<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
SPINNAKER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-0544125
(State of incorporation) (I.R.S. employer identification no.)
</TABLE>
600 N. PEARL STREET, SUITE 2160
DALLAS, TEXAS 75201
214-855-0032
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
------------------------------
NED N. FLEMING, III
PRESIDENT
SPINNAKER INDUSTRIES, INC.
600 N. PEARL STREET, SUITE 2160
DALLAS, TEXAS 75201
214-855-0032
(Name, address including zip code, and telephone number, including area
code, of agents for service)
------------------------------
COPY TO:
Timothy R. Vaughan
Crouch & Hallett, L.L.P.
717 N. Harwood St., Suite 1400
Dallas, Texas 75201
(214) 953-0053
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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, 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, please 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. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT BEING OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES BEING REGISTERED REGISTERED PER SHARE(1) PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, no par value.................. 171,428 shares $43 $7,371,404 $2,233.76
Class A Common Stock, no par value.......... 171,428 shares $53 $9,085,684 $2,753.24
Total....................................... 342,856 shares -- $16,457,088 $4,987.00
</TABLE>
(1) Estimated solely for purposes of calculating the amount of the registration
fee pursuant to the provisions of Rule 457(c) under the Securities Act of
1933 based on the average of the high and low prices for the Common Stock as
reported on the Nasdaq National Market, Small Cap Market on February 7,
1997.
------------------------------
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.
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<PAGE>
SPINNAKER INDUSTRIES, INC.
Cross-Reference Sheet pursuant to Item 501(b) of Regulation S-K showing
locations in the Prospectus of information required by Part I of Form S-3.
<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEMS AND HEADINGS LOCATION IN PROSPECTUS
----------------------------------------------------- -----------------------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside Front Facing Page; Cross-Reference Sheet; Outside Front
Cover Pages of Prospectus Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page of Prospectus
Prospectus
3. Summary Information, Risk Factors and Ratio of Risk Factors; The Company
Earnings to Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Outside Front Cover Page of Prospectus
9. Description of Securities to be Registered Not Applicable
10. Interests of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Reference Inside Front Cover Page of Prospectus
13. Disclosure of Commission Position on Indemnification Not Applicable
for Securities Act Liabilities
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY AN
OFFER TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SPINNAKER INDUSTRIES, INC.
171,428 SHARES, CLASS A COMMON STOCK
171,428 SHARES, COMMON STOCK
---------------------
The 171,428 shares of Class A Common Stock, no par value (the "Class A
Common Stock"), and the 171,428 shares of Common Stock, no par value (the
"Common Stock"), of Spinnaker Industries, Inc., a Delaware corporation (the
"Company"), offered hereby are being sold by the Selling Stockholders (as
defined). See "Selling Stockholders." The Company will not receive any of the
proceeds from the sale of the shares of Class A Common Stock (the "Class A
Shares") or the sale of the shares of Common Stock (the "Common Shares") offered
hereby.
The Class A Shares and the Common Shares may be offered by the Selling
Stockholders from time to time in open market transactions (which may include
block transactions) or otherwise in the over-the-counter market through the
Nasdaq National Market, Small Cap Market (the "Small Cap"), or in private
transactions at prices relating to prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Class A Shares and the Common Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or purchasers of the Class A
Shares and the Common Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealer acting in connection with the sale of the
Class A Shares and the Common Shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"), in which event any discounts, concessions or commissions received by
them, which are not expected to exceed those customary in the types of
transactions involved, or any profit on resales of the Class A Shares and the
Common Shares by them, may be deemed to be underwriting commissions or discounts
under the Act. The offering contemplated hereby will terminate as to the Class A
Shares and the Common Shares upon the earlier to occur of (i) the sale of all
the Class A Shares and the Common Shares by the Selling Stockholders or (ii)
July 17, 1999, pursuant to certain agreements to which the Company and each of
the Selling Stockholders are parties. See "Selling Stockholders."
