<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
Waxman Industries, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Waxman Industries, Inc.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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--------------------------------------------------------------------------------
<PAGE> 2
[WAXMAN LOGO]
WAXMAN INDUSTRIES, INC.
24460 Aurora Road
Bedford Heights, Ohio 44146
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 6, 2001
-------------------
To Our Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Waxman
Industries, Inc. (the "Company") will be held at the offices of the Company,
24460 Aurora Road, Bedford Heights, Ohio on February 6, 2001 at 11:00 a.m.
Cleveland time to consider and act on the following matters:
1. The election of six directors of the Company to serve until the 2001
Annual Meeting of Stockholders and until their successors are elected and
qualified;
2. The approval of an amendment to the Company's Certificate of
Incorporation to effect a reverse stock split of the Company's
outstanding Common Stock and Class B Common Stock, whereby the Company
would issue one new share of Common Stock and Class B Common Stock in
exchange for ten shares of outstanding Common Stock and Class B Common
Stock, respectively;
3. The ratification of the appointment of Arthur Andersen LLP as the
independent public accountants of the Company; and
4. Such other business as may properly come before the Annual Meeting and
any adjournment thereof.
The foregoing matters are described in more detail in the Proxy Statement,
which follows.
The Board of Directors has fixed the close of business on December 11, 2000
as the record date for determining stockholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments or postponements thereof.
Accordingly, only holders of record of shares of Common Stock and Class B Common
Stock of the Company at the close of business on such date will be entitled to
notice of, and to vote at, the Annual Meeting and any adjournments or
postponements thereof. A copy of the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2000 is enclosed herewith.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING,
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE
RETURN STAMPED ENVELOPE PROVIDED. PROXIES ARE REVOCABLE BY WRITTEN NOTICE TO THE
SECRETARY OF THE COMPANY AT ANY TIME PRIOR TO THEIR BEING VOTED OR BY APPEARANCE
AT THE ANNUAL MEETING TO VOTE IN PERSON. YOUR PROMPT RETURN OF THE PROXY WILL BE
OF GREAT ASSISTANCE IN PREPARING FOR THE ANNUAL MEETING AND IS THEREFORE
STRONGLY REQUESTED.
By Order of the Board of Directors
/S/ Kenneth Robins
KENNETH ROBINS, Secretary
December 15, 2000
<PAGE> 3
[WAXMAN LOGO]
WAXMAN INDUSTRIES, INC.
PROXY STATEMENT
-------------------
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 6, 2001
-------------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders of Waxman
Industries, Inc. (the "Company") in connection with the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at 11:00 a.m.,
Cleveland time, on Thursday, February 6, 2001, at the offices of the Company.
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company and is subject to revocation at any time prior to the voting of the
proxy as provided below. Unless a contrary choice is indicated, all duly
executed proxies received by the Company will be voted for (i) the election of
the six nominees for directors, (ii) the approval of an amendment (the "Stock
Split Charter Amendment") to the Company's Certificate of Incorporation to
effect a reverse stock split of the Company's outstanding Common Stock (as
defined below) and Class B Common Stock (as defined below), whereby the Company
would issue one new share of Common Stock and Class B Common Stock in exchange
for ten shares of outstanding Common Stock and Class B Common Stock,
respectively (the "Stock Split") and (iii) the ratification of the appointment
of Arthur Andersen LLP as the independent public accountants of the Company. The
approximate date on which this Proxy Statement and the enclosed proxy card are
first being sent to stockholders is December 11, 2000.
Stockholders of record at the close of business on December 11, 2000 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof. On that date, there were outstanding 9,976,412 shares of
common stock, $.01 par value per share, of the Company ("Common Stock"), and
2,142,058 shares of Class B common stock, $.0l par value per share, of the
Company ("Class B Common Stock"). Each share of Common Stock is entitled to one
vote on all matters to come before the Annual Meeting, and each share of Class B
Common Stock is entitled to ten votes on all matters to come before the Annual
Meeting. Directors will be elected by a plurality of the votes of the shares
present in person or represented by proxy at the Annual Meeting and entitled to
vote on the election of directors. Action on the other matters scheduled to come
before the Annual Meeting will be authorized by the affirmative vote of the
majority of shares present in person or represented by proxy at the meeting and
entitled to vote on such matters. For purposes of determining whether a matter
has received a majority vote, abstentions will be included in the vote totals,
with the result that an abstention has the same effect as a negative vote. In
instances where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not returned a proxy (so-called "broker
non-votes"), those shares will not be included in the vote totals, will only be
counted for purposes of determining whether a quorum is present at the Annual
Meeting and therefore will have no effect on the vote. The Company currently has
no class of voting securities outstanding other than Common Stock and Class B
Common Stock.
Shares cannot be voted at the Annual Meeting unless the holder thereof is
present or represented by proxy. When proxies in the accompanying form are
returned, properly executed, the shares represented thereby will be voted as
specified thereon. Any stockholder giving a proxy has the right to revoke it at
any time prior to its exercise, either in writing delivered to the Secretary of
the Company at its executive offices, or in person at the Annual Meeting.
1
<PAGE> 4
COMMON STOCK OWNERSHIP
CAPITAL STOCK
The following table sets forth, as of November 30, 2000 (except as noted in
footnotes 8, 9 and 10 below), the number of shares of Common Stock and Class B
Common Stock beneficially owned by each director and executive officers named in
"Summary Compensation Table," by the directors and executive officers of the
Company as a group and by each holder of at least five percent of Common Stock
and Class B Common Stock known to the Company, and the respective percentage
ownership of the outstanding Common Stock and Class B Common Stock and voting
power held by each such holder and group. The mailing address for Messrs.
Melvin, Armond and Laurence Waxman is the executive office of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
BENEFICIALLY OWNED OWNERSHIP
-------------------------------- --------------------------------
CLASS B CLASS B PERCENTAGE
NAME AND COMMON COMMON COMMON COMMON OF AGGREGATE
BENEFICIAL OWNER STOCK STOCK STOCK STOCK VOTING POWER
-------------------------------- ------------- -------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Melvin Waxman (1)........... 849,300 1,011,932 8.3% 47.2% 34.6%
Armond Waxman (2)........... 1,030,882 770,282 10.0 36.0 27.6
Laurence S. Waxman (3)...... 560,025 55,252 5.5 2.6 3.5
John S. Peters (4).......... 31,300 -- * -- *
Irving Friedman (5)......... 25,000 -- * -- *
Judy Robins (6)............. 109,750 75,250 1.1 3.5 2.7
Mark W. Wester (7) ......... 38,235 -- * -- *
Directors and officers as
a group (7 individuals).. 2,644,492 1,912,716 24.3 89.3 67.4
Credit Suisse First Boston,
Inc. (8).................... 550,000 -- 5.5 -- 1.8
11 Madison Avenue
New York, NY 10010
Herzog, Heine, Geduld, Inc.
