10-K
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
December 31, 1994 1-9608
NEWELL CO.
(Exact name of Registrant as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) (Identification No.)
Newell Center
29 East Stephenson Street, Freeport, Illinois 61032-0943
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (815)235-4171
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, $1 par value per share, and New York Stock Exchange
associated Preferred Stock Purchase Rights Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes __X__ No _____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (X)
1
There were 157.9 million shares of the Registrant's common
stock outstanding as of January 31, 1995. The aggregate market value
of the shares of common stock (based upon the closing price on the New
York Stock Exchange on that date) beneficially owned by nonaffiliates
of the Registrant was approximately $3,326.5 million. For purposes of
the foregoing calculation only, which is required by Form 10-K, the
Registrant has included in the shares owned by affiliates those shares
owned by directors and officers of the Registrant, and such inclusion
shall not be construed as an admission that any such person is an
affiliate for any purpose.
Documents Incorporated by Reference
Part III
Portions of the Registrant's Definitive Proxy Statement for its
Annual Meeting of Stockholders to be held May 10, 1995, which was
filed March 17, 1995.
2
PART I
Item 1. Business
-----------------
"Newell" or the "Company" refers to Newell Co. alone or with its
wholly-owned subsidiaries, as the context requires.
GENERAL
-------
Newell is a manufacturer and full-service marketer of high-volume
consumer products serving the needs of volume purchasers. The
Company's basic strategy is to merchandise a multi-product offering of
brand-name consumer products, with an emphasis on excellent customer
service, in order to achieve maximum results for its stockholders.
Each group of the Company's products is manufactured and sold by a
subsidiary or division (each referred to herein as a "division," even
if separately incorporated).
The Company manages the activities of its divisions through
executives at the corporate level, to whom the divisional managers
report, and controls financial activities through centralized
accounting, capital expenditure reporting, cash management, order
processing, billing, credit, accounts receivable and data processing
operations. The production and marketing functions of each division,
however, are conducted with substantial independence. Each division
is managed by employees who make day-to-day operating and sales
decisions and participate in an incentive compensation plan that ties
a significant part of their compensation to their division's return on
assets and sales growth. The Company believes that this allocation of
responsibility and system of incentives fosters an entrepreneurial
approach to management that has been important to the Company's
success.
INDUSTRY SEGMENTS
-----------------
Since the beginning of 1993, after the sale of its closures
business on December 31, 1992, over 90% of the Company's revenues are
derived from consumer products and, as such, the Company operates in a
single industry segment. Prior to 1993, the Company operated in two
industry segments, Consumer Products and Industrial Products.
Consumer Products are sold through a variety of retail and
wholesale distribution channels. Industrial Products were sold
directly and through distributors. Intersegment sales were not
material.
3
PRODUCTS
--------
HOUSEWARES
COOKWARE AND BAKEWARE. The Company's cookware and bakeware
business is conducted by the Mirro division, which manufactures
aluminum cookware, bakeware and kitchen utensils. Mirro's
manufacturing operations are highly integrated, rolling its own sheet
stock from aluminum ingot, and producing phenolic handles and knobs at
its own plastics molding facility. Principal facilities are located
in Manitowoc and Chilton, Wisconsin and Salina, Kansas.
Mirro products are sold primarily under the brand names of
MIRRO(r), FOLEY(r) and WEAREVER(r), and the trade names of AIRBAKE(r),
CUSHIONAIRE(r), CUSHIONAIRE PRO(tm), CONCENTRIC AIRE(r), CHANNELON(r)
and LIMITED EDITION by WEAREVER(tm) . Mirro also manufactures canning
accessories, pressure cookers/canners and various specialized cookware
and bakeware items for the food service industry. It also produces
aluminum contract stampings and components for other manufacturers and
makes aluminum and plastic kitchen tools and utensils. Mirro markets
its products directly to mass merchants, warehouse clubs, grocery/drug
stores, department/specialty stores, hardware distributors, cable TV
networks, and select contract customers, using a network of
manufacturers' representatives, as well as regional zone and market-
specific sales managers.
OTHER. Anchor Hocking Glass - glass ovenware, tabletop,
household and foodservice products; Anchor Hocking Plastics - plastic
microwave cookware and food storage containers; Plastics, Inc. - food
processing and foodservice items; Goody - personal consumer products
including hair accessories and beauty organizers; Anchor Specialty
Glass - glass lamp parts, lighting components, meter covers and
appliance covers; and Newell Europe - glass cookware and dinnerware
marketed in Europe, the Middle East and Africa only.
HOME FURNISHINGS
DECORATIVE WINDOW COVERINGS. In 1993, Newell acquired Levolor,
entering the custom made-to-order non-drapery window coverings market.
In 1994, Newell acquired another custom made-to-order business, Home
Fashions, Inc. and the two businesses were subsequently combined into
Levolor Home Fashions ("Levolor"). Levolor is a full-line manufacturer
and marketer of decorative window coverings sold through volume
purchasers and specialty stores. There are three major brand names:
Levolor, DelMar and LouverDrape.
Levolor products are sold primarily under the trade names of
OVATION(tm), MONACO(r), MARK I(tm) and RIVIERA(r) (for custom
products). Levolor also markets stock horizontal and vertical window
coverings. DelMar products are sold primarily under the trade names
of GRAND CLASSIQUE(r), NOUVELLE(r), LIGHT GARDE(tm), ESPIRIT(tm),
4
ENCHANTE(r) and SOFTLIGHT(r). LouverDrape sells primarily under the
LouverDrape name including sales direct to fabricators, such as stock
components, and also under the CAROUSEL(r) and GOLDEN TOUCH(r) trade
names.
Levolor's principal facility is in Greensboro, North Carolina.
Levolor has a total of 15 manufacturing facilities in the United
States and two in Canada.
WINDOW FURNISHINGS. Newell Window Furnishings ("Window
Furnishings") manufactures drapery hardware, window shades, and other
window treatments. Principal facilities are located in Freeport,
Illinois and Prescott, Ontario. Window Furnishings' products are sold
primarily under the brand name of NEWELL(r) and the trade names of
VISIONS(r), SPECTRIM(r), MAGIC FIT(r) and DESIGNERS GUILD(tm). Window
Furnishings also markets custom "size in store" programs for mini
blinds and window shades under the SPECTRIM(r) trade name.
Window Furnishings markets its products directly to mass
merchants, home centers, hardware distributors, department/specialty
stores and select contract customers, using a network of regional
sales managers, customer specific national account managers and
manufacturers' representatives.
OTHER. Lee/Rowan - coated wire storage and organization
products; Intercraft - ready-made picture frames; and Dorfile and
System Works - home storage and shelving systems.
OFFICE PRODUCTS
MARKERS AND WRITING INSTRUMENTS. In 1992, Newell acquired
Sanford, entering the markers and writing instruments market. In
1994, Newell acquired another marker and writing instrument company,
Faber-Castell (whose products are marketed under the Eberhard Faber
brand name), and the two businesses were subsequently combined. The
combined Sanford operation manufactures permanent/waterbase markers,
rolling ball pens, wood-cased pencils, highlighters, porous tip pens,
dry erase markers and overhead projector pens. Sanford manufactures
its own inks and assembles products in its manufacturing location in
Bellwood, Illinois, manufactures wood-cased pencils in Lewisburg,
Tennessee and imports other writing instruments. Sanford products are
sold in the mass market and via traditional commercial office products
channels. Principal trade names are SHARPIE(r), UNIBALL(r), EBERHARD
FABER(r), VIS A VIS(r), EXPO(r), MAJOR ACCENT(r), EXPRESSO(r),
MONGOL(r), ECOWRITER(r), PINK PEARL(r), VELVET(r) and AMERICAN(r).
Sanford sells its products directly and through distributors, using
its direct sales force and making limited use of manufacturers'
representatives.
OTHER. Stuart Hall - school supplies, stationery and office
supplies; and Newell, Rogers and Keene Office Products - desktop and
office accessories.
5
HARDWARE
CABINET AND WINDOW HARDWARE. The Company's Amerock division
offers a broad line of cabinet and window hardware, which is primarily
manufactured at its facility in Rockford, Illinois. These products
are sold under the AMEROCK(r) and ALLISON(r) brand names, and the
NATURAL ELEGANCE(tm), TRUE ELEGANCE(tm), EXPRESSIONS(tm), COLORS(tm)
and RUSTIC FINISHES(tm) trade names and include knobs, pulls, hinges,
drawer slides, catches, various window hardware components, towel bars
and tissue holders. Amerock also produces convenience and storage
products such as pantry storage systems, lazy susans for corner
cabinets and wire storage products.
Amerock markets its products directly and through distributors,
using its own sales force and a complement of manufacturers'
representatives.
OTHER. EZ Paintr - manual paint applicator products; BernzOmatic
- propane and propane/oxygen hand torches and accessories; and Bulldog
- household hardware.
6
MARKETING AND DISTRIBUTION
--------------------------
During 1994, sales to Wal-Mart Stores, Inc. and subsidiaries
amounted to approximately 15% of consolidated sales; each of the
Company's other customers, individually, amounted to less than 10%.
Most of the Company's customers are retailers who rely on a
single or principal source of each of the consumer products that they
sell. Accordingly, the divisions focus their marketing effort not on
the ultimate consumer, but on the retailer, and compete with other
suppliers for business. The Company's strategy is to emphasize
excellent customer service, innovative merchandising programs and a
quality multiproduct offering. The Company's computerized order
processing system allows it to receive orders from its customers on a
computer-to-computer basis. This system, and the ability to fill and
ship orders promptly, are important competitive factors since they
reduce a customer's order processing costs and allow the customer to
minimize the inventory it must carry. The divisions maintain sales
and service organizations to be responsive to the needs of their
customers.
BACKLOG
-------
The dollar value of unshipped factory orders is not material.
SEASONAL VARIATIONS
-------------------
The divisions are only moderately affected by seasonal trends.
Housewares products typically have higher sales in the second half of
the year due to retail stocking related to the holiday season, Home
Furnishings and Hardware products have higher sales in the second and
third quarters due to an increased level of do-it-yourself projects
completed in the summer months and Office Products have higher sales
in the second and third quarters due to the back-to-school season. As
a result of these moderate seasonal trends, the Company's consolidated
quarterly sales do not fluctuate significantly.
7
NET SALES BY PRODUCT CLASS
--------------------------
The following table sets forth the amounts and percentages of the
Company's net sales for the three years ended December 31, 1994
(including sales of acquired companies only from the time of
acquisition), for the groups of similar products described previously.
Year Ended December 31,
1994 % 1993 % 1992 %
------- ------- -------
(In millions, except percentages)
Housewares:
Cookware and Bakeware $ 280.9 14% $ 264.7 16% $ 262.8 18%
Other * 410.9 20 264.1 16 244.6 17
------- ------- -------
Total Housewares 691.8 34 528.8 32 507.4 35
------- ------- -------
Home Furnishings:
Decorative Window Coverings
and Furnishings 317.8 15 222.7 13 85.0 6
Other * 325.0 16 202.8 13 77.3 5
------- ------- -------
Total Home Furnishings 642.8 31 425.5 26 162.3 11
------- ------- -------
Office Products:
Markers and Writing
Instruments 212.6 10 156.0 10 142.0 10
Other * 170.6 8 184.7 11 136.0 9
------- ------- -------
Total Office Products 383.2 18 340.7 21 278.0 19
------- ------- -------
Hardware:
Cabinet and Window Hardware 186.3 9 179.4 11 182.7 13
Other * 170.8 8 155.9 9 142.8 9
------- ------- -------
Total Hardware 357.1 17 335.3 20 325.5 22
Sold Businesses:
Industrial - Caps & Closures - - - - 160.6 12
- Counselor - - 14.7 1 17.9 1
------- ------- -------
Total Sold Businesses - - 14.7 1 178.5 13
------- ------- -------
Newell Consolidated $2,074.9 100% $1,645.0 100% $1,451.7 100%
======= === ======= === ======= ===
* This category is comprised of many different product classes, each
representing less than 10% of net sales.
8
ACQUISITIONS AND DIVESTITURES OF BUSINESSES
-------------------------------------------
At the foundation of the Company's growth strategy is
acquisitions. Since the late 1960s, acquisitions have been the
Company's primary vehicle for growth. Over the years, the Company has
acquired more than 50 companies, and in the 1990s alone, the Company
completed ten major acquisitions, representing nearly $1.5 billion in
additional sales.
Twenty-five years ago, the Company was a small drapery hardware
manufacturer with $20 million in sales. Today, the Company is an
international consumer goods supplier with annualized sales of over
$2.5 billion. This dramatic growth is largely the result of using
acquisitions as the vehicle to execute a multi-product offering
strategy supported by internal growth from existing product lines.
In its acquisition planning, the Company looks for branded,
staple product lines sold to volume purchasers. These product lines
must have the potential to reach the Company's high standard of
profitability, have a low technology level and a long product life
cycle. In addition to adding entirely new product lines, acquisitions
can be beneficial in rounding out existing businesses by filling gaps
in the product offering, adding new customers and distribution
channels and improving operational efficiency through shared
resources.
The Company has typically acquired companies with unrealized
profit potential. "Newellization" is the profit improvement and
productivity enhancement process that is implemented to bring newly
acquired product lines up to the Company's high standards of
profitability.
Elements of the Newellization process at newly acquired companies
include establishing a focused business strategy, improving customer
service, building partnerships with customers, eliminating corporate
overhead through centralization of administrative functions, trimming
excess costs, tightening financial controls, improving manufacturing
efficiency, pruning nonproductive product lines and reducing
inventories, increasing trade receivable turnover and improving sales
mix profitability through the application of program merchandising
techniques.
As part of the Newellization process to improve profitability,
sales can often decline as unprofitable product lines are reduced or
eliminated. In the Newell strategy, once a company has been fully
Newellized and is under good control, it is expected to begin building
profitable sales and contribute to the Company's internal sales
growth.
9
Additional information regarding acquisitions and divestitures of
businesses is included in note 2 to the consolidated financial
statements.
FOREIGN OPERATIONS
------------------
Canadian sales of the Company were approximately 6% of the
Company's total net sales in 1994, 1993 and 1992. The Company's
international division coordinates export sales of consumer products
to all other foreign countries, totaling less than 3% of 1994 total
net sales. Other foreign sales were less than 1% of the Company's
total net sales in all three years.
All of the Company's products are sold by the Canadian
subsidiaries; however, only decorative window coverings and
furnishings, picture frames and home hardware are manufactured in
Canada.
On November 30, 1994, the Company acquired the European consumer
products business of Corning Incorporated (now known as Newell
Europe). This acquisition included Corning's consumer products
manufacturing facilities in England, France and Germany, the European
trademark rights and product lines for Pyrex, Pyroflam and Visions
brands in Europe, the Middle East and Africa, and Corning's consumer
distribution network throughout these areas (Pyrex and Visions are
registered trademarks of Corning Incorporated). Additionally, the
Company became the distributor in Europe, the Middle East and Africa
for Corning's U.S.-manufactured cookware and dinnerware brands.
RAW MATERIAL
------------
The Company expects to have multiple sources of supply for
substantially all of its material requirements. The raw materials and
various purchased components required for its products have generally
been available in sufficient quantities.
PATENTS AND TRADEMARKS
----------------------
The Company has a number of patents and trademarks, none of which
is considered material to the consolidated operations.
COMPETITION
-----------
The Company competes with a number of well-established domestic
and foreign manufacturers that serve the markets for its products.
Many of the Company's products also compete against a number of
substitute products. Although the available information does not
10
permit the Company to form a reliable opinion as to its precise
competitive position within these markets, the Company believes it has
a significant share in many of the markets.
ENVIRONMENT
-----------
The Company is subject to various laws regulating the discharge
of materials into the environment or otherwise relating to the
protection of the environment. Regulation in this area is in the
process of development, including changes in the standards of
enforcement of existing laws and enactment of new laws. Although the
Company, like other companies engaged in similar businesses, is a
party to various proceedings relating to environmental matters and
makes capital expenditures for environmental projects, it does not
believe that the Company will have material capital expenditures for
environmental control facilities during the current or succeeding
fiscal year.
EMPLOYEES
---------
The Company employs approximately 20,000 persons, of whom
approximately 5,000 are covered by collective bargaining agreements.
In June 1994, there was a one-week strike at the EZ Paintr division,
affecting 163 employees. There were no strikes during 1993. In
October 1992, there was a three-week strike at the Anchor Consumer
Glass division. The Company believes that its employee relations are
good.
11
Item 2. Properties
-------------------
The following table shows the location and general character of
the principal operating facilities owned or leased by the Company.
The executive offices are located in Beloit, Wisconsin, which is an
owned facility occupying approximately 9,000 square feet. Other
Corporate offices are located in owned facilities in Freeport,
Illinois (occupying 59,000 square feet) and in Rockford, Illinois
(occupying 7,000 square feet). Most of the idle facilities, which are
excluded from the following list, are subleased while being held
pending sale or lease expiration. The Company considers its
properties to be in generally good condition and well-maintained, and
are generally suitable and adequate to carry on the Company's
business.
Location City General Character
-------- ----------- -----------------
Alabama Phoenix City Distribution
Arizona Bisbee Distribution
California Garden Grove Manufacturing
Los Angeles Manufacturing
Santa Monica Manufacturing
Vista Manufacturing and Distribution
Westminster Manufacturing, Distribution and Administrative Office
Canada Calgary, AB Manufacturing
Mississauga, ON Manufacturing and Distribution
Oakville, ON Distribution and Administrative Office
Pickering, ON Distribution
Prescott, ON Manufacturing
Scarborough, ON Administrative Office
Toronto, ON Manufacturing, Distribution and Administrative Office
Watford, ON Manufacturing, Distribution and Administrative Office
Weston, ON Administrative Office
Europe Avon, France Administrative Office
Bagneaux, France Manufacturing and Distribution
Bath Road,
Slough, England Administrative Office
Berhamsted,
England Administrative Office
Brussels,
Belgium Distribution
Chateauroux,
France Manufacturing
12
Location City General Character
-------- ----------- -----------------
Deptford,
Sunderland
England Distribution
Las Rozas,
Madrid, Spain Administrative Office
Lisburn Terrace
Sunderland,
England Distribution
Milan, Italy Distribution and Administrative Office
Muhltal, Germany Manufacturing
Sunderland,
England Manufacturing
Zellick, Belgium Distribution and Administrative Office
Georgia Ashburn Manufacturing and Administrative Office
Columbus Distribution
Manchester Manufacturing and Administrative Office
Hawaii Waipahu Manufacturing
Illinois Bedford Park Manufacturing, Distribution and Administrative Office
Bellwood Manufacturing, Distribution and Administrative Office
Freeport Manufacturing, Distribution and Administrative Office
Rockford Manufacturing, Distribution and Administrative Office
South Holland Manufacturing
Kansas Salina Manufacturing and Distribution
Minnesota Coon Rapids Manufacturing
Eagan Distribution
St. Paul Manufacturing and Administrative Office
Missouri Jackson Manufacturing
Kansas City Manufacturing, Distribution and Administrative Office
Nebraska Omaha Distribution
New Jersey Kearny Manufacturing and Administrative Office
Newark Manufacturing, Distribution and Administrative Office
Parsippany Administrative Office
Rockaway Manufacturing
New York Medina Manufacturing, Distribution and Administrative Office
Ogdensburg Manufacturing
North Carolina Greensboro Administrative Office
Statesville Manufacturing and Distribution
13
Location City General Character
-------- ----------- -----------------
Ohio Bremen Manufacturing
Lancaster Manufacturing, Distribution and Administrative Office
Pennsylvania Ambridge Distribution
Evans City Distribution
Monaca Manufacturing and Administrative Office
Puerto Rico Carolina Distribution and Administrative Office
Tennessee Johnson City Manufacturing
Lewisburg Manufacturing, Distribution and Administrative Office
Memphis Distribution and Administrative Office
Texas Dallas Manufacturing
Taylor Manufacturing, Distribution and Administrative Office
Utah Ogden Manufacturing
Salt Lake City Manufacturing
West Virginia Weirton Manufacturing
Wisconsin Beloit Administrative Office
Chilton Manufacturing
Madison Manufacturing, Distribution and Administrative Office
Manitowoc Manufacturing, Distribution and Administrative Office
Milwaukee Distribution
St. Francis Manufacturing, Distribution and Administrative Office
14
Item 3. Legal Proceedings
--------------------------
Information regarding legal proceedings is included in note 15 to
the consolidated financial statements and is hereby incorporated by
reference herein.
As previously reported in the Company's Current Report on Form 8-K
dated June 20, 1994, Plastics, Inc. ("Plastics"), a subsidiary of the
Company, pled guilty to a single criminal charge of violating the
Federal antitrust laws based on its understanding that sometime after
December 1, 1991, former officers of Plastics agreed with certain
competitors to raise list prices on certain disposable injection-molded
commercial plasticware, which agreement(s) ended on or before December
8, 1992. During 1994, class action antitrust complaints on behalf of
customers were filed against Plastics and other manufacturers in the
United States District Court for the Eastern District of Pennsylvania
(the "Philadelphia cases"), the United States District Court for the
Middle District of Florida (the "Florida cases"), the Superior Court of
California, San Francisco County (the "California cases") and the
Ontario Court of Justice, Toronto, Ontario, Canada seeking civil
damages. Plastics has entered into settlement agreements relating to
the Philadelphia, Florida and California cases which provide for
aggregate payments of $4 million and which are subject to approval by
each of the respective courts. Management believes that resolution of
these cases will not have a material effect on the Company's
consolidated financial position or results of operations.
15
Item 4. Submission of Matters to a Vote of Security Holders
------- ---------------------------------------------------
There were no matters submitted to a vote of the Company's
security holders during the fourth quarter of fiscal year 1994.
Supplementary Item - Executive Officers of the Registrant
NAME AGE PRESENT POSITION WITH THE COMPANY
---- --- -------------------------------------
William P. Sovey 61 Vice Chairman and
Chief Executive Officer
Thomas A. Ferguson 47 President and
Chief Operating Officer
Donald L. Krause 55 Senior Vice President-
Corporate Controller
William T. Alldredge 55 Vice President-Finance
Richard C. Dell 49 Group President
William J. Denton 50 Group President
William K. Doppstadt 62 Vice President-Personnel Relations
William P. Sovey has been Vice Chairman and Chief Executive Officer
since July 1992. From January 1986 through July 1992, he had been
President and Chief Operating Officer.
Thomas A. Ferguson has been President and Chief Operating Officer
since May 1992. From January 1989 to May 1992, he was President-
Operating Companies.
William T. Alldredge has been Vice President-Finance of the Company
since August 1983.
Donald L. Krause was appointed Senior Vice President-Corporate
Controller in March 1990. He was President-Industrial Companies from
February 1988 to March 1990.
Richard C. Dell has been Group President since June 1992. He was
President of Amerock from November 1989 to June 1992. At EZ Paintr,
he was President from September 1987 to November 1989.
William J. Denton has been Group President since March 1990. From
April 1989 to March 1990, he was Vice President-Corporate Controller.
He was President of Anchor Hocking Glass from August 1987 to April
1989.
William K. Doppstadt has been Vice President-Personnel Relations of
the Company since 1974.
16
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
-------------------------------------------------
The Company's common stock is listed on the New York and Chicago
Stock Exchanges (symbol: NWL). The following table sets forth the
high and low sales prices of the common stock on the New York Stock
Exchange Composite Tape (as published in the Wall Street Journal) for
the calendar periods indicated as adjusted for the two-for-one stock
split discussed below.
Year Ended December 31
1994 1993
------------------- -------------------
High Low High Low
--------- -------- --------- --------
Quarters:
First $21 13/16 $19 1/8 $21 1/4 $16 7/16
Second 23 1/4 19 19 7/8 16 7/16
Third 23 7/8 21 7/8 18 1/2 15 9/16
Fourth 22 3/8 20 1/2 21 17 1/2
On December 31, 1994 there were 10,290 record holders of the
Company's common stock.
The Company has paid regular cash dividends on its common stock
since 1947. On May 13, 1993, the quarterly cash dividend was
increased to $0.09 per share from the $0.08 per share that had been
paid since February 15, 1991. The quarterly cash dividend was again
increased to $0.10 per share on May 12, 1994.
In August 1994, the Company's Board of Directors declared a two-
for-one common stock split in the form of a 100% stock distribution of
the Company's common stock, which was paid on September 1, 1994 to
stockholders of record on August 15, 1994. All per share data was
adjusted to reflect the two-for-one stock split.
Item 6. Selected Financial Data
--------------------------------
The following is a summary of certain consolidated financial
information relating to the Company. The summary has been derived in
part from, and should be read in conjunction with, the consolidated
financial statements of the Company included elsewhere in this report
and the schedules thereto.
17
Year Ended December 31,
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(In millions, except per share data)
INCOME STATEMENT DATA
Net sales $2,074.9 $1,645.0 $1,451.7 $1,259.0 $1,204.4
Cost of products sold 1,403.8 1,101.7 997.3 845.6 820.0
-------- -------- -------- -------- --------
Gross income 671.1 543.3 454.4 413.4 384.4
Selling, general
and administrative
expenses 313.2 257.2 201.1 182.2 174.3
Restructuring costs - - 20.9 - -
-------- -------- -------- -------- --------
Operating income 357.9 286.1 232.4 231.2 210.1
Nonoperating expenses
(income):
Interest expense 30.0 19.1 20.4 13.2 13.1
Other (1.4) (8.5) (65.6) (6.0) (13.2)
-------- -------- -------- -------- --------
Net 28.6 10.6 (45.2) 7.2 (0.1)
-------- -------- -------- -------- --------
Income before income
taxes and cumulative
effect of accounting
change 329.3 275.5 277.6 224.0 210.2
Income taxes 133.7 110.2 114.3 88.4 84.7
-------- -------- -------- -------- --------
Net income before
cumulative effect
of accounting
change 195.6 165.3 163.3 135.6 125.5
Cumulative effect of
accounting change - - (44.2) - -
-------- -------- -------- -------- --------
Net income $ 195.6 $ 165.3 $ 119.1 $ 135.6 $ 125.5
======== ======== ======== ======== ========
EARNINGS PER SHARE DATA
Before cumulative
effect of
accounting change $1.24 $1.05 $ 1.05 $0.89 $0.84
Cumulative effect of
accounting change - - (0.29) - -
-------- -------- -------- -------- --------
Earnings per share $1.24 $1.05 $0.76 $0.89 $0.84
======== ======== ======== ======== ========
Cash dividends per
share $0.39 $0.35 $0.30 $0.30 $0.25
======== ======== ======== ======== ========
18
Item 6. Selected Financial Data (Cont.)
----------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(In millions)
WEIGHTED AVERAGE SHARES 157.8 157.3 155.8 151.5 148.9
BALANCE SHEET DATA
Inventories $ 420.7 $ 301.0 $ 226.2 $ 215.3 $ 197.8
Working Capital 133.6 76.7 219.5 187.9 236.7
Total assets 2,488.3 1,952.9 1,569.6 1,187.5 1,000.4
Short-term debt 309.1 247.2 97.1 2.1 11.2
Long-term debt, net of
current maturities 409.0 218.1 176.8 176.6 90.3
Stockholders' equity 1,125.3 979.1 859.4 728.8 610.0
(1) On February 14, 1992, a subsidiary of the Company merged with
Sanford Corporation ("Sanford"), a designer, manufacturer and marketer
of marking and writing instruments, plastic desk accessories, file
storage boxes and other office and school supplies. The Company
issued approximately 13.8 million shares of common stock for all the
common stock of Sanford. This transaction was accounted for as a
pooling of interests; therefore, prior financial statements were
restated to reflect this merger.
On July 8, 1992, the Company acquired Stuart Hall Company, Inc.
("Stuart Hall"), a manufacturer of school supplies, stationery and
office supplies. The Company issued 1.6 million shares of common
stock for all the common stock of Stuart Hall. On October 1, 1992,
the Company acquired substantially all of the assets of Intercraft
Industries, L.P., and all of the capital stock of Intercraft
Industries of Canada, Inc. (collectively, "Intercraft"), manufacturers
of ready-made picture frames. The purchase price was $175.0 million
in cash. These transactions were accounted for as purchases;
therefore, the results of operations for Stuart Hall and Intercraft
are included in the accompanying consolidated financial statements
since their respective dates of acquisition. The cost of these 1992
acquisitions was allocated to the fair market value of assets acquired
and liabilities assumed and resulted in goodwill of approximately
$161.9 million.
On April 30, 1993, the Company acquired substantially all of the
assets of Levolor Corporation ("Levolor"), a manufacturer and
distributor of decorative window coverings. The purchase price was
$72.5 million in cash. On September 22, 1993, the Company acquired
Lee/Rowan Co. ("Lee/Rowan"), a manufacturer and marketer of coated
wire storage and organization products. The purchase price was $73.5
million in cash. On November 9, 1993, the Company acquired Goody
19
Products, Inc. ("Goody"), a manufacturer and marketer of personal
consumer products including hair accessories and beauty organizers.
The purchase price, excluding the cost of Goody common stock that the
Company owned prior to the acquisition, was $147.1 million in cash.
These transactions were accounted for as purchases; therefore, the
results of operations for Levolor, Lee/Rowan and Goody are included in
the accompanying consolidated financial statements since their
respective dates of acquisition. The cost of the 1993 acquisitions
was allocated to the fair market value of assets acquired and
liabilities assumed and resulted in goodwill of approximately $208.2
million.
As part of the Goody acquisition, the Company acquired the
capital stock of Opti-Ray, Inc. ("Opti-Ray"), a designer and marketer
of fashion sunglasses and non-prescription reading glasses. As of
January 1, 1994, the Company sold the capital stock of Opti-Ray to
Benson Eyecare Corporation. The net assets of Opti-Ray, which
totalled $8.5 million, are included in Other Assets as of December 31,
1993. The operating results of Opti-Ray from the date of acquisition
to December 31, 1993 are excluded from the Consolidated Statements of
Income and are not material.
On August 29, 1994, the Company acquired Home Fashions,
Inc.("HFI"), a manufacturer and marketer of decorative window
coverings, including vertical blinds and pleated shades. The purchase
price was $130.4 million in cash. This company was combined with
Levolor and together they are operated as a single entity called
Levolor Home Fashions. On October 18, 1994, the Company acquired
Faber-Castell Corporation, which is a leading maker and marketer of
markers and writing instruments, including wood-cased pencils and
rolling ball pens, whose products are marketed under the Eberhard
Faber brand name ("Eberhard Faber"). The purchase price was $136.5
million in cash. This company was combined with Sanford and together
they are operated as single entity called Sanford. On November 30,
1994, the Company acquired the European consumer products business of
Corning Incorporated (now known as Newell Europe). This acquisition
included Corning's consumer products manufacturing facilities in
England, France and Germany, the European trademark rights and product
lines for Pyrex, Pyroflam and Visions brands in Europe, the Middle
East and Africa, and Corning's consumer distribution network
throughout these areas (Pyrex and Visions are registered trademarks of
Corning Incorporated). Additionally, the Company became the
distributor in Europe, the Middle East and Africa for Corning's U.S.-
manufactured cookware and dinnerware brands. The purchase price was
$86.4 million in cash. These transactions were accounted for as
purchases; therefore, the results of operations for HFI, Eberhard
Faber and Newell Europe are included in the accompanying consolidated
financial statements since their respective dates of acquisition. The
cost of the 1994 acquisitions was allocated on a preliminary basis to
the fair market value of assets acquired and liabilities assumed and
resulted in goodwill of approximately $163.0 million.
20
The unaudited consolidated results of operations for the years
ended December 31, 1994 and 1993 on a pro forma basis, as though
Levolor, HFI, Lee/Rowan, Goody, Eberhard Faber and Newell Europe each
had been acquired on January 1, 1993, are as follows:
1994 1993
--------- ---------
(In millions, except per share data)
Net sales $2,455.5 $2,439.4
Net income 195.1 167.1
Earnings per share 1.24 1.06
(2) In August 1994, the Company's Board of Directors declared a two-
for-one common stock split in the form of a 100% stock distribution of
the Company's common stock, which was paid on September 1, 1994 to
stockholders of record on August 15, 1994. All per share data was
adjusted to reflect the two-for-one stock split.
(3) The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No.'s 112 and 115, "Employers'
Accounting for Postemployment Benefits" and "Accounting for Certain
Investments in Debt and Equity Securities." The Company adopted these
statements in 1994. The adoption of these statements did not have a
material effect on the consolidated financial statements.
(4) In 1992, the Company adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other than Pensions." Adoption of this
standard did not have a material effect on the annual expense for
postretirement benefits. As part of adopting this standard, the
Company recorded, in the first quarter of 1992, a one-time, non-cash
charge against earnings of $71.7 million before taxes and $44.1
million after taxes, or $0.29 per share. The effect of the change on
1992 net income before cumulative effect of accounting change was not
material to any of the consolidated financial statements.
(5) On December 31, 1992, the Company sold its closures business for
a $210.0 million note receivable due and paid January 4, 1993. The
Company recognized a net pre-tax gain of $82.9 million on the sale.
Sales for this business totalled $160.6 million in 1992.
21
QUARTERLY SUMMARIES
Summarized quarterly data for the last three years are as follows
(unaudited):
Calendar Year 1st 2nd 3rd 4th Year
--------------- -------- -------- -------- -------- --------
(In millions, except per share data)
1994
----
Net sales $ 443.5 $ 493.5 $ 553.2 $ 584.7 $2,074.9
Gross income 134.8 159.9 179.2 197.2 671.1
Net income 31.5 44.0 58.0 62.1 195.6
Earnings per share .20 .28 .37 .39 1.24
1993
----
Net sales $ 334.2 $ 372.7 $ 456.7 $ 481.4 $1,645.0
Gross income 104.5 121.7 149.1 168.0 543.3
Net income 27.7 34.5 47.6 55.5 165.3
Earnings per share .18 .22 .30 .35 1.05
1992
----
Net sales $ 310.1 $ 318.0 $ 402.1 $ 421.5 $1,451.7
Gross income 93.1 101.0 122.6 137.7 454.4
Before cumulative
effect of
accounting change:
Net income 27.4 35.2 43.0 57.7 163.3
Earnings per share .18 .23 .27 .37 1.05
After cumulative
effect of
accounting change:
Net income (16.8) 35.2 43.0 57.7 119.1
Earnings per share (.11) .23 .27 .37 .76
22
Item 7. Management's Discussion and Analysis of Results
of Operations and Financial Condition
------------------------------------------------
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of
the Company's consolidated results of operations and financial
condition. The discussion should be read in conjunction with the
consolidated financial statements and notes thereto.
RESULTS OF OPERATIONS
The following table sets forth for the period indicated items
from the Consolidated Statements of Income as a percentage of net
sales.
Year Ended December 31,
1994 1993 1992
------ ------ ------
Net sales 100.0% 100.0% 100.0%
Cost of products sold 67.7 67.0 68.7
------ ------ ------
Gross income 32.3 33.0 31.3
Selling, general
and administrative expenses ("SG&A") 15.1 15.6 13.9
Restructuring costs - - 1.4
------ ------ ------
Operating income 17.2 17.4 16.0
Nonoperating expenses (income):
Interest expense 1.4 1.1 1.4
Other (0.1) (0.5) (4.5)
------ ------ ------
Net 1.3 0.6 (3.1)
------ ------ ------
Income before income taxes and
cumulative effect of accounting change 15.9 16.8 19.1
Income taxes 6.5 6.7 7.9
------ ------ ------
Net income before cumulative effect
of accounting change 9.4 10.1 11.2
Cumulative effect of accounting change - - (3.0)
------ ------ ------
Net income 9.4% 10.1% 8.2%
====== ====== ======
23
1994 vs. 1993:
Net sales for 1994 were $2,074.9 million, representing an
increase of $429.9 million or 26.1% from 1993. Net sales for each
of the Company's product groups were as follows, in millions:
1994 1993 %Change
-------- -------- -------
Housewares $ 691.8 $ 528.8 30.8%
Home Furnishings 642.8 425.5 51.1
Office Products 383.2 340.7 12.5
Hardware 357.1 335.3 6.5
Sold Businesses - 14.7 N/A
-------- -------- -------
$2,074.9 $1,645.0 26.1%
======== ========
The overall increase in net sales was primarily attributable to
the acquisitions of Levolor, HFI, Lee/Rowan, Goody and Eberhard Faber,
which are described in note 2 to the consolidated financial
statements, and internal growth of 6%. Sales in the housewares group
were positively impacted by the Goody acquisition and 5% internal
growth. The increase in home furnishings was attributable to the
Levolor, HFI and Lee/Rowan acquisitions and internal growth of 10%.
