<PAGE> 1
As filed with the Securities and Exchange Commission on January 30, 1997.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
WAXMAN INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
Delaware 34-0899894
(Sate or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
24460 Aurora Road
Bedford Heights, Ohio 44146
(Address of principal executive offices)(Zip Code)
----------------
1996 NON-EMPLOYEE DIRECTORS' RESTRICTED SHARE PLAN
(Full titles of the Plans)
----------------
Armond Waxman
President and Co-Chief Executive Officer
24460 Aurora Road
Bedford Heights, Ohio 44146
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
Scott M. Zimmerman, Esq.
Shereff, Friedman, Hoffman
& Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Proposed
Title of Maximum Proposed Maximum
Securities Amount Offering Price Aggregate Amount of
to be Registered to be Registered(1) Per Share Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value
$0.01 per share 65,000 shares $ 5.44 (2) $ 353,600 $108
- --------------------------------------------------------------------------------------------------------
<FN>
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional securities as may become issuable to prevent dilution resulting
from stock splits, stock dividends or similar tranactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h), on the basis of the average of the high
and low prices of the Registrant's Common Stock as quoted on NYSE on
January 23, 1997.
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMIENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents, which have been filed by Waxman Industries, Inc.,
a Delaware corporation (the "Registrant"), with the Securities and Exchange
Commission (the "Commission"), are incorporated herein by reference.
(a) The Registrant's Annual Report on Form 1O-K for the fiscal year ended
June 30, 1996, as amended by an amendment thereto on Form 1O-K/A1.
(b) The Registrant's Quarterly Report on Form 1O-Q for the fiscal year
ended September 30, 1996.
(c) The Registrant's Proxy Statement for Annual Meeting of Stockholders
held on November 26, 1996.
(d) The description of the Registrant's Common Stock, par value $0.01 per
share, which is contained in Registrant's Registration Statement on Form 8-A
filed pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or report filed for the
purpose of updating such description.
In addition, all documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment to the Registration Statement which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of this Prospectus from the date of
filing hereof.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interest of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
The indemnification of officers and dirertors of the Registant is governed
by Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") and the Certificate of Incorporation of the Registrant. 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
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that such person is or was serving in a similar capacity with another entity at
the request of the corporation against expenses (including attoneys' 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 Registrant (the "Certificate")
provides that each person who is a party to or involved in any action, suit or
proceeding, where civil, criminal, administrative or investigative, by reason of
the fact that he or she was a director or officer of the Registrant, shall be
indemnified and held harmless by the Registrant to the fullest extent authorized
by the DGCL against all expense, liability and loss reasonably incurred by such
person in connection therewith. The Certificate provides that the right to
indemnification contained therein is a contract right and includes the right to
be paid by the Registrant 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 Registrant
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
Registrant maintains directors' and officers' liability, insurance covering
certain liabilities incurred by the directors and officers of the Registrant in
connection with the performance of their duties.
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<PAGE> 4
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits
--------
The following exhibits are filed as part of this registration statement:
4.1 1996 Non-Employee Directors' Restricted Share Plan.
5.1 Opinion of Shereff, Friedman, Hoffman & Goodman, LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shereff, Friedman, Hoffman & Goodman, LLP (included
in Exhibit 5.1).
24 Power of Attomey (included in signature page to this registration
statement).
Item 9. 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 this Regisation
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 this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was,
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule
424(b) promulgated under the Securities Act of 1933 in
the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in this 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;
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PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference 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 the 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 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 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 this 30th day of
January, 1997.
WAXMAN INDUSTRIES, INC.
