WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER
DECEMBER 31, 2000 1-9608
NEWELL RUBBERMAID INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3514169
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
Newell Center
29 East Stephenson Street
Freeport, Illinois 61032-0943
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:(815) 235-4171
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ----------------------
Common Stock, $1 par value New York Stock Exchange
per share, and associated Chicago Stock Exchange
Common Stock Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
There were 282.2 million shares of the Registrant's Common Stock
outstanding as of December 31, 2000. The aggregate market value of
the shares of Common Stock (based upon the closing price on the New
York Stock Exchange on that date) beneficially owned by non-affiliates
of the Registrant was approximately $6,420 million. For purposes of
the foregoing calculation only, which is required by Form 10-K, the
Registrant has included in the shares owned by affiliates those shares
owned by directors and officers of the Registrant, and such inclusion
shall not be construed as an admission that any such person is an
affiliate for any purpose.
DOCUMENTS INCORPORATED BY REFERENCE
PART III
Portions of the Registrant's Definitive Proxy Statement for its Annual
Meeting of Stockholders to be held May 9, 2001.
2
ITEM 1. BUSINESS
"Newell" or the "Company" refers to Newell Rubbermaid Inc. alone
or with its wholly-owned subsidiaries, as the context requires.
GENERAL
-------
The Company is a global manufacturer and full-service marketer of
name-brand consumer products serving the needs of volume purchasers,
including discount stores and warehouse clubs, home centers and
hardware stores, and office superstores and contract stationers. The
Company's basic business strategy is to merchandise a multi-product
offering of everyday consumer products, backed by an obsession with
customer service excellence and new product development, in order to
achieve maximum results for its stockholders. The Company's multi-
product offering consists of name-brand consumer products in six
business segments: Storage, Organization & Cleaning; Home Decor;
Office Products; Infant/Juvenile Care & Play; Food Preparation,
Cooking & Serving and Hardware & Tools. The Company's financial
objectives are to achieve above-average sales and earnings per share
growth, maintain a superior return on investment, increase its
dividend consistent with earnings growth and maintain a conservative
level of debt.
Forward-looking statements in this Report are made in reliance
upon the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements may relate to,
but are not limited to, information or assumptions about sales,
income, earnings per share, return on equity, return on invested
capital, capital expenditures, working capital, dividends, capital
structure, free cash flow, debt to capitalization ratios, interest
rates, internal growth rates, Euro conversion plans and related risks,
pending legal proceedings and claims (including environmental
matters), future economic performance, operating income improvements,
synergies, management's plans, goals and objectives for future
operations and growth or the assumptions relating to any of the
forward-looking statements. The Company cautions that forward-looking
statements are not guarantees since there are inherent difficulties in
predicting future results; and that actual results could differ
materially from those expressed or implied in the forward-looking
statements. Factors that could cause actual results to differ
include, but are not limited to, those matters set forth in this
Report, the documents incorporated by reference herein and Exhibit 99
to this Report.
3
BUSINESS SEGMENTS
-----------------
STORAGE, ORGANIZATION & CLEANING
--------------------------------
The Company's Storage, Organization & Cleaning business is
conducted by the Rubbermaid Home Products, Rubbermaid Commercial
Products, Curver (Europe) and Goody divisions. Rubbermaid Home
Products and Curver design, manufacture or source, package and
distribute indoor and outdoor organization, storage, and cleaning
products. Rubbermaid Commercial Products designs, manufactures or
sources, packages and distributes industrial and commercial waste and
recycling containers, cleaning equipment, food storage, serving and
transport containers, outdoor play systems and home health care
products. Goody designs, sources, manufactures, packages and
distributes hair care accessories.
Rubbermaid Home Products, Rubbermaid Commercial Products, Curver
and Goody primarily sell their products under the Rubbermaid{R},
Curver{R}, Carex{R}, Ace{R}, Wilhold{R} and Goody{R} trademarks.
Rubbermaid Home Products, Curver and Goody market their products
directly and through distributors to mass merchants, warehouse clubs,
grocery/drug stores and hardware distributors, using a network of
manufacturers' representatives, as well as regional direct sales
representatives and market-specific sales managers. Rubbermaid
Commercial Products markets its products directly and through
distributors to commercial channels and home centers using a direct
sales force.
HOME DECOR
----------
The Company's Home Decor business is conducted by the Levolor
Home Fashions, Newell Window Furnishings, Newell Window Fashions
Europe, Intercraft/Burnes and Newell Photo Fashion Europe divisions.
Levolor Home Fashions and Newell Window Furnishings primarily design,
manufacture or source, package and distribute drapery hardware,
made-to-order and stock horizontal and vertical blinds, as well as
pleated, cellular and roller shades for the retail marketplace.
Levolor Home Fashions also produces window treatment components for
custom window treatment fabricators. Newell Window Fashions Europe
primarily designs, manufactures, packages and distributes drapery
hardware and made-to-order window treatments for the European retail
marketplace. Intercraft/Burnes and Newell Photo Fashion Europe
primarily design, manufacture or source, package and distribute wood,
wood composite and metal ready-made picture frames and photo albums.
Levolor Home Fashions, Newell Window Furnishings and Newell
Window Fashions Europe primarily sell their products under the
trademarks Levolor{R}, Newell{R}, LouverDrape{R}, Del Mar{R},
Kirsch{R}, Acrimo{R}, Swish{R}, Gardinia{R}, Harrison Drape{R},
4
Spectrim{R}, MagicFit{R}, Riviera{R}, Levolor Cordless{TM} and
Connoisseur{R}. Intercraft/Burnes primarily sells its ready-made
picture frames under the trademarks Intercraft{R}, Decorel{R}, Burnes
of Boston{R}, Carr{R}, Rare Woods{R} and Terragrafics{R}, while photo
albums are sold primarily under the Holson{R} trademark. Newell Photo
Fashion Europe primarily sells its products under the trademarks
Albadecor{R} and Panodia{R}.
Levolor Home Fashions, Newell Window Furnishings and Intercraft/
Burnes market their products directly and through distributors to mass
merchants, home centers, department/specialty stores, hardware
distributors, custom shops and select contract customers, using a
network of manufacturers' representatives, as well as regional account
and market-specific sales managers. Newell Window Fashions Europe and
Newell Photo Fashion Europe market their products to mass merchants
and buying groups using a direct sales force.
Intercraft/Burnes markets its products directly to mass
merchants, warehouse clubs, grocery/drug stores and
department/specialty stores, using a network of manufacturers'
representatives, as well as regional zone and market-specific sales
managers. Intercraft{R}, Decorel{R} and Holson{R} products are sold
primarily to mass merchants, while the remaining U.S. brands are sold
primarily to department/specialty stores. Newell Photo Fashion Europe
markets its products to mass merchants, buying groups and the do-it-
yourself market using a direct sales force.
OFFICE PRODUCTS
---------------
The Company's Office Products business is conducted by the
Sanford North America, Sanford International, Newell Office Products
and Cosmolab divisions. Sanford North America primarily designs,
manufactures or sources, packages and distributes permanent/waterbase
markers, dry erase markers, overhead projector pens, highlighters,
wood-cased pencils, ballpoint pens and inks, and other art supplies.
It also distributes other writing instruments including roller ball
pens and mechanical pencils for the retail marketplace. Sanford
International primarily designs and manufactures, packages and
distributes ball point pens, wood-cased pencils, roller ball pens and
other art supplies for the retail and distributor markets. Newell
Office Products primarily designs, manufactures or sources, packages
and distributes desktop accessories, computer accessories, storage
products, card files and chair mats. Cosmolab primarily designs and
manufactures, packages and distributes private label cosmetic pencils
for commercial customers.
Sanford primarily sells its products under the trademarks
Sanford{R}, Sharpie{R}, Paper Mate{R}, Parker{R}, Waterman{R},
Eberhard Faber{R}, Berol{R}, Grumbacher{R}, Reynolds{R}, Rotring{R},
Uni-Ball{R} (used under exclusive license from Mitsubishi Pencil Co.
Ltd. and its subsidiaries in North America), Expo{R}, Accent{R},
5
Vis-a-Vis{R}, Expresso{R}, Liquid Paper{R}, and Mongol{R}. Newell
Office Products markets its products under the Rolodex{R}, Eldon{R},
Rogers{R} and Rubbermaid{R} trademarks.
Sanford North America markets its products directly and through
distributors to mass merchants, warehouse clubs, grocery/drug stores,
office superstores, office supply stores, contract stationers, and
hardware distributors, using a network of company sales
representatives, regional sales managers, key account managers and
selected manufacturers' representatives. Sanford International markets
its products directly to retailers and distributors using a direct
sales force. Newell Office Products markets its products directly and
through distributors to mass merchants, warehouse clubs, grocery/drug
stores, office superstores, office supply stores and contract
stationers, using a network of manufacturers' representatives, as well
as regional zone and market-specific key account representatives and
sales managers.
INFANT/JUVENILE CARE & PLAY
---------------------------
The Company's Infant/Juvenile Care & Play business is conducted
by the Little Tikes and Graco/Century divisions. These businesses
design, manufacture or source, package and distribute infant and
juvenile products such as toys, high chairs, infant seats, strollers,
play yards, ride-ons and outdoor activity play equipment.
Little Tikes and Graco/Century primarily sell their products
under the Little Tikes{R}, Graco{R} and Century{R} trademarks.
Little Tikes and Graco/Century market their products directly and
through distributors to mass merchants, warehouse clubs, grocery/drug
stores and hardware distributors, using a network of manufacturers'
representatives, as well as regional direct sales representatives and
market-specific sales managers.
FOOD PREPARATION, COOKING & SERVING
-------------------------------------
The Company's Food Preparation, Cooking & Serving business is
conducted by the Mirro, Panex and Calphalon cookware and bakeware
divisions and the Anchor Hocking and Newell Europe glassware
divisions. Mirro and Panex primarily design, manufacture, package and
distribute aluminum and steel cookware and bakeware for the U.S. and
Central and South America retail marketplace. In addition, Mirro
designs, manufactures, packages and distributes various specialized
aluminum cookware and bakeware items for the food service industry.
It also produces aluminum contract stampings and components for other
manufacturers and makes aluminum and plastic kitchen tools and
utensils. Mirro's manufacturing operations are highly integrated,
rolling sheet stock from aluminum ingot, and producing phenolic
handles and knobs at its own plastics molding facility. Calphalon
6
primarily designs, manufactures or sources, packages and distributes
hard anodized aluminum and stainless steel cookware and bakeware for
the department/specialty store marketplace. Anchor Hocking and Newell
Europe primarily design, manufacture, package and distribute glass
products. These products include glass ovenware, servingware,
cookware and dinnerware products. Anchor Hocking also produces
foodservice products, glass lamp parts, lighting components, meter
covers and appliance covers for the foodservice and specialty markets.
Newell Europe also produces glass components for appliance
manufacturers, and its products are marketed primarily in Europe, the
Middle East and Africa.
Mirro and Calphalon primarily sell their products under the
trademarks Mirro{R}, WearEver{R}, Calphalon{R}, Regal{R}, Panex{R},
Penedo{TM}, Rochedo{TM}, Clock{TM}, AirBake{R}, Cushionaire{R},
Concentric Air{R}, Channelon{R}, WearEver Air{R}, Club{R}, Royal
Diamond{R} and Kitchen Essentials{R}. Anchor Hocking primarily sells
its products under the trademarks Anchor{TM}, Anchor Hocking{R} and
Oven Basics{R}. Newell Europe primarily sells its products under the
trademarks of Pyrex{R}, Vision{TM} and Visions{R} (each used under
exclusive license from Corning Incorporated and its subsidiaries in
Europe, the Middle East and Africa only), Pyroflam{R} and Vitri{R}.
Mirro markets its products directly to mass merchants, warehouse
clubs, grocery/drug stores, department/specialty stores, hardware
distributors, cable TV networks and select contract customers, using a
network of manufacturers' representatives, as well as regional zone
and market-specific sales managers. Calphalon primarily markets its
products directly to department/specialty stores. Anchor Hocking
markets its products directly to mass merchants, warehouse clubs,
grocery/drug stores, department/specialty stores, hardware
distributors and select contract customers, using a network of
manufacturers' representatives, as well as regional zone and
market-specific sales managers. Anchor Hocking also markets its
products to manufacturers which supply the mass merchant and home
party channels of trade. Newell Europe markets its products to mass
merchants, industrial manufacturers and buying groups using a direct
sales force and manufacturers' representatives in some markets.
HARDWARE & TOOLS
----------------
The Company's Hardware & Tools business is conducted by the
Amerock Cabinet and Window Hardware Systems, EZ Paintr, Bernz O matic,
Lee Rowan and Newell Hardware Europe divisions. Amerock Cabinet and
Window Hardware Systems manufacture or source, package and distribute
cabinet hardware for the retail and O.E.M. marketplace and window
hardware for window manufacturers. EZ Paintr manufactures and
distributes manual paint applicator products. Bernz O matic
manufactures and distributes propane/oxygen hand torches. Lee Rowan
primarily designs, manufactures or sources, packages and distributes
wire storage and laminate products and ready-to-assemble closet
7
organization and work shop cabinets and distributes hardware, which
includes bolts, screws and mechanical fasteners. Newell Hardware
Europe is a manufacturer and marketer of shelving and storage
products, cabinet hardware and functional trims.
Amerock, EZ Paintr, Bernz O matic, Lee Rowan and Newell Hardware
Europe primarily sell their products under the trademarks Amerock{R},
Allison{R}, EZ Paintr{R}, Bernz O matic{R}, Dorfile{R}, Lee/Rowan{R},
System Works{R}, Douglas Kane{R}, Spur{R}, Nenplas{R}, Homelux{R}and
Ashland{R}.
Amerock, EZ Paintr, Bernz O matic and Lee Rowan market their
products directly and through distributors to mass merchants, home
centers, hardware distributors, cabinet shops and window
manufacturers, using a network of manufacturers' representatives, as
well as regional zone and market-specific sales managers.
NET SALES BY BUSINESS SEGMENT
-----------------------------
The following table sets forth the amounts and percentages of the
Company's net sales for the three years ended December 31 (including
sales of acquired businesses from the time of acquisition and sales of
divested businesses through date of sale), for the Company's six
business segments. Sales to Wal-Mart Stores, Inc. and subsidiaries
amounted to approximately 15% of consolidated net sales in 2000 and
1999, and 14% in 1998. Sales to no other customer exceeded 10% of
consolidated net sales.
[CAPTION]
% of % of % of
2000 total 1999 total 1998 total
---- ----- ---- ----- ---- -----
(In millions, except percentages)
Storage, Organization &
Cleaning $1,833.0 26% $1,899.5 28% $2,047.0 32%
Home Decor 1392.4 20 1370.4 21 1242.9 19
Office Products 1288.0 19 1218.0 18 1078.6 17
Infant/Juvenile Care &
Play 921.0 13 834.7 12 751.3 11
Food Prep., Cooking &
Serving 774.4 11 782.2 12 790.0 12
Hardware & Tools 725.9 11 607.0 9 583.4 9
-------- ----- ------- ----- ----- ---
Total Company $6,934.7 100% $6,711.8 100% $6,493.2 100%
======== ==== ======= ==== ======== ====
8
Certain 1999 and 1998 amounts have been reclassified to conform with
the 2000 presentation.
EXPORT SALES
------------
The Company's export sales business, defined as sales of products
made in the U.S. and sold abroad, is conducted primarily through its
Newell International division. For purposes of the table immediately
above, sales attributable to the Newell International division are
allocated to the business segment that manufactured the products.
GROWTH STRATEGY
---------------
The Company's growth strategy emphasizes internal growth and
acquisitions. The Company has grown internally principally by
introducing new products, entering new domestic and international
markets, adding new customers, cross-selling existing product lines to
current customers and supporting its U.S.-based customers'
international expansion. The Company has supplemented internal
growth, both domestically and internationally, by acquiring businesses
with brand name product lines and improving the profitability of such
businesses through an integration process referred to as
"Newellization." Since 1990, the Company has completed more than 20
major acquisitions (excluding Rubbermaid) representing more than $3
billion in additional sales.
Internal Growth
---------------
An important element of the Company's growth strategy is internal
growth. Internal growth is accomplished through introducing new
products, entering new domestic and international markets, adding new
customers, cross-selling existing product lines to current customers
and supporting its U.S.-based customers' international expansion.
Internal growth is defined by the Company as growth from its "core
businesses," which include continuing businesses owned more than two
years and minor acquisitions. The Company's goal is to achieve above-
average internal growth.
ACQUISITIONS AND INTEGRATION
----------------------------
ACQUISITION STRATEGY
--------------------
The Company supplements internal growth by acquiring businesses
and product lines with a strategic fit with the Company's existing
businesses. It also seeks to acquire product lines with a number one
or two position in the markets in which they compete, [USER BRANDS], a
low technology level, a long product life cycle and the potential to
9
reach the Company's standard of profitability. In addition to adding
entirely new product lines, the Company uses acquisitions to round out
existing businesses and fill gaps in its product offering, add new
customers and distribution channels, expand shelf space for the
Company's products with existing customers, and improve operational
efficiency through shared resources. The Company intends to continue
to pursue acquisition opportunities to complement internal growth.
NEWELLIZATION
-------------
"Newellization" is the Company's well-established profit
improvement and productivity enhancement process that is applied to
integrate newly acquired product lines. The Newellization process
includes establishing a more focused business strategy, improving
customer service, reducing corporate overhead through centralization
of administrative functions and tightening financial controls. In
integrating acquired businesses, the Company typically centralizes
accounting systems, capital expenditure approval, cash management,
order processing, billing, credit, accounts receivable and data
processing operations. To enhance efficiency, Newellization also
focuses on improving manufacturing processes, eliminating
non-productive lines, reducing inventories, increasing accounts
receivable turnover, extending accounts payable terms and trimming
excess costs. The Newellization process usually takes approximately
two to three years to complete.
Selective Globalization
-----------------------
The Company is pursuing selective international opportunities to
further its internal growth and acquisition objectives. The rapid
growth of consumer goods economies and retail structures in several
regions outside the U.S., particularly Europe, Mexico and South
America, makes them attractive to the Company by providing selective
opportunities to acquire businesses, develop partnerships with new
foreign customers and extend relationships with the Company's domestic
customers whose businesses are growing internationally. The Company's
recent acquisitions, combined with existing sales to foreign
customers, increased its sales outside the U.S. to approximately 25%
of total sales in 2000 from 23% in 1999 and 22% in 1998.
Additional information regarding acquisitions of businesses is
included in Item 6 and Note 2 to the consolidated financial
statements.
10
MARKETING AND DISTRIBUTION
--------------------------
CUSTOMER SERVICE
----------------
The Company believes that one of the primary ways it
distinguishes itself from its competitors is through customer service.
The Company's ability to provide superior customer service is a result
of its information technology, marketing and merchandising programs
designed to enhance the sales and profitability of its customers and
consistent on-time delivery of its products.
Information Technology
----------------------
The Company is an industry leader in the application of
Electronic Data Interchange ("EDI") technology, an electronic link
between the Company and many of its retail customers and invests in
advanced computer systems. The Company uses EDI to receive and
transmit purchase orders, invoices and payments. With the replacement
of paper-based processing with computer-to-computer business
transactions, EDI has cut days off the order/shipping cycle.
Building upon its EDI expertise, the Company has established
"Quick Response" programs with several major customers. These
programs allow the Company to implement customized features such as
vendor-managed inventories in which the Company manages certain or all
aspects of inventory of several product categories at customer
locations. The Company's experience is that its customers benefit
from such programs by increased inventory turnover and reduced
customer waiting periods for out-of-stock product.
On-Time Delivery
----------------
A critical element of the Company's customer service is
consistent on-time delivery of products to its customers. Retailers
are pursuing a number of strategies to deliver the highest-quality,
lowest-cost products to their customers. A growing trend among
retailers is to purchase on a "just-in-time" basis in order to reduce
inventory costs and increase returns on investment. As retailers
shorten their lead times for orders, manufacturers need to more
closely anticipate consumer buying patterns. The Company supports its
retail customers' "just-in-time" inventory strategies through
investments in improved forecasting systems, more responsive
manufacturing and distribution capabilities and electronic
communications. The Company manufactures the vast majority of its
products and has extensive experience in high-volume, cost-effective
manufacturing. The high-volume nature of its manufacturing processes
and the relatively consistent demand for its products enables the
Company to ship most products directly from its factories without the
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need for independent warehousing and distribution centers. For 2000,
approximately 98% of the items ordered by customers were shipped on
time, typically within two to three days of the customer's order.
Marketing
---------
The Company's objective is to develop long-term, mutually
beneficial partnerships with its customers and become their supplier
of choice. To achieve this goal, the Company has a value-added
marketing program that offers a family of leading brand name staple
products, tailored sales programs, innovative merchandising support,
in-store services and responsive top management.
The Company's marketing skills help customers stimulate store
traffic and sales through timely advertising and innovative
promotions. The Company also assists customers in differentiating
their offerings by customizing products and packaging. Through
self-selling packaging and displays that emphasize good-better-best
value relationships, retail customers are encouraged to trade up to
higher-value, best quality products.
Customer service also involves customer contact with top-level
decision makers at the Company's divisions. As part of its
decentralized structure, the Company's division presidents are the
chief marketing officers of their product lines and communicate
directly with customers. This structure permits early recognition of
market trends and timely response to customer problems.
Multi-Product Offering
----------------------
The Company's increasingly broad product coverage in multiple
product lines permits it to more effectively meet the needs of its
customers. With families of leading, brand name products and
profitable new products, the Company also can help volume purchasers
sell a more profitable product mix. As a potential single source for
an entire product line, the Company can use program merchandising to
improve product presentation, optimize display space for both sales
and income and encourage impulse buying by retail customers.
Corporate Structure
-------------------
By decentralizing its manufacturing and marketing efforts while
centralizing key administrative functions, the Company seeks to foster
a responsive entrepreneurial culture. The Company's divisions
concentrate on designing, manufacturing, marketing, selling their
products and servicing their customers, which facilitates product
development and responsiveness to customers. Administrative functions
that are centralized at the corporate level include cash management,
accounting systems, capital expenditure approvals, order processing,
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billing, credit, accounts receivable, data processing operations and
legal functions. Centralization concentrates technical expertise in
one location, making it easier to observe overall business trends and
manage the Company's businesses.
Backlog
-------
The dollar value of unshipped factory orders is not material.
Seasonal Variations
-------------------
The Company's product groups are only moderately affected by
seasonal trends. The Storage, Organization & Cleaning,
Infant/Juvenile Care & Play and Food Preparation, Cooking & Serving
business segments typically have higher sales in the second half of
the year due to retail stocking related to the holiday season; the
Home Decor and Hardware & Tools business segments have higher sales in
the second and third quarters due to an increased level of
do-it-yourself projects completed in the summer months; and the Office
Product business segment has higher sales in the second and third
quarters due to the back-to-school season. Because these seasonal
trends are moderate, the Company's consolidated quarterly sales do not
fluctuate significantly, unless a significant acquisition is made.
Foreign Operations
------------------
Information regarding the Company's 2000, 1999 and 1998 foreign
operations is included in Note 14 to the consolidated financial
statements and is incorporated by reference herein.
Raw Materials
-------------
The Company has multiple foreign and domestic sources of supply
for substantially all of its material requirements. The raw materials
and various purchased components required for its products have
generally been available in sufficient quantities.
Patents and Trademarks
----------------------
The Company has many patents, trademarks, brand names and trade
names, none of which is considered material to the consolidated
operations.
Competition
-----------
The Company competes with numerous other manufacturers and
distributors of consumer products, many of which are large and
13
well-established. The Company's principal customers are large mass
merchandisers, such as discount stores, home centers, warehouse clubs
and office superstores. The rapid growth of these large mass
merchandisers, together with changes in consumer shopping patterns,
have contributed to a significant consolidation of the consumer
products retail industry and the formation of dominant multi-category
retailers, many of which have strong bargaining power with suppliers.
This environment significantly limits the Company's ability to recover
cost increases through selling prices. Other trends among retailers
are to foster high levels of competition among suppliers, to demand
that manufacturers supply innovative new products and to require
suppliers to maintain or reduce product prices and deliver products
with shorter lead times. Another trend, in the absence of a strong
new product development effort or strong end-user brands, is for the
retailer to import generic products directly from foreign sources.
The combination of these market influences has created an intensely
competitive environment in which the Company's principal customers
continuously evaluate which product suppliers to use, resulting in
pricing pressures and the need for strong end-user brands, the ongoing
introduction of innovative new products and continuing improvements in
customer service.
For more than 30 years, the Company has positioned itself to
respond to the challenges of this retail environment by developing
strong relationships with large, high-volume purchasers. The Company
markets its strong multi-product offering through virtually every
category of high-volume retailer, including discount, drug, grocery
and variety chains, warehouse clubs, department, hardware and
specialty stores, home centers, office superstores, contract
stationers and military exchanges. The Company's largest customer,
Wal-Mart (including Sam's Club), accounted for approximately 15% of
net sales in 2000. Other top ten customers included Toys 'R Us, The
Home Depot, Kmart, Target, Lowe's, The Office Depot, JCPenney, United
Stationers, and Sears.
The Company's other principal methods of meeting its competitive
challenges are high brand name recognition, superior customer service
(including industry leading information technology, innovative
"good-better-best" marketing and merchandising programs), consistent
on-time delivery, decentralized manufacturing and marketing,
centralized administration, and experienced management.
ENVIRONMENT
-----------
Information regarding the Company's environmental matters is
included in the Management's Discussion and Analysis section of this
report and in Note 15 to the consolidated financial statements and is
incorporated by reference herein.
14
EMPLOYEES
---------
The Company has approximately 48,800 employees worldwide, of whom
5,884 are covered by collective bargaining agreements or, in certain
countries, other collective arrangements decreed by statute.
ITEM 2. PROPERTIES
------------------
The following table shows the location and general character of
the principal operating facilities owned or leased by the Company.
The properties are listed within their designated business segment:
Storage, Organization & Cleaning; Home Decor; Office Products;
Infant/Juvenile Care & Play; Food Preparation, Cooking & Serving; and
Hardware & Tools. These are the primary manufacturing locations and
in many instances also contain administrative offices and warehouses
used for distribution of our products. The Company also maintains
sales offices throughout the United States and the world. The
executive offices are located in Beloit, Wisconsin, which is an owned
facility occupying approximately 9,000 square feet. The corporate
offices are located in Illinois in owned facilities at Freeport
(approximately 91,000 square feet) and in owned and leased space in
Rockford (approximately 8,700 square feet). Most of the idle
facilities, which are excluded from the following list, are subleased
while being held pending sale or lease expiration. The Company's
properties are generally in good condition, well-maintained, and are
suitable and adequate to carry on the Company's business.
OWNED OR
BUSINESS LEASED
SEGMENT LOCATION CITY GENERAL CHARACTER
Storage, Organization & Cleaning
AZ Phoenix L Commercial Products
Mexico Cadereyta O Commercial Products
TN Cleveland O Commercial Products -- 2 facilities
Mexico Monterrey L Commercial Products
VA Winchester O/L Commercial Products -- 2 facilities
AZ Phoenix O Home Products
France Amiens O Home Products
France Grossiat O Home Products
France Lomme L Home Products
Germany Dreieich O Home Products
Hungary Debrecen L Home Products
IA Centerville O/L Home Products -- 2 facilities
Mexico Cartagena O Home Products
Mexico Tultitlan O Home Products
NC Greenville O Home Products
Netherlands Brunssum O Home Products
OH Mogadore O Home Products
15
OWNED OR
BUSINESS LEASED
SEGMENT LOCATION CITY GENERAL CHARACTER
OH Wooster O Home Products
Canada Mississauga O Home Products
Poland Seupsk O Home Products
Spain Zaragoza O Home Products
TX Cleburne O Home Products
TX Greenville O Home Products
TX Wills Point L Home Products
UK Corby O Home Products
Netherlands Goirle O Home Products
KS Winfield O Home Products -- 2 facilities
MO Farmington O Outdoor Play Systems
Canada Paris L Outdoor Play Systems
GA Manchester O Hair Accessories
GA Columbus O/L Hair Accessories -- 2 facilities
HOME DECOR
Canada Toronto O Picture Frames
France La Ferte Milon O Picture Frames
France Neunge Sur Beuvron O Picture Frames
France St. Laurent Sur Gorre O Picture Frames
Mexico Durango O Picture Frames
Mexico Tijuana L Picture Frames
NC Statesville O/L Picture Frames
TX Laredo L Picture Frames
TX Taylor O Picture Frames
NH Claremont O/L Picture Frames & Photo Albums
Mexico Ciudad Juarez L Window Treatments
AZ Bisbee L Window Treatments
Canada Calgary L Window Treatments
Canada Toronto L Window Treatments
Denmark Hornum O Window Treatments
France Feuquieres-en-Vimeu O Window Treatments
France Tremblay-les-Villages O Window Treatments
GA Athens O Window Treatments
Germany Borken L Window Treatments
Germany Isny O Window Treatments
IL Freeport O/L Window Treatments
IL South Holland L Window Treatments
Italy Como O Window Treatments
Italy Frosinone O Window Treatments
MI Sturgis O Window Treatments
NC High Point O Window Treatments
NJ Rockaway L Window Treatments
PA Shamokin O Window Treatments
Spain Vitoria O Window Treatments
Sweden Anderstorp O Window Treatments
Sweden Malmo O Window Treatments
TX Waco O Window Treatments
UK Ashbourne O Window Treatments
16
OWNED OR
BUSINESS LEASED
SEGMENT LOCATION CITY GENERAL CHARACTER
UK Birmingham O/L Window Treatments
UK Tamworth O Window Treatments
UK Watford Herts L Window Treatments
UT Ogden O Window Treatments
UT Salt Lake City L Window Treatments
CA Westminster L Window Treatments -- 3 facilities
OFFICE PRODUCTS
TN Lewisburg O Cosmetic Pencils
TN Maryville O Office & Storage Organizers
WI Madison O/L Office & Storage 4 facilities
Puerto Rico Moca O Office & Storage Organizers
CA Santa Monica L Writing Instruments
IL Bellwood O Writing Instruments 3 facilities
IL Bolingbrook L Writing Instruments
TN Lewisburg O Writing Instruments
TN Shelbyville O Writing Instruments -- 2 facilities
WI Janesville L Writing Instruments
Canada Oakville L Writing Instruments
Colombia Bogota O Writing Instruments
France St. Herblain O Writing Instruments
France Valence O Writing Instruments
Germany Hamburg O Writing Instruments
Germany Baden-Baden L Writing Instruments
Mexico Pasteje L Writing Instruments
Mexico Tijuana L Writing Instruments
Mexico Tlalnepantla O Writing Instruments
UK Newhaven O Writing Instruments
UK Kings Lynn O Writing Instruments
Venezuela Maracay O Writing Instruments
INFANT/JUVENILE CARE & PLAY
CA San Bernadino O Infant Products
OH Canton O Infant Products
OH Macedonia O Infant Products
PA Elverson O Infant Products
SC Greer L Infant Products
CA City of Industry L Juvenile Products
OH Hudson O Juvenile Products
OH Sebring O Juvenile Products
Luxembourg Niedercorn O Juvenile Products
FOOD PREPARATION, COOKING & SERVING
OH Perrysburg O Cookware
WI Manitowoc O Cookware & Bakeware -- 5 facilities
WI Chilton O Cookware Components
Brazil Sao Paulo L Cookware
Germany Muhltal O Plastic Storage Ware
UK Sunderland O Glassware & Bakeware
17
OWNED OR
BUSINESS LEASED
SEGMENT LOCATION CITY GENERAL CHARACTER
France Chateauroux O Glassware & Bakeware
OH Lancaster O Glassware & Bakeware
PA Monaca O Glassware & Food Service
HARDWARE & TOOLS
Canada Woodbridge L Cabinet & Window Hardware
IL Rockford O Cabinet & Window Hardware
SD Bismarck L Cabinet & Window Hardware
CA Vista O Home Storage Systems
MO Jackson O Home Storage Systems
Canada Watford O Home Storage Systems
NY Buffalo O Paint Applicators
TN Johnson City O Paint Applicators
WI Milwaukee O Paint Applicators
NY Medina O Propane/Oxygen Hand Torches
AZ Phoenix L Small Hardware
NY Ogdensburg O Small Hardware
IN Lowell O Window Hardware
ITEM 3. LEGAL PROCEEDINGS
-----------------
Information regarding legal proceedings is included in Note 15 to
the consolidated financial statements and is incorporated by reference
herein.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
There were no matters submitted to a vote of the Company's
shareholders during the fourth quarter of fiscal year 2000.
SUPPLEMENTARY ITEM - EXECUTIVE OFFICERS OF THE REGISTRANT.
NAME AGE PRESENT POSITION WITH THE COMPANY
---- --- ---------------------------------
Joseph Galli, Jr. 42 President and Chief Executive Officer
William T. Alldredge 61 President-Corporate Development and
Chief Financial Officer
Jeffery E. Cooley 48 Group President
Peter J. Martin 45 Group President
Robert S. Parker 55 Group President
18
Joseph M. Ramos 59 Group President
Brian T. Schnabel 48 Group President
Jeffrey J. Burbach 43 Vice President-Controller
Tim Jahnke 41 Vice President-Human Resources
Dale L. Matschullat 55 Vice President-General Counsel
Joseph Galli, Jr. has been Vice Chairman and Chief Executive Officer
of the Company since January 8, 2001. Prior thereto, he was President
and Chief Executive Officer of VerticalNet, Inc. from May 2000 until
January 2001. From June 1999 until May 2000, he was President and
Chief Operating Officer of Amazon.com. From 1980 until June 1999, he
held a variety of positions with The Black and Decker Corporation,
culminating as President of Black and Decker's Worldwide Power Tools
and Accessories.
William T. Alldredge has been President - Corporate Development and
Chief Financial Officer since January 2001. Prior thereto, he was
President - International Business Development from December 1999
until January 2001. From August 1983 until December 1999, he was Vice
President - Finance.
Jeffery E. Cooley has been Group President of the Company's Food
Preparation, Cooking & Serving business segment since November 2000.
Prior thereto, he was President of the Company's Calphalon division
from 1990 through October 2000.
Peter J. Martin has been Group President of the Company's Home Decor
business segment from November 2000. Prior thereto, he was President
of Newell Window Fashions Europe from December 1997 through October
2000. From May 1994 until December 1997 he was Vice President - Group
Controller of the Company.
Robert S. Parker has been Group President of the Company's Office
Products business segment since August 1998. Prior thereto, he was
President of Sanford Corporation, both before and after the Company
acquired it in 1992, from October 1990 to August 1998.
Joseph M. Ramos has been Group President of the Company's Storage,
Organization & Cleaning business segment since November 2000. Prior
thereto, he was President of Rubbermaid Commercial Products from 1992
through October 2000.
Brian T. Schnabel has been Group President of the Company's
Infant/Juvenile Care & Play business segment since March 5, 2001.
Prior thereto, he was Chief Operating Officer of TruServ Corporation
(a cooperative for True Value and other retailers) from March 2000
until March 2001. From October 1998 until becoming Chief Operating
19
Officer, he was Executive Vice President, Business Development of
TruServ. From 1995 until 1998, he was President and Chief Operating
Officer of Elmer's Products, Inc. From 1978 until 1995, he progressed
through a series of high-level positions at the Huffy Corporation.
Jeffrey J. Burbach has been Vice President-Controller since June 1999.
Prior thereto, he was President of the Company's EZ Paintr division
from December 1994 to June 1999. From September 1992 to December
1994, he was President of the Company's Bernz O matic division.
Tim Jahnke has been Vice President-Human Resources since February
2001. Prior thereto, he was President of the Anchor Hocking Specialty
Glass division from June 1999 until February 2001. From 1995 until
June 1999, he led the human resources department of the Company's
Sanford division's worldwide operations.
Dale L. Matschullat has been Vice President-General Counsel since
January 2001. Prior thereto, he was Vice President-Finance, Chief
Financial Officer and General Counsel from January 2000 until January
2001. From 1989 until January 2000, he was Vice President-General
Counsel.
20
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
-------------------------------------------------
The Company's Common Stock is listed on the New York and Chicago
Stock Exchanges (symbol: NWL). As of December 31, 2000, there were
26,704 stockholders of record. The following table sets forth the
high and low sales prices of the Common Stock on the New York Stock
Exchange Composite Tape (as published in the Wall Street Journal) for
the calendar periods indicated.
2000 1999 1998
---- ---- ----
High Low High Low High Low
---- --- ---- --- ---- ---
Quarters:
First $31.25 $21.50 $50.00 $36.38 $50.19 $40.88
Second 27.56 23.81 52.00 40.13 49.19 45.44
Third 28.50 21.94 47.69 27.19 54.44 43.19
Fourth 22.88 18.69 36.50 26.25 49.06 37.19
The Company has paid regular cash dividends on its Common Stock
since 1947. On February 1, 2000, the quarterly cash dividend was
increased to $0.21 per share from the $0.20 per share that had been
paid since February 8, 1999. Prior to this date, the quarterly cash
dividend paid was $0.18 per share since February 10, 1998.
Information about the 5.25% convertible quarterly income
preferred securities issued by a wholly owned subsidiary trust of the
Company, which are reflected as outstanding in the Company's
consolidated financial statements as Company-Obligated Mandatorily
Redeemable Convertible Preferred Securities of a Subsidiary Trust, is
included in Note 6 to the consolidated financial statements and is
incorporated by reference herein.
21
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The following is a summary of certain consolidated financial
information relating to the Company at December 31. The summary has
been derived in part from, and should be read in conjunction with, the
consolidated financial statements of the Company included elsewhere in
this report and the schedules thereto.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA
Net sales $6,934,747 $6,711,768 $6,493,172 $5,910,717 $5,480,951
Cost of products sold 5,103,152 4,970,569 4,670,358 4,275,234 3,916,580
---------- ---------- ---------- ---------- ----------
Gross Income 1,831,595 1,741,199 1,822,814 1,635,483 1,564,371
Selling, general
and administrative
expenses 899,424 1,104,491 967,916 838,877 798,877
Restructuring costs 48,561 246,381 115,154 37,200 -
Goodwill amortization
and other 51,930 46,722 59,405 119,743 30,487
---------- ---------- ---------- ---------- ----------
Operating Income 831,680 343,605 680,339 639,663 735,007
Nonoperating expenses (income):
Interest Expense 130,033 100,021 100,514 114,357 84,822
Other, net 16,160 12,645 (237,148) (19,284) (23,127)
---------- ---------- ---------- ---------- --------- -
Net 146,193 112,666 (136,634) 95,073 61,695
---------- ---------- ---------- ---------- ----------
Income Before Income Taxes 685,487 230,939 816,973 544,590 673,312
Income taxes 263,912 135,502 335,139 222,973 261,872
---------- ---------- ---------- ---------- ----------
Net Income $421,575 $95,437 $481,834 $321,617 $411,440
========== ========== ========== ========== ==========
Earnings per
share:
Basic $ 1.57 $ 0.34 $ 1.72 $ 1.15 $ 1.46
Diluted $ 1.57 $ 0.34 $ 1.70 $ 1.14 $ 1.46
Weighted average
shares outstanding:
Basic 268,437 281,806 280,731 280,300 280,894
Diluted 278,365 281,806 291,883 281,653 281,482
Dividends per share $ 0.84 $ 0.80 $ 0.76 $ 0.70 $ 0.63
22
BALANCE SHEET DATA
Inventories $1,262,551 $1,034,794 $1,033,488 $ 902,978 $ 801,255
Working capital 1,345,826 1,108,686 1,278,768 1,006,624 953,890
Total assets 7,261,825 6,724,088 6,289,155 5,775,248 5,112,410
Short-term debt 227,206 247,433 101,968 258,201 154,555
Long-term debt, net
of current maturities 2,314,774 1,455,779 1,393,865 989,694 1,197,486
Stockholders' equity 2,448,641 2,697,006 2,843,732 2,661,417 2,513,722
ACQUISITIONS OF BUSINESSES
2000, 1999 and 1998
-------------------
Information regarding businesses acquired in the last three years is
included in Note 2 to the consolidated financial statements.
1997
----
On March 5, 1997, the Company purchased the Rolodex business, a
marketer of office products such as card files, personal organizers
and paper punches, from Insilco Corporation. Rolodex was integrated
into Newell Office Products.
On May 30, 1997, the Company acquired the Kirsch business, a
manufacturer and distributor of drapery hardware and custom window
coverings, from Cooper Industries Incorporated. The Kirsch North
American operations were combined with Newell Window Furnishings and
Levolor Home Fashions; the Kirsch European portion operates as part of
Newell Window Fashions Europe.
1996
----
On January 19, 1996, the Company acquired the Holson Burnes Group,
Inc., a manufacturer and marketer of photo albums and picture frames.
Holson Burnes was combined with Intercraft, creating the Intercraft/
Burnes division.
23
QUARTERLY SUMMARIES
Summarized quarterly data for the last three years is as follows
(unaudited):
Calendar Year 1st 2nd 3rd 4th Year
------------- --- --- --- --- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
2000
----
Net sales $1,628,979 $1,787,025 $1,756,372 $1,762,371 $6,934,747
Gross income 408,484 487,476 468,753 466,882 1,831,595
Net income 76,220 128,015 122,999 94,341 421,575
Earnings per
share:
Basic 0.28 0.48 0.46 0.35 1.57
Diluted 0.28 0.48 0.46 0.35 1.57
1999
----
Net sales $1,589,776 $1,671,635 $1,683,344 $1,767,013 $6,711,768
Gross income 423,308 420,806 444,570 452,515 1,741,199
Net (loss) income (78,999) 30,054 72,737 71,645 95,437
(Loss) Earnings
per share:
Basic (0.28) 0.11 0.26 0.25 0.34
Diluted (0.28) 0.11 0.26 0.25 0.34
1998
----
Net sales $1,475,798 $1,636,258 $1,638,694 $1,742,422 $6,493,172
Gross income 396,223 487,028 477,849 461,714 1,822,814
Net income 158,493 141,915 117,502 63,924 481,834
Earnings per
share:
Basic 0.57 0.51 0.42 0.22 1.72
Diluted 0.56 0.50 0.42 0.22 1.70
24
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of
the Company's consolidated results of operations and financial
condition. The discussion should be read in conjunction with the
consolidated financial statements and notes thereto.
RESULTS OF OPERATIONS
The following table sets forth for the period indicated items
from the Consolidated Statements of Income as a percentage of net
sales:
Year Ended December 31, 2000 1999 1998
----------------------- ---- ---- ----
Net sales 100.0% 100.0% 100.0%
Cost of products sold 73.6 74.1 71.9
----- ----- -----
GROSS INCOME 26.4 25.9 28.1
Selling, general and
administrative expenses 13.0 16.4 14.9
Restructuring costs 0.7 3.7 1.8
Goodwill amortization
and other 0.7 0.7 0.9
----- ----- -----
OPERATING INCOME 12.0 5.1 10.5
Nonoperating
expenses (income):
Interest expense 1.9 1.5 1.5
Other, net 0.2 0.2 (3.6)
----- ----- -----
NET NONOPERATING
EXPENSES (INCOME) 2.1 1.7 (2.1)
----- ----- -----
INCOME BEFORE
INCOME TAXES 9.9 3.4 12.6
Income taxes 3.8 2.0 5.2
----- ----- -----
NET INCOME 6.1% 1.4% 7.4%
===== ===== =====
2000 vs. 1999
-------------
Net sales for 2000 were $6,934.7 million, representing an
increase of $222.9 million or 3.3% from $6,711.8 million in 1999. Net
sales for each of the Company's segments (and the primary reasons for
the year-to-year changes) were as follows, in millions:
25
YEAR ENDED DECEMBER 31, 2000 1999 % Change
----------------------- ---- ---- --------
Storage, Organization & Cleaning $1,833.0 $1,899.5 (3.5)%
Home Decor 1,392.4 1,370.4 1.6%
Office Products<1> 1,288.0 1,218.0 5.7%
Infant/Juvenile Care & Play<2> 921.0 834.7 10.3%
Food Preparation, Cooking & Serving 774.4 782.2 (0.1)%
Hardware & Tools<3> 725.9 607.0 19.6%
------- -------
$6,934.7 $6,711.8 3.3%
======= =======
PRIMARY REASONS FOR CHANGES:
<1> 4% internal growth* plus sales from the Reynolds acquisition+
(October 1999).
<2> Internal growth.
<3> 6% internal growth plus sales from the McKechnie acquisition
(October 1999).
* Internal growth is defined by the Company as growth from its core
businesses, which include continuing businesses owned more than
two years and minor acquisitions.
+ Acquisitions and divestitures are described in note 2 to the
consolidated financial statements.
Gross income as a percent of net sales in 2000 was 26.4% or
$1,831.6 million versus 25.9% or $1,741.2 million in 1999. Excluding
costs associated with the Rubbermaid merger and certain realignment
and other charges of $2.4 million and $106.2 million in 2000 and 1999,
respectively, gross income as a percent of net sales was 26.4% in 2000
versus 27.5% in 1999. This decrease in gross margins in 2000 was
primarily attributable to lower than anticipated sales volume and
higher than expected material costs.
Selling, general and administrative expenses ("SG&A") in 2000
were 13.0% of net sales or $899.4 million versus 16.4% or $1,104.5 in
1999. Excluding costs associated with the Rubbermaid merger and
certain realignment and other charges of $8.7 million and $178.8
million in 2000 and 1999, respectively, SG&A as a percent of net sales
was 12.8% or $890.7 million in 2000 versus 13.8% or $925.6 million in
1999. The decrease in SG&A expenses is primarily the result of
integration cost savings at Rubbermaid Home Products, Rubbermaid
Europe and Little Tikes and tight spending control throughout the rest
of the Company's core businesses.
26
The Company recorded restructuring charges of $48.6 million in
2000 and $246.4 million in 1999. See note 3 to the consolidated
financial statements for a review of the charges.
Goodwill amortization and other as a percentage of net sales was
0.7% in 2000 and 1999.
Operating income in 2000 was 12.0% of net sales or $831.7 million
versus 5.1% of net sales or $343.6 million in 1999. Excluding
restructuring and other charges of $59.7 million in 2000 and $531.4
million in 1999, operating income was $891.4 or 12.9% of net sales in
2000 versus $875.0 million or 13.0% of net sales in 1999.
Other nonoperating expenses in 2000 were 2.1% of net sales or
$146.2 million versus 1.7% or $112.7 million in 1999. The increased
expenses in 2000 are a result of the Company's increased level of debt
and higher interest rates.
For 2000 and 1999 the effective tax rates were 38.5% and 58.7%,
respectively. The higher rate in 1999 was primarily due to
nondeductible transaction costs associated with the Rubbermaid merger.
See note 12 to the consolidated financial statements for an
explanation of the effective tax rate.
Net income for 2000 was $421.6 million, representing an increase
of $326.2 million from 1999. Basic and diluted earnings per share in
2000 increased to $1.57 versus $0.34 in 1999. Excluding 2000 pre-tax
charges of $59.7 million ($36.7 million after taxes) as discussed
above, net income in 2000 was $458.3 million. Excluding 1999 pre-tax
charges of $531.4 million ($369.6 million after taxes), net income in
1999 was $465.0 million. Diluted earnings per share, calculated on the
same basis, increased 3.6% to $1.71 in 2000 versus $1.65 in 1999. The
decrease in net income for 2000 was primarily due to increased raw
material costs and softer than expected sales volume, offset partially
by Rubbermaid integration cost savings, tight spending control at
other core businesses and internal growth. Diluted earnings per share
increased in 2000 versus 1999 as a result of the lower share base due
to the stock repurchase program.
1999 vs. 1998
-------------
Net sales for 1999 were $6,711.8 million, representing an
increase of $218.6 million or 3.4% from $6,493.2 million in 1998. Net
sales for each of the Company's segments (and the primary reasons for
the year-to-year changes) were as follows, in millions:
27
YEAR ENDED DECEMBER 31, 1999 1998 % Change
----------------------- ---- ---- --------
Storage, Organization & Cleaning<1> $1,899.5 $2,047.0 (7.2)%
Home Decor<2> 1,370.4 1,242.9 10.3%
Office Products<3> 1,218.0 1,078.6 12.9%
Infant/Juvenile Care & Play<4> 834.7 751.3 11.1%
Food Preparation, Cooking & Serving 782.2 790.0 (1.0)%
Hardware & Tools 607.0 583.4 4.0%
-------- --------
$6,711.8 $6,493.2 3.4%
PRIMARY REASONS FOR CHANGES:
<1> 1998 Decora (April 1998) and Newell Plastics (September 1998)
divestitures and weak sales performance at Rubbermaid Home
Products, offset partially by strong sales at Rubbermaid
Commercial Products.
<2> Swish (March 1998), Gardinia (August 1998) and Ateliers (April
1999) acquisitions.
<3> 7% Internal growth and Rotring (September 1998) and Reynolds
(October 1999) acquisitions offset partially by Stuart Hall
(August 1998) divestiture.
<4> Century (May 1998) acquisition.
Gross income as a percent of net sales in 1999 was 25.9% or
$1,741.2 million versus 28.1% or $1,822.8 million in 1998. Excluding
costs associated with the Rubbermaid and Calphalon mergers and certain
realignment and other charges of $106.2 million and $27.9 million in
1999 and 1998, respectively, gross income as a percent of net sales
was 27.5% in 1999 versus 28.5% in 1998. This decrease in gross margins
in 1999 was primarily attributable to promotional commitments made
prior to the Rubbermaid merger, which affected first half 1999 results
at Rubbermaid Home Products, higher than expected resin and other
material costs, which affected second half 1999 results, and operating
inefficiencies at certain glassware and window treatments facilities.
