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EXHIBIT 10.2
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EXECUTION COPY
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "AGREEMENT"), dated as of July 10, 2000, by
and among Waxman USA Inc., a Delaware corporation ("STOCKHOLDER"), Waxman
Industries, Inc., a Delaware corporation ("PARENT"), Wilmar Industries, Inc., a
New Jersey corporation ("WILMAR") and BW Acquisition, Inc., a Delaware
corporation and a wholly-owned subsidiary of Wilmar, ("BW ACQUISITION" and,
together with Wilmar, "PURCHASER").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Purchaser and Barnett Inc., a Delaware
corporation (the "Company"), are entering into an Agreement and Plan of Merger
of even date herewith (the "MERGER AGREEMENT"), pursuant to which Purchaser will
acquire all of the outstanding shares of common stock, $0.01 par value per
share, of Company (the "COMMON STOCK"), for the Merger Consideration, as defined
in the Merger Agreement in effect on the date hereof, pursuant to a merger of BW
Acquisition with and into Company (the "MERGER");
WHEREAS, the Stockholder is a holder of record and Beneficially Owns
(as defined herein), as of the date hereof, 7,186,530 shares of Common Stock
(the "EXISTING SHARES", together with any shares of Common Stock acquired after
the date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "SHARES"), of which 1,000,000 Existing Shares are pledged
(the "PLEDGED SHARES") to Congress Financial Corporation ("CONGRESS") as
collateral security for the Stockholder's obligations to Congress pursuant to
that certain Loan and Security Agreement, dated as of June 17, 1999 and amended
as of December 8, 1999, March 29, 2000, May 1, 2000 and July 10, 2000, by and
among Congress, Waxman Consumer Products Group, Inc., WOC Inc., Western American
Manufacturing Inc., WAMI Sales, Inc., Stockholder, Parent and TWI,
International, Inc. (the "CONGRESS CREDIT FACILITY");
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, and in reliance upon Stockholder's representations, warranties,
covenants and agreements hereunder, Purchaser has required that Stockholder
agree, and Stockholder has agreed, to enter into this Agreement; and
WHEREAS, this Agreement is being entered into concurrently with the
execution of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
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1. Definitions.
1.1 Capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement.
1.2 For purposes of this Agreement, "BENEFICIALLY OWN" or "BENEFICIAL
OWNERSHIP" with respect to any securities shall mean "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
2. AGREEMENT TO VOTE; PROXY.
2.1 AGREEMENT TO VOTE. Stockholder hereby agrees that, except as
expressly set forth below, during the time this Agreement is in
effect, at any meeting of the stockholders of Company, however called,
and in any action by consent of the stockholders of Company,
Stockholder shall vote, or cause the holder of record on any
applicable record date with respect to any of the Pledged Shares
Beneficially Owned by such Stockholder (the "RECORD HOLDER") to vote,
in person or by proxy, the Pledged Shares: (a) in favor of the Merger;
(b) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or
agreement of Company under the Merger Agreement; and (c) against any
action or agreement that would impede, interfere with, delay, postpone
or attempt to discourage the Merger including, but not limited to, (i)
any extraordinary corporate transaction (other than the Merger), such
as a merger, other business combination, reorganization,
consolidation, recapitalization, dissolution or liquidation involving
Company (a "BUSINESS COMBINATION TRANSACTION"), (ii) a sale or
transfer of a material amount of assets of Company or any of its
subsidiaries, (iii) any change in the management or board of directors
of Company, except as otherwise agreed to in writing by Purchaser,
(iv) any change in the present capitalization of the Company, or (v)
any other change in the corporate structure (including the charter,
by-laws or other organizational or constitutive documents) or business
of the Company. Stockholder agrees, without limiting the foregoing,
that it shall consult with Purchaser prior to any such vote and vote,
or cause the Record Holder to vote, the Pledged Shares in such manner
as is in compliance with the provisions of this Section 2. Stockholder
acknowledges receipt and review of a copy of the Merger Agreement.
2.2 PROXY. In furtherance of Section 2.1, Stockholder hereby grants to
Purchaser a proxy to vote the Pledged Shares in accordance with the
terms and conditions of this Agreement, it being understood that such
proxy is coupled with an interest. Contemporaneously with the
execution of this Agreement, Stockholder shall deliver to Purchaser
the proxy in the form attached hereto as Exhibit A (the "PROXY").
