SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Quarterly Period Ended March 31, 1999
Commission File Number 1-9608
NEWELL RUBBERMAID INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
29 East Stephenson Street
Freeport, Illinois 61032-0943
(Address of principal executive offices)
(Zip Code)
(815) 235-4171
(Registrant's telephone number, including area code)
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, and (2) has been
subject to such filing requirements for the past 90 days.
Yes /x/ No / /
Number of shares of Common Stock outstanding
as of May 7, 1999: 281,766,982
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share data)
Three Months Ended
March 31,
------------------
1999 1998*
---- ----
<S> <C> <C>
Net sales $1,516,193 $1,402,093
Cost of products sold 1,092,885 1,005,870
---------- ----------
GROSS INCOME 423,308 396,223
Selling, general and
administrative expenses 259,965 234,058
Restructuring costs 178,024 43,382
Trade names and goodwill
amortization and other 12,038 21,808
-------- ----------
OPERATING INCOME (LOSS) (26,719) 96,975
-------- ----------
Nonoperating expenses (income):
Interest expense 25,261 22,333
Other, net 3,042 (186,703)
-------- ---------
Net nonoperating
expenses (income) 28,303 (164,370)
-------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES (55,022) 261,345
Income taxes 23,977 102,852
-------- ---------
NET INCOME (LOSS) $(78,999) $158,493
======== =========
Earnings (loss) per share:
Basic $ (0.28) $ 0.57
Diluted (0.28) 0.56
Dividends per share $ 0.20 $ 0.19
Weighted average shares
outstanding:
Basic 281,447 280,435
Diluted 292,216 291,503
See notes to consolidated financial statements.
*Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 3
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
March 31, % of December 31, % of
1999 Total 1998* Total
-------- ----- ----------- -----
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 69,858 1.1% $ 86,554 1.4%
Accounts receivable, net 1,059,696 17.0% 1,078,530 17.2%
Inventories, net 1,077,455 17.3% 1,033,488 16.4%
Deferred income taxes 104,635 1.7% 108,192 1.7%
Prepaid expenses and other 142,901 2.3% 143,885 2.3%
---------- ----- ---------- -----
TOTAL CURRENT ASSETS 2,454,545 39.4% 2,450,649 39.0%
MARKETABLE EQUITY SECURITIES 17,288 0.3% 19,317 0.3%
OTHER LONG-TERM INVESTMENTS 59,742 1.0% 57,967 0.9%
OTHER ASSETS 312,781 4.9% 267,073 4.2%
PROPERTY, PLANT AND
EQUIPMENT, NET 1,553,686 24.9% 1,627,090 25.9%
TRADE NAMES AND GOODWILL 1,837,302 29.5% 1,867,059 29.7%
---------- ------ ---------- ------
TOTAL ASSETS $6,235,344 100.0% $6,289,155 100.0%
========== ====== ========== ======
See notes to consolidated financial statements.
*Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 4
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT.)
(Unaudited, in thousands)
<TABLE>
<CAPTION>
March 31, % of December 31, % of
1999 Total 1998* Total
-------- ----- ----------- -----
<S> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 74,646 1.2% $ 94,634 1.5%
Accounts payable 269,555 4.3% 322,080 5.1%
Accrued compensation 104,418 1.7% 110,471 1.8%
Other accrued liabilities 598,891 9.6% 610,618 9.7%
Income taxes 39,313 0.6% 26,744 0.4%
Current portion of long-term debt 7,303 0.1% 7,334 0.1%
--------- ----- ---------- -----
TOTAL CURRENT LIABILITIES 1,094,126 17.5% 1,171,881 18.6%
LONG-TERM DEBT 1,590,763 25.5% 1,393,865 22.2%
OTHER NONCURRENT LIABILITIES 350,866 5.7% 374,293 5.9%
DEFERRED INCOME TAXES - - 4,527 0.1%
MINORITY INTEREST 1,157 0.0% 857 0.0%
COMPANY-OBLIGATED
MANDATORILY REDEEMABLE
CONVERTIBLE PREFERRED
SECURITIES OF A
SUBSIDIARY TRUST 500,000 8.0% 500,000 8.0%
STOCKHOLDERS' EQUITY
Common stock - authorized shares,
400.0 million at $1 par value; 281,774 4.5% 281,747 4.5%
Outstanding shares:
1999 281.8 million
1998 281.7 million
Additional paid-in capital 205,172 3.3% 183,102 2.9%
Retained earnings 2,329,439 37.4% 2,465,064 39.2%
Accumulated other comprehensive
income (117,953) (1.9%) (86,181) (1.4%)
---------- ------ ---------- ------
TOTAL STOCKHOLDERS'
EQUITY 2,698,432 43.3% 2,843,732 45.2%
---------- ------ ---------- ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $6,235,344 100.0% $6,289,155 100.0%
========== ====== ========== ======
See notes to consolidated financial statements.
*Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 5
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1999 1998*
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ (78,999) $ 158,493
Adjustments to reconcile net income
to net cash provided by
Operating activities:
Depreciation and amortization 70,040 67,117
Deferred income taxes 16,809 12,599
Net gain on sale of marketable
equity securities - (115,674)
Write-off of intangible
assets and other - 4,288
Other 35,492 35,401
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 20,834 48,943
Inventories (40,660) (37,785)
Other current assets 984 (32,998)
Accounts payable (50,525) (27,080)
Accrued liabilities and other (70,134) (44,805)
--------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (96,159) 68,499
--------- ---------
INVESTING ACTIVITIES:
Acquisitions, net (727) (260,818)
Expenditures for property,
plant and equipment (78,119) (61,188)
Sale of marketable
Equity securities - 378,321
Disposals of non-current assets
and other 18,794 8,356
--------- ---------
NET CASH PROVIDED BY
(USED IN) INVESTING
ACTIVITIES $ (60,052) $ 64,671
========= =========
See notes to consolidated financial statements.
*Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 6
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
(Unaudited, in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1999 1998*
---- ----
<S> <C> <C>
FINANCING ACTIVITIES:
Proceeds from issuance of debt $ 615,401 $ 104,466
Payments on notes payable
and long-term debt (438,522) (297,617)
Proceeds from exercised stock
options and other 22,097 1,575
Cash dividends (56,625) (52,638)
--------- ----------
NET CASH PROVIDED BY
(USED IN) FINANCING
ACTIVITIES 142,351 (244,214)
--------- ----------
Exchange rate effect on cash (2,836) (1,042)
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (16,696) (112,086)
Cash and cash equivalents at
beginning of year 86,554 150,131
--------- ----------
CASH AND CASH
EQUIVALENTS AT END
OF PERIOD $ 69,858 $ 38,045
========= ==========
Supplemental cash flow disclosures -
Cash paid during the period for:
Income taxes $ 9,130 $ 25,709
Interest $ 41,795 $ 27,760
See notes to consolidated financial statements.
*Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 7
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL INFORMATION
The condensed financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission, and reflect all adjustments
necessary to present a fair statement of the results for the periods
reported, subject to normal recurring year-end adjustments, none of
which is expected to be material. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's
latest Annual Report on Form 10-K.
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 "Company"). The merger was accounted for as
a pooling of interests and the financial statements have been
restated to retroactively combine Rubbermaid's financial statements
with those of Newell as if the merger had occurred at the beginning
of the earliest period presented.
NOTE 2 - ACQUISITIONS AND DIVESTITURES
1998
----
During January 1998, Rubbermaid acquired Curver Consumer Products
("Curver"). Curver is a manufacturer and marketer of plastic
housewares in Europe. Curver will operate as part of Rubbermaid
Europe. On March 30, 1998, the Company acquired Swish Track and Pole
("Swish") from Newmond Group 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, Rubbermaid acquired certain assets of Century Products
("Century"). Century is a manufacturer and marketer of infant
products such as car seats, strollers and infant carriers and will
operate as part of the Graco/Century division.
On June 30, 1998, the Company purchased Panex S.A. Industria e Comercio
("Panex"), a manufacturer and marketer of aluminum cookware products in
Brazil. Panex operates as part of the Mirro division. On August 31,
1998, the Company purchased the Gardinia Group ("Gardinia") 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 ("Rotring"),
a manufacturer and supplier of writing instruments, drawing instruments,
art materials and color cosmetic products based in Germany. The writing
<PAGE> 8
and drawing instruments piece of Rotring operates as part of the
Company's Sanford International division. The art materials piece of
Rotring operates as part of the Company's Sanford North America division.
The color cosmetic products piece of Rotring operates as a separate U.S.
division, Cosmolab.
For these and other minor acquisitions, the Company (and Rubbermaid)
paid $620.5 million in cash and assumed $91.7 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 $426.6 million.
The Company began to formulate an integration plan for these acquisitions
as of their respective acquisition dates. The integration plan for Curver
and Swish were finalized during the first quarter of 1999 resulting in no
integration liabilities included in the purchase price for Curver or Swish.
No integration liabilities have been included in the allocation of
purchase price for Century, Panex, Gardinia and Rotring as of March 31,
1999. Such costs will be accrued upon finalization of each acquisition's
integration plan. The Company's finalized integration plan will include
exit costs for certain plants and product lines and employee terminations
associated with the integration of Century into Graco, Panex into Mirro,
Gardinia into Newell Window Fashions Europe and Rotring into Sanford
International. The final adjustments to the purchase price allocations
are not expected to be material to the consolidated financial statements.
The unaudited consolidated results of operations for the three months
ended March 31, 1999 and 1998 on a pro forma basis, as though the
Curver, Swish, Century, Panex, Gardinia and Rotring businesses had been
acquired on January 1, 1998, are as follows (in millions, except per share
amounts):
Three Months Ended
March 31,
----------------------
1999 1998
---- ----
Net sales $1,516.2 $ 1,554.0
Net income (loss) $ (79.0) $ 154.1
Basic earnings (loss) per share $ (0.28) $ 0.55
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 (after adjustment 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.
In connection with the merger, the Company incurred $33.4 million
($.11 per common share) of merger costs which were expensed during
<PAGE> 9
the quarter ended March 31, 1999 as restructuring costs. See Note 3
for further detail of restructuring costs.
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 a former Rubbermaid operating division (Eldon) in 1997.
Because the Newell Rubbermaid merger is accounted for as a pooling of
interests, the accounting effects of Newell's purchase of Eldon must
be eliminated as if Newell has always owned Eldon. The following
table presents a reconciliation of net sales and net earnings for both
Newell and Rubbermaid individually to those presented in the accompanying
consolidated financial statements:
Quarter ended March 31, 1999 1998
-------- ------
Net sales:
Newell $ 882.2 $ 770.5
Rubbermaid 634.0 631.6
-------- --------
Combined $1,516.2 $1,402.1
======== ========
Net income:
Newell $ 32.3 $ 149.5
Rubbermaid (111.3) 9.0
-------- --------
Combined $ (79.0) $ 158.5
========= ========
On May 7, 1998, the Company acquired Calphalon Corporation ("Calphalon"),
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. Calphalon now operates as a separate division of the Company.
On April 29, 1998, Rubbermaid sold its decorative covering business. On
August 21, 1998, the Company sold its school supplies and stationery
business. On September 9, 1998, the Company sold its plastic storage and
serveware business. The pre-tax net gain on the sale of these businesses
was $59.7 million, most of which was offset by non-deductible goodwill,
resulting in a net after-tax gain which was inmaterial. Sales for these
businesses were approximately $131.0 million in 1998 and $229.0 million
in 1997.
NOTE 3 RESTRUCTURING COSTS
1999 Restructuring Costs
------------------------
In the first quarter of 1999, the Company recorded a pre-tax restructuring
charge of $178.0 million ($154.0 million after taxes). The pre-tax charge
related to the Rubbermaid acquisition, and included $33.4 million of
<PAGE> 10
merger costs (investment banking, legal and accounting fees), executive
severance costs of $83.1 million resulting from change in control employee
agreements and a $61.5 million write-off of impaired Rubbermaid capitalized
computer software costs. Concurrent with the merger with Rubbermaid, the
Company decided that all Rubbermaid businesses will be integrated into
Rubbermaid's capitalized software asset which will no longer be used. No
accrual remains for these restructuring costs at March 31, 1999 as all
related payments and write-offs have been made.
1998 Restucturing Costs
-----------------------
In the first quarter of 1998, Rubbermaid recorded a pre-tax restructuring
charge of $43.4 million ($28.2 million after tax). The 1998 restructuring
charge included $32.1 million for the write-down of assets associated with
a plant closure in the Rubbermaid Home Products division, an Australian
plant closure in the Rubbermaid Commercial Products division, and the sale
of Rubbermaid's joint venture in Japan. The exiting of the two plants and
joint venture necessitated a revaluation of the cash flows related to those
operations. 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 effected by these decisions.
Management determined the fair value of these assets using discounted cash
flows. The remaining $11.3 million of the 1998 restructuring charge was
primarily for the termination of 575 sales and administrative staff
positions. As of March 31, 1999, no reserves remain for these restructuring
costs and the 1998 restructuring program has been completed.
NOTE 4 INVENTORIES
Inventories are stated at the lower of cost or market value.
The components of inventories, net of the LIFO reserve, were as follows
(in millions):
March 31, December 31,
1999 1998
--------- -----------
Materials and supplies $ 222.4 $ 223.8
Work in process 144.5 137.2
Finished products 710.6 672.5
--------- ---------
$ 1,077.5 $ 1,033.5
========= =========
NOTE 5 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 stockholders' equity (and excluded from
earnings). Gains and losses on the sales of Long-Term Marketable Equity
Securities are based upon the average cost of the securities sold. On
March 3, 1998, the Company sold 7,862,300 shares it held in The Black &
Decker Corporation. The Black & Decker transaction resulted in net
<PAGE> 11
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 (in millions):
March 31, December 31,
1999 1998
--------- -----------
Aggregate market value $ 17.3 $ 19.3
Aggregate cost 26.3 26.0
--------- ---------
Unrealized (loss) $ (9.0) $ (6.7)
========= =========
NOTE 6 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in millions):
March 31, December 31,
1999 1998
--------- -----------
Land $ 76.1 $ 78.4
Buildings and improvements 694.2 705.6
Machinery and equipment 2,136.5 2,166.9
--------- ---------
2,906.8 2,950.9
Allowance for depreciation (1,353.1) (1,323.8)
--------- ---------
$ 1,553.7 $ 1,627.1
========= =========
Replacements and improvements are capitalized. Expenditures for mainte-
nance and repairs are charged to expense. The components of depreciation
are provided by annual charges to income calculated to amortize, princi-
pally 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 (20-40 years), machinery and
equipment (5-12 years).
NOTE 7 - LONG-TERM DEBT
Long-term debt consisted of the following (in millions):
March 31, December 31,
1999 1998
--------- -----------
Medium-term notes $ 883.5 $ 883.5
Commercial paper 708.0 500.2
Other long-term debt 6.6 17.5
--------- ---------
1,598.1 1,401.2
Current portion (7.3) (7.3)
--------- ---------
$ 1,590.8 $ 1,393.9
========= =========
<PAGE> 12
Commercial paper in the amount of $708.0 million at March 31, 1999 was
classified as long-term since it is supported by the 5-year $1.3
billion revolving credit agreement.
NOTE 8 MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES OF A
SUBSIDIARY TRUST OF THE COMPANY
In December 1997, a wholly owned subsidiary trust of the Company
issued 10,000,000 of its 5.25% convertible quarterly income preferred
securities (the "Convertible Preferred Securities"), with a
liquidation preference of $50 per security, to certain institutional
buyers. The Convertible Preferred Securities represent an undivided
beneficial interest in the assets of the trust. Each of the
Convertible Preferred Securities 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 for each preferred security (equivalent to
$50.685 per share of Common Stock), subject to adjustment in certain
circumstances. Holders of the Convertible Preferred Securities are
entitled to a quarterly cash distribution at the annual rate of 5.25%
of the $50 liquidation preference commencing March 1, 1998. The
Convertible Preferred Securities are subject to a Company guarantee
and are callable by the Company initially at 103.15% of the
liquidation preference beginning in December 2001 and decreasing over
time to 100% of the liquidation preference beginning in December 2007.
The trust invested the proceeds of this issuance of the Convertible
Preferred Securities in $500 million of the Company's 5.25% Junior
Convertible Subordinated Debentures due 2027 (the "Debentures"). The
Debentures are the sole assets of the trust, mature December 1, 2027,
bear interest at the rate of 5.25%, payable quarterly, commencing
March 1, 1998, and are redeemable by the Company beginning in December
2001. The Company may defer interest payments on the Debentures for a
period not to exceed 20 consecutive quarters during which time
distribution payments on the Convertible 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 rank PARI PASSU with or junior to the Debentures.
The Company has no current intention to exercise its right to defer
payments of interest on the Debentures.
The Convertible Preferred Securities are reflected as outstanding in
the Company's consolidated financial statements as Company-Obligated
Mandatorily Redeemable Convertible Preferred Securities of a
Subsidiary Trust.
NOTE 9 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 are calculated by dividing net income by weighted
average shares outstanding. "Diluted" earnings per share are 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
<PAGE> 13
trust). A reconciliation of the difference between basic and diluted
earnings per share for the first quarters of 1999 and 1998 is shown
below (in millions, except per share data):
<TABLE>
<CAPTION>
Convertible
Basic "In the money" Preferred Diluted
Method stock options Securities Method(1)
------ -------------- ----------- --------
<S> <C> <C> <C> <C>
First Quarter, 1999
Net loss $ (79.0) $ N/A $ N/A $ (79.0)
Weighted average
shares outstanding 281.4 N/A N/A 281.4
Loss per Share $ (0.28) N/A N/A $ (0.28)
First Quarter, 1998
Net Income $ 158.5 $ 0.0 $ 4.1 $ 162.6
Weighted average
shares outstanding 280.4 1.2 9.9 291.5
Earnings per share $ 0.57 - - $ 0.56
</TABLE>
(1) Diluted earnings per share for the three months ended March 31, 1999
excludes the impact of "in the money" stock options and convertible
preferred securities because they are antidilutive.
NOTE 10 COMPREHENSIVE INCOME
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income," (SFAS No. 130),
which requires companies to report all changes in equity during a
period, except those resulting from investment by owners and distribution
to owners, in a financial statement for the period in which they are
recognized. The Company has chosen to report Comprehensive Income and
Accumulated Other Comprehensive Income, which encompasses net income,
net unrealized gains on securities available for sale and foreign
currency translation adjustments, in the Consolidated Statements of
Stockholders' Equity and Comprehensive Income. Prior years have been
restated to conform to the SFAS No. 130 requirements.
The following table displays the components of accumulated Other
Comprehensive Income:
<PAGE> 14
<TABLE>
<CAPTION>
Net Accumulated
Unrealized Foreign Other
Gains/(Losses) Currency Comprehensive
(In Millions) on Securities Translation Income
-------------- ----------- -------------
<S> <C> <C> <C>
Balance at December 31, 1998 $ (4.1) $ (82.1) $ (86.2)
Change during three months ended
March 31, 1999 (1.4) (30.4) (31.8)
-------- -------- ----------
Balance at March 31, 1999 $ (5.5) $(112.5) $ (118.0)
======== ======== ==========
</TABLE>
NOTE 11 INDUSTRY SEGMENT INFORMATION
The Company reviewed the criteria for determining segments of an
enterprise in accordance with SFAS No. 131 and concluded it has three
reportable operating segments: Household Products, Hardware & Home
Furnishings and Office Products. This segmentation is appropriate
because the Company organizes its product categories into these groups
when making operating decisions and assessing performance. The Company
Divisions included in each segment also sell primarily to the same retail
channel: Household Products (discount stores and warehouse clubs),
Hardware and Home Furnishings (home centers and hardware stores) and
Office Products (office superstores and contract stationers). Based on the
recent merger with Rubbermaid, the Company added the Rubbermaid divisions
to the former Housewares segment to create the Household Products segment.
Net Sales
---------
Three Months
Ended March 31,
-------------------------
1999 1998
(In Millions) ---- ----
Household Products $ 842.1 $ 825.6
Hardware & Home Furnishings 430.6 373.6
Office Products 243.5 202.9
-------- --------
Total $1,516.2 $1,402.1
======== ========
<PAGE> 15
Operating Income (Loss)
-----------------------
Three Months
Ended March 31,
--------------------------
1999 1998
(In Millions) ---- ----
Household Products $ 87.9 $ 92.0
Hardware & Home Furnishings 52.0 41.2
Office Products 31.1 35.3
Corporate (19.7) (28.1)
-------- -------
Subtotal $ 151.3 $ 140.4
Restructuring costs (178.0) (43.4)
-------- -------
Total $ (26.7) $ 97.0
======== =======
Identifiable Assets
-------------------
March 31,
--------------------------
1999 1998
(In Millions) ---- -----
Household Products $2,301.4 $2,110.2
Hardware & Home Furnishings 982.4 995.8
Office Products 610.2 643.0
Corporate 2,341.3 2,540.2
-------- --------
Total $6,235.3 $6,289.2
======== ========
Operating income is net sales less cost of products sold and SG&A
expenses, but is not affected either by nonoperating (income) expenses
or by income taxes. Nonoperating (income) expenses consists principally
of net interest expense, and in 1998, the net gain on the sale of
Black & Decker common stock. In calculating operating income for
individual business segments, certain headquarters expenses of an
operational nature are allocated to business segments primarily on a net
sales basis. Trade names and goodwill amortization is considered a
corporate expense and not allocated to business segments. All inter-
company transactions have been eliminated and transfers of finished
goods between areas are not significant. Corporate assets primarily
include trade names and goodwill, equity investments and deferred tax
assets.
