<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 3, 2000
REGISTRATION NO. 333-51851
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE AMENDMENT NO. 3
ON
FORM S-3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
INDUSTRIAL DISTRIBUTION GROUP, INC.
(Exact Name of Issuer as Specified in its Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 5085 58-229339
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
950 E. PACES FERRY ROAD, SUITE 1575
ATLANTA, GEORGIA 30326
(404) 949-2100
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
PATRICK S. O'KEEFE
CHIEF EXECUTIVE OFFICER AND PRESIDENT
950 E. PACES FERRY ROAD, SUITE 1575
ATLANTA, GEORGIA 30326
(404) 949-2100
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
W. RANDY EADDY, ESQ.
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-4530
(404) 815-6500
Approximate date of commencement of proposed sale to the public: FROM TIME
TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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 (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
By the Post-Effective Amendment, the registrant also hereby deregisters an
aggregate of 3,740,751 of the original 5,000,000 shares of Common Stock
previously covered, leaving an aggregate of 1,259,249 shares of Common Stock
covered hereby.
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 SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
INDUSTRIAL DISTRIBUTION GROUP, INC.
--------------------------------
1,259,249 SHARES OF COMMON STOCK
--------------------------------
The 1,259,249 shares of our common stock, $.01 par value, that may
sold from time to time using this Prospectus are comprised of (1) 1,192,115
shares of our common stock that may be offered for resale by certain of our
shareholders who are identified later in this Prospectus and (2) 67,134 shares
of our common stock that are issuable upon exercise of options to purchase
shares of our common stock that are held by some of our shareholders who are
identified later in this Prospectus. Because of possible transactions after the
date of this Prospectus, other persons who are not now known may become selling
shareholders and be entitled to use this Prospectus to sell some of the shares
of our common stock. We will not receive any of the proceeds from the sale of
the shares by the selling shareholders, but we will receive the exercise price
payable upon any exercise of the options.
We have agreed to bear all expenses (other than the fees or expenses
of counsel or any other personal representative of any selling shareholder) in
connection with the preparation and use of this Prospectus. We will not pay any
commissions, discounts, or other fees to underwriters, broker dealers, or any
other person who may assist a selling shareholder in making a sale. We have
agreed to indemnify the selling shareholders, and they have agreed to indemnify
us, against certain liabilities under the Securities Act of 1933.
The selling shareholders may sell their stock from time to time in a
variety of ways, including:
- underwritten offerings;
- ordinary brokerage transactions at prices at or near the market
price; and
- transactions on terms that may be negotiated at the time
of sale.
The selling shareholders may pay usual and customary or specifically
negotiated underwriting discounts, brokerage fees, or commissions in connection
with such sales. To the extent required, the specific shares to be sold, the
terms of the offering, including price, the name of any broker-dealer or
underwriter, and any applicable commission, discount, or other compensation
with respect to a particular sale will be set forth in a supplement that we may
prepare to accompany this Prospectus in the future.
Our common stock is traded under the symbol "IDG" on the New York
Stock Exchange. On March 24, 2000, the last sale price of the common stock as
reported by the NYSE was $3 5/16 per share.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6 OF THIS
PROSPECTUS.
---------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is March ___, 2000.
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
Where You Can Find More Information.................2
Forward-Looking Statements..........................3
The Company.........................................3
The Offering........................................4
Price Range of Common Stock.........................4
Risk Factors........................................5
Selling Shareholders................................8
Plan of Distribution...............................10
Legal Matters......................................11
Experts............................................12
</TABLE>
..................
WHERE YOU CAN FIND MORE INFORMATION
This Prospectus is part of an amendment on Form S-3 to a registration
statement on Form S-1 that we have filed with the Securities and Exchange
Commission covering the shares of our common stock that the selling
shareholders may offer for resale. The SEC's file number for that registration
statement is 333-51851.