Selling, general and administrative expenses ("SG&A") in 1999
were 16.4% of net sales or $1,104.5 million versus 14.9% or $967.9
million in 1998. Excluding costs associated with the Rubbermaid and
Calphalon mergers and certain realignment and other charges of $178.8
million and $23.6 million in 1999 and 1998, respectively, SG&A as a
percent of net sales was 13.8% or $925.7 million versus 14.5% or
$944.3 million in 1998. This decrease in SG&A expenses is primarily
due to SG&A savings as a result of integrating Rubbermaid into Newell.
The Company recorded restructuring charges of $246.4 million in
1999 and $115.2 million in 1998. See note 3 to the consolidated
financial statements for a review of the charges.
Goodwill amortization and other as a percentage of net sales was
0.7% in 1999 and 0.9% in 1998. Excluding charges of $15.0 million in
28
1998 (which included write-offs of intangible assets), goodwill
amortization and other was 0.7% of net sales.
Operating income in 1999 was 5.1% of net sales or $343.6 million
versus 10.5% or $680.3 million in 1998. Excluding charges as discussed
above of $531.4 million in 1999 and $181.7 million 1998, operating
income was $875.0 million or 13.0% in 1999 versus $862.0 million or
13.3% in 1998.
Other nonoperating expenses in 1999 were 1.7% of net sales or
$112.7 million versus other nonoperating income of 2.1% or $136.6
million in 1998. The $249.3 million difference was due primarily to a
1998 net pre-tax gain of $191.5 million on the sale of the Company's
stake in The Black & Decker Corporation and 1998 net pre-tax gains of
$59.8 million on the divestitures of Stuart Hall, Newell Plastics and
Decora. This was offset partially by $3.7 million of Rubbermaid merger
transaction costs in 1998.
For 1999 and 1998, the effective tax rates were 58.7% and 41.0%,
respectively. The increase in 1999 was primarily due to nondeductible
transaction costs related to the Rubbermaid merger. See note 12 to the
consolidated financial statements for an explanation of the effective
tax rate.
Net income for 1999 was $95.4 million, representing a decrease of
$386.4 million or 80.2% from 1998. Basic earnings per share in 1999
decreased 80.2% to $0.34 versus $1.72 in 1998; diluted earnings per
share in 1999 decreased 80.0% to $0.34 versus $1.70 in 1998. Excluding
1999 pre-tax charges of $531.4 million ($369.6 million after taxes) as
discussed above, net income in 1999 was $465.0 million. Excluding 1998
pre-tax charges of $185.4 million ($119.4 million after taxes), the
net pre-tax gain on the sale of Black & Decker Common Stock of $191.5
million ($116.8 million after taxes) and net pre-tax gains of $59.8
million ($15.1 million after taxes) on the sales of businesses as
discussed above, net income in 1998 was $469.3 million.
LIQUIDITY AND CAPITAL RESOURCES
Sources
-------
The Company's primary sources of liquidity and capital resources
include cash provided from operations and use of available borrowing
facilities.
Cash provided by operating activities in 2000 was $623.5 million,
representing an increase of $69.5 million from $554.0 million for
1999.
The Company has short-term foreign and domestic committed and
uncommitted lines of credit with various banks which are available for
29
short-term financing. Borrowings under the Company's uncommitted lines
of credit are subject to discretion of the lender. The Company's lines
of credit do not have a material impact on the Company's liquidity.
Borrowings under the Company's lines of credit at December 31, 2000
totaled $23.5 million.
The Company has a revolving credit agreement of $1,300.0 million
that will terminate in August 2002. During 2000, the Company entered
into a new 364-day revolving credit agreement in the amount of $700.0
million. This revolving credit agreement will terminate in October
2001. At December 31, 2000, there were no borrowings under these
revolving credit agreements.
In lieu of borrowings under the Company's revolving credit
agreements, the Company may issue up to $2,000.0 million of commercial
paper. The Company's revolving credit agreements provide the committed
backup liquidity required to issue commercial paper. Accordingly,
commercial paper may only be issued up to the amount available for
borrowing under the Company's revolving credit agreements. At December
31, 2000, $1,503.7 million (principal amount) of commercial paper was
outstanding. Of this amount, $1,300.0 million is classified as
long-term debt and the remaining $203.7 million is classified as
current portion of long-term debt.
The revolving credit agreements permit the Company to borrow
funds on a variety of interest rate terms. These agreements require,
among other things, that the Company maintain a certain Total
Indebtedness to Total Capital Ratio, as defined in the agreements. As
of December 31, 2000, the Company was in compliance with these
agreements.
The Company had outstanding at December 31, 2000 a total of
$1,012.5 million (principal amount) of medium-term notes. The
maturities on these notes range from 3 to 30 years at an average
interest rate of 6.34%.
A universal shelf registration statement became effective in July
1999. As of December 31, 2000, $449.5 million of Company debt and
equity securities may be issued under the shelf.
Uses
----
The Company's primary uses of liquidity and capital resources
include acquisitions, dividend payments and capital expenditures.
In 2000, the Company acquired Mersch, Brio and Paper Mate/Parker
and made other minor acquisitions for cash purchase prices totaling
$582.7 million. In 1999, the Company acquired Ateliers, Reynolds,
McKechnie, Ceanothe and made other minor acquisitions for cash
purchase prices totaling $400.1 million. In 1998, the Company acquired
30
Curver, Swish, Century, Panex, Gardinia and Rotring and made other
minor acquisitions for cash purchase prices totaling $615.7 million.
Capital expenditures were $316.6 million, $200.1 million and
$318.7 million in 2000, 1999 and 1998, respectively. Aggregate
dividends paid during 2000, 1999 and 1998 were $225.1 million, $225.8
million and $212.5 million, respectively.
On February 7, 2000, the Company announced a stock repurchase
program of up to $500.0 million of the Company's outstanding Common
Stock. During 2000, the Company repurchased 15.5 million shares of its
Common Stock at an average price of $26 per share, for a total cash
price of $403.0 million under the program. The repurchase program
remained in effect until December 31, 2000 and was financed through
the use of working capital and commercial paper.
Retained earnings increased in 2000 by $196.3 million and
decreased in 1999 by $130.5 million. The difference between 2000 and
1999 was primarily due to restructuring costs and other pre-tax
charges relating to recent acquisitions of $59.7 million ($36.7
million after tax) in 2000 versus $531.4 million ($369.6 million after
tax) in 1999. The dividend payout ratio to common stockholders in
2000, 1999 and 1998 was 54%, 235%, and 45%, respectively (represents
the percentage of diluted earnings per share paid in cash to
stockholders).
Working capital at December 31, 2000 was $1,345.8 million
compared to $1,108.7 million at December 31, 1999 and $1,278.8 million
at December 31, 1998. The current ratio at December 31, 2000 was
1.87:1 compared to 1.68:1 at December 31, 1999 and 2.09:1 at December
31, 1998.
Total debt to total capitalization (total debt is net of cash and
cash equivalents, and total capitalization includes total debt,
company-obligated mandatorily redeemable convertible preferred
securities of a subsidiary trust and stockholders' equity) was .46:1
at December 31, 2000, .33:1 at December 31, 1999 and .30:1 at December
31, 1998.
The Company believes that cash provided from operations and
available borrowing facilities will continue to provide adequate
support for the cash needs of existing businesses; however, certain
events, such as significant acquisitions, could require additional
external financing.
LEGAL AND ENVIRONMENTAL MATTERS
The Company is subject to certain legal proceedings and claims,
including various environmental matters, that have arisen in the
ordinary conduct of its business or have been assumed by the Company
when it purchased certain businesses. Such matters are more fully
described in note 15 to the Company's consolidated financial
31
statements. Although management of the Company cannot predict the
ultimate outcome of these matters with certainty, it believes that
their ultimate resolution, including any amounts it may have to pay in
excess of amounts reserved, will not have a material effect on the
Company's consolidated financial statements.
INTERNATIONAL OPERATIONS
The Company's non-U.S. business is growing at a faster pace than
its business in the United States. This growth outside the U.S. has
been fueled by recent international acquisitions, primarily in Europe.
For the year ended December 31, 2000, the Company's non-U. S. business
accounted for approximately 25% of net sales (see note 14 to the
consolidated financial statements). Growth of both U.S. and non-U.S.
businesses is shown below:
YEAR ENDED DECEMBER 31, 2000 1999 % Change
----------------------- ---- ---- --------
(In millions)
Net sales:
- U.S. $5,191.5 $5,135.4 1.1%
- Non-U.S. 1,743.2 1,576.4 10.6
------- -------
$6,934.7 $6,711.8 3.3%
======= =======
YEAR ENDED DECEMBER 31, 1999 1998 % Change
---------------------- ---- ---- --------
(In millions)
Net sales:
- U.S. $5,135.4 $5,081.5 1.1%
- Non-U.S. 1,576.4 1,411.7 11.7
------- -------
$6,711.8 $6,493.2 3.4%
======= =======
MARKET RISK
The Company's market risk is impacted by changes in interest
rates, foreign currency exchange rates and certain commodity prices.
Pursuant to the Company's policies, natural hedging techniques and
derivative financial instruments may be utilized to reduce the impact
of adverse changes in market prices. The Company does not hold or
issue derivative instruments for trading purposes.
The Company's primary market risk is interest rate exposure,
primarily in the United States. The Company manages interest rate
exposure through its conservative debt ratio target and its mix of
32
fixed and floating rate debt. Interest rate exposure was reduced
significantly in 1997 from the issuance of $500.0 million 5.25%
Company-Obligated Mandatorily Redeemable Convertible Preferred
Securities of a Subsidiary Trust, the proceeds of which reduced
commercial paper. Interest rate swaps may be used to adjust interest
rate exposures when appropriate based on market conditions, and, for
qualifying hedges, the interest differential of swaps is included in
interest expense.
The Company's foreign exchange risk management policy emphasizes
hedging anticipated intercompany and third-party commercial
transaction exposures of one year duration or less. The Company
focuses on natural hedging techniques of the following form:
* offsetting or netting of like foreign currency cash flows,
* structuring foreign subsidiary balance sheets with
appropriate levels of debt to reduce subsidiary net
investments and subsidiary cash flows subject to conversion
risk,
* converting excess foreign currency deposits into U.S.
dollars or the relevant functional currency and
* avoidance of risk by denominating contracts in the
appropriate functional currency.
In addition, the Company utilizes forward contracts and purchased
options to hedge commercial and intercompany transactions. Gains and
losses related to qualifying hedges of commercial and intercompany
transactions are deferred and included in the basis of the underlying
transactions. Derivatives used to hedge intercompany loans are marked
to market with the corresponding gains or losses included in the
consolidated statements of income.
Due to the diversity of its product lines, the Company does not
have material sensitivity to any one commodity. The Company manages
commodity price exposures primarily through the duration and terms of
its vendor contracts.
The amounts shown below represent the estimated potential
economic loss that the Company could incur from adverse changes in
either interest rates or foreign exchange rates using the
value-at-risk estimation model. The value-at-risk model uses
historical foreign exchange rates and interest rates to estimate the
volatility and correlation of these rates in future periods. It
estimates a loss in fair market value using statistical modeling
techniques and including substantially all market risk exposures
(specifically excluding equity-method investments). The fair value
losses shown in the table below have no impact on results of
operations or financial condition as they represent economic not
financial losses.
33
Time Confidence
Amount Period Level
------ ------ ----------
(In millions)
Interest rates $7.4 1 day 95%
Foreign exchange $1.9 1 day 95%
The 95% confidence interval signifies the Company's degree of
confidence that actual losses would not exceed the estimated losses
shown above. The amounts shown here disregard the possibility that
interest rates and foreign currency exchange rates could move in the
Company's favor. The value-at-risk model assumes that all movements in
these rates will be adverse. Actual experience has shown that gains
and losses tend to offset each other over time, and it is highly
unlikely that the Company could experience losses such as these over
an extended period of time. These amounts should not be considered
projections of future losses, since actual results may differ
significantly depending upon activity in the global financial markets.
EURO CURRENCY CONVERSION
On January 1, 1999, the "Euro" became the common legal currency
for 11 of the 15 member countries of the European Union. On that date,
the participating countries fixed conversion rates between their
existing sovereign currencies ("legacy currencies") and the Euro. On
January 4, 1999, the Euro began trading on currency exchanges and
became available for non-cash transactions, if the parties elected to
use it. The legacy currencies will remain legal tender through
December 31, 2001. Beginning January 1, 2002, participating countries
will introduce Euro-denominated bills and coins, and effective July 1,
2002, legacy currencies will no longer be legal tender.
After the dual currency phase, all businesses in participating
countries must conduct all transactions in the Euro and must convert
their financial records and reports to be Euro-based. The Company has
commenced an internal analysis of the Euro conversion process to
prepare its information technology systems for the conversion and
analyze related risks and issues, such as the benefit of the decreased
exchange rate risk in cross-border transactions involving
participating countries and the impact of increased price transparency
on cross-border competition in these countries.
The Company believes that the Euro conversion process will not
have a material impact on the Company's businesses or financial
condition on a consolidated basis.
34
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Report are made in reliance
upon the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements may relate to, but
are not limited to, such matters as sales, income, earnings per share,
return on equity, capital expenditures, dividends, capital structure,
free cash flow, debt to capitalization ratios, interest rates,
internal growth rates, the Euro conversion plan and related risks,
legal proceedings and claims (including environmental matters), future
economic performance, management's plans, goals and objectives for
future operations and growth or the assumptions relating to any of the
forward-looking information. The Company cautions that forward-looking
statements are not guarantees since there are inherent difficulties in
predicting future results. Actual results could differ materially from
those expressed or implied in the forward-looking statements. Factors
that could cause actual results to differ include, but are not limited
to, those matters set forth in this Report and Exhibit 99 to this
Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
The information required by this item is incorporated herein by
reference to the section entitled "Market Risk" in the Company's
Management's Discussion and Analysis of Results of Operations and
Financial Condition (Part II, Item 7).
ITEM 8. FINANCIAL AND SUPPLEMENTARY DATA
--------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Newell Rubbermaid Inc.:
We have audited the accompanying consolidated balance sheets of
Newell Rubbermaid Inc. (a Delaware corporation) and subsidiaries as of
December 31, 2000, 1999 and 1998 and the related consolidated
statements of income, stockholders' equity and comprehensive income
and cash flows for each of the three years in the period ended
December 31, 2000. We did not audit the financial statements of
Rubbermaid Incorporated for the year and period ended December 31,
1998. Rubbermaid was acquired on March 24, 1999 in a transaction
accounted for as a pooling of interests, as discussed in note 1 to the
consolidated financial statements. Such statements are included in the
consolidated financial statements of Newell Rubbermaid Inc. and
subsidiaries and reflect total assets and total revenues of 34 percent
and 40 percent, respectively, in 1998 of the related consolidated
totals. These statements were audited by other auditors whose report
35
has been furnished to us and our opinion, insofar as it relates to the
amounts included for Rubbermaid Incorporated, is based solely upon the
report of the other auditors. These consolidated financial statements
are the responsibility of Newell Rubbermaid Inc.'s management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the
report of the other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the report of other
auditors, the financial statements referred to above present fairly,
in all material respects, the financial position of Newell Rubbermaid
Inc. and subsidiaries as of December 31, 2000, 1999 and 1998 and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in
Part IV Item 14(a)(2) of this Form 10-K is presented for the purposes
of complying with the Securities and Exchange Commission's rules and
is not a required part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in our
audit of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
January 25, 2001
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Rubbermaid Incorporated:
We have audited the consolidated balance sheets of Rubbermaid
Incorporated and subsidiaries (the Company) as of January 1, 1999, and
the related consolidated statements of earnings, shareholders' equity
36
and comprehensive income, and cash flows for the year then ended (the
consolidated financial statements are not included herein). These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Rubbermaid Incorporated and subsidiaries as of January 1, 1999, and
the results of their operations and their cash flows for the year then
ended, in conformity with accounting principles generally accepted in
the United States of America.
KPMG LLP
Cleveland, Ohio
February 5, 1999, except as to note 15,
which is as of March 24, 1999
37
NEWELL RUBBERMAID INC.
CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2000 1999 1998
---------------------- ---- ---- ----
(In thousands, except per share data)
Net sales $6,934,747 $6,711,768 $6,493,172
Cost of products sold 5,103,152 4,970,569 4,670,358
--------- --------- ---------
Gross Income 1,831,595 1,741,199 1,822,814
Selling, general and administrative expenses 899,424 1,104,491 967,916
Restructuring costs 48,561 246,381 115,154
Goodwill amortization and other 51,930 46,722 59,405
--------- --------- ---------
Operating Income 831,680 343,605 680,339
Nonoperating expenses (income):
Interest expense 130,033 100,021 100,514
Other, net 16,160 12,645 (237,148)
--------- --------- ---------
Net Nonoperating Expenses (Income) 146,193 112,666 (136,634)
--------- --------- ---------
Income Before Income Taxes 685,487 230,939 816,973
Income taxes 263,912 135,502 335,139
--------- --------- ---------
Net Income $421,575 $95,437 $481,834
========= ========= =========
Earnings per share:
Basic $1.57 $0.34 $1.72
Diluted $1.57 $0.34 $1.70
Weighted average shares outstanding:
Basic 268,437 281,806 280,731
Diluted 278,365 281,806 291,883
See notes to consolidated financial statements.
38
NEWELL RUBBERMAID INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In thousands)
OPERATING ACTIVITIES
Net income $421,575 $95,437 $481,834
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 292,576 271,731 263,804
Deferred income taxes 59,800 (9,600) 81,734
Income tax savings from employee stock plans 997 2,269 1,377
Net (gains) losses on:
Marketable equity securities - 700 (116,800)
Sales of businesses - - (24,529)
Non-cash restructuring charges 18,452 100,924 45,800
Write-off of assets - - 4,288
Other 1,947 51,748 24,075
Changes in current accounts, excluding the effects of
acquisitions:
Accounts receivable 36,301 (16,137) 39,619
Inventories (100,495) 52,662 (37,142)
Other current assets 6,598 (41,793) (29,906)
Accounts payable (45,606) 14,617 (72,020)
Accrued liabilities and other (68,658) 31,393 (183,367)
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 623,487 553,951 478,767
INVESTING ACTIVITIES
Acquisitions, net (597,847) (345,934) (654,591)
Expenditures for property, plant and equipment (316,564) (200,066) (318,731)
Purchase of marketable equity securities - - (26,056)
Sales of businesses, net of taxes paid - - 224,487
Sales of marketable securities, net of taxes paid - 14,328 303,869
Disposals of non-current assets and other 5,119 720 9,773
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (909,292) (530,952) (461,249)
FINANCING ACTIVITIES
Proceeds from issuance of debt 1,265,051 803,298 676,759
Payments on notes payable and long-term debt (428,211) (608,573) (546,603)
Common stock repurchase (402,962) - -
Cash dividends (225,083) (225,774) (212,486)
Proceeds from exercised stock options and other 1,263 27,411 2,712
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 210,058 (3,638) (79,618)
Exchange rate effect on cash (3,892) (3,751) (1,477)
-------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (79,639) 15,610 (63,577)
Cash and cash equivalents at beginning of year 102,164 86,554 150,131
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $22,525 $102,164 $86,554
======== ======== ========
Supplemental cash flow disclosures -
Cash paid during the year for:
Income taxes $152,787 $194,351 $272,239
Interest 145,455 98,536 103,831
See notes to consolidated financial statements.
39
NEWELL RUBBERMAID INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In thousands)
ASSETS
Current Assets
Cash and cash equivalents $22,525 $102,164 $86,554
Accounts receivable, net 1,183,363 1,178,423 1,078,530
Inventories, net 1,262,551 1,034,794 1,033,488
Deferred income taxes 231,875 250,587 108,192
Prepaid expenses and other 196,338 172,601 143,885
--------- ---------- ----------
TOTAL CURRENT ASSETS 2,896,652 2,738,569 2,450,649
Marketable Equity Securities 9,215 10,799 19,317
Other Long-Term Investments 72,763 65,905 57,967
Other Assets 336,344 335,699 267,073
Property, Plant and Equipment, Net 1,756,903 1,548,191 1,627,090
Trade Names and Goodwill, Net 2,189,948 2,024,925 1,867,059
---------- ---------- ----------
TOTAL ASSETS $7,261,825 $6,724,088 $6,289,155
========== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $23,492 $97,291 $94,634
Accounts payable 342,406 376,596 322,080
Accrued compensation 126,970 113,373 110,471
Other accrued liabilities 781,122 892,481 610,618
Income taxes 73,122 - 26,744
Current portion of long-term debt 203,714 150,142 7,334
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 1,550,826 1,629,883 1,171,881
Long-Term Debt 2,314,774 1,455,779 1,393,865
Other Non-Current Liabilities 352,633 354,107 374,293
Deferred Income Taxes 93,165 85,655 4,527
Minority Interest 1,788 1,658 857
Company-Obligated Mandatorily Redeemable
Convertible Preferred Securities of a
Subsidiary Trust 499,998 500,000 500,000
Stockholders' Equity
Common Stock, $1 per share par value, with
authorized shares of 800.0 million in 2000
and 1999; 400.0 million in 1998 282,174 282,026 281,747
Outstanding shares:
2000 - 282.2 million
1999 - 282.0 million
1998 - 281.7 million
40
Treasury Stock, at cost (407,456) (2,760) (21,607)
Shares held:
2000 - 15.6 million
1999 - 0.1 million
1998 - 0.6 million
Additional paid-in capital 215,911 213,112 204,709
Retained earnings 2,530,864 2,334,609 2,465,064
Accumulated other comprehensive loss (172,852) (129,981) (86,181)
---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY 2,448,641 2,697,006 2,843,732
---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,261,825 $6,724,088 $6,289,155
========== ========= =========
See notes to consolidated financial statements.
41
NEWELL RUBBERMAID INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
ACCUMULATED CURRENT
OTHER YEAR
ADDITIONAL COMPRE- COMPRE-
COMMON TREASURY PAID-IN RETAINED HENSIVE HENSIVE
STOCK STOCK CAPITAL EARNINGS INCOME INCOME
------ -------- ---------- -------- ---------- -------
(In thousands, except per share data)
BALANCE AT DECEMBER 31, 1997 $281,338 $(34,667) $199,509 $2,195,716 $19,521
Net income 481,834 $481,834
Other comprehensive income:
Unrealized gain on securities available
for sale, net of $23.5 million tax 33,850 33,850
Reclassification adjustment for gains
realized in net income, net of $74.7
million tax (116,800) (116,800)
Foreign currency translation adjustments (22,752) (22,752)
--------
Total comprehensive income $376,132
========
Cash dividends:
Common Stock $0.76 per share (212,486)
Exercise of stock options 409 13,013 9,877
Other 47 (4,677)
------- ------- ------- --------- -------
BALANCE AT DECEMBER 31, 1998 281,747 (21,607) 204,709 2,465,064 (86,181)
Net income 95,437 $95,437
Other comprehensive income:
Unrealized gain on securities available
for sale, net of $2.3 million tax 3,545 3,545
Reclassification adjustment for losses
realized in net income, net of $0.4
million tax 700 700
Foreign currency translation adjustments (48,045) (48,045)
-------
Total comprehensive income $51,637
=======
Cash dividends:
Common Stock $0.80 per share (225,774)
Exercise of stock options 279 16,316 7,699
Other 2,531 704 (118)
------- ------- ------- --------- -------
BALANCE AT DECEMBER 31, 1999 282,026 (2,760) 213,112 2,334,609 (129,981)
Net income 421,575 $421,575
Other comprehensive income:
Unrealized loss on securities available
for sale, net of $(0.7) million tax (1,201) (1,201)
42
Foreign currency translation adjustments (41,670) (41,670)
-------
Total comprehensive income $378,704
=======
Cash dividends:
Common Stock $0.84 per share (225,083)
Exercise of stock options 148 (190) 1,495
Common Stock repurchase (402,962)
Other (1,544) 1,304 (237)
------- ------- ------- ------- -------
BALANCE AT DECEMBER 31, 2000 $282,174 $(407,456) $215,911 $2,530,864 $(172,852)
======== ======== ======== ========= =========
43
NEWELL RUBBERMAID INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999,
1998
1. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of Newell Rubbermaid Inc. and its
majority owned subsidiaries (the "Company") after elimination of
intercompany accounts and transactions.
On March 24, 1999, Newell Co. ("Newell") completed a merger with
Rubbermaid Incorporated ("Rubbermaid") in which Rubbermaid became a
wholly owned subsidiary of Newell. Simultaneously with the
consummation of the merger, Newell changed its name to Newell
Rubbermaid Inc. The merger was accounted for as a pooling of interests
and the financial statements have been restated to combine
retroactively Rubbermaid's financial statements with those of Newell
as if the merger had occurred at the beginning of the earliest period
presented.
USE OF ESTIMATES: The preparation of these financial statements
required the use of certain estimates by management in determining the
Company's assets, liabilities, revenue and expenses and related
disclosures. Actual results could differ from those estimates.
RECLASSIFICATIONS: Certain 1999 and 1998 amounts have been
reclassified to conform with the 2000 presentation.
REVENUE RECOGNITION: Sales of merchandise are recognized upon
shipment to customers and when all substantial risks of ownership
change.
In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin ("SAB") No. 101, which clarified the
existing accounting rules for revenue recognition. SAB No. 101 (as
modified by SAB No. 101 A and B) was adopted by the Company in the
first quarter of 2000. The Company's revenue recognition policy did
not change with the adoption of SAB No. 101.
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS: The
following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
LONG-TERM DEBT: The fair value of the Company's long-term debt
issued under the medium-term note program is estimated based on
quoted market prices which approximate cost. All other
significant long-term debt is pursuant to floating rate
instruments whose carrying amounts approximate fair value.
COMPANY-OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
SECURITIES OF A SUBSIDIARY TRUST: The fair value of the $500.0
million company-obligated mandatorily redeemable convertible
44
preferred securities of a subsidiary trust was $328.1 million at
December 31, 2000 based on quoted market prices.
CASH AND CASH EQUIVALENTS: Cash and highly liquid short-term
investments having a maturity of three months or less.
ALLOWANCES FOR DOUBTFUL ACCOUNTS: Allowances for doubtful
accounts at December 31 totaled $36.1 million in 2000, $41.9 million
in 1999 and $34.2 million in 1998.
INVENTORIES: Inventories are stated at the lower of cost or
market value. Cost of certain domestic inventories (approximately 64%,
72% and 72% of total inventories at December 31, 2000, 1999 and 1998,
respectively) was determined by the "last-in, first-out" ("LIFO")
method; for the balance, cost was determined using the "first-in,
first-out" ("FIFO") method. If the FIFO inventory valuation method had
been used exclusively, inventories would have increased by $15.9
million, $11.4 million and $14.2 million at December 31, 2000, 1999
and 1998, respectively. Inventory reserves (excluding LIFO reserves)
at December 31 totaled $114.6 million in 2000, $119.4 million in 1999
and $113.8 million in 1998. The components of inventories, net of the
LIFO reserve, were as follows:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Materials and supplies $244.8 $240.0 $223.8
Work in process 165.3 149.5 137.2
Finished products 852.5 645.3 672.5
-------- -------- --------
$1,262.6 $1,034.8 $1,033.5
======== ======== ========
OTHER LONG-TERM INVESTMENTS: The Company has a 49% ownership
interest in American Tool Companies, Inc., a manufacturer of hand
tools and power tool accessory products marketed primarily under the
Vise-Grip{R} and Irwin{R} trademarks. This investment is accounted for
on the equity method with a net investment of $72.8 million at
December 31, 2000.
LONG-TERM MARKETABLE EQUITY SECURITIES: Long-term marketable
equity securities classified as available for sale are carried at fair
value with adjustments to fair value reported separately, net of tax,
as a component of accumulated other comprehensive income (and excluded
from earnings). Gains and losses on the sales of long-term marketable
equity securities are based upon the average cost of securities sold.
On March 8, 1998, the Company sold 7,862,300 shares it held in The
Black & Decker Corporation. The Black & Decker transaction resulted in
net proceeds of approximately $378.3 million and a net pre-tax gain,
after fees and expenses, of approximately $191.5 million. Long-term
marketable equity securities are summarized as follows:
45
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Aggregate market value $9.2 $10.8 $19.3
Aggregate cost 11.0 10.6 26.0
----- ----- -----
Unrealized pre-tax (loss) gain $(1.8) $0.2 $(6.7)
===== ===== =====
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment
consisted of the following:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Land $ 60.7 $ 63.4 $ 62.1
Buildings and improvements 736.1 691.3 721.9
Machinery and equipment 2,421.6 2,200.7 2,166.9
------- ------- -------
3,218.4 2,955.4 2,950.9
Accumulated depreciation (1,461.5) (1,407.2) (1,323.8)
------- ------- -------
$1,756.9 $1,548.2 $1,627.1
======= ======= =======
Replacements and improvements are capitalized. Expenditures for
maintenance and repairs are charged to expense. The components of
depreciation are provided by annual charges to income calculated to
amortize, principally on the straight-line basis, the cost of the
depreciable assets over their depreciable lives. Estimated useful
lives determined by the Company are: buildings and improvements (5-40
years) and machinery and equipment (2-15 years).
TRADE NAMES AND GOODWILL: The cost of trade names and goodwill
represents the excess of cost over identifiable net assets of
businesses acquired. The Company does not allocate such excess cost to
trade names separate from goodwill. In addition, the Company may
allocate excess cost to other identifiable intangible assets and
record such intangible assets in Other Assets (long-term). Trade names
and goodwill are amortized over 40 years and other identifiable
intangible assets are amortized over 5 to 40 years. Trade names and
goodwill and other identifiable intangible assets, respectively,
consisted of the following:
46
NET TRADE NAMES AND GOODWILL
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Cost $2,485.8 $2,270.5 $2,068.7
Accumulated amortization (295.9) (245.6) (201.6)
------- ------- -------
$2,189.9 $2,024.9 $1,867.1
======= ======= =======
NET OTHER IDENTIFIABLE INTANGIBLE ASSETS<1>
December 31 2000 1999 1998
----------- ---- ---- ----
(In millions)
Cost $96.1 $93.0 $131.2
Accumulated amortization (34.7) (34.3) (37.6)
------ ------ ------
$61.4 $58.7 $93.6
====== ====== ======
<1> Recorded in Other Assets
LONG-LIVED ASSETS: Subsequent to an acquisition, the Company
periodically evaluates whether later events and circumstances have
occurred that indicate the remaining estimated useful life of long-
lived assets may warrant revision or that the remaining balance of
long-lived assets may not be recoverable. If factors indicate that
long-lived assets should be evaluated for possible impairment, the
Company would use an estimate of the relevant business' undiscounted
net cash flow over the remaining life of the long-lived assets in
measuring whether the carrying value is recoverable. An impairment
loss would be measured by reducing the carrying value to fair value,
based on a discounted cash flow analysis.
ACCRUED LIABILITIES: Accrued liabilities included the following:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Customer accruals $240.7 $296.6 $190.2
Accrued self-insurance liability 99.9 92.0 80.2
Customer accruals are promotional allowances and rebates given to
customers in exchange for their selling efforts. The self-insurance
accrual is primarily for workers' compensation and product liability
and is estimated based upon historical claim experience.
47
FOREIGN CURRENCY TRANSLATION: Foreign currency balance sheet
accounts are translated into U.S. dollars at the rates of exchange in
effect at fiscal year end. Income and expenses are translated at the
average rates of exchange in effect during the year. The related
translation adjustments are made directly to accumulated other
comprehensive income. International subsidiaries operating in highly
inflationary economies translate non-monetary assets at historical
rates, while net monetary assets are translated at current rates, with
the resulting translation adjustment included in net income as other
nonoperating (income) expenses. Foreign currency transaction gains and
losses were immaterial in 2000, 1999 and 1998.
ADVERTISING COSTS: The company expenses advertising costs as
incurred, including cooperative advertising programs with customers.
Total advertising expense was $289.2 million, $285.3 million and
$281.5 million for 2000, 1999 and 1998, respectively. Cooperative
advertising is recorded in the financial statements as a reduction of
sales because it is viewed as part of the negotiated price of
products. All other advertising costs are charged to selling, general
and administrative expenses.
RESEARCH AND DEVELOPMENT COSTS: Research and development costs
relating to both future and present products are charged to selling,
general and administrative expenses as incurred. These costs
aggregated $49.4 million, $49.9 million and $44.5 million in 2000,
1999 and 1998, respectively.
EARNINGS PER SHARE: The earnings per share amounts are computed
based on the weighted average monthly number of shares outstanding
during the year. "Basic" earnings per share is calculated by dividing
net income by weighted average shares outstanding. "Diluted" earnings
per share is calculated by dividing net income by weighted average
shares outstanding, including the assumption of the exercise and/or
conversion of all potentially dilutive securities ("in the money"
stock options and company-obligated mandatorily redeemable convertible
preferred securities of a subsidiary trust).
A reconciliation of the difference between basic and diluted
earnings per share for the years ended December 31, 2000, 1999 and
1998, respectively, is shown below (in millions, except per share
data):
"IN THE CONVERTIBLE
BASIC MONEY" PREFERRED DILUTED
2000 METHOD STOCK OPTIONS SECURITIES METHOD
---- ------ ------------- ----------- -------
Net income $421.6 - $16.4 $438.0
Weighted average shares outstanding 268.4 0.1 9.9 278.4
Earnings per share $1.57 $1.57
48
"IN THE CONVERTIBLE
BASIC MONEY" PREFERRED DILUTED
1999<1> METHOD STOCK OPTIONS SECURITIES METHOD
---- ------ ------------- ---------- -------
Net income $95.4 - - $95.4
Weighted average shares outstanding 281.8 - - 281.8
Earnings per share $0.34 $0.34
"IN THE CONVERTIBLE
BASIC MONEY" PREFERRED DILUTED
1998 METHOD STOCK OPTIONS SECURITIES METHOD
---- ------ ------------- ---------- -------
Net income $481.8 - $15.7 $497.5
Weighted average shares outstanding 280.7 1.3 9.9 291.9
Earnings per share $1.72 $1.70
<1> Diluted earnings per share for 1999 exclude the impact of "in the
money" stock options and convertible preferred securities because
they are antidilutive.
COMPREHENSIVE INCOME: Comprehensive income and accumulated other
comprehensive income encompass net income, net after-tax unrealized
gains on securities available for sale and foreign currency transla-
tion adjustments in the Consolidated Statements of Stockholders'
Equity and Comprehensive Income.
The following table displays the components of accumulated other
comprehensive income:
AFTER-TAX ACCUMULATED
UNREALIZED FOREIGN OTHER
GAINS/(LOSSES) CURRENCY COMPREHENSIVE
ON SECURITIES TRANSLATION INCOME/(LOSSES)
-------------- ----------- ---------------
(In millions)
Balance at Dec. 31, 1997 $78.8 $(59.3) $19.5
Current year change (82.9) (22.8) (105.7)
----- ----- -----
Balance at Dec. 31, 1998 (4.1) (82.1) (86.2)
Current year change 4.2 (48.0) (43.8)
----- ----- -----
49
Balance at Dec. 31, 1999 0.1 (130.1) (130.0)
Current year change (1.2) (41.7) (42.9)
----- ----- -----
Balance at Dec. 31, 2000 $(1.1) $(171.8) $(172.9)
===== ======= =======
ACCOUNTING PRONOUNCEMENTS: Since June 1998, the Financial
Accounting Standards Board ("FASB") has issued SFAS Nos. 133, 137 and
138 related to "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133, as amended" or "Statements"). These
Statements establish accounting and reporting standards requiring that
every derivative instrument be recorded on the balance sheet as either
an asset or liability measured at its fair value. The Statements
require that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are
met, in which case the gains or losses would offset the related
results of the hedged item. These Statements require that, as of the
date of initial adoption, the impact of adoption be recorded as a
cumulative effect of a change in accounting principle. To the extent
that these amounts are recorded in other comprehensive income, they
will be reversed into earnings in the period in which the hedged
transaction occurs. The impact of adopting these Statements on January
1, 2001 resulted in a cumulative after-tax gain of approximately $13.0
million recorded in accumulated other comprehensive income and had no
material impact on net income. The adoption resulted in an increase in
assets and liabilities of approximately $99.0 million and $86.0
million, respectively.
In May 2000, the Emerging Issues Task Force ("EITF"), a
subcommittee of the FASB, issued EITF No. 00-10 "Accounting for
Shipping and Handling Fees and Costs." EITF No. 00-10 requires that
amounts billed to customers related to shipping and handling costs be
classified as revenue and all expenses related to shipping and
handling be classified as a cost of products sold. Historically, these
revenues and costs have been netted together and deducted from gross
sales to arrive at net sales. The net sales and cost of products sold
have been restated for this change. The impact of this change
increased net sales and costs of products sold by $286.1 million,
$298.7 million and $309.5 million for the years ended December 2000,
1999 and 1998, respectively. There is no impact on gross income
resulting from this change.
Also in May 2000, the EITF issued EITF No. 00-14 "Accounting for
Certain Sales Incentives." The EITF subsequently amended the
transition provisions of this issue in November 2000. EITF No. 00-14
prescribes guidance regarding timing of recognition and income
statement classification of costs incurred for certain sales incentive
programs. This guidance requires certain coupons, rebate offers and
free products offered concurrently with a single exchange transaction
to be recognized when incurred, and reported as a reduction of
revenue.
50
In January 2001, the EITF issued EITF No. 00-22 "Accounting for
'Points' and Certain Other Time-Based or Volume-Based Sales Incentive
Offers, and Offers for Free Products or Services to Be Delivered in
the Future." EITF No. 00-22 prescribes guidance regarding timing of
recognition and income statement classification of costs incurred in
connection with offers of "free" products or services that are
exercisable by an end consumer as a result of a single exchange
transaction with the retailer which will not be delivered by the
vendor until a future date. This guidance requires certain rebate
offers and free products that are delivered subsequent to a single
exchange transaction to be recognized when incurred, and reported as a
reduction of revenue.
The effective dates of EITF No. 00-14 and EITF No. 00-22 are
March 31, 2001 and June 30, 2001, respectively. The Company's adoption
of both EITF No. 00-14 and EITF No. 00-22 on December 31, 2000 did not
impact the results of operations, because the Company's past and
current accounting policy is to report such costs as reductions in
revenue.
2. ACQUISITIONS OF BUSINESSES
2000
----
The Company acquired Mersch SA on January 24, 2000 and Brio on
May 24, 2000. Both are manufacturers and suppliers of picture frames
in Europe, and now operate as part of Newell Photo Fashion Europe.
The Company acquired the stationery products business of The
Gillette Company ("Paper Mate/Parker") on December 29, 2000. The U.S.
and Canadian operations were merged into Sanford North America, while
all other operations were consolidated into Sanford International.
For these and for other minor acquisitions, the Company paid
$582.7 million in cash and assumed $15.5 million of debt. The
transactions were accounted for as purchases; therefore, results of
operations are included in the accompanying consolidated financial
statements since their respective acquisition dates. The acquisition
costs were allocated on a preliminary basis to the fair market value
of the assets acquired and liabilities assumed and resulted in trade
names and goodwill of approximately $241.3 million.
The Company's finalized integration plans may include exit costs
for certain plants and product lines and employee terminations
associated with the integration of Mersch and Brio into Newell Photo
Fashion Europe and Paper Mate/Parker into Sanford North America and
Sanford International. The final adjustments to the purchase price
allocations are not expected to be material to the consolidated
financial statements.
51
The unaudited consolidated results of operations for the years
ended December 31, 2000 and 1999 on a pro forma basis, as though the
Mersch, Brio and Paper Mate/Parker businesses (as well as the 1999
acquisitions of Ateliers, Reynolds, McKechnie and Ceanothe) had been
acquired on January 1, 1999, are as follows (unaudited):
YEAR ENDED DECEMBER 31, 2000 1999
----------------------- ---- ----
(In millions, except per share amounts)
Net sales $7,489.7 $7,688.8
Net income 390.2 83.3
Earnings per share (basic) $1.45 $0.30
1999
----
On April 2, 1999, the Company purchased Ateliers 28, a
manufacturer and marketer of decorative and functional drapery
hardware in Europe. Ateliers operates as part of Newell Window
Fashions Europe.
On October 18, 1999, the Company purchased a controlling interest
in Reynolds S.A., a manufacturer and marketer of writing instruments
in Europe. Reynolds operates as part of Sanford International. By
December 31, 1999, the Company owned 100% of Reynolds.
On October 29, 1999, the Company acquired the consumer products
division of McKechnie plc, a manufacturer and marketer of drapery
hardware and window furnishings, shelving and storage products,
cabinet hardware and functional trims. The drapery hardware and window
furnishings portion of McKechnie operates as part of Newell Window
Fashions Europe; the remaining portion of McKechnie operates as Newell
Hardware Europe.
On December 29, 1999, the Company acquired Ceanothe Holding, a
manufacturer of picture frames and photo albums in Europe. Ceanothe
operates as part of Newell Photo Fashion Europe.
For these and for other minor acquisitions, the Company paid
$400.1 million in cash and assumed $45.1 million of debt. The
transactions were accounted for as purchases; therefore, results of
operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The
acquisition costs were allocated on a preliminary basis to the fair
market value of the assets acquired and liabilities assumed and
resulted in trade names and goodwill of approximately $296.7 million.
The Company began to formulate integration plans for these
acquisitions as of their respective acquisition dates. The integration
plans for these acquisitions were finalized during 2000 and resulted
52
in total integration liabilities of $37.6 million for exit costs and
employee terminations. As of December 31, 2000, $9.7 million of
reserves remain for the restructuring charges recorded in 1999.
1998
----
On January 21, 1998, the Company acquired Curver Consumer
Products. Curver is a manufacturer and marketer of plastic housewares
products in Europe and operates as part of Rubbermaid Europe.
On March 27, 1998, the Company acquired Swish Track and Pole from
Newmond plc. Swish is a manufacturer and marketer of decorative and
functional window furnishings in Europe and operates as part of Newell
Window Fashions Europe.
On May 19, 1998, the Company acquired certain assets of Century
Products. Century is a manufacturer and marketer of infant products
such as car seats, strollers and infant carriers and operates as part
of the Graco/Century division.
On June 30, 1998, the Company purchased Panex S.A. Industria e
Comercio, a manufacturer and marketer of aluminum cookware products
based in Brazil. Panex operates as part of the Mirro division.
On August 31, 1998, the Company purchased the Gardinia Group, a
manufacturer and supplier of window treatments based in Germany.
Gardinia operates as part of Newell Window Fashions Europe.
On September 30, 1998, the Company purchased the Rotring Group, a
manufacturer and supplier of writing instruments, drawing instruments,
art materials and color cosmetic products based in Germany. The
writing and drawing instruments portion of Rotring operates as part of
Sanford International. The art materials portion of Rotring operates
as part of Sanford North America. The color cosmetic products portion
of Rotring operates as a separate U.S. division, Cosmolab.
For these and for other minor acquisitions, the Company paid
$615.7 million in cash and assumed $99.5 million of debt. The
transactions were accounted for as purchases; therefore, results of
operations are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The
acquisition costs were allocated on a preliminary basis to the fair
market value of the assets acquired and liabilities assumed and
resulted in trade names and goodwill of approximately $387.1 million.
The Company began to formulate integration plans for these and
other minor acquisitions as of their respective acquisition dates. The
integration plans for these acquisitions were finalized during 1999
and resulted in total integration liabilities of $84.7 million for
exit costs and employee terminations. As of December 31, 2000, no
reserves remain for the restructuring charges recorded in 1998.
53
MERGERS
On May 7, 1998, a subsidiary of the Company merged with Calphalon
Corporation, a manufacturer and marketer of gourmet cookware. The
Company issued approximately 3.1 million shares of Common Stock for
all of the Common Stock of Calphalon. This transaction was accounted
for as a pooling of interests; therefore, prior financial statements
were restated to reflect this merger. Calphalon now operates as a
separate division of the Company.
On March 24, 1999, the Company completed the Rubbermaid merger.
The merger qualified as a tax-free exchange and was accounted for as a
pooling of interests. Newell issued .7883 Newell Rubbermaid shares for
each outstanding share of Rubbermaid Common Stock. A total of 119.0
million shares (adjusted for fractional and dissenting shares) of the
Company's Common Stock were issued as a result of the merger, and
Rubbermaid's outstanding stock options were converted into options to
purchase approximately 2.5 million Newell Rubbermaid common shares.
No adjustments were made to the net assets of the combining
companies to adopt conforming accounting practices or fiscal years
other than adjustments to eliminate the accounting effects related to
Newell's purchase of Rubbermaid's office products business ("Eldon")
in 1997. Because the Newell Rubbermaid merger was accounted for as a
pooling of interests, the accounting effects of Newell's purchase of
Eldon have been eliminated as if Newell had always owned it.
The following table presents a reconciliation of net sales and
net income (loss) for Newell, Rubbermaid and Calphalon individually to
those presented in the accompanying consolidated financial statements:
YEAR ENDED DECEMBER 31, 1999 1998
----------------------- ---- ----
(In millions)
Net sales:
Newell $4,022.2 $3,747.5
Rubbermaid 2,565.0 2,637.4
Calphalon 124.6 108.3
-------- --------
$6,711.8 $6,493.2
======== ========
Net income (loss):
Newell $273.1 $405.9
Rubbermaid (189.8) 82.9
Calphalon 12.1 (7.0)
-------- --------
$95.4 $481.8
======== ========
54
DIVESTITURES
On April 29, 1998, the Company sold its Decora decorative
coverings product line. On August 21, 1998, the Company sold its
Stuart Hall school supplies and stationery business. On September 9,
1998, the Company sold its Newell Plastics plastic storage and
serveware business. The pre-tax net gain on the sales of these
businesses was $59.8 million, which was primarily offset by
nondeductible goodwill, resulting in a net after-tax gain of $15.1
million. Sales for these businesses prior to their divestitures were
approximately $136 million in 1998.
3. RESTRUCTURING COSTS
2000
----
During 2000, the Company recorded pre-tax restructuring charges
of $48.6 million ($29.9 million after taxes) related primarily to the
continued Rubbermaid integration and plant closures in the Home Decor
segment. The Company incurred employee severance and termination
benefit costs of $26.8 million related to approximately 700 employees
terminated in 2000. Such costs included $10.2 million of severance and
government mandated settlements for facility closures at Rubbermaid
Europe, $6.7 million of change in control payments made to former
Rubbermaid executives, $6.3 million for employee terminations at the
domestic Rubbermaid divisions and $3.6 million in severance at the
Home Decor segment. The Company incurred merger transaction costs of
$11.2 million related primarily to legal settlements for Rubbermaid's
1998 sale of a former division and other merger related contingencies
resolved in 2000. Additionally, the Company incurred facility and
product line exit costs of $10.6 million related primarily to the
closure of five European Rubbermaid facilities, three window
furnishings facilities and the exit of various Rubbermaid product
lines.
As of December 31, 2000, $21.9 million of reserves remain for
restructuring charges recorded during 2000, 1999 and 1998. These
reserves consist of $11.4 million for facility and product line exit
costs, $4.6 million in contractual future maintenance costs on
abandoned Rubbermaid computer software, $3.3 million for employee
severance and termination benefits, and $2.6 million in other merger
transaction costs.
1999
----
During 1999, the Company recorded pre-tax restructuring charges
of $246.4 million ($195.7 million after tax) related primarily to the
integration of the Rubbermaid businesses into Newell. Merger
transaction costs of $39.9 million related primarily to investment
55
banking, legal and accounting costs for the Newell/Rubbermaid merger.
Employee severance and termination benefits of $101.9 million related
to approximately 750 employees terminated in 1999. Such costs include
$80.9 million of change in control payments made to former Rubbermaid
executives and $21.0 million in severance and termination costs at
Rubbermaid's former headquarters ($5.5 million), Rubbermaid Home
Products division ($6.9 million), Rubbermaid Europe division ($4.0
million), Little Tikes division ($2.7 million), Rubbermaid Commercial
Products division ($0.7 million) and Newell divisions ($1.2 million).
Facility and product line exit costs totaled $104.6 million,
representing $72.0 million of impaired Rubbermaid centralized computer
software (abandoned as a result of converting Rubbermaid onto existing
Newell centralized computer software) and $32.6 million in costs
related to discontinued product lines ($4.8 million), the closure of
seven Rubbermaid facilities ($10.2 million), write-off of assets
associated with abandoned projects ($10.3 million) and impaired assets
($5.7 million) and other exit costs ($1.6 million).
1998
----
During January 1998, Rubbermaid announced a series of
restructuring initiatives to establish a central global procurement
organization and to consolidate, automate and/or relocate its
worldwide manufacturing and distribution operations. During 1998,
Rubbermaid recorded pre-tax charges of $115.2 million ($74.9 million
after tax). The 1998 restructuring charge included $16.0 million
relating to employee severance and termination benefits for
approximately 600 sales and administrative employees, $53.4 million
for costs to exit business activities at five facilities and $45.8
million to write-down impaired long-lived assets to their fair value.
The $53.4 million charge for costs to exit business activities related
to exit plans for the closure of a plastics houseware molding and
warehouse operation in the State of New York, the closure of a
commercial play systems warehouse and manufacturing facility in
Australia, the closure of a cleaning products manufacturing operation
in North Carolina, the elimination of Rubbermaid's Asia Pacific
regional headquarters and the related joint venture in Japan and the
closure of a distribution facility in France. The exiting of the
operations described above necessitated a revaluation of cash flows
related to those operations, resulting in a $45.8 million charge to
write-down $26.0 million of fixed assets and $19.8 million of goodwill
to fair value. Rubbermaid determined that the future cash flows on an
undiscounted basis (before taxes and interest) were not sufficient to
cover the carrying value of the long-lived assets affected by those
decisions. Management determined the fair value of these assets using
discounted cash flows.