NOTE 12 ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Effective January 1, 2000, the Company will adopt SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities."
Management believes that the adoption of this statement will not be
material to the consolidated financial statements.
<PAGE> 16
PART I
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated items from
the Consolidated Statements of Income as a percentage of net sales.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1999 1998*
----------- ----------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of products sold 72.1% 71.7%
------ ------
GROSS INCOME 27.9% 28.3%
Selling, general and
administrative expenses 17.1% 16.7%
Restructuring costs 11.7% 3.1%
Trade names and goodwill
amortization and other 0.9% 1.6%
------ -----
OPERATING INCOME (LOSS) (1.8)% 6.9%
------ -----
Nonoperating expenses (income):
Interest expense 1.7% 1.6%
Other, net 0.1% (13.3)%
------ ------
Net nonoperating
expenses (income) 1.8% (11.7)%
------ ------
INCOME (LOSS) BEFORE INCOME
TAXES (3.6)% 18.6%
Income taxes 1.6% 7.3%
------ ------
NET INCOME (LOSS) (5.2)% 11.3%
====== ======
See notes to consolidated financial statements.
* Restated for the merger with Rubbermaid Incorporated on March 24, 1999,
and the merger with Calphalon on May 7, 1998, both of which were
accounted for as poolings of interests.
</TABLE>
<PAGE> 17
THREE MONTHS ENDED MARCH 31, 1999 VS. THREE MONTHS ENDED MARCH 31,
1998
Net sales for the first three months of 1999 were $1,516.2 million,
representing an increase of $114.1 million or 8.1% from $1,402.1
million in the comparable quarter of 1998. Results for 1998 have been
restated to include the March 1999 Rubbermaid acquisition and the May
1998 Calphalon acquisition, which were accounted for as poolings of
interests. The overall increase in net sales was primarily attributable
to contributions from Gardinia (acquired in August 1998), Rotring
(acquired in September 1998) and 6% internal growth in the Newell core
businesses. Net sales for each of the Company's segments (and the primary
reasons for the increase or decrease) were as follows, in millions:
<TABLE>
<CAPTION>
1999 1998 % change
---------- ---------- ----------
<S> <C> <C> <C>
Household Products:
Former Housewares Group $ 208.1 $ 194.0 7.3%(1)
Rubbermaid Divisions 634.0 631.6 0.4%
-------- --------
842.1 825.6 2.0%
Hardware & Home Furnishings 430.6 373.6 15.3%(2)
Office Products 243.5 202.9 20.0%(3)
-------- --------
$1,516.2 $1,402.1 18.7%
======== ========
</TABLE>
(1) Internal growth* of 10% plus the Panex acquisition less
the Newell Plastics divestiture.
(2) Internal growth of 4% plus the Gardinia and Swish acquisitions.
(3) Internal growth of 4% plus the Rotring acquisition less the
Stuart Hall divestiture.
* The Company defines internal growth as growth from the core
businesses, which include continuing businesses owned more than two
years and minor acquisitions.
Gross income as a percentage of net sales in the first three months of
1999 was 27.9% or $423.3 million versus 28.3% or $396.2 million in the
comparable quarter of 1998. Gross margins at the Newell core
businesses increased while the 1998 acquisitions had gross margins which
were lower than the Company's average gross margins and the Rubbermaid
divisions' gross margins declined in the first quarter of 1999 versus the
first quarter of 1998. As the 1998 acquisitions and Rubbermaid divisions
are integrated, the Company expects their gross margins to improve.
Selling, general and administrative expenses ("SG&A") in the first
three months of 1999 were 17.1% of net sales or $260.0 million versus
16.7% or $234.1 million in the comparable quarter of 1998. SG&A as a
<PAGE> 18
percentage of net sales increased, due to the Rotring acquisition, which
had higher SG&A than the Company's average SG&A as a percentage of net
sales. As this acquisition is integrated, the Company expects its SG&A
spending as a percentage of net sales to decline.
In the first quarter of 1999, the Company recorded a pre-tax restructuring
charge of $178.0 million ($154.0 million after taxes). The pre-tax
charge related to the Rubbermaid acquisition, and included $33.4
million of merger costs (investment banking, legal and accounting fees),
executive severance costs of $83.1 million and a $61.5 million write-off of
impaired Rubbermaid capitalized computer software costs. Concurrent with
the merger with Rubbermaid, the Company decided that all Rubbermaid
businesses will be integrated into Newell's existing information systems,
resulting in an impairment of Rubbermaid's capitalized software asset
which will no longer be used.
In the first quarter of 1998, Rubbermaid recorded a pre-tax restructuring
charge of $43.4 million ($28.2 million after taxes). The 1998
restructuring charge primarily included costs associated with a U.S.
plant closure in the Rubbermaid Home Products division, a reduction
of the Rubbermaid sales and administrative staff in Asia, an Australian
plant closure in the Rubbermaid Commercial Products division and the
sale of Rubbermaid's joint venture in Japan.
Trade names and goodwill amortization and other in the first three
months of 1999 were 0.9% of net sales or $12.0 million versus 1.6%
or $21.8 million in the comparable quarter of 1998. The decrease
in the first quarter of 1999 was primarily due to one-time charges
in 1998 of $11.4 million (which included write-offs of intangible
assets). Excluding the one-time charges in 1998, trade names and
goodwill amortization and other was 0.7% of net sales.
The operating loss in the first three months of 1999 was 1.8% of net
sales or $26.7 million versus operating income of 6.9% or $97.0 million
in the comparable quarter of 1998. Excluding the restructuring costs
in 1998 and 1999 and the one-time charges in 1998, operating income
in the first quarter of 1999 was 10.0% or $151.3 million versus 10.8% or
$151.8 million in the first quarter of 1998. The decrease in operating
margins was primarily due to the 1998 acquisitions and the Rubbermaid
divisions, whose margins declined in the first quarter of 1999 versus
the first quarter of 1998. This decrease was offset partially by an
increase in margins at several of the Company's core businesses. As
the 1998 acquisitions and Rubbermaid are integrated, the Company expects
their operating margins to improve.
Net nonoperating expenses in the first three months of 1999 was 1.8% of
net sales or $28.3 million versus net nonoperating income of 11.7%
of net sales or $164.4 million in the comparable quarter of 1998. The
$192.7 million decrease in income was primarily due to a one-time net
gain of $191.5 million on the sale of the Company's stake in The Black &
Decker Corporation in the first quarter of 1998.
Excluding the restructuring costs and other one-time gains and charges
in 1999 and 1998, the effective tax was 39.0% in the first quarter of
1999 versus 37.5% in the first quarter of 1998.
<PAGE> 19
The net loss for the first three months of 1999 was $79.0 million,
compared to net income of $158.5 million in the first quarter of 1998.
Diluted earnings (loss) per share were $(0.28) in the first quarter of
1999 compared to $0.56 in the first quarter of 1998. Excluding the
1999 restructuring costs of $178.0 million ($154.0 million after taxes),
the 1998 restructuring costs of $43.4 million ($28.2 million after taxes),
the one-time net gain in 1998 on the sale of Black & Decker stock of
$191.5 million ($115.7 million after taxes) and 1998 one-time charges of
$11.4 million ($6.9 million after taxes), net income declined $2.9 million
or 3.7% to $75.0 million the first quarter of 1999 versus $77.9 million in
1998. Diluted earnings per share, calculated on the same basis, decreased
3.6% to $0.27 in the first quarter of 1999 versus $0.28 in the first
quarter of 1998. The decrease in net income and earnings per share in the
first quarter of 1999 was due to a slight loss at Rotring and declines at
Rubbermaid. These results were offset partially by an increase in
operating results at several of the Company's core businesses.
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 used in operating activities in the first three months of
1999 was $96.2 million compared to cash provided by operating activities
of $68.5 million for the comparable period of 1998. The decrease in
cash provided by operating activities in the first quarter of 1999 versus
the first quarter of 1998 is primarily due to the year over year increase
in restructuring costs.
On March 3, 1998, the Company received $378.3 million from the sale of
7,862,300 shares of Black & Decker common stock. The proceeds from
the sale were used to pay down commercial paper.
The Company has short-term foreign and domestic 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 discretion of the Lender. The Company's uncommitted lines of credit
do not have a material impact on the Company's liquidity. Borrowings
under the Company's uncommitted lines of credit at March 31, 1999 totaled
$81.2 million.
During 1997, the Company amended its revolving credit agreement to increase
the aggregate borrowing limit to $1.3 billion, at a floating interest rate.
The revolving credit agreement will terminate in August 2002. At March 31,
1999, there were no borrowings under the revolving credit agreement.
In lieu of borrowings under the Company's revolving credit agreement, the
Company may issue up to $1.3 billion of commercial paper. The Company's
revolving credit agreement provides 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 agreement. At March 31, 1999, $708.0 million (principal
amount) of commercial paper was outstanding. The entire amount is
classified as long-term debt.
<PAGE> 20
The Company has a universal shelf registration statement on file for the
issuance of up to $500.0 million of debt and equity securities from time
to time. The Company issued during 1998 and has outstanding as of March
31, 1999 a total of $470.5 million of Medium-term notes under this program.
The maturities on these notes range from five to thirty years at an average
interest rate of 6.0%.
At March 31, 1999, the Company had outstanding $263.0 million (principal
amount) of Medium-term notes issued under a previous shelf registration
statement with maturities ranging from five to ten years at an average
interest rate of 6.3%.
At March 31, 1999 the Company had outstanding $150.0 million (principal
amount) of Senior Notes issued under a previous shelf registration
statement with a maturity of November 15, 2006 at an interest rate of 6.6%.
USES:
The Company's primary uses of liquidity and capital resources include
acquisitions, dividend payments and capital expenditures.
Cash used in acquiring businesses was $0.7 million and $260.8 million in
the first three months of 1999 and 1998, respectively. In the first
quarter of 1998, the Company acquired Swish Track and Pole, Curver and
made another minor acquisition for cash purchase prices totaling $235.7
million. All of these acquisitions were accounted for as purchases and
were paid for with proceeds obtained from the issuance of commercial paper.
Cash used for restructuring activities was $116.5 million and $12.0
million in the first three months of 1999 and 1998, respectively. Such
cash payments represent primarily employee termination benefits and other
merger expenses. There are no remaining cash payments to be made
associated with the restructuring charges reflected in the consolidated
financial statements.
Capital expenditures were $78.1 million and $61.2 million in the first
three months of 1999 and 1998, respectively.
Aggregate dividends paid during the first three months of 1999 and 1998
were $56.6 million ($0.20 per share) and $52.6 million ($0.19 per share),
respectively.
Retained earnings decreased in the first three months of 1999 by $135.6
million. Retained earnings increased in the first three months of 1998
by $133.7 million. The decrease in 1999 was primarily due to
restructuring costs of $178.0 million ($154.0 million after taxes).
The increase in 1999 was primarily due to a net gain of $191.5 million
($115.7 million after taxes) on the sale of the Black & Decker common
stock.
Working capital at March 31, 1999 was $1,360.4 million compared to
$1,278.8 million at December 31, 1998. The current ratio at March 31,
1999 was 2.24:1 compared to 2.09:1 at December 31, 1998.
<PAGE> 21
Total debt to total capitalization (total debt is net of cash and cash
equivalents, and total capitalization includes total debt, convertible
preferred securities and stockholders equity) was .33:1 at March 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.
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, and has no material
sensitivity to changes in market rates and prices on its derivative
financial instrument positions.
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 fixed and
floating rate debt. Interest rate exposure was reduced significantly
in 1997 from the issuance of $500 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: 1)
offsetting or netting of like foreign currency flows, 2) structuring
foreign subsidiary balance sheets with appropriate levels of debt to
reduce subsidiary net investments and subsidiary cash flows subject to
conversion risk, 3) converting excess foreign currency deposits into
U.S. dollars or the relevant functional currency and 4) 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 transactions are
deferred and included in the basis of the underlying transactions.
Derivatives used to hedge intercompany transactions 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.
<PAGE> 22
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.
Time Confidence
March 31, 1999 Period Level
-------------- ------ ----------
(In millions)
Interest rates $9.2 1 day 95%
Foreign exchange $2.5 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.
YEAR 2000 COMPUTER COMPLIANCE
State of Readiness
------------------
Any computer equipment that uses two digits instead of four to specify
the year will be unable to interpret dates beyond the year 1999. This
"Year 2000" issue could result in system failures or miscalculations
causing disruptions of operations.
In order to address Year 2000 compliance issues, the Company has
initiated a comprehensive project designed to minimize or eliminate
these kinds of operational disruptions in its information technology
("IT") systems, as well as its non-IT systems (e.g., HVAC systems
and building security systems). The project consists of six phases:
company recognition, inventory of systems, impact analysis, planning,
fixing and testing.
The Company's project is approximately 60% complete with all phases for
its IT systems and 80% complete for its non-IT systems in the United
States and Canada. The Company anticipates that all phases will be
completed for all IT and non-IT systems in the United States and Canada
by November 30, 1999. With respect to International IT systems,
approximately 75% of the Company's business systems are currently
<PAGE> 23
compliant and approximately 25% are in the process of being fixed and
tested. With respect to International non-IT systems, approximately 80%
of the Company's non-IT systems are currently complaint and 20% are in
the process of being fixed and tested. The Company anticipates that all
phases will be completed for all foreign IT and non-IT systems by
November 30, 1999.
As part of its Year 2000 project, the Company has initiated
communications with all of its key vendors and services suppliers
(including raw material and utility providers) to assess their state
of Year 2000 readiness. Most of its key vendors and service
suppliers have responded in writing to the Company's Year 2000
readiness inquiries and have said they will be Year 2000 compliant.
The Company plans to continue assessment of its third party business
partners, including face-to-face meetings with management and/or
onsite visits as deemed appropriate. The Company is prepared in cases
where its main vendor or service provider cannot continue with its
business due to Year 2000 problems to use alternate vendors as sources
for required materials. Despite the Company's efforts, there can be no
guarantee that the systems of other companies which the Company relies
upon to conduct its day-to-day business will be compliant.
Costs
-----
The Company estimates that it will incur total expenses of $14 million
to $16 million in conjunction with the Year 2000 compliance project
(including such expenses relating to the Rubbermaid operations). As of
March 31, 1999, the Company has spent $14 million in conjunction with
this project. The majority of these expenditures were capitalized
since they were associated with purchased software that would have
been replaced in the normal course of business.
Risks
-----
With respect to the risks associated with its IT and non-IT systems,
the Company believes that the most likely worst case scenario is that
the Company may experience minor system malfunctions and errors in the
early days and weeks of 2000 that were not detected during its fixing
and testing efforts. The Company also believes that these problems will
not have a material effect on the Company's financial condition or
results of operations.
With respect to the risks associated with third parties, the Company
believes that the most likely worst case scenario is that some of
the Company's vendors will not be compliant and will have difficulty
filling orders and delivering goods. Management also believes that
the number of such vendors will have been minimized by the Company's
program of identifying non-compliant vendors and replacing or jointly
developing alternative supply or delivery solutions prior to 2000.
Due to the diversity of its product lines, the Company does not have
material sensitivity to any one vendor or service supplier.
<PAGE> 24
The Company has limited the scope of its risk assessment to those
factors upon which it can reasonably be expected to have an
influence. For example, the Company has made the assumption that
government agencies, utility companies and telecommunications
providers will continue to operate. Obviously, the lack of such
services could have a material effect on the Company's ability to
operate, but the Company has little if any ability to influence such
an outcome, or to reasonably make alternative arrangements in advance
for such services in the event they are unavailable. Newell
Rubbermaid products are not dependent on dates and therefore are not
affected by the transition to the Year 2000.
Contingency Plans
-----------------
In the United States, the Company has all of its major business
systems running on a centralized system for all of its operating
divisions. Although extensive testing has been completed for
these systems, the following contingency plan has been adopted for
Year 2000 issues that may occur on January 1, 2000 and thereafter:
- A triage team has been assembled which has the
authority and financial capabilities to rectify all
systems problems that may occur.
- The team consists of Corporate officers and managers
from every support function.
- The team has access to vendor support hotlines and
internal staffs.
- Once a problem has been identified and course of action
determined, staff will be assigned to provide
around-the-clock corrective actions until the problem
is resolved.
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 elect to use it. The legacy
currencies will remain legal tender through December 31, 2001. Begin-
ning January 1, 2002, participating countries will introduce Euro-
denominated bills and coins, and effective July 1, 2002, legacy curren-
cies 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 finan-
cial 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
<PAGE> 25
risk in cross-border transactions involving participating countries
and the impact of increased price transparency on cross-border compe-
tition 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.
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, the Year 2000 plan and related
risks, pending legal proceeding 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, 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 the Company's Annual
Report on Form 10-K, the documents incorporated by reference therein and
in Exhibit 99 thereto.
PART I.
Item 3.
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 Condi-
tion (Part I, Item 2).
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
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.
As of March 31, 1999, 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 ("PRPs") at contaminated sites under the Federal
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") and equivalent state laws.
<PAGE> 26
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.
Based on information available to it, the Company's estimate of
environmental response costs associated with these matters as of
March 31, 1999 ranged between $17.0 million and $22.0 million. As
of March 31, 1999, the Company had a reserve equal to $20.3 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.
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
have to pay in connection with environmental matters in excess of
amounts reserved will have a material adverse effect on its
consolidated financial statements.
Reference is made to the disclosure of several legal proceedings
relating to the importation and distribution of vinyl mini-blinds made
with plastic containing lead stabilizers in Note 14 to the consolidated
financial statements of the Company's Annual Report on Form 10-K for
the year ended December 31, 1998. All such litigation is pending.
Although management of the Company cannot predict the ultimate outcome
of these matters with certainty, it believes that their ultimate
resolution will not have a material effect on the Company's consolidated
financial statements.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.18 Rubbermaid Incorporated Amended and Restated 1989 Stock
Incentive and Option Plan, effective April 22, 1997 (incorporated by
reference to Exhibit 4.1 to Post-Effective Amendment No. 1 on Form S-3
to the Company's Registration Statement on Form S-4, Reg. No. 333-71747,
filed March 23, 1999).
<PAGE> 27
10.19 Rubbermaid Incorporated Supplemental Executive Retirement
Plan, as amended through October 1, 1998.
10.20 Rubbermaid Incorporated Supplemental Retirement Plan, as
amended through December 23, 1997.
10.21 Rubbermaid Incorporated 1993 Deferred Compensation Plan,
effective April 27, 1993.
11. Computation of Earnings per Share of Common Stock
12. Statement of Computation of Ratio of Earnings to Fixed
Charges
21. Significant Subsidiaries
27. Financial Data Schedule
(b) Reports on Form 8-K:
Registrant filed a Report on Form 8-K dated March 11, 1999,
reporting the approval, at a special meeting of the Registrant's
stockholders, of two proposals relating to the acquisition of Rubbermaid
Incorporated. The stockholders approved the issuance of 0.7883 shares of
Registrant for each share of Rubbermaid stock. The stockholders also
approved an amendment to the Registrant's Restated Certificate of
Incorporation, changing the Registrant's name at the time of the merger
to Newell Rubbermaid Inc.
Registrant filed a Report on Form 8-K dated March 24, 1999,
reporting the acquisition by Registrant of Rubbermaid Incorporated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
NEWELL RUBBERMAID INC.
Registrant
Date: May 13, 1999 /s/ William T. Alldredge
--------------------------------
William T. Alldredge
Vice President - Finance
Date: May 13, 1999 /s/ Brett E. Gries
--------------------------------
Brett E. Gries
Vice President - Accounting & Audit
EXHIBIT 10.19
-------------
RUBBERMAID INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AND
SUPPLEMENTAL EXECUTIVE FUNDED
RETIREMENT PLAN
Initially Effective January 1, 1983
(Rev. 12/1/88, Amend. No. 2)
<PAGE> 28
RUBBERMAID INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<TABLE>
<CAPTION>
Page
----
<S> <C>
PREAMBLE 1
ARTICLE I - DEFINITIONS 1
ARTICLE II - PARTICIPATION 5
ARTICLE III - REQUIREMENTS FOR RETIREMENT BENEFITS 6
ARTICLE IV - AMOUNT OF RETIREMENT INCOME 7
ARTlCLE V - FORM OF PENSION PAYMENT AND DEATH
BENEFITS 10
ARTICLE VI - COMMITTEE 11
ARTICLE VII - ADMINISTRATION 12
ARTICLE VIII - MISCELLANEOUS PROVISIONS 15
ARTICLE IX - GENERAL PROVISIONS 17
SCHEDULE I - SPECIAL PROVISIONS RELATING TO INDIVIDUAL
PARTICIPANTS
SCHEDULE II - SPECIAL PROVISIONS RELATING TO THE FUNDING
OF NONFORFEITABLE BENEFITS - RUBBERMAID
INCORPORATED SUPPLEMENTAL EXECUTIVE FUNDED
RETIREMENT PLAN
</TABLE>
(Rev. 12/1/88, Amend. No. 2)
<PAGE> 29
RUBBERMAID INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Rubbermaid Incorporated (the Company) has adopted this deferred
compensation plan (the Plan) in order to provide supplemental retirement
benefits to certain senior officers of the Company and Related Companies who
are designated to participate hereunder. The Board believes that the
establishment of the Plan will promote continuity of employment and increased
incentive and personal interest in the welfare of the Company by those
officers who participate herein.
