-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P8zwnofPWls7RQibTlA+7kLkKjhTlzb3k5wNnxO6hl+Q2TdDyzExFkHKyZ8czb+9 k+zx2FIsjf0hQt2hzIppqQ== 0000950152-98-009795.txt : 19981228 0000950152-98-009795.hdr.sgml : 19981228 ACCESSION NUMBER: 0000950152-98-009795 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAXMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000105096 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070] IRS NUMBER: 340899894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-10273 FILM NUMBER: 98774469 BUSINESS ADDRESS: STREET 1: 24460 AURORA RD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 BUSINESS PHONE: 2164391830 MAIL ADDRESS: STREET 1: 24460 AURORA ROAD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 11-K 1 WAXMAN INDUSTRIES, INC. PROFIT SHARE/401(K) 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) X Annual report pursuant to Section 15(d) of the Securities Exchange Act - - of 1934 (Fee Required) For the fiscal year ended: June 30, 1998 OR Transition report pursuant to Section 15(d) of the Securities Exchange - - Act of 1934 (No Fee Required) For the transition period from: Commission file number 0-5888 A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: Amended and Restated Waxman Industries, Inc. Profit Sharing & 401(K) Retirement Plan B. Name of issuer of the Securities held pursuant to the Plan and the address of its principal executive office: Waxman Industries, Inc. 24460 Aurora Road Bedford Heights, Ohio 44146 2 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN FINANCIAL STATEMENTS AS OF JUNE 30, 1998, 1997 AND 1996 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Waxman Industries, Inc.: We have audited the accompanying statements of participants' equity of the Amended and Restated Waxman Industries, Inc. Profit Sharing & 401(K) Retirement Plan (the Plan) as of June 30, 1998 and 1997, and the related statements of changes in participants' equity for each of the three years in the period ended June 30, 1998, as listed in the accompanying index. These financial statements and the schedules referred to below are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan's administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the participants' equity of the Plan as of June 30, 1998 and 1997, and the changes in participants' equity for each of the three years in the period ended June 30, 1998, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of June 30, 1998 (Schedule I) and reportable transactions for the year ended June 30, 1998 (Schedule II), are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of changes in participants' equity is presented for purposes of additional analysis rather than to present the changes in participants' equity of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. As explained in Note 6, information certified by the custodian and presented in Item 27a - Schedule of Assets Held for Investment Purposes (Schedule I) and Item 27d - Schedule of Reportable Transactions (Schedule II) does not disclose the 4 historical cost of certain investments. Disclosure of this information is required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ ARTHUR ANDERSEN LLP Cleveland, Ohio, December 8, 1998. 5 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN INDEX JUNE 30, 1998, 1997 AND 1996 Statements of Participants' Equity as of June 30, 1998 and 1997 Statements of Changes in Participants' Equity for the Years Ended June 30, 1998, 1997 and 1996 Notes to Financial Statements Consent of Arthur Andersen LLP - Exhibit 23 Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of June 30, 1998 Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended June 30, 1998 6 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF PARTICIPANTS' EQUITY JUNE 30, 1998
June 30, 1998 ------------- PARTICIPANT - DIRECTED INVESTMENTS, at market values unless otherwise noted (Notes 2 and 3): Waxman Industries, Inc. Common Stock $762,751 Aetna Funds: Aetna Fixed Account, at contract value 283,403 Aetna Series Money Market Fund 59,322 Aetna Ascent Fund 179,719 Aetna Crossroads Fund 290,878 Aetna Legacy Fund 25,928 Aetna Index Plus Large Cap Fund 369,870 Fidelity Advisor Growth Opportunities Fund 242,340 Neuberger & Berman Genesis Trust 175,063 Neuberger & Berman Guardian Trust 86,769 Templeton Foreign Fund 145,868 Cash Account 0 Participant Loans 49,053 ---------------- Participants' Equity $2,670,964 ================
