[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1999
To the Stockholders of NEWELL RUBBERMAID INC.:
You are cordially invited to attend the annual meeting of
stockholders of NEWELL RUBBERMAID INC. to be held on Wednesday, May
26, 1999, at 10:00 a.m. Central Daylight Savings Time, at The Northern
Trust Company, 50 South LaSalle Street, Chicago, Illinois.
At the annual meeting, we will:
1. elect five directors of the Company to serve for a term of
three years;
2. vote on an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock from 400,000,000 to 800,000,000;
3. vote on the ratification of the appointment of Arthur
Andersen L.L.P. as the Company's independent accountants for
the year 1999; and
4. transact other business as may properly come before the
annual meeting and any adjournment or postponement of the
annual meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
THREE PROPOSALS OUTLINED IN THIS PROXY STATEMENT.
Only stockholders of record at the close of business on April 16,
1999 may vote at the annual meeting or any adjournment or postponement
thereof.
The Company's annual report for the year 1998 is enclosed for
your convenience.
Whether or not you plan to attend the annual meeting, please act
promptly to vote your shares with respect to the proposals described
above. You may vote your shares by marking, signing and dating the
enclosed proxy card and returning it in the postage paid envelope
provided. You may also vote your shares by telephone or through the
Internet by following the instructions set forth on the proxy card. If
you attend the meeting, you may vote your shares in person, even if
you have previously submitted a proxy in writing, by telephone or
through the Internet.
By Order of the Board of Directors,
[SIGNATURE]
RICHARD H. WOLFF
Secretary
April ___, 1999
<PAGE> 1
NEWELL RUBBERMAID INC.
29 EAST STEPHENSON STREET
FREEPORT, ILLINOIS 61032
-------------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 26, 1999
You are receiving this proxy statement and proxy card from us
because you own shares of common stock in Newell Rubbermaid Inc. This
proxy statement describes issues on which we would like you to vote.
It also gives you information so that you can make an informed
decision. We will mail this proxy statement and the form of proxy to
stockholders beginning on or about April ___, 1999.
VOTING AT THE MEETING
DATE, TIME AND PLACE OF THE MEETING
We will hold the annual meeting at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois, at 10:00 a.m., local time, on
May 26, 1999.
WHO CAN VOTE
Record holders of the Company's common stock at the close of
business on April 16, 1999 are entitled to notice of and to vote at
the meeting. On the record date, _____________ shares of common stock
were issued and outstanding and held by ___________ holders of record.
QUORUM FOR THE MEETING
A quorum of stockholders is necessary to take action at the
annual meeting. A majority of the outstanding shares of common stock
of the Company, represented in person or by proxy, will constitute a
quorum. Votes cast by proxy or in person at the annual meeting will
be tabulated by the inspectors of election appointed for the annual
meeting. The inspectors of election will determine whether a quorum
is present at the annual meeting. The inspectors of election will
treat directions to withhold authority, abstentions and broker non-
votes as present and entitled to vote for purposes of determining the
presence of a quorum. A broker non-vote occurs when a broker holding
shares for a beneficial owner does not have authority to vote the
shares. In the event that a quorum is not present at the meeting, we
expect that the meeting will be adjourned or postponed to solicit
additional proxies.
<PAGE> 2
VOTES REQUIRED
The five nominees for director who receive the greatest number of
votes cast in person or by proxy at the annual meeting will be elected
directors of the Company. The vote required for the proposed increase
in authorized shares is the affirmative vote of a majority of the
shares of common stock entitled to vote at the annual meeting. The
vote required for ratification of the appointment of Arthur Andersen
L.L.P. as independent accountants for the year 1999 is the affirmative
vote of a majority of the shares of common stock present in person or
by proxy at the annual meeting.
You are entitled to one vote for each share you own on the record
date on each matter to be considered at the meeting. A broker or
other nominee may have discretionary authority to vote certain shares
of common stock if the beneficial owner or other person entitled to
vote those shares has not provided instructions.
Directions to withhold authority to vote will have no effect on
the election of directors, because directors are elected by a
plurality of votes cast. Any proxy marked "abstain" with respect to
the proposed increase in authorized shares or the ratification of the
appointment of Arthur Andersen L.L.P. as independent accountants for
the year 1999 will have the effect of a vote against the proposal. On
all other matters, an abstention will have no effect. Shares
represented by a proxy as to which there is a broker non-vote or a
proxy in which authority to vote for any matter considered is withheld
will have no effect on the vote for any matter.
HOW YOU CAN VOTE
You may submit your proxies by attending the annual meeting and
voting your shares in person. You also may choose to submit your
proxies by any of the following methods:
- VOTING BY MAIL. If you choose to vote by mail, simply complete
the enclosed proxy card, date and sign it, and return it in the
postage-paid envelope provided. If you sign your proxy card and
return it without marking any voting instructions, your shares
will be voted in favor of each of the proposals presented at the
annual meeting.
- VOTING BY TELEPHONE. You can vote your shares by telephone by
calling the toll-free telephone number provided on the proxy
card. Telephone voting is available 24 hours a day, and the
procedures are designed to authenticate votes cast by using a
personal identification number. The procedures allow you to
appoint a proxy to vote your shares and to confirm that your
instructions have been properly recorded. If you vote by
telephone, you should not return your proxy card.
- VOTING BY INTERNET. You can also vote via the Internet by
signing on to the web site identified on the proxy card. Like
telephone voting, Internet voting is available 24 hours a day,
<PAGE> 3
and the procedures are designed to authenticate votes cast by
using a personal identification number. The procedures allow you
to appoint a proxy to vote your shares and to confirm that your
instructions have been properly recorded. If you vote by
Internet, you should not return your proxy card.
- VOTING BY STREET NAME HOLDERS. Stockholders whose shares are
held in "street name" (i.e., in the name of a broker, bank or
other record holder) must either direct the record holder of
their shares how to vote their shares or obtain a proxy from the
record holder to vote at the annual meeting.
HOW YOU MAY REVOKE OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the
annual meeting by any of the following methods:
- Submitting a later-dated proxy by mail, telephone or Internet
- Sending a written notice, including by telegram or telecopy, to
the Corporate Secretary of the Company. You must send any
written notice of a revocation of a proxy so as to be delivered
before the taking of the vote at the meeting to:
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 101
Rockford, Illinois 61108
Telecopy: 1-815-381-8160
Attention: Corporate Secretary
- Attending the annual meeting and voting in person. Your
attendance at the annual meeting will not in and of itself revoke
your proxy. You must also vote your shares at the meeting. If
your shares are held in the name of a bank, broker or other
holder of record, you must obtain a proxy, executed in your
favor, from the holder of record to be able to vote at the annual
meeting.
If you require assistance in changing or revoking your proxy,
please contact the Company's proxy solicitor, Morrow & Co., Inc., at
the following address:
Morrow & Co., Inc.
445 Park Avenue, 5th Floor
New York, New York 10022
Phone Number: 1-800-566-9061
COSTS OF SOLICITATION
The Company will pay the costs of soliciting proxies. The
Company has retained Morrow & Co., Inc. to aid in the solicitation of
proxies and to verify certain records related to the solicitations.
<PAGE> 4
The Company will pay Morrow & Co., Inc. a fee of $8,000 as
compensation for its services and reimbursement for its related out-
of-pocket expenses.
In addition to solicitation by mail, the directors, officers and
employees of the Company may also solicit proxies from stockholders by
telephone, telecopy, telegram or in person. Upon request, the Company
will also reimburse brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expenses in sending the proxy
materials to beneficial owners.