Schedule I (Special Provisions Relating to Individual Participants)
attached to this Plan is incorporated herein by reference and is a part hereof.
If the provisions of Articles I-IX of this Plan are inconsistent with any of
the provisions contained or incorporated into Schedule I of this Plan
dealing with Special Provisions Relating To Individual Participants, the
provisions of such Schedule I shall be controlling in all respects.
Schedule II (Special Provisions Relating to the Funding of
Nonforfeitable Benefits - Rubbermaid Incorporated Supplemental Executive
Funded Retirement Plan) is incorporated herein by reference.
ARTICLE I
DEFINITIONS
The following words and phrases, when used in this Plan, unless the context
clearly indicates otherwise, shall have the following meanings:
Section 1.1 - Actuarial (or Actuarially) Equivalent
- ----------------------------------------------
A benefit equal in value, as of the effective date of determination,
to the benefit for which it is substituted, the value of both such benefits
being computed on the basis of actuarial assumptions, tables and factors then
being used under the Plan. Unless otherwise indicated in this Plan, actuarial
equivalence shall be determined using the factors specified in the Rubbermaid
Incorporated Salaried Employees' Pension Plan.
Section 1.2 - Beneficiary
- -------------------------
The person to persons, including any contingent annuitant, designated
by a Participant to receive any payment provided for hereunder in the event of
the death of such Participant, and, if and to the extent that no such
designation shall be in force or effect at the time of said payment,
the executors or administrators of the Participant's estate.
Section 1.3 - Board
- -------------------
The present and any succeeding board of directors of the Company or
any committee of said board of directors which shall have the authority of
said board of directors with respect to the Plan.
(Rev. 1/1/94, Amend. No. 5) -1-
<PAGE> 30
Section 1.4 - Change of Control
- -------------------------------
A Change of Control of the Company shall be deemed to occur:
(i) in the event Article Fifth of the Rubbermaid Amended Articles
of Incorporation shall become operative,
(ii) in the event that the Rubbermaid Incorporated Board of Directors
recommends to its shareholders the acceptance of any tender
offer as provided in said Article Fifth,
(iii) in the event the necessary percentages of shareholders approves
a transaction of the nature described in Article Sixth of the
Rubbermaid Amended Articles of Incorporation, or
(iv) in the event any person, as defined in said Article Fifth of
the Amended Articles of Incorporation, becomes the beneficial
owner, directly or indirectly, of 20% or more of the
outstanding common shares of the Company.
Section 1.5 - Committee
- -----------------------
The Retirement Committee provided for in Article VI of this Plan.
Section 1.6 - Company
- ---------------------
Rubbermaid Incorporated (an Ohio corporation) and its subsidiaries
collectively referred to as the
Company.
Section 1.7
- -----------
(a) Compensation
------------
The monthly equivalent of the total base salary and management
incentive compensation (from the Management Incentive Plan)
earned and the value of any regular restricted stock award
granted (from the Restricted Stock Plan) during a calendar year
for services rendered to the Company or a Related Company prior
to reduction for payment in any other form than cash.
(b) Final Average Compensation
--------------------------
A Participant's average monthly Compensation during the highest
five (5) complete or partial calendar years during the final
ten (10) complete or partial calendar years of the Participant's
employment with the Company and/or a Related Company (or such
other averaging period provided in the special provisions of
Schedule I) including years following the Participant's
Normal Retirement date in the event of Late Retirement.
(Rev. 1/1/94, Amend. No. 5) -2-
<PAGE> 31
Section 1.8 - Effective Date
- ----------------------------
January 1, 1983, the date on which the provisions of this Plan
become effective.
Section 1.9 - ERISA
- -------------------
Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as in effect at the time in respect to such term
is used.
Section 1.10
- ------------
(a) Participant
-----------
A senior officer of the Company or a Related Company who has
become included in this Plan in accordance with the provisions
of
Article II and who is either an Active Participant or a Retired
Participant.
(b) Active Participant
------------------
A Participant who is an active employee of the Company or a
Related Company.
(c) Retired Participant
-------------------
A Participant who has retired under this Plan in accordance with its
provisions, and who is receiving or is entitled to receive a Pension
under this Plan.
Section 1.11
- ------------
(a) Pension
-------
The retirement income provided to a person entitled to receive
benefits under this Plan, normally payable in monthly installments.
(b) Normal or Late Retirement Pension
---------------------------------
The Pension described in Section 4.1.
-3-
(Rev. 12/1/88, Amend. No. 2)
<PAGE> 32
(c) Early Retirement Pension
------------------------
The Pension described in Section 4.2.
Section 1.12 - Plan
- -------------------
The Rubbermaid Incorporated Supplemental Executive Retirement Plan, the
terms of which are set forth herein, as it may be amended from time to time.
The Rubbermaid Incorporated Supplemental Executive Funded Retirement Plan
contained in Schedule II is a separate and companion plan.
Section 1.13 - Plan Administrator
- ---------------------------------
Such officer of the Company as the Board shall designate to have the
primary administrative responsibility with respect to the Plan under the
direction of the Committee.
Section 1.14 - Plan Year
- ------------------------
The twelve-month period commencing on January 1 and ending on December
31.
Section 1.15 - Related Company
- ------------------------------
Any corporation which is a member of the same controlled group of
corporations [ within the meaning of Section 1563(a) of the Internal Revenue
Code, determined without regard to Sections 1563(a)(4) and 1563(e)(3)(C) of
the Code ] with the Company, and any other entity designated as a Related
Company by the Company.
Section 1.16
- ------------
(a) Retirement
----------
Termination of employment with the Company for reason other than
death or transfer to a Related Company after a Participant has ful-
filled all requirements and required approvals for a Normal or Early
Retirement Pension. Retirement shall be considered as commencing
on the same day as retirement would commence under the Company's
or applicable Related Company's qualified pension plan for salaried
employees as though the Participant were or is eligible to then
retire under such plan.
(b) Normal Retirement
-----------------
Retirement under the circumstances described in Section 3.1 qualify-
ing a Retired Participant to benefits pursuant to Section 4.1.
-4-
(Rev. 1/1/87, Amend. No. 1)
<PAGE> 33
(c) Normal Retirement Date
----------------------
The first day of the month coincident with or next following the
later of (i) the normal retirement date applicable to the Participant
under the Company's or Related Companies qualified pension plan for
salaried employees, or (ii) the day the Participant completes five
(5) years of Service.
(d) Early Retirement
----------------
The retirement of a Participant prior to Normal Retirement Date
pursuant to the requirements and approvals specified in Section
3.3. Upon Early Retirement a Participant shall be entitled to an
Early Retirement Pension computed as provided in Section 4.2.
Section 1.17 - Service
- ----------------------
The period of a Participant's employment considered in determining
eligibility to retire. Service shall be granted on an elapsed time basis for a
Participant's total period of employment with the Company and one or more
Related Companies, shall end on the date of the Participant's termination of
employment, and shall be measured in years and fractions thereof to completed
months, with one day or more of employment in a calendar month being deemed
a completed month.
Section 1.18 - Surviving Spouse Pension
- ---------------------------------------
A monthly pension for life payable to the spouse of a deceased
Participant in an amount equal to the pension payable to the Participant and
Spouse if the Participant had retired hereunder on the date of death and
elected a reduced, actuarially equivalent Pension payable to the Participant
for life and continued in the same amount to the Participant's spouse for
life if surviving following the death of the Participant.
ARTICLE II
PARTICIPATION
Section 2.1 -Eligibility
- ------------------------
The Committee may at any time and from time to time designate those
senior officers of the Company or of a Related Company who are management or
highly compensated employees [within the meaning of all of Section 201(2),
Section 301(a)(3) and Section 401(a)(1) of ERISA] who shall be eligible to
become Participants under the Plan. The Committee shall notify each officer
so designated of their participation in the Plan. Each such officer so
designated shall forthwith become a Participant and remain a Participant until
the earlier of (i) the date that all benefit obligations hereunder in respect
to such Participant have been paid, or (ii) the date as of which
such designation is revoked by action of the Compensation Committee of the
Board upon the recommendation of the Chief Executive Officer of the Company.
-5-
<PAGE> 34
Section 2.2 - Conditions of Participation
- -----------------------------------------
An eligible officer shall not become a Participant herein unless the
officer furnishes within a reasonable time limit established by the Committee
such applications, consents, proofs of date of birth, elections, beneficiary
designations and other documents and information as prescribed by the
Committee. Each eligible officer upon becoming a Participant shall be deemed
conclusively, for all purposes, to have assented to the terms and provisions
of this Plan and shall be bound thereby.
ARTICLE III
REQUIREMENTS FOR RETIREMENT BENEFITS
Section 3.1 - Normal Retirement
- -------------------------------
The Normal Retirement Date of each Participant shall be the first day
of the month coincident with or next following the later of the date the
Participant (i) attains the age of 65 years, or (ii) completes five (5)
years of Service. Except as provided in Section 3.2, payment of a Normal
Retirement Pension shall commence as of the Participant's Normal Retirement
Date.
Section 3.2 - Late Retirement
- -----------------------------
If a Participant remains in the employ of the Company or a Related
Company after Normal Retirement Date, the Participant's benefits shall be
postponed until the first day of the month following the month in which the
Participant actually retires as a full-time employee of the Company or a
Related Company, and the amount of such benefits shall be determined as
provided in Section 4. 1.
Section 3.3 - Early Retirement
- ------------------------------
A Participant who has attained age 60 and completed at least five (5)
years of Service may elect to retire hereunder on a date earlier than Normal
Retirement Date. A Participant who has attained age 55 and completed at
least five (5) years of Service may, subject to the approval of the Chief
Executive Officer, retire or be retired hereunder for the convenience of the
Company on a date earlier than Normal Retirement Date. A Participant who has
qualified for disability benefits under a Company or Related Company salary
continuance long term disability plan may elect to retire or be retired
hereunder for the convenience of the Company on a date earlier than Normal
Retirement Date. Payment of an Early Retirement Pension shall normally
commence as of the first day of the month coincident with or next following
the Participant's Early Retirement.
(Rev. 1/1/94, Amend. No. 5) -6-
<PAGE> 35
Section 3.4 - Termination Prior to Qualification for Retirement Benefits
- -------------------------------------------------------------------------
In the event that a Participant's employment with the Company
terminates for reasons other than death prior to qualifying for Normal
Retirement (Section 3.1) or qualifying for Early Retirement (Section 3.3),
the Participant shall NOT be eligible to receive any benefits under the
provisions of this Plan unless he or she (i) becomes eligible for vested
benefits in conjunction with a Change of Control of the Company or (ii)
becomes vested as provided in the special provisions of Schedule I. In the
event of a Change of Control of the Company, Participants will become fully
vested in their retirement benefits hereunder in respect to any subsequent
termination of their employment as provided in Section 4.5 irrespective of
their age or any approval by the Board, the Company, the Chief Executive
Officer, and/or the Committee. Payment of such vested Pension shall normally
commence as of the first day of the month coincident with or next following
the Participant's termination of employment.
Section 3.5 - Retirement While on Leave of Absence
- --------------------------------------------------
A Participant otherwise eligible to retire who is absent from work
pursuant to an approved absence may retire or be retired without returning to
active employment with the Company or a Related Company.
ARTICLE IV
AMOUNT OF RETIREMENT INCOME
Section 4.1 - Normal or Late Retirement Pension
- -----------------------------------------------
A Participant who retires on or after Normal Retirement Date shall be
entitled to a Pension, payable in the normal life only form of payment
described in Section 5.1, in the amount equal to:
Fifty-five percent (55%) of the Participant's Final Average Compensation
REDUCED by:
(a) The monthly life only pension which the Participant receives,
received, or would be eligible to receive if applied for on a timely
basis under one of the Company's or applicable Related Company's
qualified pension plan for salaried employees, determined as of the
date the Participant's Pension under this Plan commences,
(b) The amount of monthly pension payable on a life only basis which is
the Actuarial Equivalent of the Participant's Company or a Related
Company constructive deferred profit sharing Employer Account
value as of the date of the Participant's retirement. For the
purpose of calculating such constructive profit sharing Employer
Account value, it shall be assumed that all employer deferred profit
sharing contributions allocated to the initial Participants in this
Plan on or after July 1, 1982, along with the Participant's total
-7-
(Rev. 1/1/87, Amend. No. 1)
<PAGE> 36
employer deferred profit sharing account as of such date are
invested at all times thereafter prior to the Participant's
retirement in the profit sharing plan's Insured Principal and Income
Fund and that the Participant effects no loans from his Employer
profit sharing account during such period. In respect to individuals
who become Participants in this Plan subsequent to the 1983 Plan
Year, their constructive profit sharing Employer Account value shall
be calculated in the same manner except that the date from which it
is assumed the account is invested in the profit sharing plan's
Principal and Income Fund shall be (i) for new employee Participants
the first date the Participant has such an account, and (ii) for
continuous Rubbermaid employees the January 31st of the calendar
year in which the individual becomes a Participant in this Plan.
The Actuarial Equivalent referred to in this subparagraph (b) shall
be determined using the Pension Benefit Guaranty Corporation's
immediate annuity purchase rates for the second calendar month
preceding the day on which the Participant's pension commences.
(c) An amount of monthly pension payable on a life only basis which is
the Actuarial Equivalent of any vested benefits (other than those
which represent voluntary contributions made by the Participant)
which the Participant received, receives or would be eligible to
receive if applied for on a timely basis from one or more retirement
plans of employers for whom the Participant worked prior to employ-
ment by the Company and/or applicable Related Company, deter-
mined as of the date the Participant's Pension under this Plan
commences, and
(d) 100% of the Participant's primary monthly Social Security benefit,
determined according to the procedures for determining such
amounts under the Salaried Employees' Supplemental Retirement
Plan for Rubbermaid Incorporated and Related Companies.
(e) The amount of monthly annuity which is substantially equal in
value (pre-tax) to the after-tax monthly annuity payable on a
life only basis from any single premium deferred annuities
purchased on behalf of the Participant to provide benefits to the
Participant under the Rubbermaid Incorporated Supplemental
Executive Funded Retirement Plan detailed in Schedule II hereof
or any death benefit paid in lieu thereof. The determination of
such annuity amount shall be made by the Actuary (defined in
Section I of Schedule II attached hereto), certified to the
Committee and Plan Administrator and shall be final and binding
on all parties.
(f) The amount of monthly pension payable on a life only basis which
is the Actuarial Equivalent of the Participant's Account Balance
in the Rubbermaid Incorporated Supplemental Retirement Plan, as
of the date of the Participant's retirement. The Actuarial
Equivalent referred to in this subparagraph (f) shall be
determined using the Pension Benefit Guaranty Corporation's
immediate annuity purchase rates for the second calendar month
preceding the day on which the Participant's pension commences.
REV. 10/22/91 AMEND. #3
-7(a)-
<PAGE> 37
Section 4.2 - Early Retirement Pension
- --------------------------------------
<TABLE>
A Participant who retires early or who is retired early by the Company or
a Related Company (Section 3.3) shall be entitled to a Pension, payable monthly
in the normal life only form of payment described in Section 5.1 in an amount
equal to the percentage of the Participant's Final Average Compensation
determined from the following table less the Early Retirement offset amounts
listed below:
<CAPTION>
Participant's Age At Early Retirement
Early Retirement Benefit Percentage
<S> <C>
64 54%
63 53
62 52
61 51
60 50
59 49
58 48
57 47
56 46
55 45
</TABLE>
(c) Early Retirement offsets
(i) The monthly life only early retirement pension which the
Participant receives, received, or would be eligible to
receive if applied for on a timely basis under the Company's
or applicable Related Company's qualified pension plan for
salaried employees,
(ii) The amount of monthly pension payable on a life only basis
which is the Actuarially Equivalent of the Participants'
vested Company or Related Company constructive deferred profit
sharing Employer Account value as of the date of the Partici-
pant's Retirement determined pursuant to the provisions of
Section 4.1(b).
-8-
(Rev. 1/1/87, Amend. No. 1)
<PAGE> 38
(REV. 10/22/91 AMEND. #3
(iii) An amount of monthly pension payable on a life only basis
which is the Actuarial Equivalent as of the Participant's
Early Retirement of any vested benefits (other than those
which represent voluntary contributions made by the
Participant) which the Participant received, receives or would
be eligible to receive if applied for on a timely basis from
one or more retirement plans of employers for whom the
Participant worked prior to employment by the Company.
(iv) 100% of the Participants' primary monthly Social Security
benefit (including primary Social Security Disability
benefits), reduced for early commencement, determined
according to the procedures for determining such amounts under
the Salaried Employees' Supplemental Retirement Plan for
Rubbermaid Incorporated and Related Companies.
(v) The amount of any disability benefits from Company and/or
Related Company sponsored plans or practices and any workmen's
compensation benefits declared or awarded (except for awards or
fixed statutory payments for the loss or loss of use of any
bodily member) payable to a Participant with respect to the
Participant's disability.
(vi) The amount of monthly annuity which is substantially equal in
value (pre-tax) to the after-tax monthly annuity payable on a
life only basis from any single premium deferred annuities
purchased on behalf of the Participant to provide benefits to the
Participant under the Rubbermaid Incorporated Supplemental
Executive FUNDED Retirement Plan detailed in Schedule II hereof
or any death benefit paid in lieu thereof. The determination of
such offset amount shall be made by the Actuary (defined in
Section I of Schedule II attached hereto), certified to the
Committee and Plan Administrator and shall be final and binding
on all parties.
(vii) The amount of monthly pension payable on a life only basis which
is the Actuarial Equivalent of the Participant's Account Balance
in the Rubbermaid Incorporated Supplemental Retirement Plan as of
the date of the Participant's Early Retirement. The Actuarial
Equivalent referred to in this subparagraph (vii) shall be
determined using the Pension Benefit Guaranty Corporation's
immediate annuity purchase rates for the second calendar month
preceding the day on which the Participant's pension commences.
In the event that one or more of the Early Retirement offsets listed
above are not in pay status as of the date of the Participant's Early
Retirement but subsequently become payable, the offset to the benefits
provided hereunder will be applied only during periods that the offset
benefit is payable (or would be payable if timely application were made) to
or on behalf of the Participant. In the case of lump sum settlements under
workmen's compensation, the lump sum shall be divided by the weekly
workmen's compensation benefit which would otherwise have been payable in
order to determine the period over which the reduction shall be made.
-9-
<PAGE> 39
Section 4.4 - Funding of Accrued Benefits
- -----------------------------------------
When an Active Participant obtains nonforfeitable rights (vesting) in
the Pension benefits accrued hereunder as a result of (i) qualifying for
Normal Retirement (Section 3.1), (ii) qualifying for Early Retirement
(Section 3.3 or under special provisions incorporated in Schedule I), or
(iii) qualifying for vested benefits in conjunction with a Change of
Control of the Company (Section 3.4), the Company shall undertake funding
of the Participant's anticipated Normal Retirement Pension as provided in
the separate but companion, non-qualified plan, the Rubbermaid Incorporated
Supplemental Executive FUNDED Retirement Plan, which is documented in
Schedule II hereof.
Section 4.5 - Vested Pension/Corporate Takeover
- -----------------------------------------------
Irrespective of any other provision hereof, a Participant who
qualifies for vested benefits pursuant to termination of employment
following a Change of Control of the Company shall be entitled to an
immediate Pension, payable monthly in the normal form of payment described
in Section 5.1, in an amount equal to fifty-five percent (55%) of the
Participant's Final Average Compensation less the Early Retirement benefit
offsets set forth in Section 4.2 applied in the same manner as for Early
Retirement.
Section 4.6 - Benefit Coordination With Other Plans
- ---------------------------------------------------
The benefits provided under this Plan are intended to be supplemental
to the benefits provided under all other pension, deferred profit sharing
or other retirement plans to which the Company or a Related Company
contributes on behalf of any participant covered hereunder.
Section 4.7 - Special Rule for Participants of Foreign Related Companies
- ------------------------------------------------------------------------
In the event that an officer of related Company located outside the
United States (a foreign Related Company) becomes a Participant and
entitled to benefits hereunder, such benefits shall be determined in
accordance with special benefit formulas set forth in applicable schedules
attached to and included in this Plan for such purpose and shall be paid in
the same currency as the Participants' compensation prior to retirement.
-9(a)-
<PAGE> 40
ARTICLE V
FORM OF PENSION PAYMENT AND DEATH BENEFITS
Section 5.1 Normal Form of Pension Payment
- ------------------------------------------
The normal form of payment of the Pension determined under the
applicable Section of Article IV shall be monthly payments made for the life
of the Participant. The first payment shall be made on the first
day of the calendar month coinciding with or next following the Participant's
Retirement. The last payment shall be made on the first day of the calendar
month during which the Participant's death occurs.
Section 5.2 - Alternate Forms of Pension
- ----------------------------------------
In lieu of receiving pension benefits in the normal form specified in
Section 5. 1, and with the consent of the Committee, a Participant may elect
to receive benefits in an Actuarially Equivalent amount under any of the
forms permitted under the Rubbermaid Salaried Employees' Pension Plan.