(9) ........................ 544,144 -- 5.5 -- 1.7
525 Washington Blvd.
Jersey City, NJ 07310
------------------------------------------------------------------------------------------------------------------------------
* less than 1%
</TABLE>
(1) Includes 300,000 shares of Common Stock subject to options granted to Mr.
Melvin Waxman pursuant to the Company's 1992 Non-Qualified and Incentive
Stock Option Plan (the "1992 Stock Option Plan") and 100 shares of Common
Stock owned by a member of Mr. Waxman's immediate family, as to which
shares Mr. Waxman disclaims beneficial ownership. Does not include 200,000
shares of Common Stock subject to stock appreciation rights granted to Mr.
Waxman by the Company which have vested but have a $3.375 trigger price.
(2) Includes 300,000 shares of Common Stock subject to options granted to Mr.
Armond Waxman pursuant to the 1992 Stock Option Plan and 100 shares of
Common Stock owned by a member of Mr. Waxman's immediate family, as to
which shares Mr. Waxman disclaims beneficial ownership. Does not include
200,000 shares of Common Stock subject to stock appreciation rights granted
to Mr. Waxman by the Company which have vested but have a $3.375 trigger
price.
2
<PAGE> 5
(3) Includes 178,750 shares of Common Stock subject to options granted to Mr.
Laurence Waxman pursuant to the 1992 Stock Option Plan, 280,000 shares of
Common Stock in a trust that is voted by Mr. Waxman, and 27,100 shares of
Common Stock for which Mr. Waxman is custodian to his minor children. Does
not include 100,000 shares of Common Stock subject to stock appreciation
rights granted to Mr. Waxman by the Company which have vested but have a
$3.375 trigger price.
(4) Includes 26,250 shares of Common Stock subject to options granted to Mr.
Peters pursuant to the 1992 Stock Option Plan.
(5) Includes 20,000 shares of Common Stock subject to options granted to Mr.
Friedman pursuant to the 1994 Non-Employee Directors Stock Option Plan (the
"1994 Directors Plan") and 5,000 shares of Common Stock granted to Mr.
Friedman pursuant to the 1996 Non-Employee Directors' Restricted Share Plan
(the "1996 Directors Plan").
(6) Includes 20,000 and 10,000 shares of Common Stock subject to options
granted to Mrs. Robins as a director, pursuant to the 1994 Directors Plan,
and to her spouse as Corporate Secretary of the Company, respectively, and
15,000 shares of Common Stock granted to Mrs. Robins pursuant to the 1996
Directors Plan.
(7) Includes 32,500 shares of Common Stock subject to options granted to Mr.
Wester pursuant to the 1992 Stock Option Plan.
(8) The information set forth in the table with respect to Credit Suisse First
Boston, Inc. was obtained from a Statement on Schedule 13G, dated February
l3, 1998, filed with the Securities and Exchange Commission. Such Statement
reflects Credit Suisse First Boston, Inc.'s beneficial ownership as of
December 31, 1997.
(9) The information set forth in the table with respect Herzog, Heine, Geduld,
Inc. was obtained from a Statement on Schedule 13G, filed with the
Securities and Exchange Commission. Such Statement reflects Herzog, Heine,
Geduld, Inc.'s beneficial ownership as of December 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any officer, director or beneficial
owner of more than 10% of the Company's equity securities who failed to timely
file with the Securities and Exchange Commission a required report relating to
ownership and changes in ownership of the Company's equity securities. Based on
material provided to the Company by such officers, directors and beneficial
owners of more than 10% of the Company's equity securities, the Company believes
that during the fiscal year ended June 30, 2000, there was compliance with all
such filing requirements.
3
<PAGE> 6
I.
ELECTION OF DIRECTORS
The authorized number of directors of the Company is currently six.
Management recommends that six directors be elected to serve until the next
Annual Meeting of Stockholders and until their respective successors are elected
and qualified.
Unless otherwise directed, all proxies (unless revoked or suspended) will
be voted for the election of the six nominees for director set forth below. If,
for any reason, any nominee is unable to accept such nomination or to serve as a
director, an event not currently anticipated, the persons named as proxies
reserve the right to exercise their discretionary authority to substitute such
other person or persons as the case may be, as a management nominee, or to
reduce the number of management nominees to such extent as they shall deem
advisable. The Company is not aware of any reason why any nominee should become
unavailable for election, or if elected, should be unable to serve as a
director. Set forth below is certain information with respect to the nominees.
All of the nominees are currently directors of the Company. Armond and Melvin
Waxman are brothers, Judy Robins is their sister and Laurence Waxman is Melvin
Waxman's son.
<TABLE>
<CAPTION>
NAME, AGE AND OTHER BUSINESS EXPERIENCE
POSITIONS WITH THE COMPANY
------------------------------------------- -----------------------------------------------------------------------------------
<S> <C>
Melvin Waxman, 66 Mr. Melvin Waxman has been a Chief Executive Officer of the Company for over 20
Chairman of the Board and Co- years, a director of the Company since 1962 and Chairman of the Board of the
Chief Executive Officer Company since August 1976 (Co-Chairman from June 1995 to April 1996). Mr. Waxman
was the Chairman of the Board of Barnett Inc. ("Barnett") until the Company sold
its Barnett stock on September 27, 2000.
Armond Waxman, 62 Mr. Armond Waxman has been the President and Treasurer of the Company since
President, Co-Chief Executive August 1976 and Co-Chief Executive Officer since June 1995. Mr. Waxman has been a
Officer and Director director of the Company since 1962. Mr. Waxman was the Vice-Chairman of the Board
of Barnett until the Company sold its Barnett stock on September 27, 2000.