PROPOSAL 1 ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of fifteen
directors who are divided into three classes. One class is elected
each year for a three-year term. The Board of Directors has nominated
Alton F. Doody, Thomas J. Falk, Daniel C. Ferguson, Thomas A.
Ferguson, Jr. and William D. Marohn to serve in Class III until the
annual meeting of stockholders to be held in 2002 and until their
successors have been duly elected and qualified. Proxies will be
voted, unless otherwise indicated, for the election of the five
nominees for director. Proxies will be voted in a discretionary
manner should any nominee be unable to serve. All of the nominees are
currently serving as directors of the Company and have consented to
serve.
The dates shown for service as a director of the Company include
service as a director of the predecessor of the Company prior to July
1987. The nominees, and certain information about them and the
directors serving in Class I and Class II whose terms expire in future
years, are set forth below. Please note that Daniel C. Ferguson and
Thomas A. Ferguson, Jr. are not related.
NAME AND BACKGROUND DIRECTOR
SINCE
NOMINEES FOR CLASS III DIRECTORS FOR TERM EXPIRING IN
2002
Alton F. Doody, age 64, has been President and Chief
Executive Officer of The Alton F. Doody Co. (a
marketing consulting company) since 1984 . . . . . 1976
<PAGE> 5
NAME AND BACKGROUND DIRECTOR
SINCE
Thomas J. Falk, age 40, has been the Group President,
Tissue, Pulp and Paper of Kimberly-Clark
Corporation, a producer of consumer, paper and
personal care products, since January 1996. From
1993 through January 1996, Mr. Falk was the Group
President Infant and Child Care Products, Group
President North American Consumer Products and
Group President North American Tissue Products of
Kimberly-Clark. Mr. Falk has been with Kimberly-
Clark since 1983 and has served in numerous
management, financial and administrative roles.
Mr. Falk, a former director of Rubbermaid
Incorporated ("Rubbermaid"), was appointed a
director of the Company on March 24, 1999 pursuant
to the merger agreement between Rubbermaid and the
Company. . . . . . . . . . . . . . . . . . . . . . 1999
Daniel C. Ferguson, age 71, was Chairman of the Board of
the Company from May 1992 through December 1997.
Mr. Ferguson was Chief Executive Officer of the
Company from 1966 through May 1992. He is a
director of the Northern Trust Co. of Florida (a
financial institution) . . . . . . . . . . . . . . 1965
Thomas A. Ferguson, Jr., age 51, has been President and
Chief Operating Officer of the Company since May
1992. Prior thereto, Mr. Ferguson was
President Operating Companies of the Company from
January 1989 through May 1992. He was Vice
President Controller of the Company from February
1988 through December 1988. . . . . . . . . . . . 1992
William D. Marohn, age 59, retired in December 1998 as
Vice Chairman of the Board of Whirlpool
Corporation, a manufacturer and marketer of major
home appliances, a post he held since 1997. From
October 1992 through 1997, Mr. Marohn served as the
President and Chief Operating Officer of Whirlpool
Europe, B.V. From 1989 through January 1992, Mr.
Marohn served as Executive Vice President of
Whirlpool's Kenmore Appliance Group. Mr. Marohn
has been associated with Whirlpool since 1964. Mr.
Marohn, a former director of Rubbermaid, was
appointed a director of the Company on March 24,
1999 pursuant to the merger agreement between
Rubbermaid and the Company. . . . . . . . . . . . 1999
<PAGE> 6
NAME AND BACKGROUND
------------------- DIRECTOR
SINCE
CLASS II DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING -------
IN 2001
Scott S. Cowen, age 52, has been the President of
Tulane University and Seymour C. Goodman Professor
of Management and Economics since July 1998. From
1984 through July 1998, Mr. Cowen served as Dean
and Albert J. Weatherhead, III Professor of
Management, Weatherhead School of Management, Case
Western Reserve University. Prior to his
departure in 1998, Mr. Cowen had been associated
with Case Western Reserve University in various
capacities since 1976. Mr. Cowen is currently a
director of American Greetings Corp., a
manufacturer of greeting cards and related
merchandise, Forest City Enterprises, a real
estate developer, and Jo-Ann Stores, an operator
of retail fabric shops. Mr. Cowen, a former
director of Rubbermaid, was appointed a director
of the Company on March 24, 1999 pursuant to the
merger agreement between Rubbermaid and the
Company. . . . . . . . . . . . . . . . . . . . . . 1999
Elizabeth Cuthbert Millett, age 42, has been the owner
and operator of Plum Creek Ranch, located in
Newcastle, Wyoming (a commercial cattle production
company) for more than five years. . . . . . . . . 1995
Cynthia A. Montgomery, age 46, has been a Professor of
Business Administration at the Harvard University
Graduate School of Business since 1989. Prior
thereto, Professor Montgomery was a Professor at
the Kellogg School of Management at Northwestern
University from 1985 to 1989. She is also a
director of UNUM Corporation (an insurance
company) and 28 mutual funds managed by Merrill
Lynch & Co. or one of its subsidiaries (investment
companies) . . . . . . . . . . . . . . . . . . . . 1995
Allan P. Newell, age 53, has been a private investor
for more than five years . . . . . . . . . . . . . 1982
<PAGE> 7
Gordon R. Sullivan, age 61, has been President of the
Association of the United States Army since
February 1998. From 1995 through 1997, Mr.
Sullivan served as Corporate Vice President of
Coleman Research Corporation, a systems
engineering company and a subsidiary of Thermo
Electron Corporation. From 1991 through 1995, Mr.
Sullivan served as Chief of Staff of the United
States Army. Prior thereto, Mr. Sullivan served
as Vice Chief of Staff and Deputy Chief of Staff
for Operations and Plans of the United States
Army. Mr. Sullivan is also a director of Shell
Oil Company, a worldwide petrochemical
manufacturer and marketer, and Army National Bank.
Mr. Sullivan, a former director of Rubbermaid,
was appointed a director of the Company on March
24, 1999 pursuant to the merger agreement between
Rubbermaid and the Company. . . . . . . . . . . . 1999
NAME AND BACKGROUND
-------------------
DIRECTOR
SINCE
CLASS I DIRECTORS CONTINUING IN OFFICE - TERM EXPIRING --------
IN 2000
Tom H. Barrett, age 68, has been a partner of American
Industrial Partners, an investment partnership,
since 1991. From 1989 through 1991, Mr. Barrett
served as the Chairman and Chief Executive Officer
of The Goodyear Tire & Rubber Company, a DIRECTOR
manufacturer of tires, chemicals, plastic film and SINCE
other rubber products. From 1988 through 1989,
Mr. Barrett served as President and Chief
Operating Officer of Goodyear. Mr. Barrett is
also a director of Air Products and Chemicals
Inc., a manufacturer of industrial and specialty
gases and chemicals; MONY Inc., an insurance and
financial products company; and A.O. Smith
Corporation, a diversified manufacturer of home
heating, agricultural and electrical products.
Mr. Barrett, a former director of Rubbermaid, was
appointed a director of the Company on March 24,
1999 pursuant to the merger agreement between
Rubbermaid and the Company. . . . . . . . . . . . 1999
<PAGE> 8
Robert L. Katz, age 73, has been President of Robert L.