We file annual, quarterly, and current reports, proxy statements, and
other information with the SEC. You may read and copy any materials we file
with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. For information on the operation of the Public
Reference Room, call the SEC at 1-800-SEC-0330. You can also obtain reports,
proxy statements, and other information regarding issuers that file
electronically with the SEC from the SEC's Internet site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" information filed with
them, which means that we can disclose important information to you by
referring you directly to those documents. The information incorporated by
reference is considered to be a part of this Prospectus. In addition,
information we file with the SEC in the future will automatically update and
supersede information contained in this Prospectus and any accompanying
Prospectus supplement. Any information so updated or superseded shall not be
deemed, except as so updated or superseded, to be a part of this Prospectus. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until all of the shares of common stock described in this
Prospectus are sold or the offering of the shares covered by this Prospectus is
terminated:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
We will provide you with free copies of any of these documents or any
other documents that have been incorporated by reference in this Prospectus,
without exhibits, unless an exhibit is incorporated into the document by
reference, if you write us or call us at: Industrial Distribution Group, Inc.,
950 E. Paces Ferry Road, Suite 1575, Atlanta, Georgia 30326, Attention:
Investor Relations, telephone (404) 949-2100.
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FORWARD-LOOKING STATEMENTS
From time to time, information we provide or statements of our
directors, officers, or employees may be "forward-looking statements" under the
Private Securities Litigation Reform Act of 1995. Those statements involve
numerous risks and uncertainties. Typically, this information or these
statements contain the words "believes," "anticipates," "intends," "expects,"
or similar words. Any information or statements made or incorporated by
reference in this Prospectus that are not statements of historical fact are
forward-looking statements. The forward-looking statements in this Prospectus,
and others that we or our representatives make, are based on a number of
assumptions and involve risks and uncertainties. Consequently, actual results
could differ materially. The factors we describe under the heading "Risk
Factors" are some, but not all, of the reasons that results could be different.
THE COMPANY
Industrial Distribution Group, Inc. was formed in February 1997 to
create a leading, nationwide supplier of cost-effective, flexible procurement
solutions for manufacturers and other users of industrial maintenance, repair,
operating, and production (MROP) products. We distribute a full line of these
products, emphasizing our specialized expertise in product applications. Our
principal product categories include abrasives, cutting tools, hand and power
tools, coolants, lubricants, and adhesives.
Our application and product specialists are able to analyze a
customer's acquisition, possession, and application processes for the supplies
we distribute in order to design programs to streamline the processes and
reduce their associated costs. These programs may include improving a
customer's production and procurement processes, standardizing the products
they use, reducing the number of suppliers from which they purchase supplies,
or developing integrated supply arrangements that outsource to us some or all
of their maintenance, repair, operating, and production procurement and
management functions.
We intend to establish a nationwide presence, with maintenance,
repair, operating, and production product and service capability in all or most
of the top 75 U. S. industrial markets. Currently, we have 64 operating
locations in 60 cities, which include 37 of the top 75 U.S. industrial markets,
along with two small facilities abroad. Our more than 45,000 customers include
a diverse group of major national and international corporations, including
AlliedSignal, Black & Decker, Boeing, Chrysler, General Motors, Hoechst
Celanese, PPG Industries, and Shell Oil, as well as small and large local and
regional businesses. On a pro forma combined basis, we had net sales of
approximately $542.1 million for the year ended December 31, 1999.
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THE OFFERING
This Prospectus relates to the proposed offer and sale by the selling
shareholders listed in the section called "Selling Shareholders" beginning on
page 9 of shares of our common stock that they currently own or will own when
and if they exercise their outstanding stock options. Pursuant to stock option
agreements between us and several selling shareholders that were entered into
in connection with our acquisition of Continental Air Tool, Inc. in March 1998,
we granted to these selling shareholders, all of whom previously held options
to purchase shares of common stock of Continental Air Tool, options to purchase
an aggregate of 67,134 shares of our common stock. These options are
immediately exercisable (except for approximately 16% thereof, or 10,741 option
shares, that are subject to an escrow arrangement and may not become
exercisable in full until March 2000, if at all) at an exercise price of $7.31
per share, and all such options expire on April 25, 2001. Any of these option
shares that are not deemed to be effectively registered for issuance upon the
exercise of an option (or that may be held immediately following exercise by a
selling shareholder who is an affiliate of us under Rule 144), shall be covered
by this Prospectus for possible resale by the selling shareholders. We will not
receive any proceeds from the sale by a selling shareholder of any shares; the
selling shareholders will receive all such proceeds. We will receive, however,
the exercise price paid upon exercise of any of the options.
As of February 29, 2000, there were issued and outstanding a total of
8,770,341 shares of our common stock. In addition to the options owned by the
selling shareholders, there were also outstanding options or other rights to
purchase or acquire an aggregate of 1,305,900 shares of common stock from us
under certain conditions.
