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As filed with the Securities and Exchange Commission on February 14, 1997
Registration No. 33-54211
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 11 TO
REGISTRATION STATEMENT
ON FORM S-2
UNDER
THE SECURITIES ACT OF 1933
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WAXMAN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
5074
(Primary Standard Industrial Classification Code Number)
34-0899894
(I.R.S. Employer Identification Number)
24460 Aurora Road
Bedford Heights, Ohio 44146
(216) 439-1830
(Address, including zip code, and telephone number,
including area code, of registrant's principal offices)
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ARMOND WAXMAN
24460 Aurora Road
Bedford Heights, Ohio 44146
(216) 439-1830
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
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Copies to:
SCOTT M. ZIMMERMAN, ESQ.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE
PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES
EFFECTIVE.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: [X]
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box: [ ]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ] _________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission acting pursuant to said
section 8(a), may determine.
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WAXMAN INDUSTRIES, INC.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
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ITEM OF FORM S-2 PROSPECTUS CAPTION OR LOCATION
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1. Forepart of the Registration Statement and Outside Front Cover Page of Prospectus
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Available Information; Inside Front Cover and Outside
Page of Prospectus Back Cover Pages of Prospectus
3. Summary Information, Risk Factors and Prospectus Summary; Incorporation of Certain Information
Ratio of Earnings to Fixed Charges by Reference; Risk Factors.
4. Use of Proceeds Inside Front Cover Page of Prospectus; Prospectus
Summary; Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Security Holders; Plan of Distribution
8. Plan of Distribution Outside Front Cover Page of Prospectus; Plan of
Distribution
9. Description of Securities to be Registered Outside Front Cover Page of Prospectus; Prospectus
Summary; Description of Warrants; Description of Capital
Stock
10. Interests of Named Experts and Counsel Legal Matters
11. Information with Respect to the Registrant Outside Front Cover Page of Prospectus; Available
Information; Incorporation of Certain Information by
Reference; Prospectus Summary; Risk Factors
12. Incorporation of Certain Information by Available Information; Incorporation of Certain
Reference Information by Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act Liabilities
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED FEBRUARY 14, 1997
WAXMAN INDUSTRIES, INC.
2,864,000 WARRANTS TO PURCHASE SHARES OF COMMON STOCK
2,950,000 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
This Prospectus relates to the offer and sale of 2,864,000 warrants
("Restricted Warrants") to purchase shares of common stock, par value $.01 per
share (the "Common Stock"), of Waxman Industries, Inc. (the "Company") and the
2,950,000 shares of Common Stock, subject to adjustment, issuable upon exercise
of the Restricted Warrants and the Public Warrants (as defined below). The
Restricted Warrants and the Public Warrants are referred to collectively herein
as the "Warrants." An aggregate of 86,000 Warrants have been publicly traded
since the registration of the offer and sale of the Warrants in May 1996.
Therefore, this Prospectus does not cover the offer and sale of such 86,000
Warrants (the "Public Warrants"). The Restricted Warrants and shares of Common
Stock referenced above offered hereby are sometimes collectively referred to
herein as the "Securities." The Securities will be sold by the holders thereof
(the "Selling Security Holders"). See "Selling Security Holders."
On May 20, 1994, the Company issued Series A 12 3/4% Senior Secured
Deferred Coupon Notes Due 2004 having an initial accreted value of $50,000,000
(the "Notes") together with the Warrants in exchange for $50,000,000 aggregate
principal amount of the Company's then outstanding 13 3/4% Senior Subordinated
Notes due June 1, 1999 (the "Senior Subordinated Notes") pursuant to a private
exchange offer (the "Private Exchange Offer") which was a part of a series of
interrelated transactions (the "Reorganization"). In addition to the Private
Exchange Offer, the components of the Reorganization included (i) the
solicitation of the consents of the holders of the Company's 12.25% Fixed Rate
Senior Secured Notes due September 1, 1998 and Floating Rate Senior Secured
Notes due September 1, 1998 to certain waivers of and the adoption of certain
amendments to the indenture governing such Senior Secured Notes (which notes
were defeased by the Company), (ii) the establishment of a $55 million
revolving credit facility and a $15 million term loan (each of which were
refinanced) - See "Recent Developments," (iii) the solicitation of the consents
of the holders of the Senior Subordinated Notes to certain waivers of and the
adoption of certain amendments to the indenture governing the Senior
Subordinated Notes and (iv) the repayment of the borrowings under the Company's
then existing domestic revolving credit facilities.
Each Warrant entitles the holder thereof to purchase one share of
Common Stock, subject to adjustment in certain circumstances discussed below, at
a cash exercise price of $2.45 per share, subject to adjustment in certain
circumstances discussed below. The Company would receive all of the proceeds
from the exercise of the Warrants. The Warrants are currently exercisable and
expire on June 1, 2004. The Warrants were originally issued by the Company in a
private placement to certain institutional investors. There is presently no
active trading market for the Warrants and there can be no assurance that one
will develop. The Common Stock is traded on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "WAX." On January 23, 1997 the last reported
sales price per share of Common Stock, as reported by the NYSE, was $5 5/8.
The Securities are being offered for the accounts of the Selling
Security Holders. See "Selling Security Holders." The offer and sale of the
Securities is being registered under the Registration Statement of which this
Prospectus forms a part in order to satisfy certain obligations of the Company
contained in the Registration Rights Agreement (the "Equity Registration Rights
Agreement"), dated as of May 20, 1994, between the Company and The Huntington
National Bank, as Warrant Agent (the "Warrant Agent") under the Warrant
Agreement dated as of May 20, 1994 between such Warrant Agent and the Company,
on behalf of the original purchasers of the Warrants. The Company has agreed to
pay all expenses of this offering but will not receive any of the proceeds from
the sale of Securities being offered hereby. The aggregate proceeds to the
Selling Security Holders from the sale of the Securities will be the purchase
price of the Securities sold, less the aggregate underwriting fees, discounts
and commissions, if any. See "Plan of Distribution."
The Selling Security Holders directly, through agents designated from
time to time or through dealers or underwriters also to be designated, may sell
the Securities from time to time on terms to be determined at the time of sale.
To the extent required, the specific Securities to be sold, the names of the
Selling Security Holders, the purchase price, the public offering price, the
names of any such agents, dealers or underwriters and any applicable commissions
or discount with respect to a particular offer will be set forth in an
accompanying Prospectus supplement (or, if required, a post-effective amendment
to the Registration Statement of which this Prospectus forms a part). The
distribution of the Securities of the Selling Security Holders
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may be effected in one or more transactions that may take place on the NYSE or
the over-the-counter market, including ordinary broker's transactions, privately
negotiated transactions or through sales to one or more dealers for resale of
such securities as principals, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices.
Usual and customary or specifically negotiated brokerage fees, commissions or
discounts may be paid by the Selling Security Holders in connection with such
sales.
The Selling Security Holders and any broker-dealers, agents or
underwriters that participate with the Selling Security Holders in the
distribution of the Securities may be deemed to be "Underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any commissions received by them and any profit on the resale of the Securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Plan of Distribution" for indemnification
arrangements.
PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY SHOULD
CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER "RISK FACTORS."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE QUALIFIED FOR SALE
UNDER THE SECURITIES LAWS OF CANADA OR ANY PROVINCE OR TERRITORY OF CANADA. THE
SECURITIES ARE NOT BEING OFFERED FOR SALE AND MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN CANADA, OR TO ANY RESIDENT THEREOF, IN VIOLATION OF
THE SECURITIES LAWS OF CANADA OR ANY PROVINCE OR TERRITORY OF CANADA.
THIS DOCUMENT MAY NOT BE PASSED ON IN THE UNITED KINGDOM TO ANY PERSON
UNLESS THAT PERSON IS OF A KIND DESCRIBED IN ARTICLE 9(3) OF THE FINANCIAL
SERVICES ACT 1986 (INVESTMENT ADVERTISEMENTS) (EXEMPTIONS) ORDER 1988 OR IS A
PERSON TO WHOM THIS DOCUMENT MAY OTHERWISE LAWFULLY BE ISSUED OR PASSED ON.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRE NOR
THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN
THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT
ANY DOCUMENT FILED UNDER CHAPTER 421-B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE
FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN
ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL
TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE
MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
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THE DATE OF THIS PROSPECTUS IS , 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
Registration Statement, as well as such periodic reports, proxy statements and
other information, can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1400, Northwest Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661; and 7 World Trade Center, New York, New York
10048. Copies of such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission and the address of such site is
http://www.sec.gov. The Company's common stock is listed on the NYSE. Reports,
proxy statements and other information may also be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed a Registration Statement on Form S-2 (together
with all amendments thereto referred to herein as the "Registration Statement")
under the Act, with the Commission covering the securities being offered by this
Prospectus. This Prospectus does not contain all the information set forth or
incorporated by reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits and
schedules thereto which are on file at the offices of the Commission and may be
obtained upon payment of the fee prescribed by the Commission, or may be
examined without charge at the offices of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents
referred to are not necessarily complete, and are qualified in all respects by
such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 1996
filed with the Commission (File No.00-5888) pursuant to the Exchange Act, as
amended by an amendment on Form 10- K/A1 filed with the Commission on October
11, 1996 (as so amended, the "1996 Annual Report"), the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996 filed with the
Commission on November 8, 1996 (the "September 1996 10-Q") and the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1996 filed
with the Commission on February 14, 1997 (the "December 1996 10-Q" and,
together with the September 1996 10-Q and the 1996 Annual Report, the "Periodic
Reports").
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without
charge, upon request, a copy of any of the documents incorporated by reference
herein, except for the exhibits to such documents. Requests should be directed
to Waxman Industries, Inc. 24460 Aurora Road, Bedford Heights, Ohio 44146,
Telephone No: (216) 439-1830, attention: Vice-President-Finance.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information and financial
statements appearing elsewhere or incorporated by reference in this Prospectus.