Katz & Associates (consultants in corporate
strategy) for more than five years. For sixteen
years, Dr. Katz taught Business Policy and
Organizational Behavior at the Stanford, Harvard
and Dartmouth Graduate Schools of Business. He is
also a director of HON Industries Inc. (an office
furniture manufacturing company). . . . . . . . . 1975
John J. McDonough, age 62, has been Vice Chairman of
the Board and Chief Executive Officer of the
Company since January 1, 1998. He has been
President and Chief Executive Officer of McDonough
Capital Company LLC (an investment management
company) since April 1995. Prior thereto, he was
Vice Chairman and a director of Dentsply
International Inc. (a manufacturer and distributor
of dental and medical x-ray equipment and other
dental products) from 1983 through October 1995,
and was Chief Executive Officer from April 1983
through February 1995. He was Senior Vice
President Finance of the Company from November
1981 through April 1983. He is also a director of
Applied Power, Inc. (a manufacturer and
distributor of tools, equipment, systems and
consumable items to the OEM industry). . . . . . . 1992
Wolfgang R. Schmitt, age 55, was appointed Vice
Chairman of the Board on March 24, 1999 pursuant
to the merger agreement between Rubbermaid and the
Company. He was Chief Executive Officer of
Rubbermaid from November 1992 until March 23,
1999. From May 1991 through November 1992, Mr.
Schmitt served as President and Chief Operating
Officer of Rubbermaid. Mr. Schmitt served as
Executive Vice President of Rubbermaid from 1987
through May 1991, and President of the Home
Products Division of Rubbermaid from 1984 through
1990. From 1966 to 1984, Mr. Schmitt was employed
by Rubbermaid in various marketing and research
and development assignments. Mr. Schmitt is also
a director of Kimberly-Clark Corporation and
Parker-Hannifin Corporation . . . . . . . . . . . 1999
<PAGE> 9
William P. Sovey, age 65, has been Chairman of the
Board of the Company since January 1, 1998. He
was Vice Chairman and Chief Executive Officer of
the Company from May 1992 through December 1997.
Mr. Sovey was President and Chief Operating
Officer of the Company from January 1986 through
May 1992. He was President and Chief Operating
Officer of AMF Inc. (an industrial and consumer
leisure products company) from March 1982 through
July 1985, and Executive Vice President from
August 1979 through March 1982. He is also a
director of Acme Metals Incorporated (a fully
integrated producer of steel and steel products)
and TECO Energy Incorporated (an energy production
and distribution company) . . . . . . . . . . . . 1986
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held eight meetings during 1998.
The Board of Directors has an Audit Committee and an Executive
Compensation Committee. The Board as a whole operates as a committee
to nominate directors.
AUDIT COMMITTEE. The Audit Committee, whose chairman is Dr. Katz
and whose other current member is Mr. Newell, met two times in 1998.
The committee's duties are to:
- review with management and the independent accountants the
Company's accounting policies and practices and the adequacy
of internal controls
- review the scope and results of the annual examination
performed by the independent accountants
- make recommendations to the Board of Directors regarding the
appointment of the independent accountants and approval of
the services performed by the independent accountants and
the related fees
EXECUTIVE COMPENSATION COMMITTEE. The Executive Compensation
Committee (the "Compensation Committee"), whose chairman is Mr. D.
Ferguson and whose other current member is Dr. Katz, met four times in
1998. This committee is responsible for establishing the Company's
executive officer compensation policies and for administering these
policies. See "Executive Compensation Executive Compensation
Committee Report on Executive Compensation."
<PAGE> 10
NOMINATING COMMITTEE. The Board of Directors, acting as a
nominating committee, will consider candidates for director
recommended by stockholders. A stockholder who wishes to submit a
candidate for consideration at the annual meeting of stockholders to
be held in 2000 must notify the Secretary of the Company in writing no
later than February 26, 2000. The stockholder's written notice must
include appropriate biographical information about each proposed
nominee and other information required in proxy solicitations. A
candidate must be highly qualified, as well as willing and able to
serve as a director.
COMPENSATION OF DIRECTORS
During 1998, directors of the Company who are not also employees
were paid a retainer ($20,000 per annum) plus a $1,000 fee for each
Board meeting attended and a $1,000 fee for each committee meeting
attended, unless such meetings were conducted telephonically, in which
case the fee was $500 for each meeting. Non-employee directors of the
Company are eligible to receive options to purchase shares of common
stock under the Newell Co. 1993 Stock Option Plan (the "1993 Option
Plan"). All options are granted at the market value of the common
stock on the date of the grant and become exercisable in annual
cumulative installments of 20%, commencing one year from the date of
grant, with full vesting occurring on the fifth anniversary of the
date of grant. No options were granted to non-employee directors in
1998.
The Company has a consulting agreement with Dr. Katz which
provides that the Company will pay Dr. Katz $5,000 per month for
corporate strategy consulting services plus travel expenses and other
reasonable out-of-pocket costs incurred on the Company's behalf.
Unless canceled prior to 90 days before its expiration, the consulting
agreement renews automatically each year. Dr. Katz received a
consulting fee of $60,000 in 1998.
EXECUTIVE COMPENSATION
SUMMARY
The following table shows the compensation of the Company's chief
executive officer and six other most highly compensated officers
during 1998 (the "Named Officers") for the fiscal years ended December
31, 1998, 1997 and 1996.
<PAGE> 11
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
Awards
Other Annual All Other
Name and Principal Year Compensation Compensation
Position Salary ($) Bonus ($) ($)(1) Securities Underlying ($)(2)
in 1998 Options (#)
JOHN J. MCDONOUGH, 1998 $800,000 $804,000 $14,884 68,365 $1,000
VICE CHAIRMAN AND
CHIEF EXECUTIVE 1997 N/A N/A N/A N/A N/A
OFFICER(3)
1996 N/A N/A N/A N/A N/A
THOMAS A. FERGUSON, JR., 1998 $600,000 $603,000 $ 9,620 13,775 $5,000
PRESIDENT AND CHIEF
OPERATING OFFICER 1997 565,000 462,735 12,355 25,300 7,210
1996 525,000 429,975 10,552 3,000 4,750
DONALD L. KRAUSE, 1998 $367,000 $368,835 $ 9,895 8,425 $5,000
SENIOR VICE PRESIDENT -
CORPORATE CONTROLLER 1997 350,000 286,650 13,497 18,400 5,930
1996 324,000 265,356 12,139 5,500 4,750
WILLIAM T. ALLDREDGE, 1998 $357,000 $358,785 $ 7,879 18,095 $ 5,000
VICE PRESIDENT - FINANCE
1997 340,000 278,460 10,171 1,800 6,810
1996 315,000 257,985 8,117 1,000 4,750
WILLIAM J. DENTON, 1998 $357,000 $125,271 $ 8,897 8,195 $ 5,000
GROUP PRESIDENT
1997 340,000 321,300 11,263 10,700 6,890
1996 315,000 309,015 11,016 3,000 4,750
RICHARD C. DELL, 1998 $357,000 $321,157 $11,052 10,395 $ 5,000
GROUP PRESIDENT
1997 340,000 304,640 10,473 9,900 6,450
1996 315,000 199,805 9,931 2,000 4,750
ROBERT S. PARKER, 1998 $312,625 $250,256 $ 8,987 8,300 $ 5,000
GROUP PRESIDENT(4)
1997 N/A N/A N/A N/A N/A
1996 N/A N/A N/A N/A N/A
--------------------------------
<PAGE> 12
(1) The amounts shown for 1998 include costs to the Company for expenses associated with use of Company cars as
follows: Mr. McDonough, $14,884; Mr. T. Ferguson, $9,620; Mr. Krause, $9,895; Mr. Alldredge, $7,879; Mr.
Denton, $8,897; Mr. Dell, $11,052, and Mr. Parker, $8,987.