56
4. CREDIT ARRANGEMENTS
The Company has short-term foreign and domestic committed and
uncommitted lines of credit with various banks which are available for
short-term financing. Borrowings under the Company's uncommitted lines
of credit are subject to the discretion of the lender. The Company's
lines of credit do not have a material impact on the Company's
liquidity. Borrowings under these lines of credit at December 31, 2000
totaled $23.5 million. The following is a summary of borrowings under
foreign and domestic lines of credit:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ---
(In millions)
Notes payable to banks:
Outstanding at year-end
- borrowing $23.5 $97.3 $94.6
- weighted average interest rate 8.6% 6.8% 5.8%
Average for the year
- borrowing $61.1 $59.1 $144.7
- weighted average interest rate 7.7% 9.9% 6.1%
Maximum outstanding during the year $178.0 $97.3 $205.1
The Company can also issue commercial paper (as described in note
5 to the consolidated financial statements), as summarized below:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Commercial paper:
Outstanding at year-end
- borrowing $1,503.7 $718.5 $500.2
- average interest rate 6.6% 5.9% 5.5%
Average for the year
- borrowing $987.5 $534.9 $620.4
- average interest rate 6.3% 5.2% 5.5%
Maximum outstanding during the year $1,503.7 $807.0 $1,028.8
57
5. LONG-TERM DEBT
The following is a summary of long-term debt:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Medium-term notes $1,012.5 $859.5 $883.5
Commercial paper 1,503.7 718.5 500.2
Other long-term debt 2.3 27.9 17.5
-------- -------- --------
2,518.5 1,605.9 1,401.2
Current portion (203.7) (150.1) (7.3)
-------- -------- --------
$2,314.8 $1,455.8 $1,393.9
======== ======== ========
The Company has a revolving credit agreement of $1,300.0 million
that will terminate in August 2002. During 2000, the Company entered
into a new 364-day revolving credit agreement in the amount of $700.0
million. This revolving credit agreement will terminate in October
2001. At December 31, 2000, there were no borrowings under these
revolving credit agreements.
In lieu of borrowings under the Company's revolving credit
agreements, the Company may issue up to $2,000.0 million of commercial
paper. The Company's revolving credit agreements provide the committed
backup liquidity required to issue commercial paper. Accordingly,
commercial paper may only be issued up to the amount available for
borrowing under the Company's revolving credit agreements. At December
31, 2000, $1,503.7 million (principal amount) of commercial paper was
outstanding. Of this amount, $1,300.0 million is classified as long-
term debt and the remainder of $203.7 million is classified as current
portion of long-term debt.
The revolving credit agreements permit the Company to borrow
funds on a variety of interest rate terms. These agreements require,
among other things, that the Company maintain a certain Total
Indebtedness to Total Capital Ratio, as defined in the agreements. As
of December 31, 2000, the Company was in compliance with these
agreements.
The Company had outstanding at December 31, 2000 a total of
$1,012.5 million (principal amount) of medium-term notes. The
maturities on the Company's medium-term notes range from 3 to 30 years
at an average interest rate of 6.34%.
A universal shelf registration statement became effective in July
1999. As of December 31, 2000, $449.5 million of Company debt and
equity securities may be issued under the shelf.
58
The aggregate maturities of long-term debt outstanding are as
follows:
DECEMBER 31, Aggregate Maturities
------------ --------------------
(In millions)
2001 $203.7
2002 1,400.0
2003 415.5
2004 -
2005 22.0
Thereafter 477.3
--------
$2,518.5
========
6. COMPANY-OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
SECURITIES OF A SUBSIDIARY TRUST
In 1997, a wholly owned trust of the Company issued 10.0 million
of 5.25% convertible quarterly income preferred securities ("Preferred
Securities") to certain institutional buyers. Each of the Preferred
Securities represents an undivided beneficial interest in the assets
of the trust, is convertible at the option of the holder into shares
of the Company's Common Stock at the rate of 0.9865 shares of Common
Stock (equivalent to the approximate conversion price of $50.685 per
share of Common Stock), subject to adjustment in certain
circumstances, has a $50 liquidation preference and is entitled to a
quarterly cash distribution at the annual rate of $2.625 per share.
The Preferred Securities are guaranteed by the Company and are
callable initially at 103.15% of the liquidation preference beginning
in December 2001 and decreasing over time to 100% in December 2007.
The trust invested the proceeds of the Preferred Securities in
$500.0 million Company 5.25% Junior Convertible Subordinated
Debentures due 2027 ("Debentures"). The Debentures are the sole assets
of the trust, mature on December 1, 2027, bear interest at the annual
rate of 5.25%, payable quarterly, and are redeemable by the Company
beginning in December 2001. The Company may defer interest payments on
the Debentures, but has no current intention to, for a period of up to
20 consecutive quarters during which distribution payments on the
Preferred Securities are also deferred. Under this circumstance, the
Company may not declare or pay any cash distributions with respect to
its capital stock or debt securities that do not rank senior to the
Debentures.
59
7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative
financial instruments and does not use them for trading purposes. They
are used to manage certain interest rate and foreign currency risks.
The Company has entered into several interest rate swap
agreements as a means of converting certain floating rate debt
instruments into fixed rate debt. Cash flows related to these interest
rate swap agreements are included in interest expense over the terms
of the agreements, which range from three to seven years in maturity.
At December 31, 2000, the Company had an outstanding notional
principal amount of $912.6 million, with a net accrued interest
receivable of $3.4 million. The termination value of these contracts
is not included in the consolidated financial statements since these
contracts represent the hedging of long-term activities to be
amortized in future reporting periods.
The Company utilizes forward exchange contracts to manage foreign
exchange risk related to both known and anticipated intercompany and
third-party commercial transaction exposures of one year duration or
less.
The Company also utilizes cross-currency swaps to hedge long-term
intercompany transactions. The maturities on these cross-currency
swaps range from three to five years.
The following table summarizes the Company's forward exchange
contracts, foreign currency swaps and long-term cross-currency swaps
in U.S. dollars by major currency and contractual amount. The "buy"
amounts represent the U.S. equivalent of commitments to purchase
foreign currencies, and the "sell" amounts represent the U.S.
equivalent of commitments to sell foreign currencies according to
local needs in foreign subsidiaries. The contractual amounts of
significant forward exchange contracts, foreign currency swaps and
long-term cross-currency swaps and their fair value were as follows:
60
DECEMBER 31, 2000 1999
------------ ---------- ----------
(In millions)
BUY SELL BUY SELL
--- ---- --- ----
Australian dollars $ - $ 8.6 $ - $ -
British pounds 1.6 165.2 1.1 172.8
Canadian dollars 149.4 24.0 71.1 -
Euro 0.2 350.2 4.9 490.8
Japanese yen - - - 4.1
Swedish krona - - - 12.5
Swiss francs - - 8.0 -
------ ------ ------ ------
$151.2 $548.0 $ 85.1 $680.2
====== ====== ====== ======
Fair Value $146.9 $508.4 $ 84.5 $665.7
====== ====== ====== ======
The Company's forward exchange contracts, foreign currency swaps
and long-term cross-currency swaps do not subject the Company to risk
due to foreign exchange rate movement, since gains and losses on these
contracts generally offset losses and gains on the assets, liabilities
and other transactions being hedged. The Company does not obtain
collateral or other security to support derivative financial
instruments subject to credit risk but monitors the credit standing of
the counterparties.
Gains and losses related to qualifying hedges of commercial and
intercompany transactions are deferred and included in the basis of
the underlying transactions. Derivatives used to hedge intercompany
loans are marked to market with the corresponding gains or losses
included in the consolidated statements of income.
8. LEASES
The Company leases manufacturing and warehouse facilities, real
estate, transportation, data processing and other equipment under
leases which expire at various dates through the year 2018. Rent
expense was $102.9 million, $91.9 million and $79.7 million in 2000,
1999 and 1998, respectively. Future minimum rental payments for
operating leases with initial or remaining terms in excess of one year
are as follows:
61
YEAR ENDING DECEMBER 31, Minimum Payments
------------------------ ----------------
(In millions)
2001 $51.9
2002 35.6
2003 25.0
2004 14.4
2005 10.0
Thereafter 12.0
-----
$148.9
======
9. EMPLOYEE BENEFIT RETIREMENT PLANS
The Company and its subsidiaries have noncontributory pension and
profit sharing plans covering substantially all of their foreign and
domestic employees. Pension plan benefits are generally based on years
of service and/or compensation. The Company's funding policy is to
contribute not less than the minimum amounts required by the Employee
Retirement Income Security Act of 1974 or local statutes to assure
that plan assets will be adequate to provide retirement benefits. The
Company's Common Stock comprised $46.7 million, $48.7 million and
$69.3 million of pension plan assets at December 31, 2000, 1999 and
1998, respectively.
Total expense under all profit sharing plans was $14.5 million,
$12.3 million and $25.0 million for the years ended December 31, 2000,
1999 and 1998, respectively.
^G63
In addition to the Company's pension and profit sharing plans,
several of the Company's subsidiaries currently provide retiree health
care benefits for certain employee groups.
The following provides a reconciliation of benefit obligations,
plan assets and funded status of the plans within the guidelines of
SFAS No. 132:
62
Pension Benefits Other Postretirement Benefits
-------------------------------- --------------------------------
DECEMBER 31, 2000 1999 1998 2000 1999 1998
------------ ---- ---- ---- ---- ---- ----
(In millions)
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at January 1 $709.1 $691.1 $578.0 $196.3 $184.0 $175.2
Service cost 29.0 25.4 20.2 3.6 3.5 3.2
Interest cost 48.9 50.1 43.9 12.9 12.6 12.8
Amendments 3.8 6.5 2.2 - (0.5) -
Actuarial (gain)/loss (0.7) (59.6) 34.3 (31.4) 11.9 7.8
Acquisitions - 50.4 51.3 - 1.7 -
Currency exchange (2.2) (5.0) (0.3) - - -
Benefits paid from plan assets (47.0) (49.8) (38.5) (14.7) (16.9) (15.0)
------ ------ ------ ------ ------ ------
Benefit obligation at December 31 $740.9 $709.1 $691.1 $166.7 $196.3 $184.0
====== ====== ====== ====== ====== ======
CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1 $858.6 $713.8 $738.4 $- $ - $ -
Actual return on plan assets 76.4 119.5 (5.9) - - -
Acquisitions - 62.3 14.1 - - -
Contributions 3.1 11.6 6.5 14.7 16.9 15.0
Currency exchange (2.8) 1.2 (0.8) - - -
Benefits paid from plan assets (47.0) (49.8) (38.5) (14.7) (16.9) (15.0)
------ ------ ------ ------ ------ ------
Fair value of plan assets at December 31 $888.3 $858.6 $713.8 $ - $ - $ -
====== ====== ====== ==== ====== ======
Pension Benefits Other Postretirement Benefits
-------------------------------- -------------------------------
DECEMBER 31, 2000 1999 1998 2000 1999 1998
---- ---- ----- ---- ---- ----
(In millions )
FUNDED STATUS
Funded status at December 31 $147.4 $149.5 $22.7 $(166.7) $(196.3) $(184.0)
Unrecognized net gain (110.7) (118.9) (7.9) (38.6) (8.0) (20.2)
Unrecognized prior service cost 3.4 (0.9) (2.0) - (0.2) 0.2
Unrecognized net asset (2.2) (3.3) (5.0) - - -
------ ------ ------ ------ ------ -------
Net amount recognized $37.9 $26.4 $7.8 $(205.3) $(204.5) $(204.0)
====== ====== ====== ====== ====== ======
63
AMOUNTS RECOGNIZED IN THE CONSOLIDATED
BALANCE SHEETS
Prepaid benefit cost <1> $110.0 $102.9 $71.8 $- $- $-
Accrued benefit cost <2> (78.2) (80.9) (67.9) (205.3) (204.5) (204.0)
Intangible asset <1> 6.1 4.4 3.9 - - -
------ ------ ------ ------ ------ ------
Net amount recognized $37.9 $26.4 $7.8 $(205.3) $(204.5) $(204.0)
====== ====== ====== ====== ====== ======
ASSUMPTIONS AS OF DECEMBER 31
Discount rate 7.5% 7.5% 7.0% 7.5% 7.5% 6.8-7.0%
Long-term rate of return on plan assets 10.0% 10.0% 10.0% - - -
Long-term rate of compensation increase 5.0% 5.0% 5.0% - - -
Health care cost trend rate - - - 6.0% 7.0-9.0% 7.0-8.0%
<1> Recorded in Other Non-current Assets
<2> Recorded in Other Non-current Liabilities
Net pension (income) expenses and other postretirement benefit
expenses include the following components:
Pension Benefits Other Postretirement Benefits
----------------------------- -----------------------------
YEAR ENDED DECEMBER 31, 2000 1999 1998 2000 1999 1998
----------------------- ---- ---- ---- ---- ---- ----
(In millions)
Service cost-benefits earned
during the year $29.2 $30.9 $19.3 $3.6 $3.5 $3.3
Interest cost on projected
benefit obligation 49.5 50.9 46.6 12.9 12.6 12.9
Expected return on plan assets (82.8) (76.7) (59.0) - - -
Amortization of:
Transition asset (1.9) (1.2) (1.1) (1.1) (0.2) (0.5)
Prior service cost recognized (0.5) (0.4) (0.3) - - (0.4)
Actuarial (gain)/loss (1.3) 0.8 (1.8) - - -
----- ----- ----- ----- ----- -----
Net pension (income) expense $(7.8) $4.3 $3.7 $15.4 $15.9 $15.3
===== ===== ===== ===== ===== =====
The projected benefit obligation, accumulated benefit obligation
and fair value of plan assets for the pension plans with accumulated
benefit obligations in excess of plan assets are as follows:
64
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Projected benefit obligation $103.7 $145.2 $147.1
Accumulated benefit obligation 85.3 131.0 127.5
Fair value of plan assets - 50.8 52.1
The health care cost trend rate significantly affects the reported
postretirement benefit costs and obligations. A one percentage point
change in the assumed rate would have the following effects:
1% Increase 1% Decrease
----------- -----------
(In millions)
Effect on total of service and
interest cost components $1.8 $(1.6)
Effect on postretirement benefit
obligations 11.9 (11.0)
10. STOCKHOLDERS' EQUITY
At December 31, 2000, the Company's Common Stock consists of
800.0 million authorized shares with a par value of $1 per share.
On February 7, 2000, the Company announced a stock repurchase
program of up to $500.0 million of the Company's outstanding Common
Stock. During 2000, the Company repurchased 15.5 million shares of its
Common Stock at an average price of $26 per share, for a total cash
price of $403.0 million under the program. The repurchase program
remained in effect until December 31, 2000 and was financed through
the use of working capital and commercial paper.
Each share of Common Stock includes a stock purchase right (a
"Right"). Each Right will entitle the holder, until the earlier of
October 31, 2008 or the redemption of the Rights, to buy the number of
shares of Common Stock having a market value of two times the exercise
price of $200, subject to adjustment under certain circumstances. The
Rights will be exercisable only if a person or group acquires 15% or
more of voting power of the Company or announces a tender offer after
which it would hold 15% or more of the Company's voting power. The
Rights held by the 15% stockholder would not be exercisable in this
situation.
Furthermore, if, following the acquisition by a person or group
of 15% or more of the Company's voting stock, the Company was acquired
in a merger or other business combination or 50% or more of its assets
were sold, each Right (other than Rights held by the 15% stockholder)
would become exercisable for that number of shares of Common Stock of
the Company (or the surviving company in a business combination)
having a market value of two times the exercise price of the Right.
65
The Company may redeem the Rights at $0.001 per Right prior to
the occurrence of an event that causes the Rights to become
exercisable for Common Stock.
11. STOCK OPTIONS
The Company's stock option plans are accounted for under
Accounting Principles Board Opinion No. 25. As a result, the Company
grants fixed stock options under which no compensation cost is
recognized. Had compensation cost for the plans been determined
consistent with FASB Statement No. 123, the Company's net income and
earnings per share would have been reduced to the following pro forma
amounts:
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions, except per share data)
Net income:
As reported $421.6 $95.4 $481.8
Pro forma 410.5 88.2 477.5
Diluted earnings per share:
As reported $1.57 $0.34 $1.70
Pro forma 1.53 0.31 1.69
Because the FASB Statement No. 123 method of accounting has not
been applied to options granted prior to January 1, 1995, the
resulting pro forma compensation cost may not be representative of
that to be expected in future years.
The Company has authorized 16.3 million shares of Common Stock to
be issued under various stock option plans. Under the Company's
primary plan (1993 Stock Option Plan) the Company may grant options
for up to 14.1 million shares, of which the Company has granted 7.7
million options, and canceled 1.1 million options through December 31,
2000. Under this plan, the option exercise price equals the Common
Stock's closing price on the date of the grant, and options vest over
a five-year period and expire after ten years.
The following summarizes the changes in the number of shares of
Common Stock under option, including options to acquire Common Stock
resulting from the conversion of options under pre-merger Rubbermaid
option plans:
66
Weighted
Average
2000 Shares Exercise Price
---- ------ --------------
Outstanding at beginning of year 5,819,824 $35
Granted 3,485,263 28
Exercised (97,005) 17
Canceled (1,162,583) 36
----------
Outstanding at end of year 8,045,499 32
Exercisable at end of year 3,215,464 33
==========
Weighted average fair value of
options granted during the year $ 9
==========
OPTIONS OUTSTANDING AT DECEMBER 31, 2000
Weighted
Range of Number Weighted Average
Exercise Outstanding at Average Remaining
Prices December 31, 2000 Exercise Price Contractual Life
-------- ----------------- -------------- ----------------
$13-25 614,579 $20 3
26-35 5,209,505 30 8
36-45 2,062,615 42 8
46-50 158,800 48 8
---------
$13-50 8,045,499 32 8
=========
OPTIONS EXERCISABLE AT DECEMBER 31, 2000
Range of Number Weighted
Exercise Exercisable at Average
Prices December 31, 2000 Exercise Price
-------- ----------------- --------------
$13-25 539,579 $20
26-35 1,708,291 32
36-45 910,074 41
46-50 57,520 48
---------
$13-50 3,215,464 33
=========
67
Weighted
Average
1999 Exercise
---- Shares Price
------ --------
Outstanding at beginning of year 4,353,147 $32
Granted 2,498,980 39
Exercised (842,288) 30
Canceled (190,015) 35
---------
Outstanding at end of year 5,819,824 35
=========
Exercisable at end of year 2,622,352 30
=========
Weighted average fair value of
options granted during the year $ 15
=========
1998
----
Weighted
Average
Exercise
Shares Price
------ ---------
Outstanding at beginning of year 3,720,301 $28
Granted 1,576,467 38
Exercised (753,261) 23
Canceled (190,360) 30
---------
Outstanding at end of year 4,353,147 32
=========
Exercisable at end of year 3,189,309 30
=========
Weighted average fair value of
options granted during the year $ 13
=========
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions used for grants in 2000, 1999 and 1998, respectively:
risk-free interest rate of 6.5%, 6.6% and 4.1-6.4%; expected dividend
yields of 3.0%, 2.0%, and 1.6-2.0%; expected lives of 9.0, 9.0 and
5.0-9.9 years; and expected volatility of 28%, 25% and 20-34%.
12. INCOME TAXES
The provision for income taxes consists of the following:
68
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Current:
Federal $154.8 $120.6 $217.1
State 14.9 6.3 26.0
Foreign 34.4 18.2 10.3
----- ----- -----
204.1 145.1 253.4
Deferred 59.8 (9.6) 81.7
----- ----- -----
$263.9 $135.5 $335.1
===== ===== =====
The non-U.S. component of income before income taxes was $84.7
million in 2000, $56.3 million in 1999 and $19.1 million in 1998.
The components of the net deferred tax asset are as follows:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Deferred tax assets:
Accruals not currently deductible
for tax purposes $158.7 $198.0 $132.9
Postretirement liabilities 81.8 80.5 78.5
Inventory reserves 42.2 28.4 25.3
Self-insurance liability 32.1 29.5 44.1
Amortizable intangibles 9.6 27.2 13.6
Other 9.7 8.7 2.9
----- ----- -----
334.1 372.3 297.3
Deferred tax liabilities:
Accelerated depreciation (139.6) (157.5) (152.1)
Prepaid pension asset (38.8) (33.7) (27.1)
Other (17.0) (16.2) (14.4)
----- ----- -----
(195.4) (207.4) (193.6)
----- ----- -----
Net deferred tax asset $138.7 $164.9 $103.7
===== ===== =====
69
The net deferred tax asset is classified in the consolidated
balance sheets as follows:
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Current net deferred income tax asset $231.9 $250.6 $108.2
Non-current deferred income tax
liability (93.2) (85.7) (4.5)
------ ------ ------
$138.7 $164.9 $103.7
====== ====== ======
A reconciliation of the U.S. statutory rate to the effective
income tax rate is as follows:
70
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In percent)
Statutory rate 35.0% 35.0% 35.0%
Add (deduct) effect of:
State income taxes, net of
federal income tax effect 2.2 2.7 3.2
Nondeductible trade names and
goodwill amortization 1.3 4.2 1.3
Nondeductible transaction costs - 19.7 -
Tax basis differential on sales
of businesses - - 2.7
Other - (2.9) (1.2)
---- ---- ----
Effective rate 38.5% 58.7% 41.0%
==== ==== ====
No U.S. deferred taxes have been provided on the undistributed
non-U.S. subsidiary earnings which are considered to be permanently
invested. At December 31, 2000, the estimated amount of total
unremitted non-U.S. subsidiary earnings is $18.9 million.
13. OTHER NONOPERATING EXPENSES (INCOME)
Total other nonoperating expenses (income) consist of the
following:
Year Ended December 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Equity earnings <1> $(8.0) $(8.1) $(7.1)
Interest income (5.5) (9.9) (14.8)
Dividend income (0.1) (0.3) (0.1)
(Gain)/loss on sale of marketable
equity securities - 1.1 (191.5)
Gain on sales of businesses - - (59.8)
Minority interest in income of
subsidiary trust<2> 26.7 26.8 26.7
Currency translation loss 1.9 1.1 6.0
Other 1.2 1.9 3.5
----- ----- ------
$16.2 $12.6 $(237.1)
===== ===== =======
<1> Primarily relates to the Company's investment in American Tool
Companies, Inc., in which the Company has a 49% interest.
<2> Expense from Convertible Preferred Securities (see note 6).
71
14. OTHER OPERATING INFORMATION
BUSINESS SEGMENT INFORMATION
The Company operates in six reportable business segments:
Storage, Organization & Cleaning; Home Decor; Office Products;
Infant/Juvenile Care & Play; Food Preparation, Cooking & Serving and
Hardware & Tools.
NET SALES <1> <2>
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Storage, Organization & Cleaning $1,833.0 $1,899.5 $2,047.0
Home Decor 1,392.4 1,370.4 1,242.9
Office Products 1,288.0 1,218.0 1,078.6
Infant/Juvenile Care & Play 921.0 834.7 751.3
Food Preparation, Cooking & Serving 774.4 782.2 790.0
Hardware & Tools 725.9 607.0 583.4
-------- -------- --------
$6,934.7 $6,711.8 $6,493.2
======== ======== ========
<1> Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to
approximately 15% of consolidated net sales in 2000 and 1999, and
14% in 1998. Sales to no other customer exceeded 10% of
consolidated net sales.
<2> All intercompany transactions have been eliminated.
OPERATING INCOME <3>
Year Ended December 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Storage, Organization & Cleaning $202.9 $63.3 $208.6
Home Decor 168.2 193.7 191.8
Office Products 249.3 218.3 212.3
Infant/Juvenile Care & Play 104.2 16.2 70.2
Food Preparation, Cooking & Serving 112.0 128.3 97.9
Hardware & Tools 120.2 103.7 98.4
Corporate (76.5) (133.5) (83.7)
------ ------ ------
$880.3 $590.0 $795.5
Restructuring Costs (48.6) (246.4) (115.2)
------ ------ ------
$831.7 $343.6 $680.3
====== ====== ======
<3> Operating income is net sales less cost of products sold and SG&A
expenses. Certain headquarters expenses of an operational nature
are allocated to business segments and geographic areas primarily
on a net sales basis. Trade names and goodwill amortization is
72
considered a corporate expense and not allocated to business
segments.
IDENTIFIABLE ASSETS
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
Storage, Organization & Cleaning $1,145.4 $1,155.3 $956.7
Home Decor 815.4 818.0 727.3
Office Products 1,050.9 720.8 643.0
Infant/Juvenile Care & Play 497.1 433.9 758.8
Food Preparation, Cooking & Serving 524.4 539.8 550.0
Hardware & Tools 366.9 376.5 268.5
Corporate<4> 2,861.7 2,679.8 2,384.9
------- ------- -------
$7,261.8 $6,724.1 $6,289.2
======= ======= =======
<4> Corporate assets primarily include trade names and goodwill,
equity investments and deferred tax assets.
CAPITAL EXPENDITURES
Year Ended December 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Storage, Organization & Cleaning $144.4 $90.8 $126.5
Home Decor 17.4 21.1 26.5
Office Products 42.2 24.9 24.9
Infant/Juvenile Care & Play 45.0 9.5 39.3
Food Preparation, Cooking & Serving 36.0 38.0 47.7
Hardware & Tools 9.4 10.9 12.6
Corporate 22.2 4.9 41.2
------ ------ ------
$316.6 $200.1 $318.7
====== ====== ======
DEPRECIATION AND AMORTIZATION
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
Storage, Organization & Cleaning $78.9 $89.8 $81.9
Home Decor 17.8 18.2 18.0
Office Products 33.9 35.7 28.7
Infant/Juvenile Care & Play 27.7 26.5 33.6
Food Preparation, Cooking & Serving 36.5 32.3 35.0
Hardware & Tools 20.0 12.3 13.2
Corporate 77.8 56.9 53.4
------ ------ ------
$292.6 $271.7 $263.8
====== ====== ======
73
GEOGRAPHIC AREA INFORMATION
NET SALES
Year Ended December 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
United States $5,191.5 $5,135.4 $5,081.5
Canada 308.9 275.6 279.7
------- ------- -------
North America 5,500.4 5,411.0 5,361.2
Europe 1,112.5 1,015.3 894.0
Central and South America <5> 289.0 253.8 208.2
All other 32.8 31.7 29.8
------- ------- -------
$6,934.7 $6,711.8 $6,493.2
======= ======= =======
<5> Includes Argentina, Brazil, Colombia, Mexico and Venezuela.
OPERATING INCOME
YEAR ENDED DECEMBER 31, 2000 1999 1998
----------------------- ---- ---- ----
(In millions)
United States $643.4 $276.6 $617.0
Canada 54.5 22.6 16.6
------ ------ ------
North America 697.9 299.2 633.6
Europe 77.2 4.5 24.0
Central and South America 53.2 43.6 41.2
All other 3.4 (3.7) (18.5)
------ ------ ------
$831.7 $343.6 $680.3
====== ====== ======
74
IDENTIFIABLE ASSETS <6>
DECEMBER 31, 2000 1999 1998
------------ ---- ---- ----
(In millions)
United States $5,048.8 $4,813.3 $4,648.2
Canada 139.9 157.1 207.0
------- ------- -------
North America 5,188.7 4,970.4 4,855.2
Europe 1,746.4 1,459.8 1,135.2
Central and South America 290.2 273.2 276.7
All other 36.5 20.7 22.1
------- ------- -------
$7,261.8 $6,724.1 $6,289.2
======= ======= =======
<6> Transfers of finished goods between geographic areas are not
significant.
15. LITIGATION
The Company is subject to certain legal proceedings and claims,
including the environmental matters described below, that have arisen
in the ordinary conduct of its business or have been assumed by the
Company when it purchased certain businesses. Although management of
the Company cannot predict the ultimate outcome of these matters with
certainty, it believes that their ultimate resolution, including any
amounts it may be required to pay in excess of amounts reserved, will
not have a material effect on the Company's consolidated financial
statements.
As of December 31, 2000, the Company was involved in various
matters concerning federal and state environmental laws and
regulations, including matters in which the Company has been
identified by the U.S. Environmental Protection Agency and certain
state environmental agencies as a potentially responsible party
("PRP") at contaminated sites under the Federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") and
equivalent state laws.
In assessing its environmental response costs, the Company has
considered several factors, including: the extent of the Company's
volumetric contribution at each site relative to that of other PRPs;
the kind of waste; the terms of existing cost sharing and other
applicable agreements; the financial ability of other PRPs to share in
the payment of requisite costs; the Company's prior experience with
similar sites; environmental studies and cost estimates available to
the Company; the effects of inflation on cost estimates; and the
extent to which the Company's and other parties' status as PRPs is
disputed.
75
Based on information available to it, the Company's estimate of
environmental response costs associated with these matters as of
December 31, 2000 ranged between $15.7 million and $21.6 million. As
of December 31, 2000, the Company had a reserve equal to $20.0 million
for such environmental response costs in the aggregate. No insurance
recovery was taken into account in determining the Company's cost
estimates or reserve, nor do the Company's cost estimates or reserve
reflect any discounting for present value purposes, except with
respect to two long term (30 years) operation and maintenance CERCLA
matters which are estimated at present value.
Because of the uncertainties associated with environmental
investigations and response activities, the possibility that the
Company could be identified as a PRP at sites identified in the future
that require the incurrence of environmental response costs and the
possibility of additional sites as a result of businesses acquired,
actual costs to be incurred by the Company may vary from the Company's
estimates.
Subject to difficulties in estimating future environmental
response costs, the Company does not expect that any amount it may be
required to pay in connection with environmental matters in excess of
amounts reserved will have a material adverse effect on its
consolidated financial statements.
Eight complaints were filed against the Company and certain of
its officers and directors in the U.S. District Court for the Northern
District of Illinois on behalf of a purported class consisting of
persons who purchased Common Stock of the Company, Newell Co. or
Rubbermaid Incorporated during the period from October 21, 1998
through September 3, 1999 or exchanged shares of Rubbermaid Common
Stock for the Company's Common Stock as part of the Newell Rubbermaid
merger. The complaints alleged that during this time period the
defendants violated federal securities laws by issuing false and
misleading statements concerning the Company's financial condition and
results of operations. After the cases were consolidated before a
single judge, the court appointed lead plaintiffs for the uncertified
class. Plaintiffs then filed a consolidated amended class action
complaint consisting of six counts asserting claims under Sections 11,
12(a)(2) and 15 of the Securities Act and Sections 10(b) and 20(a) of
the Securities Exchange Act. All defendants moved to dismiss that
amended complaint. On October 2, 2000, the court dismissed the amended
complaint for failure to state a claim upon which relief may be
granted and on November 14, 2000 rejected the plaintiffs' motion for
reconsideration of the prior dismissal. The court dismissed the
action, and the time for filing an appeal expired with no appeal
having been filed. The case is therefore terminated in favor of the
Company and the other defendants.
76
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
77
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
Information regarding executive officers of the Company is included as
a Supplementary Item at the end of Part I of this Form 10-K.
Information regarding directors of the Company is included in the
Company's Definitive Proxy Statement for the Annual Meeting of
Stockholders to be held May 9, 2001 ("Proxy Statement") under the
caption "Proposal 1 - Election of Directors," which information is
hereby incorporated by reference herein.
Information regarding compliance with Section 16(a) of the Exchange
Act is included in the Proxy Statement under the caption "Section
16(a) Beneficial Ownership Compliance Reporting," which information is
hereby incorporated by reference herein.
Item 11. EXECUTIVE COMPENSATION
Information regarding executive compensation is included in the Proxy
Statement under the caption "Proposal 1 - Election of Directors -
Information Regarding Board of Directors and Committees," under the
captions "Executive Compensation - Summary Compensation Table; -
Option Grants in 2000; - Option Exercises in 2000; - Pension and
Retirement Plans; - Employment Security and Other Agreements," and the
caption "Executive Compensation Committee Interlocks and Insider
Participation," which information is hereby incorporated by reference
herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
---------------------------------------------------
Information regarding security ownership is included in the Proxy
Statement under the caption "Certain Beneficial Owners," which
information is hereby incorporated by reference herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Not applicable.
78
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K
(a)(1) The following is a list of the financial statements of Newell
Rubbermaid Inc. included in this report on Form 10-K which are filed
herewith pursuant to Item 8:
Report of Independent Public Accountants
Consolidated Statements of Income - Years Ended December 31,
2000, 1999 and 1998
Consolidated Balance Sheets - December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows - Years Ended December 31,
2000, 1999 and 1998
Consolidated Statements of Stockholders' Equity - Years Ended
December 31, 2000, 1999 and 1998
Notes to Consolidated Financial Statements - December 31, 2000,
1999 and 1998
(2) The following consolidated financial statement schedule of the
Company included in this report on Form 10-K is filed herewith
pursuant to Item 14(d) and appears immediately preceding the Exhibit
Index:
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
------------------------------------------------
(3) The exhibits filed herewith are listed on the Exhibit Index
filed as part of this report on Form 10-K. Each management contract
or compensatory plan or arrangement of the Company listed on the
Exhibit Index is separately identified by an asterisk.
(b) Reports on Form 8-K:
None.
79
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEWELL RUBBERMAID INC.
Registrant
By /s/ William T. Alldredge
--------------------------
Date March 26, 2001
---------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on March 26, 2001 by the following
persons on behalf of the Registrant and in the capacities indicated.
Signature Title
--------- -----
/s/ William P. Sovey Chairman of the Board and
---------------------------- Director
William P. Sovey
/s/ Joseph Galli, Jr. President and Chief
---------------------------- Executive Officer
Joseph Galli, Jr. (Principal Executive
Officer)
/s/ Jeffrey J. Burbach Vice President-Controller
--------------------------- (Principal Accounting
Jeffrey J. Burbach Officer)
/s/ William T. Alldredge Chief Financial Officer
--------------------------- (Principal Financial
William T. Alldredge Officer)
/s/ Alton F. Doody Director
---------------------------
Alton F. Doody
80
/s/ Scott S. Cowen Director
---------------------------
Scott S. Cowen
/s/ Daniel C. Ferguson Director
------------------------------
Daniel C. Ferguson
/s/ Robert L. Katz Director
------------------------------
Robert L. Katz
/s/ Elizabeth Cuthbert Millett Director
------------------------------
Elizabeth Cuthbert Millett
/s/ Cynthia A. Montgomery Director
------------------------------
Cynthia A. Montgomery
/s/ Allan P. Newell Director
------------------------------
Allan P. Newell
/s/ Gordon R. Sullivan Director
------------------------------
Gordon R. Sullivan
/s/ William D. Marohn Director
------------------------------
William D. Marohn
81
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
-----------------------------------------------
Charges to
Balance at Other Balance at
Allowance for Beginning Accounts End of
Doubtful Accounts of Period Provision (A) Write-offs Period
----------------- --------- ---------- ---------- ----------- ----------
(in thousands)
Year ended December 31, 2000 $41,870 $4,821 $4,861 ($15,454) $36,098
Year ended December 31, 1999 34,157 17,928 1,922 (12,137) 41,870
Year ended December 31, 1998 30,075 5,488 14,028 (15,434) 34,157
NOTE A - REPRESENTS RECOVERY OF ACCOUNTS PREVIOUSLY WRITTEN OFF
AND NET RESERVES OF ACQUIRED OR DIVESTED BUSINESSES.
Balance at Balance at
Beginning End of
Inventory Reserves of Period Provision Write-offs Other(B) Period
------------------ ---------- --------- ---------- -------- ----------
(in thousands)
Year ended December 31, 2000 $119,389 $45,319 ($52,294) $2,187 $114,601
Year ended December 31, 1999 113,775 75,660 (72,768) 2,722 119,389
Year ended December 31, 1998 119,179 13,338 (29,293) 10,551 113,775
NOTE B - REPRESENTS NET RESERVES OF ACQUIRED AND DIVESTED
BUSINESSES, INCLUDING PROVISIONS FOR PRODUCT LINE
RATIONALIZATION.
Balance at Balance at
Beginning Charges to End of
Restructuring Reserves of Period Provision Reserves (C) Other Period
---------------------- --------- --------- ------------ ----- ----------
(in thousands)
Year ended December 31, 2000 $17,930 $48,561 ($44,624) - $21,867
Year ended December 31, 1999 1,559 246,381 (230,010) - 17,930
Year ended December 31, 1998 1,529 115,154 (115,124) - 1,559
NOTE C - REPRESENTS COSTS CHARGED TO RESTRUCTURING RESERVES IN
ACCORDANCE WITH THE RESTRUCTURING PLAN.
82
(C) EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- -----------------------
Item 3. Articles of 3.1 Restated Certificate of Incorporation of Newell Rubbermaid
Incorporation and Inc., as amended as of March 24, 1999 (incorporated by
By-Laws reference to Exhibit 3.1 to the Company's Current Report on
Form 8-K dated March 24, 1999).
3.2 By-Laws of Newell Rubbermaid Inc., as amended through
January 5, 2001.
Item 4. Instruments 4.1 Restated Certificate of Incorporation of Newell Rubbermaid
defining the Inc., as amended as of March 24, 1999, is included in Item
rights of 3.1.
security holders,
including inden-
tures
4.2 By-Laws of Newell Rubbermaid Inc., as amended through
January 5, 2001, are included in Item 3.2.
4.3 Rights Agreement dated as of August 6, 1998, between the
Company and First Chicago Trust Company of New York, as
Rights Agent (incorporated by reference to Exhibit 4 to the
Company's Current Report on Form 8-K dated August 6, 1998).
4.4 Indenture dated as of April 15, 1992, between the Company
and The Chase Manhattan Bank (National Association), as
Trustee (incorporated by reference to Exhibit 4.4 to the
Company's Report on Form 8 amending the Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31,
1992).
4.5 Indenture dated as of November 1, 1995, between the Company
and The Chase Manhattan Bank (National Association), as
Trustee (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated May 3, 1996).
4.6 Credit Agreement dated as of June 12, 1995 and amended and
restated as of August 5, 1997, among the Company, certain of
its affiliates, The Chase Manhattan Bank (National
Association), as Agent, and the banks whose names appear on
the signature pages thereto (incorporated by reference to
Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1997).
4.7 Junior Convertible Subordinated Indenture for the 5.25%
Convertible Subordinated Debentures, dated as of December
12, 1997, among the Company and The Chase Manhattan Bank, as
Indenture Trustee (incorporated by reference to Exhibit 4.3
to the Company's Registration Statement on Form S-3, File
No. 333-47261, filed March 3, 1998 (the "1998 Form S-3").
4.8 Specimen Common Stock (incorporated by reference to Exhibit
4.1 to the Company's Registration Statement on Form S-4,
File No. 333-71747, filed February 4, 1999).
83
Exhibit
Number Description of Exhibit
------- -----------------------
4.9 $700,000,000 364-Day Credit Agreement dated as of October
23, 2000, among the Company, The Chase Manhattan Bank, as
Agent, and the banks whose names appear on the signature
pages thereto.
Pursuant to item 601(b)(4)(iii)(A) of Regulation S-K, the
Company is not filing certain documents. The Company agrees
to furnish a copy of each such document upon the request of
the Commission.
Item 10. Material *10.1 The Newell Long-Term Savings and Investment Plan, as amended
Contracts and restated effective May 1, 1993 and amended through
December 29, 1995 (incorporated by reference to Exhibit 10.1
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998 (the "1998 Form 10-K")).
*10.2 Newell Co. Deferred Compensation Plan, as amended, effective
August 1, 1980, as amended and restated effective January 1,
1997 (incorporated by reference to Exhibit 10.3 to the 1998
Form 10-K).
*10.3 Newell Operating Company's ROA Cash Bonus Plan, effective
January 1, 1977, as amended (incorporated by reference to
Exhibit 10.8 to the Company's Registration Statement on Form
S-14, Reg. No. 002-71121, filed March 4, 1981).
*10.4 Newell Operating Company's ROI Cash Bonus Plan, effective
January 1, 1986 (incorporated by reference to Exhibit 10.5
to the 1998 Form 10-K).
*10.5 Newell Operating Company's Restated Supplemental Retirement
Plan for Key Executives, effective January 1, 1982, as
amended effective January 1, 1999.
*10.6 Form of Employment Security Agreement with 10 executive
officers (incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1990).
10.7 Credit Agreement dated as of June 12, 1995 and amended and
restated as of August 5, 1997, among the Company, certain of
its affiliates, The Chase Manhattan Bank (National
Association), as Agent, and the banks whose names appear on
the signature pages thereto, is included in Item 4.6.
10.8 Shareholder's Agreement and Irrevocable Proxy dated as of
June 21, 1985, among American Tool Companies, Inc., the
Company, Allen D. Petersen, Kenneth L. Cheloha, Robert W.
Brady, William L. Kiburz, Flemming Andresen and Ane C.
Patterson (incorporated by reference to Exhibit 10.15 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1997).
84
Exhibit
Number Description of Exhibit
------- -----------------------
*10.9 Newell Rubbermaid Inc. Amended 1993 Stock Option Plan,
effective February 9, 1993, as amended May 26, 1999
(incorporated by reference to Exhibit 10.12 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1999).
10.10 Amended and Restated Trust Agreement, dated as of December
12, 1997, among the Company, as Depositor, The Chase
Manhattan Bank, as Property Trustee, Chase Manhattan
Delaware, as Delaware Trustee, and the Administrative
Trustees (incorporated by reference to Exhibit 4.2 to the
1998 Form S-3).
10.11 Junior Convertible Subordinated Indenture for the 5.25%
Convertible Subordinated Debentures, dated as of December
12, 1997, between the Company and The Chase Manhattan Bank,
as Indenture Trustee, is included in Item 4.7.
10.12 $700,000,000 364-Day Credit Agreement dated as of October
23, 2000, between the Company and The Chase Manhattan Bank,
as agent, and certain other financial institutions, is
included in Item 4.9.
*10.13 Newell Rubbermaid Medical Plan for Executives, as amended
and restated effective January 1, 2000.
*10.14 Confidential Separation Agreement and General Release dated
as of October 25, 2000, between Thomas A Ferguson and the
Company.
*10.15 Confidential Separation Agreement and General Release dated
as of November 29, 2000, between John J. McDonough and the
Company.
Item 11. 11 Statement of Computation of Earnings per Share of Common
Stock.
Item 12. 12 Statement of Computation of Earnings to Fixed Charges.
Item 21. Subsidiaries of 21 Significant Subsidiaries of the Company.
the Registrant
Item 23. Consent of 23.1 Consent of Arthur Andersen LLP.
experts and
counsel
23.2 Consent of KPMG LLP
Item 99. Additional 99 Safe Harbor Statement.
Exhibits
* Management contract or compensatory plan or arrangement of the
Company.
85
EXHIBIT 3.2
-----------
AMENDMENT
TO
DELAWARE BY-LAWS
OF
NEWELL RUBBERMAID INC.
AMENDMENT NO. 14
(Article III, Section 3.2, as amended
by the Board of Directors on January 5, 2001)
Section 3.2 of the By-Laws has been amended to change the number
of directors of the Company from ten to eleven and now shall read as
follows:
ARTICLE III
DIRECTORS
---------
3.2 NUMBER, TENURE AND QUALIFICATION. The number of
directors of the Corporation shall be eleven, and the term
of office of each director shall be as set forth in the
Restated Certificate of Incorporation, as amended. A
director may resign at any time upon written notice to the
Corporation.
BY-LAWS
OF
NEWELL RUBBERMAID INC.
(a Delaware corporation)
(as amended January 5, 2001)
ARTICLE I
OFFICES
-------
1.1 REGISTERED OFFICE. The registered office of the Corporation
in the State of Delaware shall be located in the City of Dover and
County of Kent. The Corporation may have such other offices, either
within or without the State of Delaware, as the Board of Directors may
designate or the business of the Corporation may require from time to
time.
1.2 PRINCIPAL OFFICE IN ILLINOIS. The principal office of the
Corporation in the State of Illinois shall be located in the City of
Freeport and County of Stephenson.
ARTICLE II
STOCKHOLDERS
------------
2.1 ANNUAL MEETING. The annual meeting of stockholders shall
beheld each year at such time and date as the Board of Directors may
designate prior to the giving of notice of such meeting, but if no
such designation is made, then the annual meeting of stock holders
shall be held on the second Wednesday in May of each year for the
election of directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday, such meeting shall be held on the
next succeeding business day.
2.2 SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, may be called by the Chairman, by the Board
of Directors or by the President.
2.3 PLACE OF MEETING. The Board of Directors may designate
anyplace, either within or without the State of Delaware, as the place
of meeting for any annual meeting or for any special meeting called by
the Board of Directors. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the
principal office of the Corporation in the State of Illinois.
2.4 NOTICE OF MEETING. Written notice stating the place, date
and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given
not less than ten nor more than sixty days before the date of the
meeting, or in the case of a merger or consolidation of the
Corporation requiring stockholder approval or a sale, lease or
exchange of substantially all of the Corporation's property and
assets, not less than twenty nor more than sixty days before the date
of meeting, to each stockholder of record entitled to vote at such
meeting. If mailed, notice shall be deemed given when deposited in
the United States mail, postage prepaid, directed to the stockholder
at his address as it appears on the records of the Corporation. When
a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless the
adjournment is for more than thirty days, or unless, after
adjournment, a new record date is fixed for the adjourned meeting, in
either of which cases notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
2.5 FIXING OF RECORD DATE. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent (to the
extent permitted, if permitted) to corporate action in writing without
a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than
sixty days prior to any other action. If no record date is fixed, the
record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held, and the record date for determining
stockholders for any other purpose shall be the close of business on
the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting unless the Board of Directors fixes a new
record date for the adjourned meeting.
2.6 VOTING LISTS. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days
before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of
shares registered in his name, which list, for a period of ten days
prior to such meeting, shall be kept on file either at a place within
the city where the meeting is to be held and which place shall be
specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held, and shall be open to the
examination of any stockholder, for any purpose germane to the
- 2 -
meeting, at any time during ordinary business hours. Such lists shall
also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list of
stockholders entitled to vote, or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
2.7 QUORUM. The holders of shares of stock of the Corporation
entitled to cast a majority of the total votes that all of the
outstanding shares of stock of the Corporation would be entitled to
cast at the meeting, represented in person or by proxy, shall
constitute a quorum at any meeting of stockholders; provided, that if
less than a majority of the outstanding shares of capital stock are
represented at said meeting, a majority of the shares of capital stock
so represented may adjourn the meeting. If a quorum is present, the
affirmative vote of a majority of the votes entitled to be cast by the
holders of shares of capital stock represented at the meeting shall be
the act of the stockholders, unless a different number of votes is
required by the General Corporation Law, the Certificate of
Incorporation or these By-Laws. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might
have been transacted at the original meeting. Withdrawal of
stockholders from any meeting shall not cause failure of a duly
constituted quorum at that meeting.
2.8 PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to
act for such stockholder by proxy, but no such proxy shall be voted or
acted upon after three years from its date, unless the proxy provides
for a longer period. Without limiting the manner in which a
stockholder may authorize another person or persons to act for such
stockholder as proxy pursuant to the foregoing sentence, a stockholder
may validly grant such authority (i) by executing a writing
authorizing another person or persons to act for such stockholder as
proxy or (ii) by authorizing another person or persons to act for such
stockholder as proxy by transmitting or authorizing the transmission
of a telegram, cablegram, or other means of electronic transmission to
the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent
duly authorized by the person who will be the holder of the proxy to
receive such transmission, provided that any such telegram, cablegram
or other means of electronic transmission must either set forth or be
submitted with information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by
the stockholder, or by any other means permitted under the Delaware
General Corporation Law.
2.9 VOTING OF STOCK. Each stockholder shall be entitled to such
vote as shall be provided in the Certificate of Incorporation, or,
- 3 -
absent provision therein fixing or denying voting rights, shall be
entitled to one vote per share with respect to each matter submitted
to a vote of stockholders.
2.10 VOTING OF STOCK BY CERTAIN HOLDERS. Persons holding stock
in a fiduciary capacity shall be entitled to vote the shares so held.
Persons whose stock is pledged shall be entitled to vote, unless in
the transfer by the pledgor on the books of the Corporation he has
expressly empowered the pledgee to vote thereon, in which case only
the pledgee or his proxy may represent such stock and vote thereon.
Stock standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the charter
or by-laws of such corporation may prescribe or, in the absence of
such provision, as the board of directors of such corporation may
determine. Shares of its own capital stock belonging to the
Corporation or to another corporation, if a majority of the shares
entitled to vote in the election of directors of such other
corporation is held by the Corporation, shall neither be entitled to
vote nor counted for quorum purposes, but shares of its capital stock
held by the Corporation in a fiduciary capacity may be voted by it and
counted for quorum purposes.
2.11 VOTING BY BALLOT. Voting on any question or in any election
may be by voice vote unless the presiding officer shall order or any
stockholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
---------
3.1 GENERAL POWERS. The business of the Corporation shall be
managed by its Board of Directors.
3.2 NUMBER, TENURE AND QUALIFICATION. The number of directors
of the Corporation shall be eleven, and the term of office of each
director shall be as set forth in the Restated Certificate of
Incorporation, as amended. A director may resign at any time upon
written notice to the Corporation. Directors need not be stockholders
of the Corporation.
3.3 REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law,
immediately after, and at the same place as, the annual meeting of
stockholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Delaware, for
the holding of additional regular meetings without other notice than
such resolution.
3.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the Chief Executive
- 4 -
Officer or any two directors. The person or persons authorized to
call special meetings of the Board of Directors may fix any place,
either within or without the State of Delaware, as the place for
holding any special meeting of the Board of Directors called by him or
them.
3.5 NOTICE. Notice of any special meeting of directors, unless
waived, shall be given, in accordance with Section 3.6 of the By-Laws,
in person, by mail, by telegram or cable, by telephone, or by any
other means that reasonably may be expected to provide similar notice.
Notice by mail and, except in emergency situations as described below,
notice by any other means, shall be given at least two (2) days before
the meeting. For purposes of dealing with an emergency situation, as
conclusively determined by the director(s) or officer(s) calling the
meeting, notice may be given in person, by telegram or cable, by
telephone, or by any other means that reasonably may be expected to
provide similar notice, not less than two hours prior to the meeting.