The costs, expenses and fees incurred in connection with the registration of
the Class A Shares and the Common Shares, which are estimated to be $13,487
(excluding selling commissions and brokerage fees incurred by the Selling
Stockholders), will be paid by the Company, which has also agreed to indemnify
certain of the Selling Stockholders against certain liabilities, including
liabilities under the Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 HEREOF FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY POTENTIAL PURCHASERS OF THE CLASS A COMMON
STOCK OR THE COMMON STOCK.
The Class A Common Stock and the Common Stock are traded on the Small Cap
under the symbols "SPNI-A" and "SPNI," respectively. The last reported sale
prices of the Class A Common Stock and the Common Stock on the Small Cap on
February 7, 1997 were $53 and $42.50 per share, respectively.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is February , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information concerning the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at its offices at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10046.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. In addition, such material can be inspected at the offices of the Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Reports, proxy statements and other information concerning the Company can
also be obtained electronically through a variety of databases, including among
others, the Commission's Electronic Data Gathering, Analysis and Retrieval
program, Knight-Ridder Information, Inc., Federal Filings/Dow Jones and
Lexis/Nexis. Additionally, the Commission maintains a Website (at
http://www.sec.gov) that contains such information regarding the Company.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1995, dated March 31, 1996, including all amendments thereto;
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ending March 31, June 30 and September 30, 1996;
3. The Company's Current Reports on Form 8-K filed on April 5, 1996,
and October 23, 1996, including all amendments thereto; and
4. The description of the Class A Common Stock and the Common Stock
which is contained in the Company's latest registration statement filed
under the Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Class A Shares and the Common Shares hereunder shall be deemed to be
incorporated herein by reference and shall be a part hereof from the date of the
filing of such documents. Any statements contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
replaced for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or replaces such
statement. Any such statement so modified or replaced shall not be deemed,
except as so modified or replaced, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of Class A Common Stock or Common Stock, to whom a Prospectus
is delivered, upon written or oral request of such person, a copy of the
documents incorporated by reference herein, other than exhibits to such
documents not specifically incorporated by reference. Such requests should be
directed to Spinnaker Industries, Inc., 600 N. Pearl Street, Suite 2160, Dallas,
Texas 75201, Attention: President (telephone (214) 855-0032).
2
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the following factors in
addition to the other information set forth in this Prospectus before making an
investment in the Class A Shares or the Common Shares.
SUBSTANTIAL LEVERAGE AND ABILITY TO SERVICE DEBT
In connection with the acquisitions of its principal businesses, the Company
and its subsidiaries have incurred significant indebtedness. The level of the
Company's indebtedness could have important consequences to holders of the Class
A Shares or the Common Shares, including: (i) a substantial portion of the
Company's cash flow from operations must be dedicated to debt service and will
not be available for other purposes; (ii) the Company's ability to obtain
additional debt financing in the future for working capital, capital
expenditures or acquisitions may be limited; and (iii) the Company's level of
indebtedness could limit its flexibility in reacting to changes in the industry
and economic conditions generally. Certain of the Company's competitors
currently operate on a less leveraged basis, and have significantly greater
operating and financing flexibility than the Company.
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
Pursuant to the offering of the Company's 10 3/4% Senior Secured Notes due
2006 (the "Notes"), the Company entered into an indenture, dated October 23,
1996 (the "Indenture"), by and between the Company, Brown-Bridge Industries,
Inc., Central Products Company and Entoleter, Inc., as guarantors (the
"Guarantors"), and The Chase Manhattan Bank, as Trustee. The Indenture will
restrict, among other things, the Company's and the Guarantors' ability to incur
additional indebtedness, incur liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, incur indebtedness that is subordinate in right of
payment to any senior indebtedness of the Company or senior indebtedness of a
Guarantor and senior in right of payment to the Notes or the related guarantees,
as the case may be, impose restrictions on the ability of a subsidiary to pay
dividends or make certain payments to the Company, merge or consolidate with any
other person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the assets of the Company. In addition, the Company
entered into a new credit facility (the "New Credit Facility") concurrently with
the initial offering of the Notes, which contains other restrictive covenants
that will prohibit the Company from prepaying its other indebtedness (including
the Notes). The New Credit Facility also requires the Company to maintain
specified financial ratios and satisfy certain financial condition tests. The
Company's ability to meet those financial ratios and tests can be affected by
events beyond its control, and there can be no assurance that the Company will
meet those tests. A breach of any of these covenants could result in a default
under the New Credit Facility and/or the Indenture. Upon the occurrence of an
event of default under the New Credit Facility, the lenders could elect to
declare all amounts outstanding under the New Credit Facility, together with
accrued interest, to be immediately due and payable. If the Company were unable
to repay those amounts, the lenders could proceed against the collateral granted
to them to secure that indebtedness. If the lenders under the New Credit
Facility accelerate the payment of the indebtedness, there can be no assurance
that the assets of the Company would be sufficient to repay in full such
indebtedness and the other indebtedness of the Company, including the Notes. The
substantial majority of the assets of the Guarantors (consisting of accounts
receivable, inventory and general intangibles (and certain related assets) and
all proceeds thereof) will be pledged as security under the New Credit Facility.
