The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
As filed with the Securities and Exchange Commission on April 26, 1999
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
HANDY HARDWARE WHOLESALE, INC.
(Exact name of Registrant as specified in charter)
Texas 8300 Tewantin Drive 74-1381875
(State of Incorporation) Houston, Texas 77061 (I.R.S. Employer
(713) 644-1495 Identification No.)
(Address and telephone number of
Registrant's principal executive offices)
-------------------------
James D. Tipton Copy to:
President Donald W. Brodsky
Handy Hardware Wholesale, Inc. Bo C. Chandler
8300 Tewantin Drive Jenkens & Gilchrist,
Housston, Texas 77061 A Professional Corporation
(713) 644-1495 1100 Louisiana, Suite 1800
(Name, address and telephone Houston, Texas 77002
number of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: |X|
If the Registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box: |X|
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to be Number of Shares to Offering Price per Aggregate Offering Amount of Registration
Registered be Registered Share Price Fee
<S> <C> <C> <C> <C>
Class A Common
Stock, $100 par value 5,000 $100.00 $ 500,000 $ 139.00
Class B Common Stock,
$100 par value 20,000 $100.00 $2,000,000 $ 556.00
Preferred Stock,
$100 par value 25,000 $100.00 $2,500,000 $ 695.00
TOTAL 50,000 $5,000,000 $1,390.00
</TABLE>
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to such Section 8(a),
may determine.
<PAGE>
HANDY HARDWARE WHOLESALE, INC.
CROSS-REFERENCE SHEET
Between Items of Form S-2 and the Prospectus
<TABLE>
<CAPTION>
Item No. Prospectus Caption
- -------- ------------------
<S> <C>
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus.......................................Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus...........................................................Table of Contents
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges............................................The Company; The Offering; Ratio of
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements
4. Use of Proceeds........................................................Cover Page; Use of Proceeds
5. Determination of Offering Price........................................Determination of Offering Price
6. Dilution...............................................................Inapplicable
7. Selling Security Holders...............................................Inapplicable
8. Plan of Distribution...................................................Plan of Distribution
9. Description of Securities to be Registered.............................Dividend Policy; Description of Capital
Stock
10. Interests of Named Experts and Counsel.................................Inapplicable
11. Information with Respect to the Registrant.............................Where You Can Find More Information;
The Company; Description of Capital
Stock;Incorporation of Documents by
Reference
12. Incorporation of Certain Information by Reference......................Incorporation of Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.......................Inapplicable
</TABLE>
<PAGE>
PROSPECTUS
Subject to Completion, dated April 26, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
HANDY HARDWARE WHOLESALE, INC.
5,000 Shares of Class A Common Stock
20,000 Shares of Class B Common Stock
25,000 Shares of Preferred Stock
Only member-dealers of Handy Hardware Wholesale, Inc. may purchase the
securities offered by this prospectus. No active trading market exists for any
class of Handy stock, and we do not anticipate any trading market will develop
in the future. We are offering these securities without an underwriter. No sales
commission will be paid. Our estimated expenses for this offering total $23,960.
The following table shows a breakdown of the offering:
<TABLE>
<CAPTION>
Number Per Share
Class of Securities of Shares Price to Public Proceeds to Handy
- ------------------- --------- --------------- -----------------
<S> <C> <C> <C>
Class A Common Stock 5,000 $100 $ 500,000
Class B Common Stock 20,000 $100 $2,000,000
Preferred Stock 25,000 $100 $2,500,000
</TABLE>
Only holders of Class A Common Stock have voting rights. No dividends have
ever been paid on Class A or Class B Common Stock. The holders of preferred
stock receive a cumulative annual dividend as declared by Handy's board of
directors. This dividend must range from 7%-20% of the purchase price of a share
of preferred stock and is the only form of return on stock investment in Handy.
Upon liquidation and distribution of Handy's assets, holders of preferred stock
will be paid first, with holders of Class A and Class B Common Stock sharing
ratably in the distribution of the remaining assets.