Laurence S. Waxman, 43 Mr. Laurence Waxman was elected Senior Vice President of the Company in November
Senior Vice President and 1993 and is also President of Waxman Consumer Products Group, Inc. ("Consumer
Director Products"), a wholly-owned subsidiary of the Company, a position he has held
since 1988. Mr. Waxman joined the Company in 1981. Mr. Waxman was appointed to
the board of directors of the Company in July 1996.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME, AGE AND OTHER BUSINESS EXPERIENCE
POSITIONS WITH THE COMPANY
------------------------------------------- -----------------------------------------------------------------------------------
<S> <C>
John S. Peters, 52 Mr. Peters is the Chairman and Chief Executive Officer of Handl-it, Inc., a
Director logistics, distribution services and packaging business Mr. Peters founded in
1992. Mr. Peters was the Senior Vice President - Operations of the Company from
1988 until September 1997 and served the Company in other executive capacities
since October 1974. Mr. Peters resigned as a full time employee in September 1997
due to the growth of Handl-it, but has provided certain consulting services to
the Company since that date. Mr. Peters was elected as a director in March 2000.
Irving Z. Friedman, 68 Mr. Friedman is a certified public accountant and partner with the firm of Krasney
Director Polk Friedman & Fishman for more than the past five years and, since July 1997, a
shareholder and Treasurer of Furniture Services Industry, Inc., a company that
provides fabric and leather protection products to the furniture industry. Mr.
Friedman has been a director of the Company since 1989.
Judy Robins, 51 Mrs. Robins has been a director of the Company since 1980. Mrs. Robins has owned
Director and operated an interior design business for more than the past five years. Mrs.
Robins is the sister of Messrs. Melvin and Armond Waxman and the wife of the
Secretary of the Company.
</TABLE>
INFORMATION RELATING TO THE BOARD
OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD
The Board of Directors held four meetings during the fiscal year ended June
30, 2000 and on numerous occasions took action by unanimous written consent. The
Company has an Executive Committee, Audit Committee, Compensation Committee and
Stock Option Committee. Messrs. Melvin and Armond Waxman and Mr. Irving Friedman
serve on the Executive Committee, and Mr. Friedman and Mrs. Robins serve on the
Audit Committee, the Stock Option Committee and on the Compensation Committee.
The Company does not have a nominating committee.
AUDIT COMMITTEE
The Audit Committee acts as a liaison between the Company's independent
auditors and the Board of Directors, reviews the scope of the annual audit and
the management letter associated therewith, reviews the Company's annual and
quarterly financial statements and reviews the sufficiency of the Company's
internal accounting controls. The Audit Committee held one meeting during fiscal
2000.
COMPENSATION COMMITTEE
The Compensation Committee determines the salaries and bonuses of Messrs.
Melvin and Armond Waxman (members of the Board of Directors who are also
officers of the Company). The Compensation Committee held no formal meetings
during fiscal 2000.
STOCK OPTION COMMITTEE
The Stock Option Committee administers both the 1992 Stock Option Plan and
the Employee Stock Purchase Plan of the Company. Although the Stock Option
Committee held no meetings during fiscal 2000, it took one action by unanimous
written consent during the year.
5
<PAGE> 8
DIRECTOR REMUNERATION
Each director who is not an employee of the Company received a fee of
$3,000 per fiscal quarter for services as a director during fiscal 2000 plus a
fee of $1,000 plus traveling expenses for each board meeting he or she attended.
Mr. Peters, due to his consultative role with the Company, has agreed to a
reduced quarterly director fee of $2,000, and has elected to not receive any
reimbursement for traveling expenses. In addition, each director who is not an
employee of the Company is automatically granted 5,000 shares of restricted
Common Stock for each five full years of service such director served on the
Board of Directors pursuant to the 1996 Directors Plan.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid for services
rendered during fiscal 2000 to the Co-Chief Executive Officers and the two other
most highly compensated executive officers of the Company:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION (1) LONG-TERM COMPENSATION
----------------------- ------------------------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL UNDERLYING COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) (2) OPTIONS/SAR (#) ($) (3)
-------- ---- ---------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Melvin Waxman 2000 328,366 -- -- 110,921
Chairman of the Board and 1999 331,495 1,825,000 -- 107,387
Co-Chief Executive Officer 1998 300,000 250,000 -- 107,500
Armond Waxman 2000 350,000 -- -- 175,303
President and 1999 350,000 2,250,000 -- 163,248
Co-Chief Executive Officer 1998 350,000 392,000 -- 172,033
Laurence S. Waxman 2000 200,000 -- -- 44,621
Senior Vice President 1999 200,000 365,000 -- 28,297
1998 201,510 50,000 42,500 24,559
Mark W. Wester 2000 133,000 -- -- 5,310
Vice President--Finance and 1999 132,134 130,000 -- 966
Chief Financial Officer 1998 117,423 27,500 15,000 801
</TABLE>
(1) Certain executive officers received compensation in fiscal 1998, 1999 and
2000 in the form of perquisites, the amount of which does not exceed
reporting thresholds.
(2) The executive officers named in the Summary Compensation Table received
their bonuses under the Company's Profit Incentive Plan. Messrs. Armond and
Melvin Waxman received their bonuses at the discretion of the Board of
Directors. Included in the fiscal 1999 bonus amounts is compensation
received on the sale of U.S. Lock of $1,575,000, $1,900,000, $300,000 and
$50,000 for Messrs. Melvin Waxman, Armond Waxman, Larry Waxman and Mark
Wester, respectively. Mr. Armond Waxman also received a discretionary bonus
during fiscal 1998 equal to $142,000.
(3) Unless otherwise noted, amounts principally represent premiums on
split-dollar life insurance policies, other insurances and the cost of
providing an auto to certain executives.
6
<PAGE> 9
EMPLOYMENT AGREEMENTS
Mr. Laurence Waxman entered into an employment agreement with Consumer
Products, which became effective as of November 1, 1994 and had an initial term
that expired on October 31, 1999. The Agreement is automatically extended for
successive one-year periods, unless either party provides written notice of the
intent not to extend the Agreement, not less than one year prior to the extended
term. Pursuant to such employment agreement, Mr. Laurence Waxman is to serve as
President of Consumer Products, and is also to serve in such further offices or
positions with Consumer Products or any subsidiary or affiliate of Consumer
Products as shall, from time to time, be assigned by the Board of Directors of
Consumer Products. Mr. Laurence Waxman's employment agreement provides for an
annual salary of $200,000 for the first year of the employment agreement and
provides that for each year thereafter the annual salary will be increased by
six percent of the prior year's salary. Additional increases in salary and the
granting of bonuses to Mr. Laurence Waxman will be determined by Consumer
Products, in its sole discretion, based on such individual's performance and
contributions to the success of Consumer Products, his responsibilities and
duties and the salaries of other senior executives of Consumer Products. A bonus
in the amount of $65,000 was granted to Mr. Laurence Waxman in fiscal 1999 and
1998. The employment agreement provides that upon termination of employment by
Mr. Laurence Waxman for good reason (as defined therein) or by the Company for
any reason other than death, disability (as defined therein) or cause (as
defined therein), Mr. Laurence Waxman will be entitled to receive all of the
compensation he would otherwise be entitled to through the end of the term of
the agreement. The employment agreement also contains provisions which restrict
Mr. Laurence Waxman from competing with the Company or Consumer Products during
the term of the agreement and for two years following the termination thereof.