MANAGEMENT OF GROWTH
As a result of strategic acquisitions and internal growth, the Company's net
sales have grown from $6.4 million in fiscal 1993 to $135.3 million in fiscal
1995; however, there can be no assurance as to the Company's future growth
rates. As the Company's business develops and expands, the Company may need to
implement enhanced operational and financial systems (some of which are already
in the process of being implemented) and may require additional employees and
management, operational and financial
3
<PAGE>
resources. There can be no assurance that the Company will be able to
successfully implement and maintain such operational and financial systems or
successfully obtain, integrate and utilize the required employees and
management, operational and financial resources to manage a developing and
expanding business. Failure to implement such systems successfully and use such
resources effectively could have a material adverse effect on the Company.
Furthermore, although the Company's growth strategy contemplates future
acquisitions and other arrangements, there can be no assurance that such
business opportunities will be available, or, if available, will be consummated.
LACK OF COMBINED OPERATING HISTORY
The Company acquired its principal subsidiaries, Central Products Company
and Brown-Bridge Industries, Inc., in October 1995 and September 1994,
respectively. Although each of the Company's principal businesses were
established companies with a long operating history prior to their acquisition
by the Company, these businesses have only been managed on a combined basis by
the Company's present management for a relatively short period of time. There
can be no assurance that such combined operations will be successful.
COMPETITION
The Company competes with other national and regional manufacturers in many
product segments. Certain of the Company's principal competitors are less
highly-leveraged than the Company and have greater financial resources than the
Company. As a result of the competitive environment in the markets in which the
Company operates, the Company faces (and will continue to face) pressure on
sales prices of its products. As a result of such pricing pressures, the Company
may in the future experience reductions in the profit margins on its sales, or
may be unable to pass future raw material price increases on to its customers
(which would also reduce profit margins).
Furthermore, the Company's principal competitors will be better able to
withstand changes in conditions within the industries in which the Company
operates and have significantly greater operating and financial flexibility than
the Company. There can be no assurance that the Company will not encounter
increased competition in the future, which could have a material adverse effect
on the Company's business.
EXPOSURE TO FLUCTUATIONS IN RAW MATERIAL COSTS; PRESSURE ON MARGINS
Raw materials are the most significant cost component in the Company's
production process. Future increases in raw material pricing present a potential
risk to the Company's gross profit margins to the extent that the Company is
unable to pass along price increases to its customers on a timely basis.
SUPPLY AGREEMENTS
The Company has entered into, and in the future expects to enter into,
supply agreements with various of its customers. Pursuant to these agreements,
the Company may agree to supply certain requirements of its customers. However,
these agreements may not obligate the customer to purchase any given amount of
product from the Company. Accordingly, notwithstanding the existence of certain
supply agreements, the Company faces the risk that customers do not purchase the
amounts expected by the Company pursuant to such supply agreements.