PRICE RANGE OF COMMON STOCK
Our common stock trades on the New York Stock Exchange under the "IDG"
symbol. The following table sets forth, for the periods indicated, the
quarterly high and low sales price information related to trading in our common
stock on the NYSE. Such information has been obtained from the NYSE.
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SALES PRICE
--------------------------
YEAR HIGH LOW
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1998
First Quarter ........................ $20 3/16 $15 9/16
Second Quarter ....................... $20 3/4 $15
Third Quarter ........................ $16 9/16 $ 5 1/2
Fourth Quarter ....................... $ 7 5/8 $ 5 3/8
1999
First Quarter ........................ $ 8 3/8 $ 5 1/4
Second Quarter ....................... $ 6 3/4 $ 4 7/8
Third Quarter ........................ $ 5 1/8 $ 3 5/16
Fourth Quarter ....................... $ 4 $ 2 11/16
2000
First Quarter (through March 24, 2000) $ 3 11/16 2 7/8
</TABLE>
The closing sales price for the common stock on March 24, 2000
was $3 5/16.
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RISK FACTORS
An investment in the shares offered hereby involves a significant
degree of risk. In deciding whether to purchase the shares offered hereby,
prospective investors should carefully consider all of the information
contained in this Prospectus, including the following factors that may affect
our current operations and future prospects.
WE HAVE OPERATED AS A SINGLE ENTITY ONLY SINCE SEPTEMBER 1997 AND
CONTINUE TO FACE THE CHALLENGE OF INTEGRATING NEW COMPANIES.
Although each of our founding companies has operated for over 20
years, we did not commence operations as a combined entity until September
1997. As a result, we are still engaged in integrating these businesses, along
with subsequently acquired companies, and we cannot be certain that we will be
able to do so with enough success to be as profitable as we expect or desire.
OUR INFORMATION AND OPERATIONS SYSTEMS ARE NOT FULLY INTEGRATED, AND
WE MUST THEREFORE RELY ON THE SYSTEMS OF THE COMPANIES WE ACQUIRE
UNTIL WE CAN IMPLEMENT OUR CENTRALIZED SYSTEM.
Until we can fully implement centralized management systems, we will
utilize and be dependent upon the information and operating systems of the
companies we acquire for many functions. These functions include, among others,
product ordering, financial reporting and analysis, and inventory control.
Although we have put certain control mechanisms in place, we may experience
delays, disruptions, and unanticipated expenses in implementing, integrating,
and operating centralized systems. Any of these problems could have a material
adverse effect on our results of operations and financial condition. In
addition, we will not be able to achieve the full benefit of certain
contemplated operating efficiencies and competitive advantages until we have
fully implemented our centralized management information and operating systems.
WE RELY ON A VARIETY OF DISTRIBUTION RIGHTS GRANTED BY OUR SUPPLIERS
TO OFFER THEIR PRODUCT LINES TO OUR CUSTOMERS.
Until we fully implement more centralized procurement arrangements, we
will depend for a substantial portion of our business on the collection of
varied distribution arrangements with suppliers for certain product lines that
have been established by our several operating subsidiaries in their respective
geographic markets. A significant percentage of these current distribution
arrangements are oral, and many of them can be terminated by the supplier
immediately or upon short notice. The termination or limitation by any key
supplier of its relationship with us could have a material adverse effect on
our results of operations and financial condition.
OUR INDUSTRY IS VERY COMPETITIVE, BOTH AS TO THE NUMBER AND STRENGTH
OF THE DIFFERENT COMPANIES WITH WHICH WE COMPETE AND THE BUSINESS
TERMS OFFERED TO POTENTIAL CUSTOMERS.
The industrial maintenance, repair, operating, and production supplies
industry is highly competitive and features numerous distribution channels,
including:
- national, regional, and local distributors;
- direct mail suppliers;
- Internet suppliers;
- large warehouse chains;
- hardware stores; and
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- manufacturers' own sales forces.
Many of our competitors are small enterprises who sell to customers in a
limited geographic area, but we also compete against several large distributors
that have significantly greater resources than IDG. Competition with all of
these distributors has increased as customers increasingly seek low-cost
alternatives to traditional methods of purchasing and sources of supply by,
among other things, reducing the number of their maintenance, repair,
operating, and production suppliers.
