AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 10, 1999
Registration Statement No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SPARTECH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
43-0761773
(IRS Employer Identification No.)
120 South Central Avenue, Suite 1700
Clayton, Missouri 63105
(314) 721-4242
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Jeffrey D. Fisher
Vice President and General Counsel
Spartech Corporation
120 South Central Avenue, Suite 1700
St. Louis, Missouri 63105
(314) 721-4242
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable 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, 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed Amount of
Title of each class Amount to maximum maximum registration
of be offering aggregate fee
Securities to be registered price per offering
registered unit price
Common stock, $.75 165,000 $26.03<F1> $4,294,950.00 $1,194.00<F2>
par value shares
<FN>
<F1> Average of the high and low trading prices of the common stock reported in
the consolidated reporting system as of November 9, 1999, a date within five
business days prior to the date of filing of the registration statement.
Because the common stock is being reoffered by the Selling Security Holders
described herein the registrant will receive no consideration from sales by the
Selling Security Holders and does not know the actual price or prices at which
the common stock may be sold.
<F2> The registration fee is calculated pursuant to Rule 457(c)
</FN>
</TABLE>
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 1
The information contained in this preliminary prospectus is not complete and may
be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
Subject to Completion, November 10, 1999
[SPARTECH LOGO] Spartech Corporation
120 South Central Avenue, Suite 1700
Clayton, Missouri 63105
(314) 721-4242
Options to Purchase
165,000 Shares of Common Stock
and
165,000 Shares of Common Stock
Issuable upon Exercise of Options
This prospectus relates to three possible types of transactions:
* The sale by David B. Mueller, the Executive Vice President and Chief
Operating Officer of Spartech Corporation, of options to purchase up to
165,000 shares of Spartech common stock, issued to Mr. Mueller under
Spartech's Restricted Stock Option Plan,
* The exercise of the options by the purchasers of the options, and
* The resale by the purchasers of the options of the shares issued pursuant
to their exercise of the options.
See "Description of Securities" and "Selling Security Holders" for more
information.
We do not know whether or when Mr. Mueller or any purchaser of the options may
exercise or resell them. If the options are exercised, we do not know whether,
when or on what terms the holder of the shares acquired through the exercise may
offer or sell the shares. Spartech will not receive any proceeds from the sale
of the options or the shares.
Our common stock is listed on the New York Stock Exchange under the symbol
"SEH." On November 9, 1999, the closing sale price of the common stock on the
New York Stock Exchange was $26-1/2 per share.
Investing in the common stock involves risks. See "Risk Factors" beginning on
page 2.
_______________________________
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus is not an offer to sell, and it
does not seek an offer to buy, these securities in any jurisdiction where the
offer or sale is not permitted. The information in this prospectus is correct
only as of the date of this prospectus, regardless of when this prospectus is
delivered to you or these securities are sold.
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.
_______________________________
Prospectus dated November __, 1999
<PAGE> 2
Table of Contents
Page
Risk Factors 2
Forward-Looking Statements 5
Description of Securities 5
Selling Security Holders 8
Plan of Distribution 9
Use of Proceeds 10
Legal Matters; Experts 10
About Spartech 11
Where You Can Find More Information 11
Risk Factors
The principal risks of this offering are described below. You should
carefully consider these risks before deciding to invest in our common stock.
These risks could materially and adversely affect our business, financial
condition and results of future operations. If that were to happen, the trading
price of our common stock could decline, and you could lose all or part of your
investment. The risks described below are not the only ones we face.
We Operate in a Highly Competitive Industry, and Our Failure to Compete
Effectively Could Hurt Our Profits
Our continued profitability depends on our ability to meet competition. Our
industry is competitive in several ways:
* The plastics intermediary industry is characterized by a large number of
companies and by periodic oversupply of base resins, resulting in intense
price competition. If we are unable to meet our competitors' prices, our
sales could be reduced. On the other hand, if we meet the competition but
are not able to do so in a cost-efficient way, our margins could decrease.
In either event, our profits could be reduced or we could incur writedowns
to inventory values.
* Because plastics intermediaries are consolidating, our competitors may
become larger, which could make them more efficient, reducing their cost
of materials and permitting them to be more price competitive. Increased
size could also permit them to operate in wider geographic areas and
enhance their ability to compete in other areas such as research and
development and customer service, which could reduce our profitability.
* We may experience increased competition from companies offering products
based on alternative technologies and processes that may be competitive or
better in price or performance, causing us to lose customers, sales volume
and profits.
* Some of our customers may be or become large enough to justify developing
in-house production capabilities. Any material reduction in orders to us
by our customers as a result of a shift to in-house production could
adversely affect our sales and profits.
<PAGE> 3
We May Not Be Able to Continue to Make the Acquisitions Necessary for Us to
Realize Our Growth Strategy
Acquiring businesses that complement or expand our operations has been and
continues to be an important element of our business strategy. This strategy
depends on our ability to continue to identify, complete and manage acquisitions
profitably. However, several factors may impair our ability to continue this
strategy.