STOCK OPTION GRANTS
The following table sets forth the information noted for all grants of
stock options made by the Company during fiscal 2000 to each of the executive
officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION
OPTIONS GRANTED TO EXERCISE TERM (1)
GRANTED EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- --- ----------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Mark W. Wester........ 15,000 16.22% $0.41 March 6, 2010 3,868 9,802
</TABLE>
---------------
(1) The potential realizable values represent future opportunity and have not
been reduced to present value in 2000 dollars. The dollar amounts included
in these columns are the result of calculations at assumed rates set by the
Securities and Exchange Commission for illustration purposes, and these
rates are not intended to be a forecast of the Common Stock price and are
not necessarily indicative of the values that may be realized by the named
executive officer.
7
<PAGE> 10
STOCK OPTION AND SAR EXERCISES
The following tables set forth information with respect to (i) the number
of unexercised options and SARs held by each of the Executive Officers named in
the Summary Compensation Table who held options and/or SARs as of June 30, 2000
and (ii) the value of unexercised in-the-money options and SARs held by such
persons as of June 30, 2000:
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Value of Unexercised
In-the-Money Options
at Fiscal Year-End ($)
Shares Value Number of Unexercised ---------------------------------
Acquired on Realized Options at Fiscal Year End (#) Not
Name Exercise (#) ($) Exercisable / Unexercisable Exercisable Exercisable
---- ------------ ----------- --------------------------- ----------- -----------
OPTIONS:
<S> <C> <C> <C> <C> <C>
Melvin Waxman.......... -- -- 300,000 / None 0 0
Armond Waxman.......... -- -- 300,000 / None 0 0
Laurence Waxman........ -- -- 178,750 / 21,250 0 0
Mark Wester............ -- -- 28,750 / 26,250 0 0
<CAPTION>
Value of Unexercised
In-the-Money SARs
at Fiscal Year-End ($)
Value Value Number of Unexercised ---------------------------------
Acquired on Realized SARs at Fiscal Year End (#) Not
Name Exercise (#) ($) Exercisable / Unexercisable Exercisable Exercisable
---- ------------ ----------- --------------------------- ----------- -----------
SARS:
<S> <C> <C> <C> <C> <C>
Melvin Waxman.......... -- -- 200,000 / None 0 0
Armond Waxman.......... -- -- 200,000 / None 0 0
Laurence Waxman........ -- -- 100,000 / None 0 0
---------------
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
determines the compensation of the Company's Co-Chief Executive Officers. The
Committee is comprised solely of non-employee directors who are not eligible to
participate in any of the executive compensation programs of the Company. The
proxy rules require the Committee to disclose the Committee's bases for
compensation of executive officers and for compensation reported for Melvin and
Armond Waxman, the Co-Chief Executive Officers of the Company, and to discuss
the relationship between the Company's performance during fiscal 2000 and
compensation.
The Company's compensation policy reflects its belief that the compensation
of its senior executive officers should provide total compensation reasonably
comparable and competitive to that offered by similarly situated companies and
to align the interests of its executive officers with the long term interests of
the Company's stockholders with the grant of equity based awards. The object of
these awards is to reinforce and advance the long-term interest of the Company
and its stockholders. These awards provide rewards to executives upon the
creation of incremental stockholder value and have the potential of providing
significant benefit to the executives as the price of the Company's stock
appreciates, thereby directly linking the interests of executives with those of
stockholders. There were no equity based awards granted to any senior executive
officer in fiscal 2000.
8
<PAGE> 11
Cash compensation of the Co-Chief Executive Officers is established by the
Committee. Grants of stock options and other stock based awards for all
executive officers and employees, including the Co-Chief Executive Officers, are
awarded by the Company's Stock Option Committee. Both members of the Stock
Option Committee are also members of the Compensation Committee.
While competitive practices are taken into account in determining cash
compensation, the Committee believes that the most important considerations in
setting annual compensation are individual merit, the Company's financial
performance and achievement of strategic objectives approved by the Board of
Directors. The Committee does not apply any specific quantitative formula in
making compensation decisions. The Committee appreciates the importance of
achievements that may be difficult to quantify, and accordingly recognizes
qualitative factors such as contributions of executive officers to the
achievement of the Company's strategic goals in the difficult business
environment in which it operates, the managerial effectiveness and teamwork of
individual executive officers and the implementation of policies and measures
that are intended to provide the stability and benefit the Company's long-term
performance.
The compensation of the Company's Co-Chief Executive Officers has been designed
to provide them with a fair salary and to reward them for their ongoing efforts
towards improving the efficiencies of the Company's continuing operations and
deleveraging the Company. The Committee approved the base salary that was paid
to each of them. Due, in part, to the Company's liquidity constraints, Messrs.
Melvin Waxman and Armond Waxman received no discretionary bonuses during fiscal
2000. However, the members of the Committee do recognize the exemplary efforts
of the Company's Co-Chief Executive Officers in formulating a comprehensive debt
restructuring agreement with the Company's bondholders and otherwise
implementing the Company's financial restructuring program.
The Committee does not establish the cash compensation levels for the
Company's other executive officers. The Board has delegated to the Co-Chief
Executive Officers the responsibility for establishing the salaries and bonuses
payable to those individuals. However, the grants of stock options and other
equity-based compensation are the responsibility of the Stock Option Committee.
As a result, the members of the Committee are able to review and have input into
the overall levels of compensation provided to executive officers and, in their
role as Board members, are in a position to review the performances of those
individuals with the Co-Chief Executive Officers.
