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As filed with the Securities and Exchange Commission on November 14, 1997
Registration No. 033-54211
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 13 TO
REGISTRATION STATEMENT
ON FORM S-2
UNDER
THE SECURITIES ACT OF 1933
----------------
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
(440) 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
(440) 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
<TABLE>
<CAPTION>
ITEM OF FORM S-2 PROSPECTUS CAPTION OR LOCATION
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<S> <C> <C>
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
</TABLE>
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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.
PROSPECTUS, SUBJECT TO COMPLETION, DATED NOVEMBER 14, 1997
WAXMAN INDUSTRIES, INC.
2,764,800 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 2,764,800 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 185,200 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 185,200
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 inital 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 "1994 Private Exchange Offer") which was a part of a series
of interrelated refinancing transactions.
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 November 13, 1997 the last reported
sales price per share of Common Stock, as reported by the NYSE, was $3 11/16.
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 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.
-----------------------------------------
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, 1997
filed with the Commission (File No. 001-10273) pursuant to the Exchange Act and
the Company's Quarterly Report on Form 10-Q for its first quarter ended
September 30, 1997 filed with the Commission (File No. 001-10273) on
November 12, 1997, pursuant to the Exchange Act.
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: (440) 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. This Prospectus contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 that are
based on the beliefs of the Company and its management. When used in this
document, the words "anticipate," "believe," "continue," "estimate," "expect,"
"intend," "may," "should," and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current view of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions, 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 currently unforeseen competitive pressures and
risks affecting the Company's industry, such as decreased consumer spending,
customer concentration issues and the effects of general economic conditions.
In addition, the Company's business, operations and financial condition are
subject to the risks, uncertainties and assumptions which are described in the
Company's reports and statements filed from time to time with the Securities
and Exchange Commission, including this Prospectus. Should one or more of those
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein.
THE COMPANY
The Company believes it is one of the leading suppliers of specialty
plumbing, security hardware and other products to the repair and remodeling
market in the United States. The Company distributes its products to
approximately 6,800 customers, including a wide variety of large national and
regional retailers, professional security installers and independent retail
customers. The Company's consolidated net sales were $120.1 million and $28.2
million in fiscal 1997 and for the three months ended September 30, 1997,
respectively.
The Company conducts its business primarily through its wholly-owned
subsidiaries, Waxman Consumer Products Group Inc. ("Consumer Products"), WOC
Inc. ("WOC") and TWI, International Inc. ("TWI"). WOC is comprised of two
divisions, U.S. Lock ("U.S. Lock"), a distributor of a full line of security
hardware products, and Medal Distributing, a supplier of hardware products. TWI
includes the Company's foreign sourcing operations, including manufacturing,
packaging and sourcing operations in China and Taiwan, and an operation in
Mexico that threads galvanized and black pipe and imports malleable fittings.
Consumer Products, WOC and Barnett Inc. ("Barnett") utilize the Company's and
non-affiliated foreign sourcing suppliers.
Consumer Products markets and distributes approximately 4,800 products
to a wide variety of retailers, primarily do-it-yourself ("D-I-Y") warehouse
home centers, home improvement centers, mass merchandisers and hardware stores.
Consumer Products' customers include large national retailers such as Builders
Square, Kmart, Sears and Wal-Mart, as well as several large regional D-I-Y
retailers. According to rankings of the largest D-I-Y retailers published in
National Home Center News, an industry trade publication, Consumer Products'
customers include 14 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. Consumer Products also offers certain of its customers the
option of private label programs and direct import programs. Consumer Products'
net sales for fiscal 1997 and for the three months ended September 30, 1997
were $58.2 million and $15.1 million, respectively.
