EXHIBIT 99
Employee Stock Purchase Plan
Financial Statements
December 31, 1996 and 1995
Price Waterhouse LLP
REPORT OF INDEPENDENT ACCOUNTANTS
January 31, 1997
To the Participants and Administrative Committee of General Housewares Corp.
Employee Stock Purchase Plan
In our opinion, the accompanying statements of financial condition and of
income and changes in plan equity present fairly, in all material respects,
the financial condition of General Housewares Corp. Employee Stock Purchase
Plan at December 31, 1996 and 1995, and the changes in its financial condition
for the years then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements
in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
STATEMENT OF FINANCIAL CONDITION
December 31, 1996 1995
PLAN ASSETS
Investments in employer's securities
(cost, 1996 - $216,698; 1995 - $196,947) $220,048 $154,827
LIABILITIES AND PLAN EQUITY
Liabilities - -
Plan Equity $220,048 $154,827
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Year Year
Ended Ended
December 31, December 31,
1996 1995
Dividend income $6,262 $4,584
Administrative expenses (284) (216)
Net dividend income 5,978 4,368
Realized gain (loss) on
investments 12,521 (4,344)
Unrealized appreciation
(depreciation) in
investments 24,226 (68,425)
Participant contributions 84,861 61,465
Participant distributions (62,365) (21,253)
-------- --------
Net increase (decrease) in
plan equity 65,221 (28,189)
Plan equity at beginning
of period 154,827 183,016
-------- --------
Plan equity at end of period $220,048 $154,827
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the General Housewares Corp. Employee Stock
Purchase Plan (the Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
ELIGIBILITY
All full time employees of General Housewares Corp. (the Company) who have
completed three months of service will be eligible to participate and be a
participant in the Plan at the beginning of the next calendar quarter
subsequent to their completion of three months of service.
STOCK PURCHASES
First Chicago Trust Company of New York, the Custodian for the Plan, will
purchase the Company's common stock either (1) in the open market, (2) from an
employee desiring to dispose of his/her shares pursuant to the Plan or (3)
from the Company. The Company will pay all brokerage fees on all purchases of
common stock under the Plan.
The price at which shares of common stock will be purchased will be the lesser
of: (a) 90% of the market value of the common stock on the first business day
of the applicable calendar quarter, or (b) 90% of the market value of the
common stock on the last business day of such calendar quarter.
The number of shares of common stock that will generally be purchased in each
calendar quarter will be equal to the amount of payroll deductions made during
such quarter plus any accumulated dividends divided by the purchase price of
the common stock. Dividend reinvestments are subject to a 5% administration
fee paid by the Plan.
WITHDRAWALS
An employee may withdraw part or all of his/her account balance at any time by
giving written notice to the Plan. At December 31, 1996, approximately 1,128
shares of common stock had not been distributed to employees terminated in the
fourth quarter of 1996.
PARTICIPANT ACCOUNTS
A stock purchase account shall be maintained by the Custodian in the name of
each participant. Authorized payroll deductions shall be held by the Company
and credited to the participant's stock purchase account at the end of each
calendar quarter. Interest will not accrue or be paid on available funds or
any other cash held in a participant's stock purchase account. All dividends
paid on Company's common stock held in a participant's stock purchase account
shall be used to purchase additional shares of the Company's common stock.
2. SUMMARY OF ACCOUNTING POLICIES
Quoted market prices are used to value investments.
3. INVESTMENTS
At December 31, 1996 and 1995 investments were comprised of 22,569 and 17,951
shares, respectively, of General Housewares Corp. Common Stock. The closing
market price on December 31, 1996 and 1995 was $9.750 and $8.625 per share,
respectively. Net unrealized appreciation (depreciation) of investments was
$24,226 and $(68,425) in 1996 and 1995, respectively. Realized gain (loss)
for 1996 and 1995 is calculated as follows:
Year Ended Year Ended
Dec. 31, 1996 Dec. 31, 1995
Cost (using FIFO basis) $71,524 $27,378
Unrealized appreciation
(depreciation) recognized
in prior years (21,680) (1,781)
-------- --------
49,844 25,597
Sales proceeds 62,365 21,253
-------- --------
Realized gain (loss) recognized
in current year 12,521 ($4,344)
4. FEDERAL INCOME TAXES
The Plan is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue code. As a result,
participants are not subject to any tax at the time of the purchase of the
Company"s common stock at a discount. A favorable letter of determination has
not been requested or obtained from the Internal Revenue Service.