The increase in office products was due to the Eberhard Faber
acquisition and 6% internal growth. The increase in the hardware
group was solely due to internal growth. "Sold businesses" represents
the sales in 1993 of Counselor, which was divested in October 1993.
Internal growth is defined as sales growth from continuing businesses
owned more than two years.
Gross income as a percent of net sales for 1994 was 32.3% versus
33.0% in 1993. The decrease was due to lower than average gross
margins from the businesses acquired in 1993 and 1994.
SG&A as a percent of net sales in 1994 was 15.1% versus 15.6% in
1993. The decrease was due to 6% internal growth, with only slight
increases in spending levels.
Operating income as a percent of net sales was 17.2% in 1994
versus 17.4% in 1993.
Net nonoperating expenses were $28.6 million in 1994 versus $10.6
million in 1993. The increase was due to additional interest expense
of $10.9 million, incremental goodwill amortization of $5.3 million
resulting from recent acquisitions, and a $6.0 million charge incurred
in connection with a plea agreement by a subsidiary of the Company
with the U.S. Government. The increase was offset by a $1.5 million
payment received from the settlement of a lawsuit and a $1.9 million
increase in equity earnings from American Tool Companies, Inc., in
which the Company has a 47% ownership interest.
24
The effective tax rate was 40.6% in 1994 and 40.0% in 1993. See
note 12 to the consolidated financial statements for an explanation of
the effective tax rate and deferred tax issues.
Net income for 1994 was $195.6 million, representing an increase
of $30.3 million or 18.3% from 1993. Earnings per share for 1994 were
up 18.1% to $1.24 versus $1.05 in 1993. The increases in net income
and earnings per share were primarily attributable to contributions
from the 1993 acquisitions and internal growth, net of increases in
net nonoperating expenses.
1993 vs. 1992:
-------------
Net sales for 1993 were $1,645.0 million, representing an
increase of $193.3 million or 13.3% from 1992. Net sales for each of
the Company's product groups were as follows, in millions:
1993 1992 %Change
-------- -------- -------
Housewares $ 528.8 $ 507.4 4.2%
Home Furnishings 425.5 162.3 162.2
Office Products 340.7 278.0 22.6
Hardware 335.3 325.5 3.0
Sold Businesses 14.7 178.5 N/A
-------- --------
$1,645.0 $1,451.7 13.3%
======== ========
The overall increase in net sales was attributable to the
acquisitions of Stuart Hall, Intercraft, Levolor, Lee/Rowan and Goody,
which are described in note 2 to the consolidated financial
statements, and internal growth of 4%. Sales in the housewares group
were positively impacted by the Goody acquisition. The increase in
home furnishings was attributable to the Intercraft, Levolor and
Lee/Rowan acquisitions and continued expansion in the home center
channel of trade. The increase in office products was due to the
Stuart Hall acquisition and Sanford's continued expansion in the mass
market channel of trade. The increase in the hardware group was
solely due to internal growth. "Sold businesses" represents the sales
of the closures business, which was divested in December 1992, and
Counselor, which was sold in October 1993.
Gross income as a percent of net sales for 1993 was 33.0% versus
31.3% in 1992. The increase was due to lower gross margins at the
divested closures business in 1992 and increased gross margins at
Sanford in 1993.
SG&A as a percent of net sales in 1993 was 15.6% versus 13.9% in
1992. The increase was due to lower SG&A at the divested closures
25
business in 1992 and higher SG&A at recently acquired Intercraft and
Levolor.
Operating income as a percent of net sales in 1993 was 17.4%
versus 16.0% in 1992. In 1992, the Company recorded $20.9 million in
restructuring costs, of which $17.4 million was recorded in the fourth
quarter. The primary components of this charge were costs associated
with the closing of a manufacturing facility and severance costs
related to businesses acquired in transactions accounted for under the
pooling of interests method.
Net nonoperating expenses for 1993 were $55.7 million higher than
1992, due to an $82.9 million gain recognized on the sale of the
closures business in 1992. The gain was reduced by approximately
$39.2 million of special charges in 1992, including costs associated
with the Stanley Works investment ($14.0 million), write-offs of
certain intangible assets ($11.7 million) and costs associated with
prior acquisitions and the establishment of other reserves ($13.5
million). In addition, incremental goodwill amortization was $3.4
million due to recent acquisitions, and there were no gains on
securities sales in 1993 compared to $8.6 million in 1992.
The effective tax rate was 40.0% in 1993 and 41.2% in 1992. See
note 12 to the consolidated financial statements for an explanation of
the effective tax rate and deferred tax issues.
Net income for 1993 was $165.3 million, representing an increase
of $46.2 million or 38.8% from 1992. Earnings per share for 1993 were
up 38.2% to $1.05 versus $0.76 in 1992.
In 1992, the Company adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other than Pensions." As part of adopting
this standard, the Company recorded, in the first quarter of 1992, a
one-time, non-cash charge against earnings of $71.7 million before
taxes and $44.1 million after taxes, or $0.29 per share. The deferred
income tax benefit increased $27.6 million as a result of adopting
this statement. See note 9 to the consolidated financial statements
for additional information.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources
include cash provided from operations and use of available borrowing
facilities.
Operating activities provided net cash of $238.4 million during
1994, an increase of $208.3 million from $30.1 million in 1993. This
change was primarily due to the discontinuation of a $125.0 million
sale of trade receivables program in the third quarter of 1993,
26
payment of income taxes in 1993 related to the gain on the sale of the
closures business and an increase in net income in 1994.
The Company has foreign and domestic lines of credit with various
banks and a commercial paper program which are available for short-
term financing. Under the line of credit arrangements, the Company
may borrow up to $360.0 million (of which $267.4 million was available
at December 31, 1994) based upon such terms as the Company and the
respective banks have mutually agreed upon.
The Company has a shelf registration statement covering up to
$500.0 million of debt securities, of which $257.0 million was
available for additional borrowings as of December 31, 1994. Pursuant
to the shelf registration, at December 31, 1994 the Company had
outstanding $186.0 million (principal amount) of medium-term notes
with maturities ranging from one to five years at an average rate of
interest equal to 6.6%. The fair value of these notes was $185.1
million at December 31, 1994. The Company had outstanding $153.0
million on December 31, 1993 and 1992, and the fair value of these
notes was $158.3 million at December 31, 1993 and $160.9 million at
December 31, 1992.
The Company entered into a three-year $300.0 million revolving
credit agreement in August 1993, and a $100.0 million, 364-day
revolving credit agreement in each of November 1993 and August 1994.
The November 1993 364-day revolving credit agreement was renewed for
an additional 364 days. Under these agreements, the Company may
borrow, repay and reborrow funds in an aggregate amount up to $500.0
million, at a floating interest rate. At December 31, 1994, there
were no borrowings under the revolving credit agreements.
In lieu of borrowings under the credit agreements, the Company
may issue up to $500.0 million of commercial paper. The Company's
revolving credit agreements referred to above provide the committed
backup liquidity required to issue commercial paper. Accordingly,
commercial paper may only be issued up to the amount available under
the Company's revolving credit agreements. At December 31, 1994,
$417.1 million (face or principal amount) of commercial paper was
outstanding, all of which was supported by the revolving credit
agreements. The short-term portion of this balance was $117.1
million, which is classified as notes payable. The remaining $300.0
million is classified as long-term debt under the three-year revolving
credit agreement.
The Company's primary uses of liquidity and capital resources
include capital expenditures, dividend payments and acquisitions.
Capital expenditures were $66.0 million, $58.9 million and $77.6
million in 1994, 1993 and 1992, respectively.
27
The Company has paid regular cash dividends on its common stock
since 1947. On May 13, 1993, the quarterly cash dividend was
increased to $0.09 per share from the $0.08 per share that had been
paid since February 15, 1991. The quarterly cash dividend was again
increased to $0.10 per share on May 12, 1994. In August 1994, the
Company's Board of Directors declared a two-for-one common stock split
in the form of a 100% stock distribution of the Company's common
stock, which was paid on September 1, 1994 to stockholders of record
on August 15, 1994. All per share data has been adjusted to reflect
the two-for-one stock split.
Retained earnings increased in 1994, 1993 and 1992 by $134.0
million, $111.1 million and $68.6 million, respectively. The average
dividend payout ratio to common stockholders in 1994, 1993 and 1992
(before the cumulative effect of accounting change) was 31%, 33% and
29%, respectively.
In 1994, the Company acquired HFI, Faber-Castell Corporation
(whose products are marketed under the Eberhard Faber brand name) and
the European consumer products business of Corning Incorporated (now
known as Newell Europe), with purchase prices of $130.4 million,
$136.5 million and $86.4 million, respectively. All of these
acquisitions were accounted for as purchases and were paid for with
proceeds obtained from the issuance of commercial paper, medium-term
notes and notes payable under the Company's lines of credit.
The increases in current assets, current liabilities, property,
plant and equipment and goodwill during 1993 and 1994 are primarily
due to the acquisitions occurring in those years.
Working capital at December 31, 1994 was $133.6 million compared
to $76.7 million at December 31, 1993. The current ratio at December
31, 1994 was 1.17:1 compared to 1.13:1 at December 31, 1993. The
total debt to total capitalization was .39:1 at December 31, 1994 and
.32:1 at December 31, 1993.
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.
The Financial Accounting Standards Board issued SFAS No.'s 112
and 115, "Employers' Accounting for Postemployment Benefits" and
"Accounting for Certain Investments in Debt and Equity Securities."
The Company adopted these statements in 1994. The adoption of these
statements did not have a material effect on the consolidated
financial statements.
28
Environmental Matters
---------------------
The Company is involved in various environmental remediation and
other compliance activities, including activities arising under the
federal Comprehensive Environmental Response, Compensation and
Liability Act ("Superfund") and similar state statutes. Certain
information regarding these activities is included in note 15 to the
consolidated financial statements. Based on information currently
available to it, the Company has estimated that remediation costs
associated with these activities will be between $12.5 million and
$17.5 million. As of December 31, 1994, the Company had a reserve
equal to $14.5 million for such remediation costs in the aggregate.
Because of the uncertainties associated with environmental assessment
and remediation activities, the possibility that sites could be
identified in the future that require environmental remediation 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 the imprecision in estimating future environmental
costs, the Company does not expect that any sum 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
position, liquidity or results of operations.
Outlook
-------
The Company's primary financial goals are to maintain return on
beginning equity at 20% or above and increase earnings per share an
average of 15% per year, while maintaining a ratio of total debt to
total capital (leverage) at a level of approximately 33%. The Company
has achieved its goals over the last ten years, averaging 21% ROE,
increasing EPS 20% and averaging 29% leverage. The factors affecting
the Company's ability to achieve these goals in the future will be the
rates of internal and acquisition growth.
In terms of internal growth, the Company has achieved 4-6%
internal sales growth in each of the last 4 years, and at the same
time, has improved its core operating margins. Operating margins may
be under pressure near-term, however, as a result of rising raw
material costs. The Company intends to offset these costs through
price increases to its customers, but is not certain to what extent
the cost increases can be offset since its customers are primarily
volume retailers with significant bargaining power.
In terms of acquisition growth, since 1990 the Company has more
than doubled its size, acquiring businesses with annual sales of
almost $1.5 billion. The rate at which the Company can integrate
these recent acquisitions, in order to meet the Company's high
standards of profitability, may affect near-term EPS growth. Over the
longer term, the Company's ability to make strategic acquisitions will
impact the EPS growth rate.
29
Item 8. Financial Statements and Supplementary Data
------- -------------------------------------------
30
Report of Independent Public Accountants
----------------------------------------
To the Stockholders and Board of Directors of Newell Co.:
We have audited the accompanying consolidated balance sheets of Newell
Co. (a Delaware corporation) and subsidiaries as of December 31, 1994,
1993 and 1992, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1994. These consolidated financial
statements are the responsibility of Newell Co.'s management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Newell Co.
and subsidiaries as of December 31, 1994, 1993 and 1992, and the
results of their operations and their cash flows for each of the three
years in the period ended
December 31, 1994, in conformity with generally accepted accounting
principles.
As explained in note 9 to the consolidated financial statements,
effective January 1, 1992, the Company changed its method of
accounting for post-retirement benefits other than pensions.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
January 28, 1995.
31
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1994 1993 1992
---- ---- ----
(In thousands, except per share amounts)
Net sales $2,074,934 $1,645,036 $1,451,656
Cost of products sold 1,403,786 1,101,720 997,269
--------- -------- ---------
GROSS INCOME 671,148 543,316 454,387
Selling, general and
administrative expenses 313,283 257,186 201,063
Restructuring costs - - 20,933
--------- --------- ---------
OPERATING INCOME 357,865 286,130 232,391
Nonoperating expenses (income):
Interest expense 29,970 19,062 20,417
Other (1,397) (8,488) (65,590)
--------- --------- ---------
Net 28,573 10,574 (45,173)
--------- --------- ---------
Income before income taxes
and cumulative effect of
accounting change 329,292 275,556 277,564
Income taxes 133,717 110,222 114,293
--------- --------- ---------
Net income before cumulative
effect of accounting change 195,575 165,334 163,271
Cumulative effect of
accounting change - - (44,134)
--------- --------- ---------
NET INCOME $ 195,575 $ 165,334 $ 119,137
========= ========= =========
Earnings per share
before cumulative effect
of accounting change $1.24 $1.05 $1.05
Cumulative effect of
accounting change - - (0.29)
---- ---- ----
Earnings per share $1.24 $1.05 $0.76
==== ==== ====
Weighted average shares 157,774 157,269 155,878
======= ======= =======
See notes to consolidated financial statements.
32
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
1994 1993 1992
---- ---- ----
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 14,892 $ 2,866 $ 28,008
Receivable from sale of business - - 210,000
Accounts receivable, net 335,806 256,468 57,795
Inventories 420,654 301,016 226,230
Deferred income taxes 90,063 73,461 38,991
Prepaid expenses and other 56,256 42,217 33,611
-------- --------- --------
TOTAL CURRENT ASSETS 917,671 676,028 594,635
MARKETABLE EQUITY SECURITIES 64,740 48,974 62,964
OTHER LONG-TERM INVESTMENTS 183,372 177,891 174,080
OTHER ASSETS 182,906 165,911 119,977
PROPERTY, PLANT AND EQUIPMENT, NET 454,597 370,382 292,760
GOODWILL 684,990 513,761 325,163
------- ------- -------
TOTAL ASSETS $2,488,276 $1,952,947 $1,569,579
========= ========= =========
See notes to consolidated financial statements.
33
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT.)
December 31,
1994 1993 1992
---- ---- ----
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 209,720 $ 189,003 $ 65,030
Accounts payable 112,269 72,832 37,553
Accrued compensation 48,461 36,525 32,203
Other accrued liabilities 305,878 222,508 147,926
Income taxes 8,271 20,244 60,344
Current portion of long-term debt 99,425 58,200 32,045
------- ------- -------
TOTAL CURRENT LIABILITIES 784,024 599,312 375,101
LONG-TERM DEBT 408,986 218,090 176,849
OTHER NONCURRENT LIABILITIES 152,697 156,400 158,251
DEFERRED INCOME TAXES 17,243 - -
STOCKHOLDERS' EQUITY
Par value of common stock issued 157,844 78,793 78,338
Additional paid-in capital 175,352 249,625 239,503
Retained earnings 788,862 654,819 543,765
Net unrealized gain on securities
available for sale 9,868 N/A N/A
Cumulative translation adjustment (6,466) (4,055) (2,208)
Treasury stock (at cost) (134) (37) (20)
--------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY 1,125,326 979,145 859,378
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,488,276 $1,952,947 $1,569,579
========= ========= =========
See notes to consolidated financial statements.
34
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1994 1993 1992
---- ---- ----
(In thousands)
OPERATING ACTIVITIES:
Net income $ 195,575 $ 165,334 $ 119,137
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Cumulative effective of
accounting change - - 44,134
Depreciation and amortization 72,485 64,262 53,881
Deferred income taxes 30,673 19,757 (14,914)
Net gains on:
Sale of businesses - (1,233) (82,945)
Marketable equity securities (373) - (8,616)
Write-off of intangible assets - - 11,664
Other (5,661) (3,811) (4,377)
Changes in current accounts, excluding
the effects of acquisitions and sale
of businesses:
Accounts receivable (254) (129,562) 39,010
Inventories (13,798) (6,328) 26,715
Other current assets, accounts payable,
accrued liabilities and other (40,221) (78,288) 54,548
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 238,426 30,131 238,237
--------- --------- ---------
INVESTING ACTIVITIES:
Acquisitions (345,392) (309,846) (177,317)
Expenditures for property, plant
and equipment (66,026) (58,898) (77,613)
Sale of businesses - 219,638 -
Sale of marketable equity securities 1,053 - 72,879
Purchase of other investments - (1,660) (11,930)
Disposals of noncurrent assets and other 2,628 (16,141) (18,060)
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES (407,737) (166,907) (212,041)
--------- --------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 402,708 232,852 181,320
Proceeds from exercised stock options
and other 2,799 5,216 9,023
Payments on notes payable and long-term debt (162,638) (72,154) (168,513)
Cash dividends (61,532) (54,280) (46,261)
--------- --------- ---------
NET CASH PROVIDED BY(USED IN)
FINANCING ACTIVITIES 181,337 111,634 (24,431)
--------- --------- ---------
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 12,026 (25,142) 1,765
Cash and cash equivalents at beginning of year 2,866 28,008 42,512
Sanford decrease in cash in December 1991 - - (16,269)
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 14,892 $ 2,866 $ 28,008
========= ======== ========
See notes to consolidated financial statements.
35
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Net
Unrealized
Gain on
Common & Add'l Securities Cumulative
Treasury Paid-In Retained Available Translation
Stock Capital Earnings for Sale Adjustment
-------- ------- -------- ----------- -----------
(In thousands, except per share amounts)
Balance at December 31, 1991 $ 76,030 $175,448 $475,200 $ N/A $ 2,123
Adjustment to conform fiscal
year of Sanford Corporation (4,311)
Net income 119,137
Cash dividends:
Common stock $0.30 per share (46,261)
Stock issued for acquisition 1,582 52,999
Exercise of stock options 720 8,318
Tax benefit on stock options 2,736
Foreign currency translation
and other (14) 2 (4,331)
------- ------- ------- ------- -------
Balance at December 31, 1992 $ 78,318 $239,503 $543,765 $ N/A $ (2,208)
Net income 165,334
Cash dividends:
Common stock $0.35 per share (54,280)
Stock issued for acquisition 44 1,715
Exercise of stock options 445 4,789
Tax benefit on stock options 3,585
Foreign currency translation
and other (51) 33 (1,847)
------- ------- ------- ------- -------
Balance at December 31, 1993 $ 78,756 $249,625 $654,819 $ N/A $ (4,055)
Net income 195,575
Fair value adjustment for
securities available for
sale at January 1, 1994 3,353
Cash dividends:
Common stock $0.39 per share (61,532)
Stock split, form of 100%
stock dividend 78,910 (78,910)
Exercise of stock options 155 2,723
Tax benefit on stock options 1,881
Change in net unrealized
gain on securities
available for sale 6,515
Foreign currency translation
and other (111) 33 (2,411)
------- ------- ------- ------- -------
Balance at December 31, 1994 $ 157,710 $175,352 $788,862 $ 9,868 $ (6,466)
======== ======= ======= ======= =======
See notes to consolidated financial statements.
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
1) SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial
statements include the accounts of the Company and its majority owned
subsidiaries after elimination of intercompany accounts and
transactions.
Revenue Recognition: Sales of merchandise are recognized upon
shipment to customers.
Disclosures about Fair Value of Financial Instruments: The
following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
Cash and Cash Equivalents: The carrying amounts approximate fair
value because of the short maturity of these instruments.
Marketable Equity Securities: The fair values of these
investments are based upon quoted market prices.
Long-term Investments: The fair value of the investment in
convertible preferred stock of the Black & Decker Corporation
("Black & Decker") was based in part on an independent appraisal.
Long-term Debt: The fair value of the Company's long-term debt
issued under the medium-term note program is estimated based on
quoted market prices. The carrying value of all other long-term
debt outstanding approximates fair value due to the floating
rates charged on these instruments.
Derivatives: Premiums paid or received related to interest rate
swap agreements are amortized into interest expense over the terms of
the agreements. Unamortized premiums are included in other assets or
accrued liabilities in the consolidated balance sheets.
Gains and losses relating to qualifying hedges of firm
commitments or anticipated transactions also are deferred and are
recognized in income as adjustments of carrying amounts when the
hedged transaction occurs.
Accounts Receivable: On December 5, 1991, the Company received
$104.7 million from a sale of an interest in trade receivables, with
limited recourse, pursuant to an agreement that permits the Company to
sell trade receivables, with limited recourse, to the purchaser from
time to time. A $125.0 million interest was outstanding at December
31, 1992. At both December 31, 1994 and 1993, there was no interest
in trade receivables sold under this agreement.
Allowances for Doubtful Accounts: Allowances for doubtful
accounts at December 31, totalled $10.9 million in 1994, $6.2 million
in 1993 and $5.6 million in 1992.
Inventories: Inventories are stated at the lower of cost or
market value. Cost of certain domestic inventories (approximately
87%, 83% and 81% of total inventories at December 31, 1994, 1993 and
1992, respectively) was determined by the "last-in, first-out"
("LIFO") method; for the balance, cost was determined using the
"first-in, first-out"("FIFO") method.
If the FIFO inventory valuation method had been used exclusively,
inventories would have been increased by $12.3 million, $9.2 million
and $8.0 million at December 31, 1994, 1993 and 1992, respectively.
The components of inventories at the end of each year, net of the
LIFO reserve, were as follows:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Materials and supplies $ 81.7 $ 71.3 $ 56.1
Work in process 98.9 49.6 39.7
Finished products 240.1 180.1 130.4
----- ----- -----
$420.7 $301.0 $226.2
===== ===== =====
Long-term Marketable Equity Securities: Long-term marketable
equity securities at the end of each year are summarized as follows:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Aggregate market value $ 64.7 $ 54.6 $ 64.1
Aggregate cost 48.3 49.0 63.0
----- ----- -----
Unrealized gain, net $ 16.4 $ 5.6 $ 1.1
===== ===== ======
In May 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
SFAS No. 115 requires, among other things, that securities classified
as "available for sale" be carried at fair value; however, fair value
adjustments are excluded from earnings and reported separately as a
component of stockholders' equity. This new standard, which was
adopted prospectively by the Company effective January 1, 1994, did
not have a material impact on the consolidated financial statements.
The Company considers all long-term marketable equity securities as
available for sale.
Other Long-Term Investments: The Company owns 150,000 shares of
privately placed Black & Decker convertible preferred stock, Series B,
purchased at a cost of $150.0 million. The Series B preferred shares
pay a 7 3/4% cumulative dividend, are convertible into Black & Decker
common stock at $23.62 per share, and have voting rights equivalent to
the common stock into which they are convertible. These shares have
restrictions on disposition by the Company, and Black & Decker has the
38
option at the end of ten years to repurchase the remaining preferred
shares and any common stock issued upon conversion then held by the
Company. The market value of this investment approximated cost at
December 31, 1994, 1993 and 1992. In addition, the Company has a 47%
ownership in American Tool Companies, Inc., a manufacturer of hand
tools and power tool accessory products marketed primarily under the
VISE-GRIP and IRWIN trademarks. This investment is accounted for on
the equity method with a net investment of $33.4 million included in
Other Long-Term Investments at December 31, 1994.
Property, Plant and Equipment: Property, plant and equipment at
the end of each year consisted of the following:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Land $ 9.6 $ 7.1 $ 6.7
Buildings and improvements 164.8 136.5 101.8
Machinery and equipment 515.8 419.1 347.0
------ ------ ------
690.2 562.7 455.5
Allowance for depreciation (235.6) (192.3) (162.7)
------ ------ ------
$ 454.6 $ 370.4 $ 292.8
====== ====== ======
Depreciation of property, plant and equipment (stated at cost) is
provided for by annual charges to income calculated to amortize,
principally on the straight-line basis, the cost of the depreciable
assets over their estimated useful lives, which range from five to
forty years. Replacements and improvements of fixed assets are
capitalized. Expenditures for maintenance and repairs are charged to
expense.
Goodwill: Excess of cost over identifiable net assets of
businesses acquired is being amortized over 40 years on a straight-
line basis. Subsequent to an acquisition, the Company continually
evaluates whether later events and circumstances have occurred that
indicate the remaining estimated useful life of goodwill may warrant
revision or that the remaining balance of goodwill may not be
recoverable. When factors indicate that goodwill should be evaluated
for possible impairment, the Company uses an estimate of the related
division's undiscounted net income over the remaining life of the
goodwill in measuring whether the goodwill is recoverable.
Accumulated amortization of goodwill was $57.0 million, $42.1 million
and $32.0 million at December 31, 1994, 1993 and 1992, respectively.
39
Accrued Liabilities: Accrued liabilities at the end of each year
included the following:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Promotion and advertising accruals $ 76.5 $ 54.4 $ 37.5
Accrued insurance reserves 36.0 36.3 29.8
Foreign Currency Translation: Financial statements of foreign
subsidiaries are translated in U.S. dollars in accordance with the
provisions of SFAS No. 52. Foreign currency transaction gains and
losses were insignificant in 1994, 1993 and 1992.
Cash Flows: For purposes of the Consolidated Statements of Cash
Flows, the Company considers all short-term, highly liquid investments
with an original maturity of three months or less to be cash
equivalents. Cash paid for income taxes and interest were as follows:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Income taxes $115.9 $144.7 $ 81.5
Interest 31.1 18.9 14.5
Reclassification: Certain 1992 and 1993 amounts have been
reclassified to conform with the 1994 presentation.
40
2) ACQUISITIONS AND DIVESTITURES OF BUSINESSES
On February 14, 1992, a subsidiary of the Company merged with
Sanford Corporation ("Sanford"), a designer, manufacturer and marketer
of marking and writing instruments, plastic desk accessories, file
storage boxes and other office and school supplies. The Company
issued approximately 13.8 million shares of common stock for all the
common stock of Sanford. This transaction was accounted for as a
pooling of interests; therefore, prior financial statements were
restated to reflect this merger.
On July 8, 1992, the Company acquired Stuart Hall Company, Inc.
("Stuart Hall"), a manufacturer of school supplies, stationery and
office supplies. The Company issued 1.6 million shares of common
stock for all the common stock of Stuart Hall. On October 1, 1992,
the Company acquired substantially all of the assets of Intercraft
Industries, L.P., and all of the capital stock of Intercraft
Industries of Canada, Inc. (collectively, "Intercraft"), manufacturers
of ready-made picture frames. The purchase price was $175.0 million
in cash. These transactions were accounted for as purchases;
therefore, the results of operations for Stuart Hall and Intercraft
are included in the accompanying consolidated financial statements
since their respective dates of acquisition. The cost of these 1992
acquisitions was allocated to the fair market value of assets acquired
and liabilities assumed and resulted in goodwill of approximately
$161.9 million.
On April 30, 1993, the Company acquired substantially all of the
assets of Levolor Corporation ("Levolor"), a manufacturer and
distributor of decorative window coverings. The purchase price was
$72.5 million in cash. On September 22, 1993, the Company acquired
Lee/Rowan Co. ("Lee/Rowan"), a manufacturer and marketer of coated
wire storage and organization products. The purchase price was $73.5
million in cash. On November 9, 1993, the Company acquired Goody
Products, Inc. ("Goody"), a manufacturer and marketer of personal
consumer products including hair accessories and beauty organizers.
The purchase price, excluding the cost of Goody common stock that the
Company owned prior to the acquisition, was $147.1 million in cash.
These transactions were accounted for as purchases; therefore, the
results of operations for Levolor, Lee/Rowan and Goody are included in
the accompanying consolidated financial statements since their
respective dates of acquisition. The cost of the 1993 acquisitions
was allocated to the fair market value of assets acquired and
liabilities assumed and resulted in goodwill of approximately $208.2
million.
As part of the Goody acquisition, the Company acquired the
capital stock of Opti-Ray, Inc. ("Opti-Ray"), a designer and marketer
of fashion sunglasses and non-prescription reading glasses. As of
January 1, 1994, the Company sold the capital stock of Opti-Ray to
Benson Eyecare Corporation. The net assets of Opti-Ray, which
41
totalled $8.5 million, are included in Other Assets as of December 31,
1993. The operating results of Opti-Ray from the date of acquisition
to December 31, 1993 are excluded from the Consolidated Statements of
Income and are not material.
On August 29, 1994, the Company acquired Home Fashions,
Inc.("HFI"), a manufacturer and marketer of decorative window
coverings, including vertical blinds and pleated shades. The purchase
price was $130.4 million in cash. This company was combined with
Levolor and together they are operated as single entity called Levolor
Home Fashions. On October 18, 1994, the Company acquired Faber-
Castell Corporation, which is a leading maker and marketer of markers
and writing instruments, including wood-cased pencils and rolling ball
pens, whose products are marketed under the Eberhard Faber brand name
("Eberhard Faber"). The purchase price was $136.5 million in cash.
This company was combined with Sanford and together they are operated
as a single entity called Sanford. On November 30, 1994, the Company
acquired the European consumer products business of Corning
Incorporated (now known as Newell Europe). This acquisition included
Corning's consumer products manufacturing facilities in England,
France and Germany, the European trademark rights and product lines
for Pyrex, Pyroflam and Visions brands in Europe, the Middle East and
Africa, and Corning's consumer distribution network throughout these
areas (Pyrex and Visions are registered trademarks of Corning
Incorporated). Additionally, the Company became the distributor in
Europe, the Middle East and Africa for Corning's U.S.-manufactured
cookware and dinnerware brands. The purchase price was $86.4 million
in cash. These transactions were accounted for as purchases;
therefore, the results of operations for HFI, Eberhard Faber and
Newell Europe are included in the accompanying consolidated financial
statements since their respective dates of acquisition. The cost of
the 1994 acquisitions was allocated on a preliminary basis to the fair
market value of assets acquired and liabilities assumed and resulted
in goodwill of approximately $163.0 million.
The unaudited consolidated results of operations for the years
ended December 31, 1994 and 1993 on a pro forma basis, as though
Levolor, HFI, Lee/Rowan, Goody, Eberhard Faber and Newell Europe each
had been acquired on January 1, 1993, are as follows:
1994 1993
---- ----
(In millions, except per share data)
Net sales $2,455.5 $2,439.4
Net income 195.1 167.1
Earnings per share 1.24 1.06
On December 31, 1992, the Company sold its closures business for
a $210.0 million note receivable due and paid January 4, 1993. The
Company recognized a net pre-tax gain of $82.9 million on the sale.
Sales for this business totalled $160.6 million in 1992.
42
3) RESTRUCTURING COSTS
In the year ended December 31, 1992, the Company recorded $20.9
million in restructuring costs, of which $17.4 million was recorded in
the fourth quarter. The primary components of this charge included
costs associated with the closing of a manufacturing facility and
severance costs related to businesses acquired in transactions
accounted for under the pooling-of-interests method.
43
4) CREDIT ARRANGEMENTS
The Company has foreign and domestic lines of credit with various
banks and a commercial paper program which are available for short-
term financing. Under the line of credit arrangements, the Company
may borrow up to $360.0 million (of which $267.4 million was available
at December 31, 1994) based upon such terms as the Company and the
respective banks have mutually agreed upon.
In connection with $35.0 million of the line of credit facilities
noted above, the Company has agreed to maintain compensating balances,
generally at 2.5% of the credit facility. Compensating balances are
not restricted as to withdrawals and serve as part of the Company's
minimum operating cash balances.
The following is a summary of line of credit notes payable to
banks:
1994 1993 1992
---- ---- ----
(In millions)
Notes payable to banks:
Outstanding at year-end
- borrowing $ 92.6 $ 50.3 $ 65.0
- average interest rate 6.0% 3.3% 3.9%
Average for the year
- borrowing 21.5 37.3 42.9
- average interest rate 4.9% 3.3% 3.9%
Maximum borrowing outstanding
during the year 119.3 138.0 118.0
In 1993, the Company began issuing commercial paper under a
$400.0 million program, which was subsequently increased to $500.0
million. The revolving credit facilities, as described in note 5 to
the consolidated financial statements, provide the committed backup
liquidity required to issue commercial paper. Three dealers were
engaged to market the program.
The following is a summary of commercial paper:
1994 1993 1992
---- ---- ----
(In millions)
Commercial paper:
Outstanding at year-end
- borrowing $417.1 $138.7 N/A
- average interest rate 6.0% 3.3% N/A
Average for the year
- borrowing 324.8 4.4 N/A
- average interest rate 4.4% 3.3% N/A
Maximum borrowing outstanding
during the year 479.0 138.7 N/A
44
5) LONG-TERM DEBT
The following is a summary of long-term debt:
December 31,
1994 1993 1992
---- ---- ----
(In millions)
Medium-term notes $186.0 $153.0 $153.0
Revolving Credit Agreement:
Commercial paper 300.0 - N/A
Loans payable to banks - 100.0 30.0
Other long-term debt 22.4 23.3 25.9
----- ----- -----
508.4 276.3 208.9
Current portion (99.4) (58.2) (32.0)
----- ----- -----
$409.0 $218.1 $176.9
===== ===== =====
The Company has a shelf registration statement covering up to
$500.0 million of debt securities, of which $257.0 million was
available for additional borrowings as of December 31, 1994. Pursuant
to the shelf registration, at December 31, 1994, the Company had
outstanding $186.0 million (principal amount) of medium-term notes
with maturities ranging from one to five years at an average rate of
interest equal to 6.6%. The fair value of these notes was $185.1
million at December 31, 1994. The Company had outstanding $153.0
million on December 31, 1993 and 1992, and the fair value of these
notes was $158.3 million at December 31, 1993 and $160.9 million at
December 31, 1992.
The Company entered into a three-year $300.0 million revolving
credit agreement in August 1993, and a $100.0 million, 364-day
revolving credit agreement in each of November 1993 and August 1994.
The November 1993 364-day revolving credit agreement was renewed for
an additional 364 days. Under these agreements, the Company may
borrow, repay and reborrow funds in an aggregate amount up to $500.0
million, at a floating interest rate. At December 31, 1994, there
were no borrowings under the revolving credit agreements.
In lieu of borrowings under the credit agreements, the Company
may issue up to $500.0 million of commercial paper. The Company's
revolving credit agreements referred to above provide the committed
backup liquidity required to issue commercial paper. Accordingly,
commercial paper may only be issued up to the amount available under
the Company's revolving credit agreements. At December 31, 1994,
$417.1 million (face or principal amount) of commercial paper was
outstanding, all of which was supported by the revolving credit
agreements. The short-term portion of this balance was $117.1
million, which is classified as notes payable. The remaining $300.0
million is classified as long-term debt under the three-year revolving
credit agreement.
45
The revolving credit agreements permit the Company to borrow
funds using Syndicated loans (Base Rate loans or Eurodollar loans),
Money Market loans (LIBOR Market loans or Set Rate loans) or
Acceptance liabilities, as selected by the Company. The terms of
these agreements require, among other things, that the Company
maintain a certain Total Debt to Total Capital Ratio and a minimum
Operating Income to Interest Expense Ratio, all capitalized terms as
defined in these agreements. As of December 31, 1994, the Company was
in compliance with these agreements.
The aggregate maturities of long-term debt outstanding at
December 31, 1994, are as follows:
Year Aggregate Maturities
---- --------------------
(In millions)
1995 $ 99.4
1996 358.2
1997 33.5
1998 1.5
1999 7.6
Thereafter 8.2
-----
$508.4
=====
46
6) DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative
financial instruments and does not use them for trading purposes.
They are used to manage certain interest rate and foreign currency
risks.
Interest rate swap agreements are utilized to convert certain
floating rate debt instruments into fixed rate debt or to convert
certain floating rate debt based on federal funds rates to floating
rate debt based upon commercial paper rates. As of December 31, 1994,
the Company was party to one interest rate swap agreement which
terminates in June 1996. The agreement requires the Company to pay on
a monthly basis the amounts by which the commercial paper rate exceeds
the Federal Funds rate on $50.0 million of debt.
The Company uses forward exchange contracts to hedge certain
purchase commitments denominated in currencies other than the domestic
currency (primarily Japanese yen and U.S. dollar for the Company's
Canadian subsidiary). The term of the currency derivatives is rarely
more than one year. The purpose of the Company's foreign currency
hedging activities is to protect the Company from some of the risk of
foreign currency fluctuations on foreign denominated purchases.