If the secretary shall fail or refuse to give such notice, then the
notice may be given by the officer(s) or director(s) calling the
meeting. Any meeting of the Board of Directors shall be a legal
meeting without any notice thereof having been given, if all the
directors shall be present at the meeting. The attendance of a
director at any meeting shall constitute a waiver of notice of such
meeting, and no notice of a meeting shall be required to be given to
any director who shall attend such meeting. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.6 NOTICE TO DIRECTORS. If notice to a director is given by
mail, such notice shall be deemed to have been given when deposited in
the United States mail, postage prepaid, addressed to the director at
his address as it appears on the records of the Corporation. If
notice to a director is given by telegram, cable or other means that
provide written notice, such notice shall be deemed to have been given
when delivered to any authorized transmission company, with charges
prepaid, addressed to the director at his address as it appears on the
records of the Corporation. If notice to a director is given by
telephone, wireless, or other means of voice transmission, such notice
shall be deemed to have been given when such notice has been
transmitted by telephone, wireless or such other means to such number
or call designation as may appear on the records of the Corporation
for such director.
3.7 QUORUM. Except as otherwise required by the General
Corporation Law or by the Certificate of Incorporation, a majority of
the number of directors fixed by these By-Laws shall constitute a
quorum for the transaction of business at any meeting of the Board of
Directors, provided that, if less than a majority of such number of
directors are present at said meeting, a majority of the directors
present may adjourn the meeting from time to time without further
- 5 -
notice. Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a
committee thereof.
3.8 MANNER OF ACTING. The vote of the majority of the directors
present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
3.9 ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all the members
of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
3.10 VACANCIES. Vacancies on the Board of Directors, newly
created directorships resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors
resulting from death, disability, resignation, retirement,
disqualification, removal from office or other cause shall be filled
in accordance with the provisions of the Certificate of Incorporation.
3.11 COMPENSATION. The Board of Directors, by the affirmative
vote of a majority of directors then in office, and irrespective of
any personal interest of any of its members, shall have authority to
establish reasonable compensation of all directors for services to the
Corporation as directors, officers, or otherwise. The directors maybe
paid their expenses, if any, of attendance at each meeting of the
Board and at each meeting of any committee of the Board of which they
are members in such manner as the Board of Directors may from time to
time determine.
3.12 PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of the Board of Directors or at a meeting of any
committee of the Board at which action on any corporate matter is
taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action
with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation within 24 hours after the
adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
3.13 COMMITTEES. By resolution passed by a majority of the whole
Board, the Board of Directors may designate one or more committees,
each such committee to consist of two or more directors of the
Corporation. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member of any meeting of the committee. Any such
committee, to the extent provided in the resolution or in these
- 6 -
By-Laws, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it. In the absence or
disqualification of any member of such committee or committees, the
member or members thereof present at the meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at
the meeting in the place of such absent or disqualified member.
3.14 CHAIRMAN AND VICE CHAIRMEN. The Board of Directors may from
time to time designate from among its members a Chairman of the Board
and one or more Vice Chairmen. The Chairman shall preside at all
meetings of the Board of Directors. In the absence of the Chairman of
the Board, the Chief Executive Officer and the President and Chief
Operating Officer, and, in their absence, a Vice Chairman (with the
longest tenure as Vice Chairman), shall preside at all meetings of the
Board of Directors. The Chairman and each of the Vice Chairmen shall
have such other responsibilities as may from time to time be assigned
to each of them by the Board of Directors.
ARTICLE IV
OFFICERS
--------
4.1 NUMBER. The officers of the Corporation shall be a Chief
Executive Officer, a President and Chief Operating Officer, one or
more Group Presidents (the number thereof to be determined by the
Board of Directors), one or more vice presidents (the number thereof
to be determined by the Board of Directors), a Treasurer, a Secretary
and such Assistant Treasurers, Assistant Secretaries or other officers
as may be elected by the Board of Directors.
4.2 ELECTION AND TERM OF OFFICE. The officers of the
Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting
of stockholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. New offices may be created and filled at any
meeting of the Board of Directors. Each officer shall hold office
until his successor is elected and has qualified or until his earlier
resignation or removal. Any officer may resign at any time upon
written notice to the Corporation. Election of an officer shall not
of itself create contract rights, except as may otherwise be provided
by the General Corporation Law, the Certificate of Incorporation or
these By-Laws.
4.3 REMOVAL. Any officer elected by the Board of Directors
maybe removed by the Board of Directors whenever in its judgement the
best interests of the Corporation would be served thereby, but such
- 7 -
removal shall be without prejudice to the contract rights, if any, of
the person so removed.
4.4 VACANCIES. A vacancy in any office occurring because of
death, resignation, removal or otherwise, may be filled by the Board
of Directors.
4.5 [INTENTIONALLY OMITTED.]
4.6 THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
shall be the principal executive officer of the Corporation. Subject
only to the Board of Directors, he shall be in charge of the business
of the Corporation; he shall see that the resolutions and directions
of the Board of Directors are carried into effect except in those
instances in which that responsibility is specifically assigned to
some other person by the Board of Directors; and, in general, he shall
discharge all duties incident to the office of the chief executive
officer of the Corporation and such other duties as may be prescribed
by the Board of Directors from time to time. In the absence of the
Chairman of the Board, the Chief Executive Officer shall preside at
all meetings of the Board of Directors. The Chief Executive Officer
shall have authority to vote or to refrain from voting any and all
shares of capital stock of any other corporation standing in the name
of the Corporation, by the execution of a written proxy, the execution
of a written ballot, the execution of a written consent or otherwise,
and, in respect to any meeting of the stockholders of such other
corporation, and, on behalf of the Corporation, may waive any notice
of the calling of any such meeting. The Chief Executive Officer or,
in his absence, the President and Chief Operating Officer, the Vice
President-Finance, the Vice President-Controller, the Treasurer or
such other person as the Board of Directors or one of the preceding
named officers shall designate, shall call any meeting of the
stockholders of the Corporation to order and shall act as chairman of
such meeting. In the event that no one of the Chief Executive
Officer, the President and Chief Operating Officer, the Vice
President-Finance, the Vice President-Controller, the Treasurer or a
person designated by the Board of Directors or by one of the preceding
named officers, is present, the meeting shall not be called to order
until such time as there shall be present the Chief Executive Officer,
the President and Chief Operating Officer, the Vice President-Finance,
the Vice President-Controller, the Treasurer or a person designated by
the Board of Directors or by one of the preceding named officers. The
chairman of any meeting of the stockholders of this Corporation shall
have plenary power to set the agenda, determine the procedure and
rules of order, and make definitive rulings at meetings of the
stockholders. The Secretary or an Assistant Secretary of the
Corporation shall act as secretary at all meetings of the
stockholders, but in the absence of the Secretary or an Assistant
Secretary, the chairman of the meeting may appoint any person to act
as secretary of the meeting.
- 8 -
4.7 THE PRESIDENT AND CHIEF OPERATING OFFICER. The President
and Chief Operating Officer shall be the principal operating officer
of the Corporation and, subject only to the Board of Directors and to
the Chief Executive Officer, he shall have the general authority over
and general management and control of the property, business and
affairs of the Corporation. In general, he shall discharge all duties
incident to the office of the principal operating officer of the
Corporation and such other duties as may be prescribed by the Board of
Directors and the Chief Executive Officer from time to time. In the
absence of the Chairman of the Board and the Chief Executive Officer,
the President and Chief Operating Officer shall preside at all
meetings of the Board of Directors. In the absence of the Chief
Executive Officer or in the event of his disability, or inability to
act, or to continue to act, the President and Chief Operating Officer
shall perform the duties of the Chief Executive Officer, and when so
acting, shall have all of the powers of and be subject to all of the
restrictions upon the office of Chief Executive Officer. Except in
those instances in which the authority to execute is expressly
delegated to another officer or agent of the Corporation or a
different mode of execution is expressly prescribed by the Board of
Directors or these By-Laws, he may execute for the Corporation
certificates for its shares (the issue of which shall have been
authorized by the Board of Directors), and any contracts, deeds,
mortgages, bonds, or other instruments that the Board of Directors has
authorized, and he may (without previous authorization by the Board of
Directors) execute such contracts and other instruments as the conduct
of the Corporation's business in its ordinary course requires, and he
may accomplish such execution in each case either individually or with
the Secretary, any Assistant Secretary, or any other officer there
unto authorized by the Board of Directors, according to the
requirements of the form of the instrument. The President and Chief
Operating Officer shall have authority to vote or to refrain from
voting any and all shares of capital stock of any other corporation
standing in the name of the Corporation, by the execution of a written
proxy, the execution of a written ballot, the execution of a written
consent or otherwise, and, in respect of any meeting of stockholders
of such other corporation, and, on behalf of the Corporation, may
waive any notice of the calling of any such meeting.
4.8 THE GROUP PRESIDENTS. Each of the Group Presidents shall
have general authority over and general management and control of the
property, business and affairs of certain businesses of the
corporation. Each of the Group Presidents shall report to the
President and Chief Operating Officer or such other officer as may be
determined by the Board of Directors or the President and Chief
Operating Officer and shall have such other duties and
responsibilities as may be assigned to him by the President and Chief
Operating Officer and the Board of Directors from time to time.
4.9 THE VICE PRESIDENTS. Each of the Vice Presidents shall
report to the President and Chief Operating Officer or such other
- 9 -
officer as may be determined by the Board of Directors or the
President and Chief Operating Officer. Each Vice President shall have
such duties and responsibilities as from time to time may be assigned
to him by the President and Chief Operating Officer and the Board of
Directors.
4.10 THE TREASURER. The Treasurer shall: (i) have charge and
custody of and be responsible for all funds and securities of the
corporation; receive and give receipts for monies due and payable to
the Corporation from any source whatsoever, and deposit all such
monies in the name of the Corporation in such banks, trust companies
or other depositories as shall be selected in accordance with the
provisions of Article V of these By-Laws; (ii) in general, perform all
the duties incident to the office of Treasurer and such other duties
as from time to time may be assigned to him by the President and Chief
Operating Officer or the Board of Directors. In the absence of the
Treasurer, or in the event of his incapacity or refusal to act, or at
the direction of the Treasurer, any Assistant Treasurer may perform
the duties of the Treasurer.
4.11 THE SECRETARY. The Secretary shall: (i) record all of the
proceedings of the meetings of the stockholders and Board of Directors
in one or more books kept for the purpose; (ii) see that all notices
are duly given in accordance with the provisions of these By-Laws or
as required by law; (iii) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation
is affixed to all certificates for shares of capital stock prior to
the issue thereof and to all documents, the execution of which on
behalf of the Corporation under its seal is duly authorized in
accordance with he provisions of these By-Laws; (iv) keep a register
of the post office address of each stockholder which shall be
furnished to the Secretary by such stockholder; (v) have general
charge of the stock transfer books of the Corporation and (vi) in
general, perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the
President and Chief Operating Officer or the Board of Directors. In
the absence of the Secretary, or in the event of his incapacity or
refusal to act, or at the direction of the Secretary, any Assistant
Secretary may perform the duties of Secretary.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
5.1 CONTRACTS. Except as otherwise determined by the Board of
Directors or provided in these By-Laws, all deeds and mortgages made
by the Corporation and all other written contracts and agreements to
which the Corporation shall be a party shall be executed in its name
by the Chief Executive Officer, the President and Chief Operating
- 10 -
Officer, or any Vice President so authorized by the Board of
Directors.
5.2 LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its
name unless authorized by a resolution of the Board of Directors. Such
authority may be general or confined to specific instances.
5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued
in the name of the Corporation, shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the Board of
Directors.
5.4 DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as
the Board of Directors may select.
ARTICLE VI
CERTIFICATES FOR SHARES OF
CAPITAL STOCK AND THEIR TRANSFER
--------------------------------
6.1 SHARE OWNERSHIP; TRANSFERS OF STOCK. Shares of the capital
stock of the Corporation may be certificated or uncertificated.
Owners of shares of the capital stock of the Corporation shall be
recorded in the books of the Corporation and ownership of such shares
shall be evidenced by a certificate or book entry notation in the
books of the Corporation. If shares are represented by certificates,
such certificates shall be in such form as may be determined by the
Board of Directors. Certificates shall be signed by the Chief
Executive Officer or the President and Chief Operating Officer or any
Vice President and by the Treasurer or the Secretary or an Assistant
Secretary. If any such certificate is countersigned by a transfer
agent other than the Corporation or its employee, or by a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. All
certificates for shares of capital stock shall be consecutively
numbered or otherwise identified. The name of the person to whom the
shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the Corporation. Each
certificate surrendered to the Corporation for transfer shall be
cancelled and no new certificate or other evidence of new shares
- 11 -
shall be issued until the former certificate for alike number of
shares shall have been surrendered and cancelled, except that in case
of a lost, destroyed or mutilated certificate, a new certificate or
other evidence of new shares may be issued therefor upon such terms
and indemnity to the Corporation as the Board of Directors may
prescribe. Uncertificated shares shall be transferred in the books of
the Corporation upon the written instruction originated by the
appropriate person to transfer the shares.
6.2 TRANSFER AGENTS AND REGISTERS. The Board of Directors may
appoint one or more transfer agents or assistant transfer agents and
one or more registrars of transfers, and may require all certificates
for shares of capital stock of the Corporation to bear the signature
of a transfer agent and a registrar of transfers. The Board of
Directors may at any time terminate the appointment of any transfer
agent or any assistant transfer agent or any registrar of transfers.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
-----------------------------
7.1 LIMITED LIABILITY OF DIRECTORS.
(a) No person who was or is a director of this Corporation shall
be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except
for liability (i) for breach of the duty of loyalty to the Corporation
or its stockholders; (ii) for acts of omissions not in good faith or
that involve intentional misconduct or known violation of law; (iii)
under Section 174 of the General Corporation Law; or (iv) for any
transaction from which the director derived any improper personal
benefit. If the General Corporation Law is amended after the
effective date of the By-Law to further eliminate or limit, or to the
effective date of this By-Law to further eliminate or limit, or to
authorize further elimination or limitation of, the personal liability
of a director to this Corporation or its stockholders shall be
eliminated or limited to the full extent permitted by the General
Corporation Law, as so amended. For purposes of this By-Law,
"fiduciary duty as a director" shall include any fiduciary duty
arising out of serving at the request of this Corporation as a
director of another corporation, partnership, joint venture, trust or
other enterprise, and any liability to such other corporation,
partnership, joint venture, trust or other enterprise, and any
liability to this Corporation in its capacity as a security holder,
joint venturer, partner, beneficiary, creditor, or investor of or in
any such other corporation, partnership, joint venture, trust or other
enterprise.
(b) Any repeal or modification of the foregoing paragraph by the
stockholders of this Corporation shall not adversely affect the
- 12 -
elimination or limitation of the personal liability of a director for
any act or omission occurring prior to the effective date of such
repeal or modification. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring prior to
the effective date of this By-Law.
7.2 LITIGATION BROUGHT BY THIRD PARTIES. The Corporation shall
indemnify any person 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) by reason of the fact that he is or was or has agreed to
become a director or officer of the Corporation; or is or was serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been
taken or omitted in such capacity, against costs, charges and other
expenses (including attorneys' fees) ("Expenses"), judgements, fines
and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding and any appeal
thereof if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order,
settlement, conviction, or plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful. For purposes of this By-Law, "serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise" shall include any service by a director or
officer of the Corporation as a director, officer, employee, agent or
fiduciary of such other corporation, partnership, joint venture trust
or other enterprise, or with respect to any employee benefit plan (or
its participants or beneficiaries) of the Corporation or any such
other enterprise.
7.3 LITIGATION BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person 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 he is or was or has
agreed to become a director or officer of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation
as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged
to have been taken or omitted in such capacity against Expenses
actually and reasonably incurred by him in connection with the
- 13 -
investigation, defense or settlement of such action or suit and any
appeal thereof if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall 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 of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such Expenses as the Court of Chancery of
Delaware or such other court shall deem proper.
7.4 SUCCESSFUL DEFENSE. To the extent that any person referred
to in section 7.2 or 7.3 of these By-Laws has been successful on the
merits or otherwise, including, without limitation, the dismissal of
an action without prejudice, in defense of any action, suit or
proceeding referred to therein or in defense of any claim, issue or
matter therein, he shall be indemnified against Expenses actually and
reasonably incurred by him in connection therewith.
7.5 DETERMINATION OF CONDUCT. Any indemnification under section
7.2 or 7.3 of these By-Laws (unless ordered by a court) shall be made
by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he has met the applicable standard
of conduct set forth in section 7.2 or 7.3. Such determination shall
be made (i) by the Board of Directors by a majority vote of a quorum
(as defined in these By-laws) consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such quorum is
not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
7.6 ADVANCE PAYMENT. Expenses incurred in defending a civil or
criminal action, suit or proceeding shall be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding
and any appeal upon receipt by the Corporation of an undertaking by or
on behalf of the director or officer to repay such amount if it shall
ultimately be determined that the is not entitled to be indemnified by
the Corporation.
7.7 DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. The
determination of the entitlement of any person to indemnification
under section 7.2, 7.3 or 7.4 or to advancement of Expenses under
section 7.6 of these By-Laws shall be made promptly, and in any event
within 60 days after the Corporation has received a written request
for payment from or on behalf of a director or officer and payment of
amounts due under such sections shall be made immediately after such
determination. If no disposition of such request is made within said
60 days or if payment has not been made within 10 days thereafter, or
- 14 -
if such request is rejected, the right to indemnification or
advancement of Expenses provided by this By-Law shall be enforceable
by or on behalf of the director or officer in any court of competent
jurisdiction. In addition to the other amounts due under this By-Law,
Expenses incurred by or on behalf of a director or officer in
successfully establishing his right to indemnification or advancement
of Expenses, in whole or in part, in any such action (or settlement
thereof) shall be paid by the Corporation.
7.8 BY-LAWS NOT EXCLUSIVE: CHANGE IN LAW. The indemnification
and advancement of Expenses provided by these By-Laws shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of Expenses may be entitled under any
law (common or statutory), the Certificate of Incorporation,
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, or while employed by or
acting as a director or officer of the Corporation or as a director or
officer of another corporation, partnership, joint venture, trust or
other enterprise, and shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Notwithstanding the
provisions of these By-Laws, the Corporation shall indemnify or make
advancement of Expenses to any person referred to in section 7.2 or
7.3 of this By-Law to the full extent permitted under the laws of
Delaware and any other applicable laws, as they now exist or as they
may be amended in the future.
7.9 CONTRACT RIGHTS. All rights to indemnification and
advancement of Expenses provided by these By-Laws shall be deemed to
be a contract between the Corporation and each director or officer of
the Corporation who serves, served or has agreed to serve in such
capacity, or at the request of the Corporation as director or officer
of another corporation, partnership, joint venture, trust or other
enterprise, at any time while these By-Laws and the relevant
provisions of the General Corporation Law or other applicable law, if
any, are in effect. Any repeal or modification of these By-Laws, or
any repeal or modification of relevant provisions of the Delaware
General Corporation Law or any other applicable law, shall not in
anyway diminish any rights to indemnification of or advancement of
Expenses to such director or officer or the obligations of the
Corporation.
7.10 INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was or has to
become a director or officer of the Corporation, or is or was serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
- 15 -
such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of these By-Laws.
7.11 INDEMNIFICATION OF EMPLOYEES OR AGENTS. The Board of
Directors may, by resolution, extend the provisions of these By-Laws
pertaining to indemnification and advancement of Expenses to any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was or has agreed to become an
employee, agent or fiduciary of the Corporation or is or was serving
or has agreed to serve at the request of the Corporation as a
director, officer, employee, agent or fiduciary of another
Corporation, partnership, joint venture, trust or other enterprise or
with respect to any employee benefit plan (or its participants or
beneficiaries) of the Corporation or any such other enterprise.
ARTICLE VIII
FISCAL YEAR
-----------
8.1 The fiscal year of the Corporation shall end on the
thirty-first day of December in each year.
ARTICLE IX
DIVIDENDS
---------
9.1 The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares of
capital stock in the manner and upon the terms and conditions provided
by law and its Certificate of Incorporation.
ARTICLE X
SEAL
----
10.1 The Board of Directors shall provide a corporate seal which
shall be in the form of a circle and shall have inscribed thereon the
name of the Corporation and the words "Corporate Seal, Delaware."
- 16 -
ARTICLE XI
WAIVER OF NOTICE
----------------
11.1 Whenever any notice whatever is required to be given under
any provision of these By-Laws or of the Certificate of Incorporation
or of the General Corporation Law, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
ARTICLE XII
AMENDMENTS
----------
12.1 These By-Laws may be altered, amended or repealed and new
By-Laws may be adopted at any meeting of the Board of Directors of the
Corporation by a majority of the whole Board of Directors.
- 17 -
EXHIBIT 4.9
-----------
NEWELL RUBBERMAID INC.
_______________________________________
364-DAY CREDIT AGREEMENT
Dated as of October 23, 2000
_______________________________________
$700,000,000
_______________________________________
THE CHASE MANHATTAN BANK,
as Administrative Agent
_______________________________________
CHASE SECURITIES INC.,
as Advisor, Lead Arranger and Book Manager
ROYAL BANK OF CANADA,
as Syndication Agent
BANK ONE, NA,
as Documentation Agent
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS . . . . . . . . . 1
1.01 CERTAIN DEFINED TERMS . . . . . . . . . . . . . . . . 1
1.02 ACCOUNTING TERMS AND DETERMINATIONS . . . . . . . . . 16
1.03 TYPES OF LOANS . . . . . . . . . . . . . . . . . . . . 17
1.04 TERMS GENERALLY . . . . . . . . . . . . . . . . . . . 17
SECTION 2. COMMITMENTS . . . . . . . . . . . . . . . . . . . . . 18
2.01 COMMITTED LOANS . . . . . . . . . . . . . . . . . . . 18
2.02 BORROWINGS OF COMMITTED LOANS . . . . . . . . . . . . 18
2.03 COMPETITIVE LOANS . . . . . . . . . . . . . . . . . . 19
2.04 BORROWINGS BY DESIGNATED BORROWERS . . . . . . . . . . 24
2.05 CHANGES OF COMMITMENTS . . . . . . . . . . . . . . . . 25
2.06 FEES . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.07 LENDING OFFICES . . . . . . . . . . . . . . . . . . . 26
2.08 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT . . . . . . 26
2.09 EVIDENCE OF DEBT . . . . . . . . . . . . . . . . . . . 26
2.10 PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST . . . . . . . . . . 27
3.01 REPAYMENT OF LOANS . . . . . . . . . . . . . . . . . . 27
3.02 INTEREST . . . . . . . . . . . . . . . . . . . . . . . 27
3.03 REDENOMINATION . . . . . . . . . . . . . . . . . . . . 28
SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC . . . 29
4.01 PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 29
4.02 PRO RATA TREATMENT . . . . . . . . . . . . . . . . . . 30
4.03 COMPUTATIONS . . . . . . . . . . . . . . . . . . . . . 30
4.04 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT . . . 30
4.05 SET-OFF; SHARING OF PAYMENTS . . . . . . . . . . . . . 31
SECTION 5. YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . 32
5.01 ADDITIONAL COSTS . . . . . . . . . . . . . . . . . . . 32
5.02 LIMITATION ON TYPES OF LOANS . . . . . . . . . . . . . 35
5.03 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . 35
5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5 . . . . . . . . 35
5.05 COMPENSATION . . . . . . . . . . . . . . . . . . . . . 36
5.06 TAXES . . . . . . . . . . . . . . . . . . . . . . . . 37
5.07 REPLACEMENT OF LENDERS . . . . . . . . . . . . . . . . 38
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . 39
6.01 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 39
6.02 INITIAL AND SUBSEQUENT CREDIT EXTENSIONS . . . . . . . 40
SECTION 7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 40
7.01 CORPORATE EXISTENCE . . . . . . . . . . . . . . . . . 40
-i-
7.02 FINANCIAL CONDITION . . . . . . . . . . . . . . . . . 40
7.03 LITIGATION . . . . . . . . . . . . . . . . . . . . . . 41
7.04 NO BREACH . . . . . . . . . . . . . . . . . . . . . . 41
7.05 CORPORATE ACTION . . . . . . . . . . . . . . . . . . . 42
7.06 APPROVALS . . . . . . . . . . . . . . . . . . . . . . 42
7.07 USE OF CREDIT . . . . . . . . . . . . . . . . . . . . 42
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 42
7.09 CREDIT AGREEMENTS . . . . . . . . . . . . . . . . . . 42
7.10 HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . 43
7.11 TAXES . . . . . . . . . . . . . . . . . . . . . . . . 43
7.12 TRUE AND COMPLETE DISCLOSURE . . . . . . . . . . . . . 43
7.13 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . 44
7.14 COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . 44
7.15 DESIGNATED BORROWER APPROVALS . . . . . . . . . . . . 44
SECTION 8. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . 44
8.01 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . 45
8.02 LITIGATION . . . . . . . . . . . . . . . . . . . . . . 47
8.03 CORPORATE EXISTENCE, ETC . . . . . . . . . . . . . . . 47
8.04 INSURANCE . . . . . . . . . . . . . . . . . . . . . . 48
8.05 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . 48
8.06 INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . 48
8.07 FUNDAMENTAL CHANGES . . . . . . . . . . . . . . . . . 49
8.08 LIENS . . . . . . . . . . . . . . . . . . . . . . . . 50
8.09 LINES OF BUSINESSES . . . . . . . . . . . . . . . . . 51
8.10 TOTAL INDEBTEDNESS TO TOTAL CAPITAL . . . . . . . . . 51
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 51
SECTION 10. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . 55
10.01 APPOINTMENT, POWERS AND IMMUNITIES . . . . . . . . . 55
10.02 RELIANCE BY ADMINISTRATIVE AGENT . . . . . . . . . . 55
10.03 DEFAULTS . . . . . . . . . . . . . . . . . . . . . . 56
10.04 RIGHTS AS A LENDER . . . . . . . . . . . . . . . . . 56
10.05 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 56
10.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS . . . . . . . . . . . . . . . . . . . . . . . 57
10.07 FAILURE TO ACT . . . . . . . . . . . . . . . . . . . 57
10.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT . . . 57
10.09 LEAD ARRANGER AND OTHER AGENTS . . . . . . . . . . . 58
SECTION 11. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . 58
11.01 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . 58
11.02 OBLIGATIONS UNCONDITIONAL . . . . . . . . . . . . . . 58
11.03 REINSTATEMENT . . . . . . . . . . . . . . . . . . . . 59
11.04 SUBROGATION . . . . . . . . . . . . . . . . . . . . . 59
11.05 REMEDIES . . . . . . . . . . . . . . . . . . . . . . 59
11.06 CONTINUING GUARANTEE . . . . . . . . . . . . . . . . 60
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 60
12.01 WAIVER . . . . . . . . . . . . . . . . . . . . . . . 60
12.02 NOTICES . . . . . . . . . . . . . . . . . . . . . . . 60
-ii-
12.03 EXPENSES, ETC . . . . . . . . . . . . . . . . . . . . 60
12.04 AMENDMENTS, ETC . . . . . . . . . . . . . . . . . . . 61
12.05 ASSIGNMENTS AND PARTICIPATIONS . . . . . . . . . . . 62
12.06 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . 63
12.07 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . 64
12.08 COUNTERPARTS; EFFECTIVENESS . . . . . . . . . . . . . 64
12.09 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS;
WAIVER OF JURY TRIAL; ETC . . . . . . . . . . . . . . 64
12.10 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . 65
12.11 JUDGMENT CURRENCY . . . . . . . . . . . . . . . . . . 65
12.12 EUROPEAN MONETARY UNION . . . . . . . . . . . . . . . 66
Annex I - Commitments
Schedule I - List of Indebtedness
Schedule II - List of Certain Liens
EXHIBIT A-1 - Form of Opinion of Special Illinois Counsel
EXHIBIT A-2 - Form of Opinion of Andrea Horne, Esq., Associate
General Counsel to the Company and its
Subsidiaries
EXHIBIT B - Form of Opinion of Special New York Counsel to the
Administrative Agent
EXHIBIT C - Form of Competitive Bid Request
EXHIBIT D - Form of Competitive Bid
EXHIBIT E-1 - Form of Designation Letter
EXHIBIT E-2 - Form of Termination Letter
EXHIBIT F - Form of Assignment and Acceptance
-iii-
364-DAY CREDIT AGREEMENT dated as of October 23, 2000,
between NEWELL RUBBERMAID INC., a corporation duly organized and
validly existing under the laws of the State of Delaware (together
with its successors, the "Company"); each of the lenders which is a
signatory hereto (together with its successors and permitted assigns,
individually, a "Lender" and, collectively, the "Lenders"); and THE
CHASE MANHATTAN BANK, as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Administrative Agent").
The Company has requested that the Lenders make loans to it
and the other Borrowers (as hereinafter defined) in an aggregate
principal amount not exceeding $700,000,000 at any one time
outstanding. The Lenders are prepared to make such loans upon the
terms and conditions hereof, and, accordingly, the parties agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following
terms shall have the following meanings (all terms defined in this
Section 1 or in other provisions of this Agreement in the singular to
have the same meanings when used in the plural and vice versa):
"Adjusted LIBO Rate" shall mean, for any LIBO Rate Loan, a
rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined by the Administrative Agent to be equal to the LIBO
Rate for the Interest Period for such Loan divided by 1 minus the
Reserve Requirement for such Loan for such Interest Period.
"Administrative Agent's Account" shall mean, in respect of
any Currency, such account as the Administrative Agent shall designate
in a notice to the Company and the Lenders.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form supplied by the Administrative Agent.
"Affiliate" shall mean, with respect to any Person, any
other Person that directly or indirectly controls or is controlled by
or is under common control with such Person.
"Alternative Currency" shall mean at any time (a) Euros and
(b) any currency (other than Dollars and Euros) so long as at such
time, (i) such currency is dealt with in the London interbank deposit
market, (ii) such currency is freely transferable and convertible into
Dollars in the London foreign exchange market and (iii) no central
bank or other governmental authorization in the country of issue of
such currency is required to permit use of such currency by any Lender
for making any Loan hereunder and/or to permit the relevant Borrower
to borrow and repay the principal thereof and to pay the interest
Credit Agreement
----------------
-2-
thereon, unless such authorization has been obtained and is in full
force and effect.
"Applicable Facility Fee Rate" and "Applicable Margin" shall
mean, during any period when the Rating is at one of the Rating Groups
specified below, the percentage set forth below opposite the reference
to such fee or to the relevant Type of Committed Loan:
Rating Rating Rating Rating Rating
Group Group Group Group Group
Fee or Loan I II III IV V
----------- ------ ------ ------ ------ ------
Applicable Facility 0.050% 0.060% 0.080% 0.090% 0.160%
Fee Rate
Applicable Margin for 0.125% 0.165% 0.170% 0.185% 0.340%
Committed LIBOR Loans
Applicable Margin for 0.0% 0.0% 0.0% 0.0% 0.0%
Base Rate Loans
Any change in the Applicable Facility Fee Rate or in the Applicable
Margin by reason of a change in the Moody's Rating or the Standard &
Poor's Rating shall become effective on the date of announcement or
publication by the respective Rating Agency of a change in such Rating
or, in the absence of such announcement or publication, on the
effective date of such changed rating.
"Applicable Lending Office" shall mean for each Lender and
for each Type and Currency of Loan the lending office of such Lender
(or of an Affiliate of such Lender) designated for such Type and
Currency of Loan in the Administrative Questionnaire submitted by such
Lender or such other office of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time specify to the
Administrative Agent and the Company.
"Approved Designated Borrower" shall mean (i) any Domestic
Subsidiary that is a Wholly-Owned Subsidiary of the Company as to
which a Designation Letter has been delivered to the Administrative
Agent and as to which a Termination Letter shall not have been
delivered to the Administrative Agent, which Subsidiary has been
approved as a borrower hereunder by all of the Lenders, all in
accordance with Section 2.04, and (ii) for the purposes of Section
5.06, also the Company.
Credit Agreement
----------------
-3-
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee (with the consent
of any party whose consent is required by Section 12.05), and accepted
by the Administrative Agent, in the form of Exhibit F or any other
form approved by the Administrative Agent.
"Bankruptcy Code" means the United States Bankruptcy Code of
1978, as amended from time to time.
"Base Rate" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day.
"Base Rate Loans" shall mean Loans which bear interest based
upon the Base Rate.
"Basel Accord" shall mean the proposals for risk-based
capital framework described by the Basel Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, supplemented and otherwise
modified and in effect from time to time, or any replacement thereof.
"Borrowers" shall mean the Company, each Approved Designated
Borrower and each Designated Borrower.
"Business Day" shall mean any day (a) that is not a
Saturday, Sunday or other day on which commercial banks are authorized
or required to close in New York City and (b) where such term is used
in the definition of "Quarterly Dates" in this Section 1.01 or if such
day relates to the giving of notices or quotes in connection with a
LIBOR Auction or to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a LIBO Rate
Loan or a notice by the Company with respect to any such borrowing,
payment, prepayment or Interest Period, also on which dealings in
deposits are carried out in the London interbank market and (c) if
such day relates to the date on which the LIBO Rate is determined
under this Agreement for the Interest Period of any Loan denominated
in Euros (or in any National Currency), that is a TARGET Day and (d)
if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, any Loan
denominated in an Alternative Currency, or a notice by the Company
with respect to any such borrowing, payment, prepayment or Interest
Period, also on which foreign exchange trading is carried out in the
London interbank market and on which banks are open in the place of
payment in the country in whose Currency such Loan is denominated.
"Capital Lease Obligations" shall mean, as to any Person,
the obligations of such Person to pay rent or other amounts under a
Credit Agreement
----------------
-4-
lease of (or other agreement conveying the right to use) real and/or
personal property which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person
under GAAP (including Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board) and, for purposes of
this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP
(including such Statement No. 13).
"Chase" shall mean The Chase Manhattan Bank.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, as to each Lender, the obligation
of such Lender to make Committed Loans in an aggregate amount at any
one time outstanding equal to the amount set opposite such Lender's
name on Annex I hereto under the caption "Commitment" (as the same may
be reduced pursuant to Section 2.05). The original aggregate
principal amount of the Commitments is $700,000,000.
"Commitment Termination Date" shall mean October 22, 2001;
provided that, if such date is not a Business Day, the Commitment
Termination Date shall be the next preceding Business Day.
"Committed Loans" shall mean the loans provided for by
Section 2.01.
"Committed LIBOR Loans" shall mean Committed Loans the
interest rates on which are determined on the basis of Adjusted LIBO
Rates.
"Competitive Affiliate Loan" means a Competitive Loan to be
made by an Affiliate of a Lender pursuant to Section 2.03(h).
"Competitive Bid" shall have the meaning assigned to that
term in Section 2.03(c)(i).
"Competitive Bid Rate" shall have the meaning assigned to
that term in Section 2.03(c)(ii)(D).
"Competitive Bid Request" shall have the meaning assigned to
that term in Section 2.03(b).
"Competitive Borrowing" shall have the meaning assigned to
that term in Section 2.03(b).
Credit Agreement
----------------
-5-
"Competitive LIBOR Loans" shall mean Competitive Loans the
interest rates on which are determined on the basis of Adjusted LIBO
Rates pursuant to a LIBOR Auction.
"Competitive Loan Limit" shall have the meaning assigned to
that term in Section 2.03(c)(ii).
"Competitive Loans" shall mean the loans provided for by
Section 2.03.
"Credit Documents" shall mean this Agreement, the Notes,
each Designation Letter and each Termination Letter.
"Credit Extension" shall mean the making of any Loan
hereunder.
"Currency" shall mean Dollars or any Alternative Currency.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Designated Borrower" shall mean any Wholly-Owned Subsidiary
of the Company as to which a Designation Letter has been delivered to
the Administrative Agent and as to which a Termination Letter shall
not have been delivered to the Administrative Agent in accordance with
Section 2.04; and the term "Designated Borrower" shall include any
Approved Designated Borrower.
"Designation Letter" shall have the meaning assigned to such
term in Section 2.04(a).
"Determination Date" shall mean, for any Disposition, the
last day of the fiscal quarter ending on or immediately preceding the
date of such Disposition.
"Disposition" shall have the meaning assigned to that term
in Section 8.07(vi).
"Disposition Period" shall mean, for any Disposition, a
period of twelve months ending on the date of such Disposition.
"Dollar Equivalent" shall mean, with respect to any Loan
denominated in an Alternative Currency, the amount of Dollars that
would be required to purchase the amount of the Alternative Currency
of such Loan on the date such Loan is requested (or, (a) in the case
of Competitive Loans, the date of the related Competitive Bid Request
and (b) in the case of any redenomination under Section 3.03, on the
date of such redenomination), based upon the arithmetic mean (rounded
upwards, if necessary, to the nearest 1/100 of 1%), as determined by
Credit Agreement
----------------
-6-
the Administrative Agent, of the spot selling rate at which the
Reference Banks offer to sell such Alternative Currency for Dollars in
the London foreign exchange market at approximately 11:00 a.m. London
time for delivery two Business Days later.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any Subsidiary of the
Company that is incorporated under the laws of the United States of
America or any State thereof or the District of Columbia.
"Effective Date" shall mean the date on which the conditions
specified in Section 6.01 are satisfied (or waived in accordance with
Section 12.01).
"EMU" shall mean economic and monetary union in accordance
with the Treaty of Rome 1957, as amended by the Single European Act
1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998,
as amended from time to time.
"EMU Legislation" shall mean legislative measures of the
European Council for the introduction of, changeover to or operation
of a single or unified European currency (whether known as the "euro"
or otherwise).
"Environmental Affiliate" shall mean, as to any Person, any
other Person whose liability (contingent or otherwise) for any
Environmental Claim such Person may have retained, assumed or
otherwise become liable (contingently or otherwise), whether by
contract, operation of law or otherwise; PROVIDED that each Subsidiary
of such Person, and each former Subsidiary or division of such Person
transferred to another Person, shall in any event be an "Environmental
Affiliate" of such Person.
"Environmental Claim" shall mean, with respect to any
Person, any notice, claim, demand or other communication (whether
written or oral) by any other Person alleging or asserting liability
of such Person for investigatory costs, cleanup costs, governmental
response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or
resulting from (a) the presence, or release into the environment, of
any hazardous material at any location, whether or not owned by such
Person, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
"Environmental Laws" shall mean any and all Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
Credit Agreement
----------------
-7-
licenses, agreements or other governmental restrictions relating to
the environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wastes into the environment, including,
without limitation, ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Company, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"Euro" shall mean the single currency of Participating
Member States introduced in accordance with the provisions of the EMU
Legislation.
"Event of Default" shall have the meaning assigned to that
term in Section 9.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers on such day as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day,
PROVIDED that (i) if the day for which such rate is to be determined
is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such
rate is not so published for any day, the Federal Funds Rate for such
day shall be the average rate charged to Chase on such day on such
transactions as determined by the Administrative Agent.
"Final Risk-Based Capital Guidelines" shall mean (i) the
Final Risk-Based Capital Guidelines of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part
225, Appendix A) and (ii) the Final Risk-Based Capital Guidelines of
the Office of the Comptroller of the Currency, and any successor or
supplemental regulations (12 C.F.R. Part 3, Appendix A), and any
successor regulations, in each case, as amended, supplemented and
otherwise modified and in effect from time to time.
Credit Agreement
----------------
-8-
"Foreign Currency Equivalent" shall mean, with respect to
any amount in Dollars, the amount of any Alternative Currency that
could be purchased with such amount of Dollars using the reciprocal of
foreign exchange rate(s) specified in the definition of the term
"Dollar Equivalent", as determined by the Administrative Agent.
"Foreign Subsidiary" shall mean any Subsidiary of the
Company that is not a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with the
last sentence of Section 1.02(a), are to be used in making the
calculations for purposes of determining compliance with the
provisions of this Agreement.
"Guarantee" of any Person shall mean any guarantee,
endorsement, contingent agreement to purchase or to furnish funds for
the payment or maintenance of, or any other contingent liability on or
with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any other Person (including, without
limitation, the liability of such Person in respect of the
Indebtedness of any partnership of which such Person is a general
partner), or the guarantee by such Person of the payment of dividends
or other distributions upon the stock of any other Person, or the
agreement by such Person to purchase, sell or lease (as lessee or
lessor) property, products, materials, supplies or services primarily
for the purpose of enabling any other Person to make payment of its
obligations or to assure a creditor against loss, and the verb
"Guarantee" shall have a correlative meaning, PROVIDED that the term
"Guarantee" shall not include endorsements for collection or deposits
in the ordinary course of business.
"Indebtedness" shall mean, as to any Person at any date
(without duplication): (i) indebtedness created, issued, incurred or
assumed by such Person for borrowed money or evidenced by bonds,
debentures, notes or similar instruments; (ii) all obligations of such
Person to pay the deferred purchase price of property or services,
excluding, however, trade accounts payable (other than for borrowed
money) arising in, and accrued expenses incurred in, the ordinary
course of business of such Person so long as such trade accounts
payable are paid within 120 days of the date the respective goods are
delivered or the services are rendered; (iii) all Indebtedness of
others secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person; (iv) all Indebtedness of
others Guaranteed by such Person; (v) all Capital Lease Obligations;
(vi) the Investment Amount (if any); (vii) reimbursement obligations
of such Person (whether contingent or otherwise) in respect of bankers
acceptances, surety or other bonds and similar instruments (other than
commercial, standby or performance letters of credit); and (viii)
Credit Agreement
----------------
-9-
unpaid reimbursement obligations of such Person (other than contingent
obligations) in respect of commercial, standby or performance letters
of credit.
"Interest Period" shall mean:
(a) with respect to any Committed LIBOR Loan, each period
commencing on the date such Committed LIBOR Loan is made and ending on
the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company (on its own behalf and on
behalf of any other Borrower) may select as provided in Section 2.02,
except that each Interest Period that commences on the last Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate
subsequent calendar month;
(b) with respect to any Base Rate Loan, the period
commencing on the date such Base Rate Loan is made and ending on the
first Quarterly Date thereafter;
(c) with respect to any Set Rate Loan, the period
commencing on the date such Set Rate Loan is made and ending on any
Business Day up to 180 days thereafter, as the Company may select as
provided in Section 2.03(b); and
(d) with respect to any Competitive LIBOR Loan, the period
commencing on the date such Competitive LIBOR Loan is made and ending
on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as the Company may select as provided
in Section 2.03(b), except that each Interest Period which commences
on the last Business Day of a calendar month (or any day for which
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period would
otherwise commence before and end after the Commitment Termination
Date, such Interest Period shall not be available hereunder; (ii) each
Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, in the
case of an Interest Period for any LIBO Rate Loans, if such next
succeeding Business Day falls in the next succeeding calendar month,
on the next preceding Business Day); and (iii) notwithstanding clause
(i) above, no Interest Period for any LIBO Rate Loans shall have a
duration of less than one month and, if the Interest Period for any
such Loans would otherwise be a shorter period, such Loans shall not
be available hereunder.
Credit Agreement
----------------
-10-
"Investment Amount" shall mean the amount described as an
"Investment Amount" in a Receivables Sale Agreement.
"Jurisdiction" shall mean, with respect to any Borrower, the
country or countries (including any political subdivision or taxing
authority thereof or therein) under whose laws such Borrower is
organized or where such Borrower is domiciled, resident or licensed or
otherwise qualified to do business or where any significant part of
the Property of such Borrower is located.
"Lender Affiliate" shall have the meaning assigned to that
term in Section 2.03(h).
"LIBO Rate" shall mean, for the Interest Period for any LIBO
Rate Loan, the rate for deposits in the relevant Currency with a
maturity comparable to such Interest Period commencing on the first
day of such Interest Period appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page for
such Service, as determined by the Administrative Agent, with written
notice to the Borrower, from time to time for purposes of providing
quotations of interest rates applicable to such Currency deposits in
the London interbank market) at approximately 11:00 a.m., London time,
on the Quotation Date for such Currency; PROVIDED that the LIBO Rate
for any LIBO Rate Loan denominated in Pounds Sterling for any Interest
Period shall be increased by any Mandatory Costs (but only to the
extent applicable to any Lender).
In the event that such rate is not available for any reason,
the LIBO Rate shall mean, with respect to such LIBO Rate Loan for such
Interest Period, the rate at which deposits of $1,000,000 (or, in the
case where a LIBO Rate Loan is a Currency other than Dollars, the
Foreign Currency Equivalent thereof) and for a maturity comparable to
such Interest Period are offered by the Reference Banks to leading
banks in the London interbank market as of the 11:00 a.m., London
time, on the Quotation Date for such Currency; PROVIDED that (i) if
any Reference Bank is not participating in any borrowing of LIBO Rate
Loans, the LIBO Rate for such Loans shall be determined by reference
to the amount of the Loan which such Reference Bank would have made
had it been participating in such Loans, (ii) in determining the LIBO
Rate with respect to any Competitive LIBOR Loan, each Reference Bank
shall be deemed to have made a Competitive LIBOR Loan in an amount
equal to $1,000,000, (iii) each Reference Bank agrees to use its best
efforts to furnish timely information to the Administrative Agent for
purposes of determining the LIBO Rate and (iv) if any Reference Bank
does not furnish such timely information for determination of the LIBO
Rate, the Administrative Agent shall determine such interest rate on
Credit Agreement
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the basis of timely information furnished by the remaining Reference
Banks.
"LIBO Rate Loans" shall mean Committed LIBOR Loans and
Competitive LIBOR Loans.
"LIBOR Auction" shall mean a solicitation of Competitive
Bids setting forth Margins based on the Adjusted LIBO Rate pursuant to
Section 2.03.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset.
"Loans" shall mean Committed Loans and Competitive Loans.
"Majority Lenders" shall mean Lenders having at least 51% of
(i) the aggregate amount of the Commitments and (ii) if the
Commitments shall have been terminated, the aggregate outstanding
principal amount of all Loans.
"Mandatory Cost" shall mean, with respect to any Lender, the
cost, if any, imputed to such Lender of compliance with the cash ratio
and special deposit requirements of the Bank of England and/or the
banking supervision or other costs imposed by the Financial Services
Authority during the relevant period, as determined by the Bank of
England and/or Financial Services Authority during such relevant
period.
"Margin" shall have the meaning assigned to that term in
Section 2.03(c)(ii)(C).
"Material Adverse Effect" shall mean a material adverse
effect on (i) the consolidated financial condition, operations,
business or prospects of the Company and its Subsidiaries (taken as a
whole), (ii) the ability of the Company or any Approved Designated
Borrower that is a Significant Subsidiary to perform its obligations
under any of the Credit Documents to which it is a party or (iii) the
validity or enforceability of any of the Credit Documents.
"Moody's" shall mean Moody's Investors Service, Inc. or any
successor thereto.
Credit Agreement
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"Moody's Rating" shall mean, as of any date, the rating most
recently published by Moody's relating to the unsecured, long-term,
senior debt securities of the Company.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"National Currency" shall mean the currency, other than the
Euro, of a Participating Member State.
"Net Worth" shall mean, at any time, the consolidated
stockholders' equity of the Company and its Subsidiaries determined on
a consolidated basis without duplication in accordance with GAAP.
"Non-Strategic Property" shall mean Property acquired as
part of the acquisition of a business made after December 31, 1999
that is designated by resolution of the Board of Directors of the
Company adopted no later than six months after such acquisition as
non-strategic Property.
"Notes" shall mean the promissory notes provided for by
Section 2.09(d).
"Obligor" shall mean the Company, in its capacity as a
Borrower hereunder and in its capacity as a guarantor of Loans made to
any other Borrower under Section 11, and each other Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all its functions under ERISA.
"Participating Member State" shall mean each state so
described in any EMU Legislation.
"Person" shall mean an individual, a corporation, a company,
a limited liability company, a voluntary association, a partnership, a
trust, an unincorporated organization or a government or any agency,
instrumentality or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) which is or was established, sponsored,
maintained or contributed to, by the Company or any ERISA Affiliate
and is or was subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA.
"Post-Default Rate" shall mean, in respect of any principal
of any Loan or any other amount payable by any Borrower under this
Agreement or any Note which is not paid when due (whether at stated
maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full
Credit Agreement
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equal to the sum of 2% PLUS the Base Rate as in effect from time to
time PLUS the Applicable Margin for Base Rate Loans (PROVIDED that, if
such amount in default is principal of a LIBO Rate Loan or a Set Rate
Loan and the due date is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall be,
for the period commencing on the due date and ending on the last day
of the Interest Period therefor, 2% above the interest rate for such
Loan as provided in Section 3.02 and, thereafter, the rate provided
for above in this definition).
"Pounds Sterling" shall mean lawful money of England.
"Prime Rate" shall mean the rate of interest from time to
time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of Chase,
located on the date hereof at 270 Park Avenue, New York, New York
10017.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible (including, without limitation, shares
of capital stock).
"Quarterly Dates" shall mean the last Business Day of each
March, June, September and December, the first of which shall be the
first such day after the Effective Date.
"Quotation Date" shall mean, for any Interest Period, (a)
for any Currency other than Pounds Sterling, the date two Business
Days prior to the commencement of such Interest Period and (b) for
Pounds Sterling, the first day of such Interest Period, PROVIDED that
if market practice differs in the relevant interbank market for any
Currency, the "Quotation Date" for such Currency shall be determined
by the Administrative Agent in accordance with market practice in the
relevant interbank market (and if quotations would normally be given
by leading banks in the relevant interbank market on more than one
day, the "Quotation Date" shall be the last of such days).
"Rating" shall mean the Moody's Rating or the Standard &
Poor's Rating.
"Rating Agency" shall mean Moody's or Standard & Poor's.