Section 162(m) of the Internal Revenue code of 1986, as amended (the
"Code"), which was enacted in 1993, generally disallows a tax deduction for
compensation paid or accrued in excess of $1 million with respect to the chief
executive officer and each officer and each of the four most highly compensated
employees of a publicly held corporation. Qualifying performance based
compensation will not be subject to the deduction limit if certain requirements
are met. The 1992 Stock Option Plan and the 1996 Directors Plan comply with
these requirements. The cash compensation paid to the Co-Chief Executive
Officers in fiscal 1999 exceeds the deduction limit of Section 162(m). However,
given the substantial deferred tax assets of the Company, the inability to
deduct a portion of such cash compensation will not have a material impact on
the Company.
MEMBERS OF THE COMMITTEE:
Irving Z. Friedman
Judy Robins
9
<PAGE> 12
The foregoing report of the Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference the Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Act of 1934, as amended, except to the extent that the Company
specifically incorporated this information by reference, and shall not otherwise
be deemed filed under such Acts.
PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly percentage change in the
cumulative total stockholder return of the Company's Common Stock, the Standard
& Poor's 500 Composite Stock Index and the Standard & Poor's Building Materials
Index for the period of five fiscal years commencing with fiscal 1996. The graph
assumes $100 invested on July 1, 1995 in the Company and each of the other
indices.
[Graph Inserted Here]
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN*
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
Waxman Industries
S&P 500
Peer Group
* Total Return Assumes Reinvestment of Dividends
10
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mrs. Judy Robins, a member of the Compensation Committee, owns a 13%
equity interest in Aurora Investment Company ("Aurora"). All of the other equity
interests in Aurora are owned by Melvin Waxman (34%), Armond Waxman (34%) and
members of their and Mrs. Robins' families (19%). Armond and Melvin Waxman are
brothers and Judy Robins is their sister. The Company, pursuant to a lease dated
June 30, 1992 (the "Lease"), which expires on June 30, 2002 (with an option to
renew for one additional term of five years), leases its office and warehouse
facility located at 24455 Aurora Road, Bedford Heights, Ohio, from Aurora. The
annual rent on the facility, consisting of approximately 125,000 square feet of
space, is $326,716, which management believes is competitive with other rates in
the area. In November 1998, the Company completed the relocation of its Consumer
Products distribution center in Bedford Heights, Ohio to Groveport, Ohio. Until
the termination of its lease in 2002, Consumer Products will continue to use the
office portion of the facility leased from Aurora. The warehouse portion of this
facility has been subleased to Handl-it, Inc. (see below for information
regarding affiliated ownership) for the duration of the lease term. The Company
received rental income from Handl-it, Inc. of $290,970 in fiscal 2000 for
subletting the warehouse for a portion of fiscal 2000.
Handl-it Inc., a corporation owned by John S. Peters, a director of and
consultant to the Company, together with certain other members of his family,
Melvin Waxman and Armond Waxman, provides Consumer Products with certain outside
warehousing services under month-to-month rental arrangements from time to time.
Consumer Products may enter into month-to-month leases in the future, depending
on its business requirements at the time. There was no rent paid by Consumer
Products to Handl-it in fiscal 2000. Consumer Products Group also paid Handl-it
Inc. approximately $40,000 for the cost of transportation of products in fiscal
2000.
Effective July 1, 1999, WAMI Sales replaced an internally operated
warehouse facility in Cleveland, Ohio with an arrangement with Handl-it Inc. to
provide all warehousing, labor and shipping functions for a fee equal to a
percentage of monthly sales plus other direct costs from this operation. The
charge amounted to $74,000 in fiscal 2000. The Company believes that the terms
are no less favorable than could have been obtained from an unaffiliated party.
CERTAIN RELATIONSHIPS
During fiscal 2000, the Company and Barnett provided to and received
from each other certain selling, general and administrative services and
reimbursed each other for out-of-pocket disbursements related to those services.
During fiscal 2000, the Company and Barnett were parties to an Intercorporate
Agreement (the "New Intercorporate Agreement") under which the Company provided
certain managerial, administrative and financial services to Barnett and was
paid by Barnett for the allocable cost of the salaries and expenses of the
Company's employees while they rendered such services. Barnett also reimbursed
the Company for actual out-of-pocket disbursements to third parties by the
Company required for the provision of such services by the Company. In addition
to the services provided by the Company to Barnett pursuant to the New
Intercorporate Agreement, Barnett also provided certain services to U.S. Lock
until its sale. These services included the utilization of Barnett's management
information systems, financial accounting, order processing and billing and
collection services. The Company paid Barnett the allocable cost of the salaries
and expenses of Barnett's employees while they were performing such services.
The Company also reimbursed Barnett for all actual out-of-pocket disbursements
to third parties by Barnett required for the provision of such services. The net
effect of these charges is not material. The New Intercorporate Agreement was
terminated in connection with the September 29, 2000 sale of Barnett.
All amounts incurred by the Company on behalf of Barnett, have been
reimbursed by Barnett. All amounts incurred by Barnett on behalf of the Company,
have been reimbursed by the Company and are reflected in selling, general and
administrative expenses in the accompanying statements of operations. As a
result of the sale of U.S. Lock, Barnett no longer provides the Company with
selling, general and administrative services.
11
<PAGE> 14
The Company purchases certain products, which it can not manufacture with its
existing operation, from WDI International, Inc., a company owned in part by
certain members of the Waxman family and other non-affiliated individuals. In
fiscal 2000 and 1999, purchases from WDI International amounted to $3.7 million
and $1.3 million, respectively. The Company believes that the terms it receives
are comparable to those that would be available from unaffiliated third parties.
II.
THE STOCK SPLIT CHARTER AMENDMENT
General
The Board of Directors has unanimously recommended that the Stock Split
Charter Amendment be presented to the stockholders for approval at the Annual
Meeting. The Stock Split Charter Amendment will result in the automatic
conversion of ten shares of Common Stock and Class B Common Stock outstanding
("Old Common Stock") as of the time of filing (the "Effective Date") of the
Stock Split Charter Amendment with the Secretary of State of the State of
Delaware (the "Delaware Secretary of State") into one new share of Common Stock
and Class B Common Stock, respectively ("New Common Stock").
The Company presently is authorized under its Certificate of
Incorporation to issue up to 22,000,000 shares of Common Stock and 6,000,000
shares of Class B Common Stock. The Company is not proposing to change the
number of authorized shares of Common Stock and Class B Common Stock. On the
Record Date, there were 9,976,412 shares of Common Stock and 2,142,058 shares of
Class B Common Stock outstanding (not considering the effect of the proposed
Stock Split). An additional 1,800,000 shares of Common Stock have been reserved
for issuance under the 1992 Stock Option Plan, 100,000 shares of Common Stock
have been reserved for issuance under the 1996 Non-employee Director Incentive
Plan and 500,000 shares of Common Stock have been reserved for issuance under
the Stock Appreciation Rights Plan. In addition, 2,142,058 shares of Common
Stock have been reserved for issuance upon conversion of the Class B Common
Stock.