As of December 31, 1994, the Company had contracts to buy 150
million Japanese yen and the Company's Canadian subsidiary had several
contracts to buy 7.3 million U.S. dollars. The deferred unrealized
gains and losses, based upon dealer quotes from hedging firm
purchases, are not material.
The Company is exposed to credit losses in the event of non-
performance by the counterparties to its interest rate swap and
foreign exchange contracts. The Company anticipates, however, that
counterparties will be able to satisfy fully their obligations under
the contracts. The Company does not obtain collateral or other
security to support financial instruments subject to credit risk but
monitors the credit standing of the counterparties. The market value
of all the Company's derivatives approximates its carrying value.
47
7) LEASES
The Company leases manufacturing, distribution and office
facilities, as well as transportation and data processing equipment
under noncancellable leases which expire at various dates through the
year 2007.
Future minimum rental payments under noncancellable operating
leases are as follows:
Year Minimum Payments
---- ----------------
(In millions)
1995 $20.6
1996 16.7
1997 11.9
1998 7.8
1999 6.1
Thereafter 18.1
----
$81.2
====
Total rental expense for all operating leases was approximately
$31.8 million, $26.0 million and $18.9 million in 1994, 1993 and 1992,
respectively.
48
8) EMPLOYEE BENEFIT RETIREMENT PLANS
The Company and its subsidiaries have noncontributory pension
plans covering substantially all employees. Pension plan benefits are
generally based on years of service and/or compensation. The
Company's funding policy is to contribute not less than the minimum
amounts required by the Employee Retirement Income Security Act of
1974 or additional amounts to assure that plan assets will be adequate
to provide retirement benefits. Due to the overfunded status of most
of the pension plans, contributions to these plans were insignificant
during the past three years. Total expense under all pension and
profit sharing plans was $8.5 million, $3.2 million and $1.7 million
for the years ended December 31, 1994, 1993 and 1992, respectively.
The net periodic pension cost components for the U.S. pension
plans are as follows:
1994 1993 1992
---- ---- ----
(In millions)
Service cost-benefits earned
during the year $ 13.4 $ 8.3 $ 6.7
Interest cost on projected
benefit obligation 31.3 27.3 26.2
Actual return on assets (31.3) (42.7) (20.8)
Net amortization and
other components (9.4) 6.8 (13.1)
----- ----- -----
Total U.S. pension plan
expense(income) $ 4.0 $ (.3) $ (1.0)
===== ===== =====
The principal actuarial assumptions used are as follows:
1994 1993 1992
---- ---- ----
(In percent)
Measurement of projected
benefit obligation:
Discount rate 8% 7.25% 7.75%
Long-term rate of
compensation increase 5% 5% 5%
Long-term rate of return on
plan assets 9% 9% 9%
49
The following table sets forth the funded status of the U.S.
pension plans and the amount recognized in the Company's consolidated
balance sheets:
Plans Whose Plans Whose
Assets Accumulated
Exceed Benefits
Accumulated Exceed
Benefits Assets
----------- -----------
1994 1993 1994 1993
---- ---- ---- ----
(In millions)
Actuarial present value of
benefit obligations:
Vested $347.1 $352.1 $ 21.1 $ 18.3
Nonvested 12.0 13.3 4.8 5.3
----- ----- ----- -----
Accumulated benefit
obligation 359.1 365.4 25.9 23.6
Effect of projected future
salary increases 20.9 18.1 5.7 6.8
----- ----- ----- -----
Projected benefit obligation 380.0 383.5 31.6 30.4
Plan assets at market value
(primarily common stock and
fixed income investments) 469.2 448.0 6.1 4.1
----- ----- ----- -----
Plan assets in excess of (less
than) projected benefit obligation 89.2 64.5 (25.5) (26.3)
Unrecognized transition (net asset)
obligation (13.5) (11.2) 1.7 1.2
Unrecognized net (gain)loss (7.5) 11.6 5.1 5.5
----- ----- ----- -----
Net pension asset (liability)
recognized in the consolidated
balance sheets $ 68.2 $ 64.9 $(18.7) $(19.6)
===== ===== ===== =====
50
9) RETIREE HEALTH CARE
Several of the Company's subsidiaries currently provide retiree
health care benefits for certain employee groups. In 1992, the
Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions." This standard requires
that the expected cost of retiree health benefits be charged to
expense during the years that the employees render service rather than
the Company's past practice of recognizing these costs on a cash
basis. As part of adopting this standard, the Company recorded, in
the first quarter of 1992, a one-time, non-cash charge against
earnings of $71.7 million before taxes and $44.1 million after taxes,
or $0.29 per share. The Company had previously recorded $37.5 million
relating to this liability. This cumulative adjustment as of January
1, 1992 represents the discounted present value of expected future
retiree health benefits attributed to employees' service rendered
prior to that date. The effect of the change on 1992 net income
before cumulative effect of accounting change was not material to any
of the consolidated financial statements.
The components of the net postretirement health care cost are as
follows:
1994 1993 1992
---- ---- ----
(In millions)
Service cost-benefits attributed
to service during the period $ 2.0 $ 1.1 $ 1.3
Interest cost on accumulated
postretirement benefit obligation 7.3 8.1 8.4
--- --- ---
Net postretirement health care cost $ 9.3 $ 9.2 $ 9.7
=== === ===
A reconciliation of the accumulated postretirement benefit
obligation to the liability recognized in the consolidated balance
sheets is as follows:
1994 1993 1992
---- ---- ----
(In millions)
Accumulated postretirement
benefit obligation:
Retirees $ (65.2) $ (73.0) $ (79.5)
Fully eligible active plan participants (6.0) (5.2) (8.2)
Other active plan participants (21.1) (22.8) (20.9)
------ ------ -----
Accumulated postretirement benefit
obligation (92.3) (101.0) (108.6)
Market value of assets - - -
------ ------ ------
Funded status (92.3) (101.0) (108.6)
Unrecognized net(gain) (16.7) (8.4) (0.3)
------ ------ ------
Other Noncurrent Liability $(109.0) $(109.4) $(108.9)
====== ====== ======
51
The actuarial calculation assumes a 12% increase in the health
care cost trend rate for fiscal year 1994. The assumed rate decreases
one percent every year through the sixth year to six percent and
remains constant beyond that point. The health care cost trend rate
has a significant effect on the amounts reported. For example, a one
percentage point increase in the health care cost trend rate would
increase the accumulated postretirement benefit obligation by $6.0
million and increase net periodic cost by $0.8 million. The discount
rate used in determining the accumulated postretirement benefit
obligation was 8% in 1994, 7.25% in 1993 and 7.75% in 1992.
52
10) STOCKHOLDERS' EQUITY AND PER SHARE DATA
The Company's common stock consists of 300.0 million authorized
shares, with a par value of $1 per share. Of the total unissued
common shares at December 31, 1994, total shares in reserve included
10.1 million shares for issuance under the Company's stock option
plans.
Each share of common stock includes a preferred stock purchase
right (a "Right"). Each Right will entitle the holder, until the
earlier of October 31, 1998 or the redemption of the Rights, to buy
one four-hundredth of a share of a new series of preferred stock,
denominated "Junior Participating Preferred Stock, Series B," at a
price of $25 per one four-hundredth of a share (as adjusted to reflect
stock splits since the issuance of the Rights). This preferred stock
is nonredeemable and will have 100 votes per share. The Company has
reserved 500,000 Series B preferred shares for issuance upon exercise
of such Rights. The Rights will be exercisable only if a person or
group acquires 20% or more of voting power of the Company or announces
a tender offer following which it would hold 30% or more of the
Company's voting power.
In the event that any person becomes the beneficial owner of 30%
or more of the Company's voting power, the Rights (other than Rights
held by the 30% stockholder) would become exercisable for that number
of shares of the Company's common stock having a market value of two
times the exercise price of the Right. Furthermore, if, following the
acquisition by a person or group of 20% or more of the Company's
voting power, the Company were acquired in a merger or other business
combination or 50% or more of its assets were sold, or in the event of
certain types of self-dealing transactions by a 20% stockholder, each
Right (other than Rights held by the 20% stockholder) would become
exercisable for that number of shares of common stock of the Company
(or the surviving company in a business combination) having a market
value of two times the exercise price of the Right.
The Company may redeem the Rights at one cent per Right prior to
the occurrence of an event that causes the Rights to become
exercisable for common stock. The Board of Directors may terminate
the Company's right to redeem the Rights under certain circumstances
at any time after a group or person acquires 20% or more of the
Company's voting power.
The earnings per share amounts are computed based on the weighted
average monthly number of shares outstanding during the year. On
September 1, 1994, a two-for-one split of the Company's common stock
was effected in the form of a stock dividend of one share of stock on
each share of stock outstanding at the close of business on August 15,
1994.
53
Accordingly, all share and per share data have been restated to
retroactively reflect the stock split. Common stock was credited $1
and additional paid-in capital was charged a like amount for each
share of stock issued pursuant to the stock split.
54
11) STOCK OPTIONS
Under the terms of the Company's stock option plans, all options
are granted at prices at least equal to the market value on the date
of grant and expire five years, five years and ninety days, ten years,
or ten years and one day thereafter.
The following summarizes the changes in number of shares of
common stock under option:
Range of
Number of Per Share
Shares Option Prices
--------- -------------
Outstanding at December 31, 1991 3,059,524 $ 3.84 - $21.75
Stuart Hall Grants Assumed 229,110 3.88 - 10.35
Intercraft Options Granted 400,000 18.00 - 18.00
Granted 333,200 19.95 - 24.44
Exercised (1,433,622) 3.88 - 14.88
Cancelled (35,332) 3.88 - 13.31
---------
Outstanding at December 31, 1992 2,552,880 3.84 - 24.44
Granted 431,860 16.44 - 19.38
Goody Grants Assumed 53,210 8.63 - 15.16
Exercised (881,428) 3.88 - 16.44
Cancelled (74,322) 10.35 - 10.35
---------
Outstanding at December 31, 1993 2,082,200 3.84 - 24.44
Granted 454,400 19.88 - 22.38
Exercised (273,196) 3.84 - 19.19
Cancelled (107,646) 7.34 - 21.75
---------
Outstanding at December 31, 1994 2,155,758 3.84 - 24.44
=========
Options outstanding on December 31, 1994, are exercisable at an
average price of $19.11 and expire on various dates from January 22,
1995 to November 1, 2004.
At December 31, 1994, there were 7.9 million shares available for
grant of future options.
55
12) INCOME TAXES
During 1992, the Company adopted SFAS No. 109, "Accounting for
Income Taxes." The impact of adopting this standard was not material
to any of the consolidated financial statements of the Company for
1992.
The provision for income taxes consists of the following:
1994 1993 1992
---- ---- ----
(In millions)
Current:
Federal $ 82.3 $ 70.5 $ 104.0
State 19.1 19.0 24.6
Foreign 1.6 0.9 0.6
------ ------ ------
103.0 90.4 129.2
Deferred 30.7 19.8 (14.9)
------ ------ ------
Total $ 133.7 $ 110.2 $ 114.3
====== ====== ======
The components of the net deferred tax asset are as follows:
1994 1993 1992
---- ---- ----
(In millions)
Deferred tax assets:
Accruals, not currently
deductible for tax purposes $ 79.5 $ 65.1 $ 47.2
Pension and postretirement accruals 44.9 48.0 43.3
Insurance accruals 14.1 11.3 10.3
Inventory valuation 6.2 2.1 -
Other 3.0 2.2 12.2
----- ----- -----
147.7 128.7 113.0
Deferred tax liabilities:
Accelerated depreciation (37.1) (26.3) (24.9)
Prepaid pension (24.2) (24.5) (20.7)
Inventory valuation - - (9.9)
Unrealized gain on
securities available for sale (6.5) - -
Amortizable intangibles (4.1) - -
Other (2.9) (1.6) (2.0)
------ ------ ------
(74.8) (52.4) (57.5)
------ ------ ------
Net deferred tax asset $ 72.9 $ 76.3 $ 55.5
====== ====== ======
56
The net deferred tax asset is classified in the consolidated balance sheets as follows:
1994 1993 1992
---- ---- ----
(In millions)
Current deferred income taxes $ 90.1 $ 73.5 $ 39.0
Noncurrent deferred income taxes:
Included in Other Assets - 2.8 16.5
Liability (17.2) - -
------ ------ ------
$ 72.9 $ 76.3 $ 55.5
====== ====== ======
57
A reconciliation of the United States statutory rate to the effective income tax rate is as follows:
1994 1993 1992
---- ---- ----
(In percent)
Statutory rate 35.0% 35.0% 34.0%
Add (deduct) effect of:
State income taxes, net of
federal income tax effect 4.5 4.5 4.8
Nondeductible goodwill charges 1.3 0.9 2.7
Miscellaneous (0.2) (0.4) (0.3)
---- ---- ----
Effective rate 40.6% 40.0% 41.2%
==== ==== ====
No United States deferred taxes have been provided on
undistributed non-United States subsidiary earnings of $30.5 million,
which are considered to be permanently invested.
The non-United States component of income before income taxes was
$3.5 million in 1994 and $1.8 million in both 1993 and 1992.
58
13) OTHER NONOPERATING EXPENSES(INCOME)
Total other nonoperating expenses(income) consist of the
following:
Year Ended December 31,
1994 1993 1992
---- ---- ----
(In millions)
Interest income $ (1.0) $ (.9) $ (2.5)
Dividend income (12.6) (12.9) (14.1)
Equity in earnings of
American Tool Companies, Inc. (5.7) (3.8) (3.4)
Amortization of goodwill 15.4 10.1 6.7
Net (gains)losses on:
Sale of businesses - (1.2) (82.9)
Stanley Works securities
and other related costs - - 14.0
Marketable equity securities (0.4) - (8.6)
Costs associated with legal
settlements, prior acquisitions
and other 2.9 0.2 13.5
Write-off of intangibles - - 11.7
----- ----- -----
$ (1.4) $ (8.5) $(65.6)
===== ===== =====
59
14) OTHER OPERATING INFORMATION
INDUSTRY SEGMENTS
Since the beginning of 1993, after the sale of its closures
business on December 31, 1992, over 90% of the Company's revenues are
derived from consumer products and, as such, the Company operates in a
single industry segment. Prior to 1993, the Company operated in two
industry segments, Consumer Products and Industrial Products.
Consumer Products are sold through a variety of retail and
wholesale distribution channels. Industrial Products were sold
directly and through distributors. Intersegment sales were not
material.
Consumer Industrial Corporate
Products Products & Other Consolidated
-------- ---------- ---------- ------------
(In millions)
1992
----
Net sales $1,205.7 $246.0 $ - $1,451.7
Operating income 209.7 27.6 (4.9) 232.4
Total assets 679.9 51.2 838.5 1,569.6
Depreciation and
amortization expense 35.1 7.1 11.7 53.9
Capital expenditures 61.2 13.4 3.0 77.6
GENERAL INFORMATION
The Company's segment information necessarily includes
allocations of expenses and assets shared by its segments. Although
such allocations were made on a reasonable basis, the assets and
operating income do not necessarily reflect how such data might appear
if the segments were operated as separate businesses.
Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to
approximately 15% of consolidated sales in 1994, and 14% in both 1993
and 1992. Each of the other customers amounted to less than 10% in
all three years.
Export sales were less than 10% of consolidated sales in 1994,
1993 and 1992.
Total assets are those assets that are used in the Company's
operations in each industry segment. Corporate assets are located
exclusively in the United States and consist principally of cash,
marketable equity securities, goodwill and notes receivable. Prior to
the acquisition of Newell Europe, the Company operated principally in
the North American geographic segment.
60
15) LITIGATION
The Company and its subsidiaries are subject to certain legal
proceedings and claims, including the environmental matters described
below, that have arisen in the ordinary conduct of its business.
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.
The Company and its subsidiaries are also involved in various
matters concerning federal and state environmental laws and
regulations, including seventeen matters in which they have been
identified by the U.S. Environmental Protection Agency and certain
state environmental agencies as potentially responsible parties
("PRPs") at hazardous waste disposal sites under the Comprehensive
Environmental Response, Compensation and Liability Act ("Superfund")
and equivalent state laws. In assessing its remediation 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; where applicable, the terms of existing
cost sharing and other agreements; the ability of other PRPs to share
in the payment of requisite costs; the Company's prior experience with
environmental remediation; 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 party's status as a
PRP is disputed. Based on information currently available to it, the
Company's estimate of remediation costs associated with these matters
ranges between $12.5 million and $17.5 million. As of December 31,
1994, the Company had a reserve equal to $14.5 million for such
remediation costs in the aggregate. Insufficient information is
available to the Company to permit it reasonably to reflect any
unasserted claims in its reserve or cost estimates. 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.
61
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
-----------------------------------------------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Information regarding executive officers of the Company is
included as a Supplementary Item at the end of Part I of this Form
10-K.
Information regarding directors of the Company is included
in the Company's Definitive Proxy Statement for the Annual Meeting of
Stockholders to be held May 10, 1995 ("Proxy Statement") under the
caption "Proposal 1 -Election of Directors," which information is
hereby incorporated by reference herein.
Information regarding compliance with Section 16(a) of the
Exchange Act is included in the Proxy Statement under the caption
"Compliance with Forms 3, 4 and 5 Reporting Requirements," which
information is hereby incorporated by reference herein.
Item 11. Executive Compensation
----------------------
Information regarding executive compensation is included in
the Proxy Statement under the caption "Proposal 1 - Election of
Directors - Information Regarding Board of Directors and Committees,"
the captions "Executive Compensation - Summary; - Option Grants in
1994; - Option Exercises in 1994; - Pension and Retirement Plans; and -
Employment Security Agreements," and the caption "Executive
Compensation Committee Interlocks and Insider Participation," which
information is hereby incorporated by reference herein.
Item 12. Security Ownerships of Certain Beneficial Owners
and Management
-------------------------------------------------
Information regarding security ownership is included in the
Proxy Statement under the caption "Certain Beneficial Owners," which
information is hereby incorporated by reference herein.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
Not Applicable.
62
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
------------------------------------------------------
(a) (1) The following is a list of the financial statements
of Newell Co. included in this report on Form 10-K
which are filed herewith pursuant to Item 8:
Report of Independent Public Accountants
Consolidated Statements of Income - Years Ended
December 31, 1994, 1993 and 1992
Consolidated Balance Sheets - December 31, 1994, 1993
and 1992
Consolidated Statements of Cash Flows - Year Ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Stockholders' Equity - Years
Ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements - December
31, 1994, 1993 and 1992
(2) The following is a list of the consolidated
financial statement schedules of the Company included
in this report on Form 10-K which are filed herewith
pursuant to Item 14(d) and appear immediately preceeding
the Exhibit Index:
Schedule VIII - Valuation and Qualifying Accounts
(3) The exhibits filed herewith are listed on the
Exhibit Index filed as part of this report on Form 10-
K. Each management contract or compensatory plan or
arrangement of the Company listed on the Exhibit Index
is separately identified by an asterisk.
(b) Reports on Form 8-K
(1) Registrant filed a Report on Form 8-K dated October
18, 1994 reporting the issuance of a press release
announcing the completion of its purchase of Faber-
Castell Corporation.
(2) Registrant filed a Report on Form 8-K dated October
20, 1994 reporting the issuance of a press release
regarding the results for the quarter ended September
30, 1994.
(3) Registrant filed a Report on Form 8-K dated
November 30, 1994 reporting the issuance of a press
release announcing the completion of its purchase of
Corning's European consumer business.
63
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NEWELL CO.
Registrant
By /s/ William T. Alldredge
--------------------------------
William T. Alldredge
Vice President-Finance
Date March 24, 1995
--------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 24, 1995, by the following persons on behalf
of the Registrant and in the capacities indicated.
Signature Title
--------- -----
/s/ William P. Sovey Vice Chairman and Chief Executive Officer
----------------------------- (Principal Executive Officer)
William P. Sovey
/s/ Thomas A. Ferguson President and Chief Operating
----------------------------- Officer and Director
Thomas A. Ferguson
/s/ Donald L. Krause Senior Vice President-Corporate Controller
----------------------------- (Principal Accounting Officer)
Donald L. Krause
/s/ William T. Alldredge Vice President-Finance
----------------------------- (Principal Financial Officer)
/s/ Daniel C. Ferguson Chairman of the Board
-----------------------------
Daniel C. Ferguson
/s/ William R. Cuthbert Director
-----------------------------
William R. Cuthbert
/s/ Alton F. Doody Director
-----------------------------
Alton F. Doody
/s/ Gary H. Driggs Director
-----------------------------
Gary H. Driggs
/s/ Robert L. Katz Director
-----------------------------
Robert L. Katz
64
/s/ John J. McDonough Director
-----------------------------
John J. McDonough
/s/ Allan P. Newell Director
-----------------------------
Allan P. Newell
/s/ Henry B. Pearsall Director
-----------------------------
Henry B. Pearsall
65
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
NEWELL CO. AND SUBSIDIARIES
__________________________________________________________________________________
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
__________________________________________________________________________________
Additions
-------------------------
Balance at Charged to Charged to Balance at
Beginning costs and other accounts Deductions end
Description of Period expenses (A) (B) of period
----------- ---------- ---------- -------------- ---------- ----------
Allowance for
doubtful accounts:
Year ended
December 31, 1994 $6,226 $2,780 $3,996 $(2,116) $10,886
Year ended
December 31, 1993 5,577 2,068 1,420 (2,839) 6,226
Year ended
December 31, 1992 4,104 1,493 2,028 (2,048) 5,577
Note A - Represents recovery of accounts previously written off, along with
reserves of acquired businesses.
Note B - Represents accounts charged off.
66
(C) EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- ----------------------
Item 3. Articles of 3.1 Restated Certificate of Incorporation
Incorporation of Newell Co., as amended as of November
and By-Laws 3, 1994.
3.2 By-Laws of Newell Co., as amended through
November 2, 1994.
Item 4. Instruments 4.1 Restated Certificate of Incorporation of
defining the Newell Co., as amended as of November 3,
rights of 1994, is included in item 3.1.
security
holders, 4.2 By-Laws of Newell Co., as amended through
including November 2, 1994, are included in Item 3.2.
indentures
4.3 Rights Agreement dated as of October 20,
1988 between the Company and First Chicago
Trust Company of New York (formerly
known as Morgan Shareholders Services
Trust Company)(incorporated by reference
to Exhibit 4 to the Company's Current
Report on Form 8-K dated October 25, 1988).
4.4 Indenture dated as of April 15, 1992,
between the Company and The Chase
Manhattan Bank (National Association).
Trustee (incorporated by reference to
Exhibit 4.4 to the Company's Report on
Form 8 amending the Company's Quarterly
Report on Form 10-Q for the period ended
March 31, 1992).
Pursuant to item 601(b)(4)(iii)(A) of
Regulation S-K, the Company is not filing
certain documents. The Company agrees
to furnish a copy of each such document
upon the request of the Commission.
Item 10. Material *10.1 The Newell Long-Term Savings and
Contracts Investment Plan, as amended and restated
effective May 1, 1993 (incorporated by
reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1993 (the
"June 1993 Form 10-Q").
67
Exhibit
Number Description of Exhibit
------- ----------------------
*10.2 The Company's Amended and Restated 1984
Stock Option Plan, as amended through
February 14, 1990 (incorporated by
reference to Exhibit 10.2 to the Company's
Annual Report on Form 10-K for the year
ended December 31, 1990 (the "1990 Form
10-K")).
*10.3 a. Newell Operating Company's Deferred
Compensation Plan, effective August 1,
1980 (incorporated by reference to Exhibit
10.7 to the Company's Registration
Statement on Form S-14, File No. 2-71121,
filed March 4, 1981 (the "1981 Form
S-14")).
b. Amendment I to Newell Operating
Company's Deferred Compensation Plan,
effective October 22, 1986 (incorporated
by reference to Exhibit 10.5b to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1986 (File No.
0-7843 (the "1986 Form 10-K")).
*10.4 Newell Operating Company's ROA Cash Bonus
Plan, effective January 1, 1977, as
amended (incorporated by reference to
Exhibit 10.8 to the 1981 Form S-14).
*10.5 Newell Operating Company's ROI Cash
Bonus Plan, effective July 1, 1966, as
amended (incorporated by reference to
Exhibit 10.9 to the 1981 Form S-14).
*10.6 Newell Operating Company's Pension Plan
for Salaried and Clerical Employees, as
amended and restated, effective January 1,
1989 (incorporated by reference to
Exhibit 10.2 to the June 1993 Form 10-Q).
68
Exhibit
Number Description of Exhibit
------- ----------------------
*10.7 Newell Operating Company's Pension Plan
for Factory and Distribution Hourly-Paid
Employees, as amended and restated,
effective January 1, 1984 (incorporated
by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1985
(File No. 0-7843)(the "1985 Form 10-K")).
*10.8 Newell Operating Company's Supplemental
Retirement Plan for Key Executives,
effective January 1, 1982, as amended
(incorporated by reference to Amendment
No. 2 to the Company's Registration
Statement on Form S-14, File No. 2-71121,
filed February 2, 1982).
10.9 Securities Purchase Agreement dated
June 21, 1985 between American Tool
Companies, Inc. and the Company (incor-
porated by reference to Exhibit 10.13
to the 1985 Form 10-K).
*10.10 Form of Employment Security Agreement
with six executive officers (incorpor-
ated by reference to Exhibit 10.10 to
the 1990 Form 10-K).
10.11 Letter Agreement dated as of August 13,
1991 between The Black & Decker Corpora-
tion and the Company (incorporated by
reference to Exhibit 1 to the Company's
Statement on Schedule 13D dated
August 22, 1991).
10.12 Standstill Agreement dated as of
September 24, 1991 between The Black &
Decker Corporation and the Company
(incorporated by reference to Exhibit 3
to Amendment No. 1 to the Company's
Statement on Schedule 13D dated
September 26, 1991 (the "Schedule 13D
Amendment")).
69
Exhibit
Number Description of Exhibit
------- ----------------------
10.13 Receivables Sale Agreement dated
September 6, 1991 among the Company,
Asset Securitization Cooperative
Corporation ("ASCC") and Canadian
Imperial Bank of Commerce, as Adminis-
trative Agent ("Canadian Imperial Bank")
(incorporated by reference to Exhibit 4
to the Schedule 13D Amendment).
10.14 Stock Purchase Agreement dated as of
October 23, 1992 among CMB Holdings
(USA), Inc., Anchor Hocking Corporation
and the Company (incorporated by refer-
ence to Exhibit 2 to the Company's
Current Report on Form 8-K dated
October 23, 1992).
*10.15 Newell Co. 1993 Stock Option Plan,
effective February 9, 1993 (incorporated
by reference to the Company's Registration
Statement on Form S-8, File No. 33-67632,
filed August 19, 1994).
10.16 Credit Agreement dated as of August 13,
1993, amended and restated as of
November 19, 1993, among the Company,
certain of its affiliates, The Chase
Manhattan Bank (National Association), as
Agent, and the banks whose names appear on
the signature pages thereto (incorporated
by reference to Exhibit 10.18 to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1993 (the "1993
Form 10-K)).
10.17 Agreement and Plan of Merger dated
August 2, 1993 among the Company, GPI
Acquisition Co. and Goody Products, Inc.
(incorporated by reference to Exhibit 1
to Amendment No. 9 to the Company's State-
ment on Schedule 13D dated August 5, 1993).
10.18 Form of Placement Agency Agreement relat-
ing to private placement to accredited
investors of unsecured notes of the
Company (incorporated by reference to
Exhibit 10.20 to the 1993 Form 10-K).
70
Exhibit
Number Description of Exhibit
------- ----------------------
10.19 364-Day Credit Agreement dated as of
November 19, 1993 among the Company,
certain of its affiliates, The Chase
Manhattan Bank (National Association), as
Agent and the banks whose names appear on
the signature pages thereto (incorporated
by reference to Exhibit 10.21 to the 1993
Form 10K).
10.20 364-Day Credit Agreement dated as of
August 11, 1994 among the Company, certain
of its affiliates, The Chase Manhattan Bank
(National Association), as Agent and the
banks whose names appear on the signature
pages thereto.
Item 21. Subsidiaries 21.1 Subsidiaries of the Company.
of the
Registrant
Item 23. Consent of 23.1 Consent of Arthur Andersen LLP.
experts and
counsel
Item 27. Financial 27 Financial Data Schedule.
Data Schedule
* Management contract or compensatory plan or arrangement of the Company.
71
EX-3
2
EXHIBIT 3.1
Filed May 18, 1987 at 3:00 p.m.
Delaware Secretary of State
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW NEWELL CO.
NEW NEWELL CO., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is NEW NEWELL CO. (the
"Corporation"). The date of filing the Corporation's original
Certificate of Incorporation with the Secretary of State of the
State of Delaware was February 23, 1987.
2. The text of the Certificate of Incorporation of the
Corporation as amended or supplemented heretofore and herewith is
hereby restated to read as herein set forth in full:
FIRST: the name of the Corporation is NEW NEWELL CO.
SECOND: The address of the Corporation's registered office in
the State of Delaware is 229 South State Street in the City of Dover,
County of Kent. The name of the Corporation's registered agent at
such address is United States Corporation Company.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH: The total number of shares which the Corporation shall
have authority to issue is 56,000,000, consisting of 50,000,000 shares
of Common Stock of the par value of $1.00 per share and 6,000,000
shares of Preferred Stock, consisting of 10,000 shares without par
value and 5,990,000 shares of the par value of $1.00 per share. The
designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, of each of the
classes of stock of the Corporation are as follows:
A. Common Stock. Each holder of Common Stock shall be entitled
to one (1) vote for each such share of Common Stock.
B. Preferred Stock. The Preferred Stock shall be issued from
time to time in one or more series with such distinctive serial
designations and (a) may have such voting powers, full or limited, or
may be without voting powers; (b) may be subject to redemption at such
time or times and at such price or prices; (c) may be entitled to
receive dividends (which may be cumulative or noncumulative) at such
rate or rates, on such conditions, and at such times, and payable in
preference to, or in such relation to, the dividends payable on any
72
other class or classes of stock; (d) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the
Corporation; (e) may be made convertible into, or exchangeable for,
shares of any other class or classes or of any other series of the
same or any other class or classes of stock of the Corporation, at
such price or prices or at such rates of exchange and with such
adjustments; and (f) shall have such other relative, participating,
optional or other special rights, qualifications, limitations or
restrictions thereof, all as shall hereafter be stated and expressed
in the resolution or resolutions providing for the issue of such
Preferred Stock from time to time adopted by the Board of Directors
pursuant to authority so to do which is hereby expressly vested in the
Board.
C. Increase in Authorized Shares. The number of authorized
shares of any class of stock of the Corporation may be increased by
the affirmative vote of a majority of the stock of the Corporation
entitled to vote thereon, without a vote by class or by series.
FIFTH: The name and mailing address of the incorporator of the
Corporation is as follows:
Name Address
------------------------ -------------------------
Lori E. Simon . . . . . . Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
SIXTH: A. The Board of Directors shall be divided into three
classes (which at all times shall be as nearly equal in number as
possible). The initial term of office of the first class ("Class I")
shall expire at the 1988 annual meeting of stockholders, the initial
term of office of the second class ("Class II") shall expire at the
1989 annual meeting of stockholders, and the initial term of office of
the third class ("Class III") shall expire at the 1990 annual meeting
of stockholders. At each annual meeting of stockholders following
such initial classification, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders after
their election. The foregoing notwithstanding, each director shall
serve until his successor shall have been duly elected and qualified,
unless he shall cease to serve by reason of death, resignation or
other cause. If the number of directors is changed, any increase or
decease shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible, but in
no case shall a decrease in the number of directors shorten the term
of any incumbent director.
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B. The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors, and the Board of
Directors shall determine the rights, powers, duties, rules and
procedures that shall affect the power of the Board of Directors to
manage and direct the business and affairs of the Corporation.
C. Newly created directorships resulting from any increase in
the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation or other cause may be
filled only by a majority vote of the directors then in office, though
less than a quorum, or by a sole remaining director. Any director so
chosen shall hold office for a term expiring at the annual meeting of
stockholders at which the term of office of the class to which he has
been elected expires.
D. The provisions set forth in paragraphs A and C of this
Article SIXTH are subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances as set forth in this Restated Certificate of
Incorporation or in a resolution providing for the issuance of such
stock adopted by the Board of Directors pursuant to authority vested
in it by this Restated Certificate of Incorporation.
E. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article SIXTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article SIXTH be
adopted, unless such action is approved by the affirmative vote of the
holders of at least 75% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors
generally, considered for purposes of this Article SIXTH as one class.
SEVENTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized
to make, alter or repeal the By-Laws of the Corporation.
EIGHTH: A. Subject to the rights of holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances as set forth in this Restated Certificate of
Incorporation or in a resolution providing for the issuance of such
stock adopted by the Board of Directors pursuant to authority vested
in it by this Restated Certificate of Incorporation, nominations for
the election of directors may be made by the Board of Directors or by
a committee appointed by the Board of Directors, or by any stockholder
entitled to vote in the election of directors generally provided that
such stockholder has given actual written notice of such stockholders'
intent to make such nomination or nominations to the Secretary of the
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Corporation not later than (1) with respect to an election to be held
at an annual meeting of stockholders, 90 days prior to the anniversary
date of the immediately preceding annual meeting of stockholders, and
(2) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on
the seventh day following (a) the date on which notice of such meeting
is first given to stockholders or (b) the date on which public
disclosure of such meeting is made, whichever is earlier.
B. Each such notice shall set forth: (1) the name and address
of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (2) a representation that the
stockholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice;
(3) a description of all arrangements or understandings involving any
two or more of the stockholders, each such nominee and any other
person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the stockholder or
relating to the Corporation or its securities or to such nominee's
service as a director if elected; (4) such other information regarding
each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and (5) the
consent of each nominee to serve as a director of the Corporation if
so elected. The chairman of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing
procedure.
C. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article EIGHTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article EIGHTH
be adopted, unless such action is approved by the affirmative vote of
the holders of at least 75% of the total voting powers of all shares
of stock of the Corporation entitled to vote in the election of
directors generally, considered for purposes of this Article EIGHTH as
one class.
NINTH: A. Any action required or permitted to be taken by
the stockholders of the Corporation must be effected at a duly called
annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing by such stockholders.
B. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation,
this Article NINTH may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article NINTH be
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adopted, unless such action is approved by the affirmative vote of the
holders of at least 75% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors
generally, considered for purposes of this Article NINTH as one class.
TENTH: A. Notwithstanding any other provision of this Restated
Certificate of Incorporation and in addition to any affirmative vote
which may be otherwise required, no Business Combination shall be
effected or consummated except as expressly provided in paragraph B of
this Article TENTH, unless such Business Combination has been approved
by the affirmative vote of the holders of at least 75% of the Voting
Shares.
B. The provisions of Article TENTH shall not apply to any
Business Combination if:
1. The Business Combination has been approved by a
resolution adopted by a majority of those members of the Board of
Directors who are not Interested Directors with respect to the
Business Combination; or
2. All of the following conditions have been met: (a) the
aggregate amount of the cash and the Fair Market Value of Other
Consideration to be received for each share of Common Stock in
the Business Combination by holders thereof is not less than the
higher of: (i) the highest per share price (including any
brokerage commissions, transfer taxes, soliciting dealer's fees,
dealer-management compensation and similar expenses) paid or
payable by an Interested Party with an interest in the Business
Combination to acquire beneficial ownership of any shares of
Common Stock within the two-year period immediately prior to the
first public announcement of the proposed Business Combination
(the "Announcement Date"), or (ii) the highest market price per
share of the Common Stock on the Announcement Date or on the
date on which the Interested Party became an Interested Party,
whichever is higher; (b) the consideration to be received in the
Business Combination by holders of Common Stock other than an
Interested Party with an interest in the Business Combination
shall be either in cash or in the same form used by an Interested
Party with an interest in the Business Combination to acquire the
largest number of shares of Common Stock acquired by all
Interested Parties with an interest in the Business Combination
from one or more persons who are not Interested Parties with an
interest in the Business Combination; and (c) at the record date
for the determination of stockholders entitled to vote on the
proposed Business Combination, there shall be one or more
directors of the Corporation who are not Interested Directors
with respect to the Business Combination.
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C. For purposes of this Article TENTH.