ENVIRONMENTAL REGULATIONS
The Company is subject to environmental laws and regulations governing
emissions to the air, discharges to waterways, and generation, handling,
storage, transportation, treatment and disposal of waste materials. The Company
is also subject to other federal and state laws and regulations regarding health
and safety matters. Environmental laws and regulations are constantly evolving
and it is impossible to predict the effect that these laws and regulations will
have on the Company in the future. While the
4
<PAGE>
Company believes it is currently in substantial compliance with all such
environmental laws and regulations, there can be no assurance that it will at
all times be in complete compliance with all such requirements. In addition,
although the Company believes that any noncompliance is unlikely to have a
material adverse effect on the Company, it is possible that such noncompliance
could have a material adverse effect on the Company. The Company has made and
will continue to make capital expenditures to comply with environmental
requirements. As is the case with manufacturers in general, if a release of
hazardous substances occurs on or from the Com-pany's properties or any
associated offsite disposal location, or if contamination from prior activities
is discovered at any of the Company's properties, the Company may be held liable
and the amount of such liability could be material.
CONTROLLING STOCKHOLDER
At November 30, 1996, Lynch Manufacturing Corporation ("LMC") beneficially
owned approximately 62% of both the outstanding Class A Common Stock and the
outstanding Common Stock (each on a fully diluted basis). By virtue of such
stock ownership, LMC and its affiliates, including Lynch Corporation ("Lynch"),
have the power to control all matters submitted to stockholders of the Company
and to elect all directors of the Company and its subsidiaries. The interests of
LMC and its affiliates may differ from the interests of holders of the Common
Stock. On August 16, 1996, the Company effected a two-for-one stock split (the
"Stock Split") on its then outstanding common stock, no par value (the "Old
Stock"), whereby the outstanding shares of Old Stock were reclassified as shares
of "Class A Common Stock" and each of the Company's stockholders of record on
August 5, 1996, received, for each share of Old Stock held by such stockholder
as of that date, one share of the newly authorized Common Stock. Each share of
Common Stock has 1/10 the voting rights of a share of the Class A Common Stock.
As a result of the Stock Split, Lynch has the ability to liquidate a substantial
portion of its equity position in the Company without enduring a corresponding
decrease in its voting power or control over the Company.
DEPENDENCE ON KEY PERSONNEL
The Company's success will continue to depend to a significant extent on its
executives and other key management personnel. In addition, the success of
certain of the Company's acquisitions may depend, in part, on the Company's
ability to retain management personnel of the acquired companies. There can be
no assurance that the Company will be able to retain its executive officers and
key personnel or attract additional qualified management in the future. The loss
of Richard J. Boyle or Ned N. Fleming, III, the Chairman and Chief Executive
Officer and President, respectively, of the Company, or other key personnel,
could have a material adverse effect on the Company's business, prospects,
financial condition or results of operations.
POTENTIAL LABOR DISPUTES
Approximately 200 of the Company's hourly employees are covered by
collective bargaining agreements which expire in 1998, and approximately 20
additional hourly employees are covered by a collective bargaining agreement
which expires in April 1999. Although the Company believes that its relations
with its employees are good and the Company has not experienced organized work
stoppages or slowdowns, there can be no assurance that the Company will not
experience work stoppages or slowdowns in the future. In addition, there can be
no assurance that the Company's non-union facilities will not become subject to
labor union organizational efforts.
POSSIBLE VOLATILITY OF STOCK PRICE
Prices for the Class A Common Stock and the Common Stock will be determined
in the marketplace and may be influenced by many factors, including the depth
and liquidity of the market for both the Class A Common Stock and the Common
Stock, investor perception of the Company, and general economic and market
conditions. Variations in the Company's operating results, general trends in the
5
<PAGE>
industry and other factors could cause the market price of the Class A Common
Stock and the Common Stock to fluctuate significantly. In addition, general
trends and developments in the industry, government regulation and other factors
could have a significant impact on the price of the Class A Common Stock and the
Common Stock. The stock market has, on occasion, experienced extreme price and
volume fluctuations that have often particularly affected market prices for
smaller companies and that often have been unrelated or disproportionate to the
operating performance of the affected companies, and the price of either the
Class A Common Stock and the Common Stock could be affected by such
fluctuations.
THE COMPANY
The Company's principal offices are located at 600 N. Pearl Street, Suite
2160, Dallas, Texas 75201, Attention: President (telephone (214) 855-0032).
