although the Company currently has no reason to believe that a
takeover attempt is likely to occur, increasing the number of
authorized shares of common stock may provide the Company with the
means of discouraging a possible attempt. These additional shares of
common stock could be used in the future, through private sales to
purchasers allied with management or otherwise, to dilute the stock
ownership of persons seeking to obtain control of the Company, thus
making less likely a change in control of the Company, whether or not
favored by a majority of unaffiliated stockholders, with the possible
effect of deterring an offer for the Company at a substantial premium
over the current market price of the common stock. The Company has no
present intention to issue securities for this purpose. The Restated
Certificate of Incorporation also contains a provision authorizing the
issuance of up to 10 million shares of preferred stock with rights,
preferences and limitations as determined by the Board. These shares
of preferred stock could be issued by the Board in one or more
transactions with terms which might make the acquisition of a
controlling interest in the Company more difficult or costly.
However, the Board has a policy of seeking stockholder approval prior
to designating any future series of preferred stock with a vote or
convertible into stock having a vote in excess of 13% of the vote
represented by all voting stock immediately subsequent to such
issuance, except for the purpose of (i) raising capital in the
ordinary course of business or (ii) making acquisitions, the primary
purpose of which is not to effect a change in voting power.
The Company has adopted a Rights Plan which provides
stockholders with rights to purchase shares of common stock of the
Company (or of an acquiring company) at half of the market price under
certain circumstances involving a potential change in control of the
24
Company that has not been approved by the Board. The Rights Plan is
intended as a means to protect the value of the stockholders'
investment in the Company, while preserving the possibility of a fair
acquisition bid. In addition, the Delaware General Corporation Law
provides, among other things, that any beneficial owner of more than
15% of the Company's voting stock is prohibited, without the prior
approval of the Board, from entering into any business combination
with a company for three years from the date such 15% ownership
interest is acquired. Additionally, the "fair price provisions" of
the Restated Certificate of Incorporation require that certain
proposed business combinations between the Company and an "interested
party" (a beneficial owner of 5% or more of the voting shares of the
Company) must be approved by the holders of 75% of the voting shares,
unless certain fair price and procedural requirements are met or the
business combination is approved by the directors of the Company who
are not affiliated with the interested party. A vote of the holders
of 75% of the Company's outstanding voting stock is required to amend
the fair price provisions of the Restated Certificate of
Incorporation.
The Company's Restated Certificate of Incorporation and By-Laws
contain certain other provisions which may be viewed as having an
antitakeover effect. The Restated Certificate of Incorporation
classifies the Board into three classes and provides that vacancies on
the Board of Directors are to be filled by a majority vote of
directors and that directors so chosen shall hold office until the end
of the full term of the class in which the vacancy occurred. A vote
of the holders of 75% of the Company's outstanding voting stock is
required to amend these provisions. Under the Delaware General
Corporation Law, directors of the Company may only be removed for
cause. The Restated Certificate of Incorporation and the By-Laws also
contain provisions that may reduce surprise and disruptive tactics at
stockholders' meetings. The Restated Certificate of Incorporation
provides that no action may be taken by stockholders except at an
annual or special meeting, and does not permit stockholders to
directly call a special meeting of stockholders. A stockholder must
give written notice to the Company of an intention to nominate a
director for election at an annual meeting 90 days prior to the
anniversary date of the immediately preceding annual meeting. See
"Information Regarding Board of Directors and Committees." Each of
these provisions tends to make a change in control of the Board of
Directors more difficult or time consuming. The Board is not
recommending that stockholders vote for the proposed amendment to the
Restated Certificate of Incorporation for the purpose of deterring a
possible change in control of the Company or in response to any
specific effort of which the Company is aware to obtain control of the
Company. In addition, the Board of Directors currently does not
intend to propose to stockholders any amendments which may have the
effect of discouraging takeover attempts.
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The affirmative vote of the holders of a majority of the shares
of common stock entitled to vote at the annual meeting is required to
approve the amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of common stock of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ADOPTION
OF THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK FROM 400,000,000 TO
800,000,000.
PROPOSAL 3 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of
Directors has reappointed Arthur Andersen L.L.P. as independent
accountants to audit the consolidated financial statements of the
Company for the year 1999. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT. If the
stockholders should fail to ratify the appointment of the independent
accountants, the Board of Directors would reconsider the appointment.