1. An "Associate" of a specified person is (a) a person
that, directly or indirectly (i) controls, is controlled by, or
is under common control with, the specified person, (ii) is the
beneficial owner of 10% or more of any class of the equity
securities of the specified person, or (iii) has 10% or more of
any class of its equity securities beneficially owned, directly
or indirectly, by the specified person; (b) any person (other
than the Corporation or a Subsidiary) of which the specified
person is an officer, director, partner or other official and any
officer, director, partner or other official of the specified
person; (c) any trust or estate in which the specified person
serves as trustee or in a similar fiduciary capacity, or any
trustee or similar fiduciary of the specified person; and (d) any
relative or spouse who has the same home as the specified person
or who is an officer or director of any person (other than the
Corporation or a Subsidiary), directly or indirectly,
controlling, controlled by or under common control with the
specified person. No director of the Corporation, however, shall
be deemed to be an Associate of any other director of the
Corporation by reason of such service as a director or by
concurrence in any action of the Board of Directors.
2. "Beneficial Ownership" of any Voting Shares shall be
determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934 as in effect on the date on which this Article TENTH
is approved by the stockholders of the Corporation, provided,
however, that a person shall in any event, be the beneficial
owner of any Voting Shares; (a) which such person, or any of such
person's Associates, beneficially owns, directly or indirectly;
(b) which such person or any of such person's Associates,
directly or indirectly, (i) has the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding;
or upon the exercise of conversion rights, exchange rights,
warrants or options; or pursuant to the power to revoke a trust,
discretionary account or other arrangement; or (ii) has or shares
the power, or has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) the
exclusive or shared power, to vote or direct the vote pursuant to
any agreement, arrangement, relationship or understanding; or
pursuant to the power to revoke a trust, discretionary account or
other arrangement; or (c) which are beneficially owned, directly
or indirectly, by any other person with which such first-
mentioned person or any of its Associates has any agreement,
arrangement or understanding, or is acting in concert with
respect to acquiring, holding, voting or disposing of any Voting
Shares; provided, however, that no director of the Corporation
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shall be deemed to be acting in concert with any other director
of the Corporation by reason of such service as a director or by
concurrence in any action of the Board of Directors.
3. "Business Combination" shall mean: (a) any merger or
consolidation of the Corporation or any Subsidiary with or into
any Interested Party or any Associate or an Interested Party; (b)
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one or a series of related transactions) of all
or any Substantial Part of the Consolidated Assets of the
Corporation to or with any Interested Party or any Associate of
an Interested Party; (c) any issuance, sale, exchange, transfer
or other disposition by the Corporation or any Subsidiary (in one
or a series of related transactions) of any securities of the
Corporation or any Subsidiary to or with any Interested Party or
any Associate of an Interested Party; or (d) any spin-off, split-
up, reclassification of securities (including any reverse stock
split), recapitalization, reorganization, liquidation or
dissolution of the Corporation with any Subsidiary or any other
transaction involving the Corporation or any Subsidiary (whether
or not with or otherwise involving an Interested Party) that has
the effect, directly or indirectly, of increasing the
proportionate interest of any Interested Party or any Associate
of an Interested Party in the equity securities or assets of the
Corporation or any Subsidiary.
4. "Fair Market Value" means: (a) in the case of stock, the
average closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for the New York Stock Exchange Listed Stocks, or,
if such stock is not quoted on the Composite Tape on the New York
Stock Exchange, or, if such stock is not listed on such exchange,
on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the
average closing bid quotation with respect to a share of such
stock during the 30-day period immediately preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotation System or any system then in use, provided
that, if no such prices or quotations are available, or if a
majority of those members of the Board of Directors who are not
Interested Directors with respect to the Business Combination
determine that such prices or quotations do not represent fair
market value, the Fair Market Value of such stock shall be
determined pursuant to clause (b) below; and (b) in the case of
property other than cash or stock, or in the case of stock as to
which Fair Market Value is not determined pursuant to clause (a)
above, the Fair Market Value on the date in question as
determined by a majority of those members of the Board of
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Directors who are not Interested Directors with respect to the
Business Combination. In making any such determination, the
Board of Directors may, but shall not be required to, engage the
services of an Investing Banking Firm.
5. "Interested Director" shall mean each director of the
Corporation who (a) is an Interested Party or an Associate of an
Interested Party; (b) has an Associate who is an Interested
Party; (c) was nominated or proposed to be elected as a director
of the Corporation by an Interested Party or an Associate of an
Interested Party; or (d) is, or has been nominated or proposed to
be elected as, an officer, director or employee of an Interested
Party or of an Associate of an Interested Party.
6. "Interested Party" shall mean any person (other than
the Corporation or a Subsidiary) that is the beneficial owner,
directly or indirectly, of 5% or more of the Voting Shares (a) in
connection with determining the required vote by stockholders on
any Business Combination, as of any of the following dates: the
record date for the determination of stockholders entitled to
notice of or to vote on such Business Combination or immediately
prior to the consummation of any such Business Combination or the
adoption by the Corporation of any plan or proposal with respect
thereto; (b) in connection with determining the required vote by
stockholders on any amendment, alteration or repeal of, or
adoption of a provision inconsistent with, this Article TENTH
pursuant to paragraph E of this Article TENTH, as of the record
date for the determination of stockholders entitled to notice and
to vote on such amendment, alteration, repeal or inconsistent
provision; and (c) in connection with determining whether a
director is an "Interested Director" in respect of any
determination made by the Board of Directors pursuant to
paragraph D of this Article TENTH, as of the date at which the
vote on such recommendation or determination is being undertaken,
or as close as is reasonably practicable to such date.
7. An "Investment Banking Firm" shall mean an investment
banking firm that has not previously been associated with any
Interested Party with an interest in the Business Combination,
which is selected by a majority of the directors of the
Corporation who are not Interested Directors with respect to the
Business Combination, engaged solely on behalf of the holders of
Common Stock other than Interested Parties with an interest in
the Business Combination, and paid a reasonable fee for its
services.
8. "Other Consideration" shall include (without
limitation) Common Stock and/or any other class or series of
stock of the Corporation retained by stockholders of the
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Corporation in the event of a Business Combination in which the
Corporation is the surviving corporation.
9. A "Person" shall include (without limitation) any
natural person, corporation, partnership, trust or other entity,
organization or association, or any two or more persons acting in
concert or as a syndicate, joint venture or group.
10. "Subsidiary" shall mean any corporation of which a
majority of any class of equity securities is owned, directly or
indirectly, by the Corporation; provided, however, that for
purposes of paragraph C.6 of this Article TENTH, the term
"Subsidiary" shall mean only a corporation of which a majority of
each class of equity securities is owned, directly or indirectly,
by the Corporation.
11. "Substantial Part of the Consolidated Assets" of the
Corporation shall mean assets of the Corporation and/or any
Subsidiary having a book value (determined in accordance with
generally accepted accounting principles) in excess of 10% of the
book value (determined in accordance with generally accepted
accounting principles) of the total consolidated assets of the
Corporation and all Subsidiaries which are consolidated for
public financial reporting purposes, at the end of its most
recent quarterly fiscal period ending prior to the time the
determination is made for which financial information is
available.
12. "Voting Shares" shall mean the outstanding shares of
all classes of stock of the Corporation entitled to vote for the
election of directors generally, considered for purposes of this
Article TENTH as one class. "Voting Shares" shall include shares
deemed owned by any Interested Party or any Associate of an
Interested Party through application of paragraph C.2 of this
Article TENTH, but shall not include any other shares which may
be issuable based upon a right to acquire such shares (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, exchange rights,
warrants or options, or pursuant to the power to revoke a trust,
discretionary account, or other arrangement or otherwise.
D. A majority of those members of the Board of Directors who
are not Interested Directors with respect to the Business Combination
shall have the power and duty to interpret the provisions of this
Article TENTH and to make all determinations to be made under this
Article TENTH. Any such interpretation or determination shall be
conclusive and binding for all purposes of this Article TENTH.
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E. In addition to the voting requirements imposed by law or by
any other provision of this Restated Certificate of Incorporation, the
provisions set forth in this Article TENTH may not be amended, altered
or repealed in any respect, nor may any provision inconsistent with
this Article TENTH be adopted, unless such action is approved by the
affirmative vote of the holders of at least 75% of the Voting Shares.
F. Nothing contained in this Article TENTH shall be construed
to relieve any Interested Party from any fiduciary obligation imposed
by law.
ELEVENTH: Except as otherwise provided in this Restated
Certificate of Incorporation, the Board of Directors shall have
authority to authorize the issuance, from time to time without any
vote or other action by the stockholders, of any or all shares of
stock of the Corporation of any class at any time authorized, any
securities convertible into or exchangeable for any such shares so
authorized, and any warrant, option or right to purchase, subscribe
for or otherwise acquire, shares of stock of the Corporation of any
class at any time authorized, in each case to such persons and for
such consideration and on such terms as the Board of Directors from
time to time in its discretion lawfully may determine; provided,
however, that the consideration for the issuance of shares of stock of
the corporation having par value shall not be less than such par
value. Stock so issued, for which the consideration has been paid to
the Corporation, shall be fully paid stock, and the holders of such
stock shall not be liable to any further call or assessments thereon.
TWELFTH: No holder of stock of any class of the Corporation or
of any security convertible into, or of any warrant, option or right
to purchase, subscribe for or otherwise acquire, stock of any class of
the Corporation, whether now or hereafter authorized, shall, as such
holder, have any pre-emptive right whatsoever to purchase, subscribe
for or otherwise acquire, stock of any class of the Corporation or any
security convertible into, or any warrant, option or right to
purchase, subscribe for or otherwise acquire, stock of any class of
the Corporation, whether now or hereafter authorized.
THIRTEENTH: Anything herein contained to the contrary
notwithstanding, any and all right, title, interest, and claim in or
to any dividends declared, or other distributions made, by the
Corporation, whether in cash, stock or otherwise, which are unclaimed
by the stockholder entitled thereto for a period of six years after
the close of business on the payment date, shall be and be deemed to
be extinguished and abandoned; and such unclaimed dividends or other
distributions in the possession of the Corporation, its transfer
agents or other agents or depositaries, shall at such time become the
absolute property of the Corporation, free and clear of any and all
claims of any persons whatsoever.
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FOURTEENTH: A. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he
is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as a director or officer of another
Corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such
capacity, against costs, charges and other expenses (including
attorneys' fees) ("Expenses"), judgments, fines and amount paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding and any appeal thereof if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful. For purposes of this Article, "serving or has agreed to
serve at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise" shall include any service by a director or officer of the
Corporation as a director, officer, employee, agent or fiduciary of
such other Corporation, partnership, joint venture, trust or other
enterprise, or with respect to any employee benefit plan (or its
participants or beneficiaries) of the Corporation or any such other
enterprise.
B. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or
was or has agreed to become a director or officer of the Corporation
or is or was serving or has agreed to serve at the request of the
Corporation as a director or officer of another Corporation,
partnership, joint venture, trust or other enterprise or by reason of
any action alleged to have been taken or omitted in such capacity
against Expenses actually and reasonably incurred by him in connection
with the investigation, defense or settlement of such action or suit
and any appeal thereof if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
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have been adjudged to be liable to the Corporation unless and only to
the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such Expenses which the Court of Chancery of
Delaware or such other court shall deem proper.
C. To the extent that any person referred to in paragraphs (A)
or (B) of this Article has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to
therein or in defense of any claim, issue or matter therein, he shall
be indemnified against Expenses actually and reasonably incurred by
him in connection therewith.
D. Any indemnification under paragraphs (A) or (B) of this
Article (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct
set forth in paragraphs (A) or (B). Such determination shall be made
(i) by the board of directors by a majority vote of a quorum (as
defined in the By-Laws of the Corporation) consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such
quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders.
E. Expenses incurred in defending a civil or criminal action,
suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding and appeal upon
receipt by the Corporation of an undertaking by or on behalf of the
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Corporation.
F. The determination of the entitlement of any person to
indemnification under paragraphs (A), (B) or (C) or to advancement of
Expenses under paragraph (E) of this Article shall be made promptly,
and in any event within 60 days after the Corporation has received a
written request for payment from or on behalf of a director or officer
and payment of amounts due under such sections shall be made
immediately after such determination. If no disposition of such
request is made within said 60 days or if payment has not been made
within 10 days thereafter, or if such request is rejected, the right
to indemnification or advancement of Expenses provided by this Article
shall be enforceable by or on behalf of the director or officer in any
court of competent jurisdiction. In addition to the other amounts due
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under this Article, Expenses incurred by or on behalf of a director or
officer in successfully establishing his right to indemnification or
advancement of Expenses, in whole or in part, in any such action (or
settlement thereof) shall be paid by the Corporation.
G. The indemnification and advancement of Expenses provided by
this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of Expenses may be
entitled under any law (common or statutory), By-Law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, or while employed by or acting as a
director or officer of the Corporation or as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise, and shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Notwithstanding the
provisions of this Article, the Corporation shall indemnify or make
advancement of Expenses to any person referred to in paragraphs (A) or
(B) of this Article to the full extent permitted under the laws of
Delaware and any other applicable laws, as they now exist or as they
may be amended in the future.
H. All rights to indemnification and advancement of Expenses
provided by this Article shall be deemed to be a contract between the
Corporation and each director or officer of the Corporation who
serves, served or has agreed to serve in such capacity, or at the
request of the Corporation as director or officer of another
corporation, partnership, joint venture, trust or other enterprise, at
any time while this Article and the relevant provisions of the
Delaware General Corporation Law or other applicable law, if any, are
in effect. Any repeal or modification of this Article, or any repeal
or modification of relevant provisions of the Delaware General
Corporation Law or any other applicable law, shall not in any way
diminish any rights to indemnification of or advancement of Expenses
to such director or officer or the obligations of the Corporation.
I. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was or has agreed to
become a director or officer of the Corporation, or is or was serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of this Article.
J. The Board of Directors may, by resolution, extend the
provisions of this Article pertaining to indemnification and
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advancement of Expenses to any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that he is or was or
has agreed to become an employee, agent or fiduciary of the
Corporation or is or was serving or has agreed to serve at the request
of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust or
other enterprise or with respect to any employee benefit plan (or its
participants or beneficiaries) of the corporation or any such other
enterprise.
K. The invalidity or unenforceability of any provision of this
Article shall not affect the validity or enforceability of the
remaining provisions of this Article.
FIFTEENTH: No person who was or is a director of this
Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for breach of the duty of loyalty
to the Corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing
violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General
Corporation Law is amended after the effective date of this Article to
further eliminate or limit, or to authorize further elimination or
limitation of, the personal liability of directors for breach of
fiduciary duty as a director, then the personal liability of a
director to this Corporation or its stockholders shall be eliminated
or limited to the full extent permitted by the Delaware General
Corporation Law, as so amended. For purposes of this Article,
"fiduciary duty as a director" shall include any fiduciary duty
arising out of serving at the request of this Corporation as a
director of another corporation, partnership, joint venture, trust or
other enterprise, and "personally liable to the Corporation" shall
include any liability to such other Corporation, partnership, joint
venture, trust or other enterprise, and any liability to this
Corporation in its capacity as a security holder, joint venturer,
partner, beneficiary, creditor or investor of or in any such other
corporation, partnership, joint venture, trust or other enterprise.
Any repeal or modification of the foregoing paragraph by the
stockholders of this Corporation shall not adversely affect the
elimination or limitation of the personal liability of a director for
any act or omission occurring prior to the effective date of such
repeal or modification. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring prior to
the effective date of this Article.
- 85 -
SIXTEENTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this Corporation or of any
creditor or stockholder thereof or on the application of any receiver
or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for
this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case
may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders of
this Corporation, as the case may be, and also this Corporation.
SEVENTEENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate
of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon the stockholders herein are
granted subject to this reservation.
Notwithstanding the foregoing, the provisions set forth in
Articles SIXTH, EIGHTH, NINTH, and TENTH may not be amended, altered
or repealed in any respect nor may any provision inconsistent with any
of such Articles be adopted unless such amendment, alteration, repeal
or inconsistent provision is approved as specified in each such
respective Article.
3. This Restated Certificate of Incorporation was duly
authorized by a resolution duly adopted and approved by consent of the
sole Director, dated as of May 1, 1987, the Corporation not yet having
received payment for any of its stock, in accordance with the
provisions of Section 241 and Section 245 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, New Newell Co. has caused this Restated
Certificate of Incorporation to be signed by William T. Alldredge, its
- 86 -
Vice President-Finance, and attested by Roland E. Knecht, its
Secretary this 18th day of May, 1987.
NEW NEWELL CO.
William T. Alldredge
Vice President-Finance
ATTEST:
Roland E. Knecht
Secretary
- 87 -
Filed June 23, 1987 at 9:01 a.m.
877174060 Delaware Secretary of State
CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR THE
POWERS DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED CERTIFICATE
OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
CUMULATIVE PREFERRED STOCK
($2,000 Stated Value)
of
--
NEW NEWELL CO.
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------
The undersigned DOES HEREBY CERTIFY that the following resolution
was duly adopted by the written consent of the sole director of New
Newell Co., a Delaware corporation, on May 18, 1987:
RESOLVED by the Board of Directors of New Newell Co., a Delaware
corporation (the "Corporation"), that, pursuant to authority expressly
granted to it by the Restated Certificate of Incorporation of the
Corporation, a total of 7,500 shares of the preferred stock without
par value, of the Corporation are hereby respectively constituted as
Series 1 Cumulative Preferred Stock, Series 2 Cumulative Preferred
Stock, Series 3 Cumulative Preferred Stock, Series 4 Cumulative
Preferred Stock and Series 5 Cumulative Preferred Stock, with an
aggregate stated value of $15,000,000 (hereinafter called "Cumulative
Preferred Stock"). Each series of such Cumulative Preferred Stock
shall consist of 1,500 shares, with a stated value of $2,000 per
share. Shares of Cumulative Preferred Stock shall be issued only upon
effectiveness of the merger of Newell Co., a Delaware corporation, and
Newell Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Corporation (the "Merger"). The preferences and the
relative, participating, optional and other special rights of the
shares of Cumulative Preferred Stock and the qualifications,
limitations or restrictions thereof, shall be as follows:
1. CUMULATIVE DIVIDENDS. (a) The holders of record of shares of
each series of Cumulative Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds
legally available for the payment thereof, cumulative cash dividends
at the rate specified in subsection (b) below, and no more. The
holders of shares of Cumulative Preferred Stock shall not be entitled
to any dividends other than the cash dividends provided for in this
section. Dividends shall accrue daily from the date of issuance,
whether or not earned or declared, and shall be payable quarterly on
such dates as the Board of Directors may from time to time determine.
The dividends shall be in preference to dividends upon any stock
(including common stock) of the Corporation ranking junior to the
Cumulative Preferred Stock as to dividends. If the Corporation has
not paid full dividends upon the shares of Cumulative Preferred Stock
for any preceding quarter, the Corporation shall declare and pay the
amount for payment, before declaring or paying any cash dividends on
the common stock of the Corporation. Accrued dividends on Cumulative
Preferred Stock shall not bear interest.
(b) The dividend rate for each series of Cumulative Preferred
Stock is as follows:
(i) For Series 1, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1989, after which
time the rate shall be $160 per share per annum.
(ii) For Series 2, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1990, after which
time the rate shall be $160 per share per annum.
(iii) For Series 3, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1991, after which
time the rate shall be $160 per share per annum.
(iv) For Series 4, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1992, after which
time the rate shall be $160 per share per annum.
(v) For Series 5, cash dividends shall accrue at the rate
of $100 per share per annum until September 24, 1993, after which
time the rate shall be $160 per share per annum.
2. LIQUIDATION. (a) In the event of a voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation, the
holders of shares of Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation an amount equal to the
stated value per share plus an amount equal to any accrued and unpaid
dividends thereon to the date fixed for distribution. This
distribution shall be in preference to any such distribution upon any
stock (including common stock) of the Corporation ranking junior to
Cumulative Preferred Stock as to liquidation preferences, but subject
to the prior rights of the holders of shares of all stock ranking
- 89 -
senior to Cumulative Preferred Stock as to liquidation preferences.
If the assets of the Corporation are not sufficient to pay the full
amounts to the holders of Cumulative Preferred Stock and all other
series of preferred stock of the Corporation ranking equally with the
shares of Cumulative Preferred Stock as to liquidation preferences,
then the holders of Cumulative Preferred Stock and of such other
series shall share ratably in the distribution of any assets remaining
after distribution to holders of stock ranking senior to Cumulative
Preferred Stock as to liquidation preferences.
(b) Nothing in this section, however, shall be deemed to prevent
the Corporation from redeeming or purchasing Cumulative Preferred
Stock as permitted by Section 3.
(c) A merger or consolidation of the Corporation with any other
corporation or a sale, lease, or conveyance of assets or a business
combination involving the Corporation or any related or similar
transaction shall not be considered a liquidation, dissolution, or
winding up the Corporation within the meaning of this section.
3. REDEMPTION. (a) The Corporation may redeem any or all
shares of one or more series of Cumulative Preferred Stock at its
option by resolution of the Board of Directors, at any time and from
time to time on or after issuance, in cash, at the stated value of the
shares plus an amount equal to any accrued and unpaid dividends
thereon to the date fixed for redemption. In the event that the
Corporation redeems less than the entire number of shares of any
series of Cumulative Preferred Stock outstanding at any one time, the
Corporation shall select the shares to be redeemed by lot or pro rata
or by any other manner that the Board of Directors deems equitable.
No less than 20 nor more than 120 days prior to the date fixed for any
entire or partial redemption of Cumulative Preferred Stock, the
Corporation shall mail a notice of the redemption to the holders of
record of the shares to be redeemed at their addresses as they appear
on the books of the Corporation. The notice shall state the time and
place of redemption and shall identify the particular shares to be
redeemed if less than all of the outstanding shares are to be
redeemed. Failure to mail a notice or a defect in a notice or its
mailing shall not affect the validity of the redemption proceedings.
(b) On or before the date fixed for redemption each holder of
shares of Cumulative Preferred Stock called for redemption shall
surrender his certificate representing his shares to the Corporation
or its agent at the place designated in the redemption notice. If the
Corporation redeems less than all of the shares represented by a
surrendered certificate, the Corporation shall issue a new certificate
representing the unredeemed shares. If the Corporation has duly given
notice of redemption and if funds necessary for the redemption are
available on the redemption date, then notwithstanding that any holder
- 90 -
has not surrendered his certificate representing shares called for
redemption, all rights with respect to those shares shall cease and
determine immediately after the redemption date, except that such a
holder shall have the right to receive the redemption price without
interest upon surrender of his certificate.
(c) The Corporation may, at its option at any time after giving
a notice of redemption, deposit a sum sufficient to redeem the shares
called for redemption, plus any accrued and unpaid dividends thereon
to the redemption date, with any bank or trust company in the City of
Chicago, Illinois, or in the City of Minneapolis, Minnesota, having
capital, surplus, and undivided profits aggregating at least
$50,000,000 as a trust fund with irrevocable instructions and
authority to the bank or trust company to mail notice of redemption if
the Corporation has not begun or completed such mailing at the time of
the deposit and to pay, on and after the date fixed for redemption or
prior thereto, the redemption price of the shares to their respective
holders upon the surrender of their share certificates. From the date
the Corporation makes such a deposit, the shares designated for
redemption shall be treated as redeemed and no longer outstanding, and
no dividends shall accrue on the shares after the date fixed for
redemption. The deposit shall be deemed to constitute full payment of
the shares to their holders. From the date of the deposit, the
holders of the shares shall cease to be stockholders with respect to
the shares; they shall have no interest in or claim against the
Corporation by virtue of the shares; and they shall have no rights
with respect to the shares except the right to receive from the bank
or trust company payment of the redemption price of the shares,
without interest, upon surrender of their certificates. At the
expiration of five years after the redemption date, the bank or trust
company shall pay over to the Corporation any funds then remaining on
deposit, free of trust. Thereafter the holders of certificates for
the shares shall have no claims against the bank or trust company, but
only claims as unsecured creditors against the Corporation for amounts
equal to their pro rata portions of the funds paid over, without
interest, subject to compliance by the holders with the terms of the
redemption. Any interest on or other accretions to funds deposited
with the bank or trust company shall belong to the Corporation.
(d) Nothing in this Resolution shall prevent or restrict the
Corporation from purchasing, from time to time, at public or private
sale, any or all of the Cumulative Preferred Stock at whatever prices
the Corporation may determine, but at prices not exceeding those
permitted by Delaware law.
(e) Nothing in this Resolution shall give any holder of
Cumulative Preferred Stock the right to require the Corporation to
redeem any or all shares of the Stock.
- 91 -
4. CONVERSION. The Cumulative Preferred Stock is not
convertible into any other class or series of common or preferred
stock of the Corporation.
5. STATUS OF REACQUIRED STOCK. The Corporation shall retire
and cancel any shares of Cumulative Preferred Stock that it redeems,
purchases, or acquires. Such shares thereafter shall have the status
of authorized but unissued shares of preferred stock. Subject to the
limitations in this Resolution or in any resolutions adopted by the
Board of Directors providing for the reissuance of the shares, the
Corporation may reissue the shares as shares of Cumulative Preferred
Stock or may reclassify and reissue them as preferred stock of any
class or series other than Cumulative Preferred Stock.
6. VOTING RIGHTS. (a) Except as otherwise provided herein or
as may be required by law, the holders of Cumulative Preferred Stock
shall be entitled to one vote per share on every question submitted to
holders of record of the common stock of the Corporation, voting
together with the common stock of the Corporation as a single class.
(b) Notwithstanding the foregoing, (i) without the affirmative
vote or consent of at least a majority of the shares of Cumulative
Preferred Stock then outstanding voting as a separate class, the
Corporation shall not amend the Restated Certificate of Incorporation
if the amendment would alter or change the powers, preferences, or
special rights of the shares of Cumulative Preferred Stock so as to
affect them adversely, provided that this clause "(i)" shall not apply
to an increase or decrease (but not below the number of shares thereof
then outstanding) in the number of authorized shares of any class or
classes of stock; and (ii) so long as at least 3,100 shares of
Cumulative Preferred Stock are outstanding, without the affirmative
vote or consent of the holders of at least a majority of the shares of
Cumulative Preferred Stock then outstanding voting as a separate
class, the Corporation shall not issue any stock ranking senior to the
Cumulative Preferred Stock with respect to the payment of dividends or
the distribution of assets upon liquidation, except that the
Corporation may issue such stock if the consideration therefor
consists of cash. For purposes of any vote required pursuant to
clause (i) of this subsection (b) if any proposed amendment would
alter or change the powers, preferences, or special rights of one or
more of Series 1, 2, 3, 4, or 5 of Cumulative Preferred Stock so as to
affect them adversely but shall not so affect the entire class, then
only the shares of the series so affected by the amendment shall be
considered a separate class.
7. NO OTHER RIGHTS. The shares of Cumulative Preferred Stock
shall not have any relative, participating, optional or other special
rights or powers other than as set forth above and in the Restated
Certificate of Incorporation of the Corporation.
- 92 -
IN WITNESS WHEREOF, New Newell Co. has caused this resolution to
be signed by William T. Alldredge, its Vice President - Finance, and
attested by Roland E. Knecht, its Secretary, this 22nd day of June,
1987.
NEW NEWELL CO.
William T. Alldredge,
Vice President - Finance
ATTEST:
Roland E. Knecht,
Secretary
- 93 -
Filed July 2, 1987 at 9:29 a.m.
877183082 Delaware Secretary of State
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW NEWELL CO.
------------------------------------------------------------
Adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware
------------------------------------------------------------
New Newell Co., a corporation existing under the laws of the
State of Delaware, does hereby certify as follows:
FIRST: That Article First of the Restated Certificate of
Incorporation of the Corporation has been amended in its entirety to
read as follows:
FIRST: The name of the Corporation is NEWELL CO.
SECOND: That the foregoing amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the written consent of the holder of all outstanding
shares entitled to vote.
94
IN WITNESS WHEREOF, New Newell Co. has caused this Certificate to
be signed and attested by its duly authorized officers this 30th day
of June 1987.
NEW NEWELL CO.
By: /s/ William T. Alldredge
-----------------------
Vice President - Finance
Attest:
/s/ Roland E. Knecht
-----------------------------
Secretary
- 95 -
Filed October 31, 1988 at 9:00 a.m.
688305050 Delaware Secretary of State
CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR THE
POWERS, DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED CERTIFICATE
OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES B
of
NEWELL CO.
----------------------------------------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
----------------------------------------
NEWELL CO., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called
and held on October 20, 1988:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance with the
provisions of the Corporation's Restated Certificate of Incorporation,
the Board of Directors hereby creates a series of Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the
relative rights, preferences and limitations of such series, as
follows:
Junior Participating Preferred Stock, Series B:
Section 1. Designation and Amounts. The shares of such
series shall be designated as "Junior Participating Preferred Stock,
Series B" (the "Series B Preferred Stock") and the number of shares
constituting the Series B Preferred Stock shall be 500,000. Such
number of shares may be increased or decreased by resolution of the
Board; provided, that no decrease shall reduce the number of shares of
Series B Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation
convertible into Series B Preferred Stock.
96
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series B Preferred Stock with respect
to dividends, the holders of shares of Series B Preferred Stock,
in preference to the holders of Common Stock, par value $1.00 per
share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $15 or
(b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend
- 97 -
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $15 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series B
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares
of Series B Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of shares of Series B Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of
Series B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- 98 -
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series
B Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series B Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred
Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series B Preferred Stock; or
- 99 -
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock,
or any shares of stock ranking on a parity with the
Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject
to the conditions and restrictions on issuance set forth herein, in
the Corporation's Restated Certificate of Incorporation or in any
other Certificate of Designations creating a series of Preferred Stock
or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall
have received $10,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of
Series B Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (B) to the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred
Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation
- 100 -
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series B Preferred Stock
shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series B Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series B Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Corporation's
Preferred Stock.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or
- 101 -
special rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board and
attested by its Secretary this 20th day of October 1988.
William T. Alldredge
Vice President - Finance
Attest:
Roland E. Knecht
Secretary
- 102 -
Filed September 13, 1989
Delaware Secretary of State
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NEWELL CO.
------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------
We, William T. Alldredge, Vice President, and Roland E.
Knecht, Secretary, of Newell Co., a corporation existing under the
laws of the State of Delaware, do hereby certify as follows:
FIRST: That the name of the corporation is Newell Co.,
formerly known as New Newell Co.
SECOND: That the date of filing the corporation's original
Certificate of Incorporation by the Secretary of State of Delaware was
the 23rd day of February, 1987, and that the Restated Certificate of
Incorporation of the corporation was filed by the Secretary of State
of Delaware on the 18th day of May, 1987.
THIRD: That the first sentence of Article Fourth of the
Restated Certificate of Incorporation of said Corporation has been
amended as follows:
FOURTH: The total number of shares which the
Corporation shall have authority to issue is
110,000,000, consisting of 100,000,000 shares of
Common Stock of the par value of $1.00 per share
and 10,00,000 shares of Preferred Stock,
consisting of 10,000 shares without par value and
103
9,990,000 shares of the par value of $1.00 per
share.
FOURTH: That said amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the affirmative vote of the holders of a majority of
all outstanding common and preferred stock entitled to vote at a
meeting of stockholders.
IN WITNESS WHEREOF, we have signed this certificate this
28th day of June, 1989.
NEWELL CO.
William T. Alldredge
Vice President - Finance
ATTEST:
Roland E. Knecht
Secretary
- 104 -
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 05/15/1991
911355135 - 2118347
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
NEWELL CO.
------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------
We, William T. Alldredge, Vice President and Roland E.
Knecht, Secretary, of Newell Co., a corporation existing under the
laws of the State of Delaware, do hereby certify as follows:
FIRST: That the name of the corporation is Newell Co.
SECOND: That the date of filing the corporation's original
Certificate of Incorporation by the Secretary of State of Delaware was
the 23rd day of February, 1987, that the Restated Certificate of
Incorporation of the corporation was filed by the Secretary of State
of Delaware on the 18th day of May, 1987, a Certificate of Amendment
was filed by the Secretary of State of Delaware on the second day of
July, 1987, and a Certificate of Amendment was filed by the Secretary
of State of Delaware on 13th day of September, 1989.
THIRD: That the first sentence of Article Fourth of the
Restated Certificate of Incorporation of said Corporation has been
amended as follows:
FOURTH: The total number of shares which the
Corporation shall have authority to issue is
105
310,000,000, consisting of 300,000,000 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.
FOURTH: That said amendment has been duly adopted in
accordance with provisions of the General Corporation Law of the State
of Delaware by the affirmative vote of the holders of a majority of
all outstanding common and preferred stock entitled to vote at a
meeting of stockholders.
IN WITNESS WHEREOF, we have signed this certificate this 9th
day of May, 1991.
NEWELL CO.
William T. Alldredge
Vice President - Finance
ATTEST:
Roland E. Knecht
Secretary
- 106 -
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 06/11/1991
911625086 - 2118347
AMENDED CERTIFICATE OF DESIGNATIONS AS TO THE RESOLUTION PROVIDING FOR
THE POWERS, DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, AS ARE NOT STATED AND EXPRESSED IN THE RESTATED
CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES B
of
NEWELL CO.
------------------------------
Pursuant to Section 151 of the General
Corporation Law of the
State of Delaware
------------------------------
NEWELL CO., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called
and held on February 14, 1991:
RESOLVED, that the first sentence of Section 1 of the
Certificate of Designations as to the resolution providing for the
powers, designation, preferences and relative, participating, optional
or other rights, and the qualifications, limitations or restrictions
thereof, as are not stated and expressed in the Restated Certificate
of Incorporation or in any amendment thereto, of the Junior
Participating Preferred Stock, Series B of Newell Co. (the
"Certificate of Designations") which was filed in the Office of the
Secretary of State of Delaware on October 31, 1988, is hereby amended
to read as follows:
The shares of such series shall be designated as
"Junior Participating Preferred Stock, Series B"
(the "Series B Preferred Stock") and the number of
shares constituting the Series B Preferred Stock
shall be 5,000,000.
107
IN WITNESS WHEREOF, this Amended Certificate of Designations
is executed on behalf of the Corporation by its Vice President-Finance
and attested by its Secretary this 5th day of June, 1991.
William T. Alldredge
Vice President - Finance
Attest:
Roland E. Knecht
Secretary
- 108 -
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 11/03/1994
944211670 - 2118347
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
* * * * *
Newell Co., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
The present registered agent of the corporation is United States
Corporation Company and the present registered office of the
corporation is in the county of Kent.
The Board of Directors of
adopted the following resolution on the 2nd day of November, 1994.
Resolved, that the registered office of Newell Co. in the
state of Delaware be and it hereby is changed to Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle, and the authorization of the present
registered agent of this corporation be and the same is
hereby withdrawn, and THE CORPORATION TRUST COMPANY, shall
be and is hereby constituted and appointed the registered
agent of this corporation at the address of its registered
office.
109
IN WITNESS WHEREOF, Newell Co. has caused this statement to be
signed by Richard H. Wolff, its Secretary*, this 25th day of October
1994.
/s/ Richard H. Wolff
-------------------------------
Secretary
_______________________________
(Title)
* Any authorized officer of the Chairman or Vice-Chairman of the
Board of Directors may execute this certificate.
110
EX-3
3
EXHIBIT 3.2
BY-LAWS
OF
NEWELL CO.
(a Delaware corporation)
(as amended November 2, 1994)
ARTICLE I
OFFICES
--------
1.1 Registered Office. The registered office of the Corporation
in the State of Delaware shall be located in the City of Dover and
County of Kent. The Corporation may have such other offices, either
within or without the State of Delaware, as the Board of Directors may
designate or the business of the Corporation may require from time to
time.
1.2 Principal Office in Illinois. The principal office of the
Corporation in the State of Illinois shall be located in the City of
Freeport and County of Stephenson.
ARTICLE II
STOCKHOLDERS
------------
2.1 Annual Meeting. The annual meeting of stockholders shall be
held each year at such time and date as the Board of Directors may
designate prior to the giving of notice of such meeting, but if no
such designation is made, then the annual meeting of stockholders
shall be held on the second Wednesday in May of each year for the
election of directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday, such meeting shall be held on the
next succeeding business day.
2.2 Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, may be called by the Chairman, by the Board
of Directors or by the President.
2.3 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Delaware, as the place
111
of meeting for any annual meeting or for any special meeting called by
the Board of Directors. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the
principal office of the Corporation in the State of Illinois.