If the Stock Split is effected, the Company will not issue certificates
for fractional shares. Instead, stockholders who otherwise would be entitled to
a fractional share, will receive a full share for such fractional share
interest. Each stockholder's percentage share of total voting rights in the
Company will be the same as it was prior to the Stock Split, except for the
effect of certain stockholders receiving an additional share of Common Stock or
Class B Common Stock in lieu of fractional shares, which effect the Company does
not expect to be material. There will be no change in the number of stockholders
as a result of the Stock Split. The par value of each of the shares will not be
affected by the Stock Split. It is expected that the price per share for
post-Stock Split shares will be higher than that for pre-Stock Split shares.
However, it is not possible to predict the exact effect, if any, that the Stock
Split may have on the price of shares of Common Stock and Class B Common Stock.
The Board estimates that the cost to accomplish the Stock Split will be
minimal since the matter is being addressed in connection with the Annual
Meeting. Nominal fees could be incurred by the Company for services performed by
the transfer agent. If the Stock Split is approved, then the stockholders (at
their option and at their expense) may exchange their stock certificates
representing pre-Stock Split shares for new stock certificates representing
post-Stock Split shares. However, this will not be required. A transmittal form,
with instructions for completion, will be furnished by American Stock Transfer &
Trust Company, Inc., the Company's transfer agent, to each stockholder of record
to assist in facilitating the reissuance.
12
<PAGE> 15
Attached to this Proxy Statement as Exhibit A, and incorporated herein
by reference, is the proposed text of the Stock Split Charter Amendment. Such
text is subject to change as may be required by the Delaware Secretary of State
or as the Board may deem necessary or advisable to effect the Stock Split.
PURPOSES AND REASONS FOR THE STOCK SPLIT
Over the past several years, the Company has been involved in an
extensive financial and operational restructuring process that has diminished
the Company's size and earnings capacity and has contributed to a decrease in
the price per share of Common Stock. In light of such circumstances, the Board
believes that the Stock Split would be beneficial to the Company and its
stockholders. The principal reasons for the Stock Split are to increase the
effective marketability and liquidity of the Common Stock for the Company's
stockholders.
The Board believes that the current price per share of the Common Stock
has a tendency to diminish the effective marketability of the Common Stock
because of the reluctance of many brokerage firms to recommend lower-priced
stocks to their clients. Additionally, the policies and practices of a number of
brokerage houses tend to discourage individual brokers within those firms from
dealing in lower-priced stocks. Some of these policies and practices relate to
the payment of broker's commissions and to time-consuming procedures that
operate to make the handling of lower-priced stocks economically unattractive to
brokers. The structure of trading commissions also tends to have an adverse
impact upon holders of lower-priced stocks because the brokerage commission
payable on the sale of a lower-priced stock generally represents a higher
percentage of the sales price than the commission on relatively higher-priced
stock.
The Board also believes that the relatively low price of the Common
Stock, when compared with the market prices of the common stock of the Company's
competitors, impairs the marketability of the Common Stock to institutional
investors and members of the investing public and creates a negative impression
with respect to the Company. Theoretically, the number of shares of Common Stock
outstanding should not, by itself, affect the marketability of the Common Stock,
the type of investor who acquires it or the Company's reputation in the
financial community. In practice this may not necessarily be the case, as many
investors view low-priced stock as unduly speculative in nature and, as a matter
of practice, avoid or limit investments in such stocks. The foregoing factors
adversely affect not only the liquidity of the Common Stock, but also the
Company's ability to raise additional capital through a sale of equity
securities.
The Board believes there is evidence that small-cap companies with low
stock prices that effect a reverse stock split and can generate better earnings
receive a benefit from such reverse stock split. Thus, the Board is hopeful,
although no assurance can be given, that the decrease in the number of shares of
Common Stock outstanding as a consequence of the proposed Stock Split, and the
anticipated corresponding increased price per share, will stimulate interest in
the Common Stock and possibly promote greater liquidity for the Company's
stockholders with respect to those shares presently held by them. The Board is
also hopeful that the proposed Stock Split will result in a price level for the
shares that will mitigate the present reluctance, policies and practices on the
part of brokerage firms referred to above and diminish the adverse impact of
trading commissions on the potential market for the Company's shares.
In addition, an increased price per share of Common Stock may allow the
Company to attract new financing by the issuance of equity securities, to pursue
business acquisitions which could be accomplished through the issuance of Common
Stock, or to otherwise entertain any other business opportunities where equity
participations are appropriate. The Company may consider raising additional
capital in the future for growth opportunities. Since it is anticipated that the
proposed Stock Split will facilitate the raising of additional capital, as well
as allow the Company to pursue other possible business opportunities, the Board
believes the Stock Split will benefit the Company, which in turn will benefit
the stockholders of the Company.
13
<PAGE> 16
Notwithstanding the foregoing, there can be no assurance that the
proposed Stock Split will achieve the desired results outlined above, nor can
there be any assurance that the price per share of Common Stock immediately
after the proposed Stock Split will increase proportionately with the reverse
split or that any increase can be sustained for a long period of time. In
addition, the possibility does exist that any increased liquidity with respect
to shares of Common Stock may be adversely affected by the reduced number of
shares which would be outstanding if the proposed Stock Split is effected.
Management of the Company is not aware of any present efforts by any
persons to accumulate Common Stock or to obtain control of the Company and the
proposed Stock Split is not intended to be an anti-takeover device. The Stock
Split Charter Amendment is being sought to enhance the image of the Company, its
corporate flexibility and to price the stock in a price range generally more
acceptable to the brokerage community and to investors.
CERTAIN EFFECTS OF THE STOCK SPLIT
All outstanding options, warrants, rights and convertible securities
will be appropriately adjusted, as required by their terms, for the Stock Split
automatically on the Effective Date. The Stock Split will affect all
stockholders equally and will not affect any stockholder's proportionate equity
interest in the Company except for those stockholders who would receive an
additional share of Common Stock or Class B Common Stock in lieu of fractional
shares. None of the rights currently accruing to holders of the Common Stock or
Class B Common Stock, options or warrants to purchase Common Stock or Class B
Common Stock, or securities convertible into Common Stock or Class B Common
Stock will be affected by the Stock Split. Following the Stock Split, each share
of New Common Stock will otherwise be identical to the Old Common Stock. The
Stock Split also will have no effect on the number of authorized shares of
Common Stock or Class B Common Stock or the par value of the Common Stock or
Class B Common Stock.