The accompanying notes to financial statements are an integral part of this statement. 7 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF PARTICIPANTS' EQUITY JUNE 30, 1997
June 30, 1997 ------------- PARTICIPANT - DIRECTED INVESTMENTS, at market values: Waxman Industries, Inc. Common Stock $1,113,418 CIGNA Funds: Fidelity Contrafund 203,050 Fidelity Advisor Balanced Fund* 191,193 Guaranteed Long Term Fund 987,154 INVESCO Industrial Fund 56,407 Lifetime 20 Fund 78,185 Lifetime 30 Fund 206,009 Lifetime 40 Fund 273,016 Lifetime 50 Fund 214,546 Lifetime 60 Fund 12,516 20th Century Ultra Fund 187,356 Warburg Pincus Growth & Income Fund 169,070 Warburg Pincus International Equity Fund 180,781 Cash Account 707 Participant Loans 11,802 ---------------- Participants' Equity $3,885,210 ================
The accompanying notes to financial statements are an integral part of this statement. *previously, Fidelity Income & Growth Fund 8 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY UNDER AETNA CUSTODIAL SERVICE FOR THE PERIOD FROM AUGUST 14, 1997 TO JUNE 30, 1998
|---------------------------------Participant - Directed Investments --------------- Aetna Series Aetna Aetna Money Aetna Aetna Index Plus Fixed Market Aetna Crossroads Legacy Large Cap Account Fund Ascent Fund Fund Fund Fund --------- -------- --------- -------- --------- -------- INCREASES: Contributions- Waxman Industries, Inc. $ 9,142 $ 18,295 $ 14,828 $ 13,714 $ 3,811 $ 11,763 Participants 28,554 38,093 47,287 38,629 10,403 47,506 Transfer from Fidelity Custodial Service 280,863 142,891 248,804 11,992 230,616 Investment Income (Note 2) 13,913 1,473 19,958 31,491 1,771 71,796 Loan Repayment- Principal 447 1,098 779 830 151 959 Interest 68 415 208 230 16 275 --------- -------- --------- -------- --------- -------- Total increases 332,987 59,374 225,951 333,698 28,144 362,915 DECREASES: Distributions 37,088 1,062 31,506 43,129 744 11,885 Transaction costs 131 74 110 25 28 122 Loans to participants 5,006 1,647 7,710 2,000 1,227 3,019 Other --------- -------- --------- -------- --------- -------- Total decreases 42,225 2,783 39,326 45,154 1,999 15,026 TRANSFERS BETWEEN FUNDS (7,359) 2,731 (6,906) 2,334 (217) 21,981 --------- -------- --------- -------- --------- -------- NET INCREASE 283,403 59,322 179,719 290,878 25,928 369,870 PARTICIPANTS' EQUITY, beginning of period 0 0 0 0 0 0 --------- -------- --------- -------- --------- -------- PARTICIPANTS' EQUITY, end of year $ 283,403 $ 59,322 $ 179,719 $290,878 $ 25,928 $369,870 ========= ======== ========= ======== ========= ========
The accompanying notes to financial statements are an integral part of this statement. 9
- ----------------------------------------------------------------------------------------------------------------| Fidelity Advisor Neuberger Neuberger Waxman Growth & Berman & Berman Templeton Industries, Inc. Opportunities Genesis Guardian Foreign Common Cash Participant Fund Trust Trust Fund Stock Account Loans Total ------------- ----------- ------------ ------------ ---------------- ------------ ------------ ------------- $ 22,815 $ 15,436 $10,362 $ 11,611 $ 10,084 $ 0 $ 141,861 63,303 48,343 29,706 39,056 21,481 0 412,361 135,154 124,079 34,417 101,431 1,120,612 3,447 2,434,306 34,755 8,541 4,097 (6,152) (263,824) 0 (82,181) 752 863 424 458 0 (6,761) 0 345 483 224 258 0 2,522 -------- --------- ------- --------- ----------- ------ -------- ---------- 257,124 197,745 79,230 146,662 888,353 0 (3,314) 2,908,869 12,219 11,400 2,820 7,619 76,981 0 236,453 89 99 81 6 680 0 1,445 3,688 3,803 1,909 316 22,049 0 (52,374) 0 7 7 -------- --------- ------- --------- ----------- ------ ---------- ---------- 15,997 15,302 4,810 7,941 99,710 0 (52,367) 237,905 1,212 (7,380) 12,349 7,147 (25,892) 0 0 -------- --------- ------- --------- ----------- ------ -------- ---------- 242,340 175,063 86,769 145,868 762,751 0 49,053 2,670,964 0 0 0 0 0 0 0 0 -------- --------- ------- --------- ----------- ------ -------- ---------- $242,340 $ 175,063 $86,769 $ 145,868 $ 762,751 $ 0 $ 49,053 $2,670,964 ======== ========= ======= ========= =========== ====== ======== ==========
10 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY UNDER FIDELITY CUSTODIAL SERVICE FOR THE PERIOD FROM JULY 1, 1997 TO AUGUST 13, 1997