Neither the Securities and Exchange Commission nor any state securities
commission has approved these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
May __, 1999
1
<PAGE>
Table of Contents
Page
----
The Company....................................................................3
The Offering...................................................................3
Use of Proceeds................................................................3
Dividend Policy................................................................4
Determination of Offering Price................................................4
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements.......................................5
Plan of Distribution...........................................................6
Description of Capital Stock...................................................8
Summary of Dealer Contract.....................................................9
Legal Matters..................................................................9
Experts.......................................................................10
Where You Can Find More Information...........................................10
You should rely only on the information contained in this prospectus. We
have not authorized anyone to give you any other information. If you receive
unauthorized information you should not rely on it. We are offering to sell and
seeking offers to buy these securities only in jurisdictions where offers and
sales are permitted. The information contained in this prospectus is accurate
only as of the date of this prospectus.
2
<PAGE>
THE COMPANY
In 1961 thirteen independent hardware dealers formed Handy to provide
warehouse facilities and purchasing services to independent hardware dealers. By
forming Handy, these independent hardware dealers obtained better buying power.
Handy refers to these independent hardware dealers as its member-dealers. Each
member-dealer signs a dealer contract in which the member-dealer agrees to buy
some or all of its merchandise from Handy. In addition, each member-dealer
enters into a stock subscription agreement to purchase our stock. These stock
subscriptions provide Handy with capital. Member-dealers own Handy entirely.
This prospectus covers stock sold to our member-dealers as part of their
purchases of goods. For more detail, see "Plan of Distribution" on page 6. As of
March 1, 1999, Handy's 1,021 member-dealers owned hardware stores in Texas,
Louisiana, Mississippi, Alabama, Florida, Oklahoma, Arkansas, Mexico and Central
America.
To service our member-dealers, we maintain a central warehouse and office
facility in Houston, Texas. In addition, we lease 32 vehicles which haul our 55
enclosed trailers to deliver merchandise to our member-dealers. We charge
member-dealers our cost of merchandise plus a small markup charge, resulting in
a lower price than a member-dealer can obtain on its own. For a more detailed
description of operations, see Items 1 and 2 on pages 1-7 of Handy's 1998 Annual
Report on Form 10-K.
THE OFFERING
Securities offered........................ 5,000 shares of Class A Common Stock
20,000 shares of Class B Common Stock
25,000 shares of Preferred Stock
Price of each share offered...............$100
Use of proceeds...........................Expansion of inventory, purchase of
equipment and building improvements
USE OF PROCEEDS
Handy will receive net offering proceeds of up to $5,000,000 from the sale
of these securities. We expect to use proceeds from the offering in the
following manner and priority:
o $2,214,000 for inventory expansion;
o $35,000 for computer upgrades;
o $25,000 for warehouse equipment expansion and upgrades;
o $60,000 for upgrading company cars;
o $40,000 for upgrading office equipment; and
o $2,626,000 for building improvements.
----------
o $5,000,000 Total
If we receive net offering proceeds of less than $5,000,000, we will use our
working capital to fund the remaining cost of the above projects.
3
<PAGE>
DIVIDEND POLICY
Our Articles of Incorporation require us to pay a dividend on our
outstanding preferred stock. Each year our board declares the dividend amount,
which must range between 7-20% of the amount paid by member-dealers to purchase
their preferred stock. The dividend is paid only to stockholders who own
preferred stock on January 31 of each year. We prorate the dividend paid if a
stockholder has owned preferred stock for less than one year. From year to year
the amount of the preferred stock dividend depends upon our earnings, capital
requirements and financial condition. The table below shows dividends paid over
the past five years on preferred stock as a percentage of the $100 purchase
price of a share.
1995 -- 10%
1996 -- 12%
1997 -- 13%
1998 -- 13%
1999 -- 10%
We have never paid a cash dividend on either class of our common stock, and
we do not anticipate doing so in the future. Our goal is to provide our
member-dealers with low cost, quality merchandise to increase the
member-dealers' profits. To do so, we attempt to keep our gross profit from
merchandise sales at a constant level. With the exception of funds needed to pay
preferred stock dividends, we traditionally retain all earnings to finance the
development and growth of our business.