In recent years, the rapid growth of large mass merchandisers and D-I-Y
retailers has contributed to a significant consolidation of the United States
retail industry and the formation of large, dominant, product specific and
multi-category retailers. These retailers demand suppliers who can offer a
broad range of quality products and can provide strong marketing and
merchandising support. Due to the consolidation in the D-I-Y retail industry, a
substantial portion of Consumer Products' net sales are generated by a small
number of customers. Furthermore, Consumer Products' largest customer, Builders
Square, accounted for approximately 21.9%, 24.7% and 22.3%, and its parent,
Kmart, accounted for 16.5%, 17.6% and 18.2% of Consumer Products' total net
sales in fiscal 1997, 1996 and 1995, respectively. During fiscal 1997, the
Company was advised by Kmart that, after it had completed a vendor review,
Consumer Products had successfully retained the supply arrangements for
plumbing and hardware products. In July 1997, Kmart announced that it agreed to
sell its Builders Square chain to Leonard Green & Partners, a merchant-banking
firm ("Leonard Green"). Leonard Green announced that it had also agreed to buy
another home improvement retailer, Hechinger Co. ("Hechinger"), and that it
would combine the two companies to form the nation's third largest home
improvement chain. Leonard Green announced that it consummated the purchases of
Builders Square and Hechinger effective as of October 1, 1997. Although
Consumer Products is a long term supplier to Kmart and Builders Square, as well
as a supplier to Hechinger, there can
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be no assurance that any of the foregoing relationships will continue or as
to the terms of any of the relationships that do continue. In the event
Consumer Products were to lose either Kmart or Builders Square as a customer
or Kmart, Builders Square or the surviving entity through the Builders
Square / Hechinger merger were to significantly curtail its purchases from
Consumer Products, there would be material adverse effects on the Company.
Consumer Products would likely incur significant charges if a materially
adverse change in its customer relationships were to occur.
In furtherance of its continuing efforts to improve Consumer Products'
prospects, during fiscal 1997, the Company decided to augment certain existing
product lines, streamline its packaged plumbing product lines, enhance the
appearance and appeal of its existing plumbing product packaging and undertake
certain customer retention and development programs. The Company believes the
redesign effort will help in its effort to diversify its customer base by
attracting new business and retaining existing business. In order to minimize
the financial impact, Consumer Products intends to rollout the redesign program
during fiscal 1998 and 1999.
During fiscal 1996, Consumer Products decided to exit from the
distribution of electrical products to further focus its strategic direction.
As the Company anticipated, the reorientation of Consumer Products' strategic
focus initially resulted in a decrease in net sales, but the Company believes
that the business reorientation will strengthen and improve Consumer Products'
business in the long-term by allowing it to focus on its core business and
products.
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 identify 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.
Barnett, of which the Company currently owns 44.6%, is a direct
marketer and distributor of an extensive line of plumbing, electrical,
hardware, HVAC and other products to approximately 60,000 active customers
throughout the United States and Puerto Rico. Barnett offers approximately
10,200 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
net sales for fiscal 1997 and for the three months ended September 30, 1997
were $160.1 million and $46.8 million, respectively. In fiscal 1997 and for the
three months ended September 30, 1997, the Company recognized $5.8 million and
$1.5 million, respectively, in equity income from this investment.
The Company has two operations which are conducted through WOC. The
more significant of the WOC operations is U.S. Lock, a full line supplier of
security hardware products. WOC's other operation is the Medal Distributing
division, a supplier of hardware products. Two of WOC's divisions were recently
sold, including the Madison Equipment division ("Madison"), a supplier of
electrical products, which was sold in late April 1997, and substantially all
of the business of the LeRan Gas Products division ("LeRan"), a supplier of
copper tubing, brass fittings and other related products, which was sold to
Barnett on July 1, 1997. WOC's net sales amounted to $43.5 million in fiscal
1997 and $6.8 million for the three months ended September 30, 1997. Excluding
the net sales attributable to Madison and LeRan, WOC's net sales would have
been $24.6 million in fiscal 1997.
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The current corporate structure of the Company is as follows:
WAXMAN INDUSTRIES, INC.
WAXMAN USA INC.
BARNETT WAXMAN WOC INC. TWI, INTERNATIONAL, INC.
INC.(1) CONSUMER AND SUBSIDIARIES
PRODUCTS
GROUP INC.
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(1) Waxman USA Inc. ("Waxman USA"), a wholly-owned subsidiary of the
Company, owns approximately 44.6% of the Barnett Common Stock (as
defined herein).