Section 5.3 - Death After Retirement
- ------------------------------------
In the event of the death of a Retired Participant who is receiving a
Pension under this Plan, death benefits shall be provided hereunder only if an
alternate form of Pension payment providing death benefits is in effect. The
normal life only form of Pension payment provides no death benefits.
Section 5.4 - Death Prior to Retirement
- ---------------------------------------
In the event of the death of a MARRIED Active Participant age 55 or
older prior to Retirement or commencement of a Pension hereunder, a monthly
Surviving Spouse Pension shall become payable to the Participant's spouse for
life (Section 1.18). Death benefits may also be provided in respect to
Participants under other Company executive and employee benefit plans.
(Rev. 1/1/94, Amend. No. 5) -10-
<PAGE> 41
ARTICLE VI
COMMITTEE
Section 6.1 - Appointment of Committee
- --------------------------------------
The members of the Compensation and Management Development Committee of
the Board of Directors of the Company as constituted from time to time, or its
successor shall act as the Committee hereunder.
Section 6.2 - Committee Procedures
- ----------------------------------
No Committee member at any time acting hereunder who is a Participant
shall have any vote in any decision of the Committee made uniquely with
respect to such Committee member or the Committee member's benefits hereunder.
In the event of any disagreement among the Committee members at any time
acting hereunder and authorized to act with respect to any matter, the
decision of a majority of said Committee members authorized to act upon such
matter shall be controlling and shall be binding and conclusive upon all
persons, including, without in any manner limiting the generality of the
foregoing, the other Committee member or Committee members, the Company, all
Related Companies, all persons at any time in the employ of the Company and/or
any Related Company and the Participants and their Beneficiaries, and upon the
respective successors, assigns, executors, administrators, heirs, next-of-kin
and distributes of all of the foregoing.
Subject to the provisions of the first paragraph of this Section 6.2,
each additional and each successor Committee member at any time acting
hereunder shall have all of the rights and powers (including discretionary
rights and powers) and all of the privileges and immunities hereby conferred
upon the initial Committee members hereunder, and all of the duties and
obligations so imposed upon the Initial Committee members hereunder.
Except as otherwise may be required by any applicable law, no Committee
member at any time acting hereunder shall be required to give any bond or other
security for the faithful performance of duties as such Committee member.
-11-
<PAGE> 42
ARTICLE VII
ADMINISTRATION
Section 7.1 - Administrative Powers and Duties
- ----------------------------------------------
The Committee and the Plan Administrator shall together administer the
Plan and, in this connection, all policy and discretionary decisions shall be
the responsibility of the Committee and all admInistrative functions shall be
the responsibility of the Plan Administrator who shall perform the same under
the direction of the Committee.
The Committee may retaIn auditors, accountants, legal counsel and
actuarial counsel selected by it. Any Committee member may himself act In any
such capacity, and any such auditors, accountants, legal counsel and actuarial
counsel may be persons acting In a similar capacity for the Company and/or one
or more Related Companies and may be employees of the Company and/or one or
more Related Companies. The opinion of any such auditor, accountant, legal
counsel or actuarial counsel shall be full and complete authority and
protection in respect to any action taken, suffered or omitted by the
Committee in good faith and in accordance with such opinion.
Section 7.2 - Expenses
- ----------------------
The Company shall pay (and/or reimburse the Committee for) the reasonable
expenses incurred by the Committee in the administration of the Plan,
including the fees and compensation of the persons referred to in the second
paragraph of Section 7.1. The Company shall pay all other expenses, including
its income and franchise taxes, incurred in the administration of the Plan.
Section 7.3 - Records
- ---------------------
The Company and the Committee shall each keep such records, and shall
each reasonably give notice to the other of such information, as shall be
proper, necessary or desirable to effectuate the purposes of the Plan,
including, without in any manner limiting the generality of the foregoing,
records and information with respect to the benefits granted to Participants,
dates of employment and determinations made hereunder. Neither the Company nor
the Committee shall be required to duplicate any records kept by the other.
To the extent that the Company and/or the Committee shall prescribe forms for
use by the Participants and their Beneficiaries in communicating with the
Company or the Committee, as the case may be, and shall establish periods
during which communications may be received, they shall respectively be
protected in disregarding any notice or communication for which a form shall
so have been prescribed and which shall not be made in such form, and any
notice or communication for the receipt of which a period shall so have
been established and which shall not be received during such period. The
Company and the Committee shall respectively also be protected in acting upon
any notice or other communication purporting to be signed by any person and
reasonably believed to be genuine and accurate.
Section 7.4 - Determinations
- ----------------------------
All determinations hereunder made by the Company or the Committee shall
be made in the sole and absolute discretion of the Company or of the Committee,
as the case may be.
-12-
<PAGE> 43
In the event that any disputed matter shall arise hereunder, including,
without in any manner limiting the generality of the foregoing, any matter
relating to the eligibility of any person to participate under the Plan, the
participation of any person under the Plan, the amounts payable to any person
under the Plan, and the applicability and the interpretation of the provisions
of the Plan, the decision of the Committee upon such matter shall be binding
and conclusive upon all persons, including, without in any manner limiting the
generality of the foregoing, the Company, all Related Companies, all persons
at any time in the employ of the Company and/or one or more Related Companies,
and upon the respective successors, assigns, executors, administrators, heirs,
next-of-kin and distributees of all the foregoing.
Section 7.5 - Legal Incompetency
- --------------------------------
The Committee may, in its discretion, make payment either directly to an
incompetent or disabled person, whether because of minority or mental or
physical disability, or to the guardian of such person, or to the person
having custody of such person, without further liability on the part of the
Company, the Committee, the Plan Administrator, or any person, for the
amounts of such payment to the person on whose account such payment is made.
Section 7.6 - Application for Benefits
- --------------------------------------
Notwithstanding anything to the contrary contained in this Plan, any
benefits payable hereunder shall become payable only after the Participant, or
the Participant's Beneficiary, as the case may be, has made an application
with the Committee for such benefit upon a form satisfactory to the Committee
for this purpose. In the event any benefit becomes payable under this Plan
and no application therefor has been filed by any of such persons within two
(2) years from the date such benefit becomes payable hereunder, such benefit
shall be forfeited. In the event an application has been filed for a benefit
prior to the time such benefit becomes payable under this Plan and the
Committee is unable through reasonable efforts to locate the person or persons
who are legally entitled to receive such benefit withIn two (2) years of the
date such benefit becomes payable under this Plan, such benefit may be
forfeited.
Section 7.7 - Limitation Regarding Small Payments
- -------------------------------------------------
In the event that any Pension or other benefit provided under this Plan
is payable in an amount of less than one hundred dollars ($100.00) monthly,
such retirement income or other benefit may be payable quarterly or in a
single lump-sum benefit distribution of Actuarial Equivalent value as
determined by the Committee.
Section 7.8 - Misstatement in Application for Benefits
- ------------------------------------------------------
If any person in their application to participate in the Plan or for
benefits hereunder, or in response to any request of the Committee, the
Company or the Plan Administrator for information, makes any statement which
is erroneous or omits any material fact or fails before receiving first
payment to correct any information previously incorrectly furnished to the
Company, the Committee or the Plan Administrator for the records, the amount
of the Participant's retirement income shall be adjusted on the basis of the
true facts, and the amount of any overpayment theretofore made to such person
shall be deducted from the next succeeding payments as the Committee shall
direct.
-13-
<PAGE> 44
Section 7.9 - Action by the Company
- -----------------------------------
Any action by the Company under this Plan may be by resolution of its
board of directors, or by any person or persons duly authorized by resolution
of said board to take such action.
Section 7.10 - Exemption From Liability/Indemnification
- -------------------------------------------------------
The members of the Committee and the Plan Administrator, and each of
them, shall be free from all liability, joint or several, for their acts,
omissions and conduct, and for the acts, omissions and conduct of their duly
appointed agents, in the administration of the Plan, except for those acts or
omissions and conduct resulting from willful misconduct or lack of good faith.
The Company and/or applicable Related Company shall indemnify each member
of the Committee, the Plan Administrator and any other employee, officer or
director of the Company or a Related Company against any claims, loss, damage,
expense and liability, by insurance or otherwise (other than amounts paid in
settlement not approved by the Company), reasonably incurred by the individual
in connection with any action or failure to act by reason of membership on the
Committee or performance of an authorized duty or responsibility for or on
behalf of the Company or a Related Company pursuant to the Plan unless the
same is judicially determined to be the result of the individual's gross
negligence or willful misconduct. Such indemnification by the Company and/or
applicable Related Company shall be made only to the extent such expense or
liability is not payable to or on behalf of such person under any liability
insurance coverage. The foregoing right to indemnification shall be in
addition to any other rights to which any such person may be entitled as a
matter of law.
Section 7.11 - Nonalienation of Benefits
- ----------------------------------------
Except as otherwise provided by law, no benefit, payment or distribution
under this Plan shall be subject either to the claim of any creditor of a
Participant, spouse, or Beneficiary, or to attachment, garnishment, levy,
execution or other legal or equitable process, by any creditor of such person,
and no such person shall have any right to alienate, commute, anticipate or
assign (either at law or equity) all or any portion of any benefit, payment
or distribution under this Plan.
The Plan shall not in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder.
In the event that any Participant's benefits are garnisheed or attached
by order of any court, the Plan Administrator may elect to bring an action for
a declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid by the Plan. During the pendency
of said action, any benefits that become payable may be paid into the court
as they become payable, to be distributed by the court to the recipient it
deems proper at the close of said action.
-14-
<PAGE> 45
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 - Nonguarantee of Employment
- ----------------------------------------
Nothing contained herein shall require the Company or any Related
Company to continue any Participant in its employ, or require any Participant
to continue in the employ of the Company or any Related Company.
Section 8.2 - Right to Benefits
- -------------------------------
The sole interest of each Participant and each Beneficiary of a
Participant under the Plan shall be to receive the benefits provided herein as
and when the same shall become due and payable in accordance with the terms
hereof and neither any Participant nor Beneficiary of any Participant shall
have any right, title or interest in or to any of the assets of the Company or
a Related Company. All benefits hereunder shall be paid solely from the
general assets of the Company or applicable Related Company and the Company
shall not maintain any separate fund or account to provide any benefits
hereunder.
Section 8.3 - Offsets to Benefits
- ---------------------------------
NotwithstandIng any provisions of the Plan to the contrary, the Company
or an applicable Related Company may, if the Committee in its sole and absolute
discretion shall determine, offset any amounts to be paid to a Participant, or
Beneficiary under the Plan against any amounts which such Participant may owe
to the Company and/or to any one or more Related Companies.
Section 8.4 - Withholding and Deductions
- ----------------------------------------
All payments made by the Company or a Related Company under the Plan to
any Participant or Beneficiary shall be subject to applicable withholding and
to such other deductions as shall at the time of such payment be required
under any income tax or other law, whether of the United States or any other
applicable jurisdiction, and, In the case of payments to the Beneficiary of a
Participant, the delivery to the Company of all necessary waivers and other
documents.
Section 8.5 - Amendment/Termination
- -----------------------------------
The Company may, at any time and from time to time, pursuant to a
resolution of the Board, by written notice to each affected Participant and/or
Beneficiary who shall, at such time, have any rights under the Plan, amend
the terms and provisions of the Plan and may, at any time, similarly terminate
the Plan; PROVIDED, HOWEVER, that no such amendment shall impair the Company's
obligations to make payment or distribution of amounts theretofore earned
under the Plan. In the event that a Plan amendment effects only one or a
limited number of Participants through a change to Schedule I hereof, there
shall be no requirement to provide a copy of such amendment to Participants,
or Beneficiaries not affected.
-15-
<PAGE> 46
Section 8.7 - Misconduct
- ------------------------
If the Committee finds that any Participant engages in conduct
detrimental to the best interests of the Company or a Related Company or
misconduct involving dishonesty or moral turpitude which results in detriment
or financial loss to the Company or a Related Company or in malicious
destruction of such company's property, or is convicted of a felony committed
and arising out of the Participant's employment by such company, the Committee
may direct forfeiture of all or a portion of the benefits of the Participant.
Section 8.8 - Noncompetition Provision
- --------------------------------------
If the Committee determines that a Participant has entered into
employment with a competitor of the Company or is engaged directly or
indirectly in competition with or in an occupation detrimental to the Company's
interest, and if, after due notice, such Participant continues such activity,
the Committee shall suspend payment to said Participant of all amounts
otherwise due the Participant under this Plan and such Participant shall
forfeit all rights and interest with respect thereto. Such determination shall
be based on evidence satisfactory to the Committee and such determination
shall be final; provided, however, that any Participant shall be entitled
to rely forever on any written statement made by the Company that employment
with another employer is not in direct competition with the Company or
detrimental to its interest.
Section 8.9. Plan Merger, Consolidation or Transfer of Assets
- -------------------------------------------------------------
The Plan may not be involved in a merger, consolidation or transfer of
assets or liabilities with any other plan or program unless each Participant
would (if the Plan had been terminated) receive a benefit immediately after
such merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
-16-
(Rev. 12/1/88, Amend. No. 2)
<PAGE> 47
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 - ERISA Status
- --------------------------
This Plan shall constitute a plan which is unfunded and which is
maintained primarily for the purpose of providing deferred compensation
benefits for a select group of management or highly compensated employees
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and
the ERISA reporting and disclosure regulations.
Section 9.2 - Construction
- --------------------------
In the construction of the Plan, the masculine shall include the
feminine and the singular the plural in all cases where such meanings would be
appropriate.
Section 9.3 - Controlling Law
- -----------------------------
The law of the State of Ohio shall be the controlling state law in all
matters relating to the Plan and shall apply to the extent that it is not
preempted by the laws of the United States of America.
Section 9.4 - Effect of Invalidity of Provision
- -----------------------------------------------
If any provision of this Plan is held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof,
and this Plan shall be construed and enforced as if such provision had not
been included.
-17-
<PAGE> 48
SCHEDULE I
Page 1 of 4
SPECIAL PROVISIONS RELATING TO INDIVIDUAL PARTICIPANTS
The provision of this Schedule I are a part of the Rubbermaid
Incorporated Supplemental Executive Retirement Plan and specify special Plan
provisions which apply to individual Participants and/or a group of similarly
situated Participants.
Section 1-Special Provisions Applicable to Employees of Rubbermaid Canada Inc.
- ------------------------------------------------------------------------------
A. The provisions of this Section 1 become effective with the adoption of
the plan as of January 1, 1983, and apply to any Plan Participant principally
employed by Rubbermaid Canada Inc.
B. For the purpose of calculating pension benefits for Rubbermaid Canada
Inc. Participants, subsections 4. l(b) and 4. l(d) of the Plan shall read:
"(b) The amount of monthly pension payable on a life-only
basis which is the Actuarial Equivalent of the Participant's
deferred profit-sharing employer account value as of the date
of the Participant's retirement. The Actuarial Equivalent
referred to in this subparagraph (b) shall be determined using
the Pension Benefit Guaranty Corporation's immediate annuity
purchase rates for the second calendar month preceding the day
on which the Participant's pension commences." For the purposes
of this subparagraph, the Participant's deferred profit sharing
employer account value shall be determined as if the Company
had continued to accumulate in said profit sharing plan amounts
distributed from the prior profit sharing plan prior to 1984 and
had made contributions in respect of the participant without
having been restricted in any way by limits imposed by the
Income Tax Act (Canada) or by the regulatory authorities.
"(d) 100% of the Participant's monthly Canada/Quebec Pension
Plan Benefits, plus the Participant's monthly Old Age Security
Benefit, determined according to the procedures for determining
such amounts in this Section 1."
C. For the purpose of calculating Early Retirement Pension benefits for
Rubbermaid Canada Inc. Participants, subsections 4.2(c)(ii), (iv) and
(v) shall read:
"(ii) The amount of monthly pension payable on a life only
basis which is the Actuarial Equivalent of the Participant's
vested deferred profit sharing employer account value as of the
date of the Participant's Retirement determined pursuant to the
provisions of Section 4.1 (b)." For the purposes of this
subparagraph, the Participant's deferred profitsharing employer
account shall be determined as if the Company had continued to
accumulate in said profit sharing plan amounts distributed from
the prior profit sharing plan prior to 1984 and had made
contributions in respect of the participant without having been
restricted in any way by limits imposed by the Income Tax Act
(Canada) or by the regulatory authorities.
(Rev. 1/1/94, Amend. No. 5)
<PAGE> 49
SCHEDULE I
Page 2 of 4
"(iv) 100% of the Participant's monthly Canada/Quebec Pension Plan Benefit
(including disability benefits), plus his monthly Old Age Security
Benefit, determined according to the procedures for determining such
amounts in this Section 1, and actuarially reduced for early
commencement.
"(v) The amount of any disability benefits from Company and/or Related
Company sponsored plans or practices and any workers' compensation
benefits declared or awarded (except for awards or fixed statutory
payments for loss or loss of use of any bodily member) payable to a
Participant with respect to a Participant's disability."
D. "CANADA/QUEBEC PENSION PLAN BENEFIT" means the monthly pension it is
estimated the Participant will receive, commencing at his Normal
Retirement Date, from the Canada Pension Plan and/or Quebec Pension
Plan. In making this estimate, it shall be assumed that:
(i) the Participant has contributed, or will contribute, to either
the Canada or Quebec Pension Plan to the extent necessary to
ensure that his benefit therefrom will not be reduced by
reason of less than a full contributory period; and
(ii) the Participant's annual earnings for purposes of calculation
of the applicable statutory benefit have been equal to the
lesser of:
(a) twelve times his Final Average Compensation; and
(b) the average of the year's maximum pensionable earnings
under the Canada or Quebec Pension Plan in effect for
the three (3) calendar years to and including the year
in which a determination is required pursuant to this
Schedule I.
(iii) the formula to be applied to the earnings figure in (ii) above
to calculate the applicable statutory benefit will be that
contained in the applicable legislation at the date the Plan
requires a determination pursuant to this Schedule I.
E. "OLD AGE SECURITY BENEFIT" means the monthly pension it is estimated
the Participant will receive commencing at his Normal Retirement Date,
under the Old Age Security Act of Canada. In making this estimate it
shall be assumed that the Participant's entitlement is:
(i) reduced, if applicable, by reason of having years of residence
less than that required to provide an unreduced benefit;
(ii) exclusive of any Spouse's Allowance that may be payable; and
(iii) exclusive of any Guaranteed Income Supplement that may be
payable.
(Rev. 1/1/94, Amend. No. 5)
<PAGE> 50
SCHEDULE I
Page 3 of 4
Section II - Special Pre-Age 55 Surviving Spouse Death Benefits
- ---------------------------------------------------------------
Irrespective of the regular Plan provisions, the Surviving Spouse
Pension provisions (Section 5.4) shall apply to the following specified
individual in the event of his death while an Active Participant whether
or not he has attained age 55:
Wolfgang R. Schmitt
Section III - Special Approval to Retire After Attainment of Age 55 With
- ------------------------------------------------------------------------
Non-Reduced Pension
- -------------------
Irrespective of the regular Plan provisions, the following individuals may
elect Early Retirement pursuant to the Plan at any time following
attainment of age 55 and completion of at least five (5) years of Service with
an immediate Pension, payable monthly in the normal life only form of payment
described in Section 5.1 in an amount of 55% of the Participants Final Average
Compensation less the Early Retirement offset amounts listed in Section 4.2:
Joseph G. Meehan
James A. Morgan
Thomas W. Ward
Section IV - Special Provisions Applicable to Wolfgang R. Schmitt
- -----------------------------------------------------------------
Irrespective of the regular Plan provisions, the following provisions
shall apply to Wolfgang R. Schmitt:
Termination of Employment
- -------------------------
In the event of Mr. Schmitt's termination from Company employment prior
to his Normal Retirement Date, he shall be entitled hereunder to receive
retirement pension benefits in the amount determined from the following table:
(Rev. 1/1/94, Amend. No. 5)
<PAGE> 51
SCHEDULE I
Page 4 of 4
WOLFGANG R. SCHMITT
SUPPLEMENTAL RETIREMENT PLAN PENSION SCHEDULE
----------------------------------------------
<TABLE>
<CAPTION>
|==================================================================================|
| Amount of Pension Benefits (before applicable |
| reductions) as % of Final Average Compensation* |
|----------------------------------------------------------------------------------|
| Age at | | |
| Termination** | Involuntary Termination | Voluntary Termination|
|----------------------------------------------------------------------------------|
| <S> | <C> | <C> |
| 50 | 55 | 35 |
| 51 | 55 | 37 |
| 52 | 55 | 39 |
| 53 | 55 | 41 |
| 54 | 55 | 43 |
| 55 | 55 | 45 |
| 56 | 55 | 47 |
| 57 | 55 | 49 |
| 58 | 55 | 51 |
| 59 | 55 | 53 |
| 60 | 55 | 55 |
| 61 | 55 | 55 |
| 62 | 55 | 55 |
| 63 | 55 | 55 |
| 64 | 55 | 55 |
| 65 | 55 | 55 |
- -----------------------------------------------------------------------------------|
<FN>
* CEO years' compensation only to be used in average
** Age means age on Mr. Schmitt's last birthdate preceding termination.
</TABLE>
In the event of Mr. Schmitt's voluntary termination from Company
employment, his retirement pension benefits hereunder shall commence as of the
first day of the month coincident with or next following his termination date.