DETERMINATION OF OFFERING PRICE
Because no active trading market exists for any class of Handy's stock, we
have always set our stock's offering price at $100 per share, its par value. For
more information regarding the market for Handy's shares, see "Market for
Registrant's Common Equity and Related Stockholder Matters" on page 7-8 of
Handy's 1998 Annual Report on Form 10-K.
To our knowledge, only two forms of secondary trading in Handy's securities
exist. Stock may be transferred from one member-dealer to another, or Handy may
repurchase shares from retiring member-dealers or from overinvested
member-dealers at a price of $100 per share. For more information regarding
Handy's repurchase of shares, see "Note 8 - Stockholders' Equity" on page 31-32
of Handy's 1998 Annual Report on Form 10-K and "Plan of Distribution -
Repurchases from Overinvested Member- Dealers" page 7 of this prospectus.
4
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table shows Handy's ratio of earnings to combined fixed
charges and Handy's preferred stock dividend requirements for the last five
fiscal years. For all years presented, our earnings exceeded the combined fixed
charges and preferred stock dividend requirements. "Earnings" include pretax
earnings from continuing operations, to which has been added back fixed charges.
"Fixed charges" include interest expense, the portion of rental expense
attributable to interest, and amortization of debt expense. "Preferred stock
dividend requirements" cover the amount of pre-tax earnings required to pay
preferred stock dividends.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings
Pretax Earnings $ 887,785 $ 1,568,634 $ 1,857,326 $ 2,169,718 $ 1,387,437
Plus: Fixed Charges 352,012 338,758 333,464 197,367 176,769
------------ ----------- ----------- ----------- -----------
Total Earnings $ 1,239,797 $ 1,907,392 $ 2,190,790 $ 2,367,085 $ 1,564,206
============ =========== =========== =========== ===========
Fixed Charges
Interest Expense 248,746 236,743 172,483 42,804 45,273
Rental Expense 103,266 102,015 160,981 154,563 131,496
Amortization of Debt Expense -0- -0- -0- -0- -0-
------------ ----------- ----------- ----------- -----------
Total Fixed Charges 352,012 338,758 333,464 197,367 176,769
Preferred Stock Dividend
Requirements 685,397 617,162 792,352 955,095 1,066,200
------------ ----------- ----------- ----------- -----------
Total Fixed Charges
and Preferred Stock
Dividend Requirements $ 1,037,409 $ 955,920 $ 1,125,816 $ 1,152,462 $ 1,242,969
============ =========== =========== =========== ===========
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividend Requirements 1.19 2.00 1.95 2.05 1.26
============ =========== =========== =========== ===========
</TABLE>
5
<PAGE>
PLAN OF DISTRIBUTION
Only Handy's member-dealers may purchase the securities offered by this
prospectus. We deliver this prospectus to each member-dealer and any potential
member-dealer. We are offering these securities in a continuous offering until
April 30, 2000. We expect to extend this offering after that date until April
30, 2002. All new member-dealers must enter into a stock subscription agreement
to make an initial purchase of Handy's Class A Common Stock, followed by
periodic purchases of Handy's Class B Common Stock and preferred stock.
Purchase of Class A Common Stock by New Member-Dealers
Handy requires each new member-dealer to purchase, for $1,000 cash, 10
shares of Class A Common Stock at $100 per share. Handy does not permit
member-dealers to purchase more than 10 shares of Class A Common Stock.
Purchases of Class B Common Stock and Preferred Stock by Member-Dealers
Collecting Funds from Member-Dealers to Purchase Class B Common Stock
and Preferred Stock.
Handy prepares a semi-monthly statement for each member-dealer stating that
member-dealer's total merchandise purchases made during the preceding half
month. Total merchandise purchases include both the member-dealer's inventory
purchases from our warehouse and that member-dealer's purchases directly from
the manufacturer that are billed through us. An additional charge of 2% of the
member-dealer's warehouse purchases is invoiced on each statement. We accumulate
the funds from this 2% charge for each member-dealer to use for its purchase of
Class B Common Stock and preferred stock. When a member-dealer's accumulated
funds total at least $2,000, we apply $2,000 to the purchase of 10 shares of
Class B Common Stock and 10 shares of preferred stock and retain any amounts
above $2,000 until the accumulated amounts again equal the $2,000 required for
additional purchases. Our board may, but traditionally has not, included the
amount of purchases made by a member-dealer directly from the manufacturer when
making the 2% calculation.