2.4 Notice of Meeting. Written notice stating the place, date
and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given
not less than ten nor more than sixty days before the date of the
meeting, or in the case of a merger or consolidation of the
Corporation requiring stockholder approval or a sale, lease or
exchange of substantially all of the Corporation's property and
assets, not less than twenty nor more than sixty days before the date
of meeting, to each stockholder of record entitled to vote at such
meeting. If mailed, notice shall be deemed given when deposited in
the United States mail, postage prepaid, directed to the stockholder
at his address as it appears on the records of the Corporation. When
a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless the
adjournment is for more than thirty days, or unless, after
adjournment, a new record date is fixed for the adjourned meeting, in
either of which cases notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
2.5 Fixing of Record Date. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent (to the
extent permitted, if permitted) to corporate action in writing without
a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than
sixty days prior to any other action. If no record date is fixed, the
record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be the close of business on
the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day
on which the meeting is held, and the record date for determining
stockholders for any other purpose shall be the close of business on
the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting unless the Board of Directors fixes a new
record date for the adjourned meeting.
2.6 Voting Lists. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days
- 112 -
before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of
shares registered in his name, which list, for a period of ten days
prior to such meeting, shall be kept on file either at a place within
the city where the meeting is to be held and which place shall be
specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held, and shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, at any time during ordinary business hours. Such lists shall
also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list of
stockholders entitled to vote, or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
2.7 Quorum. The holders of shares of stock of the Corporation
entitled to cast a majority of the total votes that all of the
outstanding shares of stock of the Corporation would be entitled to
cast at the meeting, represented in person or by proxy, shall
constitute a quorum at any meeting of stockholders; provided, that if
less than a majority of the outstanding shares of capital stock are
represented at said meeting, a majority of the shares of capital stock
so represented may adjourn the meeting. If a quorum is present, the
affirmative vote of a majority of the votes entitled to be cast by the
holders of shares of capital stock represented at the meeting shall be
the act of the stockholders, unless a different number of votes is
required by the General Corporation Law, the Certificate of
Incorporation or these By-Laws. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might
have been transacted at the original meeting. Withdrawal of
stockholders from any meeting shall not cause failure of a duly
constituted quorum at that meeting.
2.8 Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to
act for him by proxy, but no such proxy shall be voted or acted upon
after three years from its date, unless the proxy provides for a
longer period.
2.9 Voting of Stock. Each stockholder shall be entitled to such
vote as shall be provided in the Certificate of Incorporation, or,
absent provision therein fixing or denying voting rights, shall be
entitled to one vote per share with respect to each matter submitted
to a vote of stockholders.
2.10 Voting of Stock by Certain Holders. Persons holding stock
in a fiduciary capacity shall be entitled to vote the shares so held.
- 113 -
Persons whose stock is pledged shall be entitled to vote, unless in
the transfer by the pledgor on the books of the Corporation he has
expressly empowered the pledgee to vote thereon, in which case only
the pledgee or his proxy may represent such stock and vote thereon.
Stock standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the charter
or by-laws of such corporation may prescribe or, in the absence of
such provision, as the board of directors of such corporation may
determine. Shares of its own capital stock belonging to the
Corporation or to another corporation, if a majority of the shares
entitled to vote in the election of directors of such other
corporation is held by the Corporation, shall neither be entitled to
vote nor counted for quorum purposes, but shares of its capital stock
held by the Corporation in a fiduciary capacity may be voted by it and
counted for quorum purposes.
2.11 Voting by Ballot. Voting on any question or in any election
may be by voice vote unless the presiding officer shall order or any
stockholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
---------
3.1 General Powers. The business of the Corporation shall be
managed by its Board of Directors.
3.2 Number, Tenure and Qualification. The number of directors
of the Corporation shall be ten, and the term of office of each
director shall be as set forth in the Certificate of Incorporation of
the Corporation. Any director may resign at any time upon written
notice to the Corporation. Directors need not be stockholders of the
Corporation.
3.3 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law,
immediately after, and at the same place as, the annual meeting of
stockholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Delaware, for
the holding of additional regular meetings without other notice than
such resolution.
3.4 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Vice Chairman and
Chief Executive Officer or any two directors. The person or persons
authorized to call special meetings of the Board of Directors may fix
any place, either within or without the State of Delaware, as the
- 114 -
place for holding any special meeting of the Board of Directors called
by them.
3.5 Notice. Notice of any special meeting of directors, unless
waived, shall be given, in accordance with Section 3.6 of the By-Laws,
in person, by mail, by telegram or cable, by telephone, or by any
other means that reasonably may be expected to provide similar notice.
Notice by mail and, except in emergency situations as described
below, notice by any other means, shall be given at least two (2) days
before the meeting. For purposes of dealing with an emergency
situation, as conclusively determined by the director(s) or officer(s)
calling the meeting, notice may be given in person, by telegram or
cable, by telephone, or by any other means that reasonably may be
expected to provide similar notice, not less than two hours prior to
the meeting. If the secretary shall fail or refuse to give such
notice, then the notice may be given by the officer(s) or director(s)
calling the meeting. Any meeting of the Board of Directors shall be a
legal meeting without any notice thereof having been given, if all the
directors shall be present at the meeting. The attendance of a
director at any meeting shall constitute a waiver of notice of such
meeting, and no notice of a meeting shall be required to be given to
any director who shall attend such meeting. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.6 Notice to Directors. If notice to a director is given by
mail, such notice shall be deemed to have been given when deposited in
the United States mail, postage prepaid, addressed to the director at
his address as it appears on the records of the Corporation. If
notice to a director is given by telegram, cable or other means that
provide written notice, such notice shall be deemed to have been given
when delivered to any authorized transmission company, with charges
prepaid, addressed to the director at his address as it appears on the
records of the Corporation. If notice to a director is given by
telephone, wireless, or other means of voice transmission, such notice
shall be deemed to have been given when such notice has been
transmitted by telephone, wireless or such other means to such number
or call designation as may appear on the records of the Corporation
for such director.
3.7 Quorum. Except as otherwise required by the General Corpo-
ration Law or by the Certificate of Incorporation, a majority of the
number of directors fixed by these By-Laws shall constitute a quorum
for the transaction of business at any meeting of the Board of
Directors, provided that, if less than a majority of such number of
directors are present at said meeting, a majority of the directors
present may adjourn the meeting from time to time without further
notice. Interested directors may be counted in determining the
- 115 -
presence of a quorum at a meeting of the Board of Directors or of a
committee thereof.
3.8 Manner of Acting. The vote of the majority of the directors
present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
3.9 Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all the members
of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
3.10 Vacancies. Vacancies on the Board of Directors, newly
created directorships resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors
resulting from death, disability, resignation, retirement,
disqualification, removal from office or other cause shall be filled
in accordance with the provisions of the Certificate of Incorporation.
3.11 Compensation. The Board of Directors, by the affirmative
vote of a majority of directors then in office, and irrespective of
any personal interest of any of its members, shall have authority to
establish reasonable compensation of all directors for services to
the Corporation as directors, officers, or otherwise. The directors
may be paid their expenses, if any, of attendance at each meeting of
the Board and at each meeting of any committee of the Board of which
they are members in such manner as the Board of Directors may from
time to time determine.
3.12 Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors or at a meeting of any
committee of the Board at which action on any corporate matter is
taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action
with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation within 24 hours after the
adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
3.13 Committees. By resolution passed by a majority of the whole
Board, the Board of Directors may designate one or more committees,
each such committee to consist of two or more directors of the
Corporation. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member of any meeting of the committee. Any such
committee, to the extent provided in the resolution or in these By-
- 116 -
Laws, shall have any may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers
which may require it. In the absence or disqualification of any
member of such committee or committees, the member or members thereof
present at the meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member.
ARTICLE IV
OFFICERS
----------
4.1 Number. The officers of the Corporation shall be a Chairman
of the Board, a Vice Chairman and Chief Executive Officer, a President
and Chief Operating Officer, one or more Group Presidents (the number
thereof to be determined by the Board of Directors), one or more vice
presidents (the number thereof to be determined by the Board of
Directors), Treasurer, a Secretary and such Assistant Treasurers,
Assistant Secretaries or other officers as may be elected by the Board
of Directors.
4.2 Election and Term of Office. The officers of the
Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting
of stockholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. New offices may be created and filled at any
meeting of the Board of Directors. Each officer shall hold office
until his successor is elected and has qualified or until his earlier
resignation or removal. Any officer may resign at any time upon
written notice to the Corporation. Election of an officer shall not
of itself create contract rights, except as may otherwise be provided
by the General Corporation Law, the Certificate of Incorporation of
these By-Laws.
4.3 Removal. Any officer elected by the Board of Directors may
be removed by the Board of Directors whenever in its judgement the
best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of
the person so removed.
4.4 Vacancies. A vacancy in any office occurring because of
death, resignation, removal or otherwise, may be filled by the Board
of Directors.
- 117 -
4.5 The Chairman. The Chairman shall preside at all meetings of
the Board of Directors. In general, he shall perform all duties
incident to the office of Chairman and such other duties as may be
prescribed by the Board of Directors from time to time.
4.6 The Vice Chairman and Chief Executive Officer. The Vice
Chairman and Chief Executive Officer shall be the principal executive
officer of the Corporation. Subject only to the Board of Directors,
he shall be in charge of the business of the Corporation; he shall see
that the resolutions and directions of the Board of Directors are
carried into effect except in those instances in which that
responsibility is specifically assigned to some other person by the
Board of Directors; and, in general, he shall discharge all duties
incident to the office of the chief executive officer of the
Corporation and such other duties as may be prescribed by the Board of
Directors from time to time. In the absence of the Chairman of the
Board, the Vice Chairman and Chief Executive Officer shall preside at
all meetings of the Board of Directors. The Vice Chairman and Chief
Executive Officer shall have authority to vote or to refrain from
voting any and all shares of capital stock of any other corporation
standing in the name of the Corporation, by the execution of a written
proxy, the execution of a written ballot, the execution of a written
consent or otherwise, and, in respect to any meeting of the
stockholders of such other corporation, and, on behalf of the
Corporation, may waive any notice of the calling of any such meeting.
The Vice Chairman and Chief Executive Officer shall perform such other
duties as may be prescribed by the Board of Directors from time to
time.
The Vice Chairman and Chief Executive Officer, or, in his absence, the
President and Chief Operating Officer, the Vice President-Finance, the
Vice President-Controller, the Treasurer or such other person as the
Board of Directors or one of the preceding named officers shall
designate, shall call any meeting of the stockholders of the
Corporation to order and shall act as chairman of such meeting. In
the event that no one of the Vice Chairman and Chief Executive
Officer, the President and Chief Operating Officer, the Vice
President-Finance, the Vice President-Controller, the Treasurer or a
person designated by the Board of Directors or by one of the preceding
named officers, is present, the meeting shall not be called to order
until such time as there shall be present the Vice Chairman and Chief
Executive Officer, the President and Chief Operating Officer, the Vice
President-Finance, the Vice President-Controller, the Treasurer or a
person designated by the Board of Directors or by one of the preceding
named officers. The chairman of any meeting of the stockholders of
this Corporation shall have plenary power to set the agenda, determine
the procedure and rules of order, and make definitive rulings at
meetings of the stockholders. The Secretary or an Assistant Secretary
of the Corporation shall act as secretary at all meetings of the
stockholders, but in the absence of the Secretary or an Assistant
- 118 -
Secretary, the chairman of the meeting may appoint any person to act
as secretary of the meeting.
4.7 The President and Chief Operating Officer. The President
and Chief Operating Officer shall be the principal operating officer
of the Corporation and, subject only to the Board of Directors and to
the Vice Chairman and Chief Executive Officer, he shall have general
authority over and general management and control of the property,
business and affairs of the Corporation. In general, he shall
discharge all duties incident to the office of the principal operating
officer of the Corporation and such other duties as may be prescribed
by the Board of Directors and the Vice Chairman and Chief Executive
Officer from time to time. In the absence of the Vice Chairman and
Chief Executive Officer or in the event of his disability, or
inability to act, or to continue to act, the President and Chief
Operating Officer shall perform the duties of the Vice Chairman and
Chief Executive Officer, and when so acting, shall have all of the
powers of and be subject to all of the restrictions upon the office of
Vice Chairman and Chief Executive Officer. Except in those instances
in which the authority to execute is expressly delegated to another
officer or agent of the Corporation or a different mode of execution
is expressly prescribed by the Board of Directors or these By-Laws, he
may execute for the Corporation certificates for its shares (the issue
of which shall have been authorized by the Board of Directors), and
any contracts, deeds, mortgages, bonds, or other instruments that the
Board of Directors has authorized, and he may (without previous
authorization by the Board of Directors) execute such contracts and
other instruments as the conduct of the Corporation's business in its
ordinary course requires, and he may accomplish such execution in each
case either individually or with the Secretary, any Assistant
Secretary, or any other officer thereunto authorized by the Board of
Directors, according to the requirements of the form of the
instrument. The President and Chief Operating Officer shall have
authority to vote or to refrain from voting any and all shares of
capital stock of any other corporation standing in the name of the
Corporation, by the execution of a written proxy, the execution of a
written ballot, the execution of a written consent or otherwise, and,
in respect of any meeting of stockholders of such other corporation,
and, on behalf of the Corporation, may waive any notice of the calling
of any such meeting.
4.8 The Group Presidents. Each of the Group Presidents shall
have general authority over and general management and control of the
property, business and affairs of certain businesses of the
Corporation. Each of the Group Presidents shall report to the
President and Chief Operating Officer or such other officer as may be
determined by the Board of Directors or the President and Chief
Operating Officer and shall have such other duties and
responsibilities as may be assigned to him by the President and Chief
Operating Officer and the Board of Directors from time to time.
- 119 -
4.9 The Vice Presidents. Each of the Vice Presidents shall
report to the President and Chief Operating Officer or such other
officer as may be determined by the Board of Directors or the
President and Chief Operating officer. Each Vice President shall have
such duties and responsibilities as from time to time may be assigned
to him by the President and Chief Operating Officer and the Board of
Directors.
4.10 The Treasurer. The Treasurer shall: (i) have charge and
custody of and be responsible for all funds and securities of the
Corporation; receive and give receipts for monies due and payable to
the Corporation from any source whatsoever, and deposit all such
monies in the name of the Corporation in such banks, trust companies
or other depositories as shall be selected in accordance with the
provisions of Article V of these By-Laws; (ii) in general, perform all
the duties incident to the office of Treasurer and such other duties
as from time to time may be assigned to him by the President and Chief
Operating Officer or the Board of Directors. In the absence of the
Treasurer, or in the event of his incapacity or refusal to act, or at
the direction of the Treasurer, any Assistant Treasurer may perform
the duties of the Treasurer.
4.11 The Secretary. The Secretary shall: (i) record all of the
proceedings of the meetings of the stockholders and Board of Directors
in one or more books kept for the purpose; (ii) see that all notices
are duly given in accordance with the provisions of these By-Laws or
as required by law; (iii) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation
is affixed to all certificates for shares of capital stock prior to
the issue thereof and to all documents, the execution of which on
behalf of the Corporation under its seal is duly authorized in
accordance with he provisions of these By-Laws; (iv) keep a register
of the post office address of each stockholder which shall be
furnished to the Secretary by such stockholder; (v) have general
charge of the stock transfer books of the Corporation and (vi) in
general, perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the
President and Chief Operating Officer or the Board of Directors. In
the absence of the Secretary, or in the event of his incapacity or
refusal to act, or at the direction of the Secretary, any Assistant
Secretary may perform the duties of Secretary.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
5.1 Contracts. Except as otherwise determined by the Board of
Directors or provided in these By-Laws, all deeds and mortgages made
- 120 -
by the Corporation and all other written contracts and agreements to
which the Corporation shall be a party shall be executed in its name
by the Vice Chairman and Chief Executive Officer or the President and
Chief Operating Officer or any Vice President so authorized by the
Board of Directors.
5.2 Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its
name unless authorized by a resolution of the Board of Directors.
Such authority may be general or confined to specific instances.
5.3 Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued
in the name of the Corporation, shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the Board of
Directors.
5.4 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as
the Board of Directors may select.
ARTICLE VI
CERTIFICATES FOR SHARES OF
CAPITAL STOCK AND THEIR TRANSFER
--------------------------------
6.1 Certificates for Shares of Capital Stock. Certificates
representing shares of capital stock of the Corporation shall be in
such form as may be determined by the Board of Directors. Such
certificates shall be signed by the Vice Chairman and Chief Executive
Officer or the President and Chief Operating Officer or any Vice
President and by the Treasurer or the Secretary or an Assistant
Secretary. If any such certificate is countersigned by a transfer
agent other than the Corporation or its employee, or by a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. All
certificates for share of capital stock shall be consecutively
numbered or otherwise identified. The name of the person to whom the
shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be
- 121 -
cancelled and no new certificates shall be issued until the former
certificate for a like number of shares shall have been surrendered
and cancelled and no new certificates shall be issued until the former
certificate for a like number of shares shall have been surrendered
and cancelled, except that in case of a lost, destroyed or mutilated
certificate, a new certificate may be issued therefor upon such terms
and indemnity to the Corporation as the Board of Directors may
prescribe.
6.2 Transfer Agents And Registers. The Board of Directors may
appoint one or more transfer agents or assistant transfer agents and
one or more registrars of transfers, and may require all certificates
for shares of capital stock of the Corporation to bear the signature
of a transfer agent and a registrar of transfers. The Board of
Directors may at any time terminate the appointment of any transfer
agent or any assistant transfer agent or any registrar of transfers.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
-----------------------------
7.1 Limited Liability of Directors.
(a) No person who was or is a director of this Corporation shall
be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except
for liability (i) for breach of the duty of loyalty to the Corporation
or its stockholders; (ii) for acts of omissions not in good faith or
that involve intentional misconduct or know violation of law; (iii)
under Section 174 of the General Corporation Law; or (iv) for any
transaction from which the director derived any improper personal
benefit. If the General Corporation Law is amended after the
effective date of the By-Law to further eliminate or limit, or to the
effective date of this By-Law to further eliminate or limit, or to
authorize further elimination or limitation of, the personal liability
of a director to this Corporation or its stockholders shall be
eliminated or limited to the full extent permitted by the General
Corporation Law, as so amended. For Purposes of this By-Law,
"fiduciary duty as a director" shall include any fiduciary duty
arising out of serving at the request of this Corporation as a
director of another corporation, partnership, joint venture, trust or
other enterprise, and any liability to such other corporation,
partnership, joint venture, trust or other enterprise, and any
liability to this Corporation in its capacity as a security holder,
joint venturer, partner, beneficiary, creditor, or investor of or in
any such other corporation, partnership, joint venture, trust or other
enterprise.
- 122 -
(b) Any repeal or modification of the foregoing paragraph by the
stockholders of this Corporation shall not adversely affect the
elimination or limitation of the personal liability of a director for
any act or omission occurring prior to the effective date of such
repeal or modification. This provision shall not eliminate or limit
the liability of a director for any act or omission occurring prior to
the effective date of this By-Law.
7.2 Litigation Brought by Third Parties. The Corporation shall
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason
of the fact that he is or was or has agreed to become a director or
officer of the Corporation; or is or was serving or has agreed to
serve at the request of the Corporation as a director or officer of
the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of
any action alleged to have been taken or omitted in such capacity,
against costs, charges and other expenses (including attorneys' fees)
("Expenses"), judgements, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding and any appeal thereof if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgement, order, settlement, conviction, or plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful. For purposes of this By-Law, "serving or has agreed to
serve at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise" shall include any service by a director or officer of the
Corporation as a director, officer, employee, director or officer of
the Corporation as a director, officer, employee, agent or fiduciary
of such other corporation, partnership, joint venture trust or other
enterprise, or with respect to any employee benefit plan (or its
participants or beneficiaries) of the Corporation or any such other
enterprise.
7.3 Litigation By or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was or has
agreed to become a director or officer of the Corporation, or is or
- 123 -
was serving or has agreed to serve at the request of the Corporation
as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged
to have been taken or omitted in such capacity against Expenses
actually and reasonably incurred by him in connection with the
investigation, defense or settlement of such action or suit and any
appeal thereof if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to
the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such Expenses as the Court of Chancery of
Delaware or such other court shall deem proper.
7.4 Successful Defense. To the extent that any person referred
to in section 7.2 or 7.3 of these By-Laws has been successful on the
merits or otherwise, including, without limitation, the dismissal of
an action without prejudice, in defense of any action, suit or
proceeding referred to therein or in defense of any claim, issue or
matter therein, he shall be indemnified against Expenses actually and
reasonably incurred by him in connection therewith.
7.5 Determination of Conduct. Any indemnification under section
7.2 or 7.3 of these By-Laws (unless ordered by a court) shall be made
by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he has met the applicable standard
of conduct set forth in section 7.2 or 7.3. Such determination shall
be made (i) by the Board of Directors by a majority vote of a quorum
(as defined in these By-laws) consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such quorum is
not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
7.6 Advance Payment. Expenses incurred in defending a civil or
criminal action, suit or proceeding shall be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding
and any appeal upon receipt by the Corporation of an undertaking by or
on behalf of the director or officer to repay such amount if it shall
ultimately be determined that the is not entitled to be indemnified by
the Corporation.
7.7 Determination of Entitlement to Indemnification. The
determination of the entitlement of any person to indemnification
under section 7.2, 7.3 or 7.4 or to advancement of Expenses under
- 124 -
section 7.6 of these By-Laws shall be made promptly, and in any event
within 60 days after the Corporation has received a written request
for payment from or on behalf of a director or officer and payment of
amounts due under such sections shall be made immediately after such
determination. If no disposition of such request is made within said
60 days or if payment has not been made within 10 days thereafter, or
if such request is rejected, the right to indemnification or
advancement of Expenses provided by this By-Law shall be enforceable
by or on behalf of the director or officer in any court of competent
jurisdiction. In addition to the other amounts due under this By-Law,
Expenses incurred by or on behalf of a director or officer in
successfully establishing his right to indemnification or advancement
of Expenses, in whole or in part, in any such action (or settlement
thereof) shall be paid by the Corporation.
7.8 By-Laws Not Exclusive: Change in Law. The indemnification
and advancement of Expenses provided by these By-Laws shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of Expenses may be entitled under any
law (common or statutory), the Certificate of Incorporation,
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, or while employed by or
acting as a director or officer of the Corporation or as a director or
officer of another corporation, partnership, joint venture, trust or
other enterprise, and shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Notwithstanding the
provisions of these By-Laws, the Corporation shall indemnify or make
advancement of Expenses to any person referred to in section 7.2 or
7.3 of this By-Law to the full extent permitted under the laws of
Delaware and any other applicable laws, as they now exist or as they
may be amended in the future.
7.9 Contract Rights. All rights to indemnification and
advancement of Expenses provided by these By-Laws shall be deemed to
be a contract between the Corporation and each director or officer of
the Corporation who serves, served or has agreed to serve in such
capacity, or at the request of the Corporation as director or officer
of another corporation, partnership, joint venture, trust or other
enterprise, at any time while these By-Laws and the relevant
provisions of the General Corporation Law or other applicable law, if
any, are in effect. Any repeal or modification of these By-Laws, or
any repeal or modification of relevant provisions of the Delaware
General Corporation Law or any other applicable law, shall not in any
way diminish any rights to indemnification of or advancement of
Expenses to such director or officer or the obligations of the
Corporation.
- 125 -
7.10 Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was or has to
become a director or officer of the Corporation, or is or was serving
or has agreed to serve at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of these By-Laws.
7.11 Indemnification of Employees or Agents. The Board of
DirectorS may, by resolution, extend the provisions of these By-Laws
pertaining to indemnification and advancement of Expenses to any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was or has agreed to become an
employee, agent or fiduciary of the Corporation or is or was serving
or has agreed to serve at the request of the Corporation as a
director, officer, employee, agent or fiduciary of another
Corporation, partnership, joint venture, trust or other enterprise or
with respect to any employee benefit plan (or its participants or
beneficiaries) of the Corporation or any such other enterprise.
ARTICLE VIII
FISCAL YEAR
------------
8.1 The fiscal year of the Corporation shall end on the thirty-
first day of December in each year.
ARTICLE IX
DIVIDENDS
----------
9.1 The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares of
capital stock in the manner and upon the terms and conditions provided
by law and its Certificate of Incorporation.
- 126 -
ARTICLE X
SEAL
---------
10.1 The Board of Directors shall provide a corporate seal which
shall be in the form of a circle and shall have inscribed thereon the
name of the Corporation and the words "Corporate Seal, Delaware."
ARTICLE XI
WAIVER OF NOTICE
----------------
11.1 Whenever any notice whatever is required to be given under
any provision of these By-Laws or of the Certificate of Incorporation
or of the General Corporation Law, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
ARTICLE XII
AMENDMENTS
------------
12.1 These By-Laws may be altered, amended or repealed and new
By-Laws may be adopted at any meeting of the Board of Directors of the
Corporation by a majority of the whole Board of Directors.
- 127 -
EX-10
4
EXHIBIT 10.20
======================================================================
NEWELL CO.
-----------------------------
364-DAY CREDIT AGREEMENT
Dated as of August 11, 1994
-------------------------------
$100,000,000
-------------------------------
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
ROYAL BANK OF CANADA,
as Co-Agent
======================================================================
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS . . . . . . . . . 132
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . 132
1.02 Accounting Terms and Determinations . . . . . . . . . 147
SECTION 2. COMMITMENTS . . . . . . . . . . . . . . . . . . . . . 148
2.01 Syndicated Loans . . . . . . . . . . . . . . . . . . . 148
2.02 Borrowings of Syndicated Loans . . . . . . . . . . . . 148
2.03 Money Market Loans . . . . . . . . . . . . . . . . . . 149
2.04 Acceptances . . . . . . . . . . . . . . . . . . . . . 154
2.05 Changes of Commitments . . . . . . . . . . . . . . . . 159
2.06 Fees . . . . . . . . . . . . . . . . . . . . . . . . . 160
2.07 Lending Offices . . . . . . . . . . . . . . . . . . . 161
2.08 Several Obligations; Remedies Independent . . . . . . 161
2.09 Notes . . . . . . . . . . . . . . . . . . . . . . . . 161
2.10 Prepayments . . . . . . . . . . . . . . . . . . . . . 162
2.11 Extension of Commitment Termination Date . . . . . . . 162
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST . . . . . . . . . 164
3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . 164
3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . 164
SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. . . 165
4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . 165
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . 166
4.03 Computations . . . . . . . . . . . . . . . . . . . . . 167
4.04 Non-Receipt of Funds by the Agent . . . . . . . . . . 167
4.05 Set-off; Sharing of Payments . . . . . . . . . . . . . 168
SECTION 5. YIELD PROTECTION AND ILLEGALITY. . . . . . . . . . . 169
5.01 Additional Costs . . . . . . . . . . . . . . . . . . . 169
5.02 Limitation on Types of Loans . . . . . . . . . . . . . 171
5.03 Illegality . . . . . . . . . . . . . . . . . . . . . . 172
5.04 Base Rate Loans Pursuant to Sections 5.01 and 5.03 . . 172
5.05 Compensation . . . . . . . . . . . . . . . . . . . . . 173
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 174
6.01 Initial Credit Extension . . . . . . . . . . . . . . . 174
6.02 Initial and Subsequent Credit Extensions . . . . . . . 175
SECTION 7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 176
7.01 Corporate Existence . . . . . . . . . . . . . . . . . 176
7.02 Financial Condition . . . . . . . . . . . . . . . . . 176
7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . 177
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . . 177
(129)
Page
----
7.05 Corporate Action . . . . . . . . . . . . . . . . . . . 177
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . . 177
7.07 Use of Credit . . . . . . . . . . . . . . . . . . . . 178
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 178
7.09 Credit Agreements . . . . . . . . . . . . . . . . . . 178
7.10 Hazardous Materials . . . . . . . . . . . . . . . . . 178
7.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 179
7.12 True and Complete Disclosure. . . . . . . . . . . . . 179
7.13 Subsidiaries. . . . . . . . . . . . . . . . . . . . . 180
7.14 Compliance with Law . . . . . . . . . . . . . . . . . 180
SECTION 8. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . 180
8.01 Financial Statements . . . . . . . . . . . . . . . . . 180
8.02 Litigation . . . . . . . . . . . . . . . . . . . . . . 183
8.03 Corporate Existence, Etc. . . . . . . . . . . . . . . 183
8.04 Insurance . . . . . . . . . . . . . . . . . . . . . . 184
8.05 Use of Proceeds . . . . . . . . . . . . . . . . . . . 184
8.06 Indebtedness . . . . . . . . . . . . . . . . . . . . . 184
8.07 Fundamental Changes. . . . . . . . . . . . . . . . . . 185
8.08 Liens . . . . . . . . . . . . . . . . . . . . . . . . 186
8.09 Lines of Businesses . . . . . . . . . . . . . . . . . 188
8.10 Interest Coverage Ratio . . . . . . . . . . . . . . . 188
8.11 Total Indebtedness to Total Capital . . . . . . . . . 188
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 188
SECTION 10. THE AGENT; THE CO-AGENT . . . . . . . . . . . . . . 191
10.01 Appointment, Powers and Immunities . . . . . . . . . 191
10.02 Reliance by Agent . . . . . . . . . . . . . . . . . . 192
10.03 Defaults . . . . . . . . . . . . . . . . . . . . . . 192
10.04 Rights as a Bank . . . . . . . . . . . . . . . . . . 193
10.05 Indemnification . . . . . . . . . . . . . . . . . . . 193
10.06 Non-Reliance on Agent and Other Banks . . . . . . . . 193
10.07 Failure to Act . . . . . . . . . . . . . . . . . . . 194
10.08 Resignation or Removal of Agent . . . . . . . . . . . 194
10.09 The Co-Agent . . . . . . . . . . . . . . . . . . . . 195
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 195
11.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . 195
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . 195
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . 195
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . 196
11.05 Assignments and Participations . . . . . . . . . . . 197
11.06 Survival . . . . . . . . . . . . . . . . . . . . . . 199
11.07 Captions . . . . . . . . . . . . . . . . . . . . . . 199
11.08 Counterparts . . . . . . . . . . . . . . . . . . . . 199
11.09 Governing Law; Jurisdiction; Service of Process;
Waiver of Jury Trial; Etc. . . . . . . . . . . . . . . 199
(130)
Page
----
11.10 Successors and Assigns . . . . . . . . . . . . . . . 200
Schedule I - List of Indebtedness
Schedule II - List of Liens
Schedule III - Subsidiaries
EXHIBIT A-1 - Form of Syndicated Note
EXHIBIT A-2 - Form of Money Market Note
EXHIBIT B-1 - Form of Opinion of Special Illinois Counsel
EXHIBIT B-2 - Form of Opinion of Dale L. Matschullat, Esq.,
general counsel to the Company and its
Subsidiaries
EXHIBIT C - Form of Opinion of Special New York Counsel to the
Banks and the Agent
EXHIBIT D - Form of Money Market Quote Request
EXHIBIT E - Form of Money Market Quote
EXHIBIT F - Form of Acceptance Quote Request
EXHIBIT G - Form of Acceptance Quote
(131)
364-DAY CREDIT AGREEMENT dated as of August 11, 1994 among:
NEWELL CO., a corporation duly organized and validly existing under
the laws of the State of Delaware (formerly named "New Newell Co.",
together with its successors, the "Company"); ANCHOR HOCKING
CORPORATION, a corporation duly organized and validly existing under
the laws of the State of Delaware (together with its successors,
"Anchor"); NEWELL OPERATING COMPANY, a corporation duly organized and
validly existing under the laws of the State of Delaware (formerly
named "Newell Co.", together with its successors, "Newell"; each of
Anchor and Newell, individually, a "Drawer" and, collectively, the
"Drawers"); each of the banks which is a signatory hereto (together
with its successors and permitted assigns, individually, a "Bank" and,
collectively, the "Banks"); and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Agent for the Banks (in such capacity, together with
its successors in such capacity, the "Agent").
The Company and the Drawers have requested that the Banks
extend credit to the Company and the Drawers (by making loans to the
Company and creating and discounting bankers acceptances for account
of the Drawers) in an aggregate principal or face amount not exceeding
$100,000,000 at any one time outstanding, and the Banks are prepared
to extend such credit upon the terms hereof. Accordingly, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.
-----------------------------------
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this
Section 1 or in other provisions of this Agreement in the singular to
have the same meanings when used in the plural and vice versa):
"Acceptance" shall mean a draft drawn by a Drawer on a Bank
payable to the order of such Bank in Dollars, conforming with the
requirements of Section 2.04 hereof and accepted by such Bank in
accordance with Section 2.04(f) hereof.
"Acceptance Account Party" shall mean, with respect to any
Acceptance, the Drawer of such Acceptance.
"Acceptance Documents" shall mean, with respect to any
Acceptance, the draft drawn by a Drawer in connection with the
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creation and discount of such Acceptance and all other documents
evidencing or otherwise relating to such Acceptance.
"Acceptance Liability" shall mean, with respect to any
Acceptance, the joint and several obligation of the Company and the
Acceptance Account Party to pay to the Agent at the Principal Office,
for account of the Applicable Lending Office of the Accepting Bank,
the face amount thereof as required by Section 2.04(h) hereof.
"Acceptance Quote" shall have the meaning assigned to such
term in Section 2.04(c) hereof.
"Acceptance Quote Request" shall have the meaning assigned
to such term in Section 2.04(b) hereof.
"Accepting Bank" shall mean, with respect to any Acceptance,
the Bank that created and discounted such Acceptance.
"Adjusted Operating Income" shall mean, for any period, for
the Company and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) the sum of (i) operating
income for such period plus (ii) net income (or minus in the case of
any net loss) from discontinued operations for such period plus
(iii) interest and dividends received in cash during such period;
provided that there shall be excluded from Adjusted Operating Income
any income of any Person that accrued prior to the date it becomes a
Subsidiary of the Company or is merged into or consolidated with the
Company or any Subsidiary of the Company.
"All-In Rate" shall mean, with respect to any Acceptance,
the rate at which any Bank offers to accept and discount such
Acceptance as provided in Section 2.04(f) hereof.
"Applicable Lending Office" shall mean, for each Bank and
for each type of Credit, the lending office of such Bank (or of an
affiliate of such Bank) designated for such type of Credit on the
signature pages hereof or such other office of such Bank (or of an
affiliate of such Bank) as such Bank may from time to time specify to
the Agent and the Company as the office by which its Credits of such
type are (in the case of Loans) to be made and maintained or (in the
case of Acceptances) to be accepted and discounted.
"Applicable Margin" shall mean:
(a) with respect to Base Rate Loans, 0%; and
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(b) with respect to Eurodollar Loans, 1/4 of 1%;
provided that if the financial statements most recently delivered to
the Agent under Section 8.01(a) hereof shall demonstrate that the
Interest Coverage Ratio for the fiscal quarter of the Company to which
such financial statements relate shall be less than 5.5 to 1, then the
term "Applicable Margin" shall, with respect to each Eurodollar Loan,
be increased to 5/16 of 1% during the fiscal quarter commencing
immediately following the day on which such financial statements were
delivered to the Agent under Section 8.01(a) hereof; provided that,
for any day on which any Specified Default shall have occurred and be
continuing, the Applicable Margin with respect to Eurodollar Loans
shall be 5/16 of 1%. Notwithstanding the foregoing for any day on
which more than 50% of the aggregate amount of the Commitments is
utilized, the Applicable Margin with respect to each Eurodollar Loan
shall be increased by 1/16 of 1% over what it otherwise would have
been under the foregoing provisions of this definition.
"ASC Receivables Sale Agreement" shall mean the receivables
sale agreement dated December 3, 1991 among the Company as seller and
collection agent, Asset Securitization Cooperative Corporation as
purchaser and Canadian Imperial Bank of Commerce as administrative
agent, as amended, supplemented and otherwise modified and in effect
from time to time.
"Base Rate" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day.
"Base Rate Loans" shall mean Loans which bear interest based
upon the Base Rate.
"Basel Accord" shall mean the proposals for risk-based
capital framework described by the Basel Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, supplemented and otherwise
modified and in effect from time to time, or any replacement thereof.
"Basic Documents" shall mean this Agreement and the Notes.
"Business Day" shall mean any day on which commercial banks
are not authorized or required to close in New York City and, where
such term is used in the definition of "Quarterly Date" in this
Section 1.01 or if such day relates to the determination of rates of
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interest or the giving of notices or quotes in connection with a LIBOR
Auction or to a borrowing of, a payment or prepayment of principal of
or interest on, or the Interest Period for, a Eurodollar Loan or a
LIBOR Market Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment or Interest Period, which is also a day
on which dealings in Dollar deposits are carried out in the London
interbank market.