In the event of Mr. Schmitt's involuntary termination from Company employment,
his retirement pension benefits hereunder shall commence as of the later of
the first day of the month coincident with or next following (i) his
attainment of age 60 or (ii) his termination date.
Irrespective of any other provision of this Plan or of the companion
Rubbermaid Incorporated Supplemental Executive FUNDED Retirement Plan
("FUNDED SERP"), Mr. Schmitt shall become a Participant in the FUNDED SERP
on the earliest of (i) his fifty-fifth (55th) birthday, (ii) the date of his
voluntary termination from Company employment, or (iii) the date if he
qualifies for vested benefits in conjunction with a Change in Control of the
Company under Sections 3.4 and 4.5 of this Plan.
(Rev. 1/1/94, Amend. No. 5)
<PAGE> 52
SCHEDULE II
Page 1 of 6
SPECIAL PROVISIONS RELATING TO THE
FUNDING OF NONFORFEITABLE BENEFITS -
RUBBERMAID INCORPORATED SUPPLEMENTAL EXECUTIVE
----------------------------------------------
FUNDED RETIREMENT PLAN
----------------------
The provisions of this Schedule II constitute a separate non-qualified, funded
retirement plan for a select group of management or highly compensated
employees pursuant to the applicable provisions of ERISA.
The purpose of this separate plan is to provide funding (on a defined
contribution basis) in respect to nonforfeitable pension benefits otherwise
provided under the Rubbermaid Incorporated Supplemental Retirement Plan
(referred to in this Schedule II as the "NON-FUNDED SERP"). This funded plan
shall become effective as of December 1, 1988. The plan (the terms and
conditions of which are expressed in the provisions of this Schedule II) is
referred to herein as the "FUNDED SERP."
Section I - Definitions
- -----------------------
Unless the context otherwise indicates, all terms used herein (other than
"Participant" as defined herein) which are also used in the Rubbermaid
Incorporates Supplemental Retirement Plan shall have the meanings set forth
in Article I of said plan.
"Actuary" for the purposes of the FUNDED SERP shall mean an independent,
qualified actuary who is a Fellow of the Society of Actuaries and an Enrolled
Actuary pursuant to the provisions of ERISA, selected by the Company, or a
firm of independent actuaries selected by the Company at least one of whose
members is a Fellow of the Society of Actuaries and an Enrolled Actuary
pursuant to the provisions of ERISA.
Other terms requiring definition are defined in the text hereof.
Section II - Participation
- --------------------------
An employee of Rubbermaid Incorporated, or an affiliated company, who is an
Active Participant in the NON-FUNDED SERP shall become a participant (a
"Participant") in the FUNDED SERP as of the first day on which his accrued
pension benefit under the NON-FUNDED SERP becomes nonforfeitable (vested) as
a result of (i) qualifying for Normal Retirement (Section 3.1), (ii)
qualifying for Early Retirement (Section 3.3) or under special provisions
incorporated in Schedule I, or (iii) qualifying for vested benefits in
conjunction with a Change in Control of the Company under Sections 3.4 and
4.5 of the NON-FUNDED SERP or on a date otherwise provided in Schedule 1
(Special Provisions) of the NON-FUNDED SERP. The Company may also elect in
writing to include as a Participant in the FUNDED SERP any individual who
retired under the provisions of the NON-FUNDED SERP prior to January 1, 1988
and is receiving pension benefits under that plan. The Plan Administrator
shall endeavor to notify each individual who has become eligible to
participate in the Plan of such eligibility. All benefits funded under the
provisions of the plan expressed in this Schedule II are 100% vested.
(Rev. 1/1/94, Amend. No. 5)
<PAGE> 53
SCHEDULE II
Page 2 of 6
Notwithstanding the foregoing provisions of Section II, an individual shall not
participate in the FUNDED SERP unless he files, within 60 days of the date he
is first so notified that he is eligible to participate in the FUNDED SERP (or
such other period as may be permitted by the Plan Administrator), an
irrevocable, completed, authorized enrollment form with the Plan Administrator
pursuant to uniform procedures to be established by the Plan Administrator in
his sole discretion. Such form shall authorize the Company to forward
directly to the Committee or an insurance company (or companies) any and ali
funds necessary to satisfy requirements for the purchase of SPDAs on behalf
of the Participant under the term of the FUNDED SERP.
Section III - Benefits
- ----------------------
As of January lst coincident with or next following the date on which an
employee becomes a Participant in the FUNDED SERP, the Actuary shall deter-
mine the amount of the Participant's anticipated Normal Retirement Pension
(on a monthly life only form of payment) under the NON-FUNDED SERP benefit
formula. Such benefit shall be the Participant's "Target funded Benefit" to be
funded hereunder.
Section IV - Purchase and Terms of SPDAS
- ----------------------------------------
The sole obligation of the Company under the FUNDED SERP is to make current
funds available to applicable Participants and assist to the extent necessary
and appropriate in the direct application of such funds toward the purchase of
single premium deferred annuity contracts ("SPDAs") as provided in this
Section IV in accordance with the consents of such Participants to have such
funds so applied and to make corresponding income tax withholding payments in
accordance with the following provisions. Any additional benefits provided
under the NON-FUNDED SERP shall remain the obligation of such non-funded plan
and shall be paid out of the general assets of the Company. ln respect to
such non-funded benefits, applicable Participants and beneficiaries shall have
no rights to payments greater than the rights of general unsecured creditors
of the Company. If a Participant terminates employment with the Company for
any reason before becoming vested under the provisions of the NON-FUNDED SERP,
the participant shall forfeit all rights and benefits which may have accrued
with respect to the Participant under the NON-FUNDED SERP.
(a) The Company shall arrange on behalf of each person who initially becomes
a Participant in the FUNDED SERP during a calendar year, the purchase of
an SPDA no later than March 15th of the subsequent year. In the event of
initial plan participation caused by a Change in Control of the Company,
the Company shall arrange for the purchase of such SPDA, to the extent
possible, to occur coincident with or prior to the Change in Control. The
SPDAs so purchased shall provide a benefit which, when expressed in the
form of a single life annuity to the Participant, is substantially equal
in value to the after-tax amount of the Participant's Target Funded
Benefit had it been provided f rom the NON-FUNDED SERP. The
determination of such amount shall be made pursuant to the formula
expressed in Appendix A and based upon the assumption that the
individual for whom the SPDA is purchased will be subject to the same
taxing Jurisdiction(s) (as defined
(Added 12/ 1/88, Amend. No. 2)
<PAGE> 54
SCHEDULE II
Page 3 of 6
below) when payments under the SPDA begin as the taxing Jurisdiction(s)
to which the individual is subject when the SPDA is purchased. For such
purpose, the determination of the Applicable Tax Rate shali be made by
the Plan Administrator or, if the Committee so determines, by an
independent public accounting firm or any other advisor retained by the
Committee. Such determination shall be final and binding on all parties.
The Company, at its discretion, may accelerate the effective date of the
purchase of an SPDA on behalf of a Participant of the FUNDED SERP in
circumstances under which such purchase would be to the benefit of the
Participant or the Company.
In the event of the death of a Participant between the date such
individual becomes a Participant in the FUNDED SERP and the effective
purchase of an applicable SPDA, the Company shall, in lieu of arranging
the purchase of an SPDA, pay to the Participant's beneficiary(ies) within
90 days of the Participant's death a single sum death benefit equal in
amount to the premium for the SPDA which would otherwise have been
purchased on behalf of the Participant as determined by the Actuary.
Such amount shall be final and binding on all parties.
Should subsequent events prior to retirement substantially increase a
Participant's anticipated Normal Retirement Pension above the Target
Funded Benefit employed in the purchase of an SPDA for the Participant
under the provisions of the FUNDED SERP, the Company at its discretion
may (at the time it is otherwise purchasing SPDAs hereunder or such other
time as it deems appropriate) arrange for the purchase of an additional
SPDA on behalf of the Participant to fund such increase.
(b) As of each date that the Company arranges for the purchase of an SPDA
hereunder (or provides an equivalent lump sum death benefit), the Company
shall provide for income tax withholding with respect to the individual
for whom the SPDA is purchased (or lump sum payment made), and shall
notify such individual (or in the event of death his personal
representatives) of the amount so paid as soon as possible thereafter
but in no event later than 30 days after the close of the calendar year
in which such purchase occurs. Such income tax withholding shall
be paid by the due date for income tax withholding on wages paid in each
taxing Jurisdiction (determined as provided below) on such SPDA purchase
date. Regardless of the minimum income tax withholding requirements in
such Jursidiction, the amount of such income tax withholding payment
shall be equal to the product obtained by multiplying (a) the total
premium paid for such SPDA, times (b) the Applicable Tax Rate (determined
as provided below) on such SPDA purchase date, divided by (c) the sum of
one (1) minus the Applicable Tax Rate; provided, however, that, if a
different withholding payment is required by applicable law, the Plan
Administrator shall, pursuant to uniformly applicable rules and
procedures, require appropriate adjustments to any terms of the NON-FUNDED
SERP plan. Notwithstanding the foregoing, the Company shall have no
obligations with respect to arranging the purchase of an SPDA on behalf of
any Participant unless such Participant executes such authorization, if
any, as may be necessary for the income tax withholding provisions
required by this Section IV to be made.
(Added 12/1/88, Amend. No. 2)
<PAGE> 55
Schedule II
Page 4 of 6
For the purposes of this sub section, the term "Jurisdiction" shall mean
each taxing Jurisdiction to which a Participant or Beneficiary is
subject at the time an SPDA is purchased and the term "Applicable Tax
Rate" shall mean the combined marginal income tax rate applicable to
individuals in the highest taxable income brackets in the applicable
taxing Jurisdiction (giving due regard to the deductibility, credits or
other adjustments in one Jurisdiction for taxes paid in another). The
determination of Applicable Tax Rate shall be made by the Plan
Administrator or, if the Committee so determines, by an independent
public accounting firm or any other advisor retained by the Committee.
Such determination shall be final and binding on all parties.
(c) Each Participant shall, as a condition of having an SPDA purchased
on behalf of the Participant, (i) supply the Plan Administrator with all
assistance, information and supporting documentation as he shali reason-
ably request, and (ii) execute such authorizations, if any, as may be
necessary for the income tax withholding provisions required under sub-
paragraph (b) above to be made.
(d) Each SPDA shall contain terms consistent with the requirements of this
Section IV. Each SPDA shall permit payments to be made to the applicabie
Participant commencing no sooner than the earliest date the Participant
could elect to commence receiving benefits under the provisions of the
NON-FUNDED SERP or at a later date.
(e) Notwithstanding any other provision of the Plan to the contrary, no SPDA
shall be purchased on behalf of a Participant if the amount of the SPDA
required to be purchased in accordance with such other provision is less
than the minumum underwriting requirement of the insurer then selected by
the Company to issue SPDAs under the Plan.
(f) With respect to each purchase of SPDAs the Company shali select one or
more life insurers which are rated superior or A+ by Best's Insurance
Reports, Life-Health to provide the SPDAs. At such times as it may be of
material economic advantage to accomplish the prescribed funding to
purchase single premium immediate annuities combined with appropriate
Participant deferral elections in lieu of single premium deferred
annuities, the Plan Administrator may make such purchases as though the
contracts were SPDAs.
(g) Each SPDA shall provide for payments to the Participant commencing at
the Participant's Normal Retirement Date or earlier in a reduced amount
if the Participant has retired hereunder, or at any later date in an
increased amount, and in such available Actuarially Equivalent payment
form, as the Participant shall elect, provided that if the Participant
has a Qualified Spouse on the date of the Participant's termination of
employment with the Company for any reason, then payment shall be in the
form of a Qualified Joint and Survivor Annuity (as defined below), except
as otherwise provided below. Each SPDA shall provide for the return of
the amount of the initial SPDA premium to the Particpiant's applicable
Beneficiary(ies) in the event of the Participant's death prior to the
time that Pension benefits have commenced under the SPDA.
(Added 12/1/88, Amend. No. 2)
<PAGE> 56
SCHEDULE II
Page 5 of 6
(h) The term "Qualified Joint and Survivor Annuity" means a single life
annuity to the Participant and, lf the Participant dies leaving a
Qualified Spouse (regardless of whether payments to the Participant had
commenced), a single life annuity to such Qualified Spouse, following
the Participant's death, in an amount equal to one-half the amount of
the single life Annuity payable to the Participant (or that would have
been payable when payments commenced) under the Qualified Joint and
Survivor Annuity.
"Qualified Spouse" as used in this Schedule II shall mean a Participant's
lawful husband or wife, as the case may be, recognized under the laws of
the state, or other applicable Jurisdiction, in which the Participant
regularly and continuously is employed by the Company. The Company,
Committee, Plan Administrator and applicable insurance company may rely
on the statement of a Participant concerning the Participant's marital
status and all persons claiming any benefit under the Plan shall be
bound by such representation.
(i) Subject to additional requirements which may be imposed under applicable
law, all elections or consents under this Section IV or any SPDA shall be
made by the Participant or Beneficiary in such form and manner and at
such time or times as the terms of the SPDA shall require, provided that
any election, or revocation or change of election, by the Participant
under this Section lV must be made with the written consent of the
Participant's Qualified Spouse, if any, unless, after giving effect to
such election, revocation or change, payment shall be in the form of a
Qualified Joint and Survivor Annuity, or an annuity which provides for
payments to the Qualified Spouse which are greater than the payments
which would be made under a Qualified Joint and Survivor Annuity;
provided, however, that the Plan Administrator may prescribe procedures
under which a Qualified Spouse may relinquish all FUNDED SERP plan
rights. The Plan Administrator shall cause the Participant or Beneficiary
to be supplied with the information he reasonably deems necessary or
desirable to make the election available under this Section IV or any
SPDA and otherwise to the extent required by law.
(j) The Company shall notify each insurer that has issued an SPDA on behalf
of a Participant of the Participant's termination of employment with the
Company for any reason and to take all actions necessary or desirable to
commence payments to the Participant (or Beneficiary as applicable) under
the SPDA in accordance with its terms.
(k) Each SPDA shall provide that the issuing insurer shall determine the
portion of each SPDA payment which would be taxable by the Jurisdiction
to which the Plan Participant is subject. Such determination shall be
final and binding for purposes of the Plan.
(1) The purchase and distribution of SPDAs hereunder shall not vest in any
Participant or Beneficiary any right, title or interest in and to any
assets or benefits except at the time or times, upon the terms and
conditions, to the extent, set forth in the FUNDED SERP and any SPDA
purchased thereunder.
(Added 12/1/88, Amend. No. 2)
<PAGE> 57
SCHEDULE II
Page 6 of 6
(m) The Company's obligations to provide applicable benefits to Participants
in the FUNDED SERP shall be extinguished upon the purchase of an SPDA and
the provision of applicable income tax withholding in accordance with
this Section IV.
Section V - Administrative Provisions
- -------------------------------------
Except as otherwise specifically provided or modified below, the administrative
provisions contained in the NON-FUNDED SERP (regardless in which Article they
appear) shall also govern the FUNDED SERP documented in this Schedule II:
(a) The following Sections of the NON-FUNDED SERP shall have no application
to benefits provided through the purchase of SPDAs under the FUNDED SERP
Section 8.3 (Offsets to Benefits),
Section 8.7 (Misconduct) and
Section 8.8 (Noncompetition Provision).
(b) Each FUNDED SERP Participant shall, as a condition of having an SPDA
purchased for the Participant, supply the Plan Administrator with all
assistance, information and supporting documentation as he shall reason-
ably request.
(c) In addition to the Powers granted to the Company, Committee and the Plan
Administrator and specified in Article VII of the NON-FUNDED SERP, they
shall specifically have the power to delegate authority to agents and
other persons to act on their behalf in carrying out the provisions and
administration of the FUNDED SERP including the selection or purchase of
SPDAs, and to take or direct any action required or advisable with
respect to the administration of the FUNDED SERP.
(d) In respect to benefits provided under the FUNDED SERP, any designation of
Beneficiary or revocation or change of a Beneficiary designation regarding
such benefits must be made with the written consent of the Participant's
Qualified Spouse, if any, unless, after giving effect to such designation,
revocation or change, the Participant's sole Beneficiary is the
Participant's Qualified Spouse.
(e) The Company may, pursuant to the specifications in Section 8.5 of the
NON-FUNDED SERP, amend or terminate either or both of the SERP Plan(s);
however, in no event shall the modification, amendment or termination of
either Plan affect or reduce the value of any SPDA purchased under the
FUNDED SERP or reduce the value of or the obligation to purchase SPDAs
and pay income tax withholding in respect to applicable benefits which
have become non-forfeitable (vested) and for which an initial SPDA has
not yet been purchased or income tax withholding not provided pursuant to
Section IV of this Plan.
(Added 12/ 1/88, Amend. No. 2)
<PAGE> 58
SCHEDULE II
APPENDIX A
RUBBERMAID INCORPORATED
FORMULA FOR FUNDED SERP BENEFITS
1. Initial Target Benefit = SERP Benefit x (1 - Applicable Tax
Rate*)
2. Exclusion Ratio = Single Premium divided by Total Expected
(the amount of the annuity Payments**.
benefit which is not taxed)
3. Annuity Benefit = Initial Target Benefit divided by [ 1 -((1
- Exclusion Ratio) x Tax Bracket)]
Example
Initial Target Benefit
at age 65 (Life Income
Option) = $19,037.95
Applicable Tax Rate* = 33%
Exclusion Ratio = .32611
Annuity Benefit = $19,037.95 divided by
[((1-.32611)x.33)]
= $24,482.45
* As defined in Section IV(b) of the FUNDED SERP.
** The number of payments is determined using the IRS' Unisex annuity
mortality tables.
(Added 12/ 1/88, Amend. No. 2)
<PAGE> 59
Amendment No. 7 to the
Special Provisions Relating to Individual Participants -
Rubbermaid Incorporated Supplemental Executive Retirement Plan
(Schedule I)
--------------------------------------------------------------
Pursuant to the order of its Board of Directors, Rubbermaid
Incorporated (the "Company") hereby amends the Rubbermaid Incorporated
Supplemental Executive Retirement Plan, as amended ("Schedule I"), as
hereinafter set forth. This amendment to the Plan shall be referred
to in the Plan as the "August 1998 Amendment to the Plan."
I.
Effective upon the adoption of this Amendment, Section II of
Schedule II of Schedule I is hereby deleted in its entirely, without
renumbering the remaining sections of Schedule I.
II.
Effective as of April 22, 1997, the following new paragraph
is added after the first paragraph of Section IV of Schedule I:
"Special Definition of Compensation
-----------------------------------
With respect to Mr. Schmitt, the following shall be substituted for
Section 1.7 of this Plan:
Section 1.7
-----------
(a) Compensation
------------
The monthly equivalent of the total base salary and
management incentive compensation (from the Management
Incentive Plan) earned and the value of any performance
shares granted during a calendar year for services rendered
to the Company or a Related Company prior to reduction for
payment in any other form than cash.
(b) Final Average Compensation
--------------------------
A Participant's average monthly Compensation during the
highest three (3) complete or partial calendar years during
the final ten (10) complete or partial calendar years of the
Participant's employment with the Company and/or a Related
Company including years following the Participant's Normal
Retirement date in the event of Late Retirement."
<PAGE> 60
III.
Effective as of April 22, 1997, the Supplemental Retirement
Plan Pension Schedule contained in Section IV of Schedule I is hereby
replaced in its entirety by the following schedule:
"WOLFGANG R. SCHMITT
SUPPLEMENTAL RETIREMENT PLAN PENSION SCHEDULE
----------------------------------------------
<TABLE>
<CAPTION>
Amount of Pension Benefits (before applicable reductions)
as % of Final Average Compensation*
<S> <C> <C>
Age at Termination** Involuntary Termination Voluntary Termination
53 55 41
54 55 43
55 55 45
56 55 47
57 55 49
58 55 51
59 55 53
60 60 60
61 61 61
62 62 62
63 63 63
64 64 64
65 65 65
</TABLE>
* CEO years' compensation only to be used in average.
** Age means age on Mr. Schmitt's last birthdate preceding
termination."
IV.
Effective upon the adoption of this Amendment, the last two
paragraphs of Section IV of Schedule I are hereby replaced in their
entirety by the following:
"Irrespective of any other provision of this Plan or of the
companion Rubbermaid Incorporated Supplemental Executive Funded
Retirement Plan (the "funded SERP"), Mr. Schmitt shall in no event
become a Participant in the funded SERP at any time (notwithstanding
the provisions of this sentence, however, words and phrases used
<PAGE> 61
herein that are defined in the funded SERP are used herein as so
defined). Instead, Mr. Schmitt s benefits under the Plan shall be
provided as described below:
(a) THE SCHMITT TRUST. Upon the adoption of the August 1998
Amendment to the Plan, the Company shall establish a so-
called "rabbi trust" the purpose of which is to provide
funds, subject to the claims of the creditors of the
Company, to defray the costs of providing Mr. Schmitt's
benefits under the Plan (the "Schmitt Trust"). The Schmitt
Trust shall provide that amounts contributed to such trust
shall be used in payment of the Company's obligations to Mr.