How to Calculate the Desired Stock Ownership Level.
During March of each year, Handy calculates each member-dealer's desired
stock ownership level, which must be at least $10,000. We base each
member-dealer's desired stock ownership level on the value of its total
merchandise purchases made during the January 1 to December 31 period of the
previous year. We first determine the value of the member-dealer's actual stock
ownership, which equals the total number of all Class A Common Stock, Class B
Common Stock and preferred stock owned on December 31 of the previous year,
times $100 per share. Depending on the member-dealer's actual ownership amount,
we apply one of the formulas in the table below to determine its desired stock
ownership level.
6
<PAGE>
<TABLE>
<CAPTION>
Actual Stock
Ownership Desired Stock Ownership
- -----------------------------------------------------------------------------------------------------------
<S> <C>
$1 to $31,249 $1.00 for every $8.00 of total merchandise purchases
$31,250 to $1.00 for every $8.00 of total merchandise purchases from $1 to $250,000
$56,249 + $1.00 for every $10.00 of total merchandise purchases over $250,000
$56,250 to $1.00 for every $8.00 of total merchandise purchases from $1 to $250,000
$74,999 + $1.00 for every $10.00 of total merchandise purchases from $250,000 to $500,000
+ $1.00 for every $13.33 of total merchandise purchases over $500,000
$75,000 to $1.00 for every $8.00 of total merchandise purchases from $1 to $250,000
$87,499 + $1.00 for every $10.00 of total merchandise purchases from $250,000 to $500,000
+ $1.00 for every $13.33 of total merchandise purchases from $500,000 to $750,000
+ $1.00 for every $20.00 of total merchandise purchases over $750,000
$87,500 and $1.00 for every $8.00 of total merchandise purchases from $1 to $250,000
above + $1.00 for every $10.00 of total merchandise purchases from $250,000 to $500,000
+ $1.00 for every $13.33 of total merchandise purchases from $500,000 to $750,000
+ $1.00 for every $20.00 of total merchandise purchases from $750,000 to $1,000,000
+ $1.00 for every $40.00 of total merchandise purchases over $1,000,000
</TABLE>
Example of How to Calculate a Member-Dealer's Desired Stock Ownership Level.
On December 31, a member-dealer's actual stock ownership totaled $32,000
and its total merchandise purchases from January 1 to December 31 amounted to
$300,000. For the first $250,000 of total merchandise purchases, the
member-dealer should own $1.00 of stock for each $8.00 of total merchandise
purchases, or $31,250. For the member-dealer's remaining $50,000 of total
merchandise purchases, it should own an additional $1.00 of stock for each
$10.00 of total merchandise purchases, or $5,000, for a total desired stock
ownership of $36,250. This amount is $4,250 higher than the member-dealer's
actual stock ownership on December 31. Thus, Handy will require the
member-dealer to make additional purchases of Class B Common Stock and preferred
stock during the twelve month period beginning April 1 of the following year.
When Actual Ownership is Greater than Desired Ownership.
If a member-dealer's actual stock ownership at year-end exceeds its desired
stock ownership, it is not required to make additional stock purchases during
the twelve month period beginning April 1 of the following year. However, a
member-dealer may voluntarily continue to make additional purchases of Class B
Common Stock and preferred stock by paying Handy amounts equal to 2% of the
member-dealer's warehouse purchases invoiced on each statement.
Repurchases from Overinvested Member-Dealers.