References in this Prospectus to a particular fiscal year refer to the 12-month
period ended on June 30 in that year.
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. STATEMENTS IN THIS PROSPECTUS, INCLUDING INFORMATION INCORPORATED BY
REFERENCE HEREIN, INCLUDING STATEMENTS APPEARING IN THE ANNUAL REPORT UNDER THE
CAPTION "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS," AS WELL AS ORAL STATEMENTS THAT MAY BE
MADE BY THE COMPANY OR BY OFFICERS, DIRECTORS OR EMPLOYEES OF THE COMPANY
ACTING ON THE COMPANY'S BEHALF, THAT ARE NOT HISTORICAL FACT CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, THE RISK THAT THE COMPANY MAY NOT
BE ABLE TO IMPLEMENT ITS DELEVERAGING STRATEGY IN THE INTENDED MANNER, RISKS
ASSOCIATED WITH CERTAIN CUSTOMER CONCENTRATION ISSUES, CURRENTLY UNFORESEEN
COMPETITIVE PRESSURES AND RISKS AFFECTING THE COMPANY'S INDUSTRY SUCH AS
DECREASED CONSUMER SPENDING AND THE EFFECTS OF GENERAL ECONOMIC CONDITIONS. IN
ADDITION, THE COMPANY'S BUSINESS, OPERATIONS AND FINANCIAL CONDITION ARE
SUBJECT TO THE RISKS WHICH ARE DESCRIBED IN THE COMPANY'S REPORTS AND
STATEMENTS FILED FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE COMPANY
The Company believes it is one of the leading suppliers of plumbing
products to the repair and remodeling market in the United States. The Company
distributes plumbing, electrical and hardware products to approximately 46,000
customers in the United States, including, electrical and plumbing repair and
remodeling contractors and independent retailers. The Company's consolidated net
sales were $235.1 million and $65.9 million in fiscal 1996 and the three months
ended September 30, 1996, respectively.
The Company conducts its business primarily through its indirect
wholly-owned subsidiary Waxman Consumer Products Group Inc. ("Consumer
Products") and through Barnett Inc. ("Barnett"), of which the Company indirectly
owns approximately 49.9% of the outstanding common stock (the "Barnett Common
Stock"), and, through the ownership of certain non-voting convertible preferred
stock, owns approximately a 54% economic interest. The Company also owns several
smaller operations.
Consumer Products markets and distributes approximately 7,000 products
to a wide variety of retailers, primarily do-it-yourself ("D-I-Y") warehouse
home centers, home improvement centers, mass merchandisers, hardware stores and
lumberyards. Consumer Products' customers include large national retailers such
as Kmart, Builders Square and Wal-Mart. According to rankings of the largest
D-I-Y retailers published in National Home Center News, an industry trade
publication, Consumer Products' customers include 15 of the 25 largest D-I-Y
retailers in the United States. Consumer Products works closely with its
customers to develop comprehensive marketing and merchandising programs designed
to improve their profitability, efficiently manage shelf space, reduce inventory
levels and maximize floor stock turnover. For fiscal 1996, Consumer Products'
largest customers, Kmart and its subsidiary Builders Square, accounted for
approximately 42.3% of Consumer Products' total net sales.
Consumer Products' marketing strategy includes offering mass
merchandisers and D-I-Y retailers a comprehensive merchandising program which
includes design, layout and setup of selling areas. Sales and service personnel
assist the retailer in determining the proper product mix in addition to
designing department layouts to effectively display products and optimally
utilize available floor and shelf space. Consumer Products supplies
point-of-purchase displays for both bulk and packaged products, including
color-coded product category signs and color-coordinated bin labels to help
identify products, and backup tags to signify products that require reordering.
Consumer Products also offers certain of its customers the option of private
label programs for their plumbing and floor care products. In-house design,
assembly and packaging capabilities enable Consumer Products to react quickly
and effectively to service its customers' changing needs. In addition, Consumer
Products' products are packaged and designed for ease of use, with "how to"
instructions included to simplify installation, even for the uninitiated D-I-Y
consumer. Consumer Products' net sales for fiscal 1996 were $61.7 million. In
connection with a recent strategic reevaluation of the Consumer Products'
operations, Consumer Products decided to exit from the distribution
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of electrical products to further focus its strategic direction . The Company
believes that the reorientation of Consumer Products' strategic focus will
initially result in a decrease in net sales but will strengthen and improve the
Consumer Products business in the long-term.
Barnett is a direct marketer and distributor of an extensive line of
plumbing, electrical and hardware products to over 46,000 active customers
throughout the United States. Barnett offers approximately 9,000 name brand and
private label products through its industry-recognized Barnett(R) catalogs and
telesales operations. Barnett markets its products through three distinct,
comprehensive catalogs that target professional contractors, independent
hardware stores and maintenance managers. Barnett's staff of over 100
knowledgeable telesalespersons, customer service and technical support personnel
work together to serve customers by assisting in product selection and offering
technical advice. To provide rapid delivery and a strong local presence, Barnett
has established a network of 29 distribution centers strategically located in 29
major metropolitan areas throughout the United States. Through these local
distribution centers, approximately 70% of Barnett's orders are shipped directly
to the customer, in almost all cases, the same day of receipt of an order. The
remaining 30% of the orders are picked up by the customer at one of Barnett's
local distribution centers. Barnett's strategy of being a low-cost,
competitively priced supplier is facilitated by its volume of purchases and
offshore sourcing of a significant portion of its private label products.
Products are purchased from over 400 domestic and foreign suppliers.
Barnett believes that its distinctive business model has enabled it to
become a high-volume, cost-efficient direct marketer of competitively priced
plumbing, electrical and hardware products. Barnett's approximately 675-page
catalogs offer an extensive selection of products in an easy to use format
enabling customers to consolidate purchases with a single vendor. Barnett
provides an updated version of its catalogs to its customers on average four
times a year. To attract new customers and offer special promotions to existing
customers, Barnett supplements its catalogs with monthly promotional flyers.
Barnett's experienced and knowledgeable inbound telesales staff, located at
Barnett's centralized headquarters in Jacksonville, Florida, uses Barnett's
proprietary information systems to take customer orders as well as offer
technical advice. Barnett's highly trained outbound telesales staff maintains
frequent customer contact, makes telesales presentations and encourages
additional purchases. Targeted customer accounts are typically assigned an
outbound telesalesperson in order to enhance customer relationships and improve
customer satisfaction. Barnett's high in-stock position and extensive network of
local distribution centers enable it to fulfill approximately 94% of the items
included in each customer order and provide rapid delivery. Barnett's net sales
were $127.4 million in fiscal 1996.
The Company has several smaller operations which are conducted through
its other indirect wholly-owned subsidiaries, WOC Inc. ("WOC") and TWI,
International, Inc. ("TWI"). WOC includes four operations, the largest of which
are U.S. Lock ("U.S. Lock") - a distributor of a full line of security hardware
products and LeRan Gas Products ("LeRan") - a supplier of copper tubing, brass
fittings and other related products. WOC's other operations also include its
Madison Equipment division, a supplier of electrical products, and its Medal
Distributing division, a supplier of hardware products. TWI includes foreign
sourcing operations in Mexico, China and Taiwan which support Consumer Products,
Barnett and WOC. Net sales from these smaller operations were $46.0 million in
fiscal 1996.
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The current corporate structure of the Company is as follows:
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WAXMAN INDUSTRIES, INC.
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WAXMAN USA INC.
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BARNETT WAXMAN WOC INC. TWI, INTERNATIONAL INC.
INC.(1) CONSUMER AND SUBSIDIARIES
PRODUCTS
GROUP INC.
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<FN>
(1) Waxman USA Inc. ("Waxman USA"), a wholly owned subsidiary of the
Company, beneficially owns approximately 49.9% of the Barnett Common
Stock and, together with non-voting convertible preferred stock of
Barnett owned by Waxman USA , approximately 54% of the capital stock of
Barnett.
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RECENT DEVELOPMENTS
In August 1995, the Company announced that it had decided to sell its
Consumer Products business and entered into a letter of intent, which
subsequently expired, which contemplated the sale of the Consumer Products
business, together with certain supporting operations and certain home center
accounts now serviced by Barnett, to a group consisting of HIG Capital
Management of Miami, Florida along with certain members of Consumer Products'
existing management team. Since the consummation of Barnett's initial public
offering (the"Barnett Public Offering"), the Company has ceased its efforts to
sell Consumer Products and instead retains and continues to operate Consumer
Products and, for fiscal 1996, reported its results as a continuing operation.
Prior period consolidated financial statements have been reclassified to conform
with the current period presentation.
On February 1, 1996, Barnett filed a registration statement with the
Commission with respect to the Barnett Public Offering. On March 28, 1996, the
registration statement with respect to the Barnett Public Offering was declared
effective and on April 3, 1996, the Barnett Public Offering was consummated. In
such offering, 7,207,200 shares, representing approximately 55.1% of the Barnett
Common Stock, were sold in the aggregate by Barnett and Waxman USA, a direct
wholly-owned subsidiary of the Company, at an initial public offering price per
share of $14.00, resulting in aggregate net proceeds of $92.6 million. As a
result of the Company's ownership of certain convertible non-voting preferred
stock of Barnett, Waxman USA beneficially owns approximately 49.9% of the
Barnett Common Stock and, together with its remaining convertible non-voting
preferred stock, approximately a 54% economic interest in the capital stock of
Barnett. The Company recorded a $65.9 million pre-tax gain from the sale of the
Barnett Common Stock in fiscal 1996.