"Rating Group I" shall mean the Moody's Rating is at or
above Aa2 or the Standard & Poor's Rating is at or above AA; "Rating
Group II" shall mean (a) the Moody's Rating is at or above A3 or the
Standard & Poor's Rating is at or above A- and (b) Rating Group I is
Credit Agreement
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not in effect; "Rating Group III" shall mean (a) the Moody's Rating is
at or above Baa1 or the Standard & Poor's Rating is at or above BBB+
and (b) neither Rating Group I nor Rating Group II is in effect;
"Rating Group IV" shall mean (a) the Moody's Rating is at or above
Baa2 or the Standard & Poor's Rating is at or above BBB and (b)
neither Rating Group I, Rating Group II nor Rating Group III is in
effect; "Rating Group V" shall mean none of Rating Group I, Rating
Group II, Rating Group III and Rating Group IV is in effect; PROVIDED
that, if the Moody's Rating and the Standard & Poor's Rating fall into
different Rating levels, then the applicable Rating Group shall be
based upon the higher of such Ratings.
"Receivables Sale Agreement" shall mean an agreement
providing for the periodic sales of accounts receivable.
"Reference Banks" shall mean Chase and Royal Bank of Canada.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the
same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender,
any change after the date hereof (or, in the case of any Competitive
LIBOR Loan, the date of the Competitive Bid therefor), in United
States Federal, state or foreign law or regulations (including
Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks
including such Lender of or under any United States Federal, state or
foreign law or regulations (whether or not having the force of law) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reserve Requirement" shall mean, for any Interest Period
for any LIBO Rate Loan, the effective maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation
D by member banks of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the LIBO
Rate is to be determined or (ii) any category of extensions of credit
or other assets which includes LIBO Rate Loans.
"Set Rate Auction" shall mean a solicitation of Competitive
Bids setting forth Competitive Bid Rates pursuant to Section 2.03.
Credit Agreement
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"Set Rate Loans" shall mean Competitive Loans the interest
rates on which are determined on the basis of Competitive Bid Rates
pursuant to a Set Rate Auction.
"Significant Subsidiary" shall mean, at any time, any
Subsidiary of the Company if the revenues of such Subsidiary and its
Subsidiaries for the four consecutive fiscal quarters of such
Subsidiary most recently ended (determined on a consolidated basis
without duplication in accordance with GAAP and whether or not such
Person was a Subsidiary of the Company during all or any part of the
fiscal period of the Company referred to below) exceed an amount equal
to 7-1/2% of the revenues of the Company and its Subsidiaries for the
four consecutive fiscal quarters of the Company most recently ended
(determined on a consolidated basis without duplication in accordance
with GAAP and including such Subsidiary and its Subsidiaries on a pro
forma basis if such Subsidiary was not a Subsidiary of the Company).
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, or any successor thereto.
"Standard and Poor's Rating" shall mean, as of any date, the
rating most recently published by Standard & Poor's relating to the
unsecured, long-term, senior debt securities of the Company.
"Subsidiary" of any Person shall mean any corporation,
partnership, limited liability company or other entity of which at
least a majority of the outstanding shares of stock or other ownership
interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions of such corporation, partnership, limited liability company
or other entity (irrespective of whether or not at the time stock or
other ownership interests of any other class or classes of such
corporation, partnership, limited liability company or other entity
shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or
controlled by such Person and/or one or more of the Subsidiaries of
such Person. "Wholly-Owned Subsidiary" shall mean any such
corporation, partnership, limited liability company or other entity of
which all such shares or other ownership interests, other than
directors' qualifying shares or shares held by nominees to satisfy any
requirement as to minimum number of shareholders, are so owned or
controlled.
"TARGET Day" shall mean any day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer (TARGET) System
(or, if such clearing system ceases to be operative, such other
clearing system (if any) determined by the Administrative Agent to be
a suitable replacement) is operating.
Credit Agreement
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"Taxes" shall have the meaning assigned to such term in
Section 5.06(a).
"Termination Letter" shall have the meaning assigned to such
term in Section 2.04(a).
"Total Capital" shall mean the sum of (i) Net Worth plus
(ii) Total Indebtedness.
"Total Consolidated Assets" shall mean, as at any time, the
total of all the assets appearing on a consolidated balance sheet of
the Company and its Subsidiaries determined in accordance with
generally accepted accounting principles applicable to the type of
business in which the Company and such Subsidiaries are engaged, and
may be determined as of a date, selected by the Company, not more than
sixty days prior to the happening of the event for which such
determination is being made.
"Total Indebtedness" shall mean, as at any time, the total
Indebtedness of the Company and its Subsidiaries determined on a
consolidated basis without duplication.
"Type" shall have the meaning assigned to such term in
Section 1.03.
"Wholly-Owned Subsidiary" shall have the meaning assigned to
such term in the definition of the term "Subsidiary".
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) All accounting terms used herein shall be interpreted,
and, unless otherwise disclosed to the Lenders in writing at the time
of delivery thereof in the manner described in subsection (b) below,
all financial statements and certificates and reports as to financial
matters required to be delivered to the Lenders hereunder shall be
prepared, in accordance with generally accepted accounting principles
applied on a basis consistent with those used in the preparation of
the latest financial statements furnished to the Lenders hereunder
after the date hereof (or, until such financial statements are
furnished, consistent with those used in the preparation of the
financial statements referred to in Section 7.02(a)). All
calculations made for the purposes of determining compliance with the
terms of Sections 8.07(a)(vi) and 8.10 shall, except as otherwise
expressly provided herein, be made by application of generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the annual or quarterly financial
statements furnished to the Lenders pursuant to Section 8.01 (or,
until such financial statements are furnished, consistent with those
Credit Agreement
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used in the preparation of the financial statements referred to in
Section 7.02(a)) unless (i) the Company shall have objected to
determining such compliance on such basis at the time of delivery of
such financial statements or (ii) the Majority Lenders shall so object
in writing within 30 days after delivery of such financial statements,
in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements
delivered under Section 8.01, shall mean the financial statements
referred to in Section 7.02(a)).
(b) The Company shall deliver to the Lenders at the same
time as the delivery of any annual or quarterly financial statement
under Section 8.01 (i) a description in reasonable detail of any
material variation between the application of accounting principles
employed in the preparation of such statement and the application of
accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements as to which no
objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference
between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8, the Company
shall not change the last day of its fiscal year from December 31, or
the last days of the first three fiscal quarters in each of its fiscal
years from March 31, June 30 and September 30, respectively.
1.03 TYPES OF LOANS. Loans hereunder are distinguished by
"Type" and by "Currency". The "Type" of a Loan refers to whether such
Loan is a Base Rate Loan, a Committed LIBOR Loan, a Competitive LIBOR
Loan or a Set Rate Loan, each of which constitutes a Type. Loans may
be identified by both Type and Currency.
1.04 TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall
be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any
Person shall be construed to include such Person's successors and
Credit Agreement
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assigns, (c) the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to Sections, Annexes, Exhibits and Schedules shall
be construed to refer to Sections of, and Annexes, Exhibits and
Schedules to, this Agreement and (e) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
SECTION 2. COMMITMENTS.
-----------
2.01 COMMITTED LOANS. Each Lender severally agrees, on the
terms of this Agreement, to make loans to the Company and any Approved
Designated Borrower in Dollars during the period from and including
the Effective Date to and including the Commitment Termination Date in
an aggregate principal amount at any one time outstanding up to but
not exceeding the amount of such Lender's Commitment as then in
effect. Subject to the terms of this Agreement, during such period
the Company and the Approved Designated Borrowers may borrow, repay
and reborrow the amount of the Commitments by means of Base Rate Loans
and Committed LIBOR Loans; PROVIDED that the aggregate outstanding
principal amount of all Committed Loans at any one time shall not
exceed the aggregate amount of the Commitments at such time; and
PROVIDED, FURTHER, that there may be no more than thirty (30)
different Interest Periods for both Committed Loans and Competitive
Loans outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods
even if they are coterminous).
2.02 BORROWINGS OF COMMITTED LOANS. The Company (on its
own behalf and on behalf of any other Approved Designated Borrower)
shall give the Administrative Agent (which shall promptly notify the
Lenders) notice of each borrowing hereunder of Committed Loans, which
notice shall be irrevocable and effective only upon receipt by the
Administrative Agent, shall specify with respect to the Committed
Loans to be borrowed (i) the aggregate amount to be borrowed, which
shall be at least $1,000,000 in the case of Base Rate Loans and
$5,000,000 in the case of Committed LIBOR Loans (or in either case an
integral multiple of $1,000,000 in excess thereof), (ii) the Type and
date (which shall be a Business Day) and (iii) (in the case of
Committed LIBOR Loans) the duration of the Interest Period therefor,
and each such notice shall be given not later than 11:00 a.m. New York
time on the day which is not less than the number of Business Days
prior to the date of such borrowing specified below opposite the Type
of such Loans:
Credit Agreement
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Type Number of Business Days
---- -----------------------
Base Rate Loans 0
Committed LIBOR Loans 3
Not later than 2:00 p.m. New York time on the date specified for each
borrowing of Committed Loans hereunder, each Lender shall, subject to
Section 4.01(a), make available the amount of the Committed Loan or
Loans to be made by it on such date to the Administrative Agent, at
the Administrative Agent's Account for Dollars in immediately
available funds, for account of the relevant Borrower. The amount so
received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, promptly be made available to the
relevant Borrower by depositing the same, in immediately available
funds, in an account of the relevant Borrower designated by the
Company.
2.03 COMPETITIVE LOANS.
(a) In addition to borrowings of Committed Loans, the
Company (on its own behalf and on behalf of any other Borrower) may,
as set forth in this Section 2.03, request the Lenders to make offers
to make Competitive Loans to such Borrower in Dollars or in any
Alternative Currency. The Lenders may, but shall have no obligation
to, make such offers and such Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this
Section 2.03. Competitive Loans may be Competitive LIBOR Loans or Set
Rate Loans, PROVIDED that there may be no more than thirty (30)
different Interest Periods for both Committed Loans and Competitive
Loans outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods
even if they are coterminous). Competitive Loans shall not constitute
a utilization of the Commitments.
(b) When any Borrower wishes to request offers to make
Competitive Loans, the Company (on its own behalf and on behalf of any
other Borrower) shall give the Administrative Agent (which shall
promptly notify the Lenders) notice in the form of Exhibit C hereto (a
"Competitive Bid Request") so as to be received no later than 11:00
a.m. New York time on (x) the fifth Business Day prior to the date of
borrowing proposed therein in the case of a LIBOR Auction or (y) the
Business Day next preceding the date of borrowing proposed therein, in
the case of a Set Rate Auction, specifying:
(i) the name of the Borrower, the Currency of such
borrowing and the proposed date of such borrowing (a "Competitive
Borrowing"), which shall be a Business Day;
Credit Agreement
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(ii) the aggregate amount of such Competitive Borrowing,
which shall be at least $5,000,000 or, in the case of Competitive
Loans in an Alternative Currency, the Foreign Currency Equivalent
thereof, and in an integral multiple of $1,000,000 in excess
thereof (or the Foreign Currency Equivalent thereof, as
applicable);
(iii) the duration of the Interest Period applicable
thereto; and
(iv) whether the Competitive Bids requested are to set
forth a Margin or a Competitive Bid Rate.
The Company (on its own behalf and on behalf of any other
Borrower) may request offers to make Competitive Loans for up to
fifteen (15) different Interest Periods in a single Competitive Bid
Request; PROVIDED that the request for each separate Interest Period
shall be deemed to be a separate Competitive Bid Request for a
separate Competitive Borrowing. Except as otherwise provided in the
preceding sentence, no Competitive Bid Request shall be given within
five Business Days of any other Competitive Bid Request.
(c) (i) Any Lender may, by notice to the Administrative
Agent in the form of Exhibit D hereto (a "Competitive Bid"), submit an
offer to make a Competitive Loan in response to any Competitive Bid
Request; PROVIDED that, if the request under Section 2.03(b) specified
more than one Interest Period, such Lender may make a single
submission containing a separate offer for each such Interest Period
and each such separate offer shall be deemed to be a separate
Competitive Bid. Each Competitive Bid must be submitted to the
Administrative Agent not later than (x) 2:00 p.m. (or, in the case of
Competitive Loans in an Alternative Currency, 11:00 a.m.) New York
time on the fourth Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (y) 11:00 a.m. New York
time on the proposed date of borrowing, in the case of a Set Rate
Auction; PROVIDED that any Competitive Bid submitted by Chase (or its
Applicable Lending Office) may be submitted, and may only be
submitted, if Chase (or such Applicable Lending Office) notifies the
Company of the terms of the offer contained therein not later than (x)
1:00 p.m. (or, in the case of Competitive Loans in an Alternative
Currency, 10:00 a.m.) New York time on the fourth Business Day prior
to the proposed date of borrowing, in the case of a LIBOR Auction or
(y) 10:45 a.m. New York time on the proposed date of borrowing, in the
case of a Set Rate Auction. Subject to Sections 5.03 and 9, any
Competitive Bid so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the
Company.
Credit Agreement
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(ii) Each Competitive Bid shall specify:
(A) the name of the Borrower, the Currency of such
borrowing, the proposed date of borrowing and the Interest
Period therefor;
(B) the principal amount of the Competitive Loan for
which each such offer is being made, which principal amount
(x) may be greater than or less than the Commitment of the
quoting Lender, (y) must be at least $1,000,000 or, in the
case of a Competitive Loan in an Alternative Currency, the
Foreign Currency Equivalent thereof, and in an integral
multiple of $1,000,000 (or the Foreign Currency Equivalent
thereof, as applicable), and (z) may not exceed the
principal amount of the Competitive Borrowing for which
offers were requested;
(C) in the case of a LIBOR Auction, the margin above
or below the applicable Adjusted LIBO Rate (the "Margin")
offered for each such Competitive Loan, expressed as a
percentage (rounded to the nearest 1/10,000th of 1%) to be
added to or subtracted from the applicable Adjusted LIBO
Rate;
(D) in the case of a Set Rate Auction, the rate of
interest per annum (rounded to the nearest 1/10,000th of 1%)
(the "Competitive Bid Rate") offered for each such
Competitive Loan; and
(E) the identity of the quoting Lender.
No Competitive Bid shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth
in the applicable Competitive Bid Request and, in particular, no
Competitive Bid may be conditioned upon acceptance by the Company of
all (or some specified minimum) of the principal amount of the
Competitive Loan for which such Competitive Bid is being made;
PROVIDED that the submission of any Lender containing more than one
Competitive Bid may be conditioned on the Company not accepting offers
contained in such submission that would result in such Lender making
Competitive Loans pursuant thereto in excess of a specified aggregate
amount (the "Competitive Loan Limit").
(d) The Administrative Agent shall (x) in the case of a Set
Rate Auction, as promptly as practicable after the Competitive Bid is
submitted (but in any event not later than 11:15 a.m. New York time)
or (y) in the case of a LIBOR Auction, by 4:00 p.m. (or, in the case
of Competitive Loans in an Alternative Currency, noon) New York time
on the day a Competitive Bid is submitted, notify the Company (which
Credit Agreement
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will promptly notify the relevant Borrower if it is not the Company)
of the terms (i) of any Competitive Bid submitted by a Lender that is
in accordance with Section 2.03(c) and (ii) of any Competitive Bid
that amends, modifies or is otherwise inconsistent with a previous
Competitive Bid submitted by such Lender with respect to the same
Competitive Bid Request. Any such subsequent Competitive Bid shall be
disregarded by the Administrative Agent unless such subsequent
Competitive Bid is submitted solely to correct a manifest error in
such former Competitive Bid. The Administrative Agent's notice to the
Company shall specify (A) the aggregate principal amount of the
Competitive Borrowing for which offers have been received and (B) the
respective principal amounts and Margins or Competitive Bid Rates, as
the case may be, so offered by each Lender (identifying the Lender
that made each Competitive Bid).
(e) Not later than (x) 11:00 a.m. New York time on the
third Business Day (or, in the case of Competitive Loans in an
Alternative Currency, 2:00 p.m. New York time on the fourth Business
Day) prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 12:00 p.m. noon New York time on the proposed date of
borrowing, in the case of a Set Rate Auction, the Company shall notify
the Administrative Agent of its or the relevant Borrower's, if the
Borrower is not the Company, acceptance or nonacceptance of the offers
so notified to the Company pursuant to Section 2.03(d) (which notice
shall specify the aggregate principal amount of offers from each
Lender for each Interest Period that are accepted; and the failure of
the Company to give such notice by such time shall constitute
non-acceptance) and the Administrative Agent shall promptly notify
each affected Lender of the acceptance or non-acceptance of its
offers. The notice by the Administrative Agent shall also specify the
aggregate principal amount of offers for each Interest Period that
were accepted. The Company (on its own behalf and on behalf of any
other Borrower) may accept any Competitive Bid in whole or in part
(PROVIDED that any Competitive Bid accepted in part from any Lender
shall be in an integral multiple of $1,000,000 or, in the case of a
Competitive Loan in an Alternative Currency, the Foreign Currency
Equivalent thereof (rounded to the nearest 1,000 units of such
Alternative Currency)); PROVIDED that:
(i) the aggregate principal amount of each Competitive
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Request;
(ii) the aggregate principal amount of each Competitive
Borrowing shall be at least $5,000,000 or, in the case of a
borrowing of Competitive Loans in an Alternative Currency, the
Foreign Currency Equivalent thereof, and in an integral multiple
of $1,000,000 in excess thereof (or the Foreign Currency
Equivalent thereof, as applicable);
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(iii) acceptance of offers may, subject to clause (v)
below, only be made in ascending order of Margins or Competitive
Bid Rates, as the case may be; PROVIDED that the Company need not
accept on behalf of any Designated Borrower the offer of any
Lender if payment of the interest on the relevant Competitive
Loan would subject such Designated Borrower to the requirement of
paying any additional amounts under Section 5.06(a) or if such
interest payment would be subject to greater restrictions on
deductibility for income tax purposes than the restriction
applicable to interest payments made to other Lenders whose
offers are accepted;
(iv) the Company (on its own behalf and on behalf of any
other Borrower) may not accept any offer where the Administrative
Agent has advised the Company that such offer fails to comply
with Section 2.03(c)(ii) or otherwise fails to comply with the
requirements of this Agreement (including, without limitation,
Section 2.03(a)); and
(v) the aggregate principal amount of each Competitive
Borrowing from any Lender may not exceed any applicable
Competitive Loan Limit of such Lender.
If offers are made by two or more Lenders with the same Margins or
Competitive Bid Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which offers are
accepted for the related Interest Period, the principal amount of
Competitive Loans in respect of which such offers are accepted shall
be allocated by the Company among such Lenders as nearly as possible
(in an integral multiple of $1,000,000 or, in the case of a borrowing
of Competitive Loans in an Alternative Currency, the Foreign Currency
Equivalent thereof) in proportion to the aggregate principal amount of
such offers. Determinations by the Company of the amounts of
Competitive Loans shall be conclusive in the absence of manifest
error.
(f) Any Lender whose offer to make any Competitive Loan has
been accepted in accordance with the terms and conditions of this
Section 2.03 shall, not later than 2:00 p.m. New York time (in the
case of Loans denominated in Dollars) or 11:00 a.m. local time in the
location of the Administrative Agent's Account (in the case of Loans
denominated in an Alternative Currency) on the date specified for the
making of such Loan, make the amount of such Loan available to the
Administrative Agent at the Administrative Agent's Account for the
Currency of such Loan in immediately available funds. The amount so
received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, promptly be made available to the
relevant Borrower on such date by depositing the same, in immediately
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available funds, in an account of the relevant Borrower designated by
the Company.
(g) The amount of any Competitive Loan made by any Lender
shall not constitute a utilization of such Lender's Commitment.
(h) Subject to the terms and conditions of this Agreement,
each Foreign Subsidiary that is a Designated Borrower agrees that any
Competitive Loan to be made hereunder by any Lender that has an
Affiliate (a "Lender Affiliate") in such Designated Borrower's
Jurisdiction may be satisfied by such Lender Affiliate at its sole
discretion (such Loans are hereinafter referred to as "Competitive
Affiliate Loans"). The Company and each Designated Borrower hereby
acknowledge and agree that any Lender Affiliate that makes a
Competitive Affiliate Loan shall have made such Loan in reliance upon,
and shall be entitled to the benefits of, this Agreement (including,
without limitation, Section 11) and shall be entitled to enforce
rights hereunder in respect of such Loan as fully as though it were a
Lender party hereto.
2.04 BORROWINGS BY DESIGNATED BORROWERS.
(a) The Company may, at any time or from time to time,
designate one or more Wholly-Owned Subsidiaries as Borrowers hereunder
by furnishing to the Administrative Agent a letter (a "Designation
Letter") in duplicate, substantially in the form of Exhibit E-1
hereto, duly completed and executed by the Company and such
Subsidiary. Any such designation of a Foreign Subsidiary shall, and
any such designation of a Domestic Subsidiary may, restrict such
Wholly-Owned Subsidiary to Competitive Loans and may exclude the
applicability of Section 5.06(a) to such Wholly-Owned Subsidiary, all
as set forth in the relevant Designation Letter. Upon any such
designation of a Subsidiary, such Subsidiary shall be a Borrower
entitled to borrow Competitive Loans only; and upon approval by all of
the Lenders (which approval shall not be unreasonably withheld) of any
Domestic Subsidiary as an Approved Designated Borrower (which approval
shall be evidenced by the Administrative Agent signing and returning
to the Company a copy of such Designation Letter) such Domestic
Subsidiary shall be an Approved Designated Borrower entitled to borrow
both Committed Loans and Competitive Loans. So long as all principal
and interest on all Loans of any Borrower (other than the Company)
hereunder have been paid in full, the Company may terminate the status
of such Borrower as a Borrower hereunder by furnishing to the
Administrative Agent a letter (a "Termination Letter"), substantially
in the form of Exhibit E-2 hereto, duly completed and executed by the
Company and such Borrower. Any Termination Letter furnished in
accordance with this Section 2.04 shall be effective upon receipt by
the Administrative Agent (which shall promptly notify the Lenders),
whereupon the Lenders shall promptly deliver to the Company (through
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the Administrative Agent) the Notes, if any, of such former Borrower.
Notwithstanding the foregoing, the delivery of a Termination Letter
with respect to any Borrower shall not terminate any obligation of
such Borrower theretofore incurred (including, without limitation,
obligations under Sections 5.01, 5.05 and 5.06) or the obligations of
the Company under Section 11 with respect thereto.
(b) The Administrative Agent is hereby authorized by the
Lenders (i) to approve (on behalf of all of the Lenders) as an
Approved Designated Borrower, and (ii) to sign and return to the
Company a Designation Letter from the Company with respect to Newell
Operating Company.
(c) No Designation Letter, with respect to an Approved
Designated Borrower may be amended, supplemented or otherwise modified
without the approval of all of the Lenders.
2.05 CHANGES OF COMMITMENTS.
(a) Unless theretofore reduced to such amount pursuant to
paragraphs (b) and (c) below, the aggregate amount of the Commitments
shall automatically be reduced to zero on the Commitment Termination
Date.
(b) The Company shall have the right to terminate or reduce
permanently the amount of the Commitments at any time or from time to
time upon not less than three Business Days' prior notice to the
Administrative Agent (which shall promptly notify the Lenders) of each
such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction (which
shall be in an integral multiple of $5,000,000) and shall be
irrevocable and effective only upon receipt by the Administrative
Agent; PROVIDED that the Company may not at any time (i) terminate the
Commitments in whole if Committed Loans are then outstanding or (ii)
reduce the aggregate amount of the Commitments below the aggregate
outstanding principal amount of the Committed Loans.
(c) The Commitments once terminated or reduced may not be
reinstated.
2.06 FEES.
(a) FACILITY FEE. The Company shall pay to the
Administrative Agent for account of each Lender a facility fee on the
daily average amount of such Lender's Commitment (whether used or
unused), for the period from and including the date hereof to but not
including the earlier of the date such Commitment is terminated and
the Commitment Termination Date, at a rate per annum equal to the
Applicable Facility Fee Rate; PROVIDED that, if such Lender continues
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to have any outstanding Loans after its Commitment is terminated, then
such facility fee shall continue to accrue on the daily aggregate
amount of outstanding Loans of such Lender from and including the date
on which its Commitment terminates to but excluding the date on which
such Lender ceases to have any outstanding Loans. Accrued facility
fee shall be payable in arrears on each Quarterly Date and on the
earlier of the date the Commitments are terminated and the Commitment
Termination Date.
(b) UTILIZATION FEE. The Borrower agrees to pay to the
Administrative Agent for account of each Lender a utilization fee at a
rate per annum equal to 0.075% of the aggregate amount of the
outstanding Loans of such Lender for each day that the aggregate
principal amount of the outstanding Loans (other than Competitive
Loans) shall exceed 50% of the aggregate outstanding Commitments.
Accrued utilization fees shall be payable on each Quarterly Date and
on the earlier of the date the Commitments terminate and the
Commitment Termination Date.
2.07 LENDING OFFICES. The Loans of each Type and Currency
made by each Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type and Currency.
2.08 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The
failure of any Lender to make any Loan to be made by it on the date
specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, and no Lender shall be
responsible for the failure of any other Lender to make a Loan to be
made by such other Lender. The amounts payable by any Borrower at any
time hereunder and under its Notes to each Lender shall be a separate
and independent debt and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and the Notes, and it
shall not be necessary for any other Lender or the Administrative
Agent to consent to, or be joined as an additional party in, any
proceedings for such purposes.
2.09 EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(b) The Administrative Agent shall maintain accounts in
which it shall record (i) the date, amount, maturity date and interest
rate of each Loan made hereunder, the Type and Currency thereof and
the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable
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from each Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
clause (a) or (b) of this Section 2.09 shall be prima facie evidence
of the existence and amounts of the obligations recorded therein;
PROVIDED that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
(d) Any Lender may request that Loans made by it to any
Borrower be evidenced by a promissory note of the appropriate
Borrower. In such event, the appropriate Borrower shall prepare,
execute and deliver to such Lender one or more promissory notes
payable to the order of such Lender and in a form approved by the
Administrative Agent.
2.10 PREPAYMENTS. Base Rate Loans may be prepaid without
premium or penalty upon not less than one Business Day's prior notice
to the Administrative Agent (which shall promptly notify the Lenders),
which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which, in the case of
partial prepayments, shall be in an integral multiple of $1,000,000)
and shall be irrevocable and effective only upon receipt by the
Administrative Agent, PROVIDED that interest on the principal of any
Base Rate Loans prepaid, accrued to the prepayment date, shall be paid
on the prepayment date.
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST.
----------------------------------
3.01 REPAYMENT OF LOANS. Each Borrower hereby promises to
pay to the Administrative Agent for account of each Lender the
principal amount of each Loan made by such Lender to such Borrower in
the Currency of such Loan, and each Loan shall mature, on the last day
of the Interest Period for such Loan.
3.02 INTEREST.
(a) Each Borrower hereby promises to pay to the
Administrative Agent for account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender to such Borrower, in
the Currency of such Loan, for the period commencing on the date of
such Loan to but excluding the date such Loan shall be paid in full,
at the following rates per annum:
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(i) if such Loan is a Base Rate Loan, the Base Rate (as in
effect from time to time);
(ii) if such Loan is a Committed LIBOR Loan, the Adjusted
LIBO Rate for such Loan for the Interest Period therefor plus the
Applicable Margin;
(iii) if such Loan is a Competitive LIBOR Loan, the
Adjusted LIBO Rate for such Loan for the Interest Period therefor
plus (or minus) the Margin quoted by the Lender making such Loan
in accordance with Section 2.03; and
(iv) if such Loan is a Set Rate Loan, the Competitive Bid
Rate for such Loan for the Interest Period therefor quoted by the
Lender making such Loan in accordance with Section 2.03.
Notwithstanding the foregoing, each Borrower hereby promises to pay to
the Administrative Agent for account of each Lender interest at the
applicable Post-Default Rate on any principal of any Loan made by such
Lender to such Borrower, and (to the fullest extent permitted by law)
on any other amount payable by such Borrower hereunder or under the
Note of such Borrower held by such Lender to or for account of such
Lender, which shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise), for the period commencing on
the due date thereof until the same is paid in full.
(b) Accrued interest on each Loan shall be payable on the
last day of the Interest Period therefor and, if such Interest Period
is longer than three months, at three-month intervals following the
first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand.
(c) Promptly after the determination of any Adjusted LIBO
Rate provided for herein, the Administrative Agent shall (i) notify
the Lenders to which interest at such Adjusted LIBO Rate is payable
and the Company thereof and (ii) at the request of the Company,
furnish to the Company a copy of Page 3750 of the Telerate Service (or
such successor or substitute page of such Service, or any successor to
or substitute for such service, providing rate quotations comparable
to those currently provided on such page for such Service) on the
basis of which the relevant LIBO Rate was determined. At any time
that the Administrative Agent determines the Adjusted LIBO Rate on a
basis other than using Page 3750 of the Telerate Service, the
Administrative Agent shall promptly notify the Company.
3.03 REDENOMINATION. Anything in Section 3.01 or 3.02 to
the contrary notwithstanding, if any Borrower shall fail to pay any
principal or interest denominated in any Alternative Currency on the
original due date therefor (without giving effect to any acceleration
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under Section 9), the amount so in default shall automatically be
redenominated in Dollars on such original due date therefor in an
amount equal to the Dollar Equivalent therefor.
SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
------------------------------------------------
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein, all
payments of principal of and interest on Loans made in Dollars, and
other amounts (other than the principal of and interest on Loans made
in an Alternative Currency) payable by any Obligor under this
Agreement and the Notes, shall be made in Dollars, and all payments of
principal of and interest on Loans made in an Alternative Currency
shall (except as otherwise provided in Section 3.03) be made in such
Alternative Currency, in immediately available funds, without
deduction, set-off or counterclaim, to the Administrative Agent's
Account for such Currency, for account of the Lenders, not later than
2:00 p.m. New York time (in the case of Loans denominated in Dollars)
or 11:00 a.m. local time in the location of the Administrative Agent's
Account (in the case of Loans denominated in an Alternative Currency),
on the date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been made
on the next succeeding Business Day), PROVIDED that if a new Loan is
to be made by any Lender to any Borrower on a date such Borrower is to
repay any principal of an outstanding Loan of such Lender in the same
Currency, such Lender shall apply the proceeds of such new Loan to the
payment of the principal to be repaid and only an amount equal to the
difference between the principal to be borrowed and the principal to
be repaid shall be made available by such Lender to the Administrative
Agent as provided in Section 2.02 or paid by such Borrower to the
Administrative Agent pursuant to this Section 4.01, as the case may
be.
(b) If any Borrower shall default in the payment when due
of any principal, interest or other amounts to be made by such
Borrower under this Agreement or the Notes, any Lender for whose
account any such payment is to be made may (but shall not be obligated
to) debit the amount of any such payment due such Lender which is not
made by such time to any ordinary deposit account of such Borrower
with such Lender (with notice to the Company and the Administrative
Agent).
(c) The Company on its behalf and on behalf of any other
Borrower shall, at the time of making each payment under this
Agreement or any Note for account of any Lender, specify to the
Administrative Agent the Loans or other amounts payable by such
Borrower hereunder to which such payment is to be applied (and in the
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event that the payor fails to so specify, or if an Event of Default
has occurred and is continuing, such Lender may apply such payment
received by it from the Administrative Agent to such amounts then due
and owing to such Lender as such Lender may determine).
(d) Each payment received by the Administrative Agent under
this Agreement or any Note for account of any Lender shall be paid
promptly to such Lender, in immediately available funds.
(e) If the due date of any payment under this Agreement or
any Note would otherwise fall on a day which is not a Business Day
such date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period
of such extension.
4.02 PRO RATA TREATMENT. Except to the extent otherwise
provided herein: (a) each borrowing from the Lenders of Committed
Loans under Section 2.01 shall be made from the Lenders, each payment
of fees under Section 2.06 shall be made for account of the Lenders,
and each reduction of the amount or termination of the Commitments
under Section 2.05 shall be applied to the Commitments of the Lenders,
pro rata according to the amounts of their respective Commitments; (b)
each payment of principal of Committed Loans by any Borrower shall be
made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Committed Loans held by the
Lenders; and (c) each payment of interest on Committed Loans by any
Borrower shall be made for account of the Lenders pro rata in
accordance with the amounts of interest due and payable to the
respective Lenders; PROVIDED that, if an Event of Default shall have
occurred and be continuing, each payment of principal of and interest
on the Loans and other amounts owing hereunder by any Borrower shall
be made for account of the Lenders pro rata in accordance with the
aggregate amounts of all principal of and interest on the Loans and
all other amounts owing hereunder by such Borrower then due and
payable to the respective Lenders.
4.03 COMPUTATIONS. Interest on Loans and the fees payable
pursuant to Section 2.06 shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable;
PROVIDED that interest on Base Rate Loans and Loans in Pounds Sterling
shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
4.04 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
Unless the Administrative Agent shall have been notified by a Lender
or the Company on behalf of any Borrower (each, a "Payor") prior to
the time by, and on the date on, which such Payor is scheduled to make
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payment to the Administrative Agent of (in the case of a Lender) the
proceeds of a Loan to be made by it hereunder or (in the case of any
Borrower) a payment to the Administrative Agent for account of one or
more of the Lenders hereunder (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt,
that it does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the
Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date; and, if the Payor
has not in fact made the Required Payment to the Administrative Agent,
the recipient(s) of such payment shall, on demand, repay to the
Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period commencing
on the date such amount was so made available by the Administrative
Agent to but not including the date the Administrative Agent recovers
such amount (the "Advance Period") at a rate per annum equal to (a) if
the recipient is a Borrower, the Base Rate in effect on such day and
(b) if the recipient is a Lender, the Federal Funds Rate in effect on
such day; and, if such recipient(s) shall fail promptly to make such
payment, the Administrative Agent shall be entitled to recover such
amount, on demand, from the Payor, together with interest thereon for
each day during the Advance Period at a rate per annum equal to (i) if
the Payor is a Borrower, the rate of interest payable on the Required
Payment as provided in the second sentence of Section 3.02(a) and (ii)
if the Payor is a Lender, during the period commencing on the date
such amount was so made available to but excluding the date three
Business Days following such date, the Federal Funds Rate in effect on
such day and, thereafter, the Base Rate in effect on such day.
4.05 SET-OFF; SHARING OF PAYMENTS.
(a) Each Obligor agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its
option, to offset balances held by it for account of such Obligor at
any of its offices, in Dollars or in any other Currency, against any
principal of or interest on any of such Lender's Loans which is not
paid when due (regardless of whether such balances are then due to
such Obligor) in which case it shall promptly notify such Obligor
(through notice to the Company) and the Administrative Agent thereof,
PROVIDED that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of
or interest on any Committed Loan made by it under this Agreement
through the exercise of any right of set-off, bankers' lien or
counterclaim or similar right or otherwise, and, as a result of such
payment, such Lender shall have received a greater percentage of the
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amounts then due hereunder to such Lender in respect of Committed
Loans than the percentage received by any other Lenders, it shall
promptly purchase from such other Lenders participations in (or, if
and to the extent specified by such Lender, direct interests in) the
Committed Loans made by such other Lenders (or in the interest
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that
all the Lenders shall share the benefit of such excess payment (net of
any expenses which may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid
principal and interest on the Committed Loans held by each of the
Lenders. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored.
Each Obligor agrees that any Lender so purchasing a participation (or
direct interest) in the Committed Loans made by other Lenders (or in
the interest thereon, as the case may be) may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender were a direct holder of
Loans (or in the interest thereon, as the case may be) in the amount
of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of any
Obligor. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a set-off
to which this Section 4.05 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this
Section 4.05 to share in the benefits of any recovery on such secured
claim.
SECTION 5. YIELD PROTECTION AND ILLEGALITY.
-------------------------------
5.01 ADDITIONAL COSTS.
(a) Each Borrower shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be necessary
to compensate such Lender for any costs that such Lender determines
are attributable to its making or maintaining of any LIBO Rate Loans
or Set Rate Loans or its obligation to make any LIBO Rate Loans
hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Notes in respect of any
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of such Loans (other than taxes imposed on or measured by the
overall net income of such Lender or of its Applicable Lending
Office for any of such Loans by the jurisdiction in which such
Lender has its principal office or such Applicable Lending
Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized
in the determination of the Adjusted LIBO Rate for such Loan and
Mandatory Costs utilized in the determination of the LIBO Rate
for such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such
Lender (including, without limitation, any of such Loans or any
deposits referred to in the definition of "LIBO Rate" in Section
1.01), or any commitment of such Lender (including, without
limitation, the Commitment of such Lender hereunder); or
(iii) imposes any other condition affecting this Agreement
or its Notes (or any of such extensions of credit or liabilities)
or its Commitment.
If any Lender requests compensation from any Borrower under this
Section 5.01(a), the Company may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such
Lender thereafter to make LIBO Rate Loans until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable), PROVIDED that such
suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason of
any Regulatory Change, any Lender either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such Lender
that includes deposits by reference to which the interest rate on LIBO
Rate Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of such Lender that includes
LIBO Rate Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if
such Lender so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Lender to make LIBO Rate
Loans hereunder shall be suspended until such Regulatory Change ceases
to be in effect (in which case the provisions of Section 5.04 shall be
applicable).
(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Company shall pay
directly to each Lender from time to time on request such amounts as
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such Lender may determine to be necessary to compensate such Lender
(or, without duplication, the bank holding company of which such
Lender is a subsidiary) for any costs that it determines are
attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not
having the force of law and whether or not failure to comply therewith
would be unlawful) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not
having the force of law and whether or not the failure to comply
therewith would be unlawful) issued after the date hereof by any
government or governmental or supervisory authority implementing at
the national level the Basel Accord (including, without limitation,
the Final Risk-Based Capital Guidelines), of capital in respect of its
Commitment or Loans (such compensation to include, without limitation,
an amount equal to any reduction of the rate of return on assets or
equity of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any
Applicable Lending Office or such bank holding company) would have
achieved with respect to its Commitment or Loans but for such law,
regulation, interpretation, directive or request).
(d) Each Lender shall notify the Company of any event
occurring after the date hereof entitling such Lender to compensation
under paragraph (a) or (c) of this Section 5.01 as promptly as
practicable, but in any event within 45 days, after such Lender
obtains actual knowledge thereof. If any Lender fails to give such
notice within 45 days after it obtains actual knowledge of such an
event, such Lender shall, with respect to compensation payable
pursuant to this Section 5.01 in respect of any costs resulting from
such event, only be entitled to payment under this Section 5.01 for
costs incurred from and after the date 45 days prior to the date that
such Lender does give such notice. Each Lender will furnish to the
Company a certificate setting forth the basis and amount of each
request by such Lender for compensation under paragraph (a) or (c) of
this Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of any Regulatory Change
pursuant to paragraph (a) or (b) of this Section 5.01, or of the
effect of capital maintained pursuant to paragraph (c) of this Section
5.01, on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in respect of
Loans, and of the amounts required to compensate such Lender under
this Section 5.01, shall be conclusive absent manifest error, PROVIDED
that such determinations and allocations are made on a reasonable
basis.
(e) Each Lender will designate a different Applicable
Lending Office for the Loans of such Lender affected by any event
Credit Agreement
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specified in paragraphs (a), (b) or (c) of this Section 5.01 or in
Section 5.03 if such designation will avoid the need for, or reduce
the amount of, such compensation or suspension, as the case may be,
and will not, in the sole opinion of such Lender, be disadvantageous
to such Lender.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding:
(a) if the LIBO Rate for any Currency is to be determined
under the second paragraph of the definition of "LIBO Rate" and
the Administrative Agent determines (which determination shall be
conclusive) that no quotation from any Reference Lender of
interest rates for the relevant deposits referred to in such
paragraph are not being provided in the relevant amounts or for
the relevant maturities for purposes of determining rates of
interest for LIBO Rate Loans as provided herein; or
(b) if the LIBO Rate for any Currency is being determined
under the second paragraph of the definition of "LIBO Rate" and
the Majority Lenders determine (or any Lender that has
outstanding a Competitive Bid with respect to a Competitive LIBOR
Loan, determines), which determination shall be conclusive, and
notify (or notifies, as the case may be) the Administrative Agent
that the relevant rates of interest referred to in the second
paragraph of the definition of "LIBO Rate" do not adequately
cover the cost to such Lenders (or such quoting Lender) of making
or maintaining its LIBO Rate Loans in such Currency;
then the Administrative Agent shall give the Company and each Lender
prompt notice thereof, and so long as such condition remains in
effect, the Lenders (or such quoting Lender) shall be under no
obligation to make additional LIBO Rate Loans in such Currency.
5.03 ILLEGALITY. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Lender
or its Applicable Lending Office to honor its obligation to make or
maintain LIBO Rate Loans hereunder in any Currency, then such Lender
shall promptly notify the Company thereof (with a copy to the
Administrative Agent) and such Lender's obligation to make Committed
LIBOR Loans in such Currency shall be suspended until such time as
such Lender may again make and maintain Committed LIBOR Loans in such
Currency (in which case the provisions of Section 5.04 shall be
applicable), and such Lender shall no longer be obligated to make any
Competitive LIBOR Loan in such Currency that it has offered to make.
5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01 AND 5.03.
If the obligation of any Lender to make any LIBO Rate Loans in Dollars
shall be suspended pursuant to Section 5.01 or 5.03 (Loans of such
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type being herein called "Affected Loans" and such type being herein
called the "Affected Type"), all Loans in Dollars (other than
Competitive Loans) which would otherwise be made by such Lender as
Loans of the Affected Type shall be made instead as Base Rate Loans
(and, if an event referred to in Section 5.01(b) or 5.03 has occurred
and such Lender so requests by notice to the Company with a copy to
the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into Base Rate Loans on
the date specified by such Lender in such notice) and, to the extent
that Affected Loans are so made as (or converted into) Base Rate
Loans, all payments of principal which would otherwise be applied to
such Lender's Affected Loans shall be applied instead to its Base Rate
Loans.
5.05 COMPENSATION. Each Borrower shall pay to the
Administrative Agent for account of each Lender, upon the request of
such Lender through the Administrative Agent, such amount or amounts
as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost or expense which such Lender
determines are attributable to:
(a) any payment or conversion of a LIBO Rate Loan or a Set
Rate Loan made by such Lender for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 9)
on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by such Borrower for any reason (excluding
only failure due solely to a default by any Lender or the
Administrative Agent in its obligation to provide funds to such
Borrower hereunder but including, without limitation, the failure
of any of the conditions precedent specified in Section 6 to be
satisfied) to borrow a LIBO Rate Loan or a Set Rate Loan from
such Lender on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 or
2.03(b).
Without limiting the effect of the preceding sentence, such
compensation shall include, in the case of a Loan, an amount equal to
the excess, if any, of (i) the amount of interest which otherwise
would have accrued on the principal amount so paid or converted or not
borrowed for the period from the date of such payment, conversion or
failure to borrow to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period for such
Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the interest component of the amount such Lender
would have bid in the London interbank market for deposits in the
applicable Currency of leading banks (if such Loan is a LIBO Rate
Credit Agreement
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Loan) or in the United States certificate of deposit market for
issuance at face value of certificates of deposit for Dollar deposits
(if such Loan is a Set Rate Loan) in amounts comparable to such
principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
5.06 TAXES.
(a) Each Approved Designated Borrower agrees to pay to each
Lender such additional amounts as are necessary in order that the net
payment of any amount due to such Lender hereunder after deduction for
or withholding in respect of any Taxes imposed with respect to such
payment will not be less than the amount stated herein to be then due
and payable, PROVIDED that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such
Lender is, on the date such Borrower became a Borrower hereunder
(which, in the case of the Company and the Approved Designated
Borrowers listed in Section 2.04(b), means the date hereof and,
in the case of any other Approved Designated Borrower, means the
date of the Designation Letter of such Approved Designated
Borrower) or (if later) on the date such Lender becomes a Lender
hereunder as provided in Section 12.05(b) and on the date of any
change in the Applicable Lending Office of such Lender, entitled
to a complete exemption from withholding or deduction by such
Approved Designated Borrower of Taxes on all interest to be
received by such Lender hereunder in respect of the Loans made by
such Lender to such Approved Designated Borrower, or
(ii) to any such Taxes required to be deducted or withheld
solely by reason of the failure of such Lender to comply with
applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence,
identity or connections with such Borrower's Jurisdiction if such
compliance is required by treaty, statute or regulation as a
precondition to relief or exemption from such Taxes.
For the purposes of this Section 5.06(a), the term "Taxes" shall mean
with respect to any Approved Designated Borrower all present and
future income, stamp, registration and other taxes and levies,
imposts, deductions, charges, compulsory loans and withholdings
whatsoever, and all interest, penalties or similar amounts with
respect thereto, now or hereafter imposed, assessed, levied or
collected by such Approved Designated Borrower's Jurisdiction on or in
respect of the Credit Documents, the principal of and interest on the
Loans and any other amounts payable under any of the Credit Documents,
the recording, registration, notarization or other formalization of
any thereof, the enforcement thereof or the introduction thereof in
Credit Agreement
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any judicial proceedings, or on or in respect of any payments of
principal, interest, premium, charges, fees or other amounts made on,
under or in respect of any thereof (excluding, however, income or
franchise taxes imposed on or measured by the overall net income or
capital of a Lender (or its Applicable Lending Office) by such
Approved Designated Borrower's Jurisdiction as a result of such Lender
being organized under the laws of or resident in such Approved
Designated Borrower's Jurisdiction or of its Applicable Lending Office
being located or carrying on business in such Approved Designated
Borrower's Jurisdiction).
(b) Within 30 days after paying any amount to the
Administrative Agent or any Lender from which it is required by law to
make any deduction or withholding, and within 30 days after it is
required by law to remit such deduction or withholding to any relevant
taxing or other authority, the relevant Borrower shall deliver to the
Administrative Agent for delivery to such Lender evidence satisfactory
to such Lender of such deduction, withholding or payment (as the case
may be).
5.07 REPLACEMENT OF LENDERS. If any Lender requests
compensation pursuant to Section 5.01 or 5.06, or any Lender's
obligation to make Loans of any Type or denominated in any Currency
shall be suspended pursuant to Section 5.01 (any such Lender
requesting such compensation, or whose obligations are so suspended,
being herein called a "Requesting Lender"), the Company, upon three
Business Days' notice to the Administrative Agent given when no
Default shall have occurred and be continuing, may require that such
Requesting Lender transfer all of its right, title and interest under
this Agreement to any bank or other financial institution identified
by the Company that is satisfactory to the Administrative Agent (a) if
such bank or other financial institution (a "Proposed Lender") agrees
to assume all of the obligations of such Requesting Lender hereunder,
and to purchase all of such Requesting Lender's Loans hereunder for
consideration equal to the aggregate outstanding principal amount of
such Requesting Lender's Loans, together with interest thereon to the
date of such purchase, and satisfactory arrangements are made for
payment to such Requesting Lender of all other amounts payable
hereunder to such Requesting Lender on or prior to the date of such
transfer (including any fees accrued hereunder and any amounts that
would be payable under Section 5.05 as if all of such Requesting
Lender's Loans were being prepaid in full on such date) and (b) if
such Requesting Lender has requested compensation pursuant to Section
5.01 or 5.06, such Proposed Lender's aggregate requested compensation,
if any, pursuant to said Section 5.01 or 5.06 with respect to such
Requesting Lender's Loans is lower than that of the Requesting Lender.
Subject to the provisions of Section 12.05(b), such Proposed Lender
shall be a "Lender" for all purposes hereunder. Without prejudice to
the survival of any other agreement of the Company hereunder the
Credit Agreement
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agreements of the Company contained in Sections 5.01, 5.06 and 12.03
(without duplication of any payments made to such Requesting Lender by
the Company or the Proposed Lender) shall survive for the benefit of
such Requesting Lender under this Section 5.07 with respect to the
time prior to such replacement.
SECTION 6. CONDITIONS PRECEDENT.
--------------------
6.01 EFFECTIVE DATE. The obligations of the Lenders to
make Loans hereunder shall not become effective until the date on
which the Administrative Agent shall have received each of the
following documents (with sufficient copies for each Lender), each of
which shall be satisfactory to the Administrative Agent (and to the
extent specified below, to each Lender) in form and substance (or such
condition shall have been waived in accordance with Section 12.01):
(a) Certified copies of the charter and by-laws of, and all
corporate action taken by, the Company approving this Agreement and
the Notes (if any) to be made by the Company, borrowings by the
Company and the guarantee of the Company set forth in Section 11
(including, without limitation, a certificate setting forth the
resolutions of the Board of Directors of the Company adopted in
respect of the transactions contemplated hereby).
(b) A certificate of the Company in respect of each of the
officers (i) who is authorized to sign this Agreement, the Notes,
Competitive Bid Requests, Designation Letters and Termination Letters,
together with specimen signatures, and (ii) who will, until replaced
by another officer or officers duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving
notices and other communications in connection herewith and with the
Notes and the transactions contemplated hereby and thereby. The
Administrative Agent and each Lender may conclusively rely on such
certificate until they receive notice in writing from the Company to
the contrary.
(c) An opinion dated the Effective Date of Schiff, Hardin &
Waite, special Illinois counsel to the Company substantially in the
form of Exhibit A-1 hereto (and the Company hereby instructs such
counsel to deliver such opinion to the Lenders and the Administrative
Agent); and an opinion dated the Effective Date of Andrea Horne,
Associate General Counsel to the Company, substantially in the form of
Exhibit A-2 hereto (and the Company hereby instructs such counsel to
deliver such opinion to the Lenders and the Administrative Agent).
(d) An opinion dated the Effective Date of Milbank, Tweed,
Hadley & McCloy LLP, special New York counsel to the Administrative
Agent, substantially in the form of Exhibit B hereto.
Credit Agreement
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6.02 INITIAL AND SUBSEQUENT CREDIT EXTENSIONS. The
obligation of any Lender to make any Credit Extension hereunder
(including, without limitation, the initial Credit Extension
hereunder) is subject to the further conditions precedent that, as of
the date of such Credit Extension and after giving effect thereto and
the intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company
in Section 7 (other than Sections 7.02(c) and 7.03, except if
such Credit Extension is made on the Effective Date) shall be
true on and as of the date of such Credit Extension with the same
force and effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date).