"Capital Assets" shall mean all property, plant or equipment
which has been reflected in property, plant or equipment in any
consolidated balance sheet of the Company and its Subsidiaries
prepared in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person,
the obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real and/or
personal property which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person
under GAAP (including Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board) and, for purposes of
this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP
(including such Statement No. 13).
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment" shall mean, as to each Bank, the obligation of
such Bank to make Syndicated Loans in an aggregate amount at any one
time outstanding equal to the amount set opposite such Bank's name on
the signature pages hereof under the caption "Commitment" (as the same
may be reduced pursuant to Section 2.05 hereof). The original
aggregate principal amount of the Commitments is $100,000,000.
"Commitment Termination Date" shall mean the date 364 days
after the date hereof, as the same may be extended pursuant to Section
2.11 hereof; provided that, if such date is not a Business Day, the
Commitment Termination Date shall be the next preceding Business Day.
"Credit Extension" shall mean (i) the making of any Loan
hereunder and (ii) the creation and discount of any Acceptance
hereunder.
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"Credits" shall mean Loans (which may be Base Rate Loans,
Eurodollar Loans or Money Market Loans) and Acceptance Liabilities.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Determination Date" shall mean, for any Disposition, the
last day of the fiscal quarter ending on or immediately preceding the
date of such Disposition.
"Disposition" shall have the meaning assigned to that term
in Section 8.07 hereof.
"Disposition Period" shall mean, for any Disposition, a
period of twelve months ending on the date of such Disposition.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Domestic Shipment" shall mean the sale and shipment by a
Drawer to another Person from a location in the United States of
America to another location in the United States of America of a
specified type of goods.
"Environmental Affiliate" shall mean, as to any Person, any
other Person whose liability (contingent or otherwise) for any
Environmental Claim such Person may have retained, assumed or
otherwise become liable (contingently or otherwise), whether by
contract, operation of law or otherwise; provided that each Subsidiary
of such Person, and each former Subsidiary or division of such Person
transferred to another Person, shall in any event be an "Environmental
Affiliate" of such Person.
"Environmental Claim" shall mean, with respect to any
Person, any notice, claim, demand or other communication (whether
written or oral) by any other Person alleging or asserting liability
of such Person for investigatory costs, cleanup costs, governmental
response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or
resulting from (a) the presence, or release into the environment, of
any hazardous material at any location, whether or not owned by such
Person, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
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"Environmental Laws" shall mean any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to
the environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wastes into the environment, including,
without limitation, ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code) as the
Company or is under common control (within the meaning of
Section 414(c) of the Code) with the Company.
"Eurodollar Loans" shall mean Syndicated Loans the interest
rates on which are determined on the basis of the LIBO Base Rate.
"Event of Default" shall have the meaning assigned to that
term in Section 9 hereof.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers on such day as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day,
provided that (i) if the day for which such rate is to be determined
is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such
rate is not so published for any day, the Federal Funds Rate for such
day shall be the average rate charged to Chase on such day on such
transactions as determined by the Agent.
"Final Risk-Based Capital Guidelines" shall mean (i) the
Final Risk-Based Capital Guidelines of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 208, Appendix A; 12 C.F.R.
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Part 225, Appendix A) and (ii) and the Final Risk-Based Capital
Guidelines of the Office of the Comptroller of the Currency, and any
successor or supplemental regulations (12 C.F.R. Part 3, Appendix A),
and any successor regulations, in each case, as amended, supplemented
and otherwise modified and in effect from time to time.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with the
last sentence of Section 1.02(a) hereof, are to be used in making the
calculations for purposes of determining compliance with the
provisions of this Agreement.
"Guarantee" of any Person shall mean any guarantee,
endorsement, contingent agreement to purchase or to furnish funds for
the payment or maintenance of, or any other contingent liability on or
with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any other Person (including, without
limitation, the liability of such Person in respect of the
Indebtedness of any partnership of which such Person is a general
partner), or the guarantee by such Person of the payment of dividends
or other distributions upon the stock of any other Person, or the
agreement by such Person to purchase, sell or lease (as lessee or
lessor) property, products, materials, supplies or services primarily
for the purpose of enabling any other Person to make payment of its
obligations or to assure a creditor against loss, and the verb
"Guarantee" shall have a correlative meaning, provided that the term
"Guarantee" shall not include endorsements for collection or deposits
in the ordinary course of business.
"Indebtedness" shall mean, as to any Person at any date
(without duplication): (i) indebtedness created, issued, incurred or
assumed by such Person for borrowed money or evidenced by bonds,
debentures, notes or similar instruments; (ii) all obligations of such
Person to pay the deferred purchase price of property or services,
excluding, however, trade accounts payable (other than for borrowed
money) arising in, and accrued expenses incurred in, the ordinary
course of business of such Person so long as such trade accounts
payable are paid within 120 days of the date the respective goods are
delivered or the services are rendered; (iii) all Indebtedness of
others secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person; (iv) all Indebtedness of
others Guaranteed by such Person; (v) all Capital Lease Obligations;
(vi) the Investment Amount (if any); (vii) reimbursement obligations
of such Person (whether contingent or otherwise) in respect of bankers
acceptances, surety or other bonds and similar instruments (other than
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commercial, standby or performance letters of credit); and
(viii) unpaid reimbursement obligations of such Person (other than
contingent obligations) in respect of commercial, standby or
performance letters of credit.
"Indenture" shall mean the Indenture dated as of April 15,
1992 between the Company and Chase, as trustee, as amended and in
effect from time to time.
"Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) the Adjusted Operating Income for such period to
(ii) Interest Expense for such period.
"Interest Expense" shall mean, for any period, the sum, for
the Company and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of (a) all interest paid
during such period in cash, or accrued during such period as an
expense, in respect of Indebtedness (including, without limitation,
imputed interest on Capital Lease Obligations and amortization of
original issue discount) plus (b) all fees or commissions and net
losses payable during such period in respect of any bankers
acceptances, surety bonds, letters of credit or similar instruments
plus (c) the aggregate amount of fees and expenses paid by the Company
during such period pursuant to Article V of the ASC Receivables Sale
Agreement (other than legal fees and expenses paid pursuant to Section
5.2 thereof and the amount of any Collection Agent Fee (as such term
is defined therein) retained by the Company in its capacity as
Collection Agent (as such term is defined therein) pursuant to Section
5.1.4 thereof) plus (d) comparable fees and expenses paid by the
Company during such period under any other Receivables Sales
Agreement.
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period
commencing on the date such Eurodollar Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company may select as provided in
Section 2.02 hereof, except that each Interest Period which commences
on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
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(b) With respect to any Base Rate Loan, the period
commencing on the date such Base Rate Loan is made and ending on the
date 30 days thereafter.
(c) With respect to any Set Rate Loan, the period
commencing on the date such Set Rate Loan is made and ending on any
Business Day up to 180 days thereafter, as the Company may select as
provided in Section 2.03(b) hereof.
(d) With respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on
the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company may select as provided in
Section 2.03(b) hereof, except that each Interest Period which
commences on the last Business Day of a calendar month (or any day for
which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period would
otherwise commence before and end after the Commitment Termination
Date, such Interest Period shall end on the Commitment Termination
Date; (ii) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business
Day (or, in the case of an Interest Period for any LIBO Rate Loans, if
such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and
(iii) notwithstanding clause (i) above, no Interest Period for any
LIBO Rate Loans shall have a duration of less than one month and, if
the Interest Period for any such Loans would otherwise be a shorter
period, such Loans shall not be available hereunder.
"Investment Amount" shall mean the amount described in (i)
clause (1) of the definition of "Investment" in the ASC Receivables
Sale Agreement or (ii) any comparable provision in any other
Receivables Sales Agreement.
"LIBO Base Rate" shall mean, with respect to any LIBO Rate
Loan:
(a) the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) appearing on the Dow Jones Telerate
Service Page 3750 (British Bankers Association Settlement Rate)
(or such other page as may replace that page in that service) as
the London Interbank Offered Rate for Dollar deposits at
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approximately 11:00 a.m. London time (or as soon thereafter as
practicable) two Business Days prior to the first day of the
Interest Period for such Loan, having a term comparable to such
Interest Period and in an amount of $1,000,000 or more; or
(b) if such rate does not appear on the Dow Jones Telerate
Service Page 3750 (or, if said page shall cease to be publicly
available or if the information contained on said page, in the
Agent's reasonable judgment, shall cease accurately to reflect
such London Interbank Offered Rate, as reported by any publicly
available source of similar market data selected by the Agent
that, in the Agent's reasonable judgment, accurately reflects
such London Interbank Offered Rate), the LIBO Base Rate shall
mean, with respect to any LIBO Rate Loan for any Interest Period,
the arithmetic mean, as determined by the Agent, of the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by each Reference Bank at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) two Business Days
prior to the first day of the Interest Period for such Loan for
the offering by such Reference Bank to leading banks in the
London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the LIBO Rate Loan to be made by such
Reference Bank (or its Applicable Lending Office, as the case may
be) for such Interest Period; provided that (i) if any Reference
Bank is not participating in any Eurodollar Loan, the LIBO Base
Rate for such Loan shall be determined by reference to the amount
of the Loan which such Reference Bank would have made had it been
participating in such Loans, (ii) in determining the LIBO Base
Rate with respect to any LIBOR Market Loan, each Reference Bank
shall be deemed to have made a LIBOR Market Loan in an amount
equal to $1,000,000, (iii) each Reference Bank agrees to use its
best efforts to furnish timely information to the Agent for
purposes of determining the LIBO Base Rate and (iv) if any
Reference Bank does not furnish such timely information for
determination of the LIBO Base Rate, the Agent shall determine
such interest rate on the basis of timely information furnished
by the remaining Reference Banks.
"LIBOR Auction" shall mean a solicitation of Money Market
Quotes setting forth Money Market Margins based on the LIBO Rate
pursuant to Section 2.03 hereof.
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"LIBOR Market Loans" shall mean Money Market Loans the
interest rates on which are determined on the basis of LIBO Rates
pursuant to a LIBOR Auction.
"LIBO Rate" shall mean, for any LIBO Rate Loan, a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Agent to be equal to the LIBO Base Rate for the
Interest Period for such Loan divided by 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"LIBO Rate Loans" shall mean Eurodollar Loans and
LIBOR Market Loans.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset.
"Loans" shall mean Money Market Loans and Syndicated Loans.
"Majority Banks" shall mean Banks having at least 66-2/3% of
(i) the aggregate amount of the Commitments and (ii) if the
Commitments shall have been terminated, the aggregate outstanding
principal amount of all Loans and the aggregate outstanding amount of
all Acceptance Liabilities.
"Major Subsidiary" shall mean, at any time, any Subsidiary
of the Company if the revenues of such Subsidiary and its Subsidiaries
for the four consecutive fiscal quarters of such Subsidiary most
recently ended (determined on a consolidated basis without duplication
in accordance with GAAP and whether or not such Person was a
Subsidiary of the Company during all or any part of the fiscal period
of the Company referred to below) exceed an amount equal to 7-1/2% of
the revenues of the Company and its Subsidiaries for the four
consecutive fiscal quarters of the Company most recently ended
(determined on a consolidated basis without duplication in accordance
with GAAP and including such Subsidiary and its Subsidiaries on a pro
forma basis if such Subsidiary was not a Subsidiary of the Company).
"Material Adverse Effect" shall mean a material adverse
effect on (i) the consolidated financial condition, operations,
business or prospects of the Company and its Subsidiaries (taken as a
whole), (ii) the ability of the Company or any of its Subsidiaries to
perform its obligations under any of the Basic Documents to which it
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is a party or (iii) the validity or enforceability of any of the Basic
Documents.
"Maturity Date" shall mean, with respect to any Acceptance,
the maturity date of the draft whose acceptance by the Accepting Bank
created such Acceptance.
"Money Market Borrowing" shall have the meaning assigned to
that term in Section 2.03(b) hereof.
"Money Market Loan Limit" shall have the meaning assigned to
that term in Section 2.03(c)(ii) hereof.
"Money Market Loans" shall mean the loans provided for by
Section 2.03 hereof.
"Money Market Margin" shall have the meaning assigned to
that term in Section 2.03(c)(ii)(C) hereof.
"Money Market Quote" shall have the meaning assigned to that
term in Section 2.03(c) hereof.
"Money Market Quote Request" shall have the meaning assigned
to that term in Section 2.03(b) hereof.
"Money Market Rate" shall have the meaning assigned to that
term in Section 2.03(c)(ii)(D) hereof.
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) of ERISA to which contributions are being made, or have
been made since January 1, 1980 by the Company or any ERISA Affiliate
and which is covered by Title IV of ERISA.
"Net Worth" shall mean, at any time, the consolidated
stockholders' equity of the Company and its Subsidiaries determined on
a consolidated basis without duplication in accordance with GAAP.
"Non-Strategic Property" shall mean Property acquired as
part of the acquisition of a business made after the date hereof that
is designated by resolution of the Board of Directors of the Company
adopted no later than six months after such acquisition as non-
strategic Property.
"Notes" shall mean the promissory notes provided for by
Section 2.09 hereof.
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"Obligor" shall mean the Company and each Drawer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all its functions under ERISA.
"Person" shall mean an individual, a corporation, a company,
a voluntary association, a partnership, a trust, an unincorporated
organization or a government or any agency, instrumentality or
political subdivision thereof.
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate and
which is covered by Title IV of ERISA, other than a Multiemployer
Plan.
"Post-Default Rate" shall mean, in respect of any principal
of any Loan, the amount of any Acceptance Liability or any other
amount payable by the Company under this Agreement or any Note which
is not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period commencing on the due
date until such amount is paid in full equal to the sum of 2% plus the
Base Rate as in effect from time to time plus the Applicable Margin
for Base Rate Loans (provided that, if such amount in default is
principal of a LIBO Rate Loan or a Set Rate Loan and the due date is a
day other than the last day of the Interest Period therefor, the
"Post-Default Rate" for such principal shall be, for the period
commencing on the due date and ending on the last day of the Interest
Period therefor, 2% above the interest rate for such Loan as provided
in Section 3.02 hereof and, thereafter, the rate provided for above in
this definition).
"Prime Rate" shall mean the rate of interest from time to
time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of the
Agent and Chase presently located at 1 Chase Manhattan Plaza, New
York, New York 10081.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible (including, without limitation, shares
of capital stock).
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"Quarterly Dates" shall mean the last Business Day of each
March, June, September and December, the first of which shall be the
first such day after the date of this Agreement.
"Receivables Sale Agreement" shall mean (i) the
ASC Receivables Sale Agreement and (ii) any other comparable agreement
providing for the periodic sales of accounts receivable.
"Reference Banks" shall mean Chase and Royal Bank of Canada.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the
same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Bank,
any change after the date of this Agreement in United States Federal,
state or foreign law or regulations (including Regulation D) or the
adoption or making after such date of any interpretations, directives
or requests applying to a class of banks including such Bank of or
under any United States Federal, state or foreign law or regulations
(whether or not having the force of law) by any court or governmental
or monetary authority charged with the interpretation or
administration thereof.
"Reserve Requirement" shall mean, for any Interest Period
for any LIBO Rate Loan, the effective maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation
D by member banks of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the LIBO
Base Rate is to be determined or (ii) any category of extensions of
credit or other assets which includes LIBO Rate Loans.
"Set Rate Auction" shall mean a solicitation of Money Market
Quotes setting forth Money Market Rates pursuant to Section 2.03
hereof.
"Set Rate Loans" shall mean Money Market Loans the interest
rates on which are determined on the basis of Money Market Rates
pursuant to a Set Rate Auction.
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"Significant Subsidiary" shall mean, at any time, any
Subsidiary of the Company if the revenues of such Subsidiary and its
Subsidiaries for the four consecutive fiscal quarters of such
Subsidiary most recently ended (determined on a consolidated basis
without duplication in accordance with GAAP and whether or not such
Person was a Subsidiary of the Company during all or any part of the
fiscal period of the Company referred to below) exceed an amount equal
to 5% of the revenues of the Company and its Subsidiaries for the four
consecutive fiscal quarters of the Company most recently ended
(determined on a consolidated basis without duplication in accordance
with GAAP and including such Subsidiary and its Subsidiaries on a pro
forma basis of such Subsidiary was not a Subsidiary of the Company).
"Specified Default" shall mean any Default under Sections
8.01(a) or 8.01(b) hereof.
"Subsidiary" of any Person shall mean any corporation of
which at least a majority of the outstanding shares of stock having by
the terms thereof ordinary voting power to elect a majority of the
board of directors of such corporation (irrespective of whether or not
at the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or
controlled by such Person and/or one or more of the Subsidiaries of
such Person. "Wholly-Owned Subsidiary" shall mean any such
corporation of which all such shares, other than directors' qualifying
shares, are so owned or controlled.
"Syndicated Loans" shall mean the loans provided for by
Section 2.01 hereof.
"Syndicated Notes" shall mean the promissory notes provided
for by Section 2.09(a) hereof.
"Tenor" shall mean, with respect to any Acceptance, the
period from the date of such Acceptance to the Maturity Date of such
Acceptance.
"Total Capital" shall mean the sum of (i) Net Worth plus
(ii) Total Indebtedness.
"Total Consolidated Assets" shall mean, as at any time, the
total of all the assets appearing on the consolidated balance sheet of
the Company and its Subsidiaries determined in accordance with
generally accepted accounting principles applicable to the type of
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business in which the Company and such Subsidiaries are engaged, and
may be determined as of a date, selected by the Company, not more than
sixty days prior to the happening of the event for which such
determination is being made.
"Total Indebtedness" shall mean, as at any time, the total
Indebtedness of the Company and its Subsidiaries determined on a
consolidated basis without duplication.
1.02 Accounting Terms and Determinations.
(a) All accounting terms used herein shall be interpreted,
and, unless otherwise disclosed to the Banks in writing at the time of
delivery thereof in the manner described in subsection (b) below, all
financial statements and certificates and reports as to financial
matters required to be delivered to the Banks hereunder shall be
prepared, in accordance with generally accepted accounting principles
applied on a basis consistent with those used in the preparation of
the latest financial statements furnished to the Banks hereunder after
the date hereof (or, until such financial statements are furnished,
consistent with those used in the preparation of the financial
statements referred to in Section 7.02(a) hereof). All calculations
made for the purposes of determining compliance with the terms of
Sections 8.07(a)(vii), 8.10 and 8.11 hereof shall, except as otherwise
expressly provided herein, be made by application of generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the annual or quarterly financial
statements furnished to the Banks pursuant to Section 8.01 hereof (or,
until such financial statements are furnished, consistent with those
used in the preparation of the financial statements referred to in
Section 7.02(a) hereof) unless (i) the Company shall have objected to
determining such compliance on such basis at the time of delivery of
such financial statements or (ii) the Majority Banks shall so object
in writing within 30 days after delivery of such financial statements,
in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements
delivered under Section 8.01 hereof, shall mean the financial
statements referred to in Section 7.02(a) hereof).
(b) The Company shall deliver to the Banks at the same time
as the delivery of any annual or quarterly financial statement under
Section 8.01 hereof (i) a description in reasonable detail of any
material variation between the application of accounting principles
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employed in the preparation of such statement and the application of
accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements as to which no
objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference
between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8 hereof, the
Company shall not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal quarters in
each of its fiscal years from March 31, June 30 and September 30,
respectively.
SECTION 2. COMMITMENTS.
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2.01 Syndicated Loans. Each Bank severally agrees, on the
terms of this Agreement, to make loans to the Company during the
period from and including the date hereof to and including the
Commitment Termination Date in an aggregate principal amount at any
one time outstanding up to but not exceeding the amount of such Bank's
Commitment as then in effect. Subject to the terms of this Agreement,
during such period the Company may borrow, repay and reborrow the
amount of the Commitments; provided that the aggregate outstanding
principal amount of all Syndicated Loans and all Money Market Loans,
together with the aggregate outstanding amount of Acceptance
Liabilities, at any one time shall not exceed the aggregate amount of
the Commitments at such time; and provided, further, that there may be
no more than fifteen (15) different Interest Periods for both
Syndicated Loans and Money Market Loans outstanding at the same time
(for which purpose Interest Periods described in different lettered
clauses of the definition of the term "Interest Period" shall be
deemed to be different Interest Periods even if they are coterminous).
The Syndicated Loans may be Base Rate Loans or Eurodollar Loans (each
a "type" of Syndicated Loan).
2.02 Borrowings of Syndicated Loans. The Company shall
give the Agent (which shall promptly notify the Banks) notice of each
borrowing hereunder of Syndicated Loans, which notice shall be
irrevocable and effective only upon receipt by the Agent, shall
specify with respect to the Syndicated Loans to be borrowed (i) the
aggregate amount (which shall be at least $1,000,000 in the case of
Base Rate Loans and $5,000,000 in the case of Eurodollar Loans and in
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an integral multiple of $1,000,000 in excess thereof), (ii) the type
and date (which shall be a Business Day) and (iii) (in the case of
Eurodollar Loans) the duration of the Interest Period therefor, and
each such notice shall be given not later than 11:00 a.m. New York
time on the day which is not less than the number of Business Days
prior to the date of such borrowing specified below opposite the type
of such Loans:
Type Number of Business Days
---------------- -----------------------
Base Rate Loans 0
Eurodollar Loans 3
Not later than 2:00 p.m. New York time on the date specified for each
Syndicated Loan borrowing hereunder, each Bank shall make available
the amount of the Syndicated Loan to be made by it on such date to the
Agent, at the Principal Office, in immediately available funds. The
amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, promptly be made available to the
Company by depositing the same, in immediately available funds, in an
account of the Company maintained with Chase at the Principal Office
designated by the Company.
2.03 Money Market Loans.
(a) In addition to borrowings of Syndicated Loans, the
Company may, as set forth in this Section 2.03, request the Banks to
make offers to make Money Market Loans to the Company. The Banks may,
but shall have no obligation to, make such offers and the Company may,
but shall have no obligation to, accept any such offers in the manner
set forth in this Section 2.03. Money Market Loans may be LIBOR
Market Loans or Set Rate Loans (each a "type" of Money Market Loan),
provided that:
(i) there may be no more than fifteen (15) different
Interest Periods for both Syndicated Loans and Money Market Loans
outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the
term "Interest Period" shall be deemed to be different Interest
Periods even if they are coterminous); and
(ii) the aggregate outstanding principal amount of all Money
Market Loans and all Syndicated Loans, together with the
aggregate outstanding amount of all Acceptance Liabilities, at
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any one time shall not exceed the aggregate amount of the
Commitments at such time.
(b) When the Company wishes to request offers to make Money
Market Loans, it shall give the Agent (which shall promptly notify the
Banks) notice in the form of Exhibit E hereto (a "Money Market Quote
Request") so as to be received no later than 11:00 a.m. New York time
on (x) the fifth Business Day prior to the date of borrowing proposed
therein in the case of a LIBOR Auction or (y) the Business Day next
preceding the date of borrowing proposed therein, in the case of a Set
Rate Auction, specifying:
(i) the proposed date of such borrowing (a "Money Market
Borrowing"), which shall be a Business Day;
(ii) the aggregate amount of such Money Market Borrowing,
which shall be at least $5,000,000 (or an integral multiple of
$1,000,000 in excess thereof) but shall not cause the limits
specified in Section 2.03(a) hereof to be violated;
(iii) the duration of the Interest Period applicable thereto;
and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Rate.
The Company may request offers to make Money Market Loans
for up to three different Interest Periods in a single Money Market
Quote Request; provided that the request for each separate Interest
Period shall be deemed to be a separate Money Market Quote Request for
a separate Money Market Borrowing. Except as otherwise provided in
the preceding sentence, no Money Market Quote Request shall be given
within five Business Days of any other Money Market Quote Request.
(c) (i) Any Bank may, by notice to the Agent in the form
of Exhibit F hereto (a "Money Market Quote"), submit an offer to make
a Money Market Loan in response to any Money Market Quote Request;
provided that, if the Company's request under Section 2.03(b) hereof
specified more than one Interest Period, such Bank may make a single
submission containing a separate offer for each such Interest Period
and each such separate offer shall be deemed to be a separate Money
Market Quote. Each Money Market Quote must be submitted to the Agent
not later than (x) 2:00 p.m. New York time on the fourth Business Day
prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 11:00 a.m. New York time on the proposed date of
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borrowing, in the case of a Set Rate Auction; provided that any Money
Market Quote submitted by Chase (or its Applicable Lending Office) may
be submitted, and may only be submitted, if Chase (or such Applicable
Lending Office) notifies the Company of the terms of the offer
contained therein not later than (x) 1:00 p.m. New York time on the
fourth Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) 10:45 a.m. New York time on the
proposed date of borrowing, in the case of a Set Rate Auction.
Subject to Sections 5.03, 6.02 and 9 hereof, any Money Market Quote so
made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Company.
(ii) Each Money Market Quote shall specify:
(A) the proposed date of borrowing and the Interest
Period therefor;
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount
(x) may be greater than or less than the Commitment of the
quoting Bank, (y) must be in an integral multiple of
$1,000,000, and (z) may not exceed the principal amount of
the Money Market Borrowing for which offers were requested;
(C) in the case of a LIBOR Auction, the margin above
or below the applicable LIBO Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed
as a percentage (rounded to the nearest 1/10,000th of 1%) to
be added to or subtracted from the applicable LIBO Rate;
(D) in the case of a Set Rate Auction, the rate of
interest per annum (rounded to the nearest 1/10,000th of 1%)
(the "Money Market Rate") offered for each such Money Market
Loan; and
(E) the identity of the quoting Bank.
No Money Market Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth
in the applicable Money Market Quote Request and, in particular, no
Money Market Quote may be conditioned upon acceptance by the Company
of all (or some specified minimum) of the principal amount of the
Money Market Loan for which such Money Market Quote is being made;
provided that the submission of any Bank containing more than one
Money Market Quote may be conditioned on the Company not accepting
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offers contained in such submission that would result in such Bank
making Money Market Loans pursuant thereto in excess of a specified
aggregate amount (the "Money Market Loan Limit").
(d) The Agent shall (x) in the case of a Set Rate Auction,
as promptly as practicable after the Money Market Quote is submitted
(but in any event not later than 11:15 a.m. New York time) or (y) in
the case of a LIBOR Auction, by 4:00 p.m. New York time on the day a
Money Market Quote is submitted, notify the Company of the terms
(i) of any Money Market Quote submitted by a Bank that is in
accordance with Section 2.03(c) hereof and (ii) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the
same Money Market Quote Request. Any such subsequent Money Market
Quote shall be disregarded by the Agent unless such subsequent Money
Market Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Company shall
specify (A) the aggregate principal amount of the Money Market
Borrowing for which offers have been received and (B) the respective
principal amounts and Money Market Margins or Money Market Rates, as
the case may be, so offered by each Bank (identifying the Bank that
made each Money Market Quote).
(e) Not later than (x) 11:00 a.m. New York time on the
third Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) noon New York time on the proposed date
of borrowing, in the case of a Set Rate Auction, the Company shall
notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.03(d) hereof (which notice shall
specify the aggregate principal amount of offers from each Bank for
each Interest Period that are accepted; and the failure of the Company
to give such notice by such time shall constitute non-acceptance) and
the Agent shall promptly notify each affected Bank of the acceptance
or non-acceptance of its offers. The notice by the Agent shall also
specify the aggregate principal amount of offers for each Interest
Period that were accepted. The Company may accept any Money Market
Quote in whole or in part (provided that any Money Market Quote
accepted in part from any Bank shall be in an integral multiple of
$1,000,000); provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request;
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(ii) the aggregate principal amount of each Money Market
Borrowing shall be at least $5,000,000 (or an integral multiple
of $1,000,000 in excess thereof) but shall not cause the limits
specified in Section 2.03(a) hereof to be violated);
(iii) acceptance of offers may, subject to clause (v) below,
only be made in ascending order of Money Market Margins or Money
Market Rates, as the case may be;
(iv) the Company may not accept any offer where the Agent
has advised the Company that such offer fails to comply with
Section 2.03(c)(ii) hereof or otherwise fails to comply with the
requirements of this Agreement (including, without limitation,
Section 2.03(a) hereof); and
(v) the aggregate principal amount of each Money Market
Borrowing from any Bank may not exceed any applicable Money
Market Loan Limit of such Bank.
If offers are made by two or more Banks with the same Money Market
Margins or Money Market Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which offers
are accepted for the related Interest Period, the principal amount of
Money Market Loans in respect of which such offers are accepted shall
be allocated by the Company among such Banks as nearly as possible (in
an integral multiple of $1,000,000) in proportion to the aggregate
principal amount of such offers. Determinations by the Company of the
amounts of Money Market Loans shall be conclusive in the absence of
manifest error.
(f) Any Bank whose offer to make any Money Market Loan has
been accepted in accordance with the terms and conditions of this
Section 2.03 shall, not later than 2:00 p.m. New York time on the date
specified for the making of such Loan, make the amount of such Loan
available to the Agent at the Principal Office in immediately
available funds. The amount so received by the Agent shall, subject
to the terms and conditions of this Agreement, promptly be made
available to the Company on such date by depositing the same, in
immediately available funds, in an account of the Company maintained
with Chase at the Principal Office designated by the Company.
(g) The amount of any Money Market Loan made by any Bank
shall not constitute a utilization of such Bank's Commitment.
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2.04 Acceptances.
(a) In addition to borrowings of Loans, each Drawer may, as
set forth in this Section 2.04, request the Banks to make offers to
create and discount Acceptances that arise out of Domestic Shipments.
The Banks may, but shall have no obligation to, make such offers in
the manner provided in this Section 2.04, and the Drawer submitting
any such request may, but shall have no obligation to, accept any such
offers made in response to such request, provided that:
(i) the aggregate outstanding amount of all Acceptance
Liabilities, together with the aggregate outstanding principal
amount of all Loans, at any one time shall not exceed the
aggregate amount of the Commitments at such time; and
(ii) in no event shall the Maturity Date of any Acceptance
occur on or after the Commitment Termination Date.
(b) When a Drawer wishes to request offers to create and
discount Acceptances, it shall give the Agent (which shall promptly
notify the Banks) notice in the form of Exhibit G hereto (an
"Acceptance Quote Request") so as to be received by the Agent no later
than 11:00 a.m. New York time on the Business Day next preceding the
date proposed therein for the creation and discount of such
Acceptances, specifying:
(i) the aggregate face amount of such Acceptances (which
shall be at least $5,000,000 or any integral multiple of $100,000
in excess thereof);
(ii) the Tenor of such Acceptances (which in any event may
not exceed six months);
(iii) the type and C.I.F. value of the goods out of whose
Domestic Shipment such Acceptances will arise;
(iv) the date of shipment (which in any event may not be
more than 30 days prior to the date proposed in the Acceptance
Quote Request for the creation and discount of such Acceptances);
(v) the city and state of origin of shipment; and
(vi) the city and state of destination of shipment.
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Each Acceptance Quote Request shall constitute a certification by a
Drawer, with respect to the Acceptances requested in such Acceptance
Quote Request, to the effect set forth below:
(i) such Acceptances will arise out of a Domestic Shipment;
(ii) the aggregate face amount of such Acceptances will not
exceed the aggregate C.I.F. value of the goods included in such
Domestic Shipment;
(iii) no other financing has been or will be outstanding with
respect to such Domestic Shipment;
(iv) the Maturity Date of such Acceptances will be
reasonably commensurate with the date on which payment for the
goods included in such Domestic Shipment will become due (which
Tenor constitutes credit terms that are (x) customarily given by
the relevant Drawer and (y) usual in the industry in which such
Drawer operates);
(v) the goods included in such Domestic Shipment have been
shipped within 30 days prior to the date of such Acceptance;
(vi) the goods included in such Domestic Shipment have been
shipped either (x) from one State of the United States to another
State or (y) in the case of a shipment within one State of the
United States, not less than 25 miles from the location of origin
of such Domestic Shipment; and
(vii) such Domestic Shipment does not involve a retail sale
to a consumer.
No Acceptance Quote Request shall be given within five Business Days
of any other Acceptance Quote Request.
(c) (i) Any Bank may, by submitting a notice to the Agent
in the form of Exhibit H hereto (an "Acceptance Quote"), offer to
create and discount Acceptances in response to any Acceptance
Quote Request. Each Acceptance Quote must be submitted to the
Agent not later than 11:00 a.m. New York time on the proposed
date of creation and discount of the relevant Acceptances;
provided that any Acceptance Quote submitted by Chase (or its
Applicable Lending Office) may be submitted, and may only be
submitted, if Chase (or such Applicable Lending Office) notifies
the Drawer that submitted the relevant Acceptance Quote Request
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of the terms of the offer contained in such Acceptance Quote not
later than 10:45 a.m. New York time on the proposed date of
creation and discount of the relevant Acceptances. Subject to
Sections 6.02 and 9 hereof, any Acceptance Quote so made shall be
irrevocable except with the written consent of the Agent given on
the instructions of the Drawer that requested the submission of
such Acceptance Quote.
(ii) No Acceptance Quote shall propose terms other than or
in addition to those requested in the applicable Acceptance Quote
Request and, in particular, no Acceptance Quote may be
conditioned upon acceptance by the Drawer that requested the
submission of such Acceptance Quote of all (or some specified
minimum) of the aggregate face amount of the Acceptances
requested in the relevant Acceptance Quote Request; provided that
the minimums specified in Section 2.04(e) hereof shall apply.
(d) The Agent shall, as promptly as practicable (but in any
event not later than 11:15 a.m. New York time), notify the Drawer
submitting an Acceptance Quote Request of the terms (i) of any
Acceptance Quote submitted by a Bank in response to such Acceptance
Quote Request that is in accordance with Section 2.04(c) hereof and
(ii) of any Acceptance Quote that amends, modifies or is otherwise
inconsistent with a previous Acceptance Quote submitted by such Bank
with respect to the same Acceptance Quote Request. Any such
subsequent Acceptance Quote shall be disregarded by the Agent unless
such subsequent Acceptance Quote is submitted solely to correct a
manifest error in such former Acceptance Quote. The Agent's notice to
the Drawer that submitted an Acceptance Quote Request shall specify
(A) the aggregate face amount of the Acceptances for which offers have
been received in response thereto and (B) the aggregate face amount
and All-In Rate for the Acceptances each Bank has offered to create
and discount in response to such Acceptance Quote Request (identifying
the Bank that made each Acceptance Quote).
(e) Not later than noon New York time on the proposed date
of creation and discount of Acceptances, the Drawer requesting the
creation and discount of such Acceptances shall notify the Agent of
its acceptance or nonacceptance of the offers for the creation and
discount of such Acceptances so notified to it pursuant to
Section 2.04(d) hereof (which notice shall specify the aggregate face
amount of Acceptances that are accepted with respect to each Bank
whose offer is accepted in whole or in part; and the failure of the
Drawer to give such notice by such time shall constitute non-
acceptance) and the Agent shall promptly notify each affected Bank of
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the acceptance or non-acceptance of its offer. The notice by the
Agent shall also specify the aggregate face amount of Acceptances that
were accepted. The Drawer that submitted an Acceptance Quote Request
may accept any Acceptance Quote submitted in response thereto in whole
or in part (provided that any Acceptance Quote accepted in part from
any Bank shall be at least equal to $1,000,000 or an integral multiple
of $100,000 in excess thereof); provided that:
(i) the aggregate face amount of the Acceptances created
and discounted may not exceed the aggregate face amount of
Acceptances for which Acceptance Quotes are requested in the
related Acceptance Quote Request;
(ii) acceptance of offers may only be made in ascending
order of their respective All-In Rates; and
(iii) no offer may be accepted if the Agent has advised the
Drawer that such offer fails to comply with Section 2.04(c)(ii)
hereof or otherwise fails to comply with the requirements of this
Agreement (including, without limitation, Section 2.04(a)
hereof).
If offers are made by two or more Banks in response to an Acceptance
Quote Request with the same All-In Rates for an aggregate face amount
of Acceptances that is, together with the aggregate face amount of
Acceptances offered with lower All-In Rates, greater than the
aggregate face amount of Acceptances permitted to be accepted as
provided in clause (i) of the proviso to the immediately preceding
sentence, the aggregate face amount of Acceptances in respect of which
such offers with the same
All-In Rates are accepted shall be allocated by the Drawer that
submitted such Acceptance Quote Request among such Banks as nearly as
possible (in a minimum amount of $1,000,000 or any integral multiple
of $100,000 in excess thereof) in proportion to the aggregate face
amount of such offers.