In connection with the Barnett Public Offering and as part of the
Company's efforts to decrease its leverage and increase its financial
flexibility, Waxman USA consummated an exchange offer (the "Exchange Offer")
pursuant to which it exchanged $43,026,000 principal amount of Waxman USA
11 1/8% Senior Notes due 2001 Series A (the "Senior Notes") for a like principal
amount of the Company's outstanding Senior Subordinated Notes and in connection
therewith solicited consents to certain amendments to the indenture pursuant to
which the Senior Subordinated Notes were issued. Generally, the amendments to
the Senior Subordinated Note indenture eliminate virtually all of the
restrictive covenants and events of defaults
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<PAGE> 9
previously contained in such indenture. In January 1997, the Company
consummated private exchange offers of an aggregate of $4,829,000 principal
amount of Senior Notes for a like principal amount of the Company's outstanding
Senior Subordinated Notes (the "Private Exchange Offers"). The Exchange Offer
and the Private Exchange Offers decreased the Company's cash interest burden
and extended the maturity of the Senior Subordinated Notes exchanged in the
Exchange Offer and the Private Exchange Offers until June 1, 2001. The Company
intends to exchange the remaining outstanding Senior Subordinated Notes, prior
to the maturity thereof, for a like principal amount of Senior Notes. However,
there can be no assurances that such exchanges will be consummated.
On June 28, 1996, Waxman USA refinanced its existing bank credit
facilities with a new credit facility (the "New Credit Agreement") provided by
BankAmerica Business Credit, Inc. The New Credit Agreement, which expires in May
1999, provides, among other things, for revolving credit advances of up to $30
million and term loans of up to $5.0 million. As of December 31, 1996,
availability under the New Credit Agreement totaled approximately $12.8 million.
In connection with the likely completion of the Barnett Public Offering
and consequent retention of the Consumer Products business, the Company embarked
upon a strategic review of Consumer Products and its other wholly-owned
operations, taking into account the difficulties encountered during the sale
process of Consumer Products, as well as the recent weaknesses in the industry
in which the Company competes. As a result of management's review and refocus of
Consumer Products as a continuing operation and consistent with its strategic
direction, an $11.9 million charge, primarily for a reduction in the carrying
value of day to day operating assets and liabilities, was recorded by Consumer
Products in its fiscal 1996 operating results. See "Management's Discussion and
Analysis of Financial Condition and Results of Operation" included in the 1996
Annual Report for a further discussion of these charges.
The traditional customers of certain of WOC's operations, smaller retail
establishments, have been adversely affected by the movement by large national
retailers to expand in more rural locations and to compete with such smaller
retail establishments. In addition, the market has been increasingly impacted by
the availability of lower cost foreign sourcing to both domestic and foreign
competitors. In connection with management's strategic review of its other
wholly-owned operations and as a result of business factors affecting these
other operations, including increased competition from multi-category retailers
and competitive pricing from overseas competitors, the effect of which was
exacerbated by excess manufacturing capacity at the Company's foreign
facilities, the Company recorded an additional charge of $2.9 million in the
fiscal 1996 fourth quarter operating results primarily for a reduction in the
carrying value of day to day operating assets and liabilities. In addition,
during the fourth quarter of fiscal 1996, the Company recorded a $19.5 million
pre-tax restructuring and asset impairment charge. See "Management's Discussion
and Analysis of Financial Condition and Results of Operation" included in the
1996 Annual Report for a further discussion of these charges.
Effective July 1, 1995, the Company changed its method of accounting for
procurement costs. Procurement costs represent the amount paid in connection
with a customer's commitment to purchase products from the Company for a
specified period. The amount capitalized is the consideration paid by the
Company to the new or existing customer (x) for the right to supply such
customer for a specified period and (y) to purchase competitor's merchandise
that the customer has on hand when it changes suppliers, less the salvage value
received by the Company. The Company believes that amortization in the fiscal
year incurred for such costs is consistent with the Company's strategic review
of Consumer Products and is preferable due to the uncertainty of today's
competitive retail environment. Previously, the Company amortized these costs
over the period deemed to be benefited. The cumulative effect of this change on
prior years of $8.2 million, without tax benefit, is reported separately in the
fiscal 1996 consolidated statement of operations. The additional effect of the
change in fiscal 1996 was to decrease the operating loss by $2.1 million.
The Company recorded an extraordinary charge of approximately $6.3
million in fiscal 1996 related to a premium paid on the retirement of its
12 1/4% and Floating Rate Senior Secured Notes due 1998 and the accelerated
amortization of the related unamortized debt discount and debt issuance costs
attributed to indebtedness repaid from the net proceeds of the Barnett Public
Offering, the Senior Notes and the New Credit Agreement.
Due to the identification and correction of an intercompany inventory
reconciling item between Consumer Products and the Company's Mexican sourcing
operations, a $2.3 million charge, originally recorded in the third quarter of
1996 has been reversed and charged to 1994 for $1.0 million, 1993 for $0.9
million, 1992 for $0.2 million and 1991 for $0.2 million. The Company has
restated prior year financial statements to reflect the correction of this item.
Since the consummation of the Barnett Public Offering, the cash flow
generated by such operations is no longer available to the Company. The Company
relies primarily on Consumer Products for cash flow. Consumer Products may
vii
<PAGE> 10
be adversely affected by prolonged economic downturns or significant declines
in consumer spending. There can be no assurance that any such prolonged
economic downturn or significant decline in consumer spending will not have a
material adverse impact on the Consumer Products' business and its ability to
generate cash flow. Furthermore, Consumer Products' largest customers, Kmart
and its subsidiary, Builders Square, accounted for approximately 42.3% of
Consumer Products' total net sales in fiscal 1996. The Company was advised by
Kmart that it recently conducted a review of its supply arrangements with its
suppliers of plumbing and hardware products, including Consumer Products, and
had determined to continue utilizing Consumer Products as a vendor. As a
result, the Company believes it will retain all of its Kmart business. However,
all large merchandisers review supply arrangements from time to time and there
can be no assurances that this relationship will continue or as to the terms of
any relationship that does continue. In addition, certain articles in the
financial press in the past year have questioned the financial condition of
Kmart. Furthermore, Kmart has stated that it intends to sell its Builders
Square business, which accounted for approximately 24.8% and 24.7%,
respectively, of Consumer Products' net sales in fiscal 1996 and fiscal 1995,
respectively. On February 3, 1997, Kmart issued a press release stating that
it was negotiating to sell its Builders Square business to HomeBase, a leading
regional warehouse home center, which is not a customer of Consumer Products.
In the event Consumer Products were to either lose Kmart as a customer or Kmart
were to significantly curtail its purchases from Consumer Products, there would
be material short-term adverse effects until the Company could modify Consumer
Products' cost structure to be more in line with its reduced revenue base.
viii
<PAGE> 11
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Securities Offered............................ 2,864,000 Restricted Warrants to purchase shares of
Common Stock. In addition, this Prospectus relates to the
2,950,000 shares of Common Stock issuable upon exercise of
the Warrants, subject to adjustment in the event of any
recapitalization, reclassification, stock dividend, stock
split, reverse stock split, stock issuance below fair market
value or other similar transaction.
Underlying Common Stock....................... Each Warrant is exercisable to purchase one share of
Common Stock subject to adjustment under certain
circumstances. See "Description of Warrants."
Exercise Price................................ $2.45 per share, subject to adjustment in certain
circumstances. See "Description of Warrants."
Exercise Period............................... The Warrants are currently exercisable. See "Description of
Warrants."
Expiration Date............................... The Warrants expire at 5:00 p.m. New York City time on
June 1, 2004.
Warrant Agent................................. The Huntington National Bank is serving as Warrant Agent
under the Warrant Agreement.
Common Stock
Number of Shares.............................. 2,950,000 shares, subject to adjustment in certain
circumstances, of Common Stock issuable upon the exercise
of the Warrants.
Common Stock Outstanding...................... 11,856,774 shares as of January 2, 1997 (including
9,703,878 shares of Common Stock and 2,152,896 shares of
Class B Common Stock).
NYSE symbol for
the Common Stock.............................. WAX
Proceeds of the Offering...................... All of the proceeds from the sale of Securities offered hereby
will be received by the Selling Security Holders. The
Company will not receive any of the proceeds from this
offering.
If all of the 2,864,000 Restricted Warrants offered hereby are
exercised at the initial exercise price of $2.45 per share, the
Company would receive $7,016,800, which would be added to the
Company's working capital and used for general corporate purposes,
including repayment of debt.
</TABLE>
For more complete information regarding the Warrants, see "Description
of Warrants."
RISK FACTORS
Prospective purchasers of Securities offered hereby should carefully
consider the matters set forth under "Risk Factors," as well as the other
information and data included in this Prospectus.
ix
<PAGE> 12
RISK FACTORS
Prospective purchasers of Securities offered hereby should carefully
read the entire Prospectus and, in particular, should consider, among other
things, the following risks.
LEVERAGE
The Company has a high degree of leverage. At December 31, 1996, the
outstanding consolidated indebtedness (excluding trade payables and accrued
liabilities) of the Company's wholly-owned operations was approximately $131.9
million. This high degree of leverage may have important consequences to the
Company, including the following: (i) the ability of the Company to obtain
additional financing in the future for working capital, capital expenditures,
debt service requirements or other purposes may be impaired; (ii) a substantial
portion of the Company's cash flow from operations will be required to satisfy
its debt service obligations; (iii) the Company may be more highly leveraged
than its competitors, which may place it at a competitive disadvantage; and
(iv) the Company's high degree of leverage may make it more vulnerable in the
event of a downturn in its business and may limit its ability to capitalize on
business opportunities. In addition to the other matters set forth herein under
"Risk Factors," the Company's future performance is subject to prevailing
economic conditions and financial, business and other factors, including
factors beyond the Company's control. The Company currently believes that it
must obtain a significant infusion of funds, either through additional debt
refinancing transactions or the sale of equity and/or assets before any further
significant deleveraging can occur. The $895,000 principal amount of Senior
Subordinated Notes not exchanged in the Exchange Offer and the Private Exchange
Offers mature in June 1999. In addition, cash interest on the Company's 12 3/4%
Senior Deferred Coupon Notes due 2004 (the "Deferred Coupon Notes") is payable
semi-annually commencing December 1999. The Company's management's current
projections indicate that there will not be sufficient cash flow from
operations to make the $895,000 principal payment in June 1999 on the Senior
Subordinated Notes not exchanged or the December 1999 cash interest payment on
the Deferred Coupon Notes. Accordingly, the Company's management currently
intends to pursue a sale of assets or other capital raising transaction to
satisfy such cash requirements. However, there can be no assurances that the
Company will be able to consummate any such sale or capital raising
transaction. There can also be no assurance that the Company will be able to
refinance the Senior Subordinated Notes, the Deferred Coupon Notes, or the
Senior Notes, respectively, at or prior to their respective maturities. In
addition, the Company is a holding company with no operations of its own and,
therefore, its ability to pay cash interest on the Notes commencing in December
1999, and any principal payments for the $895,000 principal amount of the
Senior Subordinated Notes not exchanged in the Exchange Offer, will require an
increase in the Company's cash flow from current levels or a substantial
reduction in the Company's level of indebtedness or the completion of other
capital raising transactions, including asset sales. There can be no assurance
that such increase in cash flow or reduction in indebtedness or other capital
raising transaction will occur.