Since 1991, we have offered to repurchase Class B Common Stock and
preferred stock from member-dealers whose actual stock ownership has exceeded
their desired stock ownership by $4,000 or more. Each year we offer to
repurchase one-fourth of the member-dealer's excess amount at that time, equally
divided between shares of Class B Common Stock and preferred stock. We
repurchase the shares at the full initial sales price of $100 per share. In
7
<PAGE>
1998, member-dealers resold to Handy approximately 11% of the shares eligible
for repurchase. Handy paid $28,400 for these 1998 repurchases. We intend to
continue to offer to repurchase from member-dealers their entire overinvested
amounts eligible for repurchase. Our ability to make such repurchases, however,
will depend upon our future results of operations, liquidity, capital needs and
other financial factors. We cannot assure you that repurchase offers will take
place in the future, or if so, in what amounts or over what time periods.
Existing Member-Dealers Who Open New Stores
If a current member-dealer opens an additional store, Handy will treat the
new store, also known as a member-dealer affiliate, as a new member-dealer.
However, we require the member-dealer affiliate to make an initial purchase of
10 shares of preferred stock rather than 10 shares of Class A Common Stock. We
treat the member-dealer affiliate as an entirely separate entity when
determining required Class B Common Stock and preferred stock purchases. We
calculate a separate desired stock ownership level for the member-dealer
affiliate and the member-dealer affiliate has its own account for its funds to
be used to purchase its Class B Common Stock and preferred stock.
When Actual Stock Ownership is Less than Desired Stock Ownership
If Handy determines that the member-dealer's actual stock ownership level
on the previous December 31 was less than his desired stock ownership level,
Handy will begin in April of the following year to collect funds for the
member-dealer's purchase of additional Class B Common Stock and preferred stock.
We will continue to collect these funds for one year until the next March 31,
even after the member-dealer attains its desired stock ownership level. Handy
collects these funds by adding the 2% charge described above to the
member-dealer's billing statements. Until these funds total $2,000 and are
applied to purchase Class B Common Stock and preferred stock for that
member-dealer, we use the funds for working capital.
Manner of Offering
We will only offer and sell the securities offered in this prospectus in
the states of Texas, Louisiana, Mississippi, Alabama, Florida, Oklahoma and
Arkansas, as well as in Mexico and Central America. Employees who are licensed
to sell securities in those states or are exempt from licensing requirements
will sell these securities. We have not employed an underwriter for this
offering nor will we pay discounts or commissions in making these sales of
shares.
DESCRIPTION OF CAPITAL STOCK
Our Articles of Incorporation authorize us to issue 20,000 shares of Class
A Common Stock, 100,000 shares of Class B Common Stock and 100,000 shares of
preferred stock, each with a $100 par value per share.
Class A Common Stock and Class B Common Stock
Class A common stockholders must engage in the retail sale of goods and
merchandise. No member-dealer may own more than 10 shares of Class A Common
Stock. When we submit matters for shareholder vote, a member-dealer receives one
vote for each share of Class A Common Stock it owns. Class B common stockholders
may not vote on matters submitted to a shareholder vote, except in the unusual
circumstances of matters which would change their rights as shareholders.
Handy's board consists of ten directors. At each annual meeting, Handy's Class A
8
<PAGE>
common stockholders elect three directors, each to serve a three year term, and
one additional director to serve a one year term as both a director and as
President of Handy.
Class A and Class B common stockholders have no preemptive rights to
purchase any securities. Upon the liquidation and distribution of Handy's
assets, holders of preferred stock will be paid first, with holders of Class A
and Class B Common Stock sharing ratably in the distribution of the remaining
assets. As of March 23, 1999, there were 897 holders of record of Class A Common
Stock and 761 holders of record of Class B Common Stock.
Class A common stockholders must offer to sell their shares to Handy before
selling them to a third person. Handy has never declined to purchase shares
offered to it. Handy does not restrict transfer of Class B Common Stock. We
believe that member-dealers or former member-dealers own all shares of Class A
Common Stock and member-dealers, former member-dealers or member-dealer
affiliates own all shares of Class B Common Stock.
Preferred Stock
Preferred stockholders are entitled to receive cumulative dividends.
According to our Articles of Incorporation, our board declares these dividends,
which must range from 7-20% of the purchase price of the shares. Each share of
preferred stock has a $100 per share liquidation value. The preferred stock
dividend is the only form of return on stock investment in Handy. Preferred
stockholders are not entitled to vote on matters submitted to a vote of
shareholders, except in the unusual circumstances of matters which would change
their rights as shareholders. Preferred stockholders may not convert their
shares to common stock. However, at its option, Handy's board may vote to redeem
these shares in exchange for $100 per share and all accrued unpaid dividends.