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The name, age and position(s) of each director and executive officer of the
Company is as follows:
<TABLE>
<CAPTION>
PRINCIPAL POSITION
NAME AGE AND OFFICES WITH THE COMPANY
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Richard J. Boyle..................................... 62 Chairman and Chief Executive Officer
Ned N. Fleming, III.................................. 36 President and Director
Philip Wm. Colburn................................... 67 Director
Robert E. Dolan...................................... 44 Director
Frank E. Grzelecki................................... 59 Director
Joseph P. Rhein...................................... 69 Director
Anthonie C. van Ekris................................ 61 Director
K. C. Caldabaugh..................................... 49 President--Brown-Bridge
John R. Powers....................................... 63 President--Central Products
Mark R. Matteson..................................... 33 Vice President, Corporate Development
James W. Toman....................................... 45 Controller and Assistant Secretary
</TABLE>
RICHARD J. BOYLE
Mr. Boyle has been a director and Chairman and Chief Executive Officer of
the Company since June 1994. He also has served as a Managing Director of BF
since 1993. From 1990 to 1992, he was President and Chief Executive Officer of
LTV Aerospace and Defense Company, a manufacturer of aircraft, missiles and
specialty vehicles. He was Corporate Vice President, Marketing and Business
Development of Honeywell Inc., a provider of products and systems for the
industrial, building, space and marine markets from 1987 to 1990. Mr. Boyle is a
director of Key Bank and several privately-held companies.
NED N. FLEMING, III
Mr. Fleming became a member of the Board of Directors and President of the
Company in June 1994. In addition, Mr. Fleming is a Managing Director of BF, a
position he has held since 1993. From 1988 to 1993, he was an Associate at
Cardinal Investment Company, Inc., an investment concern. Mr. Fleming serves on
the board of directors of several privately-held companies.
PHILIP WM. COLBURN
Mr. Colburn, elected to the Board of Directors of the Company in March 1996,
has been the Chairman of The Allen Group, Inc. ("AGI") since 1992. From 1988 to
1992, Mr. Colburn was the Chief
6
<PAGE>
Executive Officer of AGI. Mr. Colburn is a director of AGI, Superior Industries
International, Earl Scheib, Inc. and TransPro, Inc.
ROBERT E. DOLAN
Mr. Dolan became a director of the Company in November 1995. Since February
1992, he has been the Chief Financial Officer of Lynch, and he has been its
Controller since May 1990. From 1984 to 1989, Mr. Dolan was the Corporate
Controller of Plessy North America Corporation, which was formerly a United
States subsidiary of a United Kingdom defense electronics and telecommunications
company.
FRANK E. GRZELECKI
Mr. Grzelecki is President and Chief Operating Officer of Handy & Harman, a
New York-based diversified manufacturer. Prior to being named President and
Chief Operating officer in 1992, Mr. Grzelecki had served as Vice Chairman of
the Handy & Harman board of directors for three years. Prior to joining Handy &
Harman, Mr. Grzelecki was a management consultant. From 1984 until 1986, he was
a Corporate Executive Vice President and a member of the board of directors of
Beatrice Companies, Inc., where he also served as President of the Beatrice
Consumer Products division. Mr. Grzelecki currently serves on the board of
directors of Handy & Harman, The Morgan Group, Inc. and Chartwell Re
Corporation.
JOSEPH P. RHEIN
Mr. Rhein has served as director of the Company since 1992 and has been a
business consultant since 1989. From 1969 to 1989, he was Vice President of
Finance of SPS Technologies, Inc., a diversified world-wide manufacturing
company.
ANTHONIE C. VAN EKRIS
Mr. van Ekris has been a director of the Company since December 1995. Mr.
van Ekris is Chairman and Chief Executive Officer of Balmac International, Inc.,
a New York based importer of coffee and cocoa and exporter of refrigeration
equipment, a position he has held since 1991. He also serves as a Director of
Stahel (America), Inc., The Gabelli US Treasury Money Market Fund, Gabelli Gold
Fund, Gabelli International Growth Fund, Inc., The Gabelli Growth Fund, The
Gabelli Asset Fund, The Gabelli Convertible Securities Fund, Inc., The Gabelli
Small Cap Growth Fund, The Gabelli Equity Income Fund, The Gabelli Global
Telecommunications Fund, The Gabelli Global Convertible Securities Fund, The
Gabelli Global Interactive Couch Potato Fund and The Gabelli Capital Asset Fund.