(f) Any Bank whose offer to create and discount Acceptances
has been accepted in a specified aggregate amount shall, not later
than 2:00 p.m. New York time on the date specified for the creation
and discount of such Acceptances:
(i) create such Acceptances in such aggregate amount by the
acceptance at the Applicable Lending Office of such Bank of a
draft or drafts in the form customarily employed by such Bank in
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creating bankers acceptances (the denomination of each such
Acceptance to be selected by such Bank in its sole discretion);
(ii) discount such Acceptances at the All-In Rate specified
for such Acceptances in the applicable Acceptance Quote;
(iii) give the Agent notice of the creation and discount of
such Acceptances, specifying the aggregate face amount thereof
and All-In Rate therefor; and
(iv) pay to the Agent for account of such Drawer an amount
equal to the proceeds of such discount.
The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be promptly made available by the Agent
to such Drawer by depositing the same, in immediately available funds,
in an account of such Drawer maintained with Chase at the Principal
Office designated by such Drawer.
(g) The amount of any Acceptance Liability with respect to
any outstanding Acceptance made by any Bank shall not constitute a
utilization of such Bank's Commitment.
(h) With respect to any Acceptance created and discounted
hereunder, the Company and the Acceptance Account Party
unconditionally and jointly and severally agree to pay to the Agent,
for account of the Applicable Lending Office of the Accepting Bank, on
the Maturity Date of such Acceptance, or on such earlier date as may
be required pursuant to the terms of this Agreement, the face amount
of such Acceptance. The Agent shall maintain on its books accounts
showing the aggregate face amount of the Acceptance Liabilities owing
from time to time to the Banks hereunder. If either the Company or
the Acceptance Account Party shall default in the payment in full when
due (whether at stated maturity, by acceleration or otherwise) of any
Acceptance Liability, the Company and the Acceptance Account Party
unconditionally and jointly and severally agree to pay interest on the
amount in default from the due date thereof until such amount is paid
in full (such amount to be payable on demand of the Accepting Bank,
through the Agent, in respect of which such amount is due) at a rate
per annum equal to the Post-Default Rate.
(i) Each Drawer hereby appoints each Bank to be, and each
Bank hereby accepts such appointment to be, such Drawer's true and
lawful attorney-in-fact for and on behalf of such Drawer to sign in
the name of such Drawer, as drawer, drafts naming such Bank as drawee
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and payee and otherwise in the form customarily employed by such Bank
in creating bankers acceptances, and to complete such drafts as to
amount, date and maturity (in such numbers and denominations as such
Bank is hereby authorized to determine) in accordance with the
acceptance by such Drawer under Section 2.04(e) hereof of such Bank's
offer to create and discount Acceptances.
(j) At the request of any Bank (through the Agent) that is
a member of the Federal Reserve System or that is a Federal or state
branch or agency of a foreign bank subject to reserve requirements
under Section 7 of the International Banking Act of 1978, the Company
shall cause the relevant Drawer to provide, and the relevant Drawer
shall provide, such Bank such documents as may be necessary
(including, without limitation, contracts of sale, bills of lading and
invoices) to demonstrate to such Bank and the Board of Governors of
the Federal Reserve System the truth of the certifications made
pursuant to the second sentence of Section 2.04(b) hereof upon
submission by such Drawer of any Acceptance Quote Request.
(k) The Company hereby agrees to indemnify each Bank from,
and hold each of them harmless against, any and all losses,
liabilities, claims, damages, costs or expenses incurred by any of
them in the event that any of the certifications made pursuant to the
second sentence of Section 2.04(b) hereof proves to have been
incorrect in any material respect, including, without limitation, any
losses, liabilities, claims, damages, costs or expenses attributable
to any Acceptance created and discounted by such Bank failing to
comply with all applicable provisions of law and all regulations,
rulings and interpretations of the Board of Governors of the Federal
Reserve System regarding bankers acceptances eligible for discount and
purchase by a Federal Reserve Bank.
2.05 Changes of Commitments.
(a) Unless theretofore reduced to such amount pursuant to
paragraphs (b) and (c) below, the aggregate amount of the Commitments
shall automatically be reduced to zero on the Commitment Termination
Date.
(b) The Company shall have the right to terminate or reduce
permanently the amount of the Commitments at any time or from time to
time upon not less than three Business Days' prior notice to the Agent
(which shall promptly notify the Banks) of each such termination or
reduction, which notice shall specify the effective date thereof and
the amount of any such reduction (which shall be in an integral
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multiple of $5,000,000) and shall be irrevocable and effective only
upon receipt by the Agent; provided that the Company may not at any
time (i) terminate the Commitments if Loans or Acceptance Liabilities
are then outstanding or (ii) reduce the aggregate amount of the
Commitments below the sum of the aggregate outstanding principal
amount of the Loans plus the aggregate unpaid amount of all Acceptance
Liabilities.
(c) The Commitments once terminated or reduced may not be
reinstated.
2.06 Fees. The Company shall, if the financial statements
of the Company most recently delivered to the Agent under
Section 8.01(a) hereof (or, until the first financials are delivered
under Section 8.01(a) hereof, the quarterly financial statements
referred to in Section 7.02(a) hereof) demonstrate that the Interest
Coverage Ratio for the fiscal quarter to which such financial
statements relate shall fall within one of the ranges set forth below,
pay to the Agent for account of each Bank a facility fee on such
Bank's pro rata (based on its Commitment) portion of the aggregate
Commitments at the rate per annum set forth below opposite such range
for all of the fiscal quarter (or such portion thereof as Commitments
are outstanding) immediately following the fiscal quarter to which
such financial statements relate:
Interest Coverage Ratio Facility Fee
----------------------- ------------
5.5 to 1 or greater 2/25 of 1%
less than 5.5 to 1 1/10 of 1%
provided that, for any period during which any Specified Default shall
have occurred and be continuing, a facility fee shall be payable at a
rate per annum equal to 1/10 of 1%; provided further that, if the
Company shall terminate the Commitments in any fiscal quarter before
receipt of the financial statements under Section 8.01(a) for the
immediately preceding fiscal quarter, a facility fee shall be payable
for the fiscal quarter in which such termination occurred (to such
termination) at the rate applicable to the prior fiscal quarter.
Accrued facility fee shall be payable on each Quarterly Date in
arrears and on the earlier of the date the Commitments are terminated
and the Commitment Termination Date.
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2.07 Lending Offices. The Loans of each type made by each
Bank shall be made and maintained at such Bank's Applicable Lending
Office for Loans of such type. The Acceptances created and discounted
by each Bank shall be created and discounted at such Bank's Applicable
Lending Office for Acceptances.
2.08 Several Obligations; Remedies Independent. The
failure of any Bank to make any Syndicated Loan to be made by it on
the date specified therefor shall not relieve any other Bank of its
obligation to make its Syndicated Loan on such date, and no Bank shall
be responsible for the failure of any other Bank to make a Loan or
create and discount an Acceptance to be made or created and discounted
by such other Bank. The amounts payable by the Company at any time
hereunder and under the Notes to each Bank shall be a separate and
independent debt and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement and the Notes, and it
shall not be necessary for any other Bank or the Agent to consent to,
or be joined as an additional party in, any proceedings for such
purposes.
2.09 Notes.
(a) The Syndicated Loans made by any Bank shall be
evidenced by a single promissory note of the Company in substantially
the form of Exhibit A-1 hereto, dated the date of its delivery to the
Agent, payable to such Bank in a principal amount equal to the amount
of its Commitment as originally in effect on the date hereof and
otherwise duly completed. The date, amount, type, interest rate and
maturity date of each Syndicated Loan made by each Bank, and all
payments made on account of the principal thereof, shall be recorded
by such Bank on its books and, prior to any transfer of such Note held
by it, endorsed by such Bank on the schedule attached to such Note or
any continuation thereof; provided that the failure of such Bank to
make any such recordation or endorsement shall not affect the
obligations of the Company to make any payment when due of any amount
owing hereunder or under such Note in respect of the Loans to be
evidenced by such Note.
(b) The Money Market Loans made by any Bank shall be
evidenced by a single promissory note of the Company in substantially
the form of Exhibit A-2 hereto, dated the date of its delivery to the
Agent, payable to such Bank and otherwise duly completed. The date,
amount, type, interest rate and maturity date of each Money Market
Loan made by each Bank, and all payments made on account of the
principal thereof, shall be recorded by such Bank on its books and,
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prior to any transfer of such Note held by it, endorsed by such Bank
on the schedule attached to such Note or any continuation thereof;
provided that the failure of such Bank to make any such recordation or
endorsement shall not affect the obligations of the Company to make
any payment when due of any amount owing hereunder or under such Note
in respect of the Loans to be evidenced by such Note.
(c) No Note may be subdivided, whether by exchange for
promissory notes of lesser denominations or otherwise except in
connection with a permitted assignment of a portion of the Loans
evidenced thereby pursuant to Section 11.05(b) hereof.
2.10 Prepayments. The Company may prepay Base Rate Loans
and Acceptance Liabilities upon not less than one Business Day's prior
notice to the Agent (which shall promptly notify the Banks), which
notice shall specify the prepayment date (which shall be a Business
Day) and the amount of the prepayment (which, in the case of partial
prepayments, shall be in an integral multiple of $1,000,000) and shall
be irrevocable and effective only upon receipt by the Agent, provided
that interest on the principal of any Base Rate Loans prepaid, accrued
to the prepayment date, shall be paid on the prepayment date. The
Company may not voluntarily prepay any LIBO Rate Loans or Set Rate
Loans (provided that this sentence shall not affect the Company's
obligation to prepay Loans pursuant to Section 9 of this Agreement).
2.11 Extension of Commitment Termination Date. (a) The
Company may, by notice to the Agent (which shall promptly deliver a
copy to each of the Banks) not less than 60 days and not more than 90
days prior to the Commitment Termination Date then in effect hereunder
(the "Existing Commitment Termination Date"), request that the Banks
extend the Commitment Termination Date for an additional 364 days from
the Consent Date (as defined below). Each Bank, acting in its sole
discretion, shall, by notice to the Company and the Agent given on the
date (and, subject to the proviso below, only on the date) 30 days
prior to the Existing Commitment Termination Date (provided, if such
date is not a Business Day, then such notice shall be given on the
next succeeding Business Day) (the "Consent Date"), advise the Company
whether or not such Bank agrees to such extension; provided that each
Bank that determines not to extend the Commitment Termination Date (a
"Non-extending Bank") shall notify the Agent (which shall notify the
Company) of such fact promptly after such determination (but in any
event no later than the Consent Date) and any Bank that does not
advise the Company on or before the Consent Date shall be deemed to be
a Non-extending Bank. The election of any Bank to agree to such
extension shall not obligate any other Bank to agree.
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(b) The Company shall have the right on or before the
Existing Commitment Termination Date to replace each Non-extending
Bank with, and otherwise add to this Agreement, one or more other
banks (which may include any Bank, each prior to the Existing
Commitment Termination Date an "Additional Commitment Bank") with the
approval of the Agent (which approval shall not be unreasonably
withheld), each of which Additional Commitment Banks shall have
entered into an agreement in form and substance satisfactory to the
Company and the Agent pursuant to which such Additional Commitment
Bank shall, effective as of the Existing Commitment Termination Date,
undertake a Commitment (if any such Additional Commitment Bank is a
Bank, its Commitment shall be in addition to such Bank's Commitment
hereunder on such date).
(c) If (and only if) Banks holding Commitments that,
together with the additional Commitments of the Additional Commitment
Banks that will become effective on the Existing Commitment
Termination Date, aggregate at least 90% of the aggregate amount of
the Commitments (not including the additional Commitments of the
Additional Commitment Banks) on the Consent Date shall have agreed on
the Consent Date to extend the Existing Commitment Termination Date,
then, effective as of the Existing Commitment Termination Date, the
Existing Commitment Termination Date shall be extended to the date
falling 364 days after the Consent Date (provided, if such date is not
a Business Day, then such Commitment Termination Date as so extended
shall be the next preceding Business Day) and each Additional
Commitment Bank shall thereupon become a "Bank" for all purposes of
this Agreement.
Notwithstanding the foregoing, the extension of the Existing
Commitment Termination Date shall not be effective with respect to any
Bank unless:
(i) no Default shall have occurred and be continuing on
each of the date of the notice requesting such extension, on the
Consent Date or on the Existing Commitment Termination Date;
(ii) each of the representations and warranties of the
Company in Section 7 hereof shall be true and correct on and as
of each of the date of the notice requesting such extension, the
Consent Date and the Existing Commitment Termination Date with
the same force and effect as if made on and as of each such date
(or, if any such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific
date); and
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(iii) each Non-extending Bank shall have been paid in full by
the Company all amounts owing to such Bank hereunder on or before
the Existing Commitment Termination Date.
Even if the Existing Commitment Termination Date is extended as
aforesaid, the Commitment of each Non-extending Bank shall terminate
on the Existing Commitment Termination Date.
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST.
-----------------------------------
3.01 Repayment of Loans. The Company will pay to the Agent
for account of each Bank the principal of each Loan made by such Bank,
and such Loan shall mature, on the last day of the Interest Period
therefor.
3.02 Interest.
(a) The Company will pay to the Agent for account of each
Bank interest on the unpaid principal amount of each Loan made by such
Bank for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following
rates per annum:
(i) if such Loan is a Base Rate Loan, the Base Rate (as in
effect from time to time);
(ii) if such Loan is a Eurodollar Loan, the LIBO Rate for
such Loan for the Interest Period therefor plus the Applicable
Margin;
(iii) if such Loan is a LIBOR Market Loan, the LIBO Rate for
such Loan for the Interest Period therefor plus (or minus) the
Money Market Margin quoted by the Bank making such Loan in
accordance with Section 2.03 hereof; and
(iv) if such Loan is a Set Rate Loan, the Money Market Rate
for such Loan for the Interest Period therefor quoted by the Bank
making such Loan in accordance with Section 2.03 hereof.
Notwithstanding the foregoing, the Company will pay to the Agent for
account of each Bank interest at the applicable Post-Default Rate on
any principal of any Loan made by such Bank or any Acceptance
Liability owing to such Bank, and (to the fullest extent permitted by
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law) on any other amount payable by the Company hereunder or under the
Note held by such Bank to or for account of such Bank, which shall not
be paid in full when due (whether at stated maturity, by acceleration
or otherwise), for the period commencing on the due date thereof until
the same is paid in full.
(b) Accrued interest on each Loan shall be payable on the
last day of the Interest Period therefor and, if such Interest Period
is longer than three months, at three-month intervals following the
first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand.
(c) Promptly after the determination of any LIBO Rate
provided for herein, the Agent shall (i) notify the Banks to which
interest at such LIBO Rate is payable and the Company thereof and (ii)
at the request of the Company, furnish to the Company a copy of the
Dow Jones Telerate Service Page on the basis of which the relevant
LIBO Base Rate was determined. At any time that the Agent determines
the LIBO Rate on a basis other than using the Dow Jones Telerate
Service, the Agent shall promptly notify the Company.
SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
------------------------------------------------
4.01 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the
Company under this Agreement and the Notes, and all payments to be
made by each Acceptance Account Party in respect of its Acceptance
Liabilities, shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Agent at the
Principal Office, not later than 2:00 p.m. New York time on the date
on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next
succeeding Business Day).
(b) If the Company or any Acceptance Account Party shall
default in the payment when due of any principal, interest or other
amounts to be made by the Company or such Acceptance Account Party (as
the case may be) under this Agreement or the Notes, any Bank for whose
account any such payment is to be made may (but shall not be obligated
to) debit the amount of any such payment due such Bank which is not
made by such time to any ordinary deposit account of the Company or
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such Acceptance Account Party (as the case may be) with such Bank
(with notice to the Company or such Acceptance Account Party, as the
case may be, and the Agent).
(c) The Company and each Acceptance Account Party shall, at
the time of making each payment under this Agreement or any Note for
account of any Bank, specify to the Agent the Loans, Acceptance
Liabilities or other amounts payable by it hereunder to which such
payment is to be applied (and in the event that the payor fails to so
specify, or if an Event of Default has occurred and is continuing,
such Bank may apply such payment received by it from the Agent to such
amounts then due and owing to such Bank as such Bank may determine).
(d) Each payment received by the Agent under this Agreement
or any Note for account of any Bank shall be paid promptly to such
Bank, in immediately available funds.
(e) If the due date of any payment under this Agreement or
any Note would otherwise fall on a day which is not a Business Day
such date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period
of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Banks of Syndicated
Loans under Section 2.01 hereof shall be made from the Banks, each
payment of fees under Section 2.06 hereof shall be made for account of
the Banks, and each termination, reduction or extension of the amount
of the Commitments under Section 2.05 hereof shall be applied to the
Commitments of the Banks, pro rata according to the amounts of their
respective Commitments; (b) each payment of principal of Syndicated
Loans by the Company shall be made for account of the Banks pro rata
in accordance with the respective unpaid principal amounts of the
Syndicated Loans held by the Banks; and (c) each payment of interest
on Syndicated Loans by the Company shall be made for account of the
Banks pro rata in accordance with the amounts of interest due and
payable to the respective Bank; provided that, if an Event of Default
shall have occurred and be continuing, each payment of principal of
and interest on the Loans and Acceptance Liabilities and other amounts
owing hereunder by the Company shall be made for account of the Banks
pro rata in accordance with the aggregate amounts of all principal of
and interest on the Loans and Acceptance Liabilities and all other
amounts owing hereunder by the Company then due and payable to the
respective Bank.
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4.03 Computations. Interest on Set Rate Loans, LIBO Rate
Loans, All-In Rates and the fees payable pursuant to Section 2.06
hereof shall be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day)
occurring in the period for which payable, and interest on Base Rate
Loans shall be computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
4.04 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank, the Company or any Acceptance
Account Party (each, a "Payor") prior to the time by, and on the date
on, which such Payor is scheduled to make payment to the Agent of (in
the case of a Bank) the proceeds of a Loan to be made or the discount
of any Acceptance to be created by it hereunder or (in the case of the
Company or an Acceptance Account Party) a payment to the Agent for
account of one or more of the Banks hereunder (such payment being
herein called the "Required Payment"), which notice shall be effective
upon receipt, that it does not intend to make the Required Payment to
the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient(s) of such payment shall,
on demand, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent
to but not including the date the Agent recovers such amount (the
"Advance Period") at a rate per annum equal to (a) if the recipient is
the Company or a Drawer, the Base Rate in effect on such day and
(b) if the recipient is a Bank, the Federal Funds Rate in effect on
such day; and, if such recipient(s) shall fail promptly to make such
payment, the Agent shall be entitled to recover such amount, on
demand, from the Payor, together with interest thereon for each day
during the Advance Period at a rate per annum equal to (i) if the
Payor is the Company or an Acceptance Account Party, the rate of
interest payable on the Required Payment as provided in the second
sentence of Section 3.02(a) hereof and (ii) if the Payor is a Bank,
during the period commencing on the date such amount was so made
available to but excluding the date three Business Days following such
date, the Federal Funds Rate in effect on such day and, thereafter,
the Base Rate in effect on such day.
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4.05 Set-off; Sharing of Payments.
(a) Each of the Company and each Acceptance Account Party
agrees that, in addition to (and without limitation of) any right of
set-off, bankers' lien or counterclaim a Bank may otherwise have, each
Bank shall be entitled, at its option, to offset balances held by it
for account of the Company or such Acceptance Account Party (as the
case may be) at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Bank's
Loans (in the case of the Company) or on any of Acceptance Liabilities
owing to such Bank hereunder (in the case of the Company and the
relevant Acceptance Account Party) which is not paid when due
(regardless of whether such balances are then due to the Company or
such Acceptance Account Party, as the case may be), in which case it
shall promptly notify the Company or such Acceptance Account Party, as
the case may be, and the Agent thereof, provided that such Bank's
failure to give such notice shall not affect the validity thereof.
(b) If any Bank shall obtain payment of any principal of or
interest on any Syndicated Loan made by it to the Company under this
Agreement through the exercise of any right of set-off, bankers' lien
or counterclaim or similar right or otherwise, and, as a result of
such payment, such Bank shall have received a greater percentage of
the amounts then due hereunder by the Company to such Bank in respect
of Syndicated Loans than the percentage received by any other Banks,
it shall promptly purchase from such other Banks participations in
(or, if and to the extent specified by such Bank, direct interests in)
the Syndicated Loans made by such other Banks (or in the interest
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that
all the Banks shall share the benefit of such excess payment (net of
any expenses which may be incurred by such Bank in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid
principal and interest on the Syndicated Loans held by each of the
Banks. To such end all the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The
Company agrees that any Bank so purchasing a participation (or direct
interest) in the Syndicated Loans made by other Banks (or in the
interest thereon, as the case may be) may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to
such participation as fully as if such Bank were a direct holder of
Loans (or in the interest thereon, as the case may be) in the amount
of such participation. Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank
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to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Company.
If under any applicable bankruptcy, insolvency or other similar law,
any Bank receives a secured claim in lieu of a set-off to which this
Section 4.05 applies, such Bank shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this
Section 4.05 to share in the benefits of any recovery on such secured
claim.
SECTION 5. YIELD PROTECTION AND ILLEGALITY.
--------------------------------
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time
to time such amounts as such Bank may determine to be necessary to
compensate such Bank for any costs that such Bank determines are
attributable to its making or maintaining of any LIBO Rate Loans or
its obligation to make any LIBO Rate Loans hereunder, or any reduction
in any amount receivable by such Bank hereunder in respect of any of
such Loans or such obligation (such increases in costs and reductions
in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Notes in respect of any of
such Loans (other than taxes imposed on or measured by the
overall net income of such Bank or of its Applicable Lending
Office for any of such Loans by the jurisdiction in which such
Bank has its principal office or such Applicable Lending Office);
or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized
in the determination of the LIBO Rate for such Loan) relating to
any extensions of credit or other assets of, or any deposits with
or other liabilities of, such Bank (including, without
limitation, any of such Loans or any deposits referred to in the
definition of "LIBO Base Rate" in Section 1.01 hereof), or any
commitment of such Bank (including, without limitation, the
Commitment of such Bank hereunder); or
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(iii) imposes any other condition affecting this Agreement or
its Notes (or any of such extensions of credit or liabilities) or
its Commitment.
If any Bank requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Bank (with a copy
to the Agent), suspend the obligation of such Bank thereafter to make
LIBO Rate Loans until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable), provided that such
suspension shall not affect the right of such Bank to receive the
compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason of
any Regulatory Change, any Bank either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such Bank
that includes deposits by reference to which the interest rate on LIBO
Rate Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of such Bank that includes
LIBO Rate Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if
such Bank so elects by notice to the Company (with a copy to the
Agent), the obligation of such Bank to make LIBO Rate Loans hereunder
shall be suspended until such Regulatory Change ceases to be in effect
(in which case the provisions of Section 5.04 hereof shall be
applicable).
(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Company shall pay
directly to each Bank from time to time on request such amounts as
such Bank may determine to be necessary to compensate such Bank (or,
without duplication, the bank holding company of which such Bank is a
subsidiary) for any costs that it determines are attributable to the
maintenance by such Bank (or any Applicable Lending Office or such
bank holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not
having the force of law and whether or not the failure to comply
therewith would be unlawful) heretofore or hereafter issued by any
government or governmental or supervisory authority implementing at
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the national level the Basel Accord (including, without limitation,
the Final Risk-Based Capital Guidelines), of capital in respect of its
Commitment, Loans or Acceptance Liabilities (such compensation to
include, without limitation, an amount equal to any reduction of the
rate of return on assets or equity of such Bank (or any Applicable
Lending Office or such bank holding company) to a level below that
which such Bank (or any Applicable Lending Office or such bank holding
company) would have achieved with respect to its Commitment, Loans or
Acceptance Liabilities but for such law, regulation, interpretation,
directive or request).
(d) Each Bank shall notify the Company of any event
occurring after the date of this Agreement entitling such Bank to
compensation under paragraph (a) or (c) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after such
Bank obtains actual knowledge thereof. If any Bank fails to give such
notice within 45 days after it obtains actual knowledge of such an
event, such Bank shall, with respect to compensation payable pursuant
to this Section 5.01 in respect of any costs resulting from such
event, only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that such
Bank does give such notice. Each Bank will designate a different
Applicable Lending Office for the Loans of such Bank affected by such
event if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such
Bank, be disadvantageous to such Bank, except that such Bank shall
have no obligation to designate an Applicable Lending Office located
in the United States of America. Each Bank will furnish to the
Company a certificate setting forth the basis and amount of each
request by such Bank for compensation under paragraph (a) or (c) of
this Section 5.01. Determinations and allocations by any Bank for
purposes of this Section 5.01 of the effect of any Regulatory Change
pursuant to paragraph (a) or (b) of this Section 5.01, or of the
effect of capital maintained pursuant to paragraph (c) of this
Section 5.01, on its costs or rate of return of maintaining Loans or
its obligation to make Loans, or on amounts receivable by it in
respect of Loans, and of the amounts required to compensate such Bank
under this Section 5.01, shall be conclusive absent manifest error,
provided that such determinations and allocations are made on a
reasonable basis.
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5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the LIBO Base Rate is to be determined under clause
(ii) of the first sentence of the definition of "LIBO Base Rate"
and the Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant
deposits referred to in such clause (ii) are not being provided
in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for LIBO Rate Loans as
provided herein; or
(b) the Majority Banks determine (or any Bank that has
outstanding a Money Market Quote with respect to a LIBOR Market
Loan, determines) which determination shall be conclusive, and
notify (or notifies, as the case may be) the Agent that the
relevant rates of interest referred to in the definition of "LIBO
Base Rate" in Section 1.01 hereof do not adequately cover the
cost to such Banks (or such quoting Bank) of making or
maintaining its LIBO Rate Loans;
then the Agent shall give the Company and each Bank prompt notice
thereof, and so long as such condition remains in effect, the Banks
(or such quoting Bank) shall be under no obligation to make additional
LIBO Rate Loans.
5.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Bank or
its Applicable Lending Office to honor its obligation to make or
maintain LIBO Rate Loans hereunder, then such Bank shall promptly
notify the Company thereof (with a copy to the Agent) and such Bank's
obligation to make Eurodollar Loans shall be suspended until such time
as such Bank may again make and maintain Eurodollar Loans (in which
case the provisions of Section 5.04 hereof shall be applicable), and
such Bank shall no longer be obligated to make any LIBOR Market Loan
that it has offered to make.
5.04 Base Rate Loans Pursuant to Sections 5.01 and 5.03.
If the obligation of any Bank to make any LIBO Rate Loans shall be
suspended pursuant to Section 5.01 or 5.03 hereof (Loans of such type
being herein called "Affected Loans" and such type being herein called
the "Affected Type"), all Loans (other than Money Market Loans) which
would otherwise be made by such Bank as Loans of the Affected Type
shall be made instead as Base Rate Loans (and, if an event referred to
in Section 5.01(b) or 5.03 hereof has occurred and such Bank so
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requests by notice to the Company with a copy to the Agent, all
Affected Loans of such Bank then outstanding shall be automatically
converted into Base Rate Loans on the date specified by such Bank in
such notice) and, to the extent that Affected Loans are so made as (or
converted into) Base Rate Loans, all payments of principal which would
otherwise be applied to such Bank's Affected Loans shall be applied
instead to its Base Rate Loans.
5.05 Compensation. The Company shall pay to the Agent for
account of each Bank, upon the request of such Bank through the Agent,
such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any loss, cost or expense
which such Bank determines are attributable to:
(a) any payment or conversion of a LIBO Rate Loan or a Set
Rate Loan made by such Bank for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 9
hereof) on a date other than the last day of the Interest Period
for such Loan;
(b) any failure by the Company for any reason (excluding
only failure due solely to a default by any Bank or the Agent in
its obligation to provide funds to the Company hereunder but
including, without limitation, the failure of any of the
conditions precedent specified in Section 6 hereof to be
satisfied) to borrow a LIBO Rate Loan or a Set Rate Loan from
such Bank on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 or
2.03(b) hereof; or
(c) any failure for any reason (excluding only failure due
solely to a default by any Bank or the Agent in its obligation to
provide funds to the Company hereunder but including, without
limitation, the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) for an Acceptance
to be created and discounted on the date on which such Acceptance
is to be created and discounted as specified in the notice given
by the Drawer requesting the creation and discount of such
Acceptance to the Agent under Section 2.04(e) hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include, in the case of a Loan, an amount equal to
the excess, if any, of (i) the amount of interest which otherwise
would have accrued on the principal amount so paid or converted or not
borrowed for the period from the date of such payment, conversion or
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failure to borrow to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period for such
Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the interest component of the amount such Bank
would have bid in the London interbank market for Dollar deposits of
lending banks in amounts comparable to such principal amount and with
maturities comparable to such period (as reasonably determined by such
Bank).
SECTION 6. CONDITIONS PRECEDENT.
---------------------
6.01 Initial Credit Extension. The obligation of the Banks
to make the initial Credit Extension hereunder is subject to the
receipt by the Agent of the following documents, each of which shall
be satisfactory to the Agent in form and substance:
(a) Certified copies of the charter and by-laws of each
Obligor and all corporate action taken by each Obligor approving
(i) in the case of the Company, this Agreement and the Notes,
borrowings by the Company and the creation and discount of
Acceptances and (ii) in the case of each Drawer, this Agreement
and the creation and discount of Acceptances in respect of which
such Drawer is obligated hereunder (including, without
limitation, a certificate setting forth the resolutions of the
Board of Directors of each Obligor adopted in respect of the
transactions contemplated hereby and thereby).
(b) A certificate of each Obligor in respect of each of the
officers (i) who is authorized to sign (in the case of the
Company) this Agreement, the Notes and Money Market Quote
Requests, (in the case of the Drawers) this Agreement, the drafts
furnished to the Banks pursuant to Section 2.04(i) hereof and
Acceptance Quote Requests on its behalf, as the case may be, and
(ii) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other
communications in connection herewith and with the Notes and the
transactions contemplated hereby and thereby. The Agent and each
Bank may conclusively rely on such certificate until it receives
notice in writing from such Obligor to the contrary.
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(c) A certificate, dated the date of the initial Credit
Extension, of a senior officer of the Company to the effect set
forth in clauses (a) and (b) of the first sentence of
Section 6.02 hereof.
(d) An opinion, dated the date hereof, of Schiff, Hardin &
Waite, special Illinois counsel to the Obligors, substantially in
the form of Exhibit B-1 hereto (and the Obligors hereby instruct
such counsel to deliver such opinion to the Banks and the Agent);
and an opinion, dated the date hereof, of Dale L. Matschullat,
Esq., general counsel to the Company, substantially in the form
of Exhibit B-2 hereto (and the Company hereby instructs such
counsel to deliver such opinion to the Banks and the Agent).
(e) An opinion, dated the date hereof, of Milbank, Tweed,
Hadley & McCloy, special New York counsel to the Banks and the
Agent, substantially in the form of Exhibit C hereto.
(f) The Notes, duly completed and executed by the Company.
(g) Such other documents as the Agent or any Bank or
special New York counsel to the Banks may reasonably request.
6.02 Initial and Subsequent Credit Extensions. The
obligation of any Bank to make any Credit Extension hereunder
(including, without limitation, the initial Credit Extension
hereunder) is subject to the further conditions precedent that, as of
the date of such Credit Extension and after giving effect thereto and
the intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company
in Section 7 hereof shall be true on and as of the date of such
Credit Extension with the same force and effect as if made on and
as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of
such specific date).
Each notice of borrowing by the Company hereunder and each Acceptance
Quote Request shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date of
such notice and, unless the Company otherwise notifies the Agent prior
to the date of such Credit Extension, as of the date of such Credit
Extension).
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SECTION 7. REPRESENTATIONS AND WARRANTIES. The Company
-------------------------------
represents and warrants to the Banks that:
7.01 Corporate Existence. Each of the Company and its
Significant Subsidiaries: (a) is a corporation duly organized and
validly existing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power, and has all
material governmental licenses, authorizations, consents and
approvals, necessary to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do
business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure
so to qualify would have a material adverse effect on the consolidated
financial condition, operations, business or prospects of the Company
and its Subsidiaries (taken as a whole).
7.02 Financial Condition.
(a) The consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1993 and the related consolidated
statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for the fiscal year ended on said date,
with the opinion thereon of Arthur Andersen & Co., and the unaudited
consolidated balance sheet of the Company and its Subsidiaries as at
March 31, 1994 and the related consolidated statements of income, cash
flows and stockholders' equity of the Company and its Subsidiaries for
the three-month period ended on such date, heretofore furnished to
each of the Banks, are complete and correct and fairly present the
consolidated financial condition of the Company and its Subsidiaries
as at said dates and the consolidated results of their operations for
the fiscal year and three-month period ended on said dates (subject,
in the case of such financial statements as at March 31, 1994, to
normal year-end audit adjustments), all in accordance with generally
accepted accounting principles. Neither the Company nor any of its
Subsidiaries had on said dates any material contingent liabilities,
material liabilities for taxes, material unusual forward or long-term
commitments or material unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or
provided for in said balance sheets as at said dates.
(b) Since December 31, 1993, there has been no material
adverse change in the consolidated financial condition, operations,
business or prospects of the Company and its Subsidiaries (taken as a
whole).
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7.03 Litigation. To the best knowledge and belief of the
Company, there are no legal or arbitral proceedings or any proceedings
by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against the
Company or any of its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect.
7.04 No Breach. None of the making or performance of this
Agreement, the Notes or any Acceptance Document, or the consummation
of the transactions herein or therein contemplated, will conflict with
or result in a breach of, or require any consent under, the charter or
by-laws of any Obligor or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them
is bound or to which any of them is subject, or constitute a default
under any such agreement or instrument, or constitute a tortious
interference with any agreement, or result in the creation or
imposition of any Lien upon any of the revenues or assets of the
Company or any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.
7.05 Corporate Action. Each of the Company and each Drawer
has all necessary corporate power and authority to make and perform
its obligations under this Agreement, (in the case of the Company) the
Notes and (in the case of each Drawer) each of the Acceptance
Documents to which it is a party; the making and performance (in the
case of the Company and each Drawer) this Agreement, (in the case of
the Company) the Notes and (in the case of each Drawer) each
Acceptance Document to which such Drawer is a party, have been duly
authorized by all necessary corporate action on their respective
parts; and this Agreement has been duly and validly executed and
delivered by the Company and each Drawer and constitutes, and each of
the Notes when executed and delivered by the Company for value will
constitute, and each Acceptance Document when executed and delivered
by each Drawer party thereto will constitute its legal, valid and
binding obligation, enforceable in accordance with their respective
terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally.
7.06 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution,
delivery or performance by (i) the Company of this Agreement or the
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Notes or any Acceptance Document, or (ii) any Drawer of this Agreement
or any Acceptance Document or for the validity or enforceability of
any thereof.
7.07 Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
margin stock (within the meaning of Regulation U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds
of any Credit Extension hereunder will be used in a manner that will
cause the Company to violate said Regulation X or any Bank to violate
said Regulation U.
7.08 ERISA. Each of the Company and each ERISA Affiliate
has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each of its Plans and is (and to
the best of its knowledge in the case of any Multiemployer Plan is) in
compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and has not incurred any liability
on account of the termination of any of its Plans to the PBGC or any
of its Plans and has not incurred any withdrawal liability to any
Multiemployer Plan.
7.09 Credit Agreements. Schedule I hereto is a complete
and correct list, as of the date of this Agreement, of each credit
agreement, loan agreement, indenture, purchase agreement, Guarantee or
other arrangement (other than a letter of credit) providing for or
otherwise relating to any extension of credit (or commitment for any
extension of credit) to, or Guarantee by, the Company or any
Subsidiary of any of them the aggregate principal or face amount of
which equals or exceeds (or may equal or exceed) $1,000,000 and the
aggregate principal or face amount outstanding or which may become
outstanding under each such arrangement is correctly described in said
Schedule I.
7.10 Hazardous Materials. The Company and each of its
Subsidiaries have obtained all permits, licenses and other
authorizations that are required under all Environmental Laws, except
to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. The Company
and each of its Subsidiaries are in compliance with the terms and
conditions of all such permits, licenses and authorizations, and are
also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
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schedules and timetables contained in any applicable Environmental Law
or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a
Material Adverse Effect. Except as heretofore disclosed to the Banks,
there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or that are in the
possession of the Company or any of its Subsidiaries with respect to
any property or facility now or previously owned or leased by the
Company or any of its Environmental Affiliates which reveal facts or
circumstances that could reasonably be expected to have a Material
Adverse Effect.