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3. PARENT. Parent agrees to cause the Stockholder to take (or omit to
take) the action set forth above in Section 2.1.
4. VOTING TRUST ARRANGEMENT.
4.1 VOTING TRUST AGREEMENT. Contemporaneously herewith, Stockholder
hereby delivers to American Stock Transfer & Trust Company, as voting
trustee (the "VOTING TRUSTEE") under and pursuant to that certain
Voting Trust Agreement dated today's date (the "VOTING TRUST
AGREEMENT"), the certificates representing all of the Existing Shares,
other than the Pledged Shares, together with five duly executed stock
powers, endorsed in blank (the "STOCK POWERS"). If for any reason
Stockholder receives the right to vote with respect to any or all
Shares held in the Voting Trust, at any time or from time to time,
after the date hereof and prior to the termination of the Voting Trust
Agreement, Stockholder agrees that all such Shares shall be governed
by this Agreement and Stockholder shall vote with respect to such
Shares in compliance with the terms of this Agreement, as if such
Shares were originally included herein, until such time as the right
to vote with respect such Shares reverts to the Voting Trustee.
Stockholder agrees and covenants not to take any action inconsistent
with the terms of the Voting Trust Agreement.
4.2 RELEASE OF CERTAIN SHARES FROM VOTING TRUST. If (a) the Effective
Time has not occurred on or prior to September 1, 2000 and (b) the
Company has not repurchased from the Stockholder shares of Common
Stock having a value of $2,000,000 (the "PURCHASE SHARES") in
accordance with that certain agreement, dated as of the date hereof,
by and between the Stockholder and the Company (the "BARNETT
AGREEMENT"), by September 8, 2000, then the Stockholder shall be
entitled to have transferred to it by the Voting Trustee the Purchase
Shares.
5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder and Parent
jointly and severally represent and warrant to Purchaser as follows:
5.1 OWNERSHIP OF SHARES. On the date hereof, the Existing Shares are
all of the Shares currently Beneficially Owned by the Stockholder or
any affiliate of the Stockholder, excluding a de minimus number of
shares of Common Stock held by Melvin Waxman, Armond Waxman and
members of their families. Stockholder currently has with respect to
the Existing Shares and, at all times up to and including the
Effective Time, will have with respect to the Shares (other than any
Shares purchased by the Company pursuant to the Merger Agreement),
good, valid and marketable title, free and clear of all liens,
encumbrances, restrictions, options, warrants, rights to purchase,
voting agreements or voting trusts, and claims of every kind (other
than the encumbrances created by (a) this Agreement and the Voting
Trust Agreement, (b) the pledge of 1,000,000 Shares to Congress, (c)
restrictions on transfer under applicable federal and state securities
and antitrust laws, (d) restrictions under the Congress Credit
Facility (which restrictions, with respect to the transactions
contemplated by the Merger Agreement, this Agreement and the Voting
Trust Agreement, have been waived by
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Congress as set forth in that certain letter, dated July 9, 2000, from
Congress to Parent and certain of its subsidiaries party to the
Congress Credit Facility (the "CONGRESS CONSENT LETTER"), (e)
restrictions under that certain indenture, dated as of May 20, 1994
(as amended from time to time, the "DC NOTES INDENTURE"), by and
between Waxman Industries, Inc. and The Huntington National Bank, as
trustee, relating to Waxman Industries, Inc.'s 12 3/4% Senior Secured
Deferred Coupon Notes due 2004, and that certain indenture dated as of
April 1, 1996 (as amended from time to time, the "SENIOR NOTES
INDENTURE" and together with the DC Notes Indenture, the
"INDENTURES"), by and between Waxman USA Inc. and the United States
Trust Company of New York, as trustee, relating to Waxman USA Inc.'s
11 1/8% Senior Notes, due 2001 and (f) that certain agreement dated
December 8, 1999 (the "NOTEHOLDER AGREEMENT") by and among Parent,
Stockholder, and each of the holders therein named (each, a
"CONSENTING NOTEHOLDER") of the 12 3/4% Deferred Coupon Secured Notes,
due 2004, some of whom also hold the 11 1/8% Senior Notes, due 2001
(which restrictions, with respect to the transactions contemplated by
the Merger Agreement, this Agreement and the Voting Trust Agreement,
in clauses (e) and (f) have been waived by the requisite holders under
the Indentures or the Noteholder Agreement, as applicable, as set
forth in that certain Amendment, Consent and Waiver, dated July 9,
2000, by and among Parent, Stockholder and the Consenting Noteholders
named therein.)