(2) The compensation reported represents Company matching contributions made to the Newell Co. Long-Term Savings
and Investment Plan (the "Newell 401(k) Plan").
(3) Appointed Vice Chairman and Chief Executive Officer effective January 1, 1998.
(4) Appointed Group President effective August 12, 1998.
</TABLE>
OPTION GRANTS IN 1998
The following table sets forth certain information as to options
to purchase common stock granted to the Named Officers under the 1993
Option Plan during the fiscal year ended December 31, 1998, and the
potential realizable value of each grant of options, assuming that the
market price of the underlying common stock appreciates in value
during the ten-year option term at annualized rates of 5% and 10%.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK PRICE
Number of Percent of APPRECIATION FOR OPTION TERM(3)
Securities Total Options
Underlying Granted to Exercise or
Options Employees in a Base Price Expiration
Name Granted Fiscal Year ($/Sh) (2) Date 5% ($) 10% ($)
(#)(1)
<S> <C> <C> <C> <C> <C> <C>
John J. McDonough 50,000 8.58% $ 42.63 01/02/08 $3,474,345 $5,520,585
John J. McDonough 18,365 3.15 42.56 02/09/08 1,274,031 2,024,381
Thomas A. Ferguson, Jr. 13,775 2.36 43.56 02/09/08 978,063 1,554,101
Donald L. Krause 8,425 1.44 43.56 02/09/08 598,198 950,512
William T. Alldredge 8,296 1.42 43.56 02/09/08 589,039 935,958
William T. Alldredge 9,900 1.70 49.13 08/06/08 792,810 1,259,742
William J. Denton 8,195 1.41 43.56 02/09/08 581,867 924,563
Richard C. Dell 8,195 1.41 43.56 02/09/08 581,867 924,563
Richard C. Dell 2,200 0.38 47.00 05/13/08 168,542 267,806
Robert S. Parker 7,000 1.20 43.56 02/09/08 497,020 789,742
Robert S. Parker 1,300 0.22 49.13 08/06/08 104,106 165,420
-----------------------------------------------------------------
(1) All options granted in 1998 become exercisable in annual cumulative installments of 20%, commencing one year from
date of grant, with full vesting occurring on the fifth anniversary date of the date of grant. Vesting may be
accelerated as a result of certain changes in control of the Company.
<PAGE> 13
(2) All options were granted at market value (the closing price of the common stock on the New York Stock Exchange as
reported in the Midwest Edition of THE WALL STREET JOURNAL) on the date of grant.
(3) Potential realizable value is reported net of the option exercise price but before taxes associated with exercise.
These amounts assume annual compounding results in total appreciation of approximately 63% (5% per year) and
approximately 159% (10% per year). Actual gains, if any, on stock option exercises and common stock are dependent
on the future performance of the common stock, overall market conditions and the continued employment of the Named
Officer. There can be no assurance that the amounts reflected in this table will be achieved.
</TABLE>
OPTION EXERCISES IN 1998
The table below sets forth certain information for fiscal year
1998 concerning the exercise of options to purchase shares of common
stock granted under the Newell 1984 Amended and Restated Stock Option
Plan (the "1984 Option Plan") and the 1993 Option Plan by each of the
Named Officers and the value of unexercised options granted under the
1984 Option Plan and 1993 Option Plan held by each of the Named
Officers as of December 31, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Fiscal Year-End (#) Fiscal Year-End ($) (2)
<S> <C> <C> <C> <C> <C> <C>
Name Shares
Acquired on Value
Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
John J. McDonough 0 $ 0 10,000 86,965 $231,250.00 $ 0
Thomas A. Ferguson, Jr. 9,090 183,644.38 31,556 55,886 575,980.88 241,557.50
Donald L. Krause 7,000 150,412.50 29,880 33,684 562,023.00 148,516.25
William T. Alldredge 4,500 99,141.75 20,608 33,173 478,509.00 60,766.00
William J. Denton 4,300 146,510.45 22,940 30,809 417,101.25 153,592.50
Richard C. Dell 4,500 76,360.50 21,377 31,891 407,222.31 120,135.00
Robert S. Parker 27,900 1,002,896.19 19,860 44,231 404,979.60 87,761.40
-------------------------
(1) Represents the difference between the average of the high and low prices of the common stock on the New York
Stock Exchange as reported in the Midwest Edition of THE WALL STREET JOURNAL on the date of exercise and the
option exercise price multiplied by the number of shares acquired on exercise.
(2) Represents the difference between $41.325 (the average of the high and low prices of the common stock on the
New York Stock Exchange as reported in the Midwest Edition of THE WALL STREET JOURNAL on December 31, 1998)
and the option exercise price.
</TABLE>
<PAGE> 14
PENSION AND RETIREMENT PLANS
The Pension Plan Table set forth below shows total estimated
annual benefits payable upon retirement (based on the benefit formulas
in effect and calculated on a straight life annuity basis, as
described below) to persons covered under the Non-Contributory Defined
Benefit Pension Plan for Salaried and Clerical Employees (the "Pension
Plan") and the Supplemental Retirement Plan established in 1982 (the
"Supplemental Retirement Plan"), including the Named Officers, in
specified compensation and years of credited service classifications,
assuming employment until age 65 and that Social Security benefits
remain at the current level.
<PAGE> 15
<TABLE>
<CAPTION>
PENSION PLAN TABLE
<S> <C> <C> <C> <C> <C>
Years of service
Remuneration 5 10 15 20 25 or
more
$ 200,000 . . . . $10,900 $37,700 $64,500 $91,300 $118,100
300,000 . . . . 24,300 64,500 104,700 144,900 185,100
400,000 . . . . 37,700 91,300 144,900 198,500 252,100
500,000 . . . . 51,100 118,100 185,100 252,100 319,100
600,000 . . . . 64,500 144,900 225,300 305,700 386,100
700,000 . . . . 77,900 171,700 265,500 359,300 453,100
800,000 . . . . 91,300 198,500 305,700 412,900 520,100
900,000 . . . . 104,700 225,300 345,900 466,500 587,100
1,000,000 . . . . 118,100 252,100 386,100 520,100 654,100
1,100,000 . . . . 131,500 278,900 426,300 573,700 721,100
1,200,000 . . . . 144,900 305,700 466,500 627,300 788,100
1,300,000 . . . . 158,300 332,500 506,700 680,900 855,100
1,400,000 . . . . 171,700 359,300 546,900 734,500 922,100
1,500,000 . . . . 185,100 386,100 587,100 788,100 989,100
1,600,000 . . . . 198,500 412,900 627,300 841,700 1,056,100
1,700,000 . . . . 211,900 439,700 667,500 895,300 1,123,100
</TABLE>
The Pension Plan covers full-time salaried and clerical employees
of the Company and its subsidiaries who have completed one year of
service. A participant is eligible for normal retirement benefits
under the Pension Plan if his or her employment terminates at or after
age 65. For service years prior to 1982, benefits accrued on a
straight life annuity basis, using a formula that takes into account
the five highest consecutive years of compensation in the ten years
before 1982 and years of service, reduced by a portion of expected
primary Social Security payments. For service years from and after
1982 and before 1989, benefits accumulated at the rate of 1.1% of
compensation not in excess of $25,000 for each year plus 2.3% of
compensation in excess of $25,000. For service years from and after
1989, benefits accumulate at the rate of 1.37% of compensation not in
excess of $25,000 for each year plus 1.85% of compensation in excess
of $25,000. No more than 30 years of service is taken into account in
determining benefits. Under the Pension Plan, compensation includes
regular or straight-time salary or wages (unreduced for amounts
deferred pursuant to the Newell 401(k) Plan and the Flexible Benefits
Account Plan), the first $3,000 in bonuses and 100% of commissions.