Competition in the maintenance, repair, operating, and production
industry may increase in other ways as well. First, other distributors are
consolidating to achieve economies of scale and increase efficiencies. Second,
new competitors, of which we are not currently aware, may emerge, further
increasing competition.
Other aspects of our industry also make it very competitive. For
example, certain of our competitors sell the same products we sell at lower
than we offer. Moreover, we compete on the basis of responsiveness to the needs
of customers for quality service, product diversity, and availability. We
cannot assure you that we will be able to compete successfully under such
conditions.
WE RELY HEAVILY ON OUR SENIOR MANAGEMENT AND THE EXPERTISE OF
MANAGEMENT PERSONNEL OF THE BUSINESSES WE ACQUIRE.
Our operations will depend for the immediate future on the efforts of
our executive officers, the heads of our business units, and the senior
management of the businesses we have acquired, especially as we enter into new
geographic markets. Our business and prospects could be adversely affected if
these persons, in significant numbers, do not perform their key roles as
expected, and we are unable to attract and retain qualified replacements.
THE DELIVERY OF OUR SERVICES REQUIRES HIGHLY SKILLED AND SPECIALIZED
EMPLOYEES WHO ARE NOT EASY TO LOCATE OR REPLACE.
The timely provision of our high-quality service requires an adequate
supply of skilled sales and customer service personnel, including the
application and product specialists whose expertise is an essential element of
our customer-oriented, flexible procurement solutions program. Accordingly, our
ability to implement strategies for our customers depends to a degree on our
ability to employ the skilled personnel necessary to meet our marketing and
servicing requirements. From time to time, we have experienced difficulty in
attracting or retaining sufficient numbers of qualified personnel. As a result,
our operating costs may be adversely affected by turnover in such positions. We
cannot assure you that we will be able to maintain an adequately skilled sales
and customer service force or that our labor expenses will not increase as a
result of a shortage in the supply of such skilled personnel.
OUR ABILITY TO SELL OUR PRODUCTS AND SERVICES IN THE QUANTITY WE
DESIRE DEPENDS HEAVILY UPON THE ECONOMIC CONDITIONS OF OUR CUSTOMERS.
Some of the primary markets for the products and services we sell are
subject to cyclical fluctuations that generally affect demand for industrial
and consumer durable goods produced by the users of maintenance, repair,
operating, and production products. Consequently, the demand for these products
and services has been and will continue to be influenced by many of those same
national, regional, or even international factors. Customers whose businesses
are impacted directly by such events affect our business when they delay or
slow orders for maintenance, repair, operating, and production products or
services that they otherwise would have required if their businesses had not
been adversely affected. Changes in economic conditions, such as the examples
identified, resulting in a change in the
6
<PAGE> 8
current business cycle could therefore have a material adverse effect on our
results of operations and financial condition.
MANAGEMENT AND CERTAIN INDIVIDUALS WHO HELPED FOUND US OWN OVER 41% OF
OUR STOCK AND THUS HAVE A SIGNIFICANT AMOUNT OF CONTROL OF THE
COMPANY.
Our directors and officers, as well as former stockholders of our
founding companies, beneficially own an aggregate of approximately 41% of our
outstanding common stock. Accordingly, these persons, if they were to act in
concert, could potentially control the election of directors and other matters
requiring stockholder approval by simple majority vote.
WE CANNOT BE ABSOLUTELY CERTAIN THAT ALL YEAR 2000 PROBLEMS HAVE BEEN
AVOIDED.
The "year 2000 problem" arises from the widespread use of computer
programs that rely on two-digit date codes to perform computations or
decision-making functions. Many of these programs may fail due to an inability
to properly interpret date codes beginning January 1, 2000. For example, such
programs may misinterpret "00" as the year 1900 rather than 2000. In addition,
some equipment, being controlled by microprocessor chips, may not deal
appropriately with the year "00."
Although January 1, 2000 has passed without significant disruptions, the
year 2000 problem could still disrupt our operations and the systems of other
companies upon which our systems rely. If our systems or the systems of our
customers, product vendors, utility vendors, and banks experience unforeseen
year 2000 problems in the future, it may negatively impact our systems or
operations.