5.2 POWER; AUTHORITY; BINDING AGREEMENT; AND NON-CONTRAVENTION. Each
of Parent and Stockholder has the full legal right, power and
authority to enter into this Agreement and the Voting Trust
Agreement, and to perform all of its obligations under this Agreement
and the Voting Trust Agreement in accordance with the terms and
conditions hereof and thereof, and Stockholder has the full legal
right, power and authority to enter into the Proxy contemplated
hereby. The execution, delivery and performance of this Agreement and
the Voting Trust Agreement by each of Parent and Stockholder, and the
grant of the Proxy by Stockholder, will not violate (a) its charter,
by-laws, or other organizational documents, (b) any agreement to
which Parent or Stockholder is a party, including, without
limitation, (i) any voting agreement, stockholder agreement or voting
trust to which Parent or Stockholder is a party, (ii) any agreement
with Congress or involving or related to the credit arrangements
between Parent or Stockholder and Congress or (iii) any of the
Indentures or other agreement related to the credit arrangements
which are the subject matter of the Indentures, or (c) assuming the
receipt of the approval of the holders of a majority of the
outstanding voting common stock of Parent, any law, rule, regulation
or order applicable to Parent or Stockholder. This Agreement and the
Voting Trust Agreement have been duly executed and delivered by each
of Parent and Stockholder and constitute legal, valid and binding
agreements of each of Parent and Stockholder, enforceable in
accordance with their respective terms. Neither the execution or
delivery of this Agreement and the Voting Trust Agreement by each of
Parent or Stockholder, and the Proxy by Stockholder, nor the
consummation by each of Parent or Stockholder of the transactions
contemplated hereby and thereby, will (a) require any consent or
approval of or filing with any
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governmental or other regulatory body other than filings required, if
any, under the federal or state securities and antitrust laws or (b)
result in a violation of, conflict with or default under, any (A)
law, rule, regulation or order applicable to Parent or Stockholder or
(B) any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Parent or Stockholder is a
party or by which Parent or Stockholder is bound.
5.3 WRITTEN CONSENT OF STOCKHOLDERS. Approval of this Agreement, the
Voting Trust Agreement and the Merger Agreement and all of the
transactions contemplated in connection therewith have been approved
by the written consent of the stockholders of each of Parent and
Stockholder in accordance with Delaware law, and no other consents or
filings are required in respect of such stockholder approval, except
for the filing of the Information Statement (as defined herein)
described in Section 10.3. Purchaser hereby acknowledges receipt of
copies of the written consents of the stockholders of each of Parent
and Stockholder.
5.4 FINDER'S FEES. No person other than Donaldson, Lufkin & Jenrette
Securities Corporation is, or will be, entitled to any commission or
finder's fees from Parent or Stockholder in connection with this
Agreement or the transactions contemplated hereby, exclusive of any
commission or finder's fees referred to in the Merger Agreement.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Stockholder as follows:
6.1 AUTHORITY. Purchaser has full legal right, power and authority to
enter into and perform all of its obligations under this Agreement
and the Voting Trust Agreement in accordance with the terms and
conditions hereof. The execution, delivery and performance of this
Agreement and the Voting Trust Agreement by Purchaser will not
violate (a) its charter, by-laws, or other organizational or
constitutive documents, (b) except as set forth in the Merger
Agreement, any agreement to which Purchaser is a party or (c) any
law, rule, regulation or order applicable to Purchaser. This
Agreement and the Voting Trust Agreement have been duly executed and
delivered by Purchaser and constitute legal, valid and binding
agreements of Purchaser, enforceable in accordance with their
respective terms. Except as set forth in the Merger Agreement,
neither the execution or delivery by Purchaser of this Agreement and
the Voting Trust Agreement, nor the consummation by Purchaser of the
transactions contemplated hereby and thereby, will (a) require any
consent or approval of or filing with any governmental or other
regulatory body other than filings required under the federal and
state securities and antitrust laws or (b) result in a violation of,
conflict with or result in a default under, (i) any law, rule,
regulation or order applicable to Purchaser or (ii) any contract,
commitment, agreement, understanding, arrangement or other
restriction of any kind to which or it is a party or by which it is
bound.