To the Company's knowledge, its high degree of leverage has not resulted
in the refusal by any of its customers, suppliers or manufacturers to do
business with the Company or in the alteration of material terms which have had
a material impact on the Company's business.
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS; CONSEQUENCES OF FAILURE TO COMPLY
The terms and conditions of the indentures under which the Senior Notes
and Deferred Coupon Notes were issued, and the New Credit Agreement impose, and
any other future indebtedness of the Company will impose, contain material
restrictions that affect, among other things, the ability of the Company and/or
its respective subsidiaries to incur debt, pay dividends, make acquisitions,
create liens, sell assets and make certain investments and materially change the
nature or conduct of its business. Indentures to which the Company and Waxman
USA are currently party permit the respective company to sell assets to the
extent that such sales are for fair market value and the consideration received
by the selling company consists of at least 85% cash or cash equivalents and the
net proceeds not used to repay indebtedness senior to the securities issued
under the particular indenture, or such securities, or otherwise not reinvested
are used to offer to purchase the respective security issued under such
indenture. The New Credit Agreement provides that the proceeds from any asset
sale must be used to repay debt. The breach of any of the foregoing covenants
would result in a default under the applicable debt instrument permitting the
holders of indebtedness outstanding thereunder, subject to applicable grace
periods, to accelerate such indebtedness. Any such acceleration may cause a
cross-default under the instruments evidencing other indebtedness of the Company
and/or Waxman USA, including
x
<PAGE> 13
the indentures, and there can be no assurance that the Company and/or Waxman USA
would have sufficient funds to repay such obligations or assets to satisfy such
obligations in the event of an acceleration of such other indebtedness. The
Company was in compliance with all loan covenants as of December 31, 1996.
In addition, the New Credit Agreement requires Consumer Products and WOC
(the "Borrowers") to maintain cash collateral accounts into which all available
funds are deposited and applied to service amounts outstanding thereunder on a
daily basis. If Consumer Products and WOC, the borrowers under the New Credit
Agreement, were unable to borrow under the New Credit Agreement, due to a
default or due to the failure to meet any other condition required to be met
thereunder prior to borrowing (including any of the representations and
warranties contained therein not being correct before and after giving effect to
any such borrowing), the Borrowers would be left without an available source of
cash.
CONTROL BY PRINCIPAL STOCKHOLDERS; CERTAIN ANTI-TAKEOVER EFFECTS
Approximately 18.9% (and 12.3%, assuming the exercise of all of the
Warrants offered hereby) of the outstanding shares of the Company's common
stock, par value $.01 per share, and 82.8% of the outstanding shares of the
Company's Class B common stock are beneficially owned by Melvin and Armond
Waxman, brothers and the Chairman of the Board and Co-Chief Executive Officer
and President and Co-Chief Executive Officer, respectively, of the Company (the
"Principal Stockholders"). These holdings represent 62.1% (and 56.7%, assuming
the exercise of all of the Warrants offered hereby) of the outstanding voting
power of the Company. Consequently, the Principal Stockholders have sufficient
voting power to elect the entire Board of Directors of the Company and, in
general, to determine the outcome of any corporate transaction or other matter
submitted to the stockholders for approval, including any merger, consolidation,
sale of all or substantially all of the Company's assets or "going private"
transactions, and to prevent or cause a change in control of the Company. In
addition, certain provisions in the Company's Certificate of Incorporation,
By-laws and debt instruments, including the Change of Control provisions in the
Indenture governing the Notes, may be deemed to have the effect of discouraging
a third party from pursuing a non-negotiated takeover of the Company and
preventing certain changes in control.
DEFICIENCY OF EARNINGS TO FIXED CHARGES
For fiscal 1995, 1994, and for the three months ended September 30,
1996, the Company's earnings were insufficient to cover its fixed charges by
$11.7 million, $4.1 million and $1.9 million, respectively. The Company believes
that the successful implementation of its business strategy described herein
will enable it to reduce or eliminate the deficiency of earnings to fixed
charges. However, there can be no assurances regarding when such deficiencies
will be reduced or eliminated or that the deficiencies experienced in the past
will not reoccur.
FOREIGN SOURCING
For fiscal 1996, products manufactured outside of the United States
accounted for approximately 27.0% of the total product purchases made by the
Company. Foreign sourcing involves a number of risks, including the availability
of letters of credit, maintenance of quality standards, work stoppages,
transportation delays and interruptions, political and economic disruptions,
foreign currency fluctuations, expropriation, nationalization, the imposition of
tariffs and import and export controls and changes in governmental policies
(including United States' policy toward the foreign country where the products
are produced), which could have an adverse effect on the Company's business. The
occurrence of certain of these factors would delay or prevent the delivery of
goods ordered by the Company's customers, and such delay or inability to meet
delivery requirements could have an adverse effect on the Company's results of
operations and on the Company's relationships with its customers. In addition,
the loss of a foreign manufacturer could have a short-term adverse effect on the
Company's business until alternative supply arrangements were secured.
RELIANCE ON KEY CUSTOMERS
For fiscal 1996 and 1995 and the six months ended December 31, 1996,
Consumer Products' largest customer, Kmart and its subsidiary Builders Square,
accounted for approximately 11.1%, 13.5% and 8.9%, respectively, of the
Company's total net sales and 42.3%, 43.6% and 38.6%, respectively, of Consumer
Products' total net sales. During the
xi
<PAGE> 14
same periods, the Company's ten largest customers accounted for approximately
22.9%, 24.1% and 19.1%, respectively, of the Company's total net sales. The
loss of, or a substantial decrease in, the business of one or more of the
Company's largest customers could have a material adverse effect on the
Company's operations. The Company was advised by Kmart that it recently
conducted a review of its supply arrangements with its suppliers of plumbing
and hardware products, including Consumer Products, and had determined to
continue utilizing Consumer Products as a vendor. As a result, the Company
believes it will retain all of its Kmart business. However, all large
merchandisers review supply arrangements from time to time and there can be no
assurances that this relationship will continue or as to the terms of any
relationship that does continue. In addition, certain articles in the financial
press in the past year have questioned the financial condition of Kmart,
Consumer Products' largest customer. Furthermore, Kmart has stated that it
intends to sell its Builders Square business, which accounted for approximately
24.8% and 24.7% , respectively, of Consumer Products' net sales in fiscal 1996
and fiscal 1995, respectively. On February 3, 1997, Kmart issued a press
release stating that it was negotiating to sell its Builders Square business to
HomeBase, a leading regional warehouse home center, which is not a customer of
Consumer Products. There can be no assurance that any purchaser of Builders
Square will continue to do business with the Company or to the extent it does
continue to do business with the Company, as to the amount, terms or conditions
of any sales by such purchaser. Since the consummation of the Barnett Public
Offering, the Company and Waxman USA rely primarily on Consumer Products for
cash flow. Consumer Products' customers include D-I-Y warehouse home centers,
home improvement centers, mass merchandisers, hardware stores and lumberyards.
Consumer Products may be adversely effected by prolonged economic downturns or
significant declines in consumer spending. There can be no assurance that any
such prolonged economic downturn or significant decline in consumer spending
will not have a material adverse impact on Consumer Products' business and its
ability to generate cash flow.
PROCEEDS OF THE OFFERING
The Company will not receive any of the proceeds of this offering. All
of the proceeds of this offering will be received by the Selling Security
Holders.
ABSENCE OF PUBLIC MARKET; EFFECT OF MARKET PRICE OF BARNETT COMMON STOCK
At present, the Warrants are owned by a small number of investors and
there is no active trading market for the Warrants. If an active trading market
does not develop, purchasers of the Warrants may have difficulty liquidating
their investment and the Warrants may not be readily accepted as collateral for
loans. Accordingly, no assurances can be given as to the price at which holders
of the Warrants will be able to sell the Warrants, if at all.
The liquidity of and the market prices for the Warrants and Common Stock
can be expected to vary with changes in market and economic conditions, the
financial condition and prospects of the Company and other factors that
generally influence the market prices of securities, including fluctuations in
the market for warrants and common stock generally. In addition, the market
price of the Common Stock may be effected by the market price of the Barnett
Common Stock, which may be affected by the factors enumerated in the preceding
sentence.