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SELLING SHAREHOLDERS
The following table sets forth the names of the selling shareholders,
the number of shares beneficially owned by each selling shareholder as of
February 29, 2000, the percentage of our total outstanding common stock owned
by each selling shareholder as of February 29, 2000, and the maximum number of
shares that may be offered for sale by such selling shareholders pursuant to
this Prospectus. An aggregate of 1,259,249 shares of common stock are covered
for possible sale by selling shareholders using this Prospectus; some of these
shares have already been sold (as discussed in note 1 to the table) and the
remaining such shares may be offered for resale by the selling shareholders
from time to time hereafter using this Prospectus. We will not receive any
proceeds from any sale of the shares. Except as set forth in the footnotes to
the table below, no selling shareholder has had any position, office, or other
material relationship with us or any of our predecessors or affiliates within
the past three years.
Each of the selling shareholders named below acquired his or her
shares as well as part of the consideration paid by us for our acquisition of a
corporation in which he or she was a shareholder. In connection with those
transactions, we and the selling shareholders entered into agreements pursuant
to which we agreed to file this registration statement to cover their possible
resale of the shares. Such agreements generally required the selling
shareholders to place at least 10% of the shares they received into escrow for
a one- or two-year period. Although such escrowed shares are registered
hereunder, the selling shareholders will not be able to sell such escrowed
shares until the applicable escrow period has expired. Such agreements also may
impose certain restrictions on the transfer of shares by the selling
shareholders, including restrictions mutually agreed upon between us and the
selling shareholders.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF FEBRUARY 29, 2000
NUMBER OF SHARES(1) PERCENTAGE(2)
------------------- -------------
<S> <C> <C>
James O. Gauthier(3) and Kay L. Gauthier........................ 124,030 1.41%
Mike Hiatt...................................................... 10,968 *
Samuel S. Mitchell(3)(4)........................................ 64,833 *
D. Gray Farley(3) and Clora P. Farley(5)........................ 120,576 1.37
Harry Y. McLaughlin(5).......................................... 110,862 1.26
James Fairbanks and Claudia Fairbanks(5)........................ 45,821 *
Phil Jaskoviak and Susan Jaskoviak.............................. 2,655 *
Phil Jaskoviak(5)............................................... 9,298 *
Gary Giberson and Beulah S. Giberson, JT TEN(5) ................ 5,426 *
Revocable Living Trust of Glen E. Johnson and Ann B. Johnson
Trust with AB Tax Provisions (Formula Clause) September
26, 1990................................................... 647 *
Ernie Plant..................................................... 64 *
Roger A. Gertz(5)............................................... 1,550 *
Roger A. Gertz and Eva Gertz.................................... 323 *
Continental Air Tool, Inc. Employee Stock Ownership Plan........ 105,747 1.21
Dave Gentle(5).................................................. 4,131 *
Mark W. Fuller(3)............................................... 77,886 *
Lincoln E. Fuller(3)............................................ 77,886 *
Russell E. Fuller............................................... 36,512 *
Joyce I. Fuller................................................. 16,357 *
Joseph H. Stagg, III(3)......................................... 127,370 1.45
Mercedes W. Stagg............................................... 27 *
</TABLE>
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<TABLE>
NUMBER OF SHARES(1) PERCENTAGE(2)
------------------- -------------
<S> <C> <C>
Henry D. Goff and Fleet Bank, as Trustees of the Trust FBO
Susan Goff................................................. 16,197 *
Charles J. Houston III Revocable Trust of 1989.................. 24,500 *
The Hope Group Corporation...................................... 5,000 *
John D. Hamilton(3)(4).......................................... 67,646 *
Errol A. Luginbill(3)(4)........................................ 84,557 *
Ronald L. Phillips(4)........................................... 33,823 *
David J. Schreiner(3)(4)........................................ 84,557 *
</TABLE>
- ------------------
* Less than 1%.
(1) All of the shares held are being registered hereunder and may be offered
and resold by the selling shareholder pursuant to this Prospectus. There
is no assurance, however, that any of the selling shareholders will sell
any or all of such shares. Pursuant to an earlier version of this
Prospectus, the following amount of shares reflected in the table were
sold by Selling Shareholders (with the number of shares held by such
Selling Shareholders as of February 29, 2000 in parenthesis): Samuel S.