By: /s/ Armond Waxman
----------------------------
Armond Waxman
President and Co-Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned whose
signature appears below constitutes and appoints Armond Waxman and Mark Wester
and each of them (with full power of each of them to act alone), his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and on his behalf, and in his name, place and stead, in
any all capacities to execute and sign any and all amendments or post-effective
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perfom each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact or any
of them or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof and the Registrant hereby confers like authority on
its behalf.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Armond Waxman President, Co-Chief Executive Officer and January 30, 1997
- ------------------------------ Director (Principal Executive officer)
Armond Waxman
/s/ Melvin Waxman Chairman of the Board of Directors, Co- January 30, 1997
- ------------------------------ Chief Executive Officer and Director
Melvin Waxman
/s/ Laurence Waxman Senior Vice-President and Director January 30, 1997
- ------------------------------
Laurence Waxman
/s/ Mark Wester Vice-President-Finance January 30, 1997
- ------------------------------ (Principal Accounting Officcr)
Mark Wester
/s/ William R. Pray Director January 30, 1997
- ------------------------------
William R. Pray
/s/ Samuel Krasney Director January 30, 1997
- ------------------------------
Samuel Krasney
/s/ Irving Friedman Director January 30, 1997
- ------------------------------
Irving Friedman
/s/ Judy Robins Director January 30, 1997
- ------------------------------
Judy Robins
</TABLE>
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WAXMAN INDUSTRIES, INC.
FORM S-8
REGISTRATION STATEMENT
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT PAGE
- ------- ----
<S> <C>
4.1 1996 Non-Employee Directors' Restricted Share Plan
5.1 Opinion of Shereff, Friedman, Hoffman & Goodman, LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shereff, Friedman, Hoffman & Goodman, LLP (included in
Exhibit 5.1).
24 Power of Attorney (included in signature page to this registration
statement).
</TABLE>
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<PAGE> 1
EXHIBIT 4.1
WAXMAN INDUSTRIES, INC.
1996 NON-EMPLOYEE DIRECTORS' RESTRICTED SHARE PLAN
1. Purpose. The 1996 Non-Employee Directors' Restricted Share Plan (the
"Plan") of Waxman Industries, Inc., a Delaware corporation (the "Corporation"),
is designed to increase the proprietary and vested interest of the non-employee
directors of the Corporation in the growth, development and financial success of
the Corporation by granting them awards of Restricted Shares (as defined below).
2. Amount and Source of Stock. The maximum number of shares of the
Corporation's common stock, $.01 par value per share (the "Shares") that may be
subject of awards under this Plan shall be 100,000. The Corporation shall
reserve such number of Shares for the purposes of the Plan, out of its
authorized but unissued Shares or out of Shares held in the Corporation's
treasury, or partly out of each. In the event that Shares that are awarded to a
non-employee director that are subject to the transfer and forfeitability
restrictions described in Section 5(c) (the "Restricted Shares") are forfeited
for any reason, such Shares shall thereafter again be available for award
pursuant to the Plan.
3. Administration of the Plan. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the Corporation (the
"Board") comprised of two or more members of the Board, selected by the Board,
all of which members shall be "disinterested persons" as that term is defined in
Rule 16b-3(d)(3) (or any successor provision) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Committee is
hereinafter sometimes referred to as the "Administrative Body." The
Administrative Body shall have full authority to interpret the Plan, to
establish and amend rules and regulations relating to it and to make all other
determinations necessary or advisable for the administration of the Plan.
4. Non-Discretionary Grants. Each individual who is a non-employee
director of the Corporation serving on the Board of Directors of the Corporation
for five years or more at the time of the adoption of this Plan by the Board
shall receive, as of the date of the adoption of this Plan by the Board, an
award of 5,000 Restricted Shares for each five full years of service as a
non-employee director of the Corporation. Each individual who, after the date of
the adoption of the Plan, is a non-employee director of the Corporation shall
receive, on each fifth anniversary of their initial election as, or their
becoming a, non-employee director of the Board, an award of Restricted Shares in
an amount equal to the excess of (a) the product of (i) 5,000 and (ii) the
result (rounded down to the nearest whole number) obtained by dividing the
number of full years of service as a non-employee director of the Corporation by
5 over (b) the number of Restricted Shares previously awarded to such individual
pursuant to this Plan; provided that such person is a non-employee director of
the Corporation on the date the award is granted.
5.Terms of Awards; Acceptance of Awards; Price; Restrictions and
Conditions.
The Restricted Shares awarded hereunder shall be awarded only pursuant to a
written agreement, which shall be executed by the non-employee director to whom
an award of Restricted Shares is granted pursuant to the Plan (a "Participant")
and a duly authorized officer of the Corporation and which shall contain the
following terms and conditions:
(a) ACCEPTANCE OF AWARD. An award of Restricted Shares must be
accepted by the Participant within a period of sixty (60) days (or such
other period as the Board may specify at grant) after the award date.