POSSIBLE FUTURE SALES OF SHARES BY THE SELLING SECURITY HOLDERS
Subject to the restrictions described under "Risk Factors -- Shares
Eligible for Future Sale" and applicable law, upon the effectiveness of the
Registration Statement of which this Prospectus forms a part, the Selling
Security Holders could cause the sale of any or all of the Warrants or
underlying shares of Common Stock they own. The Selling Security Holders may
determine to sell Warrants or the underlying shares of Common Stock from time to
time for any reason. Although the Company can make no prediction as to the
effect, if any, that sales of Warrants or shares of Common Stock owned by the
Selling Security Holders would have on the market price of Common Stock
prevailing from time to time, sales of substantial amounts of Warrants or Common
Stock, or the availability of such Warrants or shares of Common Stock for sale
in the public market, could adversely affect prevailing market prices of the
Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
As of January 2, 1997, there were 9,703,878 shares of Common Stock
outstanding and 2,152,896 shares of Class B Common Stock outstanding
(convertible into 2,152,896 shares of Common Stock). To the extent such shares
are not held by "affiliates" or otherwise subject to restrictions on resale,
including those imposed by Section 16(b) of the Exchange Act, the Warrants, and
upon exercise of the Warrants, the shares of Common Stock which are issuable
upon
xii
<PAGE> 15
exercise of the Warrants and offered hereby are eligible for sale in the public
market. Although the Company can make no prediction as to the effect, if any,
that sales of the Warrants and shares of Common Stock referred to above would
have on the market price of the Common Stock prevailing from time to time, sales
of a substantial amount of Warrants or Common Stock, or the availability of such
Warrants or shares of Common Stock for sale in the public market could adversely
affect prevailing market prices of the Common Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Securities offered hereby, all of which will be received by the Selling Security
Holders.
If all of the 2,864,000 Warrants offered hereby are exercised at the
initial exercise price of $2.45 per share, the Company would receive $7,016,800,
which would be added to the Company's working capital and used for general
corporate purposes.
SELLING SECURITY HOLDERS [TO BE UPDATED]
The following table sets forth certain information with respect to the
Securities beneficially owned and offered hereby by each Selling Security
Holder.
<TABLE>
<CAPTION>
Name Warrants Owned Warrants Offered
- ---- -------------- ----------------
<S> <C> <C>
Bank Of New York 277,000 277,000
Bear Stern Securities Corp. 596,500 596,500
Donaldson, Lufkin & Jenrette 67,100 67,100
First Options of Chicago, Inc. 30,000 30,000
Goldman, Sachs & Co. 96,100 96,100
UMB Bank, N.A./IFTC 1,162,300 1,162,300
Lehman Brothers, Inc. 80,000 80,000
Merrill Lynch, Pierce, Fenner & Smith, Inc. 150,000 150,000
Morgan Stanley & Co., Incorporated 44,000 44,000
Neuberger & Berman 36,500 36,500
SSB Custodian 324,500 324,500
Total 2,864,000 2,864,000
</TABLE>
- ---------------
The Company is registering, on behalf of each Selling Security Holder,
the offer and sale of the number of Warrants set forth opposite such Selling
Security Holder's name under the column captioned "Warrants Offered" and the
same number of shares of Common Stock, subject to adjustment in certain
circumstances, issuable upon exercise of the Warrants. As of the date hereof, no
Warrants have been exercised to purchase shares of Common Stock. In addition,
the Company is registering on behalf of Lehman Brothers, Inc. and Goldman Sachs
& Co., the offer and sale of 66,000 and 20,000, respectively, shares of Common
Stock issuable upon the exercise of Public Warrants.
Because the Selling Security Holders may offer all or some part of the
Securities pursuant to this Prospectus and because this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of
xiii
<PAGE> 16
Securities to be offered for sale by the Selling Security Holders nor the amount
of Securities that will be held by the Selling Security Holders upon termination
of this offering. See "Plan of Distribution." To the extent required, the
specific amount of Securities to be sold by the Selling Security Holders in
connection with a particular offer will be set forth in an accompanying
Prospectus supplement.
DESCRIPTION OF THE WARRANTS
The Warrants were issued pursuant to the terms of a Warrant Agreement,
dated as of May 20, 1994 (the "Warrant Agreement"), by and between the Company
and The Huntington National Bank, as warrant agent (the "Warrant Agent"), on
behalf of the original purchasers of the Warrants. The following summary of the
material provisions of the Warrant Agreement and the Warrant Certificate
attached thereto (the "Warrant Certificate") does not purport to be complete,
and where reference is made to particular provisions of the Warrant Agreement or
the Warrant Certificate, such provisions, including the definitions of certain
terms, are qualified in their entirety by reference to all of the provisions of
the Warrant Agreement and Warrant Certificate, which have been filed or
incorporated by reference as exhibits to the Registration Statement of which
this Prospectus forms a part.
The Warrants are currently exercisable. The Warrants will expire June 1,
2004. Upon exercise, each Warrant entitles the holder to receive one Warrant
Share at a cash exercise price of $2.45, subject to adjustment in certain
circumstances.
Holders of the Warrants do not have any of the rights or privileges of
the stockholders of the Company, including voting rights to receive dividends,
prior to exercise of the Warrants. The Company has reserved out of its
authorized but unissued shares a sufficient number of shares of Common Stock for
issuance upon exercise of the Warrants. The Common Stock issuable on exercise of
the Warrants will be, when issued, fully paid and nonassessable.
ANTI-DILUTION
The Warrants contain customary anti-dilution provisions, including
adjustments in the event of a reclassification, recapitalization, stock
dividend, stock split, reverse stock split, stock issuance below fair market
value or other similar transaction, and including protections in the event of a
transaction in which the Company is not the surviving entity.
METHOD OF EXERCISE
The Warrants may be exercised by surrendering to the Warrant Agent the
Warrant Certificates evidencing such Warrants, with the accompanying form of
election to purchase properly completed and executed. Upon surrender of the
Warrant Certificates and payment in cash of the exercise price, the Warrant
Agent will deliver, or cause to be delivered, to or upon the written order of
such holder, certificates representing the Warrant Shares to which such holder
is entitled.
Warrant Certificates will be issued in registered form only and no
service charge shall be made for registration of transfer or exchange upon
surrender of any Warrant Certificate at the office of the Warrant Agent
maintained for that purpose. The Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Warrant Certificates.
AMENDMENT
From time to time, the Company and the Warrant Agent, without the
consent of the holders of the Warrants, may amend or supplement the Warrant
Agreement for certain purposes, including curing defects or inconsistencies or
making any change that does not adversely affect the rights of any holder. Any
amendment or supplement to the Warrant Agreement that has an adverse effect on
the interests of holders or that affects the anti-dilution provisions contained
therein shall require the written consent of registered holders of a majority of
the then outstanding Warrants. The consent of each holder of an Warrant affected
shall be required for any amendment pursuant to which the number of Warrant
Shares which could be acquired upon exercise of Warrants would be decreased or
the exercise period for the Warrants would be modified in any manner.
xiv
<PAGE> 17
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 2,000,000 shares
of Preferred Stock, $.01 par value, 22,000,000 shares of Common Stock, $.01 par
value, and 6,000,000 shares of Class B Common Stock, $.01 par value. As of
January 2, 1997, no shares of Preferred Stock, 9,703,878 shares of Common Stock
and 2,152,896 shares of Class B Common Stock were issued and outstanding.
COMMON STOCK AND CLASS B COMMON STOCK
Each share of Common Stock entitles the holder to one vote on all
matters submitted to the stockholders, including the election of directors, and
each share of Class B Common Stock entitles the holder to ten votes on all such
matters. Except as set forth below, all actions submitted to a vote of
stockholders are voted on by holders of Common Stock and Class B Common Stock
voting together as a single class. The holders of Common Stock and Class B
Common Stock vote separately as classes with respect to any amendments to the
Company's Certificate of Incorporation that alter or change the powers,
preferences or special rights of their respective classes of stock so as to
affect them adversely, and with respect to such other matters as may require
class votes under the Delaware General Corporation Law (the "DGCL").
Dividends on the Class B Common Stock may not exceed those on the Common
Stock. Each share of Common Stock and Class B Common Stock is equal in respect
of rights to dividends and other distributions in stock or property of the
Company (including distributions upon liquidation of the Company), except that
in the case of dividends or other distributions payable on the Common Stock and
the Class B Common Stock in shares of such stock, including distributions
pursuant to split-ups or divisions of the Common Stock or the Class B Common
Stock, only Common Stock will be distributed with respect to Common Stock and
only Class B Common Stock will be distributed with respect to Class B Common
Stock. In no event will either the Common Stock or the Class B Common Stock be
split, divided or combined unless the other is split, divided or combined
equally.
The Class B Common Stock is not transferable by a holder except to or
among such holder's spouse, certain of such holder's relatives and certain
trusts established for their benefit. The Class B Common Stock is convertible
into Common Stock on a share-for-share basis at any time.
If the number of outstanding shares of Class B Common Stock at any time
falls below 250,000 (as adjusted for any stock splits, combinations, stock
dividends or further issuances of Class B Common Stock), the outstanding shares
of Class B Common Stock will automatically be converted into shares of Common
Stock.
The Class B Common Stock may tend to have an anti-takeover effect. Since
voting control of the Company is vested primarily in the holders of the Class B
Common Stock, the issuance of the Class B Common Stock could render more
difficult, or discourage, a hostile merger proposal, a tender offer or a proxy
contest, even if such actions were favored by a majority of the holders of
Common Stock. As of January 2, 1997, Melvin Waxman and Armond Waxman
beneficially owned an aggregate of approximately 82.8% of the outstanding Class
B Common Stock and 62.1% of the aggregate outstanding voting power of the
Company.
The transfer agent and registrar for the Common Stock and Class B Common
Stock is American Stock Transfer & Trust Company, New York, New York.
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more
series, and the Board of Directors is authorized to fix the dividend rights and
terms, any conversion rights, any voting rights, any redemption rights and terms
(including sinking fund provisions), the rights in the event of liquidation and
any other rights, preferences, privileges and restrictions of any series of
Preferred Stock, as well as the number of shares constituting such series and
the designation thereof. The Preferred Stock, if issued, will rank senior to the
Company Common Stock as to dividends and as to liquidation preference. Holders
of Preferred Stock will have no preemptive rights. The issuance of shares of
Preferred Stock could have an anti-takeover effect under certain circumstances.
The issuance of shares of Preferred Stock could enable the Board of Directors to
render more difficult or discourage an attempt to obtain control of the Company
by means of a merger, tender
xv
<PAGE> 18
offer or other business combination transaction directed at the Company by,
among other things, placing shares of Preferred Stock with investors who might
align themselves with the Board of Directors, issuing new shares to dilute stock
ownership of a person or entity seeking control of the Company or creating a
class or series of Preferred Stock with voting rights. The issuance of shares of
the Preferred Stock as an anti-takeover device might preclude stockholders from
taking advantage of a situation which they believed could be favorable to their
interests. No shares of Preferred Stock are outstanding, and the Company has no
present plans to issue any shares of Preferred Stock.