|------------------------------Participant - Directed Investments ------------------------------ Fidelity Advisor INVESCO Fidelity Balanced Guaranteed Industrial Lifetime Lifetime Lifetime Contrafund Fund* Long Term Fund Fund 20 Fund 30 Fund 40 Fund ---------- ----------- -------------- ---------- ---------- ---------- ----------- PARTICIPANTS' EQUITY, beginning of year $ 203,050 $ 191,193 $ 987,154 $ 56,407 $ 78,185 $ 206,009 $ 273,016 Realized Gains (Losses) 10,546 5,124 2,685 2,352 1,721 5,461 7,250 Transfers Between Funds (24,081) Distributions (95) Transaction costs --------- --------- --------- -------- --------- --------- --------- TOTAL PARTICIPANTS' EQUITY UNDER FIDELITY CUSTODIAL SERVICES PRIOR TO TRANSFERS 213,596 196,317 965,663 58,759 79,906 211,470 280,266 --------- --------- --------- -------- --------- --------- --------- Transfers to Barnett Plan (78,442) (55,253) (684,800) (24,342) (64,283) (84,202) (103,979) Transfers to Aetna Custodial Service (135,154) (141,064) (280,863) (34,417) (15,623) (127,268) (176,287) --------- --------- --------- -------- --------- --------- --------- Total Transfers (213,596) (196,317) (965,663) (58,759) (79,906) (211,470) (280,266) --------- --------- --------- -------- --------- --------- --------- PARTICIPANTS' EQUITY UNDER FIDELITY CUSTODIAL SERVICE, end of period $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ========= ========= ========= ======== ========= ========= =========
The accompanying notes to financial statements are an integral part of this statement. *previously, Fidelity Income & Growth Fund 11
- ---------------------------------------------------------------------------------------------------------------| Warburg Warburg 20th Waxman Pincus Pincus Lifetime Lifetime Century Industries, Inc. Growth & International Cash Participant 50 Fund 60 Fund Ultra Fund Common Stock Income Fund Equity Fund Account Loans Total - ----------- ------------ ------------- --------------- ------------ ------------- ------------- ------------- -------------- $214,546 $12,516 $187,356 $1,113,418 $169,070 $180,781 $707 $11,802 $3,885,210 4,766 280 11,481 (16,092) 7,962 2,458 0 0 45,994 24,081 0 (418) (513) (378) (707) (1,085) - ----------- ------------ ------------- -------------- ------------ ------------- ------------- ------------- -------------- 219,312 12,796 198,837 1,120,611 177,032 183,239 0 11,802 3,929,606 - ----------- ------------ ------------- -------------- ------------ ------------- ------------- ------------- -------------- (146,795) (805) (74,757) 0 (87,480) (81,806) (8,356) (1,495,300) (72,517) (11,991) (124,080) (1,120,611) (89,552) (101,433) (3,446) (2,434,306) - ----------- ------------ ------------- -------------- ------------ ------------- ------------- ------------- -------------- (219,312) (12,796) (198,837) (1,120,611) (177,032) (183,239) 0 (11,802) (3,929,606) - ----------- ------------ ------------- -------------- ------------ ------------- ------------- ------------- -------------- $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 =========== ============ ============= ============== ============ ============= ============= ============= ==============
12 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY FOR THE YEAR ENDED JUNE 30, 1997
|----------------------------Participant - Directed Investments --------------------------------- Fidelity Advisor INVESCO Fidelity Balanced Guaranteed Industrial Lifetime Lifetime Lifetime Contrafund Fund* Long Term Fund Fund Fund 30 Fund 40 Fund -------- -------- -------- ------- -------- --------- -------- INCREASES: Contributions- Waxman Industries, Inc. $ 14,208 $ 13,199 $ 55,100 $ 4,791 $ 7,522 $ 17,357 $ 18,264 Participants 48,304 49,063 160,774 14,589 21,122 48,962 49,497 Investment Income (Note 2) 34,157 32,054 32,936 9,062 9,295 24,443 32,342 Loan Repayment- Principal 154 347 943 120 169 Interest 6 32 267 4 7 -------- -------- -------- ------- -------- --------- -------- Total increases 96,829 94,695 250,020 28,566 37,939 90,938 100,103 DECREASES: Distributions 9,714 5,245 74,490 3,627 4,699 6,144 2,381 Transaction costs 80 40 2,834 400 280 189 Loans to participants 7,191 Other -------- -------- -------- ------- -------- --------- -------- Total decreases 9,794 5,285 84,515 3,627 5,099 6,424 2,570 TRANSFERS BETWEEN FUNDS 4,997 1,723 294,919 8,291 (1,479) (8,506) 2,301 -------- -------- -------- ------- -------- --------- -------- NET INCREASE (DECREASE) 92,032 91,133 460,424 33,230 31,361 76,008 99,834 PARTICIPANTS' EQUITY, beginning of year 111,018 100,060 526,730 23,177 46,824 130,001 173,182 -------- -------- -------- ------- -------- --------- -------- PARTICIPANTS' EQUITY, end of year $203,050 $191,193 $987,154 $56,407 $ 78,185 $ 206,009 $273,016 ======== ======== ======== ======= ======== ========= ========