(b) PRICE. The purchase price of each Restricted Share shall be equal
to its par value, and shall be payable by the Participant by check (or by
any other means acceptable to the
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<PAGE> 2
Board) at the time the Participant executes the Restricted Share award
agreement, unless otherwise provided by the Board.
(c) RESTRICTIONS AND CONDITIONS. The Restricted Shares awarded to a
Participant pursuant to this Section 5 shall be subject to the following
restrictions and conditions:
(i) A Participant shall not be permitted to sell, transfer, pledge,
hypothecate, factualize, assign or otherwise encumber Restricted Shares
(or any interest therein) awarded under the Plan prior to the date on
which such Shares vest in accordance with clause (iii), except (x) in
accordance with the laws of descent and distribution and (y) to the
extent permitted by applicable laws, in connection with a sale, transfer
or assignment to (1) the spouse or any lineal ancestor or descendant of
such Participant or (2) any trust, the sole beneficiaries of which are
any or all of such Participant or the spouse or any lineal ancestor or
descendant of such Participant.
(ii) Except as provided in clause (i) and this clause (ii), the
Participant shall have, with respect to the Restricted Shares, all of
the rights of a stockholder of the Corporation, including the right to
vote the Shares and to receive any cash dividends declared on them.
Stock dividends, if any, issued with respect to Restricted Shares shall
be treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply with respect to
the Restricted Shares with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the Restricted Share
award agreement and this Section, a Participant's interest in each award
of Restricted Shares shall immediately become fully vested and
nonforfeitable, and the restrictions set forth in this Section 5(c)
shall lapse, upon the earliest to occur of (x) the last day of the
second consecutive year during which the Participant shall serve as a
non-employee director commencing from the date of each award of
Restricted Shares pursuant to Section 4 (such two year vesting period
referred to herein as the "Term"), (y) the Participant's death or total
disability, or (z) a Change in Control Date (as defined herein).
Notwithstanding the foregoing, if a Participant resigns as a
non-employee director for any reason or is removed for cause prior to
the end of the Term for which he was awarded Restricted Shares, all such
Restricted Shares that have not vested in accordance with the preceding
sentence shall be forfeited immediately, and the Corporation shall
reimburse the Participant an amount equal to his purchase price for such
forfeited Restricted Shares. All determinations as to whether a
non-employee director has become totally disabled shall be made by the
Administrative Body, in good faith, upon the basis of such evidence as
it deems necessary or desirable, and shall be final and binding on all
interested persons.
(d) STOCK CERTIFICATES. A stock certificate registered in the name of
each Participant receiving a Restricted Share award shall be issued in
respect of such Restricted Shares. Such certificate shall bear whatever
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award as the Administrative Body shall determine. The
Administrative Body may, in its sole discretion, require that the stock
certificates evidencing Restricted Shares be held in custody by the
Corporation until the restrictions thereon shall have lapsed. If and to the
extent a Participant's interest in Restricted Shares becomes fully vested,
certificates for an appropriate number of unrestricted Shares shall be
delivered to the Participant promptly.
6. Adjustments Upon Certain Events.
If the outstanding Shares are subdivided, consolidated, increased,
decreased, changed into, or exchanged for a different number or kind of shares
or other securities of the Corporation through reorganization, merger,
recapitalization, reclassification, capital adjustment or similar transaction,
or if the Corporation shall issue additional Shares as a dividend or pursuant to
a
A-2
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stock split or other similar corporate event affects the Shares such that an
adjustment is required in order to preserve the benefits or potential benefits
intended under this Plan then adjustment shall be made to any or all of the
number and kind of Shares which thereafter may be awarded under the Plan, or the
number and kind of Shares subject to outstanding awards. Distributions to the
Corporation's stockholders consisting of property other than Shares of the
Corporation or its successor and distributions to stockholders of rights to
subscribe for Shares shall not result in the adjustment of the Shares subject to
outstanding awards. Adjustments under this paragraph shall be made by the
Administrative Body, whose determination thereof shall be conclusive and
binding. Any fractional Share resulting from adjustments pursuant to this
paragraph shall be eliminated from any then outstanding award. Nothing contained
herein or in any award agreement shall be construed to affect in any way the
right or power of the Corporation to make or become a party to any adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve, liquidate or otherwise transfer
all or any part of its business or assets.