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6.2 FINDER'S FEES. No person is, or will be, entitled to any
commission or finder's fee from Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any
commission or finder's fees referred to in the Merger Agreement.
7. TERMINATION.
This Agreement shall terminate on the earliest of (a) the
Effective Time (as defined in the Merger Agreement), (b) 5:00 p.m. New York City
time on November 30, 2000, but only if the Effective Time has not occurred by
such time, (c) immediately upon the termination of the Merger Agreement, (d) any
decrease in the Merger Consideration from that referenced in the Merger
Agreement as of the date hereof or any other change (including by way of
amendment, modification, waiver or other acquiescence) relating to the Merger
Consideration (including, without limitation, any changes to the manner of
calculating or paying, including the timing thereof or conditions thereto, the
Merger Consideration), (e) any amendment to the Merger Agreement that adversely
affects the Stockholder and (f) fourteen (14) days after the occurrence of the
stockholders meeting called by the Company to approve the Merger as set forth in
Section 5.5 of the Merger Agreement, but only if the Effective Time has not
occurred by such time; provided, however, the provisions of Sections 8 and 9, 12
through 18 (inclusive), and 20 and 21 shall all survive any termination of this
Agreement.
8. EXPENSES.
Except as provided in Section 21, each party hereto will pay
all of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers.
9. CONFIDENTIALITY.
Stockholder recognizes that successful consummation of the
transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to these matters. In this connection, Stockholder
agrees that it will not disclose or discuss these matters with anyone (other
than with the officers, directors, legal counsel and advisors of the
Stockholder, the Company, Congress or the Committee, if any) not a party to this
Agreement, without prior written consent of Purchaser, except that Stockholder
may make the filings and other disclosures required by it pursuant to the
Exchange Act and the rules and regulations thereunder. Additionally, other than
disclosures which would violate Section 10.1(c) below, Stockholder may make
other disclosures which Stockholder's legal counsel advises in writing are
necessary in order to fulfill Stockholder's obligations imposed by law, court
order or stock exchange regulations, so long as Stockholder shall have given
reasonable prior notice of such disclosure to Purchaser and, to the extent
applicable, shall thereafter cooperate with Purchaser in seeking a protective or
other order respecting the confidentiality hereof.
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10. COVENANTS.
10.1 Except in accordance with the provisions of or as otherwise
contemplated by this Agreement, Stockholder and Parent agree, prior
to the termination of this Agreement as provided in Section 5 above,
not to, directly or indirectly:
(a) voluntarily (i) sell, transfer, pledge, encumber, assign
or otherwise dispose of, or (ii) enter into any contract, option or
other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of,
any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) take any action to encourage, initiate or solicit any
inquiries or the making of any Takeover Proposal (as defined in the
Merger Agreement) or engage in any negotiations concerning, or
provide any confidential information or data to, or have any
discussions with or respond to, any person relating to a Takeover
Proposal or otherwise assist or facilitate any effort or attempt by
any person or entity (other than Purchaser or its officers,
directors, representatives, agents, affiliates or associates) to make
or implement a Takeover Proposal.
10.2 Each of Parent and Stockholder agrees, while this Agreement is
in effect, to notify Purchaser promptly of the number of any shares
of Common Stock acquired by Stockholder after the date hereof and to
deposit all such shares of Common Stock with the Voting Trustee to be
held in accordance with the Voting Trust Agreement.
10.3 Parent shall promptly prepare and in no event later than ten
(10) business days after the date hereof, file with the Securities
and Exchange Commission ("SEC") a preliminary information statement
relating to the approval of this Agreement and use its reasonable
best efforts to obtain and furnish the information required to be
included by the SEC in the information statement. Parent will provide
Purchaser with a reasonable opportunity to review and comment on such
materials. Parent shall respond promptly to any comments made by the
SEC with respect to the preliminary information statement, shall use
its reasonable best efforts to have the SEC clear the information
statement and shall cause a definitive information statement (such
definitive information statement, together with any amendments and
supplements thereto, the "INFORMATION STATEMENT") to be mailed to its
stockholders, and the stockholder action referred to therein to
become effective, as soon as possible after the filing with the SEC
of the preliminary information statement. Purchaser shall provide
Parent for inclusion in the Information Statement such information
regarding Purchaser which may be required under applicable law and
which is reasonably requested by Parent, and Purchaser hereby
represents and warrants that the information provided and to be
provided by it specifically for use in the Information Statement (the
"PURCHASER INFORMATION") shall not, on the date upon which the
Information
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Statement is mailed to the stockholders of Parent and on the date
upon which approval of the Sale and this Agreement by stockholders of
Parent is obtained, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
Purchaser agrees to correct promptly any of the Purchaser Information
that shall have become false or misleading in any material respect.