The accompanying notes to financial statements are an integral part of this statement. *previously, Fidelity Income & Growth Fund 13
- ---------------------------------------------------------------------------------------------------------------| Warburg Warburg 20th Waxman Pincus Pincus Lifetime Lifetime Century Industries, Inc. Growth & International Cash Participant 50 Fund 60 Fund Ultra Fund Common Stock Income Fund Equity Fund Account Loans Total ------- ------- ---------- ------------ ----------- ----------- --------- ----------- ---------- $ 10,547 $ 1,290 $ 12,334 $ 10,926 $ 16,087 $ 13,132 $ 194,757 39,093 3,743 57,706 23,990 47,233 39,497 603,573 25,421 1,286 27,715 36,286 20,140 22,856 307,993 547 144 165 328 ($ 2,917) 0 134 5 10 41 506 -------- -------- -------- ----------- --------- --------- --------- ----------- ---------- 75,742 6,319 97,904 71,202 83,635 75,854 (2,917) 1,106,829 2,315 136 6,305 74,321 6,317 8,505 204,199 106 40 40 8,718 7 77 12,811 1,302 396 223 238 (9,350) 0 42,248 42,248 -------- -------- -------- ----------- --------- --------- --------- ----------- ---------- 3,723 176 6,345 83,435 6,547 8,820 42,248 (9,350) 259,258 2,244 (1,371) 10,194 (287,049) (19,748) (6,516) 0 -------- -------- -------- ----------- --------- --------- --------- ----------- ---------- 74,263 4,772 101,753 (299,282) 57,340 60,518 (42,248) 6,433 847,571 140,283 7,744 85,603 1,412,700 111,730 120,263 42,955 5,369 3,037,639 -------- -------- -------- ----------- --------- --------- --------- ----------- ---------- $214,546 $ 12,516 $187,356 $ 1,113,418 $ 169,070 $ 180,781 $ 707 $ 11,802 $3,885,210 ======== ======== ======== =========== ========= ========= ========= =========== ==========
14 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY FOR THE YEAR ENDED JUNE 30, 1996
| ---------------------------Participant - Directed Investments ------------------------------- Waxman Industries, Inc. Fidelity INVESCO Common Stock Fidelity Income & Guaranteed Industrial Lifetime Lifetime Fund Contrafund Growth Fund CIGNA Fund Fund 20 Fund 30 Fund ---------- -------- --------- -------- ------- -------- -------- INCREASES: Contributions- Waxman Industries, Inc. $ 917 $ 1,050 $ 1,132 $ 5,440 $ 318 $ 589 $ 1,577 Participants 24,423 37,673 43,621 161,965 8,574 16,967 48,881 Loan Repayment- Principal -- 72 72 12 68 -- 21 Interest income -- 9 8 6 7 -- 10 Market value changes of investments 1,054,946 16,887 3,147 26,477 2,658 6,608 18,107 ---------- -------- --------- -------- ------- -------- -------- Total increases 1,080,286 55,691 47,980 193,900 11,625 24,164 68,596 ---------- -------- --------- -------- ------- -------- -------- DECREASES: Distributions to former participants 70,841 13,904 5,858 77,946 1,697 4,414 25,388 Transaction costs 3,442 21 180 1,270 17 440 659 Loans to Participants -- 260 682 1,834 211 -- 191 ---------- -------- --------- -------- ------- -------- -------- Total decreases 74,283 14,185 6,720 81,050 1,925 4,854 26,238 ---------- -------- --------- -------- ------- -------- -------- TRANSFERS BETWEEN FUNDS 751 5,863 (5,100) 4,402 367 (287) 857 ---------- -------- --------- -------- ------- -------- -------- NET INCREASE (DECREASE) 1,006,754 47,369 36,160 117,252 10,067 19,023 43,215 PARTICIPANTS' EQUITY, beginning of year 405,946 63,649 63,900 409,478 13,110 27,801 86,786 ---------- -------- --------- -------- ------- -------- -------- PARTICIPANTS' EQUITY, end of year $1,412,700 $111,018 $ 100,060 $526,730 $23,177 $ 46,824 $130,001 ========== ======== ========= ======== ======= ======== ========
The accompanying notes to financial statements are an integral part of this statement. 15
- -----------------------------------------------------------------------------------------------------------| Warburg Warburg 20th Pincus Pincus Lifetime Lifetime Lifetime Century Growth & International Cash Participant 40 Fund 50 Fund 60 Fund Ultra Fund Income Fund Equity Fund Account Loans TOTAL ------- ------- ------- ---------- ----------- ----------- ------- ----------- ----------- $ 1,501 $ 1,000 $ 126 $ 659 $ 1,408 $ 1,504 $ 3,359 $ -- $ 20,580 50,342 40,927 2,840 26,629 48,885 40,934 39,437 -- 592,098 582 211 -- 64 72 166 141 (141) 1,340 7 66 -- 8 9 39 18 -- 187 20,448 15,229 799 11,850 7,521 20,483 -- -- 1,205,160 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 72,880 57,433 3,765 39,210 57,895 63,126 42,955 (141) 1,819,365 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 4,181 5,137 6,877 12,963 20,731 21,910 -- -- 271,847 235 213 120 19 20 125 -- -- 6,761 589 1,656 -- 230 