EXECUTION AND CONSEQUENCES OF THE STOCK SPLIT
Each stock certificate representing Old Common Stock will, after the
Effective Date, represent the appropriate number of shares of New Common Stock
reflecting the Stock Split. It will not be necessary for stockholders to
exchange their existing stock certificates. Stockholders may, however, exchange
their certificates if they so choose.
No scrip or fractional certificates will be issued in the Stock Split.
In lieu of any such fractional shares, and solely for the purpose of avoiding
the expense and inconvenience of issuing fractional shares, any stockholder who
would otherwise receive a fractional share upon the Stock Split will be entitled
to receive one additional share of New Common Stock. The number of shares of New
Common Stock to be issued in connection with settling such fractional interests
is not expected to be material.
For the purpose of determining ownership of Common Stock and Class B
Common Stock at the Effective Date, shares will be considered to be held by the
person in whose name those shares are registered on the stock records of the
Company, regardless of the beneficial ownership of those shares. For example, if
certain shares are registered in the name of a husband and his wife, those two
amounts of shares will be treated separately and as held by two different
stockholders for the purposes of determining ownership of Common Stock and Class
B Common Stock at the Effective Date.
The Stock Split may leave certain stockholders with "odd lots" of the
Common Stock and Class B Common Stock (i.e., stock in amounts of less than one
hundred shares). These shares may be more difficult to sell, or require a
greater commission per share to sell, than shares in even multiples of one
hundred.
14
<PAGE> 17
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE STOCK SPLIT
The following is a summary of the material anticipated federal income
tax consequences of the Stock Split to stockholders of the Company. This summary
is based on the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the Treasury Department Regulations (the "Regulations") issued pursuant
thereto, and published rulings and court decisions in effect as of the date
hereof, all of which are subject to change. This summary does not take into
account possible changes in such laws or interpretations, including amendments
to the Code, applicable statutes, Regulations and proposed Regulations or
changes in judicial or administrative rulings; some of which may have
retroactive effect. No assurance can be given that any such changes will not
adversely affect the discussion of this summary.
This summary is provided for general information only and does not
purport to address all aspects of the possible federal income tax consequences
of the Stock Split and is not intended as tax advice to any person or entity. In
particular, and without limiting the foregoing, this summary does not consider
the federal income tax consequences to stockholders of the Company in light of
their individual investment circumstances or to stockholders subject to special
treatment under the federal income tax laws (for example, tax exempt entities,
life insurance companies, regulated investment companies and foreign taxpayers).
In addition, this summary does not address any consequences of the Stock Split
under any state, local or foreign tax laws. As a result, it is the
responsibility of each stockholder to obtain and rely on advice from his, her or
its personal tax advisor as to: (i) the effect on his, her or its personal tax
situation of the Stock Split, including the application and effect of state,
local and foreign income and other tax laws; (ii) the effect of possible future
legislation and Regulations; and (iii) the reporting of information required in
connection with the Stock Split on his, her or its own tax returns. It will be
the responsibility of each stockholder to prepare and file all appropriate
federal, state and local tax returns.
No ruling from the Internal Revenue Service or opinion of counsel will
be obtained regarding the federal income tax consequences to the stockholders of
the Company as a result of the Stock Split. Accordingly, each stockholder is
encouraged to consult his, her or its tax advisor regarding the specific tax
consequences of the proposed transaction to such stockholder, including the
application and effect of state, local and foreign income and other tax laws.
The Company believes that the Stock Split will qualify as a
"recapitalization" under Section 368(a)(1)(E) of the Code. As a result, no gain
or loss will be recognized by the Company or its stockholders in connection with
the Stock Split. A stockholder of the Company who exchanges his, her or its Old
Common Stock solely for New Common Stock will recognize no gain or loss for
federal income tax purposes. A stockholder's aggregate tax basis in his, her or
its shares of New Common Stock received from the Company will be the same as
his, her or its aggregate tax basis in the Old Common Stock exchanged therefor.
The holding period of the New Common Stock received by such stockholder will
include the period during which the Old Common Stock surrendered in exchange
therefor was held, provided all such Common Stock was held as a capital asset on
the date of the exchange.
TRANSFER AGENT AND REGISTRAR
The Company's Transfer Agent and Registrar is American Stock Transfer &
Trust Company, 59 Maiden Lane, Ground Floor, New York, New York 10038.
VOTE REQUIRED
Approval of the Stock Split Charter Amendment requires the affirmative
vote of the holders of a majority of the total number of shares of Common Stock
and Class B Common Stock voting together as a single class, entitled to notice
of, and to vote on the matter at, the Annual Meeting.
15
<PAGE> 18
Dissenting stockholders have no appraisal rights under Delaware law or
under the Charter or the Company's By-laws in connection with the approval of
the Stock Split Charter Amendment and the consummation of the Stock Split.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE STOCK SPLIT CHARTER AMENDMENT.
III.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
At the Annual Meeting, the stockholders of the Company will be called upon
to ratify the appointment of the independent public accountants of the Company.
The Company's financial statements for the fiscal year ended June 30, 2000
have been examined by the firm of Arthur Andersen LLP, independent certified
public accountants. Arthur Andersen LLP have been the independent certified
public accountants of the Company since 1982. Representatives of Arthur Andersen
LLP are expected to be present at the Annual Meeting to make a statement if they
so desire and they are expected to be available to respond to appropriate
questions.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Arthur Andersen LLP, Cleveland, Ohio, as independent public
accountants of the Company.
ANNUAL REPORT
The Annual Report on Form 10-K of the Company for the fiscal year ended
June 30, 2000 (without exhibits) (the "Annual Report") is being furnished
simultaneously herewith. The Annual Report is not to be considered a part of
this Proxy Statement. The Company will furnish a copy of any exhibit to the
Annual Report, as listed thereon, upon request and upon payment of the Company's
reasonable expenses of furnishing such exhibit. Requests should be directed to
the Chief Financial Officer, Waxman Industries, Inc., 24460 Aurora Road, Bedford
Heights, Ohio 44146.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
The Company intends to hold its 2001 annual meeting of stockholders in
November or December 2001. In order for a stockholder proposal to be included in
next year's proxy statement, it must be received by the Secretary of the Company
at its offices, 24460 Aurora Road, Bedford Heights, Ohio 44146, by June 15, 2001
and must otherwise comply with the rules of the Securities Exchange Commission
relating to stockholder proposals.