7.11 Taxes. The Company and its Subsidiaries are members
of an affiliated group of corporations filing consolidated returns for
Federal income tax purposes, of which the Company is the "common
parent" (within the meaning of Section 1504 of the Code) of such
group. The Company and its Subsidiaries have filed all Federal income
tax returns and all other material tax returns and information
statements that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries. The charges,
accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges are, in the opinion
of the Company, adequate. The United States Federal income tax
returns of the Company and its Subsidiaries have been examined and/or
closed through the fiscal years of the Company and its Subsidiaries
ended on or before December 31, 1985. The Company has not given or
been requested to give a waiver of the statute of limitations relating
to the payment of Federal, state, local and foreign taxes or other
impositions except that with respect to the Company's 1986 and 1987
tax years there has been an extension in the statute of limitations
relating to the payment of Federal taxes through December 31, 1993 and
with respect to the Company's 1988 and 1989 tax years there has been
such an extension through September 15, 1994.
7.12 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Company to the Banks in connection with
the negotiation, preparation or delivery of this Agreement or included
herein or delivered pursuant hereto, when taken as a whole do not
contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in
light of the circumstances under which they are made, not misleading.
All written information furnished after the date hereof by the Company
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and its Subsidiaries to the Banks in connection with this Agreement
and the transactions contemplated hereby will be true, complete and
accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing
furnished to the Banks for use in connection with the transactions
contemplated hereby.
7.13 Subsidiaries. Set forth in Schedule III hereto is a
complete and correct list, as of the date of this Agreement, of all of
the Subsidiaries of the Company, together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary,
(ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person
and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Schedule III hereto, (x)
each of the Company and its Subsidiaries owns, free and clear of
Liens, and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule
III hereto and (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully
paid and nonassessable.
7.14 Compliance with Law. As of the date of this
Agreement, the Company and its Subsidiaries are in material compliance
with all applicable laws and regulations, except to the extent that
failure to comply therewith would not have a Material Adverse Effect.
SECTION 8. COVENANTS OF THE COMPANY. The Company agrees
-------------------------
that, so long as any of the Commitments are in effect and until
payment in full of all Loans and all Acceptance Liabilities hereunder,
all interest thereon and all other amounts payable by the Company
hereunder:
8.01 Financial Statements. The Company shall deliver to
each of the Banks:
(a) as soon as available and in any event within 60 days
after the end of each of the fiscal quarterly periods of each
fiscal year of the Company, consolidated statements of income,
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cash flows and stockholders' equity of the Company and its
Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheet as at the end
of such period, setting forth in each case in comparative form
the corresponding figures for the corresponding period in the
preceding fiscal year, and accompanied by a certificate of a
senior financial officer of the Company, which certificate shall
state that said financial statements fairly present the
consolidated financial condition and results of operations of the
Company and its Subsidiaries, in accordance with generally
accepted accounting principles, as at the end of (and for) such
period (subject to normal year-end audit adjustments).
(b) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, consolidated
statements of income, cash flows and stockholders' equity of the
Company and its Subsidiaries for such year and the related
consolidated balance sheet as at the end of such year, setting
forth in each case in comparative form the corresponding figures
for the preceding fiscal year, and accompanied by an opinion
thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said financial
statements fairly present the consolidated financial condition
and results of operations of the Company and its Subsidiaries, in
accordance with generally accepted accounting principles, as at
the end of (and for) such fiscal year, and a certificate of such
accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically
stated, of any Default.
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any,
which the Company shall have filed with the Securities and
Exchange Commission (or any governmental agency substituted
therefor) or any national securities exchange.
(d) promptly upon the mailing thereof to the shareholders
of the Company generally, copies of all financial statements,
reports and proxy statements so mailed.
(e) as soon as possible, and in any event within ten days
after the Company knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan of the Company have occurred or exist, a
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statement signed by a senior financial officer of the Company
setting forth details respecting such event or condition and the
action, if any, which the Company or any ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice
required to be filed with or given to PBGC by the Company or such
ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC has not
by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence
of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302
of ERISA shall be a reportable event regardless of the
issuance of any waivers in accordance with Section 412(d) of
the Code);
(ii) the filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any
Plan if at the date of such filing or termination the fair
market value of the assets of such Plan, as determined by
the Plan's independent actuaries, is exceeded by the present
value as determined by such actuaries as of such date, of
benefit commitments under such Plan by more than $1,000,000
(including any prior terminations subject to this
provision);
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan of the
Company, of the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company
or any ERISA Affiliate under Section 4201 or 4204 of ERISA
from a Multiemployer Plan causing any withdrawal liability
in excess of $500,000 (including any prior withdrawals
subject to this provision), or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to
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terminate or has terminated under Section 4041A of ERISA;
and
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against the Company or any ERISA
Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days.
(f) promptly after the Company knows or has reason to know
that any Default has occurred, a notice of such Default,
describing the same in reasonable detail.
(g) from time to time such other information regarding the
business, affairs or financial condition of the Company or any of
its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required
to be filed under ERISA) as any Bank or the Agent may reasonably
request.
The Company will furnish to each Bank, at the time it furnishes each
set of financial statements pursuant to paragraph (a) or (b) above, a
certificate of a senior financial officer of the Company (i) to the
effect that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 8.06, 8.07(a)(vii), 8.08 (xiii), 8.10 and
8.11 hereof as of the end of the respective fiscal quarter or fiscal
year.
8.02 Litigation. The Company shall promptly give to each
Bank notice of all legal or arbitral proceedings, and of all
proceedings before any governmental or regulatory authority or agency,
instituted, or (to the knowledge of the Company) threatened, against
the Company or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
8.03 Corporate Existence, Etc. The Company shall, and
shall cause each of its Significant Subsidiaries to: preserve and
maintain its corporate existence and all its material rights,
privileges and franchises (except as otherwise expressly permitted
under Section 8.07 hereof); comply with the requirements of all
applicable laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such requirements
would have a Material Adverse Effect; pay and discharge all taxes,
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assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge
or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being
maintained; maintain all its properties used or useful in its business
in good working order and condition, ordinary wear and tear excepted;
and permit representatives of any Bank or the Agent, during normal
business hours, to examine, copy and make extracts from its books and
records, to inspect its properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by
such Bank or the Agent (as the case may be).
8.04 Insurance. The Company shall, and shall cause each of
its Subsidiaries to, keep insured by financially sound and reputable
insurers all property of a character usually insured by corporations
engaged in the same or similar business similarly situated against
loss or damage of the kinds and in the amounts customarily insured
against by such corporations and carry such other insurance as is
usually carried by such corporations.
8.05 Use of Proceeds. The Company and the Drawers shall
use the proceeds of the Credit Extensions hereunder solely for
commercial paper back-up (which use shall be in compliance with all
applicable legal and regulatory requirements, including, without
limitation, Regulations G, U and X of the Board of Governors of the
Federal Reserve System and the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder). The Company will not permit more than 25% of
the value (as determined by any reasonable method) of its assets, nor
more than 25% of the value (as determined by any reasonable method) of
the assets of the Company and its Subsidiaries, to be represented by
margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System).
8.06 Indebtedness. The Company will not, nor will it
permit any of its Subsidiaries to, incur, assume or suffer to exist
obligations in respect of standby and performance letters of credit in
an aggregate amount exceeding 5% of Total Consolidated Assets at any
one time outstanding. The Company will not permit any of its
Subsidiaries to create, issue, incur or assume, or suffer to exist,
any Indebtedness, except: (i) Indebtedness existing on the date
hereof, but not any renewals, extensions or refinancings of the same;
(ii) Indebtedness owing to the Company; (iii) Indebtedness of any
Person that becomes a Subsidiary of the Company after the date hereof
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so long as such Indebtedness exists at the time such Person becomes
such a Subsidiary and was not incurred in anticipation thereof;
(iv) Capital Lease Obligations in an aggregate amount not to exceed an
amount equal to 5% of Total Consolidated Assets at any one time
outstanding; and (v) additional Indebtedness in an aggregate amount
not to exceed an amount equal to 5% of Total Consolidated Assets at
any one time outstanding.
8.07 Fundamental Changes.
(a) The Company will not, and will not permit any of its
Subsidiaries to, be a party to any merger or consolidation, and the
Company will not, and will not permit any of its Subsidiaries or
operating divisions (whether now owned or existing or hereafter
acquired or designated) to, (x) sell, assign, lease or otherwise
dispose of all or substantially all of its Property whether now owned
or hereafter acquired or (y) sell, assign or otherwise dispose of any
capital stock of any such Subsidiary, or permit any such Subsidiary to
issue any capital stock, to any Person other than the Company or any
of its
Wholly-Owned Subsidiaries if, after giving effect thereto, the Company
does not own, directly or indirectly, a majority of the capital stock
of such Subsidiary ("Controlling Stock Disposition"); except that, so
long as both before and after giving effect thereto no Default shall
have occurred and be continuing:
(i) the Company may be a party to any merger or
consolidation if it shall be the surviving corporation;
(ii) any such Subsidiary may be a party to any merger or
consolidation with another such Subsidiary (or with any Person
that becomes another such Subsidiary as a result of such merger
or consolidation);
(iii) any such Subsidiary may merge into, and any such
Subsidiary or operating division may transfer any Property to,
the Company;
(iv) any such Subsidiary or operating division may transfer
any Property to another such Subsidiary or operating division (or
to any Person that becomes as part of such transfer another such
Subsidiary or operating division);
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(v) the Company, any such Subsidiary or operating division
may sell, assign, lease or otherwise dispose of any Non-Strategic
Property; and
(vi) the Company or any such Subsidiary or operating
division may make sales, assignments and other dispositions of
Property (including Controlling Stock Dispositions) and any such
Subsidiary may become a party to a merger or consolidation (each
such sale, assignment, disposition, Controlling Stock
Disposition, merger or consolidation, other than those described
in clauses (i) through (vi) hereof, a "Disposition") if the
Property that was the subject of any such Disposition, together
with the Property that was the subject of all Dispositions during
the Disposition Period for such Disposition, did not produce
revenue that was greater in amount than an amount equal to 10% of
the revenue of the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP)
for the twelve-month period ending on the Determination Date for
such Disposition (for which purpose, a Controlling Stock
Disposition with respect to any such Subsidiary shall be deemed
to be the disposition of Property of such Subsidiary that
produced all of the revenues of such Subsidiary).
(b) Notwithstanding anything in clauses (i)-(vi) of
Section 8.07(a) hereof to the contrary:
(i) the Company will not, and will not permit any of its
Subsidiaries or operating divisions (whether now owned or
existing or hereafter acquired or designated) to, sell, lease,
assign, transfer or otherwise dispose of (whether in one
transaction or in a series of transactions) any of its Property
(whether now owned or hereafter acquired) if such sale,
assignment, lease or other disposition (whether in one
transaction or in a series of transactions) shall have a Material
Adverse Effect; and
(ii) no Wholly-Owned Subsidiary of the Company shall be a
party to any merger or consolidation with, or shall sell, lease,
assign, transfer or otherwise dispose of any substantial part of
its Property to, any Subsidiary of the Company that is not a
Wholly-Owned Subsidiary of the Company.
8.08 Liens. The Company shall not, and shall not permit
any of its Subsidiaries to, create, assume or suffer to exist any Lien
upon any of its property or assets, now owned or hereafter acquired,
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securing any Indebtedness or other obligation except: (i) Liens
outstanding on the date hereof and listed in Schedule II hereto;
(ii) Liens for taxes or other governmental charges not yet delinquent;
(iii) Liens in respect of Property acquired or constructed or improved
by the Company or any such Subsidiary after the date hereof which
Liens exist or are created at the time of acquisition or completion of
construction or improvement of such Property or within six months
thereafter to secure Indebtedness assumed or incurred to finance all
or any part of the purchase price or cost of construction or
improvement of such Property, but any such Lien shall cover only the
Property so acquired or constructed and any improvements thereto (and
any real property on which such Property is located); (iv) Liens on
Property of any corporation that becomes a Subsidiary of the Company
after the date of this Agreement, provided that such Liens are in
existence at the time such corporation becomes a Subsidiary of the
Company and were not created in anticipation thereof; (v) Liens on
Property acquired after the date hereof, provided that such Liens were
in existence at the time such Property was acquired and were not
created in anticipation thereof; (vi) Liens imposed by law, such as
mechanics, materialmen, landlords, warehousemen and carriers Liens,
and other similar Liens, securing obligations incurred in the ordinary
course of business which are not past due for more than thirty days or
which are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established; (vii) Liens
under workmen's compensation, unemployment insurance, social security
or similar legislation; (viii) Liens, deposits, or pledges to secure
the performance of bids, tenders, contracts (other than contracts for
the payment of money), leases, public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds,
or other similar obligations arising in the ordinary course of
business; (ix) judgment and other similar Liens arising in connection
with court proceedings, provided the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings;
(x) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Company or any such
Subsidiary of the Property encumbered thereby in the normal course of
its business or materially impair the value of the Property subject
thereto; (xi) Liens securing obligations of any such Subsidiary to the
Company or another Subsidiary of the Company; (xii) Liens securing
obligations of the Company (in an aggregate amount not exceeding at
any one time the greater of (a) $175,000,000 and (b) an aggregate
amount equal to 75% of the sum of (i) the book value of the accounts
receivable of the Company and its Subsidiaries plus (ii) the unpaid
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amount of all accounts receivable that, but for the sale of such
accounts receivable pursuant to the Receivable Sales Agreements, would
have been reflected in accounts receivable on a consolidated balance
sheet of the Company and its Subsidiaries) pursuant to Receivables
Sale Agreements; and (xiii) other Liens securing Indebtedness in an
aggregate amount, which together with outstanding obligations referred
to in clause (xii) above, does not exceed 15% of Total Consolidated
Assets.
8.09 Lines of Businesses. Neither the Company nor any of
its Subsidiaries shall engage to any significant extent in any line or
lines of business other than the lines of business in which they are
engaged on the date hereof and any other line or lines of business
directly related to the manufacture, distribution and/or sale of
consumer or industrial products (collectively, "Permitted
Activities"). Notwithstanding the foregoing, the Company and its
Subsidiaries may engage in other lines of business as a result of the
acquisition of any Person primarily engaged in Permitted Activities so
long as the Company uses its best efforts to come into compliance with
the first sentence of this Section 8.09 within a reasonable period of
time after such acquisition.
8.10 Interest Coverage Ratio. The Company shall cause the
Interest Coverage Ratio, for any fiscal quarter of the Company, to be
greater than 3.0 to 1.
8.11 Total Indebtedness to Total Capital. The Company
shall not permit the ratio of Total Indebtedness to Total Capital at
any time to be greater than .50 to 1.
SECTION 9. EVENTS OF DEFAULT. If one or more of the
------------------
following events (herein called "Events of Default") shall occur and
be continuing:
(a) The Company shall default in the payment when due of
any principal of or interest on any Loan or any other amount
payable by it hereunder; or any Acceptance Account Party shall
default in the payment when due of any Acceptance Liability; or
(b) The Company or any of its Subsidiaries shall default in
the payment when due of any principal of or interest on any of
its other Indebtedness aggregating $10,000,000 or more; or any
event specified in any note, agreement, indenture or other
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document evidencing or relating to any Indebtedness aggregating
$20,000,000 or more shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause,
such Indebtedness to become due prior to its stated maturity or
to permit termination of the commitment to lend pursuant to any
such instrument or agreement; or
(c) Any representation, warranty or certification made or
deemed made by the Company or any Drawer herein, or by the
Company or any Guarantor or any Drawer in any certificate
furnished to any Bank or the Agent pursuant to the provisions
hereof or thereof, shall prove to have been false or misleading
as of the time made or furnished in any material respect; or
(d) The Company shall default in the performance of any of
its obligations under Section 8.01(f) or 8.05 through 8.11
(inclusive) hereof; or the Company shall default in the
performance of any of its other obligations in this Agreement and
such default shall continue unremedied for a period of 30 days
after notice thereof to the Company by the Agent or any Bank
(through the Agent); or
(e) The Company or any of its Significant Subsidiaries
shall admit in writing its inability to, or be generally unable
to, pay its debts as such debts become due; or
(f) The Company or any of its Significant Subsidiaries
shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the
Bankruptcy Code, or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced against the
Company or any of its Significant Subsidiaries without its
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application or consent, in any court of competent jurisdiction,
seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of it or of all or any substantial part of
its assets, or (iii) similar relief in respect of it under any
law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a
period of 60 days; or an order for relief against it shall be
entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money
in excess of $20,000,000 in the aggregate shall be rendered by a
court or courts against the Company and/or any of its
Subsidiaries and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 30 days from the date of
entry thereof and the Company or the relevant Subsidiary shall
not, within said period of 30 days, or such longer period during
which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during
such appeal; or
(i) An event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or Multi-
employer Plan of the Company and, as a result of such event or
condition, together with all other such events or conditions, the
Company or any ERISA Affiliate shall incur or in the opinion of
the Majority Banks shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which is, in the determination of
the Majority Banks, material in relation to the consolidated
financial position of the Company and its Subsidiaries (taken as
a whole); or
(j) An event of default (as defined in the Indenture) shall
occur and be continuing; or
(k) During any period of 25 consecutive calendar months
(i) individuals who were directors of the Company on the first
day of such period and (ii) other individuals whose election or
nomination to the Board of Directors of the Company was approved
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by at least a majority of the individuals referred to in clause
(i) above and (iii) other individuals whose election or
nomination to the Board of Directors of the Company was approved
by at least a majority of the individuals referred to in clauses
(i) and (ii) above shall no longer constitute a majority of the
Board of Directors of the Company;
THEREUPON: (i) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9 in respect of the
Company or any Acceptance Account Party, (x) the Agent may and, upon
request of the Majority Banks, shall, by notice to the Company, cancel
the Commitments and (y) the Agent may and, upon request of Banks
holding at least 66-2/3% of the aggregate unpaid principal amount of
Loans, and unpaid amount of Acceptance Liabilities, then outstanding
shall, by notice to the Company, declare the principal amount of and
the accrued interest on the Loans and Acceptance Liabilities, and all
other amounts payable by the Company or any Acceptance Account Party
hereunder and under the Notes, to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company and (in the case of
each Acceptance Liability) the Acceptance Account Party; and (ii) in
the case of the occurrence of an Event of Default referred to in
clause (f) or (g) of this Section 9 in respect of the Company or any
Acceptance Account Party, the Commitments shall be automatically
cancelled and the principal amount then outstanding of, and the
accrued interest on, the Loans and Acceptance Liabilities and all
other amounts payable by the Company or any Acceptance Account Party
hereunder and under the Notes shall become automatically immediately
due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by
the Company and (in the case of each Acceptance Liability) the
Acceptance Account Party.
SECTION 10. THE AGENT; THE CO-AGENT.
------------------------
10.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably (but subject to Section 10.08 hereof) appoints and
authorizes the Agent to act as its agent hereunder with such powers as
are specifically delegated to the Agent by the terms of this
Agreement, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence
and in Section 10.05 and the first sentence of Section 10.06 hereof
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shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents): (a) shall
have no duties or responsibilities except those expressly set forth in
this Agreement, and shall not by reason of this Agreement be a trustee
for any Bank; (b) shall not be responsible to the Banks for any
recitals, statements, representations or warranties contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by any of them under this Agreement, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note, or any other document
referred to or provided for herein or for any failure by the Company
or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder; and (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith, except for its own
gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Agent may deem and treat the payee of any
Syndicated Note as the holder thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall
have been filed with the Agent, together with the written consent of
the Company to such assignment or transfer.
10.02 Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including
any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf
of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by
the Agent. As to any matters not expressly provided for by this
Agreement, the Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with
instructions signed by the Majority Banks, and such instructions of
the Majority Banks and any action taken or failure to act pursuant
thereto shall be binding on all the Banks.
10.03 Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default unless the Agent has received
notice from a Bank or the Company specifying such Default and stating
that such notice is a "Notice of Default". In the event that the
Agent receives such a notice of the occurrence of a Default, the Agent
shall give prompt notice thereof to the Banks. The Agent shall
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(subject to Section 10.07 hereof) take such action with respect to
such Default as shall be directed by the Majority Banks, provided
that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it
shall deem advisable in the best interest of the Banks.
10.04 Rights as a Bank. With respect to its Commitment and
the Loans made, and the Acceptances created and discounted, by it,
Chase (and any successor acting as Agent), in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Agent in its individual capacity.
Chase (and any successor acting as Agent) and its affiliates may
(without having to account therefor to any Bank) accept deposits from,
lend money to and generally engage in any kind of banking, trust or
other business with the Company (and any of its affiliates) as if it
were not acting as the Agent, and Chase and its affiliates may accept
fees and other consideration from the Company for services in
connection with this Agreement or otherwise without having to account
for the same to the Banks.
10.05 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 11.03 hereof, but
without limiting the obligations of the Company under said
Section 11.03), ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or any other documents contemplated
by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses which the
Company is obligated to pay under Section 11.03 hereof but excluding,
unless a Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency duties
hereunder) or the enforcement of any of the terms hereof or of any
such other documents, provided that no Bank shall be liable for any of
the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or
any other Bank, and based on such documents and information as it has
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deemed appropriate, made its own credit analysis of the Company, the
Drawers and their respective Subsidiaries and decision to enter into
this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own analysis and decisions in taking or not taking action under
this Agreement. The Agent shall not be required to keep itself
informed as to the performance or observance by the Company or any
Drawer of this Agreement or any other document referred to or provided
for herein or to inspect the properties or books of the Company, any
Drawer or any of their respective Subsidiaries. Except for notices,
reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Bank with any credit or
other information concerning the affairs, financial condition or
business of the Company, the Drawers or any of their respective
Subsidiaries (or any of their affiliates) which may come into the
possession of the Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly required
of the Agent hereunder the Agent shall in all cases
be fully justified in failing or refusing to act hereunder unless it
shall be indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
10.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the
Agent may resign at any time by giving notice thereof to the Banks,
the Company and the Drawers and the Agent may be removed at any time
with or without cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice
of resignation or the Majority Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a bank which has an office in New
York, New York with a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the
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provisions of this Section 10 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent.
10.09 The Co-Agent. The Co-Agent referred to on the cover
page of this Agreement shall not have any rights or obligations under
this Agreement except in its capacity as a "Bank" hereunder.
SECTION 11. MISCELLANEOUS.
--------------
11.01 Waiver. No failure on the part of the Agent or any
Bank to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement,
any Note or any Acceptance Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or
privilege under this Agreement, any Note or any Acceptance Document
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
11.02 Notices. All notices and other communications
provided for herein (including, without limitation, any modifications
of, or requests, demands, waivers or consents under, this Agreement)
shall be given or made by telex, telecopy, telegraph, cable or in
writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any
party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly
given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as
aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Banks and the Agent for paying: (a) the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy,
special New York counsel to the Banks, in connection with (i) the
preparation, execution and delivery of this Agreement and the Notes,
the making of the Loans and the creation and discount of the
Acceptances hereunder and (ii) any amendment, modification or waiver
(whether or not such amendment, modification or waiver shall become
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effective) of any of the terms of this Agreement or any of the Notes
or Acceptance Documents; (b) all reasonable costs and expenses of the
Banks and the Agent (including reasonable counsels' fees) in
connection with the enforcement of this Agreement or any of the Notes
or Acceptance Documents; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of this Agreement, any of the Notes,
any Acceptance Document or any other document referred to herein. The
Company hereby agrees to indemnify the Agent and each Bank and their
respective directors, officers, employees and agents from, and hold
each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them arising out of or
by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other
proceedings) relating to any actual or proposed use by the Company or
any Subsidiary of the Company of the proceeds of any of the Loans or
Acceptances, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding any
such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to
be indemnified).
11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the
Company, the Drawers, the Agent and the Majority Banks, or by the
Company, the Drawers and the Agent acting with the consent of the
Majority Banks, and any provision of this Agreement may be waived by
the Majority Banks or by the Agent acting with the consent of the
Majority Banks; provided that no amendment, modification or waiver
shall, unless by an instrument signed by all of the Banks or by the
Agent acting with the consent of all of the Banks: (i) increase or
extend the term, or extend the time or waive any requirement for the
reduction or termination, of the Commitments, (ii) extend the date
fixed for the payment of any Acceptance Liability or any principal of
or interest on any Loan, (iii) reduce the amount of any Acceptance
Liability or any principal of any Loan or the rate at which interest
or any fee is payable hereunder, (iv) alter the terms of this Section
11.04, (v) amend the definition of the term "Majority Banks" or
(vi) waive any of the conditions precedent set forth in Section 6
hereof; and provided, further, that any amendment of Section 10
hereof, or which increase the obligations of the Agent hereunder,
shall require the consent of the Agent.
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11.05 Assignments and Participations.
(a) The Company may not assign any of its rights or
obligations hereunder or under the Notes, and neither the Company
nor any Acceptance Account Party may assign any of its rights or
obligations in respect of any Acceptance Liabilities, without the
prior consent of all of the Banks and the Agent.
(b) No Bank may assign all or any part of its Acceptance
Liabilities, its Loans, its Notes or its Commitment without the
prior consent of the Company and the Agent, which consent will
not be unreasonably withheld; provided that, (i) without the
consent of the Company or the Agent, any Bank may assign to
another Bank all or (subject to the further clauses below) any
portion of its Commitment; (ii) any such partial assignment shall
be not less than $5,000,000 and in multiples of $1,000,000 in
excess thereof; and (iii) such assigning Bank shall also
simultaneously assign the same proportion of each of its
Syndicated Loans then outstanding (together with the same
proportion of its Syndicated Note then outstanding). Upon
written notice to the Company and the Agent of an assignment
permitted by the preceding sentence (which notice shall identify
the assignee, the amount of the assigning Bank's Commitment,
Loans and Acceptance Liabilities assigned in detail reasonably
satisfactory to the Agent) and upon the effectiveness of any
assignment consented to by the Company and the Agent, the
assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment with the consent of the
Company and the Agent), the obligations, rights and benefits of a
Bank hereunder holding the Commitment, Loans and Acceptance
Liabilities (or portions thereof) assigned to it (in addition to
the Commitment, Loans and Acceptance Liabilities, if any,
theretofore held by such assignee) and the assigning Bank shall,
to the extent of any such Commitment assignment, be released from
its Commitment (or portions thereof) so assigned. Upon the
effectiveness of any assignment referred to in this
Section 11.05(b), the assigning Bank or the assignee Bank shall
pay to the Agent a transfer fee in an amount equal to $3,000.
(c) A Bank may sell or agree to sell to one or more other
Persons a participation in all or any part of its Commitment, its
Loans or its Acceptance Liabilities, in which event each such
participant shall be entitled to the rights and benefits of the
provisions of Section 8.01(g) hereof with respect to its
participation as if (and the Company shall be directly obligated
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to such participant under such provisions as if) such participant
were a "Bank" for purposes of said Section, but shall not have
any other rights or benefits under this Agreement or such Bank's
Notes or any Acceptance Document (the participant's rights
against such Bank in respect of such participation to be those
set forth in the agreement (the "Participation Agreement")
executed by such Bank in favor of the participant). All amounts
payable by the Company to any Bank under Section 5 hereof shall
be determined as if such Bank had not sold or agreed to sell any
participations and as if such Bank were funding all of its Loans
in the same way that it is funding the portion of its Loans in
which no participations have been sold. In no event shall a Bank
that sells a participation be obligated to the participant under
the Participation Agreement to take or refrain from taking any
action hereunder or under such Bank's Note or under any
Acceptance Document except that such Bank may agree in the
Participation Agreement that it will not, without the consent of
the participant, agree to (i) the increase, or the extension of
the term, or the extension of the time or waiver of any
requirement for the reduction or termination, of such Bank's
Commitment, (ii) the extension of any date fixed for the payment
of principal of or interest on any participated Loan or
Acceptance Liability or any portion of any fees payable to the
participant, (iii) the reduction of any payment of principal of
any participated Loan or Acceptance Liability, (iv) the reduction
of the rate at which either interest or (if the participant is
entitled to any part thereof) fees are payable hereunder to a
level below the rate at which the participant is entitled to
receive interest or fees (as the case may be) in respect of such
participation or (v) any modification, supplement or waiver
hereof or of any of the other Basic Documents to the extent that
the same, under the terms hereof or thereof, requires the consent
of each Bank.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.05, a
Bank may assign and pledge all or any portion of its Loans and
its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the
Bank from its obligations hereunder.
(e) A Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Bank
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from time to time to assignees and participants (including
prospective assignees and participants).
11.06 Survival. The obligations of the Company under
Sections 5.01 and 5.05 hereof, the obligations of the Banks under
Section 10.05 hereof and the obligations of Company under
Section 11.03 hereof shall survive the repayment of the Loans and
Acceptance Liabilities and the termination of the Commitments. In
addition, each representation and warranty made, or deemed to be made,
by a notice of borrowing of Loans or an Acceptance Quote Request for
the creation and discount of Acceptances hereunder shall survive the
making of such Loans or the creation and discount of such Acceptances,
and no Bank shall be deemed to have waived, by reason of making any
Loan, creating and discounting any Acceptance, any Default or Event of
Default which may arise by reason of such representation or warranty
proving to have been false or misleading, notwithstanding that such
Bank or the Agent may have had notice or knowledge or reason to
believe that such representation or warranty was false or misleading
at the time such Loan was made or such Acceptance was created and
discounted.
11.07 Captions. Captions and section headings appearing
herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this
Agreement.
11.08 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be identical and all of
which, when taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
11.09 Governing Law; Jurisdiction; Service of Process;
Waiver of Jury Trial; Etc.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND ANY ACTION OR PROCEEDING TO
EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED IN CONNECTION
THEREWITH, MAY BE INSTITUTED IN THE SUPREME COURT OF THE STATE OF NEW
YORK, COUNTY OF NEW YORK OR IN THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
GENERALLY (BUT NON-EXCLUSIVELY) TO THE JURISDICTION OF EACH SUCH
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Credit Agreement
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- 200 -
COURT. THE COMPANY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO THE COMPANY AT ITS ADDRESS SET FORTH UNDERNEATH ITS
SIGNATURE HERETO. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY FURTHER AGREES
THAT ANY SUCH ACTION OR PROCEEDING AGAINST THE AGENT AND/OR ANY OF THE
BANKS SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW
YORK, COUNTY OF NEW YORK OR IN THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND THE AGENT AND THE BANKS HEREBY
CONSENT TO THE JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.10 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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Credit Agreement
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- 201 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
NEWELL CO.
By /s/ C.R. Davenport
-----------------------------
Title: Vice President-Treasurer
Address for Notices:
Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Telecopy No.: 815-233-8060
Telephone No.: 815-233-8040
Attention: C.R. Davenport
Vice President and Treasurer
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- 202 -
THE DRAWERS
ANCHOR HOCKING CORPORATION
By /s/ C.R. Davenport
----------------------------
Title: Vice President-Treasurer
Address for Notices:
Anchor Hocking Corporation
c/o Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Telecopy No.: 815-233-8060
Telephone No.: 815-233-8040
Attention: C.R. Davenport
Vice President and Treasurer
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Credit Agreement
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- 203 -
NEWELL OPERATING COMPANY
By /s/ C.R. Davenport
-----------------------------
Title: Vice President-Treasurer
Address for Notices:
Newell Operating Company
c/o Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Telecopy No.: 815-233-8060
Telephone No.: 815-233-8040
Attention: C.R. Davenport
Vice President and Treasurer
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Credit Agreement
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- 204 -
THE AGENT
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By /s/ Alexander Danzberger
--------------------------
Title:
Address for Notices:
The Chase Manhattan Bank
(National Association),
as Agent
New York Agency
4 Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopy No.: 718-242-6910
Telephone No.: 718-242-7979
Attention: New York Agency
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- 205 -
THE BANKS
Commitment THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
$50,000,000 By /s/ Alexander H. Danzberger
----------------------------
Title:
Lending Office for all Credits:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Telecopy No.: (212) 552-1457
Telephone No.: (212) 552-2750
Attention: Alexander H. Danzberger
Vice President
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Credit Agreement
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- 206 -
Commitment ROYAL BANK OF CANADA
$50,000,000 By /s/ G. David Cole
-----------------------------
Title:
Lending Office for all Credits:
New York Branch
Royal Bank of Canada
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Address for Notices:
New York Branch
Royal Bank of Canada
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans
Administration
Telecopy No.: (718) 522-6292/3
Telephone No.: (212) 858-7168
with a copy to:
Royal Bank of Canada
One North Franklin Street
Suite 700
Chicago, Illinois 60606
Attention: G. David Cole,
Senior Manager
Telecopy No.: (312) 551-0805
Telephone No.: (312) 551-1618
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Credit Agreement
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EX-21
5
EXHIBIT 21.1
SUBSIDIARIES
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Anchor Hocking Corporation Delaware 100% of stock owned by
Newell Operating Company
Counselor Borg Scale Company Delaware 100% of stock owned by
Anchor Hocking Corporation
Eberhard Faber, Inc. Delaware 100% of stock owned by
Faber-Castell Corporation
Eberhard Faber, Inc. New Jersey 100% of stock owned by
Faber-Castell Corporation
Fabell Corporation New Jersey 100% of stock owned by
Faber-Castell Corporation
Faber-Castell Canada Ltd. Ontario, Canada 100% of stock owned by
Faber-Castell Corporation
Faber-Castell Corporation New Jersey 100% of stock owned by
Newell Co.
Faber-Castell Domestic New Jersey 100% of stock owned by
International Corporation Faber-Castell Corporation
Goody Products, Inc. Delaware 100% of stock owned by
Newell Co.
Intercraft Company Delaware 100% of stock owned by
Newell Co.
Lee-Rowan Company Missouri 100% of stock owned by
Newell Co.
Newell Finance Company Delaware 100% of stock owned by
Newell Operating Company
207
EXHIBIT 21.1
SUBSIDIARIES, CONTINUED
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Newell Holdings France S.A.S. France 1% of stock owned by
Newell Operating Company;
99% of stock owned by
Newell Investments Inc.
Newell Holdings U.K. Limited United Kingdom 100% of stock owned by
Newell Investments Inc.
Newell Iberica S.A. Spain 100% of stock owned by
Newell S.A.
Newell Industries Canada, Inc. Ontario, Canada 100% of stock owned by
Newell Operating Company
Newell International Jamaica 100% of stock owned by
Corporation Limited Newell Co.
Newell Investment Co. Limited Ontario, Canada 100% of stock owned by
Newell Co.
Newell Investments Inc. Delaware 100% of stock owned by
Newell Operating Company
Newell Limited United Kingdom 100% of stock owned by
Newell Holdings U.K.
Limited
Newell Operating Company Delaware 100% of stock owned by
Newell Co.
Newell Puerto Rico, Ltd. Delaware 100% of stock owned by
Anchor Hocking Corporation
Newell S.A. France 99% of stock owned by
Newell Holdings France
S.A.S.; Remaining 1% owned
by nominees as required by
statute.
Newell S.p.A. Italy 100% of stock owned by
Newell S.A.
208
EXHIBIT 21.1
SUBSIDIARIES, CONTINUED
Jurisdiction
of
Name Organization Ownership
---- ------------ ---------
Newell Window Furnishings, Inc. Delaware 100% of stock owned by
Newell Operating Company
NSM Industries, Inc. New Jersey 100% of stock owned by
Faber-Castell Corporation
N.V. Newell Benelux S.A. Belgium 99% of stock owned by
Newell S.A.; Remaining 1%
owned by nominees as
required by statute
Plastics, Inc. Delaware 100% of stock owned by
Anchor Hocking Corporation
Sanford Corporation Illinois 100% of stock owned by
Newell Co.
Sterling Plastics Co. New Jersey 100% of stock owned by
Sanford Corporation
Stuart Hall Company, Inc. Missouri 100% of stock owned by
Newell Co.
209
EX-23
6
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
As independent public accounts, we hereby consent to the incorporation
of our report dated January 28, 1995, included in this Form 10-K, into
the Company's previously filed Form S-8 Registration Statements File
Nos. 33-24447, 33-25196, 33-40641, 33-67620, 33-67632, 33-51063 and
33-51961, Form S-3 Registration Statement File No. 33-46208 and Post-
Effective Amendment No. 1 on Form S-8 to Form S-4 Registration
Statements File Nos. 33-49282 and 33-44957.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
March 24, 1995
210
EX-27
7
ART. 5 FDS FOR 10-K
5