Each notice of borrowing by the Company hereunder (whether on its own
behalf or on behalf of any other Borrower) shall constitute a
certification by the Company to the effect set forth in the preceding
sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Administrative Agent prior to the date of such
Credit Extension, as of the date of such Credit Extension).
SECTION 7. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Company represents and warrants to the Lenders that:
7.01 CORPORATE EXISTENCE. Each of the Company and its
Significant Subsidiaries: (a) is a corporation duly organized and
validly existing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power, and has all
material governmental licenses, authorizations, consents and
approvals, necessary to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do
business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary except where
failure so to qualify would not have a Material Adverse Effect.
7.02 FINANCIAL CONDITION.
(a) The consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1999 and the related consolidated
statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for the fiscal year ended on said date,
with the opinion thereon of Arthur Andersen LLP, heretofore furnished
to each of the Lenders, are complete and correct and fairly present
Credit Agreement
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the consolidated financial condition of the Company and its
Subsidiaries as at said date and the consolidated results of their
operations for the fiscal year ended on said date, all in accordance
with generally accepted accounting principles. Neither the Company
nor any of its Subsidiaries had on said date any material contingent
liabilities, material liabilities for taxes, material unusual forward
or long-term commitments or material unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected
or provided for in said balance sheet as at said date.
(b) The consolidated balance sheet of the Company and its
Subsidiaries as at June 30, 2000 and the related consolidated
statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for the six-month period ended on said
date, heretofore furnished to each of the Lenders, are complete and
correct and fairly present the consolidated financial condition of the
Company and its Subsidiaries as at said date and the consolidated
results of their operations for the six-month period ended on said
date, all in accordance with generally accepted accounting principles.
Neither the Company nor any of its Subsidiaries had on said date any
material contingent liabilities, material liabilities for taxes,
material unusual forward or long-term commitments or material
unrealized or anticipated losses from any unfavorable commitments,
except as referred to or reflected or provided for in said balance
sheet as at said date.
(c) Since December 31, 1999, there has been no material
adverse change in the consolidated financial condition, operations,
business or prospects of the Company and its Subsidiaries (taken as a
whole).
7.03 LITIGATION. To the best knowledge and belief of the
Company, there are no legal or arbitral proceedings or any proceedings
by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against the
Company or any of its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect.
7.04 NO BREACH. The making or performance of this
Agreement or the Notes, and the consummation of the transactions
herein contemplated, will not conflict with or result in a breach of,
or require any consent under, the charter or by-laws of the Company or
any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to which
any of them is subject, or constitute a default under any such
agreement or instrument, or constitute a tortious interference with
any agreement, or result in the creation or imposition of any Lien
Credit Agreement
----------------
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upon any of the revenues or assets of the Company or any of its
Subsidiaries pursuant to the terms of any such agreement or
instrument.
7.05 CORPORATE ACTION. The Company has all necessary
corporate power and authority to make and perform its obligations
under this Agreement and the Notes of the Company; the making and
performance of this Agreement and the Notes of the Company by the
Company have been duly authorized by all necessary corporate action on
the part of the Company; and this Agreement has been duly and validly
executed and delivered by the Company and constitutes, and each of the
Notes of the Company when executed and delivered by the Company for
value will constitute, its legal, valid and binding obligation,
enforceable in accordance with their respective terms, except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally.
7.06 APPROVALS. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution,
delivery or performance by the Company of this Agreement or the Notes
of the Company or for the validity or enforceability of any thereof.
7.07 USE OF CREDIT. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
margin stock (within the meaning of Regulation U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds
of any Credit Extension hereunder will be used in a manner that will
cause the Company to violate said Regulation X or any Lender to
violate said Regulation U.
7.08 ERISA. Each of the Company and each ERISA Affiliate
has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each of its Plans and is (and to
the best of its knowledge in the case of any Multiemployer Plan is) in
compliance in all material respects with the currently applicable
provisions of ERISA and the Code, and has not incurred any liability
on account of the termination of any of its Plans to the PBGC or any
of its Plans and has not incurred any withdrawal liability to any
Multiemployer Plan.
7.09 CREDIT AGREEMENTS. Schedule I hereto is a complete
and correct list, as of the date hereof, of each credit agreement,
loan agreement, indenture, purchase agreement, Guarantee or other
arrangement (other than a letter of credit) providing for or otherwise
relating to any extension of credit (or commitment for any extension
Credit Agreement
----------------
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of credit) to, or Guarantee by, the Company or any of its Subsidiaries
the aggregate principal or face amount of which equals or exceeds (or
may equal or exceed) $1,000,000 and the aggregate principal or face
amount outstanding or which may become outstanding under each such
arrangement is correctly described in said Schedule I.
7.10 HAZARDOUS MATERIALS. The Company and each of its
Subsidiaries have obtained all permits, licenses and other
authorizations that are required under all Environmental Laws, except
to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. The Company
and each of its Subsidiaries are in compliance with the terms and
conditions of all such permits, licenses and authorizations, and are
also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law
or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a
Material Adverse Effect. Except as heretofore disclosed to the
Lenders, there have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or that are in
the possession of the Company or any of its Subsidiaries with respect
to any property or facility now or previously owned or leased by the
Company or any of its Environmental Affiliates which reveal facts or
circumstances that could reasonably be expected to have a Material
Adverse Effect.
7.11 TAXES. The Company and its Subsidiaries are members
of an affiliated group of corporations filing consolidated returns for
Federal income tax purposes, of which the Company is the "common
parent" (within the meaning of Section 1504 of the Code) of such
group. The Company and its Subsidiaries have filed all Federal income
tax returns and all other material tax returns and information
statements that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries. The charges,
accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges are, in the opinion
of the Company, adequate. The United States Federal income tax
returns of the Company and its Subsidiaries have been examined and/or
closed through the fiscal years of the Company and its Subsidiaries
ended on or before December 31, 1997. The Company has not given or
been requested to give a waiver of the statute of limitations relating
to the payment of Federal, state, local and foreign taxes or other
impositions.
7.12 TRUE AND COMPLETE DISCLOSURE. The information,
reports, financial statements, exhibits and schedules furnished in
Credit Agreement
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writing by or on behalf of the Company to the Lenders in connection
with the negotiation, preparation or delivery of this Agreement or
included herein or delivered pursuant hereto, when taken as a whole do
not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in
light of the circumstances under which they are made, not misleading.
All written information furnished after the date hereof by the Company
and its Subsidiaries to the Lenders in connection with this Agreement
and the transactions contemplated hereby will be true, complete and
accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
7.13 SUBSIDIARIES. As of the date hereof, each of the
Company and its Subsidiaries (as disclosed in the periodic reports
which the Company has filed with the Securities and Exchange
Commission) owns, free and clear of Liens, and has the unencumbered
right to vote all of its outstanding ownership interests in, each
Subsidiary held by it and all of the issued and outstanding capital
stock of each such Person is validly issued, fully paid and
nonassessable.
7.14 COMPLIANCE WITH LAW. As of the date hereof, the
Company and its Subsidiaries are in material compliance with all
applicable laws and regulations, except to the extent that failure to
comply therewith would not have a Material Adverse Effect.
7.15 DESIGNATED BORROWER APPROVALS. No authorizations,
approvals or consents of, and no filings or registrations with, any
governmental or regulatory authority or agency that have not been
obtained by the time any Subsidiary of the Company becomes a
Designated Subsidiary are necessary for the execution, delivery or
performance by such Designated Borrower of the Designation Letter of
such Designated Borrower, this Agreement or the Notes of such
Designated Borrower or for the validity or enforceability of any
thereof or for the borrowing by such Designated Borrower hereunder.
SECTION 8. COVENANTS OF THE COMPANY.
------------------------
The Company agrees that, so long as any of the Commitments
are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by each Borrower
hereunder:
Credit Agreement
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8.01 FINANCIAL STATEMENTS. The Company shall deliver to
each of the Lenders:
(a) as soon as available and in any event within 60 days
after the end of each of the fiscal quarterly periods of each
fiscal year of the Company, consolidated statements of income,
cash flows and stockholders' equity of the Company and its
Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheet as at the end
of such period, setting forth in each case in comparative form
the corresponding figures for the corresponding period in the
preceding fiscal year, and accompanied by a certificate of a
senior financial officer of the Company, which certificate shall
state that said financial statements fairly present the
consolidated financial condition and results of operations of the
Company and its Subsidiaries, in accordance with generally
accepted accounting principles, as at the end of (and for) such
period (subject to normal year-end audit adjustments).
(b) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, consolidated
statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for such year and the related
consolidated balance sheet as at the end of such year, setting
forth in each case in comparative form the corresponding figures
for the preceding fiscal year, and accompanied by an opinion
thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said financial
statements fairly present the consolidated financial condition
and results of operations of the Company and its Subsidiaries, in
accordance with generally accepted accounting principles, as at
the end of (and for) such fiscal year, and a certificate of such
accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically
stated, of any Default.
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any,
which the Company shall have filed with the Securities and
Exchange Commission (or any governmental agency substituted
therefor) or any national securities exchange.
(d) promptly upon the mailing thereof to the shareholders
of the Company generally, copies of all financial statements,
reports and proxy statements so mailed.
Credit Agreement
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(e) as soon as possible, and in any event within ten days
after the Company knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan of the Company have occurred or exist, a
statement signed by a senior financial officer of the Company
setting forth details respecting such event or condition and the
action, if any, which the Company or any ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice
required to be filed with or given to PBGC by the Company or such
ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event
(PROVIDED that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA
shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of
any Plan if at the date of such filing or termination the
fair market value of the assets of such Plan, as determined
by the Plan's independent actuaries, is exceeded by the
present value as determined by such actuaries as of such
date, of benefit commitments under such Plan by more than
$5,000,000 (including any prior terminations subject to this
provision);
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan of the
Company, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company
or any ERISA Affiliate under Section 4201 or 4204 of ERISA
from a Multiemployer Plan causing any withdrawal liability
in excess of $2,500,000 (including any prior withdrawals
subject to this provision), or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
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(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against the Company or any ERISA
Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days.
(f) promptly after the Company knows or has reason to know
that any Default has occurred, a notice of such Default,
describing the same in reasonable detail.
(g) from time to time such other information regarding the
business, affairs or financial condition of the Company or any of
its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required
to be filed under ERISA) as any Lender or the Administrative
Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each
set of financial statements pursuant to paragraph (a) or (b) above, a
certificate of a senior financial officer of the Company (i) to the
effect that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 8.06, 8.07(a)(vi), 8.08(xiii) and 8.10 as of
the end of the respective fiscal quarter or fiscal year.
8.02 LITIGATION. The Company shall promptly give to each
Lender notice of all legal or arbitral proceedings, and of all
proceedings before any governmental or regulatory authority or agency,
instituted, or (to the knowledge of the Company) threatened, against
the Company or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
8.03 CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each of its Significant Subsidiaries to: preserve and
maintain its corporate existence and all its material rights,
privileges and franchises (except as otherwise expressly permitted
under Section 8.07); comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements would have a
Material Adverse Effect; pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained;
maintain all its properties used or useful in its business in good
working order and condition, ordinary wear and tear excepted; and
permit representatives of any Lender or the Administrative Agent,
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during normal business hours, to examine, copy and make extracts from
its books and records, to inspect its properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such Lender or the Administrative Agent (as the case may
be).
8.04 INSURANCE. The Company shall, and shall cause each of
its Subsidiaries to, keep insured by financially sound and reputable
insurers all property of a character usually insured by corporations
engaged in the same or similar business similarly situated against
loss or damage of the kinds and in the amounts customarily insured
against by such corporations and carry such other insurance as is
usually carried by such corporations.
8.05 USE OF PROCEEDS. The proceeds of the Credit
Extensions hereunder will be used solely for general corporate
purposes, including (without limitation) commercial paper back-up and
acquisitions (each of which uses shall be in compliance with all
applicable legal and regulatory requirements, including, without
limitation, Regulations U and X of the Board of Governors of the
Federal Reserve System and the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder). The Company will not permit more than 25% of
the value (as determined by any reasonable method) of its assets, nor
more than 25% of the value (as determined by any reasonable method) of
the assets of the Company and its Subsidiaries, to be represented by
margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System).
8.06 INDEBTEDNESS. The Company will not, nor will it
permit any of its Subsidiaries to, incur, assume or suffer to exist
obligations in respect of standby and performance letters of credit in
an aggregate amount exceeding 5% of Total Consolidated Assets at any
one time outstanding. The Company will not permit any of its
Subsidiaries to create, issue, incur or assume, or suffer to exist,
any Indebtedness, except: (i) Indebtedness existing on the date
hereof, but not any renewals, extensions or refinancings of the same;
(ii) Indebtedness owing to the Company; (iii) Indebtedness of any
Person that becomes a Subsidiary of the Company after the date hereof
so long as such Indebtedness exists at the time such Person becomes
such a Subsidiary and was not incurred in anticipation thereof; (iv)
Capital Lease Obligations in an aggregate amount not to exceed an
amount equal to 5% of Total Consolidated Assets at any one time
outstanding; (v) Indebtedness in respect of Committed Loans under this
Agreement; and (vi) additional Indebtedness in an aggregate amount not
to exceed an amount equal to 15% of Total Consolidated Assets at any
one time outstanding.
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8.07 FUNDAMENTAL CHANGES.
(a) The Company will not, and will not permit any of its
Subsidiaries to, be a party to any merger or consolidation, and the
Company will not, and will not permit any of its Subsidiaries or
operating divisions (whether now owned or existing or hereafter
acquired or designated) to, (x) sell, assign, lease or otherwise
dispose of all or substantially all of its Property whether now owned
or hereafter acquired or (y) sell, assign or otherwise dispose of any
capital stock of any such Subsidiary, or permit any such Subsidiary to
issue any capital stock, to any Person other than the Company or any
of its Wholly-Owned Subsidiaries if, after giving effect thereto, the
Company does not own, directly or indirectly, a majority of the
capital stock of such Subsidiary ("Controlling Stock Disposition");
except that, so long as both before and after giving effect thereto no
Default shall have occurred and be continuing:
(i) the Company or any Subsidiary of the Company may be a
party to any merger or consolidation if it shall be the surviving
corporation;
(ii) any such Subsidiary may be a party to any merger or
consolidation with another such Subsidiary (or with any Person
that becomes another such Subsidiary as a result of such merger
or consolidation);
(iii) any such Subsidiary may merge into, and any such
Subsidiary or operating division may transfer any Property to,
the Company;
(iv) any such Subsidiary or operating division may transfer
any Property to another such Subsidiary or operating division (or
to any Person that becomes as part of such transfer another such
Subsidiary or operating division);
(v) the Company, any such Subsidiary or operating division
may sell, assign, lease or otherwise dispose of any Non-Strategic
Property; and
(vi) the Company or any such Subsidiary or operating
division may make sales, assignments and other dispositions of
Property (including Controlling Stock Dispositions) and any such
Subsidiary may become a party to a merger or consolidation (each
such sale, assignment, disposition, Controlling Stock
Disposition, merger or consolidation, other than those described
in clauses (i) through (v), a "Disposition") if the Property that
was the subject of any such Disposition, together with the
Property that was the subject of all Dispositions during the
Disposition Period for such Disposition, did not produce revenue
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that was greater in amount than an amount equal to 10% of the
revenue of the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP)
for the twelve-month period ending on the Determination Date for
such Disposition (for which purpose, a Controlling Stock
Disposition with respect to any such Subsidiary shall be deemed
to be the disposition of Property of such Subsidiary that
produced all of the revenues of such Subsidiary).
(b) Notwithstanding anything in clauses (i) through (vi) of
Section 8.07(a) to the contrary:
(i) the Company will not, and will not permit any of its
Subsidiaries or operating divisions (whether now owned or
existing or hereafter acquired or designated) to, sell, lease,
assign, transfer or otherwise dispose of (whether in one
transaction or in a series of transactions) any of its Property
(whether now owned or hereafter acquired) if such sale,
assignment, lease or other disposition (whether in one
transaction or in a series of transactions) shall have a Material
Adverse Effect; and
(ii) no Wholly-Owned Subsidiary of the Company shall be a
party to any merger or consolidation with, or shall sell, lease,
assign, transfer or otherwise dispose of any substantial part of
its Property to, any Subsidiary of the Company that is not a
Wholly-Owned Subsidiary of the Company.
8.08 LIENS. The Company shall not, and shall not permit
any of its Subsidiaries to, create, assume or suffer to exist any Lien
upon any of its property or assets, now owned or hereafter acquired,
securing any Indebtedness or other obligation except: (i) Liens
outstanding on the date hereof and listed in Schedule II hereto; (ii)
Liens for taxes or other governmental charges not yet delinquent;
(iii) Liens in respect of Property acquired or constructed or improved
by the Company or any such Subsidiary after the date hereof which
Liens exist or are created at the time of acquisition or completion of
construction or improvement of such Property or within six months
thereafter to secure Indebtedness assumed or incurred to finance all
or any part of the purchase price or cost of construction or
improvement of such Property, but any such Lien shall cover only the
Property so acquired or constructed and any improvements thereto (and
any real property on which such Property is located); (iv) Liens on
Property of any corporation that becomes a Subsidiary of the Company
after the date hereof, PROVIDED that such Liens are in existence at
the time such corporation becomes a Subsidiary of the Company and were
not created in anticipation thereof; (v) Liens on Property acquired
after the date hereof, PROVIDED that such Liens were in existence at
the time such Property was acquired and were not created in
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anticipation thereof; (vi) Liens imposed by law, such as mechanics',
materialmen's, landlords', warehousemen's and carriers' Liens, and
other similar Liens, securing obligations incurred in the ordinary
course of business which are not past due for more than thirty days or
which are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established; (vii) Liens
under workmen's compensation, unemployment insurance, social security
or similar legislation; (viii) Liens, deposits, or pledges to secure
the performance of bids, tenders, contracts (other than contracts for
the payment of money), leases, public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds,
or other similar obligations arising in the ordinary course of
business; (ix) judgment and other similar Liens arising in connection
with court proceedings, PROVIDED the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings;
(x) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Company or any such
Subsidiary of the Property encumbered thereby in the normal course of
its business or materially impair the value of the Property subject
thereto; (xi) Liens securing obligations of any such Subsidiary to the
Company or another Subsidiary of the Company; (xii) Liens securing
obligations of the Company pursuant to Receivables Sale Agreements;
and (xiii) other Liens securing Indebtedness in an aggregate amount
which does not exceed 5% of Total Consolidated Assets.
8.09 LINES OF BUSINESSES. Neither the Company nor any of
its Subsidiaries shall engage to any significant extent in any line or
lines of business other than the lines of business in which they are
engaged on the date hereof and any other line or lines of business
directly related to the manufacture, distribution and/or sale of
consumer or industrial products (collectively, "Permitted
Activities"). Notwithstanding the foregoing, the Company and its
Subsidiaries may engage in other lines of business as a result of the
acquisition of any Person primarily engaged in Permitted Activities so
long as the Company uses its best efforts to come into compliance with
the first sentence of this Section 8.09 within a reasonable period of
time after such acquisition.
8.10 TOTAL INDEBTEDNESS TO TOTAL CAPITAL. The Company
shall not permit the ratio of Total Indebtedness to Total Capital at
any time to be greater than 0.65 to 1.
SECTION 9. EVENTS OF DEFAULT.
-----------------
If one or more of the following events (herein called
"Events of Default") shall occur and be continuing:
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(a) Any Borrower shall default in the payment when due of
any principal of or interest on any Loan or any other amount
payable by it hereunder; or
(b) The Company or any of its Subsidiaries shall default in
the payment when due of any principal of or interest on any of
its other Indebtedness aggregating $25,000,000 or more; or any
event specified in any note, agreement, indenture or other
document evidencing or relating to any Indebtedness aggregating
$25,000,000 or more shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause,
such Indebtedness to become due prior to its stated maturity or
to permit termination of the commitment to lend pursuant to any
such instrument or agreement; or
(c) Any representation, warranty or certification made or
deemed made by the Company herein or in any Designation Letter or
by the Company in any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of the
time made or furnished in any material respect; or
(d) The Company shall default in the performance of any of
its obligations under Section 8.01(f) or 8.05 through 8.10; or
the Company shall default in the performance of any of its other
obligations in this Agreement and such default shall continue
unremedied for a period of 30 days after notice thereof to the
Company by the Administrative Agent or any Lender (through the
Administrative Agent); or
(e) The Company or any of its Significant Subsidiaries
shall admit in writing its inability to, or be generally unable
to, pay its debts as such debts become due; or
(f) The Company or any of its Significant Subsidiaries
shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the
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Bankruptcy Code, or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced against the
Company or any of its Significant Subsidiaries without its
application or consent, in any court of competent jurisdiction,
seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or
the like of it or of all or any substantial part of its assets,
or (iii) similar relief in respect of it under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 days; or an
order for relief against it shall be entered in an involuntary
case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money
in excess of $20,000,000 in the aggregate shall be rendered by a
court or courts against the Company and/or any of its
Subsidiaries and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 30 days from the date of
entry thereof and the Company or the relevant Subsidiary shall
not, within said period of 30 days, or such longer period during
which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during
such appeal; or
(i) An event or condition specified in Section 8.01(e)
shall occur or exist with respect to any Plan or Multiemployer
Plan of the Company and, as a result of such event or condition,
together with all other such events or conditions, the Company or
any ERISA Affiliate shall incur or in the opinion of the Majority
Lenders shall be reasonably likely to incur a liability to a
Plan, a Multiemployer Plan or PBGC (or any combination of the
foregoing) which is, in the determination of the Majority
Lenders, material in relation to the consolidated financial
position of the Company and its Subsidiaries (taken as a whole);
or
(j) During any period of 25 consecutive calendar months (i)
individuals who were directors of the Company on the first day of
such period and (ii) other individuals whose election or
nomination to the Board of Directors of the Company was approved
by at least a majority of the individuals referred to in clause
(i) above and (iii) other individuals whose election or
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nomination to the Board of Directors of the Company was approved
by at least a majority of the individuals referred to in clauses
(i) and (ii) above shall no longer constitute a majority of the
Board of Directors of the Company; or
(k) The Guarantee provided in Section 11, or any provisions
thereof, shall cease to be in full force and effect in all
material respects, or any guarantor thereunder or any Person
acting on behalf of such guarantor shall deny or disaffirm such
guarantor's obligations under such Guarantee or shall default in
the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to
such Guarantee;
THEREUPON: (i) in the case of an Event of Default (other than one
referred to in clause (f) or (g) of this Section 9 in respect of the
Company) (x) the Administrative Agent may and, upon request of the
Majority Lenders, shall, by notice to the Company, cancel the
Commitments and (y) the Administrative Agent may and, upon request of
Lenders holding at least 51% of the aggregate unpaid principal amount
of Loans then outstanding shall, by notice to the Company, declare the
principal amount of and the accrued interest on the Loans, and all
other amounts payable by the Company or any other Borrower hereunder
and under the Notes, to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company and each other Borrower; and
(ii) in the case of the occurrence of an Event of Default referred to
in clause (f) or (g) of this Section 9 in respect of the Company, the
Commitments shall be automatically cancelled and the principal amount
then outstanding of, and the accrued interest on, the Loans and all
other amounts payable by the Company or any other Borrower hereunder
and under the Notes shall become automatically immediately due and
payable without presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the Company and
each other Borrower.
In addition, in the case of the occurrence of any event of
the type referred to in clause (f) or (g) of this Section 9 in respect
of any Designated Borrower, the principal amount then outstanding of,
and accrued interest on, the Loans and other amounts payable by such
Designated Borrower hereunder and under its Notes shall automatically
become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby
expressly waived by such Designated Borrower and the Company.
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SECTION 10. THE ADMINISTRATIVE AGENT.
------------------------
10.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender
hereby irrevocably (but subject to Section 10.08) appoints and
authorizes the Administrative Agent to act as its agent hereunder with
such powers as are specifically delegated to the Administrative Agent
by the terms of this Agreement together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term
as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 shall include reference to its Affiliates and its own
and its affiliates' officers, directors, employees and agents): (a)
shall have no duties or responsibilities except those expressly set
forth in this Agreement and shall not by reason of this Agreement be a
trustee for any Lender; (b) shall not be responsible to the Lenders
for any recitals, statements, representations or warranties contained
in this Agreement or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement
or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, any Note or any other document
referred to or provided for herein or for any failure by the Company
or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder; and (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith, except for its own
gross negligence or willful misconduct. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.02 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent.
As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with
instructions signed by the Majority Lenders (or such other number of
Lenders as is expressly required hereby), and such instructions of the
Majority Lenders (or such other number of Lenders) and any action
taken or failure to act pursuant thereto shall be binding on all the
Lenders.
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10.03 DEFAULTS. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or the Company
specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a
notice of the occurrence of a Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent
shall (subject to Section 10.07) take such action with respect to such
Default as shall be directed by the Majority Lenders, PROVIDED that,
unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the
Lenders.
10.04 RIGHTS AS A LENDER. With respect to its Commitment
and the Loans made by it, Chase (and any successor acting as
Administrative Agent), in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Administrative Agent in its
individual capacity. Chase (and any successor acting as
Administrative Agent) and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business
with the Company (and any of its Affiliates) as if it were not acting
as the Administrative Agent, and Chase and its Affiliates may accept
fees and other consideration from the Company for services in
connection with this Agreement or otherwise without having to account
for the same to the Lenders.
10.05 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section
12.03, but without limiting the obligations of the Company under said
Section 12.03), ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement or any other
documents contemplated by or referred to herein or the transactions
contemplated hereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Section 12.03 but
excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms
hereof, or of any such other documents, PROVIDED that no Lender shall
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be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the party to be indemnified.
10.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS. Each Lender agrees that it has, independently and without
reliance on the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its
own credit analysis of the Company and its Subsidiaries and decision
to enter into this Agreement and that it will, independently and
without reliance upon the Administrative Agent or any other Lender,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The
Administrative Agent shall not be required to keep itself informed as
to the performance or observance by any Obligor of this Agreement or
any other document referred to or provided for herein or to inspect
the properties or books of the Company or any Subsidiary of the
Company. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or
business of the Company or any Subsidiary of the Company (or any of
their affiliates) which may come into the possession of the
Administrative Agent or any of its Affiliates.
10.07 FAILURE TO ACT. Except for action expressly required
of the Administrative Agent hereunder the Administrative Agent shall
in all cases be fully justified in failing or refusing to act
hereunder unless it shall be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.
10.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the
Company and the Administrative Agent may be removed at any time with
or without cause by the Majority Lenders. Upon any such resignation
or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a bank with a combined
capital and surplus of at least $100,000,000 which has an office in
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New York, New York. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent,
such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.
After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Administrative Agent.
10.09 LEAD ARRANGER AND OTHER AGENTS. Anything herein to
the contrary notwithstanding, the Advisor, Lead Arranger and Book
Manager, the Syndication Agent and the Documentation Agent listed on
the cover page shall not have any duties or responsibilities under
this Agreement, except in their capacity, if any, as Lenders.
SECTION 11. GUARANTEE.
---------
11.01 GUARANTEE. The Company hereby guarantees to each
Lender and the Administrative Agent and their respective successors
and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration, by optional prepayment or otherwise) of the
principal of and interest on the Loans made by the Lenders to, and the
Notes held by each Lender of, any Designated Borrower and all other
amounts from time to time owing to the Lenders or the Administrative
Agent by any Designated Borrower under this Agreement pursuant to its
Designation Letter and under the Notes, in each case strictly in
accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). The Company hereby
further agrees that if any Designated Borrower shall fail to pay in
full when due (whether at stated maturity, by acceleration, by
optional prepayment or otherwise) any of the Guaranteed Obligations,
the Company will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such
extension or renewal.
11.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Company hereunder are unconditional irrespective of (a) the value,
genuineness, validity, regularity or enforceability of any of the
Guaranteed Obligations, (b) any modification, amendment or variation
in or addition to the terms of any of the Guaranteed Obligations or
any covenants in respect thereof or any security therefor, (c) any
extension of time for performance or waiver of performance of any
Credit Agreement
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covenant of any Designated Borrower or any failure or omission to
enforce any right with regard to any of the Guaranteed Obligations,
(d) any exchange, surrender, release of any other guaranty of or
security for any of the Guaranteed Obligations, or (e) any other
circumstance with regard to any of the Guaranteed Obligations which
may or might in any manner constitute a legal or equitable discharge
or defense of a surety or guarantor, it being the intent hereof that
the obligations of the Company hereunder shall be absolute and
unconditional under any and all circumstances.
The Company hereby expressly waives diligence, presentment,
demand, protest, and all notices whatsoever with regard to any of the
Guaranteed Obligations and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed
against any Designated Borrower hereunder or under the Designation
Letter of such Designated Borrower or any Note of such Designated
Borrower or any other guarantor of or any security for any of the
Guaranteed Obligations.
11.03 REINSTATEMENT. The guarantee in this Section 11
shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Designated Borrower in
respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder(s) of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
11.04 SUBROGATION. Until the termination of the
Commitments and the payment in full of the principal of and interest
on the Loans and all other amounts payable to the Administrative Agent
or any Lender hereunder, the Company hereby irrevocably waives all
rights of subrogation or contribution, whether arising by operation of
law (including, without limitation, any such right arising under the
Bankruptcy Code) or otherwise, by reason of any payment by it pursuant
to the provisions of this Section 11.
11.05 REMEDIES. The Company agrees that, as between the
Company on the one hand and the Lenders and the Administrative Agent
on the other hand, the obligations of any Designated Borrower
guaranteed under this Agreement may be declared to be forthwith due
and payable, or may be deemed automatically to have been accelerated,
as provided in Section 9, for purposes of Section 11.01
notwithstanding any stay, injunction or other prohibition (whether in
a bankruptcy proceeding affecting such Designated Borrower or
otherwise) preventing such declaration as against such Designated
Borrower and that, in the event of such declaration or automatic
acceleration such obligations (whether or not due and payable by such
Designated Borrower) shall forthwith become due and payable by the
Company for purposes of said Section 11.01.
Credit Agreement
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11.06 CONTINUING GUARANTEE. The guarantee in this Section
11 is a continuing guarantee and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 12. MISCELLANEOUS.
-------------
12.01 WAIVER. No failure on the part of the Administrative
Agent or any Lender to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under
this Agreement, any Designation Letter or any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement, any Designation Letter or any
Note preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein and
therein are cumulative and not exclusive of any remedies provided by
law.
12.02 NOTICES. All notices and other communications
provided for herein (including, without limitation, any modifications
of, or requests, demands, waivers or consents under, this Agreement)
shall be given or made by telex, telecopy, telegraph, cable or in
writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at (i) in the case of the Company
or the Administrative Agent, the "Address for Notices" specified below
its name on the signature pages hereof and (ii) in the case of each
Lender, the address (or telecopy) set forth in its Administrative
Questionnaire; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as
otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex or
telecopier, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid. Each Designated Borrower hereby
agrees that each notice or other communication provided for herein may
be furnished to the Company or by the Company on its behalf in the
manner specified above and each Designated Borrower further agrees
that failure of the Company to deliver to such Designated Borrower any
notice furnished in accordance with this Section 12.02 shall not
affect the validity of such notice.
12.03 EXPENSES, ETC. The Company agrees to pay or
reimburse each of the Lenders and the Administrative Agent for paying:
(a) the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy LLP, special New York counsel to the Administrative Agent, in
connection with (i) the preparation, execution and delivery of this
Agreement, the Designation Letters and the Notes and the making of the
Loans hereunder and (ii) any amendment, modification or waiver
Credit Agreement
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(whether or not such amendment, modification or waiver shall become
effective) of any of the terms of this Agreement or any of the Notes;
(b) all reasonable costs and expenses of the Lenders and the
Administrative Agent (including reasonable counsels' fees) in
connection with the enforcement of this Agreement, any Designation
Letter or any of the Notes; and (c) all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, any
Designation Letter, any of the Notes or any other document referred to
herein.
The Company hereby agrees to indemnify the Administrative
Agent and each Lender and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages, costs, expenses, taxes
or penalties incurred by any of them arising out of, by reason of or
as a consequence of (i) any representation or warranty made or deemed
to be made by the Company in Section 7 or in any Designation Letter
proving to have been false or misleading as of the time made in any
material respect or (ii) any investigation or litigation or other
proceedings (including any threatened investigation or litigation or
other proceedings) relating to any actual or proposed use by the
Company or any Subsidiary of the Company of the proceeds of any of the
Loans, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding any
such losses, liabilities, claims, damages, costs, expenses, taxes or
penalties incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
12.04 AMENDMENTS, ETC. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the
Company, the Administrative Agent and the Majority Lenders, or by the
Company, and the Administrative Agent acting with the consent of the
Majority Lenders, and any provision of this Agreement may be waived by
the Majority Lenders or by the Administrative Agent acting with the
consent of the Majority Lenders; PROVIDED that no amendment,
modification or waiver shall, unless by an instrument signed by all of
the Lenders or by the Administrative Agent acting with the consent of
all of the Lenders: (i) increase or extend the term, or extend the
time or waive any requirement for the reduction or termination, of the
Commitments, (ii) extend the date fixed for the payment of any
principal of or interest on any Loan, (iii) reduce the amount of any
principal of any Loan or the rate at which interest or any fee is
payable hereunder, (iv) alter the terms of Section 11 or release the
Company from any of its obligations thereunder, (v) alter the terms of
this Section 12.04, (vi) amend the definition of the term "Majority
Lenders" or modify in any other manner the number or percentage of the
Credit Agreement
----------------
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Lenders required to make any determinations or waive any rights
hereunder or to modify any provision hereof, (vii) amend the
definition of the term "Alternative Currency" or (viii) waive any of
the conditions precedent set forth in Section 6; and PROVIDED;
further, that any amendment of Section 10, or which increases the
obligations or alters the rights of the Administrative Agent
hereunder, shall require the consent of the Administrative Agent.
12.05 ASSIGNMENTS AND PARTICIPATIONS.
(a) No Obligor may assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the
Lenders and the Administrative Agent.
(b) No Lender may assign all or any part of its Loans, its
Notes or its Commitment without the prior consent of the Company and
the Administrative Agent, which consents will not be unreasonably
withheld and, in the case of the Company, shall not be required if an
Event of Default referred to in clauses (a), (f) or (g) of Section 9
exists; PROVIDED that, (i) without the consent of the Company or the
Administrative Agent, any Lender may assign to any Lender Affiliate or
to another Lender all or (subject to the further clauses below) any
portion of its Commitment; (ii) any such partial assignment shall be
not less than $5,000,000 and in multiples of $1,000,000 in excess
thereof, unless the Company and the Administrative Agent otherwise
consent; and (iii) such assigning Lender shall also simultaneously
assign the same proportion of each of its Committed Loans then
outstanding. Upon written notice to the Company and the
Administrative Agent of an assignment permitted by the preceding
sentence (which notice shall identify the assignee, the amount of the
assigning Lender's Commitment and Loans assigned in detail reasonably
satisfactory to the Administrative Agent) and upon the effectiveness
of any assignment consented to by the Company (if required) and the
Administrative Agent, the assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the
consent of the Company and the Administrative Agent), the obligations,
rights and benefits of a Lender hereunder holding the Commitment and
Loans (or portions thereof) assigned to it (in addition to the
Commitment and Loans, if any, theretofore held by such assignee) and
the assigning Lender shall, to the extent of any such Commitment
assignment, be released from its Commitment (or portions thereof) so
assigned. Upon the effectiveness of any assignment referred to in
this Section 12.05(b), the assigning Lender or the assignee Lender
shall pay to the Administrative Agent a transfer fee in an amount
equal to $3,500.
(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part of its Commitment or its
Loans, in which event each such participant shall be entitled to the
Credit Agreement
----------------
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rights and benefits of the provisions of Section 8.01(g) with respect
to its participation as if (and the Company shall be directly
obligated to such participant under such provisions as if) such
participant were a "Lender" for purposes of said Section, but shall
not have any other rights or benefits under this Agreement or such
Lender's Notes (the participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
(the "Participation Agreement") executed by such Lender in favor of
the participant). All amounts payable by the Company to any Lender
under Section 5 shall be determined as if such Lender had not sold or
agreed to sell any participations and as if such Lender were funding
all of its Loans in the same way that it is funding the portion of its
Loans in which no participations have been sold. In no event shall a
Lender that sells a participation be obligated to the participant
under the Participation Agreement to take or refrain from taking any
action hereunder or under such Lender's Notes except that such Lender
may agree in the Participation Agreement that it will not, without the
consent of the participant, agree to (i) the increase, or the
extension of the term, or the extension of the time or waiver of any
requirement for the reduction or termination, of such Lender's
Commitment, (ii) the extension of any date fixed for the payment of
principal of or interest on any participated Loan or any portion of
any fees payable to the participant, (iii) the reduction of any
payment of principal of any participated Loan, (iv) the reduction of
the rate at which either interest or (if the participant is entitled
to any part thereof) fees are payable hereunder to a level below the
rate at which the participant is entitled to receive interest or fees
(as the case may be) in respect of such participation or (v) any
modification, supplement or waiver hereof or of any of the other
Credit Documents to the extent that the same, under the terms hereof
or thereof, requires the consent of each Lender.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement and
its Notes (if any) to secure obligations of such Lender, including any
such pledge or assignment to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security
interest; PROVIDED that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(e) A Lender may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants).
12.06 SURVIVAL. The obligations of any Borrower under
Sections 5.01, 5.05 and 5.06, the obligations of the Lenders under
Section 10.05 and the obligations of the Company under Section 12.03
Credit Agreement
----------------
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shall survive the repayment of the Loans and the termination of the
Commitments. In addition, each representation and warranty made, or
deemed to be made, by a notice of borrowing of Loans hereunder shall
survive the making of such Loans, and no Lender shall be deemed to
have waived, by reason of making any Loan, any Default or Event of
Default which may arise by reason of such representation or warranty
proving to have been false or misleading, notwithstanding that such
Lender or the Administrative Agent may have had notice or knowledge or
reason to believe that such representation or warranty was false or
misleading at the time such Loan was made.
12.07 CAPTIONS. Captions and section headings appearing
herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this
Agreement.
12.08 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in any number of counterparts, each of which shall be
identical and all of which, when taken together, shall constitute one
and the same instrument, and any of the parties hereto may execute
this Agreement by signing any such counterpart. Except as provided in
Section 6.01, this Agreement shall become effective when it shall have
been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery
of an executed counterpart of a signature page to this Agreement by
telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
12.09 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS;
WAIVER OF JURY TRIAL; ETC.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND ANY ACTION OR PROCEEDING TO
EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED IN CONNECTION
THEREWITH, MAY BE INSTITUTED IN THE SUPREME COURT OF THE STATE OF NEW
YORK, COUNTY OF NEW YORK OR IN THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND EACH OBLIGOR IRREVOCABLY AND
UNCONDITIONALLY SUBMITS GENERALLY (BUT NON-EXCLUSIVELY) TO THE
JURISDICTION OF EACH SUCH COURT. THE COMPANY IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES OF SUCH PROCESS TO THE COMPANY AT ITS ADDRESS
SET FORTH UNDERNEATH ITS SIGNATURE HERETO. EACH DESIGNATED BORROWER
HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
BROUGHT IN NEW YORK MAY BE MADE UPON SUCH DESIGNATED BORROWER BY
Credit Agreement
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SERVICE UPON THE COMPANY AT THE "ADDRESS FOR NOTICES" SPECIFIED BELOW
ITS NAME ON THE SIGNATURE PAGES HEREOF AND EACH DESIGNATED BORROWER
HEREBY IRREVOCABLY APPOINTS THE COMPANY AS ITS AUTHORIZED AGENT
("PROCESS AGENT") TO ACCEPT, ON BEHALF OF ITSELF AND ITS PROPERTY,
SUCH SERVICE OF PROCESS IN NEW YORK. EACH OBLIGOR AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. EACH OBLIGOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH
OBLIGOR FURTHER AGREES THAT ANY SUCH ACTION OR PROCEEDING AGAINST THE
ADMINISTRATIVE AGENT AND/OR ANY OF THE LENDERS SHALL BE BROUGHT ONLY
IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR
IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY CONSENT TO THE
JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE.
(b) EACH OF THE OBLIGORS, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.10 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12.11 JUDGMENT CURRENCY. This is an international loan
transaction in which the specification of Dollars or an Alternative
Currency, as the case may be (the "Specified Currency"), and any
payment in New York City or the country of the Specified Currency, as
the case may be (the "Specified Place"), is of the essence, and the
Specified Currency shall be the currency of account in all events
relating to Loans denominated in the Specified Currency. The payment
obligations of the Obligors under this Agreement and the Notes shall
not be discharged by an amount paid in another currency or in another
place, whether pursuant to a judgment or otherwise, to the extent that
the amount so paid on conversion to the Specified Currency and
transfer to the Specified Place under normal banking procedures does
not yield the amount of the Specified Currency due hereunder at the
Specified Place. If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in the Specified
Currency into another currency (the "Second Currency"), the rate of
exchange which shall be applied shall be that at which in accordance
with normal banking procedures the Administrative Agent could purchase
the Specified Currency with the Second Currency on the Business Day
next preceding that on which such judgment is rendered. The
Credit Agreement
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obligation of each Obligor in respect of any such sum due from it to
the Administrative Agent or any Lender hereunder (an "Entitled
Person") shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be discharged only to the extent that on
the Business Day following receipt by such Entitled Person of any sum
adjudged to be due hereunder or under the Notes in the Second Currency
such Entitled Person may in accordance with normal banking procedures
purchase and transfer to the Specified Place the Specified Currency
with the amount of the Second Currency so adjudged to be due; and each
Obligor hereby, as a separate obligation and notwithstanding any such
judgment, agrees to indemnify such Entitled Person against, and to pay
such Entitled Person on demand in the Specified Currency, any
difference between the sum originally due to such Entitled Person in
the Specified Currency and the amount of the Specified Currency so
purchased and transferred.
12.12 EUROPEAN MONETARY UNION. (a) If, as a result of the
implementation of European monetary union, (i) any National Currency
ceases to be lawful currency of the nation issuing the same and is
replaced by the Euro, or (ii) any National Currency and the Euro are
at the same time recognized by any governmental authority of the
nation issuing such National Currency as lawful currency of such
nation and the Administrative Agent or the Majority Lenders shall so
request in a notice delivered to the Company, then any amount payable
hereunder by any party hereto in such National Currency shall instead
be payable in the Euro and the amount so payable shall be determined
by translating the amount payable in such National Currency to the
Euro at the exchange rate recognized by the European Central Bank for
the purpose of implementing European monetary union. Prior to the
occurrence of the event or events described in clause (i) or (ii) of
the preceding sentence, each amount payable hereunder in any National
Currency will, except as otherwise provided herein, continue to be
payable only in that Currency.
(b) The Company agrees, at the request of any Lender, to
compensate such Lender for any loss, cost, expense or reduction in
return that such Lender shall reasonably determine shall be incurred
or sustained by such Lender as a result of the implementation of
European monetary union and that would not have been incurred or
sustained but for the transactions provided for herein. A certificate
of a Lender setting forth such Lender's determination of the amount or
amounts necessary to compensate such Lender shall be delivered to the
Company and shall be conclusive absent manifest error so long as such
determination is made on a reasonable basis. The Company shall pay
such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
Credit Agreement
----------------
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
NEWELL RUBBERMAID INC.
By /s/ C. R. Davenport
-------------------------------------
Name: C. R. Davenport
Title: Vice President -- Treasurer
Address for Notices:
Newell Rubbermaid Inc.
29 East Stephenson Street
Freeport, Illinois 61032
Attn: C.R. Davenport
Vice President-Treasurer
Telecopy No.: 815-233-8060
Telephone No.: 815-233-8040
Credit Agreement
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THE ADMINISTRATIVE AGENT
------------------------
THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ Randolph E. Cates
-------------------------------------
Name: Randolph E. Cates
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Christina R. Gould
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7684
Credit Agreement
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LENDERS
-------
THE CHASE MANHATTAN BANK
By /s/ Randolph E. Cates
-------------------------------------
Name: Randolph E. Cates
Title: Vice President
Credit Agreement
----------------
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BANK ONE, NA
By /s/ Richard R. Howard
-------------------------------------
Name: Richard R. Howard
Title: Vice President
Credit Agreement
----------------
-71-
ROYAL BANK OF CANADA
By /s/ Gordon C. MacArthur
-------------------------------------
Name: Gordon C. MacArthur
Title: Senior Manager
Credit Agreement
----------------
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BANK OF AMERICA, N.A.
By /s/ Gretchen Spoo
----------------------------------
Name: Gretchen Spoo
Title: Vice President
Credit Agreement
----------------
-73-
BARCLAYS BANK PLC
By /s/ L. Peter Yetman
-------------------------------------
Name: L. Peter Yetman
Title: Director
Credit Agreement
----------------
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COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK
AND GRAND CAYMAN BRANCHES
By /s/ Mark Monsow
-------------------------------------
Name: Mark Monsow
Title: Vice President
By /s/ Albert Morrow
-------------------------------------
Name: Albert Morrow
Title: Assistant Treasurer
Credit Agreement
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DANSKE BANK A/S,
NEW YORK BRANCH
By /s/ George B. Wendell
-------------------------------------
Name: George B. Wendell
Title: Vice President
By /s/ Daniel F. Lenzo
-------------------------------------
Name: Daniel F. Lenzo
Title: Vice President
Credit Agreement
----------------
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MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Robert Bottamedi
-------------------------------------
Name: Robert Bottamedi
Title: Vice President
Credit Agreement
----------------
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BANCA COMMERCIALE ITALIANA, NEW YORK BRANCH
By /s/ J. Dickerhof
--------------------------------------
Name: J. Dickerhof
Title: Vice President
By /s/ Frank Maffei
--------------------------------------
Name: Frank Maffei
Title: Authorized Signature
Credit Agreement
----------------
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BANCO BILBAO VIZCAYA ARGENTARIA, NEW YORK
By /s/ John Martini
-------------------------------------
Name: John Martini
Title: Vice President - Corporate
Banking
By /s/ Manuel Sanchez
-------------------------------------
Name: Manuel Sanchez
Title: Global Rel. Manager -
Corporate Banking
Credit Agreement
----------------
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THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By /s/ Hisashi Miyashiro
-------------------------------------
Name: Hisashi Miyashiro
Title: Deputy General Manager
Credit Agreement
----------------
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BNP PARIBAS,
By /s/ Jo Ellen Bender
-------------------------------------
Name: Jo Ellen Bender
Title: Senior Vice President
By /s/ Frederick H. Moryl, Jr.
-------------------------------------
Name: Frederick H. Moryl, Jr.
Title: Senior Vice President
Credit Agreement
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ING BANK N.V.
By /s/ Alan Duffy
-------------------------------------
Name: Alan Duffy
Title: Vice President
By /s/ Michael Fenlon
-------------------------------------
Name: Michael Fenlon
Title: Manager
Credit Agreement
----------------
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THE SANWA BANK, LIMITED
By /s/ Lee E. Prewitt
-------------------------------------
Name: Lee E. Prewitt
Title: Vice President
Credit Agreement
----------------
-83-
BANCA DI ROMA - CHICAGO BRANCH
By /s/ James W. Semonchik
-------------------------------------
Name: James W. Semonchik
Title: Vice President
By /s/ Enrico Verdoscia
-------------------------------------
Name: Enrico Verdoscia
Title: Sr. Vice Pres. & Branch Mgr.
Credit Agreement
----------------
-84-
THE BANK OF NEW YORK
By /s/ David G. Shedd
-------------------------------------
Name: David G. Shedd
Title: Vice President
Credit Agreement
----------------
-85-
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Nobuyasu Fukatsu
-------------------------------------
Name: Nobuyasu Fukatsu
Title: General Manager
Credit Agreement
----------------
-86-
FIRSTAR BANK, NA
By /s/ R. Bruce Anthony
-------------------------------------
Name: R. Bruce Anthony
Title: Assistant Vice President
Credit Agreement
----------------
-87-
MERITA BANK PLC
By /s/ Anu Seppala
-------------------------------------
Name: Anu Seppala
Title: Vice President
By /s/ John. F. Kehnle
-------------------------------------
Name: John F. Kehnle
Title: Vice President
Credit Agreement
----------------
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WACHOVIA BANK, N.A.
By /s/ Susan F. Holmes
-------------------------------------
Name: Susan F. Holmes
Title: Vice President
Credit Agreement
----------------
Annex I
Commitments
-----------
Lender Commitment
------ ----------
The Chase Manhattan Bank $50,000,000
Bank One, NA 50,000,000
Royal Bank of Canada 50,000,000
Bank of America, N.A. 50,000,000
Barclays Bank PLC 50,000,000
Commerzbank AG, New York and Grand Cayman Branches 50,000,000
Danske Bank A/S, New York Branch 50,000,000
Morgan Guaranty Trust Company of New York 50,000,000
Banca Commerciale Italiana, New York Branch 30,000,000
Banco Bilbao Vizcaya Argentaria, New York 30,000,000
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch 30,000,000
Banque Nationale de Paris, Chicago Branch 30,000,000
ING Bank N.V. 30,000,000
The Sanwa Bank, Limited 30,000,000
Banca di Roma - Chicago Branch 20,000,000
The Bank of New York 20,000,000
The Dai-Ichi Kangyo Bank, Ltd. 20,000,000
Firstar Bank, NA 20,000,000
Merita Bank Plc 20,000,000
Wachovia Bank, N.A. 20,000,000
Total $700,000,000
============
Commitments
-----------
SCHEDULE I
LIST OF INDEBTEDNESS
List of Indebtedness
---------------------
SCHEDULE II
LIST OF CERTAIN LIENS
List of Indebtedness
---------------------
EXHIBIT A-1
[FORM OF OPINION OF SPECIAL ILLINOIS COUNSEL]
Form of Opinion of Special Illinois Counsel
-------------------------------------------
EXHIBIT A-2
[FORM OF OPINION OF ASSOCIATE GENERAL COUNSEL
TO NEWELL RUBBERMAID INC.]