PLAN OF DISTRIBUTION
Any or all of the Securities may be sold from time to time to purchasers
directly by the Selling Security Holders. Alternatively, the Selling Security
Holders may from time to time offer the Securities through underwriters, dealers
or agents who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Security Holders and/or the
purchasers of Securities for whom they may act as agents. The Selling Security
Holders and any such underwriters, dealers or agents that participate in the
distribution of Securities may be deemed to be underwriters under the Securities
Act, and any profit on the sale of the Securities by them and any discounts,
commissions or concessions received by them may be deemed to be underwriting
discounts and commissions under the Securities Act. The Securities may be sold
from time to time in one or more transactions at a fixed offering price, which
may be changed, or at varying prices determined at the time of sale or at
negotiated prices. The distribution of Securities by the Selling Security
Holders may be effected in one or more transactions that may take place on the
NYSE or the over-the-counter market, including ordinary broker's transactions,
privately-negotiated transactions or through sales to one or more broker-dealers
for resale of such shares as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices. Usual and customary or specifically negotiated brokerage fees, discounts
and commissions may be paid by the Selling Security Holders in connection with
such sales of securities.
At the time a particular offer of Securities is made, to the extent
required, a supplement to this Prospectus will be distributed (or, if required,
a post-effective amendment to the Registration Statement of which this
Prospectus is a part will be filed) which will identify the specific Securities
being offered and set forth the aggregate amount of Securities being offered,
the purchase price and the terms of the offering, including the name or names of
the Selling Security Holders and of any underwriters, dealers or agents, the
purchase price paid by any underwriter for Securities purchased from the Selling
Security Holders, any discounts, commissions and other items constituting
compensation from the Selling Security Holders and/or the Company and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
including the proposed selling price to the public. In addition, an underwritten
offering will require clearance by the National Association of Securities
Dealers, Inc. of the underwriter's compensation arrangements. The Company will
not receive any of the proceeds from the sale by the Selling Security Holders of
the Securities offered hereby. All of the filing fees and other expenses of this
Registration Statement will be borne in full by the Company, other than any
underwriting fees, discounts and commissions relating to this offering.
Pursuant to the Equity Registration Rights Agreement, the Company will
use its best efforts to keep the Registration Statement of which this Prospectus
forms a part effective under the Act for a period of three years following the
initial effective date of such Registration Statement (or such shorter period as
permitted under the Equity Registration Rights Agreement) and the Company will
pay substantially all of the expenses incident to the offering and sale of the
Securities to the public, other than underwriting fees, discounts and
commissions. The Equity Registration Rights Agreement provides for
cross-indemnification of the Selling Security Holders and the Company, to the
extent permitted by law, for losses, claims, damages, liabilities and expenses
arising, under certain circumstances, out of any registration of the Securities.
The Equity Registration Rights Agreement also provides that in connection with
an underwriting offering, the Company will indemnify the underwriters thereof,
their officers and directors and each person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided with
respect to the indemnification of the Selling Security Holders signatory to such
agreement, except with respect to information provided by such underwriters
specifically for inclusion within the appropriate registration statement. The
period beginning on the date the Equity Registration Statement is first declared
effective by the Commission and ending on the date which is three years after
the expiration of the Warrants or, if earlier, the date on which all Warrants
and Warrant Shares have been sold pursuant to the Equity Registration Statement
or the date three years after all Warrants have been exercised, is referred to
as the "Effectiveness Period." In the event that the Equity Registration
Statement is not filed or effective by, or continuously effective through, the
dates referred to above
xvi
<PAGE> 19
or prior to the end of the Effectiveness Period, the Commission shall have
issued a stop order suspending the effectiveness of the Equity Registration
Statement or the prospectus contained in the Equity Registration Statement, as
amended or supplemented, shall (x) not contain current information required by
the Securities Act and the rules and regulations promulgated thereunder or (y)
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, the
Company agreed to pay, or cause to be paid, as liquidated damages and not as a
penalty, to each holder of a Warrant or Warrant Share, an amount equal to
$0.0025 per week per Warrant or Warrant Share, as the case may be, for each week
beginning on such date and ending 90 days thereafter. Such liquidated damages
shall be increased by $0.0025 per week per Warrant or Warrant Share, as the case
may be, at the beginning of each subsequent 90-day period up to a maximum
aggregate amount of $0.01 per week per Warrant or Warrant Share, as the case may
be. The Company agreed to pay all expenses incident to the Company's performance
of or compliance with the Equity Registration Rights Agreement, including the
reasonable fees and expenses of counsel to the original purchasers of the
Warrants but excluding any underwriting fees, discounts or commissions
attributable to the sale of the Warrants or Warrant Shares. Each of the Company
and the Warrant Agent, on behalf of the original purchasers of the Warrants,
pursuant to the Equity Registration Rights Agreement, agreed to indemnify the
other party, its officers, directors and controlling persons in respect of
certain liabilities and expenses arising, under certain circumstances, out of
any registration of the Securities pursuant to the Equity Registration Rights
Agreement.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not simultaneously engage
in market making activities with respect to the Securities for a period of two
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, the Selling Security Holders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rules 10b-6 and 10b-7, which provisions
may limit the timing of purchases and sales of the Securities by the Selling
Security Holders.
In order to comply with certain states' securities laws, if applicable,
the Securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the Securities may not be sold
unless the Securities have been registered or qualified for sale in such state,
or unless an exemption from registration or qualification is available and is
obtained.
The Warrants originally issued by the Company in the Private Exchange
Offer contained legends as to their restricted transferability. In addition, the
certificates for Common Stock issuable upon exercise of the Warrants would
contain, legends as to their restricted transferability. Upon the effectiveness
of the Registration Statement of which this Prospectus forms a part and the
transfer of the Securities pursuant thereto, these legends will no longer be
necessary, and accordingly, new certificates representing such Securities will
be issued to the transferee without any such legends unless otherwise required
by law.
In addition to sales pursuant to the Registration Statement of which
this Prospectus forms a part, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants may be sold in accordance with Rule 144
under the Securities Act.
LEGAL MATTERS
The legality of the securities covered by this Prospectus has been
passed upon by Shereff, Friedman, Hoffman & Goodman, LLP, New York, New York,
counsel to the Company.
EXPERTS
The consolidated financial statements of the Company as of June 30, 1995
and June 30, 1996 and for each of the three years in the period ended June 30,
1996 appearing in the Company's Annual Report and incorporated by reference in
this Prospectus and elsewhere in this Registration Statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said report, which includes an explanatory paragraph with
xvii
<PAGE> 20
respect to the change in the method of accounting for certain long-lived assets
and procurement costs and for distribution center start-up and catalog
development costs as discussed in Notes 3 and 4 to the consolidated financial
statements.
xviii
<PAGE> 21
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE HEREIN, IN CONNECTION WITH THIS OFFER AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THESE SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
----
<S> <C>
Available Information............................ 3
Incorporation of Certain
Documents by Reference....................... 3
Prospectus Summary............................... 4
Risk Factors..................................... 10
Use of Proceeds.................................. 13
Selling Security Holders......................... 13
Description of Warrants.......................... 14
Description of Capital Stock..................... 15
Plan of Distribution............................. 16
Legal Matters.................................... 18
Experts.......................................... 18
</TABLE>
WAXMAN INDUSTRIES, INC.
2,864,000
WARRANTS TO
PURCHASE COMMON STOCK
---------
2,950,000
SHARES OF
COMMON STOCK
PAR VALUE $.01 PER SHARE
---------
PROSPECTUS
---------
, 1997
---------
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following expenses incurred in connection with this Registration
Statement will be paid by the Company. The Selling Security Holders will not
bear any of such expenses.
<TABLE>
<CAPTION>
<S> <C>
Filing Fees - Securities and Exchange Commission $ --
Accounting Fees and Expenses 5,000*
Legal Fees and Expenses 15,000*
Printing Fees and Expenses 2,500*
Miscellaneous Expenses 2,500*
--------
Total $25,000*
<FN>
* Estimated
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The indemnification of officers and directors of the Registrant is
governed by Section 145 of the DGCL and the Certificate of Incorporation of the
Company (the "Certificate"). Among other things, the DGCL permits
indemnification of a director, officer, employee or agent in civil, criminal,
administrative or investigative actions, suits or proceedings (other than an
action by or in the right of the corporation) to which such person is a party or
is threatened to be made a party by reason of the fact of such relationship with
the corporation or the fact that such person is or was serving in a similar
capacity with another entity at the request of the corporation against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action if such
person 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, if he had no reasonable cause to believe his
conduct was unlawful. No indemnification may be made in any such suit to any
person adjudged to be liable to the corporation unless and only to the extent
that the Delaware Court of Chancery or the court in which the action was brought
determines that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper. Under the DGCL,
to the extent that a director, officer, employee or agent is successful, on the
merits or otherwise, in the defense of any action, suit or proceeding or any
claim, issue or matter therein (whether or not the suit is brought by or in the
right of the corporation), he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. In all cases in which indemnification is permitted (unless ordered by
a court), it may be made by the corporation only as authorized in the specific
case upon a determination that the applicable standard of conduct has been met
by the party to be indemnified. The determination must be made by a majority of
the directors who were not parties to the action, suit or proceeding, even
though less than a quorum, or if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or by
the stockholders. The statute authorizes the corporation to pay expenses
(including attorneys' fees) incurred by an officer or director in advance of a
final disposition of a proceeding upon receipt of an undertaking by or on behalf
of the person to whom the advance will be made, to repay the advances if it
shall ultimately be determined that he was not entitled to indemnification. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be paid upon such terms and conditions, if any, as the Board may determine. The
DGCL provides that indemnification and advances of expenses permitted thereunder
are not to be exclusive of any rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote of
stockholders or disinterested directors, or otherwise. The DGCL also authorizes
the corporation to purchase and maintain liability insurance on behalf of its
directors, officers, employees and agents regardless of whether the corporation
would have the statutory power to indemnify such persons against the liabilities
insured.