244 953 -- (5,510) 1,340 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 5,005 7,006 6,997 13,212 20,995 22,988 -- (5,510) 279,948 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 459 1,103 (22) 15,657 (17,039) (7,011) -- -- -- -------- -------- -------- ------- --------- --------- ------- ------- ---------- 68,334 51,530 (3,254) 41,655 19,861 33,127 42,955 5,369 1,539,417 104,848 88,753 10,998 43,948 91,869 87,136 -- -- 1,498,222 -------- -------- -------- ------- --------- --------- ------- ------- ---------- $173,182 $140,283 $ 7,744 $85,603 $ 111,730 $ 120,263 $42,955 $ 5,369 $3,037,639 ======== ======== ======== ======= ========= ========= ======= ======= ==========
16 AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998, 1997 AND 1996 1. SUMMARY OF PLAN: - --------------------- The following description of the Amended and Restated Waxman Industries, Inc. (the Company) Profit Sharing & 401(k) Retirement Plan (the Plan) provides only general information. Participants should refer to the plan agreement for a more comprehensive description of the Plan's provisions. General - ------- The Plan is a defined contribution profit sharing plan. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Trustee and Custodian - --------------------- Effective July 1, 1997, the trustee and the custodian of the Plan were changed from Connecticut General Trust Co. and Connecticut General Life Insurance Company (CIGNA), respectively, to a committee designated by Waxman Industries, Inc. and Aetna Life Insurance and Annuity Company (Aetna), respectively. The Plan's custodian maintains all records of investment transactions and determines the valuation of the investment portfolio. Eligibility - ----------- Certain employees of the Company and its subsidiaries are eligible to participate in the Plan provided they are at least 21 years of age and have completed three months of service with the Company, as defined in the plan agreement. Effective July 1, 1997, the employees of Barnett Inc., a previous subsidiary and current affiliate of the Company, were considered terminated employees of the Company for purposes of participation in the Plan. As of that date, these employees became eligible to participate in the Barnett Inc. Profit Sharing and 401(k) Retirement Plan. As a result, a partial termination of the Plan was deemed to have occurred. The Plan participants that were considered to be terminated employees of the Company became fully vested in their participant accounts as of July 1, 1997, and these accounts were transferred to the Barnett Inc. Profit Sharing and 401(k) Retirement Plan, as reflected in the accompanying statement of changes in participants' equity for the period July 1, 1997 to August 13, 1997. 17 Participant and Employer Contributions - -------------------------------------- Participants may defer up to 15% of their pretax compensation by making contributions to the Plan, subject to certain limitations. Participants may direct the allocation of their post-September 1994 contributions to various investment options. Participants have the option to transfer cumulative balances, except those relating to prior Company contributions, between investment options. Effective October 1, 1994, the Company may make discretionary matching contributions to the Plan. Currently, the match is $.50 per every $1.00 contributed by the participant, with the maximum Company match being 4% of the participant's compensation. The amount of the Company contributions made to the Plan is limited by the Internal Revenue Code and is determined at the discretion of the Board of Directors of the Company. Company contributions are allocated to the accounts of eligible participants, on a monthly basis, as established in Section 4.2 of the Plan. Participant Accounts and Vesting - -------------------------------- The Plan provides for the establishment and maintenance of several accounts for each participant which represent, in total, the participants' equity in the net assets of the Plan. The individual participant accounts distinguish funds attributable to participant deferral contributions and Company contributions made on the participant's behalf. Participant accounts are credited with the participant's allocation of investment earnings and are charged with the participant's allocation of transaction costs. Allocations are based on the ratio of the participant's balance in the fund to the total fund balance. Participants are immediately vested in the value of their contributions plus