OTHER EXECUTIVE OFFICERS OF THE COMPANY
K. C. CALDABAUGH
Mr. Caldabaugh has been the President of Brown-Bridge since September 1994.
From 1987 to 1993, he served in various capacities (most recently as Senior Vice
President and Chief Financial Officer) of LTV Corporation, a diversified
manufacturing firm. From 1979 to 1987, he served as Senior Vice President and
then Executive Vice President and Chief Financial Officer of The Charter
Company, a diversified concern.
JOHN R. POWERS
Mr. Powers joined Central Products in 1979 and has been its President since
1981. Mr. Powers currently serves on the Board of Directors of Wisconsin Paper
Group and the First National Bank of Menasha.
7
<PAGE>
MARK R. MATTESON
Mr. Matteson became Vice President, Corporate Development of the Company in
January 1995. During 1994, he was an Associate at BF. From 1992 to 1994, Mr.
Matteson was a Managing Associate at George Group, Incorporated, a corporate
re-engineering consulting firm. From 1990 to 1992, Mr. Matteson attended
graduate business school at Georgetown University where he earned a Masters
degree in business administration.
JAMES W. TOMAN
Mr. Toman has been Controller of the Company since January 1995. From 1991
to 1994, he was Chief Financial Officer of Entoleter. Mr. Toman served as the
Controller of Oxford Health Plans, Inc. from 1988 until 1991, and, from 1986 to
1988, served as the Assistant Treasurer at Moore McCormack Resources, Inc.
SELLING STOCKHOLDERS
The table below sets forth the beneficial ownership of the Company's common
stock by the persons selling shares of Class A Common Stock and Common Stock
pursuant to this Prospectus (the "Selling Stockholders") at January 31, 1997,
and after giving effect to the sale of the shares of Class A Common Stock and
Common Stock offered hereby. Each of the persons named below has sole voting and
investment power with respect to the shares of Class A Common Stock and Common
Stock beneficially owned by him or it.
<TABLE>
<CAPTION>
SHARES OWNED
SHARES OWNED SHARES AFTER THE
BEFORE THE OFFERING OFFERED HEREBY OFFERING
------------------------ ------------------------ ---------------
CLASS A CLASS A CLASS A
COMMON COMMON COMMON COMMON COMMON
STOCK STOCK STOCK STOCK STOCK(1)
----------- ----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Delaware Group Trend Fund, Inc.................... 164,428 164,428 164,428 164,428 --
Delaware Group Premium Fund, Inc., for the
Emerging Growth Series.......................... 7,000 7,000 7,000 7,000 --
<CAPTION>
PERCENTAGE OF
OUTSTANDING SHARES
OWNED AFTER
THE OFFERING
--------------------------------
CLASS A
COMMON COMMON COMMON
STOCK(1) STOCK(1) STOCK(1)
--------------- --------------- ---------------
<S> <C> <C> <C>
Delaware Group Trend Fund, Inc.................... -- -- --
Delaware Group Premium Fund, Inc., for the
Emerging Growth Series.......................... -- -- --
</TABLE>
- ------------------------
(1) Assumes that all of the Class A Shares and the Common Shares offered hereby
are sold.
The Selling Stockholders acquired their shares of Class A Common Stock and
Common Stock from Alco Standard Corporation ("Alco") in a private sale effected
in July 1996. Alco had acquired the shares in connection with the repayment of a
portion of outstanding indebtedness owed to Alco, which was incurred by the
Company in connection with its acquisition of Central Products Company, a wholly
owned subsidiary of the Company, from Alco in September 1995. The Company is
registering the Class A Shares and the Common Shares owned by the Selling
Stockholders pursuant to certain registration rights granted to them pursuant to
a Registration Rights Agreement entered in connection with their purchase of the
Shares from Alco. The offering of the Class A Shares and the Common Shares
contemplated hereby will terminate on July 17, 1999, or such earlier date as all
shares of Class A Common Stock and Common Stock offered hereby have been sold.