7. General Restrictions.
(a) No award of Restricted Shares hereunder shall be granted if the
Corporation shall at any time determine that (i) the listing upon any securities
exchange, registration or qualification under any state or federal law of any
Shares otherwise deliverable upon such grant, or (ii) the consent or approval of
any regulatory body or the satisfaction of withholding tax or other withholding
liabilities, is necessary or appropriate in connection with such grant. In any
of the events referred to in clause (i) or clause (ii) above, the grant of such
awards shall be suspended and shall not be effective unless and until such
withholding, listing, registration, qualifications or approval shall have been
effected or obtained free of any conditions not acceptable to the Corporation in
its sole discretion, notwithstanding any termination of any option or any
portion of any option during the period when such grant has been suspended.
(b) The Administrative Body may require, as a condition to the right to
receive an award, that the Corporation receive from the Participant, at the time
of any such award, representations, warranties and agreements to the effect that
the Shares are being held by the Participant for investment only and without any
present intention to sell or otherwise distribute such Shares and that the
Participant will not dispose of such Shares in transactions which, in the
opinion of counsel to the Corporation, would violate the registration provisions
of the Securities Act of 1933, as then amended, and the rules and regulations
thereunder. The certificates issued to evidence such Shares shall bear
appropriate legends summarizing such restrictions on the disposition thereof.
8. Extraordinary Event Provisions.
(a) IMPACT OF EVENT.
Upon the occurrence of an Extraordinary Event (as defined below), the
transferability and forfeiture restrictions placed on any Restricted Shares by
Section 5 shall lapse on the Extraordinary Event Date (as defined below) and
such Shares shall be deemed fully vested and owned by the Participant as of such
date.
(b) DEFINITION OF EXTRAORDINARY EVENT.
For purposes of the Plan, an Extraordinary Event means the happening of any
of the following:
(i) any "person," as such term is used in Section 13(d) and 14(d) of
the Exchange Act (other than the Corporation or any subsidiary in which the
Corporation owns fifty percent (50%) or more of the total combined voting
power, or any trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or any such subsidiary) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly
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<PAGE> 4
or indirectly, of securities of the Corporation representing twenty percent
(20%) or more of the combined voting power of the Company's then
outstanding securities.
(ii) during any period of two consecutive years beginning on or after
the Effective Date, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the
Corporation to effect a transaction described in clause -- (iii) or (iv) of
this Section 8) whose election by the Board or nomination for election by
the Corporation's stockholders was approved by a vote of at least
two-thirds ( 2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved (unless the approval of the
election or nomination for election of such new directors was in connection
with an actual or threatened election or proxy contest), cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than (a)
a merger or consolidation which would result in the voting securities of
the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than eighty percent (80%)
of the combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation or (b) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no
"person" -- as such term is used in Section 13(d) and 14(d) of the Exchange
Act (other than the Corporation or any subsidiary in which the Corporation
owns fifty (50%) or more of the total combined voting power, or any trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation or any such subsidiary) acquired more than twenty percent (20%)
of the combined voting power of the Corporation's then outstanding
securities;
(iv) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets
or any transaction having a similar effect; or
(v) there is a corporate separation or division, including, but not
limited to, a split-up, spin-off or extraordinary distribution of cash,
securities or other property.
The "Extraordinary Event" shall be the earliest date on which one of the events
described in this Section 8 occurs.
Notwithstanding anything in this definition to the contrary, an event or
occurrence (or a series of events or occurrences) which would otherwise
constitute an Extraordinary Event under the foregoing shall not constitute an
Extraordinary Event for purposes of this Plan if the Board, by majority vote,
determines that an Extraordinary Event does not result therefrom; but only if
Continuing Directors constitute a majority of the directors voting in favor of
such determination. Further, an event or occurrence (or a series of events or
occurrences) which would not otherwise constitute an Extraordinary Event under
the foregoing shall be deemed to constitute an Extraordinary Event for purposes
of this Plan if the Board, by majority vote, determines that an Extraordinary
Event does result therefrom; but only if Continuing Directors constitute a
majority of the directors voting in favor of such determination. A determination
by the Board under the provisions of this paragraph shall be made solely for
purposes of this Plan and shall not directly or indirectly affect any
determination or analysis of whether an Extraordinary Event results for any
other purpose. Any determination made with respect to whether an Extraordinary
Event results for purposes of any other plan or agreement of the Company shall
have no effect for purposes of this Plan.