EXPENSES OF SOLICITATION
All expenses relating to the solicitation of proxies will be paid by the
Company (including the cost of mailing the proxy material) and are estimated to
be $20,000. Solicitation will be made principally by mail, but officers and
regular employees may solicit proxies by telephone or personal contact with
nominal expense to the Company. The Company will request brokers and other
nominees who hold Common Stock or Class B Common Stock in their names to solicit
proxies from the beneficial owners thereof and will pay the standard charges and
expenses associated therewith.
16
<PAGE> 19
OTHER MATTERS
The Board of Directors and management know of no other matters to be
presented for action at the Annual Meeting. If other matters properly come
before the Annual Meeting, it is intended that proxies in the accompanying form
will be voted thereon in accordance with the best judgment of the person or
persons voting the proxies.
MANAGEMENT RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE NOMINEES TO THE
BOARD OF DIRECTORS NAMED HEREIN, AND FOR PROPOSAL II (THE ONE-FOR-TEN REVERSE
STOCK SPLIT OF THE COMPANY'S COMMON STOCK AND CLASS B COMMON STOCK) AND FOR
PROPOSAL III (THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP). ALL
STOCKHOLDERS ARE URGED TO MARK, SIGN AND SEND IN THEIR PROXIES WITHOUT DELAY IN
THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
APPRECIATED.
By Order of the Board of Directors
/s/ Kenneth Robins
KENNETH ROBINS, Secretary
December 15, 2000
17
<PAGE> 20
EXHIBIT A
PROPOSAL TO AUTHORIZE THE BOARD TO FILE AN AMENDMENT TO THE CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE SPLIT OF THE
COMMON STOCK AND CLASS B COMMON STOCK
---------
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
OF WAXMAN INDUSTRIES, INC.
a Delaware corporation
(Pursuant to Section 242 of the General Corporation Law of the State of
Delaware)
WAXMAN INDUSTRIES, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of Waxman
Industries, Inc. (hereinafter called the "Corporation"), resolutions
were duly adopted (a) setting forth a proposed amendment to the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation") to effect a reverse stock split of shares of common
stock, par value $0.01 per share of the Corporation ("Common Stock"),
and shares of Class B common stock, $0.01 par value per share, of the
Corporation ("Class B Common Stock"), on the basis of issuing one share
of Common Stock for each ten shares of outstanding Common Stock and one
share of Class B Common Stock for each ten shares of outstanding Class
B Common Stock, (b) declaring said amendment to be advisable and in the
best interests of the Corporation and its stockholders, (c) directing
that said amendment be considered at the next annual meeting of the
stockholders and (d) authorizing the appropriate officers of the
Corporation to solicit the consent of the stockholders therefor.
SECOND: That the Certificate of Incorporation be amended by adding the
following new subdivision to the end of Article Fourth, Subsection B of
the Certificate of Incorporation:
"9. Effective as of _________, 2000, each ten shares of Common
Stock, outstanding at such time, shall be combined into one fully paid
and non-assessable share of Common Stock and each ten shares of Class B
Common Stock, outstanding at such time, shall be combined into one
fully paid and non-assessable share of Class B Common Stock. In lieu of
the issuance of any fractional shares that would otherwise result from
the reverse stock split effected hereby, the Corporation shall issue to
any stockholder that would otherwise receive fractional shares of
Common Stock or Class B Common Stock an additional share of Common
Stock or Class B Common Stock, as the case may be. Certificates for the
shares of Common Stock and Class B Common Stock to be outstanding after
the Stock Split shall be issued pursuant to procedures adopted by the
Corporation's executive officers and communicated to those who are to
receive new certificates.
THIRD: That at least a majority of the outstanding stock of the
Corporation entitled to vote on the reverse stock split, acting at a
meeting of stockholders of the Corporation at which a quorum was
present in accordance with the General Corporation Law of the State of
Delaware, duly approved the aforesaid amendment to the Certificate of
Incorporation.
<PAGE> 21
FOURTH: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State
of Delaware.
FIFTH: That the capital of the Corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its Chairman and attested by its Assistant Secretary
this ____ day of ________, 2000.
WAXMAN INDUSTRIES, INC.
By:__________________________________________
Name: Melvin Waxman
Title: Chairman of the Board and Co-Chief
Executive Officer
ATTEST:
By:__________________________________
Name: Mark Wester
Title: Assistant Secretary
<PAGE> 22
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
WAXMAN INDUSTRIES, INC.
February 6, 2001
* Please Detach and Mail in the Envelope Provided *
[X] Please mark your
votes as in this
example
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to vote for
to the contrary below) all nominees
FOR AGAINST ABSTAIN
1. Election of [ ] [ ] Nominees: Melvin Waxman 2. Ratification of the one for [ ] [ ] [ ]
Directors Armond Waxman ten reverse stock split.
Laurence S. Waxman
Irving Z. Friedman
Judy Robins 3. Ratification of the [ ] [ ] [ ]
John S. Peters appointment of Arthur
(INSTRUCTIONS: To withhold authority to vote for Andersen LLP as independent
any individual nominee, write that nominee's name public accountants.
on the space provided below.)
------------------------------------------------- 4. In their discretion, the proxies are authorized
to vote upon such other business as may properly
come before the meeting and any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES AND IN FAVOR OF PROPOSALS II
AND III.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
------------------------------------------------- ------------------------------------------------------- DATED: ---------, 20 --
SIGNATURE SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name or names appear hereon. when shares are held by jointly tenants, both must sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in
full corporate name by the president or other authorized officer. If a partnership, please sign in partnership name by any
authorized person.
</TABLE>
<PAGE> 23
PROXY WAXMAN INDUSTRIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
ANNUAL MEETING OF STOCKHOLDERS - FEBRUARY 6, 2001
The undersigned appoints each of Melvin Waxman and Armond Waxman, each with the
power to appoint his substitute, as proxies of the undersigned, and hereby
authorizes them to represent and to vote, as designated on the reverse side of
this Proxy Card, all the shares of Common Stock and Class B Common Stock of
Waxman Industries, Inc. held of record by the undersigned on December 11, 2000,
at the Annual Meeting of Stockholders of Waxman Industries, Inc. to be held on
February 6, 2001.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