If a participant has completed 15 years of service, upon attainment of
age 60, the Pension Plan also provides for an early retirement benefit
<PAGE> 16
equal to the benefits described above, reduced by .5% for each month
the benefits commence before age 65.
In 1982, the Supplemental Retirement Plan was established, funded
by cost recovery life insurance, which covers 130 current officers and
key executives, including the Named Officers, and four former officers
and key executives. The Supplemental Retirement Plan adds to
retirement benefits under the Pension Plan so that at age 65, a
covered employee receives a maximum aggregate pension equal to 67% of
his or her average compensation for the five consecutive years in
which it was highest (multiplied by a fraction, the numerator of which
is the participant's credited service (not to exceed 25) and the
denominator of which is 25). The benefit is reduced by primary Social
Security. Compensation includes salary and bonus (unreduced for
amounts deferred pursuant to the Newell 401(k) Plan and the Flexible
Benefits Accounts Plan). Both the Pension Plan and the Supplemental
Retirement Plan provide a death benefit for surviving spouses and
dependent children. The Supplemental Retirement Plan also provides
for an early retirement benefit upon attainment of age 60 equal to the
benefits described above, reduced by .5% for each month the benefits
commence before age 65.
In 1998, Mr. McDonough had no years of credited service, Mr. T.
Ferguson had 26 years, Mr. Krause had 25 years, Mr. Alldredge had 15
years, Mr. Denton had 22 years and Mr. Dell had 24 years.
EMPLOYMENT SECURITY AGREEMENTS
The Company has entered into Employment Security Agreements with
the Named Officers which provide for the continuation of salary, bonus
and certain employee benefits for a severance period of 24 months (but
not beyond age 65) following the termination of employment of the
Named Officer within 12 months (but prior to age 65) after certain
changes in control of the Company. In the event of such termination
of employment, the Named Officer will continue to receive his base
salary and bonus (based upon his average bonus for the three full
fiscal years preceding the change in control) during the severance
period. The Named Officer also will receive all benefits accrued
under the incentive and retirement plans of the Company to the date of
termination of employment and will be given service credit for all
purposes of these plans during the severance period. All options held
by the Named Officer with respect to common stock will become
immediately exercisable upon the date of termination of employment and
remain exercisable for a period of 90 days thereafter.
During the severance period, the Named Officer and his spouse
will continue to be covered by all welfare plans of the Company, and
the Company will continue to reimburse the Named Officer for
automobile expenses. However, the amount of any benefits or
reimbursement the Named Officer or his spouse receives will be reduced
by the amounts received from another employer or from any other
source. If the Named Officer dies during the severance period, all
amounts payable during the remainder of the severance period shall be
paid to his surviving spouse, and his spouse will continue to be
covered under all applicable welfare plans. No amounts are payable if
the employment of the Named Officer is terminated by the Company for
good cause (as defined in the agreements) or if the Named Officer
<PAGE> 17
voluntarily terminates his employment without good reason (as defined
in the agreements).
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on
executive compensation to the stockholders of the Company. The
material in this report is not incorporated by reference in any filing
of the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934.
COMPENSATION PROCEDURES AND POLICIES. The Compensation Committee
determines the compensation of all of the executive officers of the
Company, including the Named Officers and the one other executive
officer of the Company.
The Company's executive compensation philosophy and specific
compensation plans tie a significant portion of executive compensation
to the Company's success in meeting specified profit and growth and
performance goals and to appreciation in the Company's stock price.
The Company's compensation objectives include:
- attracting and retaining the best possible executive talent
- motivating executive officers to achieve the Company's
performance objectives
- rewarding individual performance and contributionsA.linking
executive and stockholder interests through equity based plans
The Company's executive compensation consists of three key components:
- base salary
- annual incentive compensation
- stock options
Each component is intended to complement the others and, taken
together, to achieve the Company's compensation objectives. The
Compensation Committee's policies with respect to each of the three
components, including the bases for the compensation awarded to John
J. McDonough, as the Company's Chief Executive Officer, are discussed
below.
Section 162(m) of the Internal Revenue Code limits the
deductibility of executive compensation paid to the chief executive
officer and the four other most highly compensated officers of a
public company to $1,000,000 per year, but contains an exception for
certain performance-based compensation. The Compensation Committee
considered the tax deductibility of executive compensation as one factor
to be considered in the context of its overall compensation philosophy
and objectives. As a result, the Company paid an immaterial amount of
non-deductible executive compensation in 1998. The Compensation
Committee currently does not expect to change the Company's
compensation policies and practices for 1999. Accordingly, the
Company may pay non-deductible compensation in 1999.
BASE SALARY. In the early part of each fiscal year, the
Compensation Committee reviews the base salary of the Company's Chief
Executive Officer and the recommendation of the Chief Executive
Officer with regard to the base salaries of the Chief Operating
<PAGE> 18
Officer and all other executive officers of the Company and approves,
with any modifications it deems appropriate, annual base salaries for
each of the executive officers.
Base salaries of the executive officers (other than the Chief
Executive Officer) are set using ranges recommended annually by the
Chief Executive Officer of the Company. The Compensation Committee
reviews national survey data available regarding salaries of those
persons holding comparable positions at comparably sized consumer
goods companies to establish base salary ranges. A majority of these
consumer goods companies are not included in the Dow Jones Consumer,
Non-Cyclical Industry Group Index in the Common Stock Price
Performance Graph included in this Proxy Statement. The base salary
range is based upon the midpoint of the comparative compensation
group, plus or minus twenty-five percent. The Compensation Committee
establishes the base salary of each of the executive officers in
relation to the midpoint of the base salary ranges based upon an
evaluation of the individual performance of the executive officer,
including satisfaction of such officer's annual objectives. The
Compensation Committee establishes the base salary of the Chief
Executive Officer in relation to the midpoint of his base salary
range, based on:
- achievement of the Company's annual goals relating to earnings
per share, sales growth and return on investment
- an evaluation of the individual performance of the Chief
Executive Officer
The base salaries paid in 1998 to each of the executive officers,
including the Chief Executive Officer, were within the prescribed base
salary ranges.
Mr. McDonough became Chief Executive Officer of the Company on
January 1, 1998. His base salary for 1998 was set at the February
1998 meeting of the Compensation Committee. In setting Mr.
McDonough's salary for 1998, the Compensation Committee considered his
base salary in relation to the midpoint of his salary range and his
prior experience and accomplishments. In consideration of these
factors, the Compensation Committee approved a base salary for Mr.
McDonough of $800,000, approximately 6.7% higher than the base salary
of his predecessor for 1997.
ANNUAL INCENTIVE COMPENSATION. The Company's executive officers
(other than the Group Presidents) are entitled to participate in an
incentive bonus plan which provides for the payment of cash bonuses
based on the Company's return on investment (the "ROI Plan"). The
Compensation Committee makes awards under the ROI Plan if the
Company's annual after-tax return on beginning of the year
stockholder's equity exceeds 11% and determines awards by multiplying
each executive officer's base salary by percentages established in the
ROI Plan reflecting the actual return achieved.
The annual after-tax return on beginning of the year
stockholder's equity for 1998 was approximately 23%. Based on these
results, the Compensation Committee awarded Mr. McDonough a bonus of
$804,000 for 1998.