LEGAL MATTERS
The validity of the Class A Shares and the Common Shares offered hereby has
been passed upon by Crouch & Hallett, L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements and schedules of Spinnaker Industries,
Inc. appearing in its Annual Report (Form 10-K) for the year ended December 31,
1995, have been audited by Ernst & Young
8
<PAGE>
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference, which report, as to the year 1995, is
based in part on the report of Deloitte & Touche LLP, independent auditors. Such
financial statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance upon the
reports of Ernst & Young LLP and Deloitte & Touche LLP pertaining to such
financial statements (to the extent covered by consents filed with the
Securities and Exchange Commission) given upon the authority of such firms as
experts in accounting and auditing.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses will be paid by the Company:
<TABLE>
<CAPTION>
ITEM AMOUNT(1)
- ------------------------------------------------------------------------------------------------------ -----------
<S> <C>
SEC registration fee.................................................................................. $ 4,987
Legal fees and expenses............................................................................... 5,000
Accounting fees....................................................................................... 2,000
Miscellaneous......................................................................................... 1,500
-----------
Total............................................................................................... $ 13,487
-----------
-----------
</TABLE>
- ------------------------
(1) All items other than SEC registration fee are estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware provides
generally and in pertinent part that a Delaware corporation may indemnify its
directors and officers against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection with any suit
or proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) if, in connection with the
matters in issue, they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, in connection with any criminal suit or proceeding, if in connection with
the matters in issue, they had no reasonable cause to believe their conduct was
unlawful. Section 145 further provides that in connection with the defense or
settlement of any action by or in the right of the corporation, a Delaware
corporation may indemnify its directors and officers against expenses actually
and reasonably incurred by them if, in connection with the matters in issue,
they acted in good faith, and in a manner they reasonably believed to be in, or
not opposed to, the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper. Section 145 permits a Delaware corporation to grant its
directors and officers additional rights of indemnification through bylaw
provisions and otherwise and to purchase indemnity insurance on behalf of its
directors and officers.
The Company's Certificate of Incorporation, as amended, eliminates to the
fullest extent permissible under the General Corporation Law of Delaware the
liability of directors to the Company and the stockholders for monetary damages
for breach of fiduciary duty as a director. This provision states that it does
not eliminate liability of a director (a) for any breach of a director's duty of
loyalty to the Company or its stockholders; (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of the
law; (c) in connection with payment of any illegal dividend or illegal stock
repurchase; or (d) for any transaction from which the director derives an
improper personal benefit.
The Bylaws of the Company provide that indemnification of directors and
officers shall be provided to the fullest extent permitted under Delaware law
and the Company's Certificate of Incorporation. Lynch, the Company's controlling
stockholder, has obtained an insurance policy insuring the directors and
officers the Company against certain liabilities, if any, that arise in
connection with the performance of their duties on behalf of the Company and its
subsidiaries.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
3.1 -- Certificate of Incorporation of the Registrant, as amended (filed as Exhibit 3(i)
to the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1994)
3.2 -- Bylaws of the Registrant (filed as Exhibit 3(ii) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994)
5 -- Opinion of Crouch & Hallett, L.L.P. (1)
23.1 -- Consent of Ernst & Young LLP (1)
23.2 -- Consent of Deloitte & Touche LLP (1)
23.3 -- Consent of Crouch & Hallett, L.L.P. (included in opinion filed as Exhibit 5
hereto)
24 -- Power of Attorney (included on p. II-3)
</TABLE>
- ------------------------
(1) Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING
The registrant hereby undertakes (1) to file, during any period in which
offers or sales are being made of the Class A Shares and the Common Shares
registered hereby, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(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.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) INDEMNIFICATION FOR LIABILITY UNDER THE SECURITIES ACT OF 1934
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Dallas and State of Texas on the 11th day of February,
1997.
SPINNAKER INDUSTRIES, INC.