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<PAGE> 5
9. Amendment. The Board shall have full authority to amend the Plan;
provided, however, that the Board shall not amend the Plan more than once every
six months, with respect to the provisions of the Plan which relate to the
amount, price and timing of grants, other than to comport with changes in the
Internal Revenue Code (the "Code"), Employee Retirement Income Security Act
("ERISA"), or the rules thereunder. Except as provided in Section 10, any
amendment that (i) increases the total number of Shares reserved for the
purposes of the Plan, (ii) expands the class of individuals eligible to receive
grants under the Plan, (iii) increases the period for granting awards as
provided herein, or (iv) modifies the Plan in any other way if such modification
requires stockholder approval shall only be adopted by the Board subject to any
required stockholder approval. No amendment to the Plan shall, without the
consent of the Participant, materially and adversely affect his or her rights
under any award theretofore granted.
10. Termination. Unless the Plan shall theretofore have been terminated as
provided hereinafter and in Section 13, the Plan shall terminate on May 14,
2006, and no awards may be granted under the Plan thereafter; provided, however,
that the Board may at any time, in its sole discretion, terminate the Plan prior
to the foregoing date. No termination of the Plan by the Board shall, without
the consent of the Participant, materially and adversely affect his or her
rights under such award theretofore granted.
11. Taxable Income and Section 83(b) Election. Taxable income recognized
by each Participant as a result of the award of Restricted Shares hereunder, and
the withholding liability and withholding date with respect thereto, would be
affected by a decision by each Participant to make an election under Section
83(b) of the Code (an "83(b) Election") with respect to the Restricted Shares
within 30 days of the date of award. Each Participant will have the sole
responsibility for determining whether to make an 83(b) Election with respect to
the Restricted Shares, and for properly making such election and filing the
election with the relevant taxing authorities on a timely basis. Each
Participant will not rely on the Corporation for any advice in connection with
the decision to whether to make, or procedures for making the 83(b) Election and
each Participant should consult his or her own tax advisor with respect to the
desirability of and procedures for making an 83(b) Election with respect to the
Restricted Shares. Each Participant should submit to the Corporation a copy of
any 83(b) Election with respect to the Restricted Shares immediately upon filing
such election with the relevant taxing authority.
12. Certain Additional Payments by the Corporation.
(i) Each Participant shall be entitled to receive a payment (the "Gross-Up
Payment") in an amount equal to the additional federal, state and local taxes
payable by the Participant attributable to each award of Restricted Shares and
the Gross-Up Payment such that the net amount of the award and the Gross-Up
Payment, after the calculation and deduction of any such taxes with respect to
such amounts, shall be equal to the award. In determining this amount: (a) the
amount of the Gross-Up Payment shall be reduced by the amount of federal, state
and local income taxes that could be obtained by the deduction of the portion of
the Gross-Up Payment attributable to federal, state and local income taxes; (b)
in the case of any tax which applies only to income below a certain level, no
Gross-Up Payment will be payable with respect to such tax, except to the extent
that the award or the Gross-Up Payment results in additional tax liability; and
(c) the Gross-Up Payment shall be reduced by income or excise tax withholding
payments made by the Corporation to any federal, state or local taxing authority
with respect to the award and/or Gross-Up Payment that was not deducted from
compensation payable to the Participant.
(ii) All determinations required to be made under this Section 12,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, except as specified in Section 12(i) above, shall be made by the
Corporation, which shall provide detailed supporting calculation to
A-5
<PAGE> 6
the Participant within 15 business days after the earlier to occur of the making
of an 83(b) Election by the Participant or the end of the Term. The
determination of tax liability made by the Corporation shall be subject to
review by the Participant's tax advisor, and, if the Participant's tax advisor
does not agree with the determination reached by the Corporation, then the
Corporation's independent auditors (the "Accounting Firm") and the Participant's
tax advisor shall jointly make the determination. All fees and expenses of the
Accounting Firm, but not tax advisors retained by the Participant, shall be
borne by the Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 12, shall be paid by the Corporation to the Participant within five days
after the receipt of the determination.