Handy has no obligation to redeem the preferred stock or provide for a sinking
fund for the redemption of such shares.
Handy does not restrict the transfer of preferred stock. However, we
believe that member-dealers, former member-dealers or member-dealer affiliates
own all Handy preferred stock. As of March 23, 1999, there were 828 holders of
preferred stock.
SUMMARY OF DEALER CONTRACT
Handy requires each member-dealer to enter into a dealer contract with
us. Under the dealer contract, Handy agrees to sell merchandise and furnish
services to the member-dealer at Handy's cost, plus freight costs and a small
mark-up. Handy sells the merchandise to each member-dealer f.o.b. Handy's
warehouse. Handy's trucks or common carrier deliver merchandise at charges set
by Handy. Handy also agrees to permit the member-dealer to use the trade name
"Handy Hardware Store" and agrees to furnish signs, a general catalog and other
materials to the member-dealer for its operation as a Handy Hardware Store.
Under the contract, the member-dealer agrees to enter into a stock
subscription agreement to purchase Handy's securities. In addition, the dealer
contract requires the member-dealer to pay an initial service charge, currently
set at $200, to defray in part the costs of establishing their new account. The
member-dealer must maintain in confidence all materials provided by Handy and,
upon termination of the dealer contract, must return all materials furnished by
Handy. The member-dealer also agrees to order merchandise from Handy, to pay all
invoices when due and to attend trade shows and other member-dealer meetings.
However, the dealer contract does not impose on the member-dealer any minimum
9
<PAGE>
inventory purchase amount to remain a member-dealer. Either Handy or the
member-dealer may cancel the dealer contract upon 60 days notice.
LEGAL MATTERS
The validity of our securities offered in this prospectus has been
passed upon by Jenkens & Gilchrist, A Professional Corporation, Houston, Texas.
EXPERTS
The financial statements of Handy included in its 1998 Annual Report on
Form 10-K have been examined by Clyde D. Thomas & Company, independent public
accountants, as stated in their opinion incorporated herein by reference. The
financial statements referred to above are incorporated herein by reference in
reliance upon such report and upon that firm's authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
Our SEC filings are available to the public over the Internet at the SEC's
web site at http://www.sec.gov. You may also read and copy any document we file
at the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330.
We have filed a registration statement with the SEC on Form S-2 to register
the securities offered in this prospectus. This prospectus is part of such
registration statement. As allowed by SEC rules, this prospectus does not
contain all the information in the registration statement or in the exhibits to
the registration statement.
Incorporation of Documents by Reference
The SEC allows us to include information in this document by "incorporating
by reference," which means that we can disclose important information to you by
referring to those documents. Handy's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 that has been filed with the SEC is incorporated by
reference in this prospectus, along with any future filings made with the SEC
under Sections 13(a) and 15(d) of the Exchange Act. You may request a copy of
any document incorporated by reference in this prospectus, at no cost, by
writing or telephoning us at our headquarters:
Handy Hardware Wholesale, Inc.
8300 Tewantin Drive
Houston, Texas 77061
(713) 644-1495
10
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
The estimated offering expenses are:
SEC registration fee $ 1,390
Printing expense 570
Legal fees and expenses 12,000
Blue sky fees and expenses 7,500
Accounting fees and expenses 2,500
------------
TOTAL $ 23,960
Item 15. Indemnification of Directors and Officers.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify its officers, directors, employees and agents for
expenses and costs incurred in certain proceedings arising out of actions taken
in their official capacity only if such persons were acting in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, except in relation to matters in which they have been found
liable to the corporation, or on the basis that personal benefit was improperly
received regardless of whether or not the benefit resulted from action taken in
their official capacity. In the case of any criminal proceeding, such persons
must also have had no reasonable cause to believe such conduct was unlawful.