RECENT DEVELOPMENTS
The Company and Barnett consummated the initial public offering (the
"Barnett Initial Public Offering") of the common stock of Barnett (the "Barnett
Common Stock") in April 1996. In such offering, 7,207,200 shares, representing
approximately 55.1% of the Barnett Common Stock, were sold in the aggregate by
Barnett and 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 conversion of a portion of the convertible non-voting preferred
stock of Barnett, which was owned solely by Waxman USA, a wholly-owned
subsidiary of the Company, to Barnett Common Stock during the fiscal 1996
fourth quarter, the Company beneficially owned approximately 49.9% of the
Barnett Common Stock and, together with the convertible non-voting preferred
stock of Barnett owned by Waxman USA, approximately a 54% economic interest of
the capital stock of Barnett at June 30, 1996. In April 1997, the Company and
Barnett consummated a secondary offering (the "Barnett Secondary Offering") of
1,300,000 shares of Barnett Common Stock and the Company converted its
remaining convertible non-voting preferred stock of Barnett to Barnett Common
Stock. As a result of these transactions, at June 30, 1997, the Company owned
44.5% of the outstanding shares of Barnett Common Stock. In July 1997, as a
result of the sale of a substantial portion of the business of LeRan, one of
WOC's operations, to Barnett, the Company received cash and an additional
24,730 shares of Barnett Common Stock which increased the Company's ownership
to 44.6%. The Barnett Common Stock trades on the Nasdaq National Market under
the symbol "BNTT."
In connection with the Barnett Initial Public Offering and as part of
the Company's efforts to decrease its leverage and increase its financial
flexibility, in April 1996, 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 (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 eliminated virtually all
of the restrictive covenants and events of defaults 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.
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,
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among other things, for revolving credit advances of up to $30 million and
term loans of up to $5.0 million. As of September 30, 1997, availability under
the New Credit Agreement totaled approximately $14.4 million.
Since the consummation of the Barnett Initial 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 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
customer, Builders Square, accounted for approximately 21.9%, and its parent,
Kmart, accounted for 16.5% of Consumer Products' total net sales in fiscal
1997. During fiscal 1997, the Company was advised by Kmart that, after it had
completed a vendor review, Consumer Products had successfully retained the
supply arrangements for plumbing and hardware products. In July 1997, Kmart
announced that it agreed to sell its Builders Square chain to Leonard Green.
Leonard Green announced that it had also agreed to buy another home improvement
retailer, Hechinger, and that it would combine the two companies to form the
nation's third largest home improvement chain. Leonard Green announced that it
consummated the purchases of Builders Square and Hechinger effective as of
October 1, 1997. Although Consumer Products is a long term supplier to Kmart
and Builders Square, as well as a supplier to Hechinger, there can be no
assurance that any of the foregoing relationships will continue or as to the
terms of any of the relationships that do continue. In the event Consumer
Products were to lose either Kmart or Builders Square as a customer or Kmart,
Builders Square or the surviving entity through the Builders Square/Hechinger
merger were to significantly curtail its purchases from Consumer Products,
there would be material adverse effects on the Company. Consumer Products would
likely incur significant charges if a materially adverse change in its customer
relationships were to occur.
The Company's business strategy includes the reduction of its leverage
by the sale of selected assets and the refinancing of its remaining
indebtedness whenever possible. To that end, the Company sold Madison for $2.0
million in April 1997 and substantially all of the business of LeRan for $3.2
million in cash and 24,730 shares of Barnett Common Stock (with a value of $0.6
million at the time of the transaction) in July 1997.
In July 1997, the Company retired $2.5 million of Senior Notes tendered
in an offer to purchase $12.0 million principal amount of Senior Notes at par
(the "Purchase Offer"). Upon expiration of the Purchase Offer, the Company
called for the redemption of $9.5 million principal amount of Senior Notes that
had not been tendered in the Purchase Offer and completed the redemption of
such notes in August 1997.
7
<PAGE>
THE OFFERING
Securities Offered............... 2,764,800 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................. 2,764,800 shares, subject to adjustment in
certain circumstances, of Common Stock
issuable upon the exercise of the Warrants.
Common Stock Outstanding......... 12,013,072 shares as of November 7, 1997
(including 9,865,251 shares of Common Stock
and 2,147,821 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 2,764,800 Restricted Warrants
offered hereby are exercised at the initial
exercise price of $2.45 per share, the
Company would receive $6,773,760 which would
be added to the Company's working capital and
used for general corporate purposes,
including repayment of debt.