[______________], 2000
To the Lenders Party to the Credit Agreement
referred to Below and The Chase
Manhattan Bank, as Administrative Agent
Ladies and Gentlemen:
I am the Associate General Counsel of Newell Rubbermaid Inc.
(the "Company") and am rendering the opinion contained herein in
connection with the 364-Day Credit Agreement (the "Credit Agreement"),
dated as of October 23, 2000, among the Company, the Lenders party
thereto and The Chase Manhattan Bank, as Administrative Agent. Terms
defined in the Credit Agreement are used herein as defined therein.
In rendering the opinion expressed below, I have examined
the originals or copies of such corporate and stockholder records,
agreements and instruments of the Company, certificates of public
officials and of officers of the Company and such other documents and
papers as I have deemed necessary as a basis for the opinion
hereinafter expressed. In such examination, I have assumed the
genuineness of all signatures, the authenticity of documents submitted
to me as originals and the conformity to the original documents of all
documents submitted to me as copies. With respect to matters of fact,
I have relied upon representations and certificates of public
officials and of officers of the Company, including the
representations made by the Company in the Credit Agreement.
Based upon the foregoing and subject to the qualifications
set forth below, and having due regard for such legal considerations
as I have deemed relevant, I am of the opinion that, to my knowledge,
there are no legal or arbitral proceedings, and no proceedings by or
before any governmental or regulatory authority or agency, pending or
threatened against the Company or any of its Subsidiaries which could
be reasonably expected to have a Material Adverse Effect.
This opinion has been rendered solely to you for your use in
connection with the Credit Agreement. No other Person shall be
entitled to rely hereon without my prior written consent.
Very truly yours,
Form of Opinion of General Counsel
----------------------------------
EXHIBIT B
[FORM OF OPINION OF SPECIAL NEW YORK
COUNSEL TO THE ADMINISTRATIVE AGENT]
[______________], 2000
Each of the Lenders party to
the Credit Agreement referred
to below and The Chase Manhattan
Bank, as Administrative Agent
Ladies and Gentlemen:
We have acted as special New York counsel to The Chase
Manhattan Bank in connection with the 364-Day Credit Agreement dated
as of October 23, 2000 (the "Credit Agreement") among Newell
Rubbermaid Inc., a corporation organized under the laws of Delaware
(the "Company"), the Lenders party thereto and The Chase Manhattan
Bank, in its capacity as agent for said Lenders (the "Administrative
Agent"), providing for, among other things, the making of loans by the
Lenders in an aggregate principal amount not to exceed $700,000,000.
All capitalized terms used but not defined herein have the respective
meanings given to such terms in the Credit Agreement.
In rendering the opinions expressed below, we have examined:
(a) the Credit Agreement; and
(b) the Notes (if any) being executed and delivered to the
Lenders on the Effective Date (herein, the "Notes")
The Credit Agreement and the Notes (if any) are collectively referred
to as the "Credit Documents".
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with
authentic original documents of all documents submitted to us as
copies. When relevant facts were not independently established, we
have relied upon representations made in the Credit Documents.
In rendering the opinions expressed below, we have assumed,
with respect to the Credit Documents, that:
Form of Opinion of Special New York Counsel
to the Administrative Agent
-------------------------------------------
-2-
(i) the Credit Documents have been duly authorized by, have
been duly executed and delivered by, and (except to the
extent set forth below, as to the Company) constitute
legal, valid, binding and enforceable obligations of,
all of the parties to such documents;
(ii) all signatories to the Credit Documents have been duly
authorized; and
(iii) all of the parties to the Credit Documents are duly
organized and validly existing and have the power and
authority (corporate or other) to execute, deliver and
perform the Credit Documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered
such questions of law as we have deemed necessary as a basis for the
opinions expressed below, we are of the opinion that each Credit
Document (assuming, in the case of the Notes of the Company, execution
and delivery thereof for value) constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally and except as the
enforceability of the Credit Documents is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a)
the possible unavailability of specific performance, injunctive relief
or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following comments
and qualifications:
A. The enforceability of Section 12.03 of the Credit
Agreement may be limited by laws limiting the enforceability of
provisions exculpating or exempting a party, or requiring
indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct.
B. The enforceability of provisions in the Credit
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
Form of Opinion of Special New York Counsel
to the Administrative Agent
-------------------------------------------
-3-
C. We express no opinion as to (i) the effect of the laws
of any jurisdiction in which any Lender is located (other than the
State of New York) that limit the interest, fees or other charges such
Lender may impose, (ii) the third sentence of Section 4.05(b) of the
Credit Agreement, (iii) Section 12.11 of the Credit Agreement, (iv)
the second sentence of Section 12.09(a) of the Credit Agreement,
insofar as such sentence relates to the subject matter jurisdiction of
the United States District Court for the Southern District of New York
to adjudicate any controversy related to the Credit Documents and (v)
the waiver of inconvenient forum set forth in Section 12.09(a) of the
Credit Agreement with respect to proceedings in the United States
District Court for the Southern District of New York.
D. We point out with reference to obligations stated to be
payable in an Alternative Currency that (a) a New York statute
provides that a judgment rendered by a court of the State of New York
in respect of an obligation denominated in a currency other than
Dollars would be rendered in such other currency and would be
converted into Dollars at the rate of exchange prevailing on the date
of entry of the judgment and (b) a judgment rendered by a Federal
court sitting in the State of New York in respect of an obligation
denominated in a currency other than Dollars may be expressed in
Dollars, but we express no opinion as to the rate of exchange such
Federal court would apply.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the law of the State
of New York, and we do not express any opinion as to the laws of any
other jurisdiction.
This opinion letter is, pursuant to Section 6.01(d) of the
Credit Agreement, provided to you by us in our capacity as your
special New York counsel and may not be relied upon by any Person for
any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance, our
prior written consent.
Very truly yours,
WJM/RJW
Form of Opinion of Special New York Counsel
to the Administrative Agent
-------------------------------------------
EXHIBIT C
[FORM OF COMPETITIVE BID REQUEST]
COMPETITIVE BID REQUEST
[______________, 20__]
The Chase Manhattan Bank,
as Administrative Agent
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention:
Ladies and Gentlemen:
Reference is made to the 364-Day Credit Agreement dated as
of October 23, 2000 (as amended, supplemented and otherwise modified
and in effect from time to time, the "Credit Agreement"), among Newell
Rubbermaid Inc., a Delaware corporation, the Lenders party thereto and
The Chase Manhattan Bank, as Administrative Agent. Terms used but not
defined herein have the respective meanings given to such terms under
the Credit Agreement. This Competitive Bid Request is being delivered
to the Administrative Agent pursuant to Section 2.03(b) of the Credit
Agreement.
The undersigned hereby requests that the Lenders submit, as
provided in Section 2.03(c) of the Credit Agreement, Competitive Bids
for the proposed Competitive Borrowing(s) described below:
Borrowing Interest
Borrower Date Currency Amount* Type** Period***
-------- --------- -------- ------- ------ ---------
__________________
* Each amount must be per Section 2.03(c)(ii) or an integral
multiple of $1,000,000 or the Foreign Currency Equivalent therof.
** Insert either "Margin" (in the case of Competitive LIBOR Loans)
or "Rate" (in the case of Set Rate Loans).
*** 1, 2, 3 or 6 months (in the case of a Competitive LIBOR Loan) or
a period of up to 180 days after the making of the Loan the last
day of which is a Business Day (in the case of a Set Rate Loan).
Form of Competitive Bid Request
-------------------------------
-2-
Please notify, as provided in Section 2.03(b) of the Credit
Agreement, the Lenders of this Competitive Bid Request.
Very truly yours,
NEWELL RUBBERMAID INC.
By __________________________
Name:
Title:
Form of Competitive Bid Request
-------------------------------
EXHIBIT D
[FORM OF COMPETITIVE BID]
Competitive Bid
[______________, 20__]
The Chase Manhattan Bank,
as Administrative Agent
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention:
Ladies and Gentlemen:
Reference is made to the 364-Day Credit Agreement dated as
of October 23, 2000 (as amended, supplemented and otherwise modified
and in effect from time to time, the "Credit Agreement"), among Newell
Rubbermaid Inc., a Delaware corporation, the Lenders party thereto and
The Chase Manhattan Bank, as Administrative Agent. Terms used but not
defined herein have the respective meanings given to such terms under
the Credit Agreement. This Competitive Bid is being delivered to the
Administrative Agent pursuant to Section 2.03(c) of the Credit
Agreement.
In response to the Competitive Bid Request of the Company
dated [_______, 200_], the undersigned hereby submits, as provided in
Section 2.03(c) of the Credit Agreement, Competitive Bid(s) for the
proposed Competitive Borrowing(s) described below:
Borrowing Interest
Borrower Date Currency Amount* Type** Period*** Rate****
-------- -------- -------- ------- ------ --------- --------
__________________
* Each amount must be per Section 2.03(c)(ii) or an integral
multiple of $1,000,000 or the Foreign Currency Equivalent
thereof.
** Insert either "Margin" (in the case of Competitive LIBOR Loans)
or "Rate" (in the case of Set Rate Loans).
*** 1, 2, 3 or 6 months (in the case of a Competitive LIBOR Loan) or
a period of up to 180 days after the making of the Loan the last
day of which is a Business Day (in the case of a Set Rate Loan).
Form of Competitive Bid
-----------------------
-2-
**** For a Competitive LIBOR Loan, specify margin over or under the
LIBO Rate determined for the applicable Interest Period as a
percentage (rounded to the nearest 1/10,000th of 1%) and whether
"PLUS" or "MINUS". For a Set Rate Loan, specify rate of interest
per annum (rounded to the nearest 1/10,000th of 1%).
PROVIDED that the Company may not accept offers that would result in
the undersigned making Competitive Loans pursuant hereto in excess of
$[____________] in the aggregate (the "Competitive Loan Limit").
Please notify, as provided in Section 2.03(d) of the Credit
Agreement, the Company of this Competitive Bid.
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in
the Credit Agreement, irrevocably obligate(s) us to make the
Competitive Loan(s) for which any offer(s) [is] [are] accepted, in
whole or in part (subject to the third sentence of Section 2.03(e) of
the Credit Agreement and any Competitive Loan Limit specified above).
Very truly yours,
[NAME OF LENDER]
By __________________________
Name:
Title:
Form of Competitive Bid
-----------------------
EXHIBIT E-1
[FORM OF DESIGNATION LETTER]
[Date]
To The Chase Manhattan Bank,
as Administrative Agent
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention:
Ladies and Gentlemen:
We make reference to the 364-Day Credit Agreement (as
amended, supplemented and otherwise modified and in effect from time
to time, the "Credit Agreement"), dated as of October 23, 2000 among
Newell Rubbermaid Inc. (the "Company"), the lenders party thereto (the
"Lenders") and The Chase Manhattan Bank, as Administrative Agent (in
such capacity, the "Administrative Agent"). Terms defined in the
Credit Agreement are used herein as defined therein.
The Company hereby designates [_____________] (the
"Designated Borrower"), a Wholly-Owned Subsidiary of the Company and a
corporation duly incorporated under the laws of [STATE/COUNTRY], as a
Borrower in accordance with Section 2.04 of the Credit Agreement until
such designation is terminated in accordance with said Section 2.04,
entitled to borrow Competitive Loans.
The Designated Borrower hereby accepts the above designation
and hereby expressly and unconditionally accepts the obligations of a
Borrower under the Credit Agreement, adheres to the Credit Agreement
and agrees and confirms that, upon your execution and return to the
Company of the enclosed copy of this letter, it shall be a Borrower
for purposes of the Credit Agreement and agrees to be bound by and to
perform and comply with the terms and provisions of the Credit
Agreement applicable to it as if it had originally executed the Credit
Agreement. The Designated Borrower hereby authorizes and empowers the
Company to act as its representative and attorney-in-fact for the
purposes of signing documents and giving and receiving notices
(including notices of borrowing under Section 2 of the Credit
Agreement) and other communications in connection with the Credit
Agreement and the transactions contemplated thereby and for the
purposes of modifying or amending any provision of the Credit
Form of Designation Letter
--------------------------
-2-
Agreement and further agrees that the Administrative Agent and each
Lender may conclusively rely on the foregoing authorization.
The Company hereby represents and warrants to the
Administrative Agent and each Lender that, before and after giving
effect to this Designation Letter, (i) the representations and
warranties set forth in Section 7 of the Credit Agreement are true and
correct as if made on and as of the date hereof and as if each of the
representations and warranties in Sections 7.01, 7.04, 7.05 and 7.06
specifically included a reference to the Designated Borrower and (ii)
no Default has occurred and is continuing.
The Designated Borrower hereby agrees that this Designation
Letter, the Credit Agreement and the Notes shall be governed by, and
construed in accordance with, the law of the State of New York. The
Designated Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York
and of the Supreme Court of the State of New York, County of New York,
for the purposes of all legal proceedings arising out of or relating
to this Designation Letter, the Credit Agreement or the transactions
contemplated thereby. The Designated Borrower irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum. The
Designated Borrower further agrees that service of process in any such
action or proceeding brought in New York may be made upon it by
service upon the Company at the "Address for Notices" specified below
its name on the signature pages to the Credit Agreement and the
Designated Borrower hereby irrevocably appoints the Company as its
authorized agent ("Process Agent") to accept, on behalf of it and its
property such service of process in New York.
THE DESIGNATED BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS DESIGNATION
LETTER, THE CREDIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
Anything herein to the contrary notwithstanding, the Company
and the Designated Borrower hereby agree that unless and until the
Designated Borrower becomes an Approved Designated Borrower as
aforesaid, Committed Loans are not available to the Designated
Borrower under the Credit Agreement; and the Administrative Agent
hereby agrees on behalf of the Lenders that the provisions of Section
5.06(a) of the Credit Agreement are not applicable to the Designated
Borrower, unless and until the Designated Borrower becomes an Approved
Designated Borrower.
Form of Designation Letter
--------------------------
-3-
[The Company hereby requests that the Designated Borrower be
approved as an Approved Designated Borrower. Subject to the approval
of all of the Lenders (to be evidenced by your signing at the place
below indicated and returning to the Company the enclosed copy of this
letter) such Designated Borrower will become an Approved Designated
Borrower entitled to borrow both Committed Loans and Competitive
Loans.]
NEWELL RUBBERMAID INC.
By __________________________
Name:
Title:
[DESIGNATED BORROWER]
By ___________________________
Name:
Title:
[Insert Address]
[Consent and Agree to the aforesaid
Designated Borrower being an
Approved Designated Borrower:
THE CHASE MANHATTAN BANK
As Administrative Agent for and on behalf
of the Lenders
By ________________________
Name:
Title:
Date:_____________________]
Form of Designation Letter
--------------------------
EXHIBIT E-2
[FORM OF TERMINATION LETTER]
[Date]
To The Chase Manhattan Bank,
as Administrative Agent
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention:
Ladies and Gentlemen:
We make reference to the 364-Day Credit Agreement (as
amended, supplemented and otherwise modified and in effect from time
to time, the "Credit Agreement") dated as of October 23, 2000 among
Newell Rubbermaid Inc. (the "Company"), the Lenders party thereto (the
"Lenders") and The Chase Manhattan Bank as Administrative Agent (in
such capacity, the "Administrative Agent"). Terms defined in the
Credit Agreement are used herein as defined therein.
The Company hereby terminates the status as a Designated
Borrower of [______________], a corporation incorporated under the
laws of [STATE/COUNTY], in accordance with Section 2.04 of the Credit
Agreement, effective as of the date of receipt of this notice by the
Administrative Agent. The undersigned hereby represent and warrant
that all principal and interest on any Loan of the above-referenced
Designated Borrower and all other amounts payable by such Designated
Borrower pursuant to the Credit Agreement have been paid in full on or
prior to the date hereof. Notwithstanding the foregoing, this
Termination Letter shall not affect any obligation which by the terms
of the Credit Agreement survives termination thereof.
NEWELL RUBBERMAID INC.
By ___________________________
Name:
Title:
[INSERT NAME OF DESIGNATED
BORROWER]
By __________________________
Name:
Title:
Form of Termination Letter
--------------------------
EXHIBIT 10.5
------------
NEWELL OPERATING COMPANY
SUPPLEMENTAL RETIREMENT PLAN FOR KEY EXECUTIVES
1999 RESTATEMENT
Effective January 1, 1999
NEWELL OPERATING COMPANY
SUPPLEMENTAL RETIREMENT PLAN FOR KEY EXECUTIVES
1999 RESTATEMENT
Effective January 1, 1999
ARTICLE I
PURPOSE; EFFECTIVE DATE
-----------------------
The purpose of this Supplemental Retirement Plan for Key
Executives (hereinafter referred to as the "Plan") is to provide
supplemental retirement and death benefits for certain employees of
Newell Operating Company (hereinafter referred to as "Company"). The
Plan was originally effective as of January 1, 1982 and was restated
effective January 1, 1996. This restatement of the Plan shall be
effective as of January 1, 1999.
ARTICLE II
DEFINITIONS
-----------
For the purposes of the Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates otherwise:
2.1 ACTUARIAL EQUIVALENT. "Actuarial Equivalent" means
equivalence in value between two or more forms of payment based on a
determination by an actuary chosen by the Company, using sound
actuarial assumptions at the time of such determination.
2.2 BENEFICIARY. "Beneficiary" means the person, persons or
entity entitled under Section 4.2(b) to receive any Plan benefits
payable after a Participant's death.
2.3 BOARD. "Board" means the Board of Directors of the Company.
2.4 COMMITTEE. "Committee" means the Compensation and Benefits
Committee of the Board. The Committee will administer the Plan
pursuant to Article VII.
2.5 COMPANY. "Company" means Newell Operating Company, a
Delaware corporation, or any successor to the business thereof, and
any affiliated or subsidiary corporations thereof or of Newell Co.
2.6 COMPENSATION. "Compensation" means the base salary payable
to and bonus earned by a Participant from the Company and considered
to be "wages" for purposes of federal income tax withholding and shall
not include severance pay. Compensation shall be calculated before
reduction for any amounts deferred by the Participant pursuant to the
Company's tax qualified plans which may be maintained under Section
401(k) or Section 125 of the Internal Revenue Code of 1986, as amended
(the "Code"), or under the Newell Co. Deferred Compensation Plan.
1
Inclusion of any other forms of compensation is subject to Committee
approval.
2.7 CREDITED SERVICE. "Credited Service" means the total period
of elapsed time, computed in years and days, during the period
beginning on a Participant's Credited Service Date and ending on his
date of termination of employment with the Company, or the date
designated by the Board as described in Section 3.2. Credited Service
shall include leaves of absence authorized by the Company but shall
not include any period following termination of employment during
which severance pay is received.
2.8 CREDITED SERVICE DATE. "Credited Service Date" means
either:
(a) the date on which a Participant commenced employment
with Newell Co. or Newell Operating Company; or (b) the later of
(1) the date a Participant commenced employment with
an affiliate or subsidiary of Newell Co. or of Newell
Operating Company, or
(2) the date such affiliate or subsidiary initially
became an affiliate or a subsidiary of Newell Co. or of
Newell Operating Company.
Credited Service will start to accrue from the applicable Credited
Service Date.
2.9 DEATH BENEFIT OFFSET. "Death Benefit Offset" means the
aggregate monthly death benefit (or Actuarial Equivalent) payable in
the same manner and form described in Section 4.1(b) with respect to a
Participant from all Plan Offsets.
2.10 DEFERRED RETIREMENT DATE. "Deferred Retirement Date" means
a date that occurs after the Participant's Normal Retirement Date.
2.11 DEPENDENT CHILDREN. "Dependent Children" means a
Participant's unmarried children (including posthumous children and
adopted children, but only those adopted at least one (1) year prior
to the date of his death) under the age of eighteen (18) years at the
date of his death or, at the date of his death, under the age of
twenty-two (22) years while a full time student at an elementary or
secondary school, a vocational or professional school, or an
accredited college or university as an undergraduate or graduate
student.
2.12 EARLY RETIREMENT DATE. "Early Retirement Date" means the
date on which a Participant both (i) attains age 60 and (ii) completes
fifteen (15) years of Early Retirement Service, but has not reached
his Normal Retirement Date.
2
2.13 EARLY RETIREMENT SERVICE. "Early Retirement Service" means
the total Vesting Service of a Participant credited under the Plan
Offset described in Section 2.21(a).
2.14 ELIGIBLE SPOUSE. "Eligible Spouse" means a person to whom a
Participant is lawfully married for at least the one (1) year period
ending on the Participant's Retirement.
2.15 FINAL AVERAGE COMPENSATION. "Final Average Compensation"
means the sum of a Participant's Compensation from the Company during
the five (5) consecutive calendar years in which the Participant's
Compensation was the highest divided by sixty (60). If a Participant-
has not been employed by the Company for five (5) full calendar years,
"Final Average Compensation" shall mean the sum of the Participant's
Compensation during the full months (not greater than sixty (60)) he
was employed by the Company divided by the number of full months (not
greater than sixty (60)) the Participant was employed by the Company.
2.16 JOINT AND FIFTY PERCENT (50%) SURVIVOR ANNUITY. "Joint and
Fifty Percent (50%) Survivor Annuity" means an annuity payable for a
Participant's life with a survivor annuity payable for the Eligible
Spouse's life equal to fifty percent (50%) of the amount paid or
payable to the Participant.
2.17 NORMAL RETIREMENT DATE. "Normal Retirement Date" means a
Participant's sixty-fifth (65th) birthday.
2.18 "PARTICIPANT" means any employee who is eligible, pursuant
to Section 3.1, to participate in the Plan, and who has not yet
received full benefits hereunder.
2.19 PARTICIPATION AGREEMENT. "Participation Agreement" means
the agreement filed by a Participant which acknowledges assent to the
terms of the Plan and approved by the Committee pursuant to Article
III.
2.20 PLAN. "Plan" means the Newell Operating Company
Supplemental Retirement Plan for Key Executives, as amended and
restated effective as of January 1, 1996, as herein set forth and as
from time to time amended.
2.21 PLAN OFFSET. "Plan Offset" means any plan or plans
maintained by the Company that are used to determine benefits under
the Plan. Plan Offsets shall include:
(a) the Newell Pension Plan for Salaried and Clerical
Employees; and
(b) any other plan, agreement or arrangement (whether tax
qualified or nonqualified) maintained by the Company that provides
retirement benefits for a Participant, other than a plan containing a
3
cash or deferred arrangement under Section 401(k) of the Code or any
successor section.
2.22 PRIMARY SOCIAL SECURITY BENEFIT. "Primary Social Security
Benefit" means the monthly Primary Social Security amount to which a
Participant would be entitled upon proper application therefore, under
the Old-Age and Survivors Insurance Benefit provisions of the federal
Social Security Act as in effect at the Retirement of the Participant,
payable on the date that the Supplemental Retirement Benefit begins
under Section 5.1, 5.2 or 5.3. If a Participant is not eligible to
begin receiving benefits under the federal social Security Act on the
date that the Supplemental Retirement Benefit begins under Section
5.2, under the terms of the federal Social Security Act in effect at
the Retirement of the Participant, an age sixty-five (65) benefit
(reduced as provided in Section 5.2) shall be substituted, calculated
by assuming that the Participant's Compensation for the last full
calendar year prior to his Retirement will continue to be his
Compensation for calendar years up to the calendar year before his
sixty-fifth (65th) birthday. If a Participant is not entitled to
benefits under the federal Social Security Act but is entitled to
equivalent benefits under a similar national pension program
established by a foreign government, "Primary Social Security Benefit"
means such equivalent benefits determined on a basis consistent with
the above.
2.23 RETIREMENT. "Retirement" means a Participant's (i)
separation from employment with the Company on or after the
Participant's Early Retirement Date, Normal Retirement Date, or
Deferred Retirement Date, and (ii) commencement of receipt of benefits
hereunder.
2.24 RETIREMENT BENEFIT OFFSET. "Retirement Benefit Offset"
means the aggregate monthly retirement benefit payable under the
normal form of benefit payments described in Section 5.4(a)(i) to a
Participant from all Plan Offsets.
2.25 SUPPLEMENTAL DEATH BENEFIT. "Supplemental Death Benefit"
means the benefit determined under Article IV of the Plan.
2.26 SUPPLEMENTAL RETIREMENT BENEFIT. "Supplemental Retirement
Benefit" means the benefit determined under Article V of the Plan.
2.27 SURVIVING SPOUSE. "Surviving Spouse" means a person to whom
a Participant is lawfully married for at least the one (1) year period
ending on the Participant's date of death.
2.28 TARGET BENEFIT PERCENTAGE. The Target Benefit Percentage
shall equal sixty-seven percent (67%) multiplied by a fraction, the
numerator of which is a Participant's years and fractional years
(computed in days) of Credited Service (not to exceed twenty-five
(25)) and the denominator of which is twenty-five (25).
4
ARTICLE III
PARTICIPATION AND VESTING
-------------------------
3.1 ELIGIBILITY AND PARTICIPATION.
(a) ELIGIBILITY. Eligibility to participate in the Plan
shall be limited to an employee of the Company who satisfies all
of the following requirements:
(i) is a participant in Bonus categories A or A/B of
the Company's Management Bonus Plan; and
(ii) is an active participant in any Plan Offset
described in Section 2.21; and
(iii) is a vice president or president of the Company
or any affiliated or subsidiary corporation; and
(iv) is a citizen or a resident alien of the United
States; and
(v) is designated for participation by management of
the Company.
(b) PARTICIPATION. An employee's participation in the Plan
shall be effective upon notification to the employee of
eligibility to participate, completion of a Participation
Agreement by the Participant and acceptance of such Agreement by
the Committee. Subject to Sections 3.2 and 3.3, participation in
the Plan shall continue until such time as the Participant
terminates employment with the Company and all affiliated and
subsidiary corporations, and as long thereafter as the
Participant (or his Beneficiary, Eligible Spouse or Surviving
Spouse) is eligible to receive benefits under this Plan.
3.2 CHANGE IN STATUS.
(a) If the Board determines that the employment performance
of a Participant who has not then either attained age 60, or
completed fifteen (15) years of Early Retirement Service, is no
longer at a level that deserves reward through participation in
the Plan, but does not terminate the Participant's employment
with the Company, or if such a Participant no longer satisfies
one or more of the requirements of paragraph (a) of Section 3.1,
such Participant's accrued interest in his benefit hereunder
shall be forfeited and neither the Participant nor any other
person shall be entitled to receive any benefit with respect to
such Participant hereunder. Notwithstanding the preceding
sentence, the Board, in its discretion, may determine that a
Participant described in the preceding sentence shall be entitled
to all, or a designated portion, of his accrued interest in his
5
benefit hereunder, determined as of a date designated by the
Board, in which event such benefit shall be based solely on the
Participant's Credited Service, Early Retirement Service, Final
Average Compensation and Retirement Benefit Offset as of such
designated date, and his total Primary Social Security Benefit.
(b) If the Board determines that the employment performance
of a Participant who has then attained age 60 and/or completed
fifteen (15) years of Early Retirement Service is no longer at a
level that deserves reward through participation in the Plan, but
does not terminate the Participant's employment with the Company,
or if such a Participant no longer satisfies one or more of the
requirements of paragraph (a) of Section 3.1, such Participant's
accrued interest in his benefit hereunder, as of a subsequent
date designated by the Board, shall be based solely on such
Participant's Credited Service, Early Retirement Service, Final
Average Compensation and Retirement Benefit Offset, as of such
designated date, and his total Primary Social Security Benefit.
(c) If a Participant described in paragraph (a) or
paragraph (b) of this Section again is determined by the Board to
be performing at a level that deserves a reward through
participation in the Plan, or again satisfies all of the
requirements of paragraph (a) of Section 3.1, he shall thereafter
again actively participate in the Plan and his accrued interest
in his benefit hereunder shall be based upon his aggregate
Credited Service and Early Retirement Service during his total
period of employment with the Company. In addition, the benefit
hereunder of a Participant described in the preceding sentence
shall be based upon his Final Average Compensation and Retirement
Benefit Offset as of the date he ceases termination of employment
with the Company, and his total Primary Social Security Benefit.
(d) If a Participant's employment with the Company
terminates before he either attains age 60, or completes fifteen
(15) years of Early Retirement Service, and if he is subsequently
re-employed by the Company and satisfies all of the eligibility
requirements for active participation in the Plan set forth in
paragraph (a) of Section 3.1, he shall be treated as a new
Participant and his benefit under the Plan shall be based solely
upon his Credited Service, Early Retirement Service, Final
Average Compensation and Retirement Benefit Offset from and after
his date of re-employment, and his total Primary Social Security
Benefit.
(e) If a Participant's employment with the Company
terminates on or after the date he either attains age 60, or
completes fifteen (15) years of Early Retirement Service, and if
he is subsequently re-employed by the Company and he satisfies
all of the eligibility requirements for active participation in
the Plan set forth in paragraph (a) of Section 3.1, any benefit
payments then being made to him under the Plan shall be suspended
6
during his subsequent period of re-employment. Upon his
subsequent termination of employment with the Company or death,
payment of his benefit hereunder shall resume to him, or to his
Eligible Spouse or Dependent Children, pursuant to the applicable
provisions of the Plan, and shall be based upon his Credited
Service, Early Retirement Service, Final Average Compensation and
Retirement Benefit Offset for his total period of employment with
the Company, both prior to his initial termination of employment
and subsequent to his date of re-employment, and his total
Primary Social Security Benefit.
3.3 FORFEITURES. No benefits will be payable under the Plan to
or in respect of any Participant who:
(a) voluntarily terminates employment with the Company for
any reason at any time prior to the first to occur of his
attainment of age 60, and the date of his death;
(b) has his employment with the Company terminated
involuntarily for any reason by the Company at any time prior to
the date he completes fifteen (15) years of Early Retirement
Service;
(c) has his employment with the Company terminated at any
time by the Company because of any act or failure to act on the
part of the Participant which constitutes fraud,
misappropriation, theft or embezzlement of Company funds or
intentional breach of fiduciary duty, including a breach of the
Company's Code of Business Conduct involving the Company or any
of its affiliates.
(d) at any time engages in competition with, or works for
another business entity in competition with, the Company in the
areas that it serves;
(e) at any time makes any unauthorized disclosure of any
trade or business secrets or privileged information acquired
during his employment with the Company;
(f) at any time is found to have misappropriated, stolen or
embezzled funds from the Company;
(g) at any time fraudulently, dishonestly or willfully
causes the Company to suffer any loss of, or damage to, money or
other property belonging to it or for the care and protection of
which it is responsible or to its reputation;
(h) at any time is discharged by the Company for repeated
drunkenness on the job; or
(i) at any time is convicted of a felony connected with his
employment by the Company.
7
In any such event, participation of such Participant in the Plan
shall automatically terminate and the Company shall have no further
obligation to make payments (including further payments of any
benefits then being paid) to such Participant (or to his Beneficiary,
Eligible Spouse, or Surviving Spouse) under the Plan.
3.4 SUICIDE OR MISREPRESENTATION. The provisions of Articles IV
or V notwithstanding, no benefit shall be paid to a Beneficiary,
Eligible Spouse or Surviving Spouse if the Participant's death occurs
as a result of suicide during the twenty-four (24) successive calendar
months beginning with the calendar month following the commencement of
an employee's participation in the Plan. Similarly, no benefit shall
be paid if death occurs within the twenty-four (24) successive
calendar months following commencement of an employee's participation
in the Plan if the Participant has made a material misrepresentation
in any form or document provided by the Participant to or for the
benefit of the Company or any affiliated or subsidiary corporation.
3.5 VESTING. Except as otherwise provided in Sections 3.2, 3.3
and 3.4, a Participant shall become one hundred percent (100%) vested
in his Supplemental Retirement Benefit and Supplemental Death Benefit
accrued under the Plan, while he was a Participant, upon the first to
occur of his completion of fifteen (15) years of Early Retirement
Service, his attainment of age 60, and the date of his death.
3.6 CANADIAN PARTICIPANTS. Effective as of January 1, 1996,
individuals employed at locations of affiliates and subsidiaries of
the Company in Canada ceased to be Participants in the Plan and became
participants in the Newell Operating Company Supplemental Retirement
Plan for Key Canadian Executives ("Canadian Plan"). The liability for
all accrued benefits of such individuals under the Plan as of January
1, 1996 were transferred as of such date to the Canadian Plan, and
such accrued benefits shall be payable pursuant to the terms of the
Canadian Plan.
3.7 SALE OF AFFILIATE. Notwithstanding any other provisions of
the Plan, the following provisions shall apply in the event of a
"Sale" of an affiliated or subsidiary corporation or division of the
Company that employs a Participant on the date of consummation of such
Sale:
1. If the Participant has attained age 60, and/or
completed 15 years of Early Retirement Service, at the date of
consummation of such Sale, the Supplemental Retirement Benefit
and Supplemental Death Benefit earned by such Participant as of
the date of consummation shall be payable to, or with respect to,
such Participant, or his Surviving Spouse or Dependent Children,
pursuant to the terms of the Plan.
2. If the Participant has neither attained age 60 nor
completed 15 years of Early Retirement Service at the date of
8
consummation of such Sale, no benefit shall be payable under the
Plan to, or in respect of, such Participant.
For purposes of this Section, the term Sale shall include the
following:
1. The acquisition of more than 50% of the equity interest
in any subsidiary or affiliated corporation of the Company by
persons or entities that are not affiliated with the Company;
2. A sale of substantially all of the assets of an
affiliated or subsidiary corporation or division of the Company
to persons or entities that are not affiliated with the Company;
or
3. The effective time of a merger or consolidation of a
subsidiary or affiliated corporation of the Company with one or
more other entities as a result of which the surviving entity is
not affiliated with the Company.
ARTICLE IV
SUPPLEMENTAL DEATH BENEFIT
--------------------------
4.1 PRE-TERMINATION DEATH BENEFIT. If a Participant dies while
employed by the Company or any affiliated or subsidiary corporation
(subject to Sections 3.2, 3.3 and 3.4), the Company shall pay to the
Participant's Surviving Spouse and/or Dependent Children a monthly
Supplemental Death Benefit as follows:
(a) AMOUNT. The amount of the Supplemental Death Benefit
shall be:
(i) One-half (1/2) of sixty-seven percent (67%) of the
Participant's Final Average Compensation, less;
(ii) The Participant's Death Benefit Offset.
The amount payable under paragraph (a) above shall be payable
beginning on the date set forth in paragraph (b) of this Section 4.1.
(b) PAYMENT OF BENEFITS. The Supplemental Death Benefit will be
paid monthly to the Surviving Spouse, if there is a Surviving Spouse
on the Participant's date of death, beginning on the first day of the
month next following the Participant's date of death, and will not be
reduced for commencement prior to the date the Participant would have
attained the age of sixty-five (65) years. The Supplemental Death
Benefit shall continue to the Surviving Spouse until the first day of
the month coincident with or next preceding the earlier of:
9
(i) The death of the Surviving Spouse;
(ii) The remarriage of the Surviving Spouse, if at
the time of such remarriage, there are one (1) or more Dependent
Children; and
(iii) The later of the fifteenth (15th) anniversary of
the Participant's date of death and the date that would have been
the Participant's sixty-fifth (65th) birthday.
The Supplemental Death Benefit will be paid monthly to the
Participant's Dependent Children (payable in equal shares to those
persons who then qualify as "Dependent Children"), if there is not a
Surviving Spouse on the Participant's date of death, beginning on the
first day of the month next following the Participant's date of death,
and will not be reduced for commencement prior to the date the
Participant would have attained the age of sixty-five (65) years. The
Supplemental Death Benefit shall continue to the Dependent Children
until the first day of the month coincident with or next preceding the
earlier of:
(i) The date that there are no longer any Dependent
Children; and
(ii) The later of the fifteenth (15th) anniversary of
the Participant's date of death and the date that would have
been the Participant's sixty-fifth (65th) birthday.
The Supplemental Death Benefit will also be paid monthly to the
Participant's Dependent Children (payable in equal shares to those
persons who then qualify as "Dependent Children") beginning on the
first day of the month next following the death or remarriage of the
Surviving Spouse who had been receiving the Supplemental Death Benefit
as described above. The Supplemental Death Benefit shall continue to
the Dependent Children until the first day of the month coincident
with or next preceding the earlier of:
(i) The date that there are no longer any Dependent
Children; and
(ii) The later of the fifteenth (15th) anniversary of
the Participant's date of death and the date that would have been
the Participant's sixty-fifth (65th) birthday.
If there are no Dependent Children on the date of remarriage of a
Surviving Spouse who had been receiving the Supplemental Death Benefit
as described above, or on any date subsequent to the date of
remarriage, such remarried Surviving Spouse will again be paid, or
continue to be paid, a monthly Supplemental Death Benefit beginning on
the first day of the month next following the later of the date of
remarriage or the date there are no longer Dependent Children. The
Supplemental Death Benefit shall continue to the remarried Surviving
10
Spouse until the first day of the month coincident with or next
preceding the earlier of:
(i) The death of the remarried Surviving Spouse; and
(ii) The later of the fifteenth (15th) anniversary of
the Participant's date of death and the date that would have been
the Participant's sixty-fifth (65th) birthday.
If there is not a Surviving Spouse or Dependent Children on the
date of death of the Participant, no Supplemental Death Benefit shall
be payable under this Section 4.1.
4.2 POST-TERMINATION DEATH BENEFIT.
(a) DEATH PRIOR TO COMMENCEMENT OF BENEFITS. If a Participant
dies after either his attainment of age 60 or his completion of
fifteen (15) years of Early Retirement Service and after his
termination of employment with the Company, but before payments have
commenced hereunder, a monthly Supplemental Death Benefit shall be
paid with respect to such Participant only if, and to the extent
provided under Section 4.1. The Supplemental Death Benefit (if any)
will begin on the first day of the month next following the
Participant's date of death, will continue for the duration of the
applicable payment period provided under Section 4.1, and will not be
reduced for commencement prior to the date the Participant would have
attained the age of sixty-five (65) years.
(b) DEATH AFTER COMMENCEMENT OF BENEFITS. If a Participant dies
after either his attainment of age sixty (60) or his completion of
fifteen (15) years of Early Retirement Service and after payments have
commenced hereunder, a monthly Supplemental Death Benefit will be paid
with respect to such Participant only if, and to the extent, provided
under the applicable form of payment in effect under Section 5.4, with
respect to such Participant on the date of his death. The
Supplemental Death Benefit, (if any) will begin on the first day of
the month next following the date on which the Participant received
his last payment under Section 5.1, 5.2 or 5.3 (whichever is
applicable) and shall continue for the duration of the payment period
provided under the applicable form of payment in effect under Section
5.4 with respect to the Participant on the date of his death. The
Supplemental Death Benefit (if any) payable pursuant to this paragraph
(b) shall be payable to the Participant's Beneficiary.
ARTICLE V
SUPPLEMENTAL RETIREMENT BENEFIT
-------------------------------
5.1 NORMAL RETIREMENT BENEFIT. If a Participant's employment
with the Company terminates on his Normal Retirement Date, or if his
employment with the Company terminates after he attains age 60 but
before he attains his Early Retirement Date, the Participant's
11
Retirement shall occur on his Normal Retirement Date and the Company
shall pay to the Participant a monthly Supplemental Retirement Benefit
beginning on the date of payment of the Retirement Benefit Offset
attributable to the Plan Offset described in Section 2.21(a). In such
event the Supplemental Retirement Benefit shall be paid in an amount
equal to the Participant's Target Benefit Percentage multiplied by his
Final Average Compensation, less:
(a) The Participant's Primary Social Security Benefit; and
(b) The Participant's Retirement Benefit Offset.
The amounts under (a) and (b) above shall be determined in the
amount payable on the date that the Supplemental Retirement Benefit
begins under this Section 5.1 and in the same form that the
Supplemental Retirement Benefit is paid under Section 5.4.
5.2 EARLY RETIREMENT BENEFIT. If a Participant's employment
with the Company terminates on or before an Early Retirement Date, and
if he elects payment of his Retirement Benefit Offset attributable to
the Plan Offset described in Section 2.21(a) on any date during the
period commencing on his Early Retirement Date and ending on his
Normal Retirement Date, the Participant's Retirement shall occur on
such Early Retirement Date and the Company shall pay to the
Participant a monthly Supplemental Retirement Benefit beginning on the
date of payment of such Retirement Offset Benefit; provided that the
Committee approves such date of commencement of payment of the
Supplemental Retirement Benefit. In such event the Supplemental
Retirement Benefit shall be paid in an amount equal to the
Participant's Target Benefit Percentage multiplied by his Final
Average Compensation, reduced by one-half of one percent (0.5%) for
each month, if any, by which benefits payable under this Section 5.2
precede the date that benefits would be payable under Section 5.1,
less:
(a) The Participant's Primary Social Security Benefit;
and
(b) The Participant's Retirement Benefit Offset.
The amounts under (a) and (b) above shall be determined in the
amount payable on the date that the Supplemental Retirement Benefit
begins under this Section 5.2 and in the same form that the
Supplemental Retirement Benefit is paid under Section 5.4.
If the amount under (a) above is not payable on the date that the
Supplemental Retirement Benefit begins under this Section 5.2, an
amount payable on the date that benefits would be payable under
Section 5.1, reduced by the one-half of one percent (0.5%) reduction
mentioned above shall be substituted.
5.3 DEFERRED RETIREMENT BENEFIT. If a Participant's employment
with the Company terminates on a Deferred Retirement Date, the
Participant's Retirement shall occur on such Deferred Retirement Date
12
and the Company shall pay to the Participant a monthly Supplemental
Retirement Benefit beginning on the date of payment of the Retirement
Benefit Offset attributable to the Plan Offset described in Section
2.21(a). In such event the Supplemental Retirement Benefit shall be
paid in an amount equal to the Participant's Target Benefit Percentage
multiplied by his Final Average Compensation, less:
(a) The Participant's Primary Social Security Benefit; and
(b) The Participant's Retirement Benefit Offset.
The amounts under (a) and (b) above shall be determined in the
amount payable on the date that the Supplemental Retirement Benefit
begins under this Section 5.3 and in the same form that the
Supplemental Retirement Benefit is paid under Section 5.4.
5.4 PAYMENT OF BENEFITS.
(a) FORM OF BENEFIT PAYMENTS. The Supplemental Retirement
Benefit shall be paid monthly in the normal form provided below,
unless the Participant requests an alternative form as described
in paragraph (b) next below. Any alternative form shall be the
Actuarial Equivalent of the normal form of benefit payments. The
normal forms of payment are as follows:
(i) If the Participant has an Eligible Spouse at
Retirement, the normal form is a Joint and Fifty Percent
(50%) Survivor Annuity.
(ii) If the Participant does not have an Eligible
Spouse at Retirement, the normal form is a life annuity
payable only for the Participant's life.
(b) If a Participant elects an alternative form of payment
of his Retirement Benefit Offset attributable to the Plan Offset
described in Section 2.21(a), then his Supplemental Retirement
Benefit shall be payable to him in the same alternative form,
provided that the Committee approves such alternative form of
payment of the Supplemental Retirement Benefit.
(c) COMMENCEMENT OF BENEFIT PAYMENTS. Payment of the
Supplemental Retirement Benefit to a Participant under the
Normal, Deferred, or Early Retirement provisions of this Article
shall commence on the date on which payment of his Retirement
Benefit Offset attributable to the Plan Offset described in
Section 2.21(a) commences.
5.5 SMALL BENEFIT. If the Actuarial Equivalent of a
Supplemental Retirement Benefit or a Supplemental Death Benefit
payable to or with respect to a Participant does not exceed $5,000 on
the date for commencement of payment thereof, such Supplemental
Retirement Benefit or Supplemental Death Benefit shall be payable to
13
the Participant, or to his Eligible Spouse or Dependent Children as
applicable, in a lump sum, on or as soon as practicable after the date
that payment thereof would otherwise commence.
5.6 ACTUARIAL EQUIVALENT. If a Supplemental Retirement Benefit
is payable in an alternative form pursuant to paragraph (b) of Section
5.4, such alternative form of payment, including the Target Benefit
Percentage, shall be determined by the same actuarial adjustments as
those specified in the Plan Offset described in Section 2.21(a) with
respect to determination of the amount of payment of the Retirement
Benefit Offset attributable to such Plan Offset. The actuarial
adjustments specified in the Plan Offset described in Section 2.21(a)
shall also be used to convert the amount of the Primary Social
Security Benefit, the Retirement Benefit Offset, and the Death Benefit
Offset specified in Sections 5.1, 5.2, 5.3 and 2.9 to the same form in
which the Supplemental Retirement Benefit is paid under Section 5.4,
or in which the Supplemental Death Benefit is paid under Article IV.
5.7 WITHHOLDING. The Company shall withhold from payments made
hereunder to any Participant or Beneficiary any taxes required to be
withheld from such payments under federal, state or local law.
However, a Participant or Beneficiary may elect not to have
withholding of federal income tax pursuant to Section 3405(a)(2) of
the Code, or any successor provision.
5.8 PAYMENT TO GUARDIAN. If a Plan benefit is payable to a
minor or a person declared incompetent or to a person incapable of
handling the disposition of property, the Committee may direct payment
of such Plan benefit to the guardian, legal representative or person
having the care and custody of such minor, incompetent or person. The
Committee may require proof of incompetency, minority, incapacity or
guardianship as it may deem appropriate prior to distribution of the
Plan benefit. Such distribution shall completely discharge the
Committee and the Company from all liability with respect to such
benefit.
5.9 RELEASE. Notwithstanding any other provision of the Plan,
payment of any benefit under the Plan to a Participant who becomes
vested in such benefit pursuant to Section 3.5 before attaining age
60, and before his date of death, is conditioned upon the prior
execution by such Participant of a release, in a form satisfactory to
the Company, whereby the Participant fully releases the Company, all
of its affiliated or subsidiary corporations, and all of their
respective officers, employees, directors and agents, from any and all
rights and claims that such Participant, or his or her heirs,
representatives, successors and assigns, may at any time have with
respect to the receipt of benefits under the Plan. No payment shall
be made to any such Participant under the Plan until such fully
executed release has been delivered by the Participant to the Company.
14
ARTICLE VI
BENEFICIARY DESIGNATION
-----------------------
6.1 BENEFICIARY DESIGNATION. Each Participant shall have the
right, at any time, to designate any person, persons or entity as
Beneficiary or Beneficiaries (both primary as well as secondary) to
whom benefits under Section 4.2(b) of the Plan shall be paid. Each
Beneficiary designation shall be in a written form prescribed by the
Committee, and will be effective only when filed with the Committee
during the Participant's lifetime.
6.2 CHANGING BENEFICIARY. Any Beneficiary designation may be
changed by a Participant without the consent of the previously
designated Beneficiary by the filing of a new Beneficiary designation
with the Committee. The filing of a new designation shall cancel all
designations previously filed. If a Participant's Compensation is
community property, any Beneficiary Designation shall be valid or
effective only as permitted under applicable law.
6.3 NO BENEFICIARY DESIGNATION. If any Participant fails to
designate a Beneficiary in the manner provided above, if the
designation is void, or if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant's
Supplemental Retirement Benefits, then the Participant's designated
Beneficiary shall be deemed to be the person or persons surviving the
Participant in the first of the following classes in which there is a
survivor, share and share alike;
(a) The Participant's Surviving Spouse;
(b) Tho Participant's children, except that if any of
the children predecease the Participant but leave issue
surviving, then such issue shall take by right of represen-
tation the share their parent would have taken if living;
(c) The Participant's estate.
6.4 EFFECT OF PAYMENT. The payment to the deemed Beneficiary
shall completely discharge the Company's obligations under the Plan.
ARTICLE VII
ADMINISTRATION
--------------
7.1 COMMITTEE; DUTIES. The Committee shall have the authority
to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve
any and all questions including interpretations of the Plan, as may
arise in connection with the Plan. A majority vote of the Committee
members shall control any decision. Members of the Committee may be
Participants under the Plan.
15
7.2 AGENTS. The Committee may, from time to time, employ other
agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with counsel who may be counsel to
the Company.
7.3 BINDING EFFECT OF DECISIONS. The decision or action of the
Committee in respect of any question arising out of or in connection
with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
7.4 INDEMNITY OF COMMITTEE. The Company shall indemnify and
hold harmless the members of the Committee against any and all claims,
loss, damage, expense or liability arising from any action or failure
to act with respect to the Plan on account of such member's service on
the Committee except in the case of gross negligence or willful
misconduct.
ARTICLE VIII
CLAIMS PROCEDURE
----------------
8.1 CLAIM. Any person or entity claiming a benefit, requesting
an interpretation or ruling under the Plan, or requesting information
under the Plan (hereinafter referred to as "claimant") shall present
the request in writing to the Committee which shall respond in writing
within ninety (90) days.
8.2 DENIAL OF CLAIM. If the claim or request is denied, the
written notice of denial shall state:
(a) The reason for denial, with specific reference to the
Plan provisions on which the denial is based;
(b) A description of any additional material or information
required and an explanation of why it is necessary; and
(c) An explanation of the Plan's claim review procedure.
8.3 REVIEW OF CLAIM. Any claimant whose claim or request is
denied or who has not received a response within ninety (90) days may
request review by notice given in writing to the Committee. Such
request must be made within ninety (90) days after receipt by the
claimant of the written notice of denial, or in the event the claimant
has not received a response within one hundred eighty (180) days after
receipt by the Committee of claimant's claim or request. The claim or
request shall be reviewed by the Committee which may, but shall not be
required to, grant the claimant a hearing. On review, the claimant
may have representation, examine pertinent documents, and submit
issues and comments in writing.
16
8.4 FINAL DECISION. The decision on review shall be made within
sixty (60) days after the Committee's receipt of the claimant's claim
or request. If an extension of time is required for a hearing or
other special circumstances, the claimant shall be notified and the
time limit shall be one hundred twenty (120) days. The decision shall
be in writing and shall state the reason and the relevant Plan
provisions. All decisions on review shall be final and bind all
parties concerned.