Article 2.02-1 further provides that a corporation shall indemnify its officers
and directors against reasonable expenses incurred in connection with
proceedings arising out of actions taken in their official capacity in which
such persons have been wholly successful, on the merits or otherwise, in the
defense of such actions.
II-1
<PAGE>
Item 16. Exhibits.
The following is a list of exhibits filed as part of this registration
statement.
Exhibit
Number
-------
4.1 Specimen copy of certificate representing Class A Common
Stock. (Filed as Exhibit 4.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1983, and
incorporated herein by reference.)
4.2 Specimen copy of certificate representing Class B Common
Stock. (Filed as Exhibit 4.2 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1983, and
incorporated herein by reference.)
4.3 Specimen copy of certificate representing preferred stock.
(Filed as Exhibit 4.3 to the Company's Annual Report on Form
10-K for the year ended December 31, 1983, and incorporated
herein by reference.)
4.4 Form of Subscription to Shares of Handy Hardware Wholesale,
Inc. for Class A Common Stock, Class B Common Stock and
preferred stock. (Filed as Exhibit 4.4 to this Registration
Statement as originally filed on May 5, 1994, and
incorporated herein by reference.)
(2) 5.1 Opinion of Jenkens & Gilchrist, A Professional Corporation.
10.1 Split-Dollar Agreement dated November 13, 1991 between the
Company and James D. Tipton. (Filed as Exhibit 10.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.)
10.2 Form of Dealer Contract (Alabama, Arkansas, Florida,
Louisiana, Oklahoma and Texas). (Filed as Exhibit 10.7 to
this Registration Statement as originally filed on May 5,
1994, and incorporated herein by reference.)
10.3 Form of Dealer Contract (Mississippi). (Filed as Exhibit
10.8 to this Registration Statement as originally filed on
May 5, 1994, and incorporated herein by reference.)
10.4 Amendment and Restatement of Credit Agreement dated April
30, 1996, between Texas Commerce Bank, N.A., and Handy
Hardware Wholesale, Inc. (Filed as Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996, and incorporated herein by
reference.)
II-2
<PAGE>
(1) 10.5 Ninth Amendment to the Employment Agreement, as amended,
between Handy Hardware Wholesale, Inc. and James D. Tipton
dated December 31, 1998. (Filed as Exhibit 10.13 to the
Company's Annual report on Form 10-K for the year ended
December 31, 1998, and incorporated herein by reference.)
10.6 Second Amendment to Amendment and Restatement of Credit
Agreement between Handy Hardware Wholesale, Inc. and Chase
Bank of Texas, National Association, dated April 30, 1998.
(Filed as Exhibit 10.15 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, and
incorporated herein by reference.)
11.1 Statement re computation of per share earnings. (Filed as
Exhibit 11.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998, and incorporated herein by
reference.)
12.1 Statements re computation of ratios. (Omitted because
sufficiently described in this Registration Statement under
"Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements" in the .)
13.1 Annual Report to Security Holders. (Incorporated by
reference from the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1998 as previously filed
with the Commission.)
(2) 23.1 Consent of Clyde D. Thomas & Company.
23.2 Consent of Jenkens & Gilchrist, A Professional Corporation.
(Contained in their opinion filed as Exhibit 5.1 hereto.)
(2) 24.1 Powers of Attorney of Directors of the Registrant.
- -----------------------------
(1) Management contract.
(2) Filed herewith.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1993, as amended (the "1933 Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
II-3
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the 1933 Act,
each filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act") (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the 1934 Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(5) To deliver or cause to be delivered with the prospectus or prior to
delivery of the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirement of Rule 14a-3 or Rule 14c-3 under the 1934 Act; and, where interim
financial information required to be present by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver or cause to be delivered to each
person to whom the prospectus is sent or given, the latest quarterly report on
Form 10-Q that is specifically incorporated by reference in the prospectus to
provide such interim financial information.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Handy Hardware Wholesale, Inc., certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-2 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Houston, State of Texas on
April 26, 1999.
HANDY HARDWARE WHOLESALE, INC.