<PAGE> 19
The Group Presidents are entitled to participate in an incentive
bonus plan which provides for the payment of cash bonuses based on
return on assets used in, and sales and income growth by, the
divisions for which the Group President is responsible (the "ROA
Plan"). The Compensation Committee makes awards under the ROA Plan if
the return on assets used during the year in the divisions for which
the Group President is responsible exceeds 10% on a pre-tax basis and
sales growth exceeds the prior year sales level. The Compensation
Committee determines the amount of awards by multiplying each Group
President's base salary by percentages established in the ROA Plan
reflecting the actual results achieved. Actual return on assets and
sales growth in 1998 exceeded the goals established for payment of a
bonus in the divisions for which each of the Group Presidents was
responsible.
STOCK OPTIONS. The Company's executive officers are also
entitled to participate in the 1993 Option Plan. Under this Plan, the
Compensation Committee may grant incentive stock options and
nonqualified stock options to purchase common stock of the Company at
prices not less than fair market value of the common stock at the date
of grant. Options granted under the 1993 Option Plan become
exercisable in annual cumulative installments of 20% of the number of
options granted over a five-year period and have a maximum term of ten
years. The Compensation Committee has adopted guidelines that take
into account outstanding options for determining, on a quarterly
basis, whether an executive officer of the Company should be awarded
an option. If the total option exercise price of the options held by
an executive officer is less than a multiple of the executive
officer's base salary, the Compensation Committee will consider a
grant of options. The Compensation Committee also has the discretion,
in circumstances such as a promotion, to grant options otherwise than
in accordance with the guidelines. Based upon the guidelines, in 1998
the Compensation Committee granted Mr. McDonough options to purchase
68,365 shares of common stock.
This report is submitted on behalf of the Compensation Committee:
Daniel C. Ferguson, Chairman
Robert L. Katz
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. D.
Ferguson and Dr. Katz. Daniel C. Ferguson, Chairman of the
Compensation Committee, is a former employee of the Company.
CERTAIN BENEFICIAL OWNERS
The only person or group which is known to the Company to be the
beneficial owner of more than five percent of the outstanding Common
Stock is:
<PAGE> 20
Amount and Nature
of Percent of
Name and Address of Beneficial Beneficial Class
Owner Ownership Outstanding
-------------------------------- ------------------ -------------
FMR Corp.
Edward C. Johnson 3d
Abigail P. Johnson
Fidelity Management & Research
Company
82 Devonshire Street
Boston, Massachusetts 02109 10,014,487 6.16%(1)
-------------------
(1) As reported in a statement on Schedule 13-G filed with the
Securities and Exchange Commission on February 1, 1999 by FMR
Corp., Edward C. Johnson 3d, Abigail P. Johnson and Fidelity
Management & Research Company. According to the filing, FMR Corp.
has sole voting power with respect to 567,817 shares and
dispositive power with respect to 10,014,487 shares. Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR
Corp., serves as an investment advisor to various investment
companies and is the beneficial owner of 9,144,270 shares.
Through their ownership of voting common stock and the execution
of a shareholders' agreement with respect to FMR Corp., members
of the Johnson family may be deemed to form a controlling group
with respect to FMR Corp, and thus each is deemed to have
beneficial ownership of 10,014,487 shares.
The following table sets forth information as to the beneficial
ownership of shares of common stock of each director, each nominee for
director, and each Named Officer, individually, and all directors and
executive officers of the Company, as a group. Except as otherwise
indicated in the footnotes to the table, each individual has sole
investment and voting power with respect to the shares of common stock
set forth.
COMMON STOCK BENEFICIALLY
OWNED ON APRIL , 1999
--------------------------
PERCENT OF
CLASS
NUMBER OF OUTSTANDING
NAME OF BENEFICIAL OWNER SHARES ------------
------------------------ ---------
Tom H. Barrett . . . . . . . . . . 23,302(1) %
Scott S. Cowen . . . . . . . . . . 2,376(2)
Alton F. Doody . . . . . . . . . . 64,500(3)
Thomas J. Falk . . . . . . . . . . 2,118(2)
<PAGE> 21
Daniel C. Ferguson . . . . . . . . 3,153,532(3)(4)
Thomas A. Ferguson, Jr. . . . . . . 200,478(3)(5)
Robert L. Katz . . . . . . . . . . 124,544(3)
William D. Marohn . . . . . . . . . 4,328(6)
John J. McDonough . . . . . . . . . 127,146(3)(5)(7)
Elizabeth Cuthbert Millett . . . . 246,062(3)(8)
Cynthia A. Montgomery . . . . . . . 4,100(3)
Allan P. Newell . . . . . . . . . . 2,159,596(3)(9)
Wolfgang R. Schmitt . . . . . . . . 928,086.6(3)(10)
William P. Sovey . . . . . . . . . 418,300(3)(5)
Gordon R. Sullivan . . . . . . . . 2,647(11)
William T. Alldredge . . . . . . . 223,740(3)(5)(12)
William J. Denton . . . . . . . . . 82,353(3)(5)
Richard C. Dell . . . . . . . . . . 100,371(3)(5)(13)
Donald L. Krause . . . . . . . . . 318,652(3)(14)
Robert S. Parker . . . . . . . . . 23,280(3)(5)
All directors and executive
officers as a group (20 persons) . 8,209,511.6 %
----------------------------------- --------------
(1) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company, including 15,804
shares acquired in exchange for shares of Rubbermaid common stock
that were previously acquired in exempt transactions pursuant to
Rubbermaid's 1993 Deferred Compensation Plan and 63 shares owned
of record by his wife.
(2) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company, including 1,075 shares
acquired in exchange for shares of Rubbermaid common stock that were
previously acquired in exempt transactions pursuant to Rubbermaid's
1993 Deferred Compensation Plan.
<PAGE> 22
(3) Includes shares issuable pursuant to stock options exercisable
within 60 days of April __, 1999 as follows: Dr. Doody, 14,000
shares; Mr. D. Ferguson, 12,400 shares; Mr. T. Ferguson, 36,311
shares; Dr. Katz, 4,000 shares; Mr. McDonough, 23,673 shares; Ms.
Millett, 4,000 shares; Ms. Montgomery, 4,000 shares; Mr. Newell,
4,000 shares; Mr. Schmitt, 700,898 shares; Mr. Sovey, 101,830
shares; Mr. Alldredge, 23,599 shares; Mr. Denton, 24,579 shares;
Mr. Dell, 23,716 shares; Mr. Krause, 31,565 shares; and Mr.
Parker, 21,260 shares.
(4) Includes 3,400 shares beneficially owned of record by his wife,
100,906 shares held in charitable trusts of which Mr. D. Ferguson
is trustee, 694,384 shares held in a trust of which Mr. D.
Ferguson is beneficiary and 1,280,240 shares held by a
partnership of which Mr. D. Ferguson is managing partner.
(5) Includes shares held by the Newell 401(k) Plan over which each of
the following persons has voting power: Mr. T. Ferguson, 7,163
shares; Mr. J. McDonough, 256 shares; Mr. Sovey, 7,103 shares;
Mr. Alldredge, 1,457 shares; Mr. Denton, 3,574 shares; and Mr.
Dell, 6,475 shares; and Mr. Parker, 2,020 shares.
(6) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company, all of which were
acquired in exchange for shares of Rubbermaid common stock that were
previously acquired in exempt transactions pursuant to Rubbermaid's
Retirement Plan.
(7) Includes 5,200 shares held in his wife's individual retirement
account, but excludes 5,500 shares owned of record by his
children with respect to which Mr. McDonough disclaims beneficial
ownership and 33,000 shares in trusts in which Mr. McDonough is
not trustee with respect to which Mr. McDonough disclaims
beneficial ownership.