It is expected that representatives of Arthur Andersen L.L.P.
will be present at the annual meeting, will have an opportunity to
make a statement if they desire to do so and will be available to
answer appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Based solely upon a review of Reports on Forms 3, 4 and 5 and any
amendments thereto furnished to the Company pursuant to Section 16 of
the Securities Exchange Act of 1934, as amended, and written
representations from the executive officers and directors that no
other Reports were required, the Company believes that all of such
Reports were filed on a timely basis by executive officers and
directors during 1998, except that Mr. Parker filed a single initial
ownership report on Form 3 late, and Mr. Sovey filed a single Form 4
late in connection with one open market purchase of common stock.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
To be considered for inclusion in next year's proxy materials,
stockholder proposals to be presented at the Company's 2000 annual
meeting must be in writing and be received by the Company no later
than December 21, 1999.
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Other proposals that are not included in the proxy materials will
be considered timely and may be eligible for presentation at the
Company's 2000 meeting if they are received by the Company in the form
of a written notice no later than March 2, 2000.
OTHER BUSINESS
The Board of Directors does not know of any business to be brought
before the annual meeting other than the matters described in the
notice of annual meeting. However, if a stockholder properly brings
any other matters for action, each person named in the accompanying
proxy intends to vote the proxy in accordance with his judgment on
such matters.
By Order of the Board of
Directors,
RICHARD H. WOLFF
Secretary
April 19, 1999
A COPY OF THE COMPANY'S 1998 ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K WILL BE FURNISHED TO STOCKHOLDERS
FREE OF CHARGE UPON WRITTEN REQUEST TO THE OFFICE OF THE CORPORATE
SECRETARY OF THE COMPANY.
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APPENDIX
[Form of proxy card for holders of common stock of the Company]
NEWELL RUBBERMAID INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 26, 1999
The undersigned hereby appoints William P. Sovey and William T.
Alldredge, and each of them individually, as proxies, with the powers
the undersigned would possess if personally present, and with full
power of substitution, to vote at the Annual Meeting of Stockholders
of NEWELL RUBBERMAID INC. to be held May 26, 1999, and at any
adjournment thereof, on the following proposals:
(1) Election of Directors.
Nominees: Alton F. Doody, Thomas J. Falk,
Daniel C. Ferguson, Thomas A. Ferguson, Jr.
and William D. Marohn.
(2) Adoption of an amendment to the Restated
Certificate of Incorporation, as amended,
of Newell Rubbermaid Inc. to increase the
number of authorized shares of common
stock from 400,000,000 to 800,000,000.
(3) Ratification of the appointment of Arthur
Andersen L.L.P. as independent accountants
for the year 1999.
With respect to other matters that properly come before the Annual
Meeting or any adjournment of the Annual Meeting, which, as of April
19, 1999, the proxies named above do not know are to be presented at
the Annual Meeting, those proxies are authorized to vote upon those
matters in their discretion.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish
to vote in accordance with the Board of Directors' recommendations.
Your shares cannot be voted unless you sign, date and return this
card, or vote your shares via the Internet as described on the reverse
side.
SEE REVERSE SIDE
----------------------------------------------------------------------
(FOLD AND DETACH HERE)
[Map setting forth location of Annual Meeting.]
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Please mark
_X_ your vote as in [CONTROL NO.]
this example.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES TO WHICH IT RELATES
WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE,
THE SHARES WILL BE VOTED FOR ELECTION OF DIRECTORS AND FOR PROPOSALS
(2) AND (3) BELOW.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL (1), FOR PROPOSAL (2) AND FOR PROPOSAL (3).
FOR WITHHOLD FOR, except withhold vote from the following
nominee(s):
1. Election of Directors ____ ____ ___________________________________________
(see reverse).
FOR AGAINST ABSTAIN
2. Adoption of amendment to Restated Certificate
of Incorporation relating to increase in number
of authorized shares of common stock (see reverse). ____ ____ ____
3. Ratification of independent accountants. ____ ____ ____
Signature(s) ________________________________________ Date __________________________
NOTE: Please sign exactly as name appears hereon. Joint The signer hereby revokes all proxies
owners should each sign. When signing as attorney, executor, heretofore given by the signer to vote
administrator, or guardian, please give full title as such. at said meeting or any adjournments
thereof.
-------------------------------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
NEWELL RUBBERMAID ENCOURAGES YOU TO TAKE ADVANTAGE OF A NEW AND
CONVENIENT WAY BY WHICH YOU CAN VOTE YOUR SHARES -- ELECTRONICALLY, BY
THE INTERNET. Access the world wide web site "http://www.
vote-by-net.com" and follow the instructions posted on the web site.
Your vote by use of the Internet authorizes the proxies named on the
front of this proxy card in the same manner as if you marked, signed,
dated and returned the proxy card. If you choose to vote your shares
this way there is no need for you to mail back your proxy card. By
signing this proxy card or voting over the Internet, you acknowledge
receipt of the Notice of Annual Meeting of Stockholders to be held May
26, 1999 and the Proxy Statement dated April 19, 1999.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
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