earnings. Participants are vested in the Company contributions plus earnings ratably over five years of service and fully vest after five years of service, as defined. Distribution of Benefits - ------------------------ Distributions to participants generally commence at age 60 or earlier in cases of death or disability. The form of payment is designated by the participant. Earlier distributions of vested benefits may be made for participants who leave the Company prior to retirement. Participant Loans - ----------------- Participants may borrow from their accounts a maximum amount equal to the lesser of $50,000 or 50 percent of their vested account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loans Fund. Loan terms range from one to five years or up to twenty-five years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates, as determined quarterly by the Plan's administrator, plus one percent. Interest rates on loans outstanding as of June 30, 1998 are 9.5%. Principal and interest payments on participant loans are paid ratably through monthly payroll deductions. 18 Forfeitures - ----------- Forfeitures are used to reduce the contributions of the Company or to pay the administrative expenses of the Plan, at the Company's discretion. In the current year, forfeitures amounted to $11,010. Plan Termination - ---------------- Although it has not expressed any intent to do so, the Company may amend or terminate the Plan at its discretion, subject to applicable Internal Revenue Service and ERISA regulations. The rights of all participants to benefits accrued prior to any such termination are nonforfeitable. Investment Options - ------------------ Investment options as of June 30, 1998 include the following: AETNA FIXED ACCOUNT Aetna Fixed Account is invested in interest-bearing contracts or other arrangements issued by life insurance companies or other financial institutions. AETNA SERIES MONEY MARKET FUND Aetna Series Money Market Fund is invested in high-quality money market instruments. AETNA ASCENT FUND Aetna Ascent Fund is invested primarily in equity securities with some fixed-income securities with the objective of capital appreciation. AETNA CROSSROADS FUND Aetna Crossroads Fund is invested primarily in equity securities with some fixed-income securities with the objective of income and capital appreciation (realized and unrealized). AETNA LEGACY FUND Aetna Legacy Fund is invested primarily in fixed-income securities with some equity securities with the objective of providing a consistent return with preservation of capital. AETNA INDEX PLUS LARGE CAP FUND Aetna Index Plus Large Cap Fund is invested in large cap equity securities with the objective of outperforming the S&P 500. 19 FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND Fidelity Advisor Growth Opportunities Fund is invested primarily in common stocks and securities convertible into common stocks. NEUBERGER & BERMAN GENESIS TRUST Neuberger & Berman Genesis Trust is invested primarily in common stocks of companies with small market capitalizations with the objective of capital appreciation. NEUBERGER & BERMAN GUARDIAN TRUST Neuberger & Berman Guardian Trust is invested primarily in common stocks of long-established, high-quality companies. TEMPLETON FOREIGN FUND Templeton Foreign Fund is invested primarily in equity securities and debt obligations of companies and governments located outside the United States with the objective of long-term capital growth. WAXMAN INDUSTRIES, INC. COMMON STOCK Waxman Industries, Inc. Common Stock is invested only in common stock of the Company. Investment Options - ------------------ Investment options as of June 30, 1997 and 1996 include the following: FIDELITY CONTRAFUND Fidelity Contrafund is invested primarily in common stock and securities convertible into common stocks of both domestic and foreign companies. FIDELITY ADVISOR BALANCED FUND (previously, Fidelity Income & Growth Fund) Fidelity Advisor Balanced Fund is invested in a diversified portfolio of equity and fixed-income securities. GUARANTEED LONG TERM FUND Guaranteed Long Term Fund is invested primarily in commercial mortgages and private bond placements. INVESCO INDUSTRIAL FUND INVESCO Industrial Fund is invested primarily in dividend-paying common stocks of domestic companies. It may also invest in fixed-income securities. 