II-1
<PAGE> 23
The Certificate of Incorporation of the Company provides that each
person who is a party to or involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
or she was a director or officer of the Company, shall be indemnified and held
harmless by the Company to the fullest extent authorized by the DGCL against all
expense, liability and loss reasonably incurred by such person in connection
therewith. The Certificate of Incorporation provides that the right to
indemnification contained therein is a contract right and includes the right to
be paid by the Company the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that if the DGCL requires,
the payment of such expenses incurred in advance of the final disposition of a
proceeding shall be made only upon delivery to the Company of an undertaking to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified. The Company maintains
directors' and officers' liability insurance covering certain liabilities
incurred by the directors and officers of the Company in connection with the
performance of their duties.
ITEM 16. EXHIBITS
4.1(1) Indenture, dated as of May 20, 1994, by and between Waxman
Industries, Inc. and The Huntington National Bank, as Trustee, with
respect to the Senior Secured Deferred Coupon Notes, including the
form of Senior Secured Deferred Coupon Notes (Exhibit 4.1 to Waxman
Industries, Inc.'s Form S-4 filed June 20, 1994, incorporated herein
by reference).
4.2(2) First Supplemental Indenture, dated as of January 19, 1996, by and
between Waxman Industries, Inc. and The Huntington National Bank, as
Trustee.
4.3(1) Warrant Agreement, dated as of May 20, 1994, by and between Waxman
Industries, Inc. and The Huntington National Bank, as Warrant Agent
(Exhibit 4.2 to Waxman Industries, Inc.'s Form S-4 filed June 20,
1994, incorporated herein by reference).
4.4(1) Warrant Certificate (Exhibit 4.3 to Waxman Industries, Inc.'s Form
S-4 filed June 20, 1994, incorporated herein by reference).
5.1(1) Opinion of Shereff, Friedman, Hoffman & Goodman, LLP regarding
legality (filed as Exhibit 5.1 to this Registration Statement).
10.1(1) Lease between Waxman Industries, Inc. as Lessee and Aurora Investment
Co. as Lessor dated June 30, 1992 (Exhibit 10.1 to Waxman Industries,
Inc.'s Annual Report on Form 10-K for the year ended June 30, 1992,
File No. 0-5888, incorporated herein by reference).
10.2(1) Policy Statement (revised as of June 1, 1980) regarding Waxman
Industries, Inc.'s Profit Incentive Plan (Exhibit 10(c)-1 to Waxman
Industries, Inc.'s Annual Report on Form 10-K for the year ended June
30, 1984, File No. 0-5888, incorporated herein by reference).
10.3(1) Form of Stock Option Agreement between Waxman Industries, Inc. and
its Directors (Exhibit 10.5 to Waxman Industries, Inc.'s Annual
Report on Form 10-K for the year ended June 30, 1991, File No.
0-5888, incorporated herein by reference).
10.4(1) Employment Contract dated January 1, 1992 between Waxman Industries,
Inc. and John S. Peters (Exhibit 10.6 to Waxman Industries, Inc.'s
Annual Report on Form 10-K for the year ended June 30, 1992, File No.
0-5888, incorporated herein by reference).
10.5(1) Employment Agreement dated November 1, 1994 between Waxman Consumer
Products Group Inc. and Laurence Waxman. (Exhibit 10.6 to Waxman
Industries, Inc.'s Amendment No. 4 on Form S-2 to Form S-1 filed
October 10, 1995, Registration No. 33-54211, incorporated herein by
reference).
10.6(1) Tax Sharing Agreement dated May 20, 1994 among Waxman Industries,
Inc., Waxman USA, Barnett Inc., Waxman Consumer Products Group Inc.,
WOC Inc. and Western American Manufacturing, Inc. (Exhibit 10.6 to
Waxman Industries, Inc.'s Form S-4 filed June 20, 1994, incorporated
herein by reference).
II-2
<PAGE> 24
10.7(1) Intercorporate Agreement dated May 20, 1994 among Waxman Industries,
Inc., Waxman USA, Barnett Inc., Waxman Consumer Products Group Inc.,
WOC Inc. and Western American Manufacturing, Inc. (Exhibit 10.7 to
Waxman Industries, Inc.'s Form S-4 filed June 20, 1994, incorporated
herein by reference).
10.8(2) Intercorporate Agreement dated March 28, 1996 among Barnett Inc.,
Waxman Industries, Inc., Waxman USA Inc., Waxman Consumer Products
Group Inc., WOC Inc. and TWI, International Inc.
10.9(1) Credit Agreement dated as of May 20, 1994 among Waxman USA, Inc.,
Barnett Inc., Waxman Consumer Products Group Inc. and WOC Inc., the
Lenders and Issuers party thereto and Citicorp USA, Inc. as Agent,
and certain exhibits thereto (Exhibit 10.8 to Waxman Industries,
Inc.'s Form S-4 filed June 20, 1994, incorporated herein by
reference).
10.10(1) Term Loan Credit Agreement dated as of May 20, 1994 among Waxman USA
Inc., Barnett Inc., Waxman Consumer Products Group Inc. and WOC Inc.,
the Lenders and Issuers party thereto and Citibank, N.A., as Agent
(Exhibit 10.9 to Waxman Industries, Inc.'s Form S-4 filed June 20,
1994, incorporated herein by reference).
10.11(1) Amendment No. 2 to the Term Loan Agreement and Amendment No. 1 to the
Revolving Credit Agreement among Waxman USA Inc., Barnett Inc.,
Waxman Consumer Products Group Inc. and WOC Inc., the Lenders and
Issuers party thereto and Citibank, N.A., as Agent. (Exhibit 10.11 to
Waxman Industries, Inc.'s Amendment No. 4 on Form S-2 to Form S-1
filed October 10, 1995, Registration No. 33-54211, incorporated
herein by reference).
10.12(2) Amended and Restated Credit Agreement dated as of April 3, 1996 among
Waxman USA Inc., Waxman Consumer Products Group Inc., WOC Inc., the
Lenders and Issuers party thereto and Citibank, N.A., as agent, and
certain exhibits thereto.
10.13(2) Standstill Agreement dated March 28, 1996 between Waxman Industries,
Inc. and Barnett Inc.
10.14(2) Indenture, dated as of April 3, 1996, by and between Waxman USA Inc.
and the United States Trust Company of New York, as Trustee, with
respect to the 111/8% Senior Notes due 2001 of Waxman USA Inc.,
including the form of Senior Notes.
10.15(2) Registration Rights Agreement, dated as of April 3, 1996, by and
between Waxman USA Inc. and the United States Trust Company of New
York.
10.16(1) Loan and Security Agreement dated as of June 28, 1996 among the
Financial Institutions named therein and BankAmerica Business Credit,
Inc., as the Agent, Waxman Consumer Products Group Inc. and WOC Inc.,
including certain exhibits thereto (Exhibit 4.33 to Waxman
Industries, Inc.'s Annual Report on Form 10-K for the year ended June
30, 1996, File No. 001-10273, incorporated herein by reference).
10.17(1) Waxman Industries, Inc. 1996 Non-Employee Directors'
Restricted Share Plan (Exhibit A to Waxman Industries, Inc.'s 1996
Proxy Statement, File No. 001-10273, incorporated herein by
reference).
10.18(3) SAR Agreement, dated as of March 29, 1996, between
Waxman Industries, Inc. and Armond Waxman.
10.19(3) SAR Agreement, dated as of March 29, 1996 between Waxman
Industries, Inc. and Melvin Waxman.
10.20(3) SAR Agreement, dated as of September 27, 1996, between
Waxman Industries, Inc. and Laurence Waxman.
12.1(1) Statement re: computation of ratio (Exhibit 12.1 to Waxman
Industries, Inc.'s Form S-1 filed July 18, 1995, incorporated herein
by reference).
13.1(1) Waxman Industries, Inc.'s Annual Report on Form 10-K for its fiscal
year ended June 30, 1996 (File No. 001-10273, incorporated herein by
reference).
13.2(1) Waxman Industries, Inc.'s Amendment to Annual Report on Form 10-K/A1
for its fiscal year ended June 30, 1996 (File No. 001-10273,
incorporated herein by reference).
13.3(1) Waxman Industries, Inc.'s Quarterly Report on Form 10-Q for its
fiscal quarter ended September 30, 1996 (File No. 001-10273,
incorporated herein by reference).
13.4(1) Waxman Industries, Inc.'s Quarterly Report on Form 10-Q for its
fiscal quarter ended December 31, 1996 (File No. 001-10273,
incorporated herein by reference).
23.1 Consent of Arthur Andersen LLP.
II-3
<PAGE> 25
23.2(1) Consent of Shereff, Friedman, Hoffman & Goodman, LLP (contained in
its opinion filed as Exhibit 5.1 to this Registration Statement).
24.1(3) Power of Attorney.
- ------------------
(1) Incorporated herein by reference as indicated.
(2) Filed on April 15, 1996.
(3) Filed on January 24, 1997.
(B) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because the required
information is not present or not present in amounts sufficient to require
submission of the schedule, or because the information required is included in
the consolidated financial statements including notes thereto.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value in securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
maximum offering range may be reflected on the form of
prospectus filed with the Commission pursuant Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE> 26
C. The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such
interim financial information.
D. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-5
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Waxman
Industries, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cleveland, State of Ohio on the 14th day of
February, 1997.
WAXMAN INDUSTRIES, INC.