Schmitt under the Plan, provided, however, that any funds
contained therein shall remain subject to the claims of the
Company's general creditors.
(b) THE SCHMITT ACCOUNT. The Plan Administrator shall maintain
an account (the "Schmitt Account") for Mr. Schmitt which
shall be (i) credited with any amounts contributed to the
Schmitt Trust by the Company of behalf of Mr. Schmitt, (ii)
credited with or reduced by the gains, losses and earnings
on such amounts, as determined in accordance with the terms
of the Schmitt Trust, and (iii) reduced by any distributions
or forfeitures therefrom.
(c) CONTRIBUTIONS TO THE SCHMITT TRUST. Upon the adoption of the
August 1998 Amendment to the Plan, the Company shall
contribute to the Schmitt Trust an amount in cash equal to
$10,149,245. That amount equals the $11,149,245 actuarially
determined value of Mr. Schmitt's Target Funded Benefit less
$1,000,000 dedicated by the Company to purchase a split
dollar life insurance policy on behalf of Mr. Schmitt.
(d) DISTRIBUTION FORM AND TIMING. The Schmitt Account shall be
paid to Mr. Schmitt in a lump sum payment following the
cessation of Mr. Schmitt s employment with the Company,
unless otherwise elected by Mr. Schmitt in accordance with
paragraph (e) or (f).
(f) OPTIONAL DISTRIBUTION FORM AND/OR TIMING. Subject to the
approval of the Committee, Mr. Schmitt may elect to change
the form of payment of the Schmitt Account and/or date upon
which the lump sum payment or the first quarterly payment
(described below) will be paid, as the case may be, to a
form of payment and/or distribution date otherwise permitted
under this paragraph (e). Such election shall be in writing
on a form provided by the Company, which form must be filed
with the Company (x) at a time at which Mr. Schmitt is an
employee of the Company and (y), except as described below
in the sentence that immediately follows, at least 180 days
prior to the date on which Mr. Schmitt otherwise would be
entitled to receive a lump sum payment or the first
installment of a series of payments, as the case may be.
The 180-day notice requirement described in (y)above,
<PAGE> 62
however, does not apply in the case where Mr. Schmitt
otherwise would be entitled to receive a lump sum payment or
the first installment of a series of payments following an
involuntary termination of Mr. Schmitt's employment,
including by reason of death or disability. In the case of
an invalid election, payment shall be made in accordance
with Mr. Schmitt's last valid election, if any.
(i) Mr. Schmitt may elect, in accordance with this
paragraph (e), to receive the Schmitt Account in a lump
sum payment or in a number of approximately equal
quarterly payments (recognizing that the final payment
will be in an amount equal to any remaining balance),
not in excess of forty (40) payments, as designated by
Mr. Schmitt in writing on a form provided by the
Company. The amount of each quarterly payment, if
quarterly payments are selected, shall be determined by
the Committee in its sole discretion so that the
quarterly payments have a present value (taking into
account the value of the Schmitt Account at the time
such payments begin and interest, at a rate determined
by the Committee in its sole discretion, that would be
earned on the value of the Schmitt Account during the
payment period equivalent to the value of the Schmitt
Account at the time such payments begin.
(ii) Mr. Schmitt may elect, in accordance with this paragraph
(e), to defer the date upon which the lump sum payment
or the first quarterly payment will be made, to a date
which may be (I) the date Mr. Schmitt ceases to be
employed by the Company by death, retirement or
otherwise or (II) a date which is a fixed number of
months, not in excess of sixty (60) months, after the
date Mr. Schmitt ceases to be employed by the Company
by death, retirement or otherwise.
(iii)Notwithstanding any other provision of the Plan, Mr.
Schmitt (or his Beneficiary) shall be permitted, either
before or after his cessation of employment with the
Company, to make an election, in accordance with this
paragraph (e), to receive, payable as soon as
practicable after such election is received by the
Company, the remaining amount of the Schmitt Account in
the form of a lump sum payment, if (and only if) the
Schmitt Account is reduced by ten (10) percent, which
ten (10) percent amount shall thereupon be irrevocably
forfeited.
(f) SPECIAL PAYMENT ELECTION IN THE EVENT OF THE DEATH OF MR.
SCHMITT. In the event of the death of Mr. Schmitt, the
amount of the Schmitt Account shall be paid to Mr. Schmitt's
Beneficiary in accordance with Mr. Schmitt's last valid
election, or in accordance with a special payment election
filed by Mr. Schmitt with the Company that is to be
<PAGE> 63
operative and override any other payment election filed by
Mr. Schmitt, in the event of his death before he receives or
commences receiving payments under the Plan. In a special
payment election, Mr. Schmitt may elect payment of the
Schmitt Account in a lump sum amount or in a number of equal
quarterly payments, not in excess of forty payments
(determined in this manner described in paragraph (e)(i)),
to his Beneficiary on or commencing on a designated date
that is within the twenty-four (24) month period following
the date of his death.
(g) UNFORESEEABLE EMERGENCY. Notwithstanding the foregoing
provisions, in the event of an unforeseeable emergency (as
defined in Treasury Regulation Sections I.457-2(h)(4) and
(5)), the Committee may in its sole discretion accelerate
the payment to Mr. Schmitt (or his Beneficiary) of the
amount of the Schmitt Account, but only up to the amount
necessary to meet the emergency.
(h) ADDITIONAL BENEFITS. In the event that, at the time of Mr.
Schmitt's cessation of employment with the Company, Mr.
Schmitt's retirement benefits hereunder (determined as if
the August 1998 Amendment to the Plan had not been adopted)
exceed the Target Funded Benefit utilized for purposes of
paragraph (c), the Company shall, subject to paragraph (i)
below, pay to Mr. Schmitt a Pension, payable monthly in the
normal life only form of payment described in Section 5.1 of
the Plan or in an optional form of payment permitted under
Section 5.2 of the Plan, equal to the amount of such excess
(the "Additional Pension"). If Mr. Schmitt's employment
terminates by reason of his death (either before or after
his attainment of age 55) and he is survived by his spouse,
his spouse shall be entitled to a Surviving Spouse Pension
described in Sections 1.18 and 5.4 of the Plan, such
Surviving Spouse Pension to be determined by reference
solely to the Additional Pension (if any).
(i) CHANGE IN CONTROL. In the event of a Change in Control (as
such term is defined in the Rights Agreement dated June 25,
1996 between the Company and First National Bank of Boston),
the Schmitt Account, and the Actuarial Equivalent of any
Additional Pension described in paragraph (h), if any,
determined as if Mr. Schmitt terminated employment at the
time of such Change in Control, shall be payable to Mr.
Schmitt or his Beneficiary immediately in a lump sum payment
upon the occurrence of such Change in Control.
(k) SATISFACTION OF OBLIGATION. The payment of the Schmitt
Account in a lump sum amount, or in a number of
approximately equal quarterly payments, not in excess of
forty (40) payments, as designated by Mr. Schmitt in writing
on a form provided by the Company, to Mr. Schmitt (or his
Beneficiary) pursuant to this paragraph, whether by the
Schmitt Trust or directly by the Company, and the payment by
<PAGE> 64
the Company of the Additional Pension, if any, described in
paragraph (h), shall discharge all obligations of the
Company to Mr. Schmitt (or his Beneficiary) under the Plan."
IN WITNESS WHEREOF, the Company, pursuant to the order of
its Board of Directors, has executed this amendment to Schedule II at
Wooster, Ohio on October 1, 1998.
Rubbermaid Incorporated
/s/ James A. Morgan
---------------------------------
Title: Senior Vice President
I hereby acknowledge receipt of a copy of this amendment and
fully understand its contents. I understand that by signing this
amendment, I agree that the Company has the authority to adopt this
amendment. I am signing this amendment intending to be legally bound
by its terms and conditions. I further understand that this amendment
describes all rights and benefits to which my Beneficiaries, including
my spouse, and me are entitled under the Plan.
/s/ Wolfgang R. Schmitt Date October 1, 1998
--------------------------------- ----------------------------
Wolfgang R. Schmitt
/s/ Toni A. Schmitt Date October 1, 1998
--------------------------------- ----------------------------
Toni Schmitt
EXHIBIT 10.20
-------------
THE RUBBERMAID INCORPORATED
SUPPLEMENTAL RETIREMENT PLAN
Reflecting Amendments Through
December 23, 1997
Federal Employer Identification No. 34-0628700
<PAGE> 66
Originally effective as of January 1, 1991 and restated as of January
1, 1995, Rubbermaid Incorporated adopted this Plan known as the Rubbermaid
Incorporated Supplemental Retirement Plan, to provide retirement benefits to
certain management and highly compensated employees to supplement benefits
provided from other retirement or profit sharing plans maintained by Rubbermaid
Incorporated or a subsidiary.
The Plan is not intended to meet the requirements of Sections 401(a)
and 501(a) of the Internal Revenue Code of 1954, as amended by the Employee
Retirement Income Security Act of 1974 nor is the Plan intended to meet other
requirements of such Act.
The provisions of this Plan as revised and restated effective January
1, 1995 shall apply only to persons who are employed by Rubbermaid Incorporated
or an Adopting Employer.
ARTICLE I
---------
DEFINITIONS
-----------
The following words and phrases, when used in this Plan, unless the
context clearly indicates otherwise, shall have the following meanings:
1.1 - Accrual or Employer Accrual
- ---------------------------------
The amount which is computed and credited to a Participant's account
pursuant to Article 3 of this Plan.
1.2 - Actuary
- -------------
An independent, qualified actuary who is a Fellow of the Society of
Actuaries and an enrolled actuary pursuant to the provisions of ERISA,
selected by the Company or a firm of independent actuaries selected by
the Company at least one of whose members is a Fellow of the Society
of Actuaries and an enrolled actuary pursuant to the provisions of
ERISA.
1.3 - Adopting Employer
- -----------------------
A Subsidiary of Rubbermaid Incorporated who has adopted this Plan
pursuant to the terms of Article 6.
1.4 - Age
- ---------
A person's actual attained age expressed in years from date of birth.
<PAGE> 67
1.5 - Approved Absence
- ----------------------
Absence of an Associate (including periods of temporary or indefinite
layoff) authorized or approved by the Company as determined in
accordance with the normal practices of the Company as may be applied
at each location, division or Subsidiary of the Company. In the event
the Associate does not return within the period specified, termination
of employment shall be deemed to have occurred on the last day of such
period. The provisions of this Section shall be uniformly applied to
all Participants similarly situated.
1.6 - Associate
- ---------------
The term Associate shall mean any non-union, salaried employee of
Rubbermaid Incorporated or any of its United States Subsidiaries.
1.7 - Beneficiary
- -----------------
The term Beneficiary shall mean such persons described in Section 5.8.
1.8 - Board
- -----------
The present and any succeeding Board of Directors of Rubbermaid
Incorporated.
1.9 - Bonus
- -----------
The amount of annual incentive compensation payable by Rubbermaid
Incorporated or an Adopting Employer under the Rubbermaid Incorporated
Management Incentive Plan ("MIP") (effective January 1, 1997, the
Rubbermaid Incorporated Management Value Plan ("MVP")) maintained by
Rubbermaid Incorporated or an Adopting Employer.
1.10 - Break in Service
- -----------------------
The term Break in Service shall mean any Plan Year during which an
Associate is credited with 500 or fewer Hours of Service.
1.11 - Code
- -----------
The Internal Revenue Code of 1986, as amended from time to time.
1.12 - Committee
- ----------------
The Committee appointed pursuant to Article 7.
<PAGE> 68
1.13 - Company
- --------------
Rubbermaid Incorporated, an Ohio corporation, and any United States
Subsidiary of Rubbermaid Incorporated which is an Adopting Employer
and any organization that is a successor to Rubbermaid Incorporated
or is the result of a merger or consolidation of one or more Adopting
Employers.
1.14 - Change of Control
- ------------------------
A "Change of Control" of Rubbermaid Incorporated shall be deemed to
occur:
a. in the event Article Fifth of Rubbermaid Incorporated
Amended Articles of Incorporation shall become operative,
b. in the event that the Rubbermaid Incorporated Board of
Directors recommends to its shareholders the acceptance of
any tender offer as provided in said Article Fifth,
c. in the event the necessary percentage of shareholders
approves a transaction of the nature described in Article
Sixth of the Rubbermaid Incorporated Amended Articles of
Incorporation, or
d. in the event any person, as defined in said Article Fifth
of the Amended Articles of Incorporation, becomes the
beneficial owner, directly or indirectly, of 20% or more
of the outstanding common shares of Rubbermaid
Incorporated.
1.15 - Effective Date
- ---------------------
January 1, 1995, the date on which the provisions of this Plan were
revised and restated.
1.16 - Eligible Associate
- -------------------------
Any non-union salaried Associate of the Company compensated on the
basis of periodic salary in accordance with the Company's normal
practices, who is receiving remuneration for personal services
rendered to the Company (or who would be receiving such remuneration
except for an Approved Absence) and such Associate is:
a. eligible to participate in the Rubbermaid Incorporated
Management Incentive Plan ("MIP") (effective January 1,
1997, the Rubbermaid Incorporated Management Value Plan
("MVP")) and the Rubbermaid Retirement Plan; or
b. a Highly Compensated Associate and eligible to participate
in the Rubbermaid Retirement Plan; or
c. any other Associate as designated by the Company.
<PAGE> 69
1.17 - Eligible Spouse
- ----------------------
The lawful husband or wife, as the case may be, recognized under the
laws of the state in which a Participant is regularly and continuously
employed by the Company, as of the date specified in the relevant
section of this Plan. The Plan Administrator may rely on the statement
of a Participant concerning the Participant's marital status and all
persons claiming any benefit under the Plan shall be bound by such
reliance.
1.18 - Employer
- ---------------
Any Employer as defined in Section 3(5) of ERISA, which includes
Rubbermaid Incorporated and any Adopting Employer.
1.19 - Employment Commencement Date
- -----------------------------------
The date upon which an Eligible Associate first performs an Hour of
Service for the Company.
1.20 - ERISA
- ------------
Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.21 - Fiduciary
- ----------------
Rubbermaid Incorporated (acting through its Board or where applicable,
duly authorized officers), the Plan Administrator, or such other
parties named as Fiduciaries in this Plan, but only with respect to
the specific responsibilities of each.
1.22 - Highly Compensated Associate
- -----------------------------------
Any Associate who during any Plan Year is a highly compensated
employee as defined in Section 414(q) of the Code.
1.23 - Hour of Service
- ----------------------
An Hour of Service shall generally be determined in accordance with
Department of Labor Regulation 2530.200(b)-2. Hours of Service with
respect to any Participant shall be determined using the same rules as
the Rubbermaid Retirement Plan.
1.24 - Participant
------------------
An Eligible Associate who (i) has met all the participation
requirements of this Plan and (ii) has become included in this Plan
as provided in Section 2.1.
<PAGE> 70
1.25 - Plan
- -----------
The Rubbermaid Incorporated Supplemental Retirement Plan, the terms of
which are set forth herein, as it may be amended from time to time.
1.26 - Plan Administrator
- -------------------------
The Plan Administrator shall be the Rubbermaid Incorporated and
effective August 22, 1995 shall be the Benefit Plans Committee of
Rubbermaid Incorporated, or its delegate.
1.27 - Plan Year
- ----------------
The twelve-month period commencing each January I and ending on
December 31.
1.28 - Rubbermaid Incorporated
- ------------------------------
Rubbermaid Incorporated shall mean the Ohio corporation located in
Wooster, Ohio
1.29 - Subsidiary
- -----------------
Any corporation included with a "controlled group of corporations" of
which Rubbermaid Incorporated is a member shall be deemed a
Subsidiary. A controlled group of corporations shall be defined
pursuant to Section 1563 of the Code and the Regulations thereunder.
1.30 - Normal Retirement Date
- -----------------------------
The Normal Retirement Date is the first day of the month following
the date upon which a Participant attains the Age of 65. A Participant
shall be vested in all amounts credited to such Participant's account
upon attaining Age 65 notwithstanding any other provision of this
Plan.
1.31 - Disability Retirement Date
- ---------------------------------
The date upon which a Participant retires from the employment of the
Company due to Total and Permanent Disability.
1.32 - Retirement Plan
- ----------------------
Retirement Plan shall mean the Rubbermaid Retirement Plan.
1.33 - Total and Permanent Disability
- -------------------------------------
Total and Permanent Disability or Totally and Permanently Disabled
shall mean physical or mental disability or illness which renders the
Participant incapable of performing the duties regularly performed
for the Company when such disability commenced, as determined by
<PAGE> 71
the Plan Administrator upon the basis of evidence submitted to it
within a reasonable time after it so requests. In case of a difference
of opinion between a doctor selected by the Participant and a doctor
selected by the Company as to the existence and extent of the
disability of the Participant, a third doctor shall be appointed by
the other two doctors to examine said Participant and to make a report
to the Plan Administrator with respect to the disability of the
Participant. The report of such doctor shall be accepted by the Plan
Administrator as the basis for its determination of the existence and
extent of disability under the provisions of this Section.
1.34 - Valuation Date
- ---------------------
Each January 31, which is the date on which Participant Accounts shall
be adjusted to reflect accruals and forfeitures for the preceding Plan
Year. Such date shall also be used to credit interest to the
Participant's Account for the 12 month period ending on such date. The
Plan Administrator may select other Valuation Dates (not more
frequently than monthly) as it deems necessary.
1.35 - Year(s) of Service
- -------------------------
A Participant shall be credited with a Year of Service under this Plan
for any "Year of Vesting Service" credited to such Participant under
the Rubbermaid Retirement Plan.
ARTICLE 2
---------
PARTICIPATION
-------------
2.1 - Eligibility
- -----------------
An Associate shall become eligible to participate in the Plan on the
date the Associate becomes an Eligible Associate.
2.2 - Conditions of Participation
- ---------------------------------
Participation in this Plan by an Eligible Associate shall be
contingent upon receipt by the Plan Administrator of such documents
and information as prescribed by the Plan Administrator. Each
Associate, upon becoming a Participant, shall be deemed conclusively,
for all purposes, to have consented to the terms and provisions of
this Plan and shall be bound thereby.
2.3 - Break in Service/Rehire
- -----------------------------
A Participant who terminates employment and is rehired shall
participate in the Plan pursuant to Section 2.1.
<PAGE> 72
ARTICLE 3
---------
ACCRUALS
--------
3.1 - Employer Accruals
- -----------------------
As of the last day of the Plan Year, Rubbermaid Incorporated and each
Adopting Employer shall accrue on their book of account, an amount
which equals the sum of the following amounts for each Participant who
is employed by Rubbermaid Incorporated or an Adopting Employer on the
last day of the Plan Year (June 13, 1997 with respect to a Participant
who was employed by Rubbermaid Office Products Inc. on June 13, 1997
and not employed by Rubbermaid Incorporated or an Adopting Employer
after June 13, 1997 but before December 31, 1997) except for absence
due to Military Duty, Death, Approved Absence or Disability:
a. For each Participant who is a participant in the Executive
Management Plan of the Rubbermaid Incorporated Management
Incentive Plan (effective January 1, 1997, the Rubbermaid
Incorporated Management Value Plan) AND eligible to receive
an "employer regular contribution" under the Retirement
Plan, an amount equal to the greater of:
i. Fifteen percent (15%) of the total of the
Participant's Bonus (determined prior to reduction
under the 1997 Exchange of Compensation for Stock
Options Program) earned for the Plan Year,
regardless of whether such Bonus was deferred in
whole or in part and for a Participant who is a member
of Corporate Council, the value of any regular
restricted stock award (effective January 1, 1997,
performance stock award) for the Plan Year under the
Rubbermaid Incorporated Amended and Restated 1989
Stock Incentive and Option Plan; or
ii. Fifteen percent (15%) of the Participant's
"compensation" (as defined in the Retirement Plan)
for the Plan Year LESS the amount of the "employer
regular contribution" made to the Retirement Plan for
such Participant for the Plan Year.
b. For each Participant who is a participant in the Key
Management Incentive Plan of the Rubbermaid Incorporated
Management Incentive Plan (effective January 1, 1997, the
Rubbermaid Incorporated Management Value Plan) AND eligible
to receive an "employer regular contribution" under the
Retirement Plan, an amount equal to the greater of:
i. Twelve percent (12%) of the Participant's Bonus
(determined prior to reduction under the 1997
Exchange of Compensation for Stock Options Program)
earned for the calendar year, regardless of whether
such Bonus was deferred in whole or in part; or
<PAGE> 73
ii. Fifteen percent (15%) of the Participant's
"compensation" (as defined in the Retirement Plan)
for the Plan Year LESS the amount of the "employer
regular contribution" made to the Retirement Plan for
such Participant for the Plan Year EXCEPT that this
Section 3.1(b)(ii) shall NOT apply for the 1995 Plan
Year to a Participant who was employed by The Little
Tikes Company.
c. For each Participant who is NOT eligible for a contribution
under Sections 3.1(a) or 3.1(b) AND is a eligible to receive
an "employer regular contribution" under the Retirement Plan,
an amount equal to the difference, if any, between the amount
of the "employer regular contribution" the Participant would
receive under the Retirement Plan for the Plan Year if he was
a non-Highly Compensated Associate (based on his total
"compensation" as defined in the Retirement Plan) and the
amount he actually received as an "employer regular
contribution" under the Retirement Plan for the Plan Year.
d. For each Participant who is eligible to receive an "employer
regular contribution" under the Retirement Plan, an amount
equal to the amount the Participant would have received as an
"employer regular contribution" under the Retirement Plan for
the Plan Year if the limitations under Sections 401(a)(17)
and 401(a)(4) of the Code were not applied to that
Participant.
e. For each Participant designated by the Company, such amount
as determined by the Company in its sole discretion.