10.4 If the Company has purchased the Purchase Shares pursuant to the
Barnett Agreement for less than the Merger Consideration, Purchaser
shall, within ten (10) days after the Effective Time, pay to
Stockholder by wire transfer of immediately available funds to the
account or accounts designated for payment an amount equal to the
product of (a) the difference between the Merger Consideration and
the price per share paid by the Company for the Purchase Shares,
multiplied by (b) the number of Purchase Shares purchased by the
Company.
10.5 To the extent that the net proceeds per share received by the
Stockholder from any sale of the Purchase Shares is less than the
Merger Consideration, Purchaser shall, within ten (10) days after the
Effective Time, pay to the Stockholder by wire transfer of
immediately available funds to the account or accounts designated for
payment an amount equal to the product of (a) the difference between
the Merger Consideration and the net proceeds per share received by
the Stockholder for the Purchase Shares, multiplied by (b) the number
of Purchase Shares sold by the Stockholder.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Except as set forth in Section 7 above, all representations,
warranties, covenants and agreements made by Stockholder, Parent or Purchaser in
this Agreement shall survive notwithstanding any investigation at any time made
by or on behalf of any party.
12. NOTICES.
All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein), given in
the manner provided in the Merger Agreement, and shall be deemed duly given when
received, addressed as follows:
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If to Purchaser:
Wilmar Industries, Inc.
303 Harper Drive
Moorestown, New Jersey 08057
Attention: William Sanford
Facsimile: (856) 439-8846
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attn: Mark A. Underberg, Esq.
Facsimile: (212) 757-3990
If to Stockholder or Parent:
Waxman Industries, Inc.
Waxman USA Inc.
24460 Aurora Road
Bedford Heights, OH 44146
Attention: Armond Waxman
Facsimile: (440) 439-8678
With a copy to:
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Scott M. Zimmerman, Esq.
Facsimile: (212) 891-9598
13. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, together with the documents expressly referred
to herein, constitute the entire agreement among the parties hereto with respect
to the subject matter contained herein and supersede all prior agreements and
understandings among the parties with respect to such subject matter. This
Agreement may not be modified,
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amended, altered or supplemented except by an agreement in writing executed by
the parties hereto.
14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties; PROVIDED that this Agreement shall
not be binding on any transferee of the Pledged Shares not affiliated with the
Stockholder or Parent, other than Congress.
15. GOVERNING LAW.
Except as expressly set forth below, this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. In addition, each of the parties hereto hereby
agree that any dispute arising out of this Agreement shall be heard in the
Chancery Court of the State of Delaware or in the United States District Court
for the District of Delaware and, in connection therewith, each party to this
Agreement hereby consents to the jurisdiction of such courts and agrees that any
service of process in connection with any dispute arising out of this Agreement
may be given to any other party hereto by certified mail, return receipt
requested, at the respective addresses set forth in Section 12 above.
16. INJUNCTIVE RELIEF.
The parties agree that in the event of a breach of any
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
17. COUNTERPARTS; FACSIMILE SIGNATURES.
This Agreement may be executed, including execution by
facsimile, in any number of counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the same document.
18. SEVERABILITY.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining
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terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.
19. FURTHER ASSURANCES.
Each party hereto shall execute and deliver such additional
documents as may be necessary or desirable to consummate the transactions
contemplated by this Agreement.
20. THIRD PARTY BENEFICIARIES.
Nothing in this Agreement, expressed or implied, shall be
construed to give any person other than the parties hereto any legal or
equitable right, remedy or claim under or by reason of this Agreement or any
provision contained herein.
21. LEGAL EXPENSES.
In the event any legal proceeding is commenced by any party to
this Agreement to enforce, or recover damages for any breach of, the provisions
hereof, the prevailing party in such legal proceeding shall be entitled to
recover in such legal proceeding from the losing party such prevailing party's
costs and expenses incurred in connection with such legal proceedings, including
reasonable attorneys fees and disbursements.