For more complete information regarding the Warrants, see
"Description of Warrants."
RISK FACTORS
Prospective purchasers of Securities offered hereby should carefully
consider matters set forth under "Risk Factors," as well as other information
and data included in this Prospectus.
8
<PAGE>
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 September 30, 1997, the
outstanding consolidated indebtedness (excluding trade payables and accrued
liabilities) of the Company's wholly-owned operations was approximately $119.7
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, many of which
are beyond the Company's control. Although the Company believes that
its operating cash flow will be sufficient to fund working capital and capital
expenditures for the foreseeable future, the Company's ability to satisfy its
obligations will be dependent upon its future performance, which is subject to
prevailing economic conditions and financial, business and other factors. 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 believes that there will not be sufficient cash flow
from operations to make 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 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 Deferred Coupon
Notes commencing in December 1999 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 contain, and the New Credit Agreement
imposes, and any other future indebtedness of the Company will impose, certain
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 the indentures, and
there can be no assurance that the Company and/or Waxman USA would have
sufficient funds to repay such
9
<PAGE>
obligations or assets to satisfy such obligations in the event of an
acceleration of such other indebtedness. Due to changes in the Company's
financial structure and continuing operations, the Company negotiated certain
covenant modifications to the New Credit Agreement effective September 30,
1997. The Company was in compliance with all loan covenants at September 30,
1997.
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 19.5% (and 15.2%, 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 83.0% 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 62.4% (and 57.1%, 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
Excluding the gains on the sales of Barnett Common Stock by the
Company, equity earnings of Barnett and restructuring and other non-recurring
charges, the Company's earnings were insufficient to cover its fixed charges by
$17.8 million, $20.4 million, $9.0 million and $1.7 million for fiscal 1997,
1996, 1995 and the three months ended September 30, 1997, 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 1997, products purchased from sources outside of the United
States accounted for approximately 29.8% 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.
10
<PAGE>
RELIANCE ON KEY CUSTOMERS
For fiscal 1997, 1996 and 1995, Consumer Products' largest customer,
Builders Square, accounted for approximately 21.9%, 24.7% and 22.3% and its
parent, Kmart, accounted for 16.5%, 17.6% and 18.2%, respectively, of Consumer
Products' total net sales. During the same periods, the Company's ten largest
customers accounted for approximately 36.5%, 23.0% and 24.0%, 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. During fiscal 1997, the
Company was advised by Kmart that, after it had completed a vendor review,
Consumer Products had successfully retained the supply arrangements for
plumbing and hardware products. In July 1997, Kmart announced that it agreed to
sell its Builders Square chain to Leonard Green. Leonard Green announced that it
had also agreed to buy another home improvement retailer, Hechinger, and that it
would combine the two companies to form the nation's third largest home
improvement chain. Leonard Green announced that it consummated the purchases of
Builders Square and Hechinger effective as of October 1, 1997. Although Consumer
Products is a long term supplier to Kmart and Builders Square, as well as a
supplier to Hechinger, there can be no assurance that any of the foregoing
relationships will continue or as to the terms of any of the relationships that
do continue. In the event Consumer Products were to lose either Kmart or
Builders Square as a customer or Kmart, Builders Square or the surviving entity
through the Builders Square/Hechinger merger were to significantly curtail its
purchases from Consumer Products, there would be material adverse effects on
the Company. Consumer Products would likely incur significant charges if a
materially adverse change in its customer relationships were to occur.
Since the consummation of the Barnett Public Offering, the Company
relies 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 affected 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.
11
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
As of November 7, 1997, there were 9,865,251 shares of Common Stock
outstanding and 2,147,821 shares of Class B Common Stock outstanding
(convertible into 2,147,821 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 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
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 2,764,800 Restricted Warrants offered hereby are
exercised at the initial exercise price of $2.45 per share, the Company would
receive $6,773,760, which would be added to the Company's working capital and
used for general corporate purposes, including repayment of debt.
SELLING SECURITY HOLDERS
The following table sets forth certain information with respect to the
Securities beneficially owned and offered hereby by each Selling Security
Holder.