20 LIFETIME 20, 30, 40, 50 & 60 FUNDS ("CIGNA LIFETIME FUNDS") CIGNA LIFETIME FUNDS are a family of five distinct investment portfolios structured to maximize return and minimize risk over a specific time period based on the participant's approximate age. Each fund primarily is invested in a diversified mix of stock and bond funds, designed to fit the time horizons and risk tolerances of investors at different stages of their lives. 20TH CENTURY ULTRA FUND 20thCentury Ultra Fund is invested primarily in common stocks of medium-sized companies that meet certain technical and fundamental criteria. WAXMAN INDUSTRIES, INC. COMMON STOCK Waxman Industries, Inc. Common Stock is invested only in common stock of the Company. WARBURG PINCUS GROWTH & INCOME FUND Warburg Pincus Growth & Income Fund is invested primarily in common stocks and securities which derive their value from common stocks. WARBURG PINCUS INTERNATIONAL EQUITY FUND Warburg Pincus International Equity Fund is invested primarily in common stocks of companies that are generally non-U.S. based. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: - ------------------------------------------------ Basis of Accounting - ------------------- The accompanying financial statements are prepared on the accrual basis of accounting. Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases during the reporting period. Actual results could differ from those estimates. Administrative Expenses - ----------------------- Fees of the trustee, custodian, legal counsel, and auditors of the Plan are paid by the Company and thus are not reflected in the accompanying financial statements. Costs specific to various investment transactions are paid directly by the Plan and are reflected in the accompanying statements of changes in participants' equity. 21 Investments - ----------- The investments of the Plan are maintained by Aetna. Except for the Aetna Fixed Account (Note 3), investments are valued at their market values in the accompanying financial statements. In general, market values are estimated by Aetna based on market conditions and the characteristics of the funds' holdings, such as quality ratings. The investment vehicles are credited with actual earnings on the underlying investments and charged for distributions and transaction costs on a daily basis. As a result, the records of Aetna are based solely on the market values of the investments. Therefore, the accompanying statements of changes in participants' equity do not reflect separate accounting for unrealized appreciation or depreciation of investments and realized gains or losses. In addition, Schedules I and II do not include information on the historical costs of the investments as required by ERISA. 3. INVESTMENT CONTRACTS: - -------------------------- The Aetna Fixed Account invests in investment contracts that are fully benefit-responsive. In accordance with the American Institute of Certified Public Accountants' Statement of Position 94-4, " Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans," the Plan values these investment contracts at contract value. As of June 30, 1998, the contract value of these investment contracts approximates fair value. The average yield for the investment contracts was 5.61% for the period from August 14, 1997 to June 30, 1998 and the crediting interest rate as of June 30, 1998 was 5.50%. 4. AMOUNTS DUE TO TERMINATED PARTICIPANTS: - ----------------------------------------------- Participants' equity includes $0 and $113,904 of amounts due to terminated participants at June 30, 1998 and 1997, respectively. These amounts are recorded as a liability in the Plan's Form 5500 for the respective year. However, these amounts are not recorded as a liability in the accompanying statements of participants' equity in accordance with generally accepted accounting principles. The following table reconciles participants' equity per the accompanying financial statements to the Form 5500 as filed by the Company for the years ended June 30, 1998 and 1997:
Benefits Participants' Participants' Payable to Benefits Equity Equity Participants Paid June 30, 1998 June 30, 1997 --------------------- ------------------- ------------------------- -------------------- Per financial Statements $ - $ 236,453 $ 2,670,964 $ 3,885,210 Accrued benefit Payments - - - (113,904) Prior year Reversal - (113,904) - - --------------------- ------------------- ------------------------- -------------------- Per Form 5500 $ - $ 122,549 $ 2,670,964 $ 3,771,306 ===================== =================== ========================= ====================