(iii) As a result of the uncertainty in the application of federal, state
and local income taxes at the time of the initial determination hereunder, it is
possible that Gross-Up Payments will not have been made by the Corporation that
should have been made consistent with the calculations required to be made
hereunder ("Underpayment"). In the event that the Participant thereafter is
required to make a payment of any Taxes, any such Underpayment shall be promptly
paid by the Corporation to or for the benefit of the Participant. In the event
that the Gross-Up Payment exceeds the amount subsequently determined to be due,
such excess shall constitute a loan from the Corporation to the Participant
payable on the fifth day after demand by the Corporation (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code).
(iv) The Gross-Up Payments determined under this Section 12 are payable to
the Participant not later than five days prior to the date on which federal
estimated tax payments are due for the calendar quarter in which the Participant
recognizes gross income with respect to the award for federal income tax
purposes.
13. Stockholder Approval. The Plan was submitted to, and was approved
by, the stockholders of the Corporation at the 1996 Annual Meeting of the
Corporation's stockholders.
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<PAGE> 1
EXHIBIT 5.1
OPINION OF SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
January 30, 1997
Waxman Industries, Inc.
24460 Aurora Road
Bedford Heights, Ohio 44146
Ladies and Gentlemen:
On the date hereof, Waxman Industries, Inc., A Delaware corporation
(the "Company"), intends to transmit for filing with the Securities and
Exchange Commission, a Registration Statement on Form S-8 (the "registration
Statement"), relating to a aggregate of 65,000 shares (the "Shares") of common
stock, par value $.01 per share (the "Common Stock"), of the Company which may
be offered from time to time pursuant to the 1996 Waxman Industries, Inc.
Non-Employee Directors Restricted Share Plan (the "Plan"). This opinion is an
exhibit to the Registration Statement.
We have at times acted as counsel to the Company with respect to
certain corporate and securities matters, and in such capacity we are familiar
with the various corporate and other proceedings taken by or on behalf of the
Company in connection with the proposed offer and sale of the Shares as
contemplated by the Registration Statement. We have examined copies (in each
case signed, certified or otherwise proven to our satisfaction to be genuine)
of the Company's Certificate of Incorporation as presently in effect, its
By-Laws as presently in effect, minutes and other instruments evidencing
actions taken by its directors and stockholders, the Plan and such other
documents and instruments relating to the Company and the proposed offering as
we have deemed necessary under the circumstances. Insofar as this opinion
relates to securities to be issued in the future, we have assumed that all
applicable laws, rules and regulations in effect at the time of such issuance
are the same as such laws, rules and regulations in effect as of the date
hereof.
We note that we are members of the Bar of the State of New York and
that we are not admitted to the Bar in the State of Delaware. To the extent
that the opinions expressed herein involve the law of the State of Delaware,
such opinions are based solely upon our reading of the Delaware General
Corporation Law as reported by CSC Networks Prentice-Hall Legal and Financial
Services.
<PAGE> 2
Waxman Industries, Inc.
January 30, 1997
Page 2
Based on, and subject to, the foregoing, and subject to and in reliance
on the accuracy and completeness of the information relevant thereto provided
to us, it is our opinion that the Shares to be issued pursuant to the Plan
(including upon the proper exercise of options granted pursuant to the Plan)
have been duly authorized and, subject to the effectiveness of the Registration
Statement and and compliance with applicable state securities laws, when issued
in accordance with the terms set forth in the Plan and options issued under the
Plan, will be legally and validly issued, fully paid and nonassessable.
It should be understood that nothing in this opinion is intended to
apply to any disposition of the Shares which any participant in the Plan might
propose to make in the future.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any filing made by the Company
under the securities or "Blue Sky" laws of any state.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose, except as expressly provided in the
preceding paragraph, without our express written consent, and no party other
than you is entitled to rely on it. This opinion is rendered to you as of the
date hereof and we undertake no obligation to advise you of any change, whether
legal or factual, and the date hereof.
Very truly yours,
/s/ Shereff, Friedman, Hoffman & Goodman, LLP
---------------------------------------------
SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
SMZ:GA:KLL
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 7, 1996
included in Waxman Industries, Inc.'s Form 10-K for the year ended June 30,
1996 and to all references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Cleveland, Ohio,
January 29, 1997