<TABLE>
<CAPTION>
Restricted Restricted
Name Warrants Owned Warrants Offered
- ---- --------------- ----------------
<S> <C> <C>
Bank Of New York 277,000 277,000
Bear Stern Securities Corp. 597,400 597,400
First Options of Chicago, Inc. 30,000 30,000
Goldman, Sachs & Co. 64,000 64,000
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 79,600 79,600
SSB Custodian 324,500 324,500
Total 2,764,800 2,764,800
</TABLE>
- ---------------
The Company is registering, on behalf of each Selling Security Holder,
the offer and sale of the number of Restricted Warrants set forth opposite such
Selling Security Holder's name under the column captioned "Restricted Warrants
Offered" and the same number of shares of Common Stock, subject to adjustment
in certain circumstances, issuable upon exercise of the Restricted 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 Bear Stearns
Securities Corp. and Donaldson, Lufkin & Jenrette, respectively, the offer and
sale of 145,500 and 39,700, respectively, shares of Common Stock issuable upon
the exercise of Public Warrants.
12
<PAGE>
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 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 share
of the common stock of the Company (the "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 or 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 a 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.
13
<PAGE>
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 November 7, 1997, no shares of Preferred Stock, 9,865,251 shares of
Common Stock and 2,147,821 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 November 7, 1997 , Melvin Waxman and Armond Waxman
beneficially owned an aggregate of approximately 83.0% of the outstanding Class
B Common Stock and 62.4% 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
14
<PAGE>
Company by means of a merger, tender 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
15
<PAGE>
effective by, or continuously effective through, the dates referred to above 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 1994 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,
1996 and June 30, 1997 and for each of the three years in the period ended June
30, 1997 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
16
<PAGE>
paragraph with respect to the change in the method of accounting for certain
long-lived assets and procurement costs as discussed in Notes 3 and 5 to the
consolidated financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION WAXMAN INDUSTRIES, INC.
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 2,764,800
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THESE Warrants to
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS Purchase Common Stock
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. 2,950,000
Shares of
Common Stock
Par Value $.01 Per Share
--------------------
TABLE OF CONTENTS
PAGE
----------------
AVAILABLE INFORMATION.....................................3 PROSPECTUS
----------------
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE......................................3
PROSPECTUS SUMMARY........................................4 , 1997
----------------
RISK FACTORS..............................................9
USE OF PROCEEDS..........................................12
SELLING SECURITY HOLDERS.................................12
DESCRIPTION OF THE WARRANTS..............................12
DESCRIPTION OF CAPITAL STOCK.............................13
PLAN OF DISTRIBUTION.....................................14
LEGAL MATTERS............................................16
EXPERTS .................................................16
</TABLE>
<PAGE>
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.
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*
* Estimated
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.
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
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<PAGE>
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).
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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 11 1/8% 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. 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, 1997 (File No. 001- 10273, incorporated herein
by reference).
II-3
<PAGE>
13.2(1) Waxman Industries, Inc.'s Quarterly Report on Form 10-Q for its
first quarter ended September 30, 1997 (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.
- ------------------
(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
II-4
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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.
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.
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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
November, 1997.
WAXMAN INDUSTRIES, INC.
By:/s/ Armond Waxman
---------------------------------------
Armond Waxman
President, Co-Chief Executive
Officer and Director
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>
* Chairman of the Board, November 14, 1997
- -------------------------------------- Co-Chief Executive Officer and Director
Melvin Waxman
/s/ Armond Waxman President, Co-Chief Executive November 14, 1997
- -------------------------------------- Officer and Director
Armond Waxman
* Senior Vice President and Director November 14, 1997
- --------------------------------------
Laurence Waxman
* Vice-President-Finance November 14, 1997
- --------------------------------------
Mark Wester
* Director November 14, 1997
- --------------------------------------
William R. Pray
* Director November 14, 1997
- --------------------------------------
Samuel Krasney
* Director November 14, 1997
- --------------------------------------
Irving Friedman
* Director November 14, 1997
- --------------------------------------
Judy Robins
by: /s/ Armond Waxman
------------------------
Attorney-In-Fact
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
[Letterhead of Arthur Andersen LLP]
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 August 22, 1997
included in Waxman Industries, Inc.'s Form 10-K for the year ended June 30,
1997 and to all references to our Firm included in this Registration Statement
(File No. 33-54211).
/s/ Arthur Andersen LLP
Cleveland, Ohio
November 14, 1997