If the amount credited to a Participant for the 1997 Plan Year under
this Section 3.1 (except 3.1(e)) PLUS the amount of the "employer
regular contribution" made to the Retirement Plan for such Participant
for the 1997 Plan Year (the "1997 Retirement Plan Allocation") is LESS
than the amount credited to the Participant for the 1996 Plan Year
under this Section 3.1 (except 3.1(e)) PLUS the amount of the
"employer regular contribution" made to the Retirement Plan for the
1996 Plan Year (the "1996 Total Allocation") then the amount credited
to the Participant for the 1997 Plan Year under this Section 3.1
(except 3.1(e)) shall be an amount equal to the 1996 Total Allocation
LESS the 1997 Retirement Plan Allocation. Notwithstanding the above,
the amount credited to a Participant under this Section 3.1 for the
1997 Plan Year (after application of the preceding sentence) shall be
REDUCED by the amount, if any, elected by the Participant under the
1997 Exchange of Compensation for Stock Options Program. Participants
in the Rubbermaid Incorporated Executive FUNDED Supplemental
Retirement Plan shall not receive a contribution under this
Section 3.1(a), (b) or (c).
3.2 - Participant Accounts
- --------------------------
The Plan Administrator shall establish separate accounts for each
Participant as it deems necessary or appropriate to reflect the
Participants interest in Employer Accruals credited to the Participant
under Section 3.1.
<PAGE> 74
3.3 - Interest on Participant Accounts
- --------------------------------------
a. The rate of interest credited to the Participant accounts
shall be the rate actually earned by the Stable Value Fund
under the Retirement Plan for the 12 month period ending on
the Valuation Date.
b. As of each Valuation Date, each Participant's individual
account, unless otherwise provided herein, is to be adjusted
to reflect for amounts or items directly allocable to such
individual account, including but not limited to amounts
accrued, amounts paid out, amounts forfeited and interest
earned.
3.4 - Costs
- -----------
All normal costs and expenses of administering the Plan are to be paid
by the Company.
ARTICLE 4
---------
VESTING
-------
4.1 - Vesting - Employer Accruals
- ---------------------------------
a. Accruals allocated to the Participant's account under Section
3.3(a)(i) as in effect prior to the January 1, 1995
restatement of the Plan shall be 100% vested.
b. Accruals under Section 3.1(e) shall be vested as of the date
or dates determined by the Company in its sole discretion.
c. Accruals under Section 3.1(a), (b), (c) and (d) shall vest at
the following rate:
<TABLE>
<CAPTION>
YEAR OF VESTING EACH YEAR CUMULATIVE VESTING
SERVICE
<S> <C> <C>
First Year 0% 0%
Second Year 0% 0%
Third Year 20% 20%
Fourth Year 20% 40%
Fifth Year 20% 60%
Sixth Year 20% 80%
Seventh Year
and Thereafter 20% 100%
</TABLE>
d. The nonforfeitable percentage of a Participant's interest in
the Participant's account shall not be reduced as the result
of any direct or indirect amendment to this Article.
<PAGE> 75
4.2 - Years of Service
- ----------------------
A Participant's Years of Service shall be equal to the Years of
Service determined pursuant to Section 1.35 of the Plan.
4.3 - Forfeitures
- -----------------
Any amount credited to a Participant's account which is not vested
upon termination of employment (other than for death or disability)
shall be retained in the Plan in a segregated account in the
Participant's name until forfeited. Such amounts shall be forfeited
in the Plan Year in which the Participant incurs a 1-year Break in
Service. However, effective January 31, 1997, such amounts shall
be forfeited upon the earlier of any distribution to the Participant
or the Valuation Date immediately following termination of
employment with the Company.
As of each Valuation Date, forfeitures which occurred during the
preceding 12 month period shall be removed from the books of the
Company.
A Participant's forfeited account balance will be restored if the
Participant is re-employed by the Company prior to incurring five (5)
consecutive 1 Year Breaks in Service.
4.4 - Break in Service/Rehire
- -----------------------------
A Participant who terminates employment for any reason and who is
rehired will have his Years of Service determined in accordance with
Section 1.35.
4.5 - Disability
- ----------------
When it is determined that a Participant is Totally and Permanently
Disabled, the Participant's account shall become 100% vested.
4.6 - Death
- -----------
On the death of a Participant while employed by the Company, the
interest of the Participant in the account shall become 100% vested
in the Beneficiary.
4.7 - Change of Control
- -----------------------
In the event of an imminent or actual Change of Control, a
Participant's account shall become 100% vested in the amount in the
Participant's account.
<PAGE> 76
ARTICLE 5
---------
DISTRIBUTIONS
-------------
5.1 - Amount of Distribution or Payment
- ---------------------------------------
At such time that a Participant has satisfied any of the requirements
of this Article, the Plan Administrator shall commence to make
payments from the Participant's account as provided in this
Article 5.
a. The amount which is to be paid to a Participant or a
Beneficiary shall be equal to the amount in the
Participant's account on the Valuation Date coincident
with or subsequent to any of the following events:
i. Separation from service on or after the Normal
Retirement Date;
ii. Separation from service due to Permanent and
Total Disability;
iii. Death while in the employ of the Company;
iv. Change of Control.
b. The amount which is to be paid to a Participant or
Beneficiary due to termination of employment prior to the
Normal Retirement Date for reasons other than disability,
death or a Change of Control, shall not exceed the vested
interest of the Participant in the account on the
Valuation Date coincident with or subsequent to the date
of termination of employment. The non vested amount shall
be forfeited in accordance with the provisions of Article
4.
The account of each Participant which becomes payable under this
Article 5 shall continue to be credited with interest pursuant to
Article 3.
5.2 - Time of Distribution
- --------------------------
Annual distributions shall commence as of the April of the Plan Year
immediately following the earlier of the Plan Year in which the
Participant attains Age 65 or the Plan Year in which the Participant
retires from full time employment (whether or not such employment is
with the Company). A Participant shall notify the Committee in
writing that he has retired from full-time employment.
5.3 - Change of Control
- -----------------------
Unless the Board provides otherwise by their written resolution, the
Plan Administrator shall cause the entire account balance of each
Participant to be paid in one lump sum payment on or before the
date of such Change of Control.
<PAGE> 77
5.4 - Authority to Alter Time or Form of Distribution
- -----------------------------------------------------
The Committee, taking into account the health, financial need and
family obligations of the Participant, may alter the form of payments
or the time at which any vested amount is to be paid, as it in its
sole discretion decides.
5.5 - Normal Form of Benefit Payment
- ------------------------------------
Benefit payments will be made annually in April of each year for a
period of fifteen (15) years, commencing as of the date set forth in
Section 5.2. The annual amounts will be determined by the Plan
Administrator by dividing the account balance on the Valuation Date
by the number of annual payments remaining.
5.6 - Optional Lump Sum Payment
- -------------------------------
Prior to the commencement of any annual benefit payments as set forth
in Section 5.5, a Participant may irrevocably elect to receive a
single lump-sum payment of his entire vested account by notifying
the Plan Administrator in writing at least eighteen (18) months
prior to the month in which the Participant attains Age 65. The
lump sum payment will be paid in the April of the Plan Year
following the Plan Year in which the Participant attains Age 65.
5.7 - Death Distribution Provisions
- -----------------------------------
A Participant who dies before attaining Age 65 or retirement and
who is not receiving distributions from the Plan, shall have
their account balance paid to the designated Beneficiary in the
same form as receivable by the Participant, commencing on the
April 1 following the Participant's Normal Retirement Date.
If a Participant dies while distributions are being made, the
Beneficiary shall receive the balance of the remaining payments in
the same manner and at the same time as the Participant would
have received them if living.
Upon a determination by the Committee that a hardship exists, the
Committee may direct payments to commence within a reasonable period
after the Participant's death and/or be in form other than elected by
the Participant.
5.8 - Designation of Beneficiary
- --------------------------------
A person entitled to designate a Beneficiary shall do so in writing
on a form provided by the Plan Administrator. The Beneficiary
designation may be changed at any time by filing a new form, and
the most recent designation received by the Plan Administrator shall
govern. If a deceased Participant is not survived by a named
Beneficiary (or if no Beneficiary was effectively named), the
benefits shall be paid to the Participant's
<PAGE> 78
surviving spouse or, if there is no surviving spouse, the deceased
Participant's surviving children in equal shares or, if there are no
surviving children, the Participant's estate. If the Beneficiary is
living at the death of the Participant, but the Beneficiary dies prior
to receiving the entire death benefit, the remaining portion (if any)
of such death benefit shall be paid in a single sum to the estate of
such deceased Beneficiary.
5.9 - Location of Participant or Beneficiary Unknown
- ----------------------------------------------------
In the event that all, or any portion, of the distribution payable to a
Participant or a Beneficiary hereunder shall, at the expiration of
five (5) years after it shall become payable, remain unpaid solely
by reason of the inability of the Plan Administrator, after
reasonable effort to ascertain the whereabouts of such Participant
or Beneficiary, the amount so distributable shall be treated as a
forfeiture pursuant to the Plan.
ARTICLE 6
---------
ADOPTING EMPLOYERS
------------------
6.1 - Adoption by Employers
- ---------------------------
Rubbermaid Incorporated and each Subsidiary which is listed in Exhibit
A, as attached hereto, shall be deemed to adopt this Plan with all of
the provisions herein and shall be known as an Adopting Employer as of
the date set forth in Exhibit A. An Employer which becomes a
Subsidiary after the Effective Date may adopt this Plan with the
consent of Rubbermaid Incorporated.
6.2 - Requirements of Adopting Employer
- ---------------------------------------
Each Adopting Employer shall be bound by all decisions of the Plan
Administrator and the Committee. The Committee shall have the sole
authority to make any and all necessary rules or regulations, binding
upon any Adopting Employer and as to all Participants of such Adopting
Employer, to effectuate the purpose of this Article. Each Adopting
Employer shall be deemed to have designated irrevocably Rubbermaid
Incorporated as its agent.
The transfer of any Participant from or to an Adopting Employer
participating in this Plan, whether such person is an Employee of
Rubbermaid Incorporated or an Adopting Employer, shall not affect such
Participant's rights under the Plan. All amounts credited to such
Participant's Account as well as accumulated service time with the
transferor or predecessor shall continue to the Participant's credit.
<PAGE> 79
6.3 - Adopting Employer Accruals
- --------------------------------
The Plan Administrator shall keep records concerning the accounts of
the Participants of each Adopting Employer.
6.4 - Discontinuance of Participation
- -------------------------------------
Any Adopting Employer shall be permitted to discontinue or revoke its
participation in the Plan by written resolution of the Adopting
Employer's Board of Directors. Rubbermaid Incorporated, at its
discretion, may determine that an Adopting Employer shall no longer
participate and may require such Adopting Employer to withdraw from
the Plan. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed
shall be delivered to the Plan Administrator. A Subsidiary shall not
participate in this Plan upon the date it ceases to be a Subsidiary of
Rubbermaid Incorporated.
ARTICLE 7
---------
THE PLAN ADMINISTRATOR/COMMITTEE
--------------------------------
7.1 - Plan Administrator
- ------------------------
The Plan Administrator shall have only those specific powers, duties,
responsibilities and obligations as are specifically given under this
Plan, and any power, duty, responsibility or obligation for the
control, management, or administration of the Plan which is not
specifically allocated to any Fiduciary, or with respect to which the
allocation is in doubt, shall be deemed allocated to the Committee.
The Plan Administrator may employ and suitably compensate attorneys,
accountants and other advisors as may be necessary to the performance
of the Plan Administrator's duties.
The Plan Administrator shall maintain adequate records and information
to insure the proper operation of this Plan for the benefit of its
Participants.
The Plan Administrator shall make available to Participants and their
Beneficiaries, for examination during business hours, such records as
pertain to the person wishing to examine the same.
The Plan Administrator, on behalf of the Participants and their
Beneficiaries shall enforce the Plan in accordance with the terms of
this Plan and shall have all powers necessary to accomplish that
purpose including, but not by way of limitation, the following:
a. To receive all Participant information, determine all
questions relating to the eligibility of Associates to
become Participants, or receive distributions;
<PAGE> 80
b. To compute and certify the amount and kind of benefits
payable to Participants and their Beneficiaries;
c. To authorize all disbursements;
d. To make and publish such rules for the regulation of the
Plan as are not inconsistent with the terms hereof and
regulations, rules and interpretations concerning the
Plan as may be approved by the Committee.
e. To file or cause to be filed all such annual reports,
financial and other statements as may be required by any
Federal or State statute, agency or authority within the
time prescribed by law or regulations for filing such
documents. The Plan Administrator shall furnish such
reports, statements and other documents to such
Participants and Beneficiaries of the Plan as may be
required by any Federal or State statute or regulation
within the time prescribed for furnishing such documents.
7.2 - Appointment of Committee
- ------------------------------
The Chief Executive Officer of Rubbermaid Incorporated shall appoint a
Committee, which effective August 22, 1995 is the Rubbermaid
Incorporated Benefit Plans Committee as established by the Board,
under the Plan whose powers, duties and responsibilities shall be
those set forth in this Plan and those as delegated to the Committee
by the Board. The Committee shall provide rules, regulations, and
interpretations of the Plan provisions as the Committee deems
necessary for the administration of the Plan.
7.3 - Indemnification
- ---------------------
Rubbermaid Incorporated shall indemnify the Members of the Committee
and any person in the employ of the Company engaged in the
administration of this Plan against any claims, loss, damage, expense
and liability, whether or not compensated for by insurances or
otherwise (other than amounts paid in settlement not approved by
Rubbermaid Incorporated), reasonably incurred by such person in
connection with any action or failure to act to which such person may
be a party by reason of performance of an authorized duty or
responsibility for or on behalf of the Company pursuant to the Plan
unless the same is judicially determined to be the result of the
individual's gross negligence or willful misconduct. Such
indemnification shall be made only to the extent (i) such expense or
liability is not payable to or on behalf of such person under any
liability insurance coverage, and (ii) the Plan is precluded from
assuming such expense or liability because of the operations of
applicable law. The foregoing right to indemnification shall be in
addition to any other rights to which any such person may be entitled
as a matter of law.
<PAGE> 81
ARTICLE 8
---------
TERMINATION
-----------
Rubbermaid Incorporated has established this Plan with the expectation
that the Plan will be continued indefinitely. However, Rubbermaid
Incorporated by action of its Board may terminate the Plan at any
time. In the event of the dissolution, merger, consolidation or
reorganization of Rubbermaid Incorporated, the Plan shall terminate
and benefits hereunder shall become immediately payable to the
Participants, unless the Plan is Adopted by the successor to
Rubbermaid Incorporated or the Board specifies otherwise by their
written resolution. Upon termination of the Plan with respect to a
group of Participants which is deemed to be a partial termination of
the Plan, the benefits payable to such affected Participants shall
become immediately payable unless otherwise provided for by the
Committee. Upon the complete or partial termination of the Plan,
the right of all Participants to their account balance shall become
fully vested and nonforfeitable.
ARTICLE 9
---------
NON-ALIENATION OF BENEFITS
--------------------------
Except as specifically provided under a qualified domestic relations
order (as defined under Section 414(p) of the Code), no Participant's
interest hereunder and no amount payable to or held for the benefit of
any Participant or the Beneficiary of any Participant shall be
alienated, disposed of or in any manner encumbered, voluntarily or
involuntarily or by operation of law by a Participant or Beneficiary.
If by reason of any act of any Participant, Beneficiary or by
operation of law or the happening of any event, the amount, or any
part of the amount, payable to or held for the benefit of such
Participant or Beneficiary, under this Plan would, except for this
provision, vest in or be enjoyed by some person, firm, association
or corporation otherwise than as provided in this Plan, then and in
any of such event the Participant's or Beneficiary's interest in any
such amount so payable to the Participant or held for the
Participant's benefit shall cease. Thereafter such amount or
interest may be held by the Plan Administrator to or for the benefit
of such Participant, the Participant's spouse, children or other
dependents, or any of them, in such manner and in such proportions
pursuant to the terms of the Plan as the Plan Administrator in its
sole and absolute discretion interprets such terms. The foregoing
shall apply to any attempt by a Participant or Beneficiary to
alienate, charge, or encumber any amount held for the benefit of
or payable to a Participant or Beneficiary by reason of any
attachment, garnishment, judicial or legal proceeding, order,
judgement of court of law or in equity. Rubbermaid Incorporated,
or the Plan Administrator may bring an action in a court of competent
jurisdiction for a determination of the proper recipient of benefits
under the Plan.
<PAGE> 82
ARTICLE 10
----------
AMENDMENTS
----------
Except as hereinafter provided, Rubbermaid Incorporated (acting
through its Board) or effective October 27, 1997, the Committee
(but only with respect to administrative matters as determined by
the Committee in its sole discretion) has the right to amend this
Plan in whole or in part. No modification or amendment may result
in the retroactive reduction of a Participant's Accruals prior to
such amendment or modification. Such amendment shall be evidenced
by a written instrument executed by an Officer or Committee member
pursuant to a resolution by the Board of Directors or the
Committee. Any amendment shall be binding upon all Adopting Employers
unless otherwise provided in such amendment.
ARTICLE 11
----------
MERGER OR CONSOLIDATION
-----------------------
This Plan shall not be merged or consolidated with, nor shall any
assets or liabilities be transferred to any other plan, unless the
benefits payable to each Participant if the Plan was terminated
immediately after such action would be equal to or greater than the
benefits to which such Participant would have been entitled if this
Plan had been terminated immediately before such action.
ARTICLE 12
----------
CLAIMS PROCEDURE
----------------
Any person who may be entitled to a benefit under the Plan shall have
the right to file with the Plan Administrator a written notice of
claim for such benefit. Within a reasonable time after its receipt
of such written notice of claim, the Plan Administrator shall either
grant or deny such claim provided, however, that any delay on the
part of the Plan Administrator in arriving at a decision shall not
adversely affect benefits payable under a granted claim. Each
claimant shall have the right to appeal the denial of his claim
to the Committee for a full and fair review at any time within
seventy-five (75) days after claimant received written notice of
such denial. The Committee shall thereby afford the claimant or his
duly authorized representative the opportunity (1) to review documents
pertinent to the claim, (2) to submit issues and comments in writing
and (3) to discuss such documents and issues. The final decision of
the Committee shall be made promptly after its receipt from the
claimant of a request for review unless circumstances beyond the
control of the Committee require an extension of time for
processing. Such decision shall be made in writing and shall include
specific reasons for the decision, and specific references to
pertinent Plan provisions on which the decision is based.
<PAGE> 83
ARTICLE 13
----------
MISCELLANEOUS PROVISIONS
------------------------
13.1 - Validity of Plan
- -----------------------
The laws of the State of Ohio shall be the controlling State law with
respect to all matters relating to this Plan.
13.2 - No Commitment as to Employment
- -------------------------------------
Nothing contained in this Plan shall be construed as a contract of
employment between the Company and any Associate, or as a right of any
Associate to be continued in the employment of the Company, or as a
limitation of the right of the Company to discharge any Associate with
or without cause.
IN WITNESS WHEREOF, Rubbermaid Incorporated has caused this Rubbermaid
Incorporated Supplemental Retirement Plan to be executed as of this 23rd day of
December, 1997.
By: /s/ David L. Robertson
-------------------------------------------
David L. Robertson, Senior Vice-President
By: /s/ James A. Morgan
-------------------------------------------
James A. Morgan, Secretary
<PAGE> 84
EXHIBIT A
---------
ADOPTING EMPLOYER AND
--------------------- DATE OF
LOCATION ADOPTION
-------- --------
1. Rubbermaid Commerical 1/1/91
Products Inc.
Winchester, Virginia
2. Rubbermaid Incorporated 1/1/91
Wooster, Ohio
3. Rubbermaid Texas Limited 1/1/95
Greenville, Texas
(formerly Rubbermaid Incorporated,
Greenville, Texas)
Cleburne, Texas
(formerly Rubbermaid
Incorporated,
Cleburne, Texas)
4. Rubbermaid Sales Corporation 1/1/95
Wooster, Ohio
Winchester, Virginia
Hudson, Ohio
Corning, New York
Jeffersonville, Ohio
Woodbridge, Virginia
5. Rubbermaid Commerical 1/1/91
Products Inc. (formerly
Rubbermaid Commercial -
Cleveland Inc.)
Cleveland, Tennessee
6. Rubbermaid Health Care 1/1/91
Products (formerly
Rubbermaid-Statesville,
Inc. and Carex Inc.)
Statesville, North Carolina
7. Rubbermaid-Cortland, Inc. 1/1/91
Cortland, New York
8. Rubbermaid Specialty 1/1/91
Products Inc.
Centerville, Iowa
(formerly Rubbermaid
Centerville Inc.)
<PAGE> 85
9. Rubbermaid Office 1/1/91
Products, Inc.