Mitchell - 1,103 (63,730); D. Gray Farley and Clora P. Farley - 18,300
(102,276); James and Claudia Fairbanks - 1,800 (44,021); Continental Air
Tool, Inc. Employee Stock Ownership Plan - 3,000 (102,747); Mark W. Fuller
- 520 (77,366); and Lincoln E. Fuller - 519 (77,367).
(2) Based on 8,770,341 shares outstanding on February 29, 2000.
(3) In connection with the acquisition transaction in which we issued the
shares to the selling shareholder, the selling shareholder entered into an
employment agreement with a subsidiary of ours pursuant to which he agreed
to provide certain services to the subsidiary for a period of two to three
years from the closing date of the acquisition. Under each such employment
agreement, the selling shareholder is paid an annual salary, may be
eligible for an annual bonus (subject to certain performance criteria),
and is eligible for our benefits of the type generally provided to our
similarly situated employees for comparable services.
(4) All of the shares held by the selling shareholder are subject to a
restriction pursuant to which the selling shareholder agreed that he will
not, directly or indirectly, without our consent, sell or otherwise
dispose of the shares for a period of up to two years after the
acquisition in which the shares were issued to him.
(5) Includes currently exercisable options for shares of our common stock
issued to the selling shareholder in connection with the acquisition by us
of Continental Air Tool, Inc. Options for an aggregate of 67,134 shares
were issued to the following selling shareholders: D. Gray Farley (20,657
shares); Harry Y. McLaughlin (20,657 shares); Phil Jaskoviak (8,263
shares); Roger Gertz (1,032 shares); Dave Gentle (4,131 shares); Gary
Giberson (4,131 shares); and James Fairbanks (8,263 shares). All such
options are exercisable at $7.31 per share.
The selling shareholders may offer and sell all or a portion of the
shares from time to time, but are under no obligation to offer or sell any of
the shares. See "Plan of Distribution" below. Because the selling shareholders
may sell all, none, or any part of the shares from time to time, no estimate
can be given as to the number of shares that will be beneficially owned by the
selling shareholders upon termination of any offering by them or as to the
percentage of our total outstanding common stock that the selling shareholders
will beneficially own after termination of any offering.
This Prospectus also covers possible sales by certain presently unknown
persons who may become the record or beneficial owners of some of the covered
shares as a result of certain types of private transactions, including but not
limited to gifts, private sales, and transfers pursuant to a foreclosure or
similar proceeding by a lender or other creditor to whom shares may be pledged
as collateral to secure an obligation of a named selling shareholders. Each such
potential transferee of a
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named selling shareholders is hereby deemed to be a selling shareholders for
purposes of selling shares using this Prospectus. To the extent required by
applicable law, information (including the name and number of shares owned and
proposed to be sold) about such transferees, if there shall be any, will be set
forth in an appropriate supplement to this Prospectus.
PLAN OF DISTRIBUTION
The shares may be offered and sold by or for the account of the
selling shareholders (or their pledgees, donees, or transferees), from time to
time as market conditions permit, on the NYSE, any other exchange on which the
shares may be listed, over the counter, or otherwise, at prices and on terms
then prevailing or in negotiated transactions. The shares may be sold by one or
more of the following methods, without limitation:
- a block trade in which a broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;
- purchases by a broker or dealer (including a specialist or market
maker) as principal and resale by such broker or dealer for its
account pursuant to this Prospectus;
- an underwritten offering, subject to compliance with applicable
disclosures concerning the identity and compensation arrangements
of each firm acting as underwriter;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- face-to-face transactions between sellers and purchasers without a
broker-dealer;
- transactions in options, swaps, or other derivatives (whether
exchange listed or otherwise);
- sales in other ways not involving market makers or established
trading markets, including direct sales to institutions or
individual purchasers; and
- any combination of the foregoing, or by any other legally available
means.
In addition, the selling shareholders or their successors in interest may enter
into hedging transactions with broker-dealers who may engage in short sales of
common stock in the course of hedging the positions they assume with a selling
shareholders. The selling shareholders or their successors in interest may also
enter into option or other transactions with broker-dealers that require the
delivery to such broker-dealers of the shares of common stock, which shares of
common stock may be resold thereafter pursuant to this Prospectus.