(8) Includes 41,211 shares beneficially owned of record by her two
children of which Ms. Millett is custodian and includes 70,860
shares held in a trust of which Ms. Millett is trustee.
(9) Includes 24,000 shares held in trusts of which Mr. Newell is co-
trustee and beneficiary and over which he has shared investment
and voting power and 2,144 shares beneficially owned of record by
his wife.
(10) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company, including 15,494
shares owned of record by his wife and 4,259 shares owned of
record by his wife as custodian for his son.
(11) Consists of shares acquired March 24, 1999 pursuant to the merger
agreement between Rubbermaid and the Company, including 2,383
shares acquired in exchange for shares of Rubbermaid common stock
previously acquired in exempt transactions pursuant to
Rubbermaid's 1993 Deferred Compensation Plan.
(12) Includes 50,764 shares owned of record by his wife.
(13) Includes 41,443 shares held in joint tenancy over which Mr. Dell
has shared investment and voting power.
<PAGE> 23
(14) Includes 1,562 shares held in trusts of which Mr. Krause is
trustee and 12,000 shares held in joint tenancy over which Mr.
Krause has shared investment and voting power.
<PAGE> 24
COMMON STOCK PRICE PERFORMANCE GRAPH
-------------------------------------
The following common stock price performance graph compares the yearly
change in the Company's cumulative total stockholder returns on its
common stock during the years 1994 through 1998, with the cumulative
total return of the Standard & Poor's 500 Index and the Dow Jones
Consumer, Non-Cyclical Industry Group Index, assuming the investment
of $100 on December 31, 1993 and the reinvestment of dividends
(rounded to the nearest dollar).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
December 31,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Newell Rubbermaid $100.00 $105.94 $132.88 $164.62 $225.44 $222.63
DJ Consumer, Non Cyclical 100.00 111.37 162.32 202.61 277.80 355.11
S&P 500 Index 100.00 101.28 138.88 170.38 226.78 291.48
</TABLE>
This performance graph is presented in accordance with
requirements of the Securities and Exchange Commission, but is not
incorporated by reference in any filing of the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934. We
caution you not to draw any conclusions from the data in the graph, as
past results do not necessarily indicate future performance. The
graph does not necessarily reflect the Company's forecast of future
financial performance.
PROPOSAL 2 - AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously approved, and recommends
that stockholders adopt, an amendment to Article FOURTH of the
Restated Certificate of Incorporation to increase the number of
authorized shares of common stock from 400,000,000 to 800,000,000. If
the Company's stockholders adopt the proposed amendment, the first
sentence of Article FOURTH would read as follows:
FOURTH: The total number of shares which the Corporation
shall have authority to issue is 810,000,000, consisting
of 800,000,000 shares of Common Stock of the par value of
$1.00 per share and 10,000,000 shares of Preferred Stock,
consisting of 10,000 shares without par value and
9,990,000 shares of the par value of $1.00 per share.
The Company currently is authorized to issue 400,000,000 shares
of common stock, of which ___________ shares of common stock were
issued and outstanding as of April ___, 1999. In addition, as of
April ___, 1999, the Company had _________ shares of common stock
reserved for issuance under the Company's stock option plans and
__________ shares of common stock were held in its treasury, leaving
___________ shares of authorized common stock available for issuance.
If adopted, the proposed amendment would increase the number of shares
of common stock available for issuance to 800,000,000.
<PAGE> 25
The additional shares of common stock for which authorization
is sought would be part of the existing class of common stock, if and
when issued. These shares would have also the same rights and
privileges as the shares of common stock presently outstanding.
Holders of the Company's common stock do not have preemptive rights to
subscribe for and purchase any new or additional issue of common stock
or securities convertible into common stock.
The Board of Directors believes that the increase in the number
of authorized shares of common stock is in the best interests of the
Company and its stockholders. The purpose of increasing the number of
authorized shares of common stock is to have shares available for
issuance for such corporate purposes as the Board of Directors may
determine in its discretion, including, without limitation:
- future acquisitions
- investment opportunities
- stock splits
- stock dividends or other distributions
- conversion of convertible securities
- future financings and other corporate purposes
Except for certain stock option plans and the share purchase rights
plan (the "Rights Plan") discussed below, the Company has no
agreements or understandings regarding the issuance of additional
shares of common stock.
Under the provisions of the Delaware General Corporation Law, a
board of directors generally may issue authorized but unissued shares
of common stock without stockholder approval. A substantial number of
authorized but unissued shares of common stock not reserved for
specific purposes will allow the Company to take prompt action with
respect to corporate opportunities that develop, without the delay and
expense of convening a special meeting of stockholders. The issuance
of additional shares of common stock may reduce stockholders' equity
per share and may reduce the percentage of ownership of common stock
of existing stockholders. It is not the present intention of the
Board of Directors to seek stockholder approval prior to any issuance
of additional shares of common stock unless required by law or the
rules of the New York Stock Exchange, the Chicago Stock Exchange or
any other stock exchanges on which the common stock may be listed.
The New York Stock Exchange currently requires stockholder approval as
a prerequisite to listing shares in several instances, including
acquisition transactions where the present or potential issuance of
shares could result in an increase in the number of shares of common
stock outstanding by 20% or more.
Although the Company currently has no reason to believe that a
takeover attempt is likely to occur, increasing the number of
authorized shares of common stock may provide the Company with the
means of discouraging a possible attempt. These additional shares of
common stock could be used in the future, through private sales to
purchasers allied with management or otherwise, to dilute the stock
ownership of persons seeking to obtain control of the Company, thus
making less likely a change in control of the Company, whether or not
favored by a majority of unaffiliated stockholders, with the possible
effect of deterring an offer for the Company at a substantial premium
over the current market price of the common stock. The Company has no
<PAGE> 26
present intention to issue securities for this purpose. The Restated
Certificate of Incorporation also contains a provision authorizing the
issuance of up to 10 million shares of Preferred Stock with rights,
preferences and limitations as determined by the Board. These shares
of Preferred Stock could be issued by the Board in one or more
transactions with terms which might make the acquisition of a
controlling interest in the Company more difficult or costly.
However, the Board has a policy of seeking stockholder approval prior
to designating any future series of Preferred Stock with a vote or
convertible into stock having a vote in excess of 13% of the vote
represented by all voting stock immediately subsequent to such
issuance, except for the purpose of (i) raising capital in the
ordinary course of business or (ii) making acquisitions, the primary
purpose of which is not to effect a change in voting power.
The Company has adopted a Rights Plan which provides
stockholders with rights to purchase shares of common stock of the
Company (or of an acquiring company) at half of the market price under
certain circumstances involving a potential change in control of the
Company that has not been approved by the Board. The Rights Plan is
intended as a means to protect the value of the stockholders'
investment in the Company, while preserving the possibility of a fair
acquisition bid. In addition, the Delaware General Corporate Law
provides, among other things, that any beneficial owner of more than
15% of the Company's voting stock is prohibited, without the prior
approval of the Board, from entering into any business combination
with a company for three years from the date such 15% ownership
interest is acquired. Additionally, the "fair price provisions" of
the Restated Certificate of Incorporation require that certain
proposed business combinations between the Company and an "interested
party" (a beneficial owner of 5% or more of the voting shares of the
Company) must be approved by the holders of 75% of the voting shares,
unless certain fair price and procedural requirements are met or the
business combination is approved by the directors of the Company who
are not affiliated with the interested party. A vote of the holders
of 75% of the Company's outstanding voting stock is required to amend
the fair price provisions of the Restated Certificate of
Incorporation.