By: /s/ Mark Wester
------------------------------
Mark Wester,
Vice President-Finance
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C> <C>
* Chairman of the Board, February 14, 1997
- ---- ----------------------- Co-Chief Executive Officer and Director
Melvin Waxman
* President, Co-Chief Executive February 14, 1997
- ---- ---------------------- Officer and Director
Armond Waxman
* Senior Vice President and Director February 14, 1997
- ---- ----------------------
Laurence Waxman
/s/ Mark Wester Vice-President Finance (Principal February 14, 1997
- ---- ---------------------- Accounting Officer)
Mark Wester
* Director February 14, 1997
- ----- ----------------------
William R. Pray
* Director February 14, 1997
- ----- ----------------------
Samuel Krasney
* Director February 14, 1997
- ----- ----------------------
Irving Friedman
* Director February 14, 1997
- ----- ----------------------
Judy Robins
*by: /s/ Mark Wester
-------------------------------
Attorney-in-fact
</TABLE>
II-6
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit Description Sequential Page Number
- -------------- ------------------- ----------------------
<S> <C>
4.1(1) Indenture, dated as of May 20, 1994, by and
between Waxman Industries, Inc. and The
Huntington National Bank, as Trustee, with
respect to the Deferred Coupon Notes,
including the form of Deferred Coupon Notes
(Exhibit 4.1 to Waxman Industries, Inc.'s
Form S-4 filed June 20, 1994, incorporated
herein by reference).
4.2(2) First Supplemental Indenture, dated as of
January 19, 1996 by and between Waxman
Industries, Inc. and The Huntington
National Bank.
4.3(1) Warrant Agreement, dated as of May 20,
1994, by and between Waxman Industries,
Inc. and The Huntington National Bank, as
Warrant Agent (Exhibit 4.2 to Waxman
Industries, Inc.'s Form S-4 filed June 20,
1994, incorporated herein by reference).
4.3(1) Warrant Certificate (Exhibit 4.3 to Waxman
Industries, Inc.'s Form S-4 filed June 20,
1994, incorporated herein by reference).
5.1(1) Opinion of Shereff, Friedman, Hoffman &
Goodman, LLP regarding legality (filed as
Exhibit 5.1 to this Registration
Statement).
10.1(1) Lease between Waxman Industries, Inc. as
Lessee and Aurora Investment Co. as Lessor
dated June 30, 1992 (Exhibit 10.1 to Waxman
Industries, Inc.'s Annual Report on Form
10-K for the year ended June 30, 1992, File
No. 0-5888, incorporated herein by
reference).
10.2(1) Policy Statement (revised as of June 1,
1980) regarding Waxman Industries, Inc.'s
Profit Incentive Plan (Exhibit 10(c)-1 to
Waxman Industries, Inc.'s Annual Report on
Form 10-K for the year ended June 30, 1984,
File No. 0-5888, incorporated herein by
reference).
10.3(1) Form of Stock Option Agreement between
Waxman Industries, Inc. and its Directors
</TABLE>
II-7
<PAGE> 29
<TABLE>
<CAPTION>
Exhibit Number Exhibit Index Sequential Page Number
- -------------- ------------- ----------------------
<S> <C>
(Exhibit 10.5 to Waxman Industries, Inc.'s
Annual Report on Form 10-K for the year
ended June 30, 1991, File No. 0-5888,
incorporated herein by reference).
10.4(1) Employment Contract dated January 1, 1992
between Waxman Industries, Inc. and John S.
Peters (Exhibit 10.6 to Waxman Industries,
Inc.'s Annual Report on Form 10-K for the
year ended June 30, 1992, File No. 0-5888,
incorporated herein by reference).
10.5(1) Employment Agreement dated November 1, 1994
between Waxman Consumer Products Group Inc.
and Laurence Waxman (Exhibit 10.6 to Waxman
Industries, Inc.'s Amendment No. 4 on Form
S-2 to Form S-1 filed October 10, 1995,
Registration No. 33-54211, incorporated
herein by reference).
10.6(1) Tax Sharing Agreement dated May 20, 1994
among Waxman Industries, Waxman USA Inc.,
Barnett Inc., Waxman Consumer Products
Group Inc., WOC Inc. and Western American
Manufacturing, Inc. (Exhibit 10.6 to Waxman
Industries, Inc.'s Form S-4 filed June 20,
1994, incorporated herein by reference).
10.7(1) Intercorporate Agreement dated May 20, 1994
among Waxman Industries, Inc., Waxman USA
Inc., Barnett Inc., Waxman Consumer
Products Group Inc., WOC Inc. and Western
American Manufacturing, Inc. (Exhibit 10.7
to Waxman Industries, Inc.'s Form S-4 filed
June 20, 1994, incorporated herein by
reference).
10.8(2) Intercorporate Agreement dated as of March
28, 1996 among Barnett Inc., Waxman
Industries, Inc., Waxman USA Inc., Waxman
Consumer Products Group Inc., WOC Inc. and
TWI, International Inc.
10.9(1) Credit Agreement dated as of May 20, 1994
among Waxman USA Inc., Barnett Inc., Waxman
Consumer Products Group Inc. and
</TABLE>
II-8
<PAGE> 30
<TABLE>
<CAPTION>
Exhibit Number Exhibit Index Sequential Page Number
- -------------- ------------- ----------------------
<S> <C>
WOC Inc., the Lenders and Issuers party
thereto and Citicorp USA, Inc., as Agent,
and certain exhibits thereto (Exhibit 10.8
to Waxman Industries, Inc.'s Form S-4 filed
June 20, 1994, incorporated herein by
reference).
10.10(1) Term Loan Credit Agreement dated as of May
20, 1994 among Waxman USA Inc., Barnett
Inc., Waxman Consumer Products Group, Inc.
and WOC Inc., the Lenders and Issuers party
thereto and Citibank, N.A., as Agent
(Exhibit 10.9 to Waxman Industries, Inc.'s
Form S-4 filed June 20, 1994, incorporated
herein by reference).
10.11(1) Amendment No. 2 to the Term Loan Agreement
and Amendment No. 1 to the Revolving Credit
Agreement among Waxman USA Inc., Barnett
Inc., Waxman Consumer Products Group Inc.
and WOC Inc., the Lenders and Issuers party
thereto and Citibank, N.A., as Agent
(Exhibit 10.11 to Amendment No. 4 on Form
S-2 to Form S-1 filed October 10, 1995,
Registration No. 33- 54211, incorporated
herein by reference).
10.12(2) Amended and Restated Credit Agreement dated
as of April 3, 1996 among Waxman USA Inc.,
Waxman Consumer Products Group Inc., WOC
Inc., the Lenders and Issuers party thereto
and Citibank, N.A., as Agent and certain
exhibits thereto.
10.13(2) Standstill Agreement dated March 28, 1996
between Waxman Industries, Inc. and Barnett
Inc.
10.14(2) Indenture, dated as of April 3, 1996, by
and between Waxman USA Inc. and the United
States Trust Company of New York, as
Trustee, with respect to the 111/8% Senior
Notes due 2001 of Waxman USA, Inc.,
including the form of Senior Notes.
10.15(2) Registration Rights Agreement, dated as of
April 3, 1996, by and between Waxman USA
Inc. and the United States Trust Company of
New York.
</TABLE>
II-9
<PAGE> 31
<TABLE>
<CAPTION>
Exhibit Number Exhibit Index Sequential Page Number
- -------------- ------------- ----------------------
<S> <C>
10.16(1) Loan and Security Agreement dated as of
June 28, 1996 among the Financial
Institutions named therein and BankAmerica
Business Credit, Inc., as the Agent, Waxman
Consumer Products Group Inc. and WOC Inc.,
including certain exhibits thereto (Exhibit
4.33 to Waxman Industries, Inc.'s Annual
Report on Form 10-K for the year ended June
30, 1996, File No. 001-10273, incorporated
herein by reference).
10.17(1) Waxman Industries, Inc. 1996 Non-Employee Directors'
Restricted Share Plan (Exhibit A to Waxman Industries,
Inc.'s 1996 Proxy Statement, File No. 001-10273,
incorporated herein by reference).
10.18(3) SAR Agreement, dated as of March 29, 1996, between
Waxman Industries, Inc. and Armond Waxman.
10.19(3) SAR Agreement, dated as of March 29, 1996 between
Waxman Industries, Inc. and Melvin Waxman.
10.20(3) SAR Agreement, dated as of September 27, 1996, between
Waxman Industries, Inc. and Laurence Waxman.
12.1(1) Statement re: computation of ratios
(Exhibit 12.1 to Waxman Industries, Inc.'s
Form S-1, filed July 18, 1995, incorporated
herein by reference).
13.1(1) Waxman Industries, Inc.'s Annual Report on
Form 10-K for its fiscal year ended June
30, 1996 (File No. 001-10273, incorporated
herein by reference).
13.2(1) Waxman Industries, Inc.'s Amendment to
Annual Report on Form 10-K/A1 for its
fiscal year ended June 30, 1996 (File No.
001-10273, incorporated herein by reference).
13.3(1) Waxman Industries, Inc.'s Quarterly Report
on Form 10-Q for its fiscal quarter ended
September 30, 1996 (File No. 001-10273,
incorporated herein by reference).
13.4(1) Waxman Industries, Inc.'s Quarterly Report
on Form 10-Q for its fiscal quarter ended
December 31, 1996 (File No. 001-10273,
incorporated herein by reference).
23.1 Consent of Arthur Andersen LLP.
23.2(1) Consent of Shereff, Friedman, Hoffman &
Goodman, LLP (contained in its opinion
filed as Exhibit 5.1 to this Registration
Statement).
24.1(3) Power of Attorney.
- ------------------
<FN>
(1) Incorporated herein by reference as indicated.
(2) Filed on April 15, 1996.
(3) Filed on January 24, 1997.
</TABLE>
II-10
<PAGE> 1
ARTHUR
ANDERSEN
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 7, 1996
included in Waxman Industries, Inc.'s Form 10-K for the year ended June 30,
1996 and to all references to our Firm included in this Registration Statement
(File No. 33-54211).
/s/ Arthur Andersen LLP
Cleveland, Ohio
February 14, 1997