In effecting sales, brokers or dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Such
brokers or dealers may receive commissions or discounts from the selling
shareholders and/or the purchasers of the shares for whom such brokers or
dealers act as agents or to whom they sell as principals, or both, in amounts
to be negotiated (which compensation as to a particular broker-dealer might be
in excess of customary commissions). At the time a particular offer of shares
is made by one or more of the selling shareholders, a Prospectus supplement, if
required, will be distributed to set forth the aggregate number of shares being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, any discounts, commissions, and other items
constituting compensation from the selling shareholders, and any discounts,
commissions, or concessions allowed or reallocated or paid to dealers,
including the proposed selling price to prospective purchasers. The selling
10
<PAGE> 12
shareholders and such brokers and dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. There can be no assurance,
however, that all or any of the shares will be offered by the selling
shareholders. See "Selling Shareholders" above. We know of no existing
arrangements between any selling shareholders and any broker, dealer, finder,
underwriter, or agent relating to the sale or distribution of the shares.
We will not receive any of the proceeds of any sale of shares by the
selling shareholders. We will, however, receive any exercise price paid to
acquire shares from us by exercising stock options. We will bear substantially
all expenses of the registration of this offering under the Securities Act,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of our counsel and independent public
accountants, fees of the NASD, transfer taxes, fees of transfer agents and
registrars, and costs of insurance, if any. All underwriting discounts, selling
commissions, and broker's fees applicable to the sale of any shares will be
borne by the selling shareholders or by such persons other than us as agreed by
and among the selling shareholders and such other persons.
ISSUANCE OF OPTION SHARES
Pursuant to stock option agreements between us and certain selling
shareholders that were entered into in connection with the acquisition of
Continental Air Tool, Inc., we granted to those selling shareholders, all of
whom previously held options to purchase shares of common stock of Continental
Air Tool, options to purchase an aggregate of 67,134 shares of our common
stock. These options are immediately exercisable (except for approximately 16%
thereof, for an aggregate of 10,741 shares, that are subject to an escrow
arrangement and may not become exercisable in full until March 2000, if at all)
at an exercise price of $7.31 per share, and all such options expire on April
25, 2001. Any of these option shares that are not deemed to be effectively
registered for issuance upon the exercise of an option (or that may be held
immediately following exercise by a selling shareholder who is an affiliate of
ours under Rule 144), shall be covered by this Prospectus for possible resale
by the selling stockholders.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for
us by Kilpatrick Stockton LLP, Atlanta, Georgia.
EXPERTS
The financial statements and schedule incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
11
<PAGE> 13
LIMITATIONS ON AUTHORITY AND USE
No dealer, sales person, or other individual has been authorized to
give any information or to make any representations not contained in this
Prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by us. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the common
stock in any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has not been any change in the facts set forth in this Prospectus or
in our affairs since the date hereof.
12
<PAGE> 14
===============================================================================
INDUSTRIAL DISTRIBUTION GROUP, INC.
COMMON STOCK
----------------------------
PROSPECTUS
----------------------------
________ __, 2000
===============================================================================
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimated,
except the SEC registration fee, and relate to this Post-Effective Amendment
only, and the fee is not cumulative with respect to the signed Registration
Statement.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee ....... $ 0*
Legal fees and expenses .... $15,000
Accounting fees and expenses $ 5,000
Miscellaneous expenses ..... $ 5,000
-------
Total ................. $25,000
-------
</TABLE>
* No fee paid in connection with this Post-Effective Amendment; a fee of
$28,440 was paid in connection with the original Registration Statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Certificate of Incorporation provides that, to the fullest extent
permitted by the Delaware General Corporation Law, our directors are not be
liable to us or our stockholders for monetary damages for breach of fiduciary
duty as a director. Under Delaware law, liability of a director may not be
limited (1) for any breach of the director's duty of loyalty to us or our
stockholders, (2) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (3) in respect of certain
unlawful dividend payments or stock redemptions or repurchases, and (4) for any
transaction from which the director derives an improper personal benefit. The
effect of the provisions of our Certificate of Incorporation is to eliminate
our rights and the rights of our stockholders (through stockholders' derivative
suits on behalf of us) to recover monetary damages against a director for
breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior), except in the
situations described in clauses (1) through (4) above. This provision does not
limit or eliminate the rights of us or any stockholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care.
In addition, under our Certificate of Incorporation and Article Eight
of our Bylaws, we indemnify our directors, officers, employees, and agents
against losses incurred by any such person by reason of the fact that such
person was acting in such capacity or was serving at our request as a director,
officer, employee, or agent of another entity. In addition, we have entered
into indemnification agreements with our directors and executive officers.