Maryville, Tennessee
Carson, California
10. Rubbermaid Incorporated 1/1/91
Goodyear, Arizona
11. The Little Tikes Company 1/1/91
Hudson, Ohio
Sebring, Ohio
City of Industry, California
12. The Little Tikes Company 1/1/91
(Missouri)
Aurora, Missouri
13. The Little Tikes Company 1/1/94
(Pennsylvania)
Shippensburg, Pennsylvania
14. The Little Tikes Company 1/1/95
(South Carolina)
Columbia, South Carolina
15. Rubbermaid Cleaning 1/1/96
Products Inc.
(formerly Empire Brushes,
Inc.)
Greenville, North Carolina
16. Graco Childrens Products Inc. 1/1/97
Elverson, Pennsylvania
EXHIBIT 10.21
-------------
RUBBERMAID INCORPORATED
1993 DEFERRED COMPENSATION PLAN
Effective April 27, 1993
ARTICLE I
Purpose of the Plan
The purpose of the Rubbermaid Incorporated 1993 Deferred
Compensation Plan is to provide non-employee Directors and employee
participants in the Company's Management Incentive Plan ("MIP Plan")
the option of deterring receipt of Director fees or MIP Plan payments
which will help build loyalty to the Company through increased
investment in the Company thereby promoting the long term profits and
growth of the Company.
ARTICLE II
Definitions
As used herein, the following words shall have the meaning stated
after them unless otherwise specifically provided:
2.1. "Board of Directors" means the Board of Directors of Rubbermaid
Incorporated.
2.2. "Change of Control" means the occurrence of any of the following
events:
(1) Article Fifth of the Rubbermaid Amended Articles of
Incorporation becomes operative,
(ii) the Board of Directors recommends to its shareholders
the acceptance of any tender offer as provided in said Article
Fifth,
(iii) the necessary percentage of shareholders approves
a transaction of the nature described in Article Sixth of the
Rubbermaid Amended Articles of Incorporation, or
(iv) any person, defined in said Article Fifth of the
Rubbermaid Amended Articles of Incorporation, becomes the
beneficial owner, directly or indirectly, of 20% or more of the
outstanding common shares of the Company.
2.3. "Committee" means the Committee described in Section 7.1 hereof.
1
<PAGE> 87
2.4. "Company" means Rubbermaid Incorporated and any subsidiary
company.
2.5. "Company Stock" means Common Shares of the Company.
2.6. "Compensation" means Directors fees payable to non-employee
Directors of Rubbermaid Incorporated and cash bonus awards
payable to employee participants in the Rubbermaid Incorporated
MIP Plan.
2.7. "Deferred Compensation Account" or "Account" means an account
established in a Participant's name to record Compensation
deferred pursuant to the terms of the Plan.
2.8. "Participant" means any non-employee Director of the Company and
any employee participant in the MIP Plan who elects to
participate in the Plan.
2.9. "Plan" means the Rubbermaid Incorporated 1993 Deferred
Compensation Plan.
2.10. "Plan Year" means the fiscal year of the Company, currently
the twelve-month period ended December 31.
2.11. "Plan Administrator" means the person appointed by the Board
of Directors to represent the Company in the administration
of this Plan pursuant to the provisions of Article V.
2.12. "Trust Agreement" means the Trust Agreement dated as of
_________ entered into between the Company and the Trustee
in connection with the Plan.
2.13. "Trustee" means the entity named as Trustee in the Trust
Agreement, any corporate successor to a majority of its
trust business, or any successor Trustee thereunder.
ARTICLE III
Elections by Participants
3.1. ELECTION TO DEFER. A non-employee Director of the Company and
any participant in the MIP Plan shaLl become a Participant by
electing on an annual basis, prior to the beginning of a Plan
Year, to defer receipt of all or a portion of Compensation payable
to such person for such Plan Year. If a person becomes a Director
or MIP Plan participant after the beginning of any Plan Year, the
person may elect to defer receipt of the Compensation payable for
future services. Such election must be made within thirty days
after becoming a Director or participant in the MIP Plan and
shall be made on an election form specified by the Plan Adminis-
trator ("Election Form"). Such election shall indicate the
2
<PAGE> 88
portion of Compensation to be credited to an interest bearing
account and the portion of such Compensation to be credited to a
Company Stock account. Notwithstanding the foregoing, from May 1
through May 31, 1993, a Participant may elect, to deter receipt
of future 1993 Compensation.
3.2. EFFECTIVENESS OF ELECTIONS. Elections shaLl be effective and
irrevocable upon the delivery of an Election Form to the Plan
Administrator. Subject to the provisions of Article V, amounts
deferred pursuant to such election shall be distributed at the
time and in the manner set forth in such election.
Notwithstanding anything to the contrary set forth herein, with
respect to Participants who are subject to the requirements of
Section(s) 16(a) and 16(b) of the Securities Exchange Act of 1934
(a "Section 16 Reporting Person"), the effective date of any
transaction in which amounts deferred hereunder are credited to
Company Stock accounts shall be not less than six months after
the date of such election.
3.3. AMENDMENT OF ELECTIONS. Amendments which serve only to change
the beneficiary designation shall be permitted at any time and as
often as necessary.
ARTICLE IV
Accounts and Investments
4.1. CREDITING ACCOUNTS. If a Participant elects to have deferred
Compensation credited to the interest bearing account of the
Plan, the Company shall credit an amount equal to such
Compensation to such account. The Company shall credit interest
annually on amounts deposited in such account equal to one
hundred twenty percent (120%) of the Applicable Federal Long Term
Rate.
If a Participant elects to have deferred Compensation credited to
the Company Stock account, the Company shall either transfer such
Compensation to the Trustee for the purchase of Company Stock in
the open market or transfer to the Trustee a number of shares of
Company Stock equal to the Fair Market Value of Company Stock on
a date that is the later of the date such Compensation would
otherwise have been paid to the Participant or six months after
the date of the election referred to in Section 3.2 hereof with
respect to a Section 16 Reporting Person.
As used herein, the Fair Market Value of Company Stock for non-
employee Director Compensation deferrals shall be the closing
price on Company Stock reported on the composite tape for
securities listed on the New York Stock Exchange on the date
deferred Compensation would have been paid, provided that if no
sales or Company Stock were made on said Exchange on that date,
3
<PAGE> 89
the closing price or Company Stock as reported on said composite
tape for the preceding day on which sales of Company Stock were
made on said Exchange.
As used herein, the Fair Market Value of Company Stock for MIP
Plan participant Compensation deferrals shall be the average
closing price of Company Stock reported on the composite tape for
securities listed on the New York Stock Exchange for each day
such shares are traded during the 30 day period beginning 45
calendar days preceding the end of any Plan Year and ending 16
calendar days preceding such date.
4.2. SHARES SUBJECT TO THE PLAN. The total number of shares of
Company Stock available for use pursuant to the Plan in each Plan
Year during any part of which the Plan is effective shall be
three-tenths of one percent (0.3%) of the total outstanding
shares of Company Stock as of the first day of such year for
which the Plan is in effect subject to adjustment in the event of
changes in the corporate structure of the Company affecting
Company Stock. Any Company stock transferred by the Company to
the Trustee hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares. Cash
transferred to the Trustee shall be used to purchase Company
Stock in the open market.
4.3. ESTABLISHMENT OF ACCOUNTS. The Company or the Trustee as
appropriate shall establish a separate "Deferred Compensation
Account" for each Participant who defers Compensation pursuant to
the Plan.
4.4. ADJUSTMENT OF ACCOUNTS. As of December 31 of each Plan Year and
on such other dates as the Committee directs, the value of each
Deferred Compensation Account shall be determined by the Company
or the Trustee as appropriate.
4.5. INVESTMENT OF ASSETS. Deferred Compensation held by the Company
shall be used in the business of the Company at its discretion.
ARTICLE V
Payment of Accounts
5.1. TIME OF PAYMENT AND METHOD OF DISTRIBUTION. Distribution of a
non-employee Director Deferred Compensation Account shall
commence as of the calendar year following (i) the date the
Participant leaves the Board of Directors, or (ii) attains age 70
if earlier and shall be distributed in a lump sum or in equal
annual installments over a period of not more than ten years.
Distribution of a particular Plan Year MIP Plan participant
Account shall be in a lump sum as of a calendar year at Least
4
<PAGE> 90
three years after such Plan Year deferral as specified by the
Participant, but in no event later than the calendar year
following (i) the date the Participant retires whether or not
directly from the Company or (ii) attains age 65, if earlier, at
which time all accounts shall be distributed in a lump sum or in
equal annual installments over a period of not more than ten
years.
5.2. HARDSHIP DISTRIBUTION. Prior to the time a Participant's account
becomes payable, the Committee, in its sole discretion, may
elect to distribute all or a portion of the Participant's
Deferred Compensation Account in the event such Participant
requests a distribution on account of severe financial hardship.
For purposes of this Plan, severe financial hardship shall be
deemed to exist in the event the Committee determines that a
Participant needs a distribution to meet immediate and heavy
financial needs resulting from a sudden or unexpected illness or
accident of the Participant or a family member, loss of the
Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the participant. A distribution
based on financial hardship shall not exceed the amount required
to meet the immediate financial need created by the hardship.
5.3. DESIGNATION OF BENEFICIARY. Upon the death of a participant, the
Deferred Compensation Account of the deceased Participant shall
be paid to the designated beneficiary or beneficiaries either (i)
in the same manner as it would have been paid to the Participant
or (ii) in a lump sum settlement as determined by the Committee
in its sole discretion. If there is no designated beneficiary,
or no designated beneficiary surviving at a Participant's death,
payment of the Deferred Compensation Account shall be made to the
estate of the Participant. Beneficiary designations shall be
made in writing. A participant may designate a new beneficiary or
beneficiaries at any time by notifying the Plan Administor.
5.4. TAXES. The Trustee of the Company as appropriate shall deduct
the amount of any taxes required by law to be withheld or paid
from any payments made pursuant to the Plan and shall transmit
the withheld amounts to the appropriate taxing authority.
ARTICLE VI
Creditors and Insolvency
6.1. CLAIMS OF THE COMPANY'S CREDITORS. All assets held pursuant to
the provisions of this Plan, and any payment to be made by the
Trustee or the Company pursuant to the terms and conditions of
the Plan or Trust, shall be subject to the claims of general
creditors of the Company, including judgment creditors and
5
<PAGE> 91
bankruptcy creditors. The rights of a Participant or
beneficiaries to any assets of the Plan or Trust shall be no
greater than the rights of an unsecured creditor of the Company.
6.2. NOTIFICATION OF INSOLVENCY. In the event the Company becomes
insolvent, the Board of Directors and the Chief Executive Officer
of the Company shall immediately notify the Trustee of that fact.
The Trustee shall not make any payments from the Trust to any
Participant or any beneficiary under the Plan after such
notification is received or at any time after the Trustee has
knowledge of such insolvency. Under any such circumstances, the
Trustee shall deliver to satisfy the claims of the Company's
creditors any property held in the Trust only as a court of
competent jurisdiction may direct. For purposes of this Plan,
the Company shall be deemed to be insolvent if the Company is
subject to a pending voluntary or involuntary proceeding as a
debtor under the United States Bankruptcy Code, as amended, or is
unable to pay its debts as they mature.
ARTICLE VII
Administration
7.1 APPOINTMENT OF COMMITTEE. The Board of Directors shall appoint
a Committee consisting of not less than three persons to
administer and interpret the Plan. Members of the Committee
shall hold office at the pleasure of the Board of Directors and
may be dismissed at any time with or without cause. Persons
serving on the Committee need not be members of the Board of
Directors of the Company.
The Board of Directors shall also designate an officer of the
Company to be the Plan Administrator to have the primary
administrative responsibility with respect to the Plan in
coordination with and under the direction of the Committee.
7.2 POWERS OF THE COMMITTEE. The Committee and the Plan
Administrator shall together administer the Plan and, in this
connection, all policy and discretionary decisions shall be the
responsibility of the Committee and all administrative functions
shall be the responsibility of the Plan Administrator who shall
perform the same under the direction of the Committee. The
Committee shall interpret the provisions of the Plan where
necessary and may adopt procedures for the administration of the
Plan consistent with the provisions of the Plan and the rules
adopted by the Committee. Whenever directions, designations,
applications, requests or other notices are to be given by a
Participant under the Plan, they shall be filed with the Plan
Administrator. The Committee shall have no discretion with
respect to Plan contributions or distributions but shall act in
an administrative capacity only.
6
<PAGE> 92
ARTICLE VIII
Miscellaneous
8.1 TERM OF PLAN. The Company reserves the right to amend or
terminate the Plan at any time; provided, however, that no
amendment or termination shall affect the rights of Participants
to amounts previously credited to their accounts pursuant to
Section 4.2 provided that no such amendments shall be made without
shareholder approval where such approval is required by Rule 16b-
3 of the Securities Exchange Act of 1934 or any successor to such
rule, or any interpretations issued thereunder.
8.2 NON-ALIENATION OF BENEFITS. Except as otherwise provided by law,
no benefit, payment or distribution under this Plan shall be
subject either to the claim of any creditor of a Participant or
Beneficiary, or to attachment, garnishment, levy, execution or
other legal or equitable process, by any creditor or such person,
and no person shall have any right to alienate, commute,
anticipate or assign (either at law or equity) all or any portion
of any benefit, payment or distribution under this Plan.
This Plan shall not in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of any persons
entitled to benefits hereunder.
In the event that any Participant's benefits are garnisheed or
attached by order of any court, the Plan Administrator may elect
to bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Plan. During the pendency of said
action, any benefits that become payable may be paid into the
court as they become payable, to be distributed by a court to the
recipient as it deems proper at the close of said action.
In addition, a Participant or beneficiary shall have no rights
against or security interest in the assets of the Plan or Trust
Fund and shall have only the Company's unsecured promise to pay
benefits. All assets of the Trust Fund shall remain subject to the
claims of the Company's general creditors.
8.3 CHANGE OF CONTROL. Irrespective of any other provision hereof,
in the event of an imminent or actual Change of Control,
immediate payment of Deferred Compensation Accounts to Plan
Participants will be made.
8.4 NON-COMPETITION. Notwithstanding any other terms of this Plan,
if a Participant is employed directly or indirectly by a
competitor of the Company within five years after termination of
employment from the Company and the Committee finds that such
conduct is detrimental to the Company, the Participant's Deferred
Compensation Account(s) shall be audited with no interest or
7
<PAGE> 93
dividends retroactive to the date of employment with a competitor
and be paid out immediately to the Participant.
8.5 MISCONDUCT. Notwithstanding any other terms of this Plan, if the
Committee finds that any Participant engages in conduct
detrimental to the best interest of the Company or misconduct
involving dishonesty or moral turpitude which results in
detriment or financial loss to the Company or in malicious
destruction of the Company's property, or is convicted of a
felony committed and arising out of the Participant's employment
by the Company, the Committee may direct that the Participant's
Deferred Compensation Account(s) shall be credited with no
additional interest or dividends elective as of such
determination and be paid out immediately to the Participant.
8.6 TAXES. This Plan is intended to be treated as an unfunded
deferred compensation Plan under the Internal Revenue Code. It is
the intention of the Company that the amounts deferred pursuant
to this Plan shall not be included in the gross income of the
Participants or their beneficiaries until such time as the
deferred amounts are distributed from the Plan. If, at any time,
it is determined that amounts deferred pursuant to the Plan are
currently taxable to the Participants or their beneficiaries, the
Plan shall terminate and Deferred Compensation Accounts shall be
distributed immediately to the Participants or their
beneficiaries.
8.7 EFFECTIVE DATE OF PLAN. The Plan shall be elective as of April
27, 1993, subject to approval by the shareholders of the Company.
Any contributions made prior to such shareholder approval shall
be contingent on such approval. Upon shareholder approval of
this Plan and upon the written election of a Non-Employee
Director, such Director's Contingent Share Account in the
existing Rubbermaid Incorporated Deferred Compensation Plan will
be converted to Company Stock and deposited with the Trustee.
Also as of the date of shareholder approval, the existing
Rubbermaid Incorporated Deferred Compensation Plan shall no
longer be available for Compensation deferrals.
8
<TABLE>
<CAPTION>
EXHIBIT 11
----------
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS
PER SHARE OF COMMON STOCK
(in thousands, except per share data)
Y-T-D through For the Year Ended
March 31, 1999 December 31, 1998*
-------------- --------------------
<S> <C> <C>
Basic Earnings (loss) per Share:
Net income $(78,999) $158,493
Weighted average outstanding 281,447 280,435
Basic Earnings (loss) per Share $ (0.28) $ 0.57
Diluted Earnings per Share:
Net income (loss) $(78,999) $158,493
Minority interest in income of
subsidiary trust, net of tax N/A 4,074
-------- --------
Net income, assuming conversion
of all applicable securities $(78,999) $162,567
Weighted average shares outstanding: 281,447 280,435
Incremental common shares applicable
to common stock options based on
the market price during the period N/A 1,203
Average common shares issuable assuming
conversion of the Company-Obligated
Mandatorily Redeemable Convertible
Preferred Securities of a Subsidiary
Trust N/A 9,865
-------- --------
Weighted average shares outstanding
assuming full dilution 281,447 291,503
Diluted Earnings (loss) per Share assuming
conversion of all applicable securities(1) $ (0.28) $ 0.56
*Restated for the March 1999 merger with Rubbermaid Incorporated, and the merger with Calphalon on May 7, 1998, both
of which were accounted for as poolings of interests.
(1) Diluted earnings per share for the three months ended March 31, 1999 excludes the impact of "In the money" stock
options and convertible preferred securities because they are anti-dilutive.
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 12
----------
NEWELL RUBBERMAID INC. AND SUBSIDIARIES
STATEMENT OF COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio data)
Y-T-D through For the Twelve Months
March 31, 1999 Ended December 31, 1998*
-------------- ------------------------
<S> <C> <C>
Earnings (loss) available to
fixed charges:
Income before income taxes $(55,022) $261,345
Fixed charges:
Interest expense 25,261 22,333
Portion of rent determined
to be interest (1) 10,765 6,807
Minority interest in
income of subsidiary trust 6,712 6,678
Eliminate equity in earnings (1,820) (2,775)
-------- --------
$(14,104) $294,388
======== ========
Fixed charges:
Interest expense 25,261 22,333
Portion of rent determined
to be interest (1) 10,765 6,807
Minority interest in
income of subsidiary trust 6,712 6,678
-------- --------
$ 42,738 $ 35,818
======== ========
Ratio of earnings to fixed charges N/A(2) 8.22
(1) A standard ratio of 33% was applied to gross rent expense to approximate the interest portion of short-term and
long-term leases.
(2) Earnings were inadequate to cover fixed charges for the three months ended March 31, 1999.
*Restated for the March 1999 merger with Rubbermaid Incorporated, and the merger with Calphalon on May 7, 1998, both
of which were accounted for as poolings of interests.
</TABLE>
EXHIBIT 21
----------
SIGNIFICANT SUBSIDIARIES
------------------------
NAME OWNERSHIP
Intercraft Company Delaware 100% of stock owned by
Newell Rubbermaid Inc.
Newell Investments Delaware 100% of stock owned by
Inc. Newell Operating
Company
Newell Operating Delaware 77.5% of stock owned
Company by Newell Co.; 22.5%
of stock owned by
Anchor Hocking
Corporation
Rubbermaid Ohio 100% of stock owned
Incorporated by Newell Rubbermaid
Inc.
Sanford, L.P. Illinois (limited Newell Operating
partnership) Company is the general
partner and Sanford
Investment Company is
the limited partner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the Newell
Rubbermaid Inc. and Subsidiaries
Consolidated Balance Sheets and State-
ments of Income and is qualified in its
entirety by reference to such financial
statements.
<MULTIPLIER> 1,000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 69,858
<SECURITIES> 0
<RECEIVABLES> 1,059,696
<ALLOWANCES> (34,921) <F1>
<INVENTORY> 1,077,455
<CURRENT-ASSETS> 2,454,545
<PP&E> 2,906,846 <F2>
<DEPRECIATION> (1,353,160)<F2>
<TOTAL-ASSETS> 6,235,344
<CURRENT-LIABILITIES> 1,094,126
<BONDS> 1,590,763
500,000
0
<COMMON> 281,774
<OTHER-SE> 2,416,658
<TOTAL-LIABILITY-AND-EQUITY> 6,235,344
<SALES> 1,516,193
<TOTAL-REVENUES> 423,308
<CGS> 1,092,885
<TOTAL-COSTS> 1,542,912
<OTHER-EXPENSES> 28,303
<LOSS-PROVISION> 2,272 <F1>
<INTEREST-EXPENSE> 25,261
<INCOME-PRETAX> (55,022)
<INCOME-TAX> 23,977
<INCOME-CONTINUING> (78,999)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (78,999)
<EPS-PRIMARY> (0.28)
<EPS-DILUTED> (0.28)
<FN> <F1> Allowances for doubtful accounts are reported as contra accounts to accounts
receivable. The corporate reserve for bad debts is a percentage of trade receivables
based on the bad debts experienced in one or more past years, general economic
conditions, the age of the receivables and other factors that indicate the element
of uncollectibility in the receivables outstanding at the end of the period.
<F2> See notes to consolidated financial statements.
</TABLE>