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IN WITNESS WHEREOF, Parent, Stockholder and Purchaser have
caused this Agreement to be executed by their duly authorized officers, each as
of the date and year first above written.
Waxman USA Inc.
By: /s/ Armond Waxman
---------------------------------
Name: Armond Waxman
Title: President and Co-CEO
Waxman Industries, Inc.
By: /s/ Armond Waxman
---------------------------------
Name: Armond Waxman
Title: President and Co-CEO
Wilmar Industries, Inc.
By: /s/ Michael J. Grebe
---------------------------------
Name: Michael J. Grebe
Title: President
BW Acquisition, Inc.
By: /s/ William Sanford
---------------------------------
Name: William Sanford
Title: Senior Vice President
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Exhibit A
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Proxy
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Waxman USA Inc. ("STOCKHOLDER"), a shareholder of Barnett
Inc., a Delaware corporation (the "COMPANY"), hereby irrevocably (to the fullest
extent permitted by law) appoints and constitutes Wilmar Industries, Inc.
("WILMAR") and BW Acquisition, Inc. ("BW ACQUISITION" and, together with Wilmar,
"PURCHASER"), the attorney and proxy of Stockholder with full power of
substitution and resubstitution, to the full extent of Stockholder's rights with
respect to (i) 1,000,000 of the issued and outstanding shares of capital stock
of the Company owned of record by Stockholder as of the date of this proxy and
pledged to Congress Financial Corporation ("CONGRESS") as collateral security
for certain of Stockholder's obligations to Congress (the "PLEDGED SHARES").
Upon the execution hereof, all prior proxies given by Stockholder with respect
to any of the Pledged Shares are hereby revoked until the Termination Date (as
defined below), and no subsequent proxies will be given with respect to any of
the Pledged Shares until the Termination Date.
This proxy is coupled with an interest and is granted in
connection with a Stockholder Agreement, dated as of the date hereof, between
Purchaser and Stockholder (the "STOCKHOLDER AGREEMENT"), and is granted in
consideration of and to induce Purchaser to enter into the Agreement and Plan of
Merger, dated as of the date hereof, between the Purchaser and the Company (the
"MERGER AGREEMENT"). Capitalized terms used but not otherwise defined in this
proxy have the meanings ascribed to such terms in the Merger Agreement as in
effect on the date hereof.
Until the Termination Date, the attorney and proxy named above
will be empowered, and may exercise this proxy, solely to vote, or cause the
holder of record on any applicable record date with respect to any Pledged
Shares to vote, the Pledged Shares at any time, until the termination of the
Stockholder Agreement (upon which this Proxy shall automatically terminate), at
any meeting of the stockholders of the Company, however called, or in any
written action by consent of stockholders of the Company: (a) in favor of the
Merger; (b) against any action or agreement that would result in a breach of any
covenant, any representation or warranty or any other obligation or agreement of
the Company under or pursuant to the Merger Agreement; or (c) against any action
or agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger, including, but not limited to, (i) any corporate
transaction not entered into in the ordinary course of business (other than the
Merger) such as a merger, other business combination, reorganization,
consolidation, recapitalization, dissolution or liquidation involving Company,
(ii) a sale or transfer of a material amount of assets of Company or any of its
subsidiaries, (iii) any change in the management or board of directors of
Company, other than a change necessary to fill a vacancy, (iv) any change in the
present capitalization of the Company, or (v) any other change in the corporate
structure (including the charter, by-laws or other organizational or
constitutive documents) or business of the Company.
13
<PAGE> 14
This proxy shall be binding upon the heirs, successors and
assigns of Stockholder (including any transferee of any of the Pledged Shares in
accordance with the Stockholder Agreement) except that this proxy shall not be
binding, and shall immediately terminate, upon the earlier of (a) November 30,
2000, (b) the termination of the Merger Agreement and (c) the transfer of the
Pledged Shares to any transferee not affiliated with the Stockholder or Parent,
including Congress or its designee.
Any term or provision of this proxy which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this proxy or affecting
the validity or enforceability of any of the terms or provisions of this proxy
in any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Dated: July 10, 2000
Waxman USA Inc.
By: /s/ Armond Waxman
---------------------------------
Name: Armond Waxman
Title: President and Co-CEO