22 5. INCOME TAX STATUS: - ----------------------- The Plan obtained its latest determination letter on November 21, 1996, in which the Internal Revenue Service stated that the Plan, as amended and restated, was in compliance with the applicable requirements of the Internal Revenue Code. The plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and that the Plan was qualified and the related trust was tax exempt as of June 30, 1998. Accordingly, income taxes have not been provided in the accompanying financial statements. Annually, informational returns are prepared and filed with the Internal Revenue Service. 6. INFORMATION CERTIFIED BY THE CUSTODIAN: - -------------------------------------------- Information on investments held and their market/contract values as presented in the accompanying statements of participants' equity and on investment income as presented in the accompanying statements of changes in participants' equity has been certified by the custodian as being accurate and complete. 7. PARTY-IN-INTEREST TRANSACTIONS: - ---------------------------------- There were no prohibited transactions with a party in interest, as defined by ERISA. 8. REPORTABLE TRANSACTIONS: - ----------------------------- Schedule II summaries the Plan's reportable transactions for the year ended June 30, 1998. As defined, a reportable transaction is a transaction or series of transactions in one fund involving amounts in excess of 5% of the market value of the Plan's assets at the beginning of the plan year. 23 SCHEDULE I AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1998 EMPLOYER IDENTIFICATION NUMBER: 34-0899894 PLAN NUMBER: 001
IDENTITY OF MARKET/ ISSUER DESCRIPTION OF INVESTMENT CONTRACT VALUE(a) - --------------------- ------------------------------------------------------------------------- ------------------ Waxman Waxman Industries, Inc. Common Stock $762,751 Industries:* Aetna: * Aetna Fixed Account 283,403 Aetna Series Money Market Fund 59,322 Aetna Ascent Fund 179,719 Aetna Crossroads Fund 290,878 Aetna Legacy Fund 25,928 Aetna Index Plus Large Cap Fund 369,870 -- Fidelity Advisor Growth Opportunities Fund 242,340 -- Neuberger & Berman Genesis Trust 175,063 -- Neuberger & Berman Guardian Trust 86,769 -- Templeton Foreign Fund 145,868 Participant Loans: * Participant Loans (9.5% interest rate) 49,053 --------- $2,670,964 ==========
(a) The Plan has requested historical cost information related to the above investments; however, this information has not been provided by the custodian due to the nature of its recordkeeping system. * Indicates a party in interest The accompanying notes to financial statements are an integral part of this schedule. 24 SCHEDULE II AMENDED AND RESTATED WAXMAN INDUSTRIES, INC. PROFIT SHARING & 401(K) RETIREMENT PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED JUNE 30, 1998 EMPLOYER IDENTIFICATION NUMBER: 34-0899894 PLAN NUMBER: 001
Cost of Asset/ Current Current Value of Value of Asset on Cost Asset on Net Purchase Trans. Selling of Trans. Gain Price Date price Asset Date (Loss) - ------------------------- ----------------- ------------------ -------------- ----------- --------------- ------------- Aetna Fixed Account $ 335,270 $ 335,270 $ 65,780 (a) $ 65,780 (a) Aetna Ascent Fund 205,992 205,992 46,231 (a) 46,231 (a) Aetna Crossroads Fund 357,727 357,727 98,340 (a) 98,340 (a) Aetna Index Plus Large Cap Fund 324,897 324,897 26,823 (a) 26,823 (a) Fidelity Advisor Growth Opportunities Fund 234,479 234,479 26,894 (a) 26,894 (a) Neuberger & Berman Genesis Trust 203,393 203,393 36,871 (a) 36,871 (a) Waxman Industries, Inc. Common Stock 124,539 124,539 195,290 (a) 195,290 (a) Fidelity Contrafund -- -- 213,596 (a) 213,596 (a) Fidelity Advisor Balanced Fund -- -- 196,317 (a) 196,317 (a) Guaranteed Long Term Fund -- -- 989,839 (a) 989,839 (a) Lifetime 30 Fund -- -- 211,470 (a) 211,470 (a)
25 Lifetime 40 Fund -- -- 280,266 (a) 280,266 (a) Lifetime 50 Fund -- -- 219,312 (a) 219,312 (a) 20th Century Ultra Fund -- -- $198,837 (a) $198,837 (a)
(a) The Plan has requested historical cost information related to the above investments; however, this information has not been provided by the custodian due to the nature of its recordkeeping system. As a result, the net gain or loss cannot be determined. The accompanying notes to financial statements are an integral part of this schedule. EX-23 2 EXHIBIT 23 1 ARTHUR ANDERSEN LLP Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed Form S-8 Registration Statement No. 33-57477. /s/ Arthur Andersen LLP Cleveland, Ohio, December 22, 1998. -----END PRIVACY-ENHANCED MESSAGE-----