Our directors and officers are insured against losses arising from any
claim against them as such for wrongful acts or omissions, subject to certain
limitation.
We have obtained directors' and officers' liability insurance
coverage.
II-1
<PAGE> 16
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C> <C>
4.1 -- Form of Common Stock Certificate of the Company (filed
as Exhibit 4.1 of the Company's Registration
Statement on Form S-1 (File No. 333-36233) filed
with the Commission, is hereby incorporated by
reference)
5.1 -- Opinion of Kilpatrick Stockton LLP
23.1 -- Consent of Kilpatrick Stockton LLP (included in Exhibit
5.1)
23.2 -- Consent of Arthur Andersen LLP
</TABLE>
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 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
Securities 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) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-2
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on April 3, 2000.
INDUSTRIAL DISTRIBUTION GROUP, INC.
By: /s/ Patrick S. O'Keefe
--------------------------------------
Patrick S. O'Keefe, President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Patrick S. O'Keefe and Jack P. Healey as
attorneys-in-fact, having the power of substitution, for them in any and all
capacities, to sign any amendments to this Registration Statement on Form S-3
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on the 3rd day of April, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Patrick S. O'Keefe
---------------------------- President, Chief Executive
Patrick S. O'Keefe Officer and Director (Principal Executive
Officer)
/s/ Jack P. Healey
---------------------------- Senior Vice President, Chief
Jack P. Healey Financial Officer and Secretary
(Principal Financial and
Accounting Officer)
/s/ Richard M. Seigel
---------------------------- Chairman of the Board of Directors
Richard M. Seigel
/s/ David K. Barth
---------------------------- Director
David K. Barth
/s/ William J. Burkland
---------------------------- Director
William J. Burkland
/s/ William R. Fenoglio
----------------------------
William R. Fenoglio Director
</TABLE>
II-3
<PAGE> 18
<TABLE>
<S> <C>
/s/ William T. Parr
-------------------------
William T. Parr Director
/s/ George L. Sachs, Jr.
-------------------------
George L. Sachs, Jr. Director
/s/ Andrew B. Shearer
-------------------------
Andrew B. Shearer Director
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
OPINION OF KILPATRICK STOCKTON LLP
KILPATRICK STOCKTON LLP
ATTORNEYS AT LAW
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
April 3, 2000
Industrial Distribution Group, Inc.
950 E. Paces Ferry Road, Suite 1575
Atlanta, Georgia 30326
Gentlemen:
At your request, we have examined Amendment No. 3 on Form S-3 to the
Registration Statement on Form S-1, File No. 333-51851 (as so amended, the
"Registration Statement"), filed by Industrial Distribution Group, Inc. (the
"Company"), a Delaware corporation, with the Securities and Exchange Commission
(the "SEC") with respect to the continued registration under the Securities Act
of 1933, as amended, of 1,259,249 shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock"), proposed to be sold by certain
persons as shareholders of the Company.
As your counsel, and in connection with the preparation of the
Registration Statement, we have examined the originals or copies of such
documents, corporate records, certificates of public officials and officers of
the Company, and other instruments related to the authorization and issuance of
the common stock as we deemed relevant or necessary for the opinion expressed
herein.
Based upon the foregoing, it is our opinion that the shares of common
stock proposed to be sold by the persons identified as selling shareholders in
the Registration Statement are (and in the case of certain shares to be issued
pursuant to the exercise of certain stock options as contemplated by and
described generally in the Registration Statement, will be, when issued and
paid for), validly issued, fully paid for, and nonassessable, and that such
shares may be sold and delivered by the selling shareholders in the manner and
under the terms and conditions described in the Registration Statement, without
affecting adversely their status as validly issued, fully paid, and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name in the "Legal
Matters" section of the Prospectus constituting a part of the Registration
Statement, and any amendments thereto.
Very truly yours,
KILPATRICK STOCKTON LLP
By: /s/ W. Randy Eaddy
--------------------------------------
W. Randy Eaddy, A Partner
<PAGE> 1
EXHIBIT 23.2
ACCOUNTANT'S CONSENT
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
Arthur Andersen LLP
Atlanta, Georgia
March 28, 2000