/s/ James D. Tipton
-------------------------------------------
James D. Tipton
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James D. Tipton President, Chief Executive April 26, 1999
- ------------------- Officer and Director
James D. Tipton
/s/ Tina S. Kirbie Chief Financial and April 26, 1999
- ------------------- Accounting Officer
Tina S. Kirbie
/s/ Weldon D. Bailey Director April 26, 1999
- -------------------
Weldon D. Bailey
/s/ Norman J. Bering, II Director April 26, 1999
- -------------------
Norman J. Bering, II
/s/ Susie Bracht-Black Director April 26, 1999
- -------------------
Susie Bracht-Black
/s/ Virgil H. Cox Director April 26, 1999
- -------------------
Virgil H. Cox
<PAGE>
/s/ Samuel J. Dyson Director April 26, 1999
- -------------------
Samuel J. Dyson
/s/ Robert L. Eilers Director April 26, 1999
- -------------------
Robert L. Eilers
/s/ Richard A. Lubke Director April 26, 1999
- -------------------
Richard A. Lubke
/s/ Jimmy T. Pate Director April 26, 1999
- -------------------
Jimmy T. Pate
/s/ Leroy Wellborn Director April 26, 1999
- -------------------
Leroy Wellborn
</TABLE>
EXHIBIT 5.1
Opinion of Jenkens & Gilchrist, A Professional Corporation
<PAGE>
April 26, 1999
Handy Hardware Wholesale, Inc.
8300 Tewantin Drive
Houston, Texas 77061
Re: Opinion as to legality of certain securities of Handy Hardware
Wholesale, Inc.
Gentlemen:
We have acted as counsel to Handy Hardware Wholesale, Inc., a Texas
corporation (the "Company"), in connection with the filing under the Securities
Act of 1933 of a Registration Statement on Form S-2 (the "Registration
Statement") covering 5,000 shares of Class A Common Stock, 20,000 shares of
Class B Common Stock, and 25,000 shares of Preferred Stock (collectively, the
"Shares"). The terms and conditions of the offering of the Shares are described
in the Prospectus contained in the Registration Statement.
We have examined (i) the Registration Statement, (ii) the Articles of
Incorporation of the Company, as amended, and the bylaws and corporate
proceedings of the Company, and (iii) such other records, documents, opinions
and instruments as in our judgment are necessary or appropriate to enable us to
render this opinion. We have made such legal and factual determinations as we
have deemed relevant.
Based upon the foregoing, and having regard for such legal considerations
as we deem relevant, we are of the opinion that the Shares are duly authorized,
and when issued to and paid for by the purchasers thereof, will be validly
issued, fully paid and non-assessable securities of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to reference being made to our firm in the Prospectus
contained therein.
Very truly yours,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ Donald W. Brodsky
---------------------
Donald W. Brodsky
Authorized Signatory
BCC/at
Exhibit 23.1
Consent of Clyde D. Thomas & Company
<PAGE>
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference herein of our report included
in Handy Hardware Wholesale, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1998, and the reference to our firm under the heading
"Experts" in the Prospectus.
/s/ Clyde D. Thomas
-------------------------------
CLYDE D. THOMAS & COMPANY
Certified Public Accountants
April 26, 1999
Pasadena, Texas
Exhibit 24.1
Powers of Attorney
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Weldon D. Bailey
----------------------------------------
Weldon D. Bailey
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Norman J. Bering, II
----------------------------------------
Norman J. Bering, II
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Susie Bracht-Black
----------------------------------------
Susie Bracht-Black
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Virgil H. Cox
----------------------------------------
Virgil H. Cox
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Samuel J. Dyson
----------------------------------------
Samuel J. Dyson
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Robert L. Eilers
----------------------------------------
Robert L. Eilers
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Richard Lubke
----------------------------------------
Richard Lubke
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Jimmy Pate
----------------------------------------
Jimmy Pate
Date:
------------------------
<PAGE>
Powers of Attorney
Each person whose signature appears below hereby constitutes and appoints
James D. Tipton with full power to act as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming that
said attorney-in-fact and agent or his substitute may lawfully do or cause to be
done by virtue hereof.
/s/ Leroy Wellborn
----------------------------------------
Leroy Wellborn
Date:
------------------------
<PAGE>