By /s/ NED N. FLEMING, III
-----------------------------------------
Ned N. Fleming, III
PRESIDENT
POWER OF ATTORNEY
Each of the undersigned hereby appoints Ned N. Fleming, III as attorney and
agent for the undersigned, with full power of substitution, for and in the name,
place and stead of the undersigned, to sign and file with the Securities and
Exchange Commission under the Securities Act of 1933 any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of the securities covered hereby, with
full power and authority to do and perform any and all acts and things
whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on February 11, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ---------------------------------------------------------
<C> <S>
/s/ RICHARD J. BOYLE
------------------------------------------- Chairman of the Board and Chief Executive Officer
Richard J. Boyle (Principal Executive Officer)
/s/ NED N. FLEMING, III
------------------------------------------- President and Director
Ned N. Fleming, III
/s/ JAMES W. TOMAN
------------------------------------------- Controller and Assistant Secretary (Principal Financial
James W. Toman and Accounting Officer)
/s/ PHILIP WM. COLBURN
------------------------------------------- Director
Philip Wm. Colburn
/s/ ROBERT E. DOLAN
------------------------------------------- Director
Robert E. Dolan
/s/ FRANK E. GRZELECKI
------------------------------------------- Director
Frank E. Grzelecki
/s/ JOSEPH P. RHEIN
------------------------------------------- Director
Joseph P. Rhein
/s/ ANTHONIE C. VAN EKRIS
------------------------------------------- Director
Anthonie C. van Ekris
</TABLE>
II-3
<PAGE>
EXHIBIT LIST
<TABLE>
<S> <C> <C>
3.1 -- Certificate of Incorporation of the Registrant, as amended (filed as Exhibit 3(i) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1994)
3.2 -- Bylaws of the Registrant (filed as Exhibit 3(ii) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994)
5 -- Opinion of Crouch & Hallett, L.L.P. (1)
23.1 -- Consent of Ernst & Young LLP (1)
23.2 -- Consent of Deloitte & Touche LLP (1)
23.3 -- Consent of Crouch & Hallett, L.L.P. (included in opinion filed as Exhibit 5 hereto)
24 -- Power of Attorney (included on p. II-3)
</TABLE>
- ------------------------
(1) Filed herewith.
<PAGE>
EXHIBIT 5
(214) 953-0053
February 11, 1997
Spinnaker Industries, Inc.
600 N. Pearl Street
Suite 2150
Dallas, Texas 75201
Gentlemen:
We have served as counsel for Spinnaker Industries, Inc., a Delaware
corporation (the "Company"), and certain stockholders of the Company (the
"Selling Stockholders") in connection with the Registration Statement on Form
S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering the proposed
sale from time to time by the Selling Stockholders of a maximum of 171,428
shares (the "Class A Shares") of Class A Common Stock, no par value, of the
Company and 171,428 shares (the "Common Shares") of Common Stock, no par value,
of the Company.
With respect to the foregoing, we have examined such documents and questions
of law as we have deemed necessary to render the opinions expressed below. Based
upon the foregoing, we are of the opinion that:
1. The Class A Shares, when sold and delivered, will be duly and
validly issued and outstanding and fully paid and nonassessable.
2. The Common Shares, when sold and delivered, will be duly and validly
issued and outstanding and fully paid and nonassessable.
We consent to the use of this opinion as Exhibit 5 to the Registration
Statement and to the use of our name in the Registration Statement and in the
Prospectus included therein under the heading "Legal Matters."
Very truly yours,
CROUCH & HALLETT, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Spinnaker
Industries, Inc. for the registration of 171,428 shares of its Class A Common
Stock and 171,428 shares of its Common Stock and to the incorporation by
reference therein of our report dated February 29, 1996, except for Note 4, to
which the date is April 8, 1996, with respect to the consolidated financial
statements and schedules of Spinnaker Industries, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Dallas, Texas
February 5, 1997
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Spinnaker Industries, Inc. on Form S-3 of our report dated February 26, 1996
(relating to the financial statements of Central Products Company), appearing in
the Annual Report on Form 10-K of Spinnaker Industries, Inc. for the three
months ended December 31, 1995 and to the reference to us under the hearing
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Milwaukee, Wisconsin
February 6, 1997