ARTICLE IX
TERMINATION, SUSPENSION OR AMENDMENT
------------------------------------
9.1 TERMINATION, SUSPENSION OR AMENDMENT OF PLAN. The Board
may, in its sole discretion, terminate or suspend the Plan at any time
or from time to time, in whole or in part. The Board may amend the
Plan at any time. Any amendment may provide different benefits or
amounts of benefits from those herein set forth. However, no such
termination, suspension or amendment shall adversely affect the
benefits of Participants which have accrued and vested prior to such
action, the benefits of any Participant who has previously retired,
except as otherwise determined by the Board under Section 10.1 with
respect to any Participant, or the benefits of any Beneficiary,
Eligible Spouse or Surviving Spouse of a Participant who has
previously died.
ARTICLE X
MISCELLANEOUS
-------------
10.1 UNFUNDED PLAN. The Plan is an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group
of "management OR highly compensated employees" within the meaning of
Sections 201, 301, and 401 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and therefore is exempt from the
provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the
Board may terminate the Plan and make no further benefit payments, or
remove certain employees as Participants if it is determined by the
United States Department of Labor, a court of competent jurisdiction,
or an opinion of counsel that the Plan constitutes an employee pension
benefit plan within the meaning of Section 3(2) of ERISA (as currently
in effect or hereafter amended) which is not so exempt.
10.2 COMPANY OBLIGATION. The obligation to make benefit payments
to any Participant under the Plan shall be an obligation solely of the
Company with respect to the deferred Compensation receivable from, and
contributions by the Company, and shall not be an obligation of
another company.
10.3 UNSECURED GENERAL CREDITOR. Except as provided in Section
10.4, Participants and their Beneficiaries, Eligible Spouses,
Surviving Spouses, heirs, successors and assigns shall have no legal
17
or equitable rights, interest or claims in any property or assets of
the Company, nor shall they be beneficiaries of, or have any rights,
claims or interests in, any life insurance policies, annuity contracts
or the proceeds therefrom owned or which may be acquired by the
Company. Except as provided in Section 10.4, such policies or other
assets of the Company shall not be held under any trust for the
benefit of Participants, their Beneficiaries, Eligible Spouses,
Surviving Spouses, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of the
Company under the Plan. Any and all of the Company's assets shall be,
and remain, the general, unpledged, unrestricted assets of the
Company. The Company's obligation under the Plan shall be that of an
unfunded and unsecured promise of the Company to pay money in the
future.
10.4 TRUST FUND. The Company shall be responsible for the
payment of all benefits provided under the Plan. At its discretion,
the Company may establish one (1) or more trusts, with such trustees
as the Board may approve, for the purpose of providing for the payment
of such benefits. Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Company's
creditors. To the extent any benefits provided under the Plan are
actually paid from any such trust, the Company shall have no further
obligation with respect thereto, but to the extent not so paid, such
benefits shall remain the obligation of, and shall be paid by, the
Company.
10.5 NONASSIGNABILITY. Neither a Participant nor any other
person shall have any right to commute, sell, assign, transfer,
pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights
to which are, expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy
or insolvency.
10.6 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of
the Plan shall not be deemed to constitute a contract of employment
between the Company and any Participant, and neither the Participant
(nor his Beneficiary, Eligible Spouse or Surviving Spouse) shall have
any rights against the Company except as may otherwise be specifically
provided herein. Moreover, nothing in the Plan shall be deemed to
give a Participant the right to be retained in the service of the
Company or to interfere with the right of the Company to discipline or
discharge him at any time.
10.7 PROTECTIVE PROVISIONS. A Participant will cooperate with
the Company by furnishing any and all information requested by the
18
Company, in order to facilitate the payment of benefits hereunder and
by taking such physical examinations as the Company may deem necessary
and taking such other action as may be requested by the Company.
10.8 GENDER AND NUMBER. Whenever any words are used herein in
the masculine, they shall be construed as though they were used in the
feminine and the neuter in all cases where they would so apply; and
wherever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
10.9 CAPTIONS. The captions of the articles, sections and
paragraphs of the Plan are for convenience only and shall not control
or affect the meaning or construction of any of its provisions.
10.10 GOVERNING LAW. The provisions of the Plan shall be
construed and interpreted according to the laws of the State of
Illinois except to the extent preempted by ERISA.
10.11 VALIDITY. In case any provision of the Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining parts hereof, but the Plan shall be construed
and enforced as if such illegal and invalid provision had never been
inserted herein.
10.12 NOTICE. Any notice or filing required or permitted to be
given to the Committee under the Plan shall be sufficient if in
writing and hand delivered, or sent by registered or certified mail to
any member of the Committee or the Secretary of the Company. Such
notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification. Mailed notice to the
Committee shall be directed to the Company's address. Mailed notice
to a Participant, Eligible Spouse, Surviving Spouse or Beneficiary
shall be directed to the individual's last known address in the
Company's records.
10.13 SUCCESSORS. The provisions of the Plan shall bind and
inure to the benefit of the Company and its successors and assigns.
The term successors as used herein shall include any corporate or
other business entity which shall, whether by merger, consolidation,
purchase or otherwise, acquire all or substantially all of the
business and assets of the Company, and successors of any such
corporation or other business entity.
19
IN WITNESS WHEREOF, Newell Operating Company has caused this
instrument to be executed by its duly authorized officer effective as
of January 1, 1999.
NEWELL OPERATING COMPANY
By: /s/ C.R. Davenport
-----------------------------
Dated: November 17, 2000
----------------------------
20
EXHIBIT 10.13
-------------
NEWELL RUBBERMAID
MEDICAL PLAN FOR EXECUTIVES
(As Amended and Restated Effective January 1, 2000)
NEWELL RUBBERMAID
MEDICAL PLAN FOR EXECUTIVES
Table of Contents
-----------------
ARTICLE I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 1
1.1 Nature and Purpose of Plan . . . . . . . . . . . . . . . 1
ARTICLE II. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
2.1 Board . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Code . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Committee . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Company . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.5 Core Medical Plan . . . . . . . . . . . . . . . . . . . . 1
2.6 Eligible Dependent . . . . . . . . . . . . . . . . . . . 1
2.7 Eligible Employee . . . . . . . . . . . . . . . . . . . . 1
2.9 Participant . . . . . . . . . . . . . . . . . . . . . . . 1
2.10 Participating Employer . . . . . . . . . . . . . . . . . 1
2.11 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III. PARTICIPATION . . . . . . . . . . . . . . . . . . . . 1
ARTICLE IV. BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE V. CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE VI. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . 2
6.1 Plan Administrator . . . . . . . . . . . . . . . . . . . 2
6.2 Indemnification of Committee Members and Other Employees 2
ARTICLE VII. AMENDMENT AND TERMINATION OF PLAN . . . . . . . . . . 2
ARTICLE VIII. CLAIMS FOR BENEFITS . . . . . . . . . . . . . . . . 2
8.1 Submission of Claim . . . . . . . . . . . . . . . . . . . 2
8.2 Appeal of Denial of Claim . . . . . . . . . . . . . . . . 3
ARTICLE IX. PLAN FUNDING . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE X. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . 3
10.1 Subrogation . . . . . . . . . . . . . . . . . . . . . . . 3
10.2 Coordination of Benefits . . . . . . . . . . . . . . . . 3
10.3 Applicable Law . . . . . . . . . . . . . . . . . . . . . 3
10.4 Operation of COBRA . . . . . . . . . . . . . . . . . . . 3
i
ARTICLE I. INTRODUCTION
1.1 NATURE AND PURPOSE OF PLAN. The Plan is a group health plan
as that term is defined in the Code and ERISA. The purpose of the
Plan is to provide Participants and their Dependents with supplemental
group health benefits.
ARTICLE II. DEFINITIONS
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
2.3 "Committee" means the Newell Rubbermaid Welfare Benefit
Plans Administrative Committee.
2.4 "Company" means Newell Operating Company, a corporation
organized under the laws of Delaware.
2.5 "Core Medical Plan" means the Newell Rubbermaid Medical Plan
for Exempt and Non-Exempt Employees, which is a Participating Plan in
the Newell Rubbermaid Health and Welfare Program 506, as such Plan is
applicable to an Eligible Employee and an Eligible Dependent.
2.6 "Eligible Dependent" means a dependent of an Eligible
Employee who is a dependent under the Core Medical Plan.
2.7 "Eligible Employee" means each participant in the Core
Medical Plan who holds the title of vice-president or higher.
2.8 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.9 "Participant" means any Eligible Employee who participates
in the Plan in accordance with Article III.
2.10 "Participating Employer" means Participating Employer as
that term is defined in the Newell Rubbermaid Health and Welfare
Program 506.
2.11 "Plan" means the Newell Rubbermaid Medical Plan for
Executives as set forth herein and as amended from time to time.
ARTICLE III. PARTICIPATION
Each Eligible Employee shall automatically become a Participant
entitled to benefits under the Plan at the same time he or she first
becomes an Eligible Employee. A Participant shall cease to be a
Participant when he or she is no longer an Eligible Employee. Each
dependent (as that term is defined in the Core Medical Plan) shall
automatically become an Eligible Dependent entitled to benefits under
1
the Plan at the same time he or she becomes a dependent of an Eligible
Employee under the Core Medical Plan.
ARTICLE IV. BENEFITS
The Plan shall provide benefits equal to any deductible, co-
payment or co-insurance that would otherwise be payable under the Core
Medical Plan.
ARTICLE V. CONTRIBUTIONS
The Company or a Participating Employer shall make all
contributions required to provide Plan benefits and pay Plan
administrative expenses. Eligible Employees shall not be required or
permitted to make any contribution to the Plan.
ARTICLE VI. ADMINISTRATION OF THE PLAN
6.1 PLAN ADMINISTRATOR. The administration of the Plan shall be
under the supervision of the Committee. The Committee is the "named
fiduciary" of the Plan as that term is defined in Section 402(a)(2) of
ERISA. It shall be a principal duty of the Committee to see that the
Plan is carried out, in accordance with its terms, for the exclusive
benefit of Participants and their Dependents. The powers and duties
of the Committee shall be the same as those set forth in the Core
Medical Plan. The Committee shall have the authority to allocate its
responsibilities concerning the operation and administration of the
Plan to the extent provided under the Core Medical Plan. Benefits
under the Plan will be paid only if the Committee decides in its
discretion that the applicant is entitled to them.
6.2 INDEMNIFICATION OF COMMITTEE MEMBERS AND OTHER EMPLOYEES.
The Company agrees to indemnify and defend to the fullest extent
permitted by law any person serving as a member of the Committee
(including any person who formerly served as a member of such
Committee) and each of its other employees against all liabilities,
damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claim) occasioned by any act or omission to
act in connection with the Plan, if such act or omission is in good
faith.
ARTICLE VII. AMENDMENT AND TERMINATION OF PLAN
The Plan may be at any time amended or terminated through
resolution of the Board.
ARTICLE VIII. CLAIMS FOR BENEFITS
8.1 SUBMISSION OF CLAIM. Any claim for benefits under the Plan
shall be made in accordance with the claims procedure set forth in the
Core Medical Plan.
2
8.2 APPEAL OF DENIAL OF CLAIM. If a claim for benefits is
denied, the terms of the claims review procedure contained in the Core
Medical Plan shall govern.
ARTICLE IX. PLAN FUNDING
Plan benefits shall be funded through a group insurance policy
purchased by the Company. Plan administrative expenses shall be paid
from the general assets of the Company or the Participating Employers.
ARTICLE X. MISCELLANEOUS PROVISIONS
10.1 SUBROGATION. The Company shall have subrogation and third
party recovery rights to the extent provided under the Core Medical
Plan.
10.2 COORDINATION OF BENEFITS. The Coordination of Benefits
rules contained in the Core Medical Plan shall apply.
10.3 APPLICABLE LAW. The Plan shall comply with the requirements
of the Consolidated Omnibus Budget Reconciliation Act of 1985, the
Health Insurance Portability and Accountability Act of 1996, the
Mental Health Parity Act of 1996, the Newborns' and Mothers' Health
Protection Act of 1996, the Women's Health and Cancer Rights Act of
1996, and all other applicable law governing group health plans. The
provisions necessary for such compliance shall be contained within the
Core Medical Plan.
10.4 OPERATION OF COBRA. Each Qualified Beneficiary (as defined
in the Core Medical Plan) shall be entitled to elect COBRA
continuation coverage under this Plan to the extent that such coverage
is available under the Core Medical Plan. COBRA continuation coverage
shall not be available under this Plan independent of COBRA
continuation coverage under the Core Medical Plan.
IN WITNESS WHEREOF, the Company has caused this amended and
restated Plan to be executed in its name by its duly authorized
officer, effective as of the 1st day of January, 2000.
NEWELL OPERATING COMPANY
By: /s/ C.R. Davenport
-------------------------------
Its: Vice President-Treasurer
------------------------
3
EXHIBIT 10.14
-------------
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
This Confidential Separation Agreement and General Release
(hereinafter referred to as "Agreement") is made this 25th day of
October, 2000, by and between Thomas A. Ferguson (hereinafter referred
to as "Ferguson") and Newell Rubbermaid, Inc. (hereinafter referred to
as "Newell").
WHEREAS, Newell decided to terminate Ferguson's employment and at
Newell's request Ferguson thereafter submitted his resignation as an
employee and director of Newell to be effective October 20, 2000; and
WHEREAS, Ferguson's resignation shall for all purposes pertaining
to compensation and benefits be treated as if his employment was
terminated by Newell; and
WHEREAS, Ferguson desires to secure the severance benefits as
provided below; and recognizes that this package includes valuable
consideration to which he would not otherwise be entitled; and
WHEREAS, the parties desire to affect a final settlement of all
matters relating to Ferguson's employment and his relationship with
Newell and have arrived at a compromise of all such matters.
NOW, THEREFORE, based upon the foregoing and in consideration of
the mutual covenants and promises contained herein and other good and
valuable consideration, the parties agree as follows:
1. Neither this Agreement nor any action taken by Newell
pursuant to it shall in any way be construed as an admission
by Newell of any liability, wrongdoing or violation of law,
regulation, contract or policy.
2. Newell agrees to pay and/or provide to Ferguson the
following severance benefits in final settlement of all
claims Ferguson may have against Newell:
a. Severance pay will be paid to Ferguson at his base
salary in effect on October 20, 2000, plus Twelve
Thousand Five Hundred Dollars ($12,500) per month, on
normal pay periods less all legally required
withholding for taxes and social security through
October 20, 2003. Such payments will begin after the
passage of seven (7) days following Ferguson's
execution of this Agreement.
b. Ferguson will be eligible for a full year 2000 bonus
based upon his participation in the Newell Rubbermaid
Bonus Plan pursuant to the provisions of that Plan and
will be paid that bonus, if any, at the same time other
participants are paid.
c. For purposes of Section 3.3 of the Newell Operating
Company Supplemental Retirement Plan for Key Executives
(Plan) as restated effective January 1, 1999, which
provides for a forfeiture of benefits under the Plan in
the event a participant voluntarily terminates
employment prior to the attainment of age 60, and for
all other purposes pertaining to compensation and
benefits, Ferguson shall be treated as if his
employment were involuntarily terminated by Newell.
Therefore, under the terms of the Plan there is no
forfeiture of Ferguson's benefit.
d. Medical and dental group coverage will be continued for
Ferguson through October 20, 2003, or the date Ferguson
secures other employment that provides equivalent or
better coverage, whichever event occurs first on the
same basis as such benefits are provided to existing
employees at his level. Ferguson will remain
responsible for the partial payment of premiums to the
extent that existing employees at his level pay such
premiums and such payments will be deducted from
severance payments. With regard to medical and dental
coverage, Ferguson and his covered dependents have been
offered and have elected to continue medical and dental
coverage under the Consolidated Omnibus Budget
Reconciliation Act (COBRA). For those purposes, the
date of the qualifying event will be October 20, 2000.
Payments made by Newell toward such coverage during the
period of continuation will run concurrently with
COBRA.
e. All stock options held by Ferguson pursuant to the
Newell Rubbermaid Stock Option Plan as of October 20,
2000, that are not vested will become immediately
vested and Ferguson may exercise stock options held at
any time prior to the expiration date of such options.
f. Ferguson will be allowed the use of his Newell lease
car until the earlier of October 20, 2001 or the date
he becomes reemployed. Ferguson may, at his
discretion, purchase his Newell leased car at any time
prior to October 20, 2001 or his date of reemployment,
whichever occurs first, at the buy-out price as
established by the leased automobile program as of the
date of purchase.
g. With regard to his rights to distribution of his
account in the Newell Co. Deferred Compensation Plan,
Ferguson will have the right to request either a lump
sum distribution or distribution in substantially equal
annual installments over ten (10) years as soon as
reasonably practicable after the effective date of his
5
termination as an employee and member of the Board of
Directors.
h. Ferguson will be provided a personal income tax service
for his year 2000 returns and if be is not employed at
the time his year 2001 returns are to be prepared, tax
preparation service for those returns will likewise be
provided.
i. Ferguson shall receive vacation pay for five weeks of
accrued but unused vacation.
j. Ferguson shall be provided with outplacement services
at Newell's expense with a professional outplacement
firm reasonably selected by Ferguson with the approval
of Newell, which approval shall not be unreasonably
withheld.
k. Ferguson will be paid no further wages, bonuses,
benefits, compensation or remuneration of any kind
subsequent to October 20, 2000, other than those
specifically provided above.
3. Ferguson hereby resigns from Newell as an employee effective
October 20. 2000 and expressly declines reinstatement,
employment and rehire by Newell and waives all rights to
claim such relief and agrees never to seek or apply for
employment with Newell Rubbermaid, Inc. or any of its
subsidiaries, affiliated businesses or divisions in the
future. Ferguson further hereby resigns from the Newell
Board of Directors and from the Board of Directors of any
subsidiary of Newell of which he is a member also effective
October 20, 2000.
4. Ferguson agrees that this Agreement and all its terms and
provisions are strictly confidential and shall not be
divulged or disclosed in any way to any person other than
his spouse, legal counsel and tax advisor if he so desires,
and that he will protect the confidentiality of the
Agreement in all regards. Should Ferguson choose to divulge
the terms and conditions of the Agreement to his spouse,
legal counsel or tax advisor, he shall ensure that they will
be similarly bound to protect its confidentiality and that a
breach of the paragraph by Ferguson's spouse, legal counsel
or tax advisor shall be considered a breach of the paragraph
by Ferguson.
5. Ferguson represents that he has not tiled any pending
complaint, charge, claim or grievance against Newell with
any local, state or federal agency, court or commission.
6. (a) Ferguson acknowledges that:
6
(i) As a result of his employment with Newell and as a
member of its Board of Directors he has obtained
secret and confidential information concerning the
business of Newell and its subsidiaries and
divisions, including, without limitation, the
operations and finances, the business plan, the
identity of potential acquisitions, the identity
of customers and sources of supply, their needs
and requirements, the nature and extent of
contracts with them, product and process
specifications and related costs, price,
profitability and sales information;
(ii) Newell and its subsidiaries and divisions will
suffer substantial damage which will be difficult
to compute if Ferguson should enter into a
Competitive Business (as defined below), unless
approved by Newell in writing and in advance, or
if he should divulge secret and confidential
information relating to the business of Newell
heretofore acquired by him in the course of his
employment with Newell or his participation on its
Board of Directors; and
(iii) The provisions of this Agreement are reasonable
and necessary for the protection of the business
of Newell and its subsidiaries and divisions.
(b) Ferguson agrees that he will not for a period of one
(1) year following the date Ferguson signs this
Agreement divulge to any person, firm or corporation,
or use for his own benefit, any secret or confidential
information obtained or learned by him in the course of
his employment with Newell with regard to the
operational, financial, business or other affairs of
Newell or its subsidiaries and divisions, including,
without limitation, proprietary trade "know how" and
secrets, financial information and models, customer
lists, business, marketing and sales plans, identity
and qualifications of Newell's employees, sources of
supply, pricing policies, proprietary operational
methods, product specifications or technical processes,
except (i) with Newell's express written consent; or
(ii) to the extent that any such information is in or
becomes part of the public domain other than as a
result of Ferguson's breach of any of his obligations
hereunder.
(c) Except as provided herein, Ferguson represents that he
has no later than the date he signs this Agreement,
delivered to Newell all memoranda. notes, files,
computers, software, discs, memory storage records,
7
reports, manuals, drawings, blueprints, credit cards
and other documents (and all copies thereof) and other
tools provided to Ferguson by Newell relating to the
business of Newell and its subsidiaries and divisions
and all property associated therewith which he may
possess or have under his control. Ferguson further
represents that he has neither kept, created, nor
downloaded any copy of Newell's computer records.
(d) For a period of one (1) year following the date
Ferguson signed this Agreement, Ferguson, without the
prior express written permission of Newell Rubbermaid,
Inc., shall not (i) enter into the employ of or render
any services, in an executive, managerial, sales,
financial or strategic planning capacity, to any
person, firm, or corporation engaged in the
manufacture, sale or distribution of products currently
being designed, developed, manufactured, sold or
distributed by Newell Rubbermaid, Inc. or any of its
subsidiaries or divisions which directly or indirectly
compete with the business of Newell Rubbermaid, Inc. or
any of its subsidiaries or divisions as presently
conducted as of the date Ferguson signed this Agreement
(a "Competitive Business"); (ii) engage in any
Competitive Business for his own account; (iii)
solicit, induce or entice, or cause any other person or
entity to solicit, recruit, induce or entice to leave
the employ of Newell any person employed or retained by
Newell; or (iv) solicit, interfere with, or endeavor to
entice away from Newell any of its customers with which
Ferguson had contact or communications during his
employment with Newell, The covenants contained in
paragraphs 6(d)(i) and (ii) shall apply only as to
Competitive Business located or doing business in the
United States or Canada.
(e) If Ferguson commits a breach, or threatens to commit a
breach, of any of the provisions of paragraph 6, Newell
shall have the right:
(i) to have the provisions of this Agreement
specifically enforced by and obtain any other
relief to which it is entitled by law from any
court having jurisdiction; and
(ii) following adjudication by the court of competent
jurisdiction (including exhaustion of all appeals)
that a breach of any of the provisions of
paragraph 6 has occurred, to require Ferguson to
pay over to Newell all severance benefits provided
in paragraphs 2.a. and b. of this Agreement; and
8
(iii) discontinue the payment of any further severance
benefits under paragraphs 2.a., b., and d of this
Agreement.
(f) Each of the rights and remedies enumerated in this
paragraph 6 shall be independent of the other, and
shall be severally enforceable, and such rights and
remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to Newell in
law or equity.
7. Ferguson agrees that he will conduct himself in a
professional manner and not make any disparaging or negative
statements regarding Newell, its subsidiaries or divisions
or their officers, directors or employees.
8. Following his resignation and throughout his period of
severance pay, Ferguson shall, upon reasonable notice and at
reasonable times, (having due regard for the conflicting
obligations arising from any other employment or engagement
of Ferguson), advise and assist Newell in preparing such
operational, financial or other reports or other filings as
Newell may reasonably request, and to respond to inquiries
concerning the operations, finances and business of Newell
and otherwise cooperate with Newell and its affiliates as
Newell shall reasonably request. Furthermore, upon
reasonable notice, Ferguson agrees to cooperate with Newell
at Newell's request in prosecuting or defending against any
litigation, complaints or claims against or involving Newell
or any of its subsidiaries, divisions or affiliated
businesses at any time in the future. Ferguson shall be
reimbursed for any and all out-of-pocket expenses reasonably
incurred by him in connection with fulfilling his
obligations under this paragraph 8.
9. As a material inducement to Newell to enter the Agreement,
Ferguson hereby irrevocably and unconditionally releases,
acquits and forever discharges Newell, its successors,
assigns, agents, directors, officers, employees,
representatives, subsidiaries, divisions, parent
corporations and affiliates, and all other persons acting
by, through or in concert with any of them (collectively
"Releasees") from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, actions,
damages, expenses (including attorneys' fees and costs
actually incurred), or any rights of any and every kind or
nature, accrued or unaccrued, known and unknown, which
Ferguson has or claims to have against each or any of the
Releasees. This release pertains to but is in no way
limited to all matters relating to or arising out of
Ferguson's employment and termination of employment by
Newell and all claims for severance benefits. The release
9
further pertains to but is in no way limited to rights and
claims under the Age Discrimination in Employment Act of
1967 (29 U.S.C. 621, et seq. Title VII of the Civil Rights
Act, as amended, the Americans With Disabilities Act, and
all state, local or municipal fair employment laws.
10. The Agreement shall be binding upon Ferguson and upon his
heirs, administrators, representatives, executors,
successors, and assigns and shall inure to the benefit of
the Releasees and to their heirs, administrators,
representatives, executors, successors, and assigns.
11. As a further material inducement to Newell to enter into
this Agreement, Ferguson hereby agrees to indemnify and hold
each and all of the Releasees harmless from and against any
and all attorneys' fees incurred by Releasees, not to exceed
Fifty Thousand Dollars ($50,000.00), arising out of the
breach of the Agreement by Ferguson. In the event that
Newell commences litigation against Ferguson for breach of
the Agreement and it is ultimately determined by a court of
competent jurisdiction that Ferguson did not breach the
Agreement, Newell agrees to indemnify and hold Ferguson
harmless from and against any and all attorneys' fees
incurred by Ferguson in connection with defending such
litigation not to exceed Fifty-Thousand Dollars
($50,000.00). Newell's right to indemnification in this
paragraph 11 is independent from and in addition to all of
its rights to relief, and to recover damages and severance
benefits, and to discontinue severance benefits as provided
in paragraph 6 of this Agreement.
12. The parties understand and agree that the Agreement is final
and binding and constitutes the complete and exclusive
statement of the terms and conditions of settlement, that no
representations or commitments were made by the parties to
induce the Agreement other than as expressly set forth
herein and that the Agreement is fully understood by the
parties. Ferguson further represents that he has had the
opportunity and time to consult with legal counsel
concerning the provisions of the Agreement and that he has
been given twenty-one (21) days within which to execute the
Agreement and seven (7) days following his execution to
revoke the Agreement. The Agreement may not be modified or
supplemented except by a subsequent written Agreement signed
by the party against whom enforcement of the modification is
sought.
13. The validity, construction and enforceability of this
Agreement shall be governed in all respects by the laws of
the State of Illinois, without regard to its conflicts of
laws rules.
10
14. Ferguson acknowledges that he has carefully read the entire
document, that a copy of the document was available to him
prior to execution, that he knows and understands the
provisions of the document, and that he has signed the
document as his own free act and deed.
[The rest of this page has been left purposely blank.]
11
IN WITNESS WHEREOF, the parties herein executed the Agreement as
of the date appearing next to their signatures.
NEWELL RUBBERMAID, INC.
Date: October 25, 2000
-----------------
/s/ Gilbert A. Nielsen
----------------------------------
GILBERT A. NIESEN, VICE-PRESIDENT
PERSONNEL RELATIONS
CAUTION: THIS IS A RELEASE CONSULT WITH AN ATTORNEY AND READ IT
BEFORE SIGNING, THIS AGREEMENT MAY BE REVOKED IN WRITING BY YOU WITHIN
SEVEN (7) DAYS OF YOUR EXECUTION OF THE DOCUMENT.
Date: October 25, 2000
-----------------
/s/ Thomas A. Ferguson
----------------------------------
THOMAS A. FERGUSON
STATE OF ILLINOIS )
) SS.
COUNTY OF STEPHENSON )
On the 25th day of October, 2000, Thomas A. Ferguson appeared
before me and, after being duly sworn, did say that he acknowledged
the instrument to be his voluntary act.
In witness whereof, I hereunto set my hand and official seal:
/s/ Bonnie Jean Beyer
----------------------------------
Notary Public
12
EXHIBIT 10.15
-------------
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
This Confidential Separation Agreement and General Release
(hereinafter referred to as "Agreement") is made this 29th day of
November, 2000, by and between John J. McDonough (hereinafter referred
to as "McDonough") and Newell Rubbermaid, Inc. (hereinafter referred
to as "Newell").
WHEREAS, Newell decided to terminate McDonough's employment and
McDonough thereafter submitted his resignation as an employee and
director of Newell to be effective October 31, 2000; and
WHEREAS, McDonough desires to secure the severance benefits as
provided below; and recognizes that this package includes valuable
consideration to which he would not otherwise be entitled; and
WHEREAS, the parties desire to affect a final settlement of all
matters relating to McDonough's employment and his relationship with
Newell and have arrived at a compromise of all such matters.
NOW, THEREFORE, based upon the foregoing and in consideration of
the mutual covenants and promises contained herein and other good and
valuable consideration, the parties agree as follows:
1. Neither this Agreement nor any action taken by Newell
pursuant to it shall in any way be construed as an admission
by Newell of any liability, wrongdoing or violation of law,
regulation, contract or policy.
2. Newell agrees to pay and/or provide to McDonough the
following severance benefits in final settlement of all
claims McDonough may have against Newell:
a. Severance pay will be paid to McDonough at his base
salary in effect on October 31, 2000, on normal pay
periods less all legally required withholding for taxes
and social security through December 31, 2000. Such
payments will begin after the passage of seven (7) days
following McDonough's execution of this Agreement.
b. McDonough will be eligible for a full year 2000 bonus
based upon his participation in the Newell Rubbermaid
Bonus Plan pursuant to the provisions of that Plan and
will be paid that bonus, if any, at the same time other
participants are paid.
c. Medical and dental group coverage will be continued for
McDonough through December 31, 2000, on the same basis
as such benefits are provided to existing employees at
his level. McDonough will remain responsible for the
partial payment of premiums to the extent that existing
employees pay such premiums and such payments will be
deducted from severance payments. With regard to
medical and dental coverage, McDonough and his covered
dependents have been offered and have elected to
continue medical and dental coverage under the
Consolidated Omnibus Budget Reconciliation Act (COBRA).
For those purposes, the date of the qualifying event
will be January 1, 2001. Thereafter, McDonough may
continue coverage through June 30, 2002, at his own
expense. Should McDonough desire, Newell agrees to
deduct premiums for continued Coverage from McDonough's
final payroll check.
d. All stock options held by McDonough pursuant to the
Newell Rubbermaid Stock Option Plan as of October 31,
2000, that are not vested will vest pursuant to the
terms of that Plan as if McDonough was a participant in
the Plan and McDonough may exercise stock options held
at any time prior to the expiration date of such
options. No further stock options will be granted to
McDonough.
e. McDonough's rights under the Newell Operating Company
Supplemental Retirement Plan for Key Executives as
restated effective January 1, 1999 are governed by the
terms of that plan.
f. McDonough's rights to distribution from his account, if
any, in the Newell Co. Deferred Compensation Plan are
governed by the terms of that Plan.
g. McDonough will be paid no further wages, bonuses,
benefits, compensation or remuneration of any kind
subsequent to October 31, 2000, other than those
specifically provided above.
3. McDonough hereby resigns from Newell as an employee
effective October 31, 2000 and expressly declines
reinstatement, employment and rehire by Newell and waives
all rights to claim such relief and agrees never to seek or
apply for employment with Newell Rubbermaid, Inc. or any of
its subsidiaries, affiliated businesses or divisions in the
future. McDonough further hereby resigns from the Newell
Board of Directors and from the Board of Directors of any
subsidiary of Newell of which he is a member also effective
October 31, 2000.
4. McDonough agrees that this Agreement and all its terms and
provisions are strictly confidential and shall not be
divulged or disclosed in any way to any person other than
his spouse, legal counsel and tax advisor if he so desires,
and that be will protect the confidentiality of the
2
Agreement in all regards. Should McDonough choose to
divulge the terms and conditions of the Agreement to his
spouse, legal counsel or tax advisor, he shall ensure that
they will be similarly bound to protect its confidentiality
and that a breach of the paragraph by McDonough's spouse,
legal counsel or tax advisor, he shall ensure that they will
be similarly hound to protect its confidentiality and that a
breach of the paragraph by McDonough's spouse, legal counsel
or tax advisor shall be considered a breach of the paragraph
by McDonough.
5. McDonough represents that he has not filed any pending
complaint, charge, claim or grievance against Newell with
any local, state or federal agency, court or commission.
6. (a) McDonough acknowledges that:
(i) As a result of his employment with Newell and as a
member of its Board of Directors he has obtained
secret and confidential information concerning the
business of Newell and its subsidiaries and
divisions, including, without limitation, the
operations and finances, the business plan, the
identity of potential acquisitions, the identity
of customers and sources of' supply, their needs
and requirements, the nature and extent of
contracts with them, product and process
specifications and related costs, price,
profitability and sales information;
(ii) Newell and its subsidiaries and divisions will
suffer substantial damage which will be difficult
to compute if McDonough should divulge secret and
confidential information relating to the business
of Newell heretofore acquired by him in the course
of his employment with Newell or his participation
on its Board of Directors; and
(iii) The provisions of this Agreement are reasonable
and necessary for the protection of the business
of Newell and its subsidiaries and divisions.
(b) McDonough agrees that he will not for a period of two
(2) years following the date McDonough signs this
Agreement divulge to any person, firm or corporation,
or use for his own benefit, any secret or confidential
information obtained or learned by him in the course of
his employment with Newell with regard to the
operational, financial, business or other affairs of
Newell or its subsidiaries and divisions, including,
without limitation, proprietary trade "know how" and
secrets, financial information and models, customer
3
lists, business, marketing and sales plans, identity
and qualifications of Newell's employees, sources of
supply, pricing policies, proprietary operational
methods, product specifications or technical processes,
except (i) with Newell's express written consent; or
(ii) to the extent that any such information is in or
becomes part of the public domain other than as a
result of McDonough's breach of any of his obligations
hereunder.
(c) Except as provided herein, McDonough represents that he
has no later than the date he signs this Agreement,
delivered to Newell all memoranda, notes, files,
computers, software, discs, memory storage records,
reports, manuals, drawings, blueprints, credit cards
and other documents (and all copies thereof) and other
tools provided to McDonough by Newell relating to the
business of Newell and its subsidiaries and divisions
and all property associated therewith which he may
possess or have under his control. McDonough further
represents that he has neither kept, created, nor
downloaded any copy of Newell's computer records.
(d) If McDonough commits a breach, or threatens to commit a
breach, of any of the provisions of paragraph 6, Newell
shall have the right:
(i) to have the provisions of this Agreement
specifically enforced by and obtain any other
relief to which it is entitled by law from any
court having jurisdiction; and
(ii) following adjudication by the court of competent
jurisdiction (including exhaustion of all appeals)
that a breach of any of the provisions of
paragraph 6 has occurred, to require McDonough to
pay over to Newell all severance benefits provided
in paragraphs 2.a. and b. of this Agreement and to
account for and pay over to Newell all
compensation, profits, monies, accruals,
increments or other benefits (collectively
"Benefits") derived or received by him as the
result of any transactions constituting a breach
of any of the provisions of paragraph 6, and
McDonough hereby agrees to account for and pay
over such Benefits to Newell; and
(iii) discontinue the payment of any further severance
benefits under paragraphs 2.a. and b of this
Agreement.
4
(e) Each of the rights and remedies enumerated in this
paragraph 6 shall be independent of the other, and
shall be severally enforceable, and such rights and
remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to Newell in
law or equity.
7. McDonough agrees that he will conduct himself in a
professional manner and not make any disparaging or negative
statements regarding Newell, its subsidiaries or divisions
or their officers, directors or employees.
8. Following his resignation McDonough shall, upon reasonable
notice and at reasonable times, (having due regard for the
conflicting obligations arising from any other employment or
engagement of McDonough), advise and assist Newell in
preparing such operational, financial or other reports or
other filings as Newell may reasonably request, and to
respond to inquiries concerning the operations, finances and
business of Newell and otherwise cooperate with Newell and
its affiliates as Newell shall reasonably request.
Furthermore, upon reasonable notice, McDonough agrees to
cooperate with Newell at Newell's request in prosecuting or
defending against any litigation, complaints or claims
against or involving Newell or any of its subsidiaries,
divisions or affiliated businesses at any time in the
future.
9. As a material inducement to Newell to enter the Agreement,
McDonough hereby irrevocably and unconditionally releases,
acquits and forever discharges Newell, its successors,
assigns, agents, directors, officers, employees,
representatives, subsidiaries, divisions, parent
corporations and affiliates, and all other persons acting
by, through or in concert with any of them (collectively
"Releasees") from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, actions,
damages, expenses (including attorneys' fees and costs
actually incurred), or any rights of any and every kind or
nature, accrued or unaccrued, known and unknown, which
McDonough has or claims to have against each or any of the
Releasees. This release pertains to but is in no way
limited to all matters relating to or arising out of
McDonough's employment and termination of employment by
Newell and all claims for severance benefits. The release
further pertains to but is in no way limited to rights and
claims under the Age Discrimination in Employment Act of
1967 (29 U.S.C. 621, et seq.), Title VII of the Civil Rights
Act, as amended, the Americans With Disabilities Act, and
all state, local or municipal fair employment laws.
5
10. The Agreement shall be binding upon McDonough and upon his
heirs, administrators, representatives, executors,
successors, and assigns and shall inure to the benefit of
the Releasees and to their heirs, administrators,
representatives, executors, successors, and assigns.
11. As a further material inducement to Newell to enter into
this Agreement, McDonough hereby agrees to indemnify and
hold each and all of the Releasees harmless from and against
any attorneys' fees incurred by Releasees, not to exceed
Fifty Thousand Dollars ($50,000), arising out of the breach
of the Agreement by McDonough. Newell's right to
indemnification in this paragraph 11 is independent from and
in addition to all of its rights to relief under this
Agreement, and to recover damages and severance benefits,
and to discontinue severance benefits as provided in
paragraph 6 of this Agreement.
12. The parties understand and agree that the Agreement is final
and binding and constitutes the complete and exclusive
statement of the terms and conditions of settlement, that no
representations or commitments were made by the parties to
induce the Agreement other than as expressly set forth
herein and that the Agreement is fully understood by the
parties. McDonough further represents that he has had the
opportunity and time to consult with legal counsel
concerning the provisions of the Agreement and that he has
been given twenty-one (21) days within which to execute the
Agreement and seven (7) days following his execution to
revoke the Agreement. The Agreement may not be modified or
supplemented except by a subsequent written Agreement signed
by the party against whom enforcement of the modification is
sought.
13. The validity, construction and enforceability of this
Agreement shall be governed in all respects by the laws of
the State of Illinois, without regard to its conflicts of
laws rules.
14. McDonough acknowledges that he has carefully read the entire
document, that a copy of the document was available to him
prior to execution, that he knows and understands the
provisions of the document, and that he has signed the
document as his own free act and deed.
[The rest of this page has been left purposely blank.]
6
IN WITNESS WHEREOF, the parties herein executed the Agreement as
of the date appearing next to their signatures.
NEWELL RUBBERMAID, INC.
Date: December 1, 2000
----------------- /s/ Gilbert A. Niesen
----------------------------------
GILBERT A. NIESEN, VICE-PRESIDENT
PERSONNEL RELATIONS
CAUTION: THIS IS A RELEASE CONSULT WITH AN ATTORNEY AND READ IT
BEFORE SIGNING THIS AGREEMENT MAY BE REVOKED IN WRITING BY YOU WITHIN
SEVEN (7) DAYS OF YOUR EXECUTION OF THE DOCUMENT.
Date: November 29, 2000 /s/ John J. McDonough
------------------ ----------------------------------
JOHN J. McDONOUGH
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On the 29th day of November, 2000, John J. McDonough appeared
before me and, after being duly sworn, did say that he acknowledged
the instrument to be his voluntary act.
In witness whereof, I hereunto set my hand and official seal:
/s/ Susan K. Russell
----------------------------------
Notary Public
7
EXHIBIT 11
----------
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
--------------------------------------------------
YEAR ENDED DECEMBER 31,
2000 1999 1998
---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
BASIC EARNINGS PER SHARE:
Net income $421,575 $95,437 $481,834
Weighted average shares
outstanding 268,437 281,806 280,731
BASIC EARNINGS PER SHARE $1.57 $0.34 $1.72
DILUTED EARNINGS PER SHARE:
Net income $421,575 $95,437 $481,834
Minority interest in income of
subsidiary trust, net of tax 16,436 (A) 15,742
------- --- -------
Net income, assuming conversion
of all applicable securities $438,011 $95,437 $497,576
Weighted average shares
outstanding 268,437 281,806 280,731
Incremental common shares
applicable to common stock
options based on the average
market price during the period 63 (A) 1,287
Average common shares issuable
assuming conversion of the
Company-Obligated Mandatorily
Redeemable Convertible
Preferred Securities of a
Subsidiary Trust 9,865 (A) 9,865
------- --- -----
Weighted average shares
outstanding assuming full
dilution 278,365 281,806 291,883
DILUTED EARNINGS PER SHARE,
ASSUMING CONVERSION OF ALL
APPLICABLE SECURITIES $1.57 $0.34 $1.70
NOTE A - DILUTED EARNINGS PER SHARE FOR THE TWELVE MONTHS
EXCLUDE THE IMPACT OF "IN-THE-MONEY" STOCK OPTIONS AND
CONVERTIBLE PREFERRED SECURITIES BECAUSE THEY ARE ANTI-
DILUTIVE.
EXHIBIT 12
----------
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2000 1999 1998 1997 1996
(In thousands, except ratio data)
EARNINGS AVAILABLE TO FIXED
CHARGES:
Income before income
taxes $685,487 $230,939 $816,973 $544,590 $673,312
Fixed charges -
Interest expense 130,033 100,021 100,514 114,357 84,822
Portion of rent
determined to be
interest(A) 33,957 30,319 26,287 23,343 17,561
Minority interest
in income of
subsidiary trust 26,725 26,771 26,692 1,528 -
Equity in earnings
elimination (7,996) (8,118) (7,127) (5,831) (6,364)
-------- -------- -------- -------- --------
$868,206 $379,932 $963,339 $677,987 $769,331
======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $130,033 $100,021 $100,514 $114,357 $84,822
Portion of rent
determined to be
interest(A) 33,957 30,319 26,287 23,343 17,561
Minority interest
in income of
subsidiary trust 26,725 26,771 26,692 1,528 -
-------- -------- -------- -------- --------
$190,715 $157,111 $153,493 $139,228 $102,383
======== ======== ======== ======== ========
RATIO OF EARNINGS TO
FIXED CHARGES 4.55 2.42 6.28 4.87 7.51
====== ====== ====== ====== ======
NOTE A - A STANDARD RATIO OF 33% WAS APPLIED TO GROSS RENT
EXPENSE TO APPROXIMATE THE INTEREST PORTION OF SHORT-TERM AND
LONG-TERM LEASES.
EXHIBIT 21
----------
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
SIGNIFICANT SUBSIDIARIES
----------------------------------------
State of
Name Organization Ownership
---- ------------ --------
Newell Investments Delaware 68.5% of stock owned by
Inc. Newell Operating Company;
31.5% owned by Newell
Rubbermaid Inc.
Newell Operating Delaware 77.5% of stock owned by
Company Newell Rubbermaid Inc.;
22.5% of stock owned by
Anchor Hocking Corporation
Rubbermaid Ohio 100% of stock owned by
Incorporated Newell Rubbermaid Inc.
Rubbermaid Texas Texas Rubbermaid Incorporated is
Limited (limited the general partner with 1%;
partnership) Rubfinco Inc. is the limited
partner with 99%
Sanford, L.P. Illinois Newell Operating Company is
(limited the general partner with
partnership) 1.62%; Sanford Investment
Company is the limited
partner with 98.38%
EXHIBIT 23.1
------------
[ARTHUR ANDERSEN LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-------------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference of our report dated January 25, 2001,
included in this Form 10-K into the Company's previously filed Form
S-8 Registration Statements File Nos. 33-24447, 33-25196, 33-40641,
33-67632, 33-62047, and 333-38621, Form S-3 Registration Statements
File Nos. 33-46208, 33-64225, 333-47261, 333-53039, and 333-82829, and
Post-Effective Amendment No. 1 on Form S-8 to Form S-4 Registration
Statement File No. 33-44957.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
March 20, 2001
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
---------------------------------
The Board of Directors
Newell Rubbermaid Inc.:
We consent to the incorporation by reference in Newell Rubbermaid
Inc.'s previously filed Form S-8 Registration Statements (File Nos.
33-24447, 33-25196, 33-40641, 33-62047, 33-67632, and 333-38621), and
Form S-3 Registration Statements (File Nos. 33-46208, 33-64225,
333-47261, 333-53039, and 333-82829), and Post Effective Amendment No.
1 on Form S-8 to Form S-4 Registration Statement (File No. 33-44957)
of our report dated February 5, 1999, except as to Note 15, which is
as of March 24, 1999, with respect to the consolidated balance sheets
of Rubbermaid Incorporated and subsidiaries as of January 1, 1999, and
the related consolidated statements of earnings, shareholder's equity
and comprehensive income, and cash flows for the year then ended.
/s/ KPMG LLP
Cleveland, Ohio
March 20, 2001
EXHIBIT 99
----------
NEWELL RUBBERMAID INC. SAFE HARBOR STATEMENT
---------------------------------------------
The Company has made statements in its Annual Report on Form 10-K
for the year ended December 31, 2000, and the documents incorporated
by reference therein that constitute forward-looking statements, as
defined by the Private Securities Litigation Reform Act of 1995. These
statements are subject to risks and uncertainties. The statements
relate to, and other forward-looking statements that may be made by
the Company may relate to, information or assumptions about sales,
income, earnings per share, return on equity, return on invested
capital, capital expenditures, working capital, dividends, capital
structure, free cash flow, debt to capitalization ratios, interest
rates, internal growth rates, Euro conversion plans and related risks,
pending legal proceedings and claims (including environmental
matters), future economic performance, operating income improvements,
synergies, management's plans, goals and objectives for future
operations and growth. These statements generally are accompanied by
words such as "intend," "anticipate," "believe," "estimate,"
"project," "expect," "should" or similar statements. You should
understand that forward-looking statements are not guarantees since
there are inherent difficulties in predicting future results. Actual
results could differ materially from those expressed or implied in the
forward-looking statements. The factors that are discussed below, as
well as the matters that will be set forth generally in the 2000 Form
10-K and the documents that are incorporated by reference therein
could cause actual results to differ. Some of these factors are
described as criteria for success. Our failure to achieve, or limited
success in achieving, these objectives could result in actual results
differing materially from those expressed or implied in the
forward-looking statements. In addition, there can be no assurance
that we have correctly identified and assessed all of the factors
affecting the Company or that the publicly available and other
information we receive with respect to these factors is complete or
correct.
Retail Economy
--------------
Our business depends on the strength of the retail economies in
various parts of the world, primarily in North America and to a lesser
extent Europe, Central and South America and Asia.
These retail economies are affected primarily by such factors as
consumer demand and the condition of the consumer products retail
industry. In recent years, the consumer products retail industry in
the U.S. and, increasingly, elsewhere has been characterized by
intense competition and consolidation among both product suppliers and
retailers.
1
Nature of the Marketplace
-------------------------
We compete with numerous other manufacturers and distributors of
consumer products, many of which are large and well-established. Our
principal customers are large mass merchandisers, such as discount
stores, home centers, warehouse clubs and office superstores. The
rapid growth of these large mass merchandisers, together with changes
in consumer shopping patterns, have contributed to a significant
consolidation of the consumer products retail industry and the
formation of dominant multi-category retailers, many of which have
strong bargaining power with suppliers. This environment
significantly limits our ability to recover cost increases through
selling prices. Other trends among retailers are to foster high
levels of competition among suppliers, to demand that manufacturers
supply innovative new products and to require suppliers to maintain or
reduce product prices and deliver products with shorter lead times.
Another trend, in the absence of a strong new product development
effort or strong end-user brands, is for the retailer to import
generic products directly from foreign sources.
The combination of these market influences has created an
intensely competitive environment in which our principal customers
continuously evaluate which product suppliers to use, resulting in
pricing pressures and the need for strong end-user brands, the ongoing
introduction of innovative new products and continuing improvements in
customer service.
New Product Development
-----------------------
Our long-term success in this competitive retail environment
depends on our consistent ability to develop innovative new products
that create consumer demand for our products. Although many of our
businesses have had notable success in developing new products, we
need to continuously improve our new product development capability.
There are numerous uncertainties inherent in successfully developing
and introducing innovative new products on a consistent basis.
End-User Brands
---------------
Our competitive success also depends increasingly on our ability
to develop, maintain and strengthen our end-user brands so that our
retailer customers will need our products to meet consumer demand. We
will need to devote more marketing resources to this objective on a
cost-effective basis.
2
Cost Control
------------
Our success also depends on our ability to control and reduce our
costs, while maintaining consistently high customer service levels and
investing in new product development and in marketing our end-user
brands. Our objective is to become our retailer customers' low-cost
provider and global supplier of choice. To do this, we will need to
continuously improve our manufacturing efficiencies and develop
alternative sources of supply on a world-wide basis.
Acquisition Integration
-----------------------
The acquisition of companies that sell name-brand, staple
consumer product lines to volume purchasers has historically been one
of the foundations of our growth strategy. Over time, our ability to
continue to make sufficient strategic acquisitions at reasonable
prices and to integrate the acquired businesses successfully,
obtaining anticipated cost savings and operating income improvements
within a reasonable period of time, will be important factors in our
future growth. Having completed substantially the integration of
Rubbermaid Incorporated, we now need to complete the integration of
the Paper Mate/Parker businesses, which we acquired at the end of
2000.
Foreign Operations
------------------
Foreign operations, which include manufacturing and/or sourcing
in many countries in Europe, Asia, Central and South America and
Canada, are increasingly important to our business. Foreign
operations can be affected by factors such as currency devaluation,
other currency fluctuations and the Euro currency conversion, tariffs,
nationalization, exchange controls, interest rates, limitations on
foreign investment in local business and other political, economic and
regulatory risks and difficulties.
3