The Company's Restated Certificate of Incorporation and By-Laws
contain certain other provisions which may be viewed as having an
antitakeover effect. The Restated Certificate of Incorporation
classifies the Board into three classes and provides that vacancies on
the Board of Directors are to be filled by a majority vote of
directors and that directors so chosen shall hold office until the end
of the full term of the class in which the vacancy occurred. A vote
of the holders of 75% of the Company's outstanding voting stock is
required to amend these provisions. Under the Delaware General
Corporation Law, directors of the Company may only be removed for
cause. The Restated Certificate of Incorporation and the By-Laws also
contain provisions that may reduce surprise and disruptive tactics at
stockholders' meetings. The Restated Certificate of Incorporation
provides that no action may be taken by stockholders except at an
annual or special meeting, and does not permit stockholders to
directly call a special meeting of stockholders. A stockholder must
give written notice to the Company of an intention to nominate a
director for election at an annual meeting 90 days prior to the
anniversary date of the immediately preceding annual meeting. See
<PAGE> 27
"Information Regarding Board of Directors and Committees." Each of
these provisions tends to make a change in control of the Board of
Directors more difficult or time consuming. The Board is not
recommending that stockholders vote for the proposed amendment to the
Restated Certificate of Incorporation for the purpose of deterring a
possible change in control of the Company or in response to any
specific effort of which the Company is aware to obtain control of the
Company, nor does the Board of Directors currently intend to propose
to stockholders any amendments which may have the effect of
discouraging takeover attempts.
The affirmative vote of the holders of a majority of the
outstanding shares of common stock is required to approve the
amendment to the Restated Certificate of Incorporation to increase the
number of authorized shares of common stock of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ADOPTION
OF THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK FROM 400,000,000 TO
800,000,000.
PROPOSAL 3 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of
Directors has reappointed Arthur Andersen L.L.P. as independent
accountants to audit the consolidated financial statements of the
Company for the year 1999. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT. If the
stockholders should fail to ratify the appointment of the independent
accountants, the Board of Directors would reconsider the appointment.
It is expected that representatives of Arthur Andersen L.L.P.
will be present at the annual meeting, will have an opportunity to
make a statement if they desire to do so and will be available to
answer appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Based solely upon a review of Reports on Forms 3, 4 and 5 and any
amendments thereto furnished to the Company pursuant to Section 16 of
the Securities Exchange Act of 1934, as amended, and written
representations from the executive officers and directors that no
other Reports were required, the Company believes that all of such
Reports were filed on a timely basis by executive officers and
directors during 1998.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
To be considered for inclusion in next year's proxy materials,
stockholder proposals to be presented at the Company's 2000 annual
meeting must be in writing and be received by the Company no later
than December __, 1999.
Other proposals that are not included in the proxy materials will
be considered timely and may be eligible for presentation at the
<PAGE> 28
Company's 2000 meeting if they are received by the Company in the form
of a written notice no later than March __, 2000.
OTHER BUSINESS
The Board of Directors does not know of any business to be brought
before the annual meeting other than the matters described in the
notice of annual meeting. However, if a stockholder properly brings
any other matters for action, each person named in the accompanying
proxy intends to vote the proxy in accordance with his judgment on
such matters.
By Order of the Board of
Directors,
RICHARD H. WOLFF
Secretary
April ___, 1999
A COPY OF THE COMPANY'S 1998 ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K WILL BE FURNISHED TO STOCKHOLDERS
FREE OF CHARGE UPON WRITTEN REQUEST TO THE OFFICE OF THE VICE
PRESIDENT-FINANCE OF THE COMPANY.
<PAGE> 29
APPENDIX
[Form of proxy card for holders of Common Stock of the Company]
NEWELL RUBBERMAID INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 26, 1999
The undersigned hereby appoints William P. Sovey and William T.
Alldredge, and each of them individually, as proxies, with the powers
the undersigned would possess if personally present, and with full
power of substitution, to vote at the Annual Meeting of Stockholders
of NEWELL RUBBERMAID INC. to be held May 26, 1999, and at any
adjournments thereof, on the following proposals:
(1) Election of Directors.
Nominees: Alton F. Doody, Thomas J. Falk, Daniel C.
Ferguson, Thomas A. Ferguson, Jr. and William D.
Marohn.
(2) Adoption of an amendment to the Restated Certificate of
Incorporation, as amended, of Newell Rubbermaid Inc. to
increase the number of authorized shares of common stock
from 400,000,000 to 800,000,000.
(3) Ratification of the appointment of Arthur Andersen
L.L.P. as independent accountants for the year 1999.
With respect to other matters that properly come before the Annual
Meeting or any adjournment of the Annual Meeting, which, as of April
___, 1999, the proxies named above do not know are to be presented at
the Annual Meeting, those proxies are authorized to vote upon those
matters in their discretion.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish
to vote in accordance with the Board of Directors' recommendations.
Your shares cannot be voted unless you sign, date and return this
card, or vote your shares by using either of the electronic means
described on the reverse side.
SEE REVERSE SIDE
---------------------------------------------------------------------
(FOLD AND DETACH HERE)
[Map setting forth location of Annual Meeting.]
<PAGE> 30
Please mark
_X_ your vote as in
this example. [CONTROL NO.]
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES TO WHICH IT RELATES
WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE,
THE SHARES WILL BE VOTED FOR ELECTION OF DIRECTORS AND FOR PROPOSALS
(2) AND (3) BELOW.
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL (1), FOR PROPOSAL (2) AND FOR PROPOSAL (3).
<S> <C> <C> <C>
FOR WITHHOLD For, except withhold vote from the following nominee(s):
1. Election of Directors.
(See reverse) ____ ____ _____________________________________
FOR AGAINST ABSTAIN
2. Adoption of amendment to Restated Certificate
of Incorporation relating to increase in number
of authorized shares of common stock (see reverse). ____ ____ ____
3. Ratification of independent accountants. ____ ____ ____
Signature(s) Date
------------------------------------------------------------------- ------------------------
NOTE: Please sign exactly as name appears hereon. Joint The signer hereby revokes all proxies
owners should each sign. When signing as attorney, executor, heretofore given by the signer to vote
administrator, or guardian, please give full title as such. at said meeting or any adjournments
thereof.
--------------------------------------------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
</TABLE>
NEWELL RUBBERMAID ENCOURAGES YOU TO TAKE ADVANTAGE OF A NEW AND
CONVENIENT WAY BY WHICH YOU CAN VOTE YOUR SHARES -- ELECTRONICALLY, BY
EITHER TELEPHONE OR THE INTERNET.
- BY TELEPHONE. On a touch-tone telephone, call 1-800-OK2-VOTE
(1-800-652-8683). Listen to the recorded instructions, use the
control number printed in the box in the upper right corner of
this proxy card to access the system, and use your telephone key
pad to vote.
- OVER THE INTERNET. Access the World Wide Web site
"http://www.vote-by-net.com" and follow the instructions posted
on the web site.
Your vote by telephone or over the Internet authorizes the proxies
named on the front of this proxy card in the same manner as if you
marked, signed, dated and returned the proxy card. If you choose to
vote your shares by either of these electronic means, there is no need
for you to mail back your proxy card. By signing this proxy card or
voting by telephone or over the Internet, you acknowledge receipt of
<PAGE> 31
the Notice of Annual Meeting of Stockholders to be held May 26, 1999
and the Proxy Statement dated April __, 1999.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