* Some of our major competitors have or could initiate similar growth
strategies, and the overall plastics intermediary segment is continuing to
consolidate. As a result, competition for suitable acquisition candidates
is increasing. We may not be able to acquire additional companies in our
industry on terms favorable to us.
* We have generally financed our acquisitions from bank borrowings or the
placement of debt securities, or from the issuance of capital stock, and
we expect to derive the consideration used for future acquisitions from
the same sources. However, we may not be able to obtain this financing in
the future on economically feasible or acceptable terms, or at all. Our
consolidated long-term indebtedness was $206.1 million at July 31, 1999,
or 46% of our total consolidated capitalization.
* Integrating acquired businesses requires a significant amount of
management time and skill and may place significant demands on our
operations and financial resources. We may not be successful in
integrating acquired businesses into our operations.
If we are unable to continue our acquisition strategy, or if we fail to
effectively integrate future acquisitions into our operations, it could have a
material adverse effect on our business, financial condition and results of
operations.
Completed Acquisitions May Result in Interest or Goodwill Amortization Expense
that Exceeds the Net Income from the Acquired Operations
* The amount of debt used to finance our acquisitions and the potential for
higher interest rates in the future may result in increased interest
costs.
* To complete future acquisitions we may have to negotiate higher purchase
prices that result in increased goodwill amortization expense.
* The Financial Accounting Standards Board has proposed changes to the
accounting for goodwill resulting from future acquisitions, including
shortening the maximum period for amortizing goodwill from 40 years to 20
years. Shortening the amortization period would result in increased
goodwill amortization expense.
Any of these factors could result in expenses from these acquisitions that
exceed the net income we derive from the acquired operations, which would reduce
our net income.
Large Increases in the Costs of Raw Materials Or Substantial Decreases in Their
Availability Could Materially and Adversely Affect Our Operating Profit
* The costs of raw materials used in our manufacturing processes represented
approximately 76% of cost of goods sold in 1998. These raw materials
include resins that are affected by changes in supply and demand
conditions within the commodity resins market. Prices for these raw
materials could increase significantly.
* In addition, any major disruptions in the availability of petroleum or
natural gas to our suppliers could adversely impact the availability of
the resins used in our manufacturing process.
<PAGE> 4
Either of these factors could cause us to lose orders or customers and have
a material adverse effect on our sales and operating profit.
We Operate in Cyclical Markets and Have Exposure to Economic Downturns
Our products are sold in a number of end markets which tend to be cyclical
in nature, including transportation, building and construction, bath/pool and
spa, and electronics and appliances. A downturn in one or more of these end
markets could have a material adverse effect on our sales and operating profit.
Our Stock Price Is Volatile and May Decline
The trading price of our common stock has fluctuated widely, ranging between
$17-7/8 and $32-1/2 per share over the past 52 weeks. The overall market and the
price of our common stock may continue to be volatile. The trading price of our
common stock may be significantly affected by various factors, including:
* Variations in our quarter to quarter operating results;
* Changes in investors' and analysts' perceptions of the business risks and
conditions of our business;
* The relative size of our market capitalization; and
* The limited float of our common stock.
Our Principal Stockholder Could Influence Our Management and Policies, and Could
Also Be a Potential Competitor
As of July 31, 1999, Vita International Limited, of Manchester, England,
held approximately 44% of the outstanding shares of our common stock. Two of our
directors, Calvin J. O'Connor and Alan R. Teague, serve on our board as
representatives of Vita.
* Vita's representation on the board and its large percentage of stock
ownership means Vita could be in a position to effectively control our
management and policies if it were supported by a relatively small
percentage of the other stockholders or if a relatively small percentage
of the other shareholders did not choose to exercise their voting rights.
In addition, under our certificate of incorporation, Vita's current
representation on the board together with its current share ownership are
sufficient to give it the power to block significant business combinations
with any other 10% shareholder, of which there are none at present, unless
the board approves the business combination before the other shareholder
acquires its 10% ownership.
* Vita is a manufacturer and distributor of cellular polymers, engineered
thermoplastics, fibers and fabrics, primarily in Europe. Although we do
not currently compete with Vita in any material respect, there can be no
assurance that our growth and business strategies will not conflict with
or be affected by those of Vita at some time in the future. In that event,
Vita could act in its interests at the expense of Spartech's interests.
Our Inability to Obtain or Maintain Required Regulatory or Environmental Permits
Could Hurt our Profits
* We operate under numerous federal, state, local and non-U.S. laws and
regulations controlling the discharge of materials into the environment or
otherwise relating to the protection of the environment. In particular,
our operations are subject to laws and regulations governing industrial
waste water and storm water discharges, public notice or "community right-
to-know" requirements concerning the hazardous materials located or used
at our facilities, and the disposal of solid waste from our facilities,
some of which is considered special waste within the meaning of these laws
and regulations. Some of these laws require us to obtain permits in order
to conduct our operations. If we were to violate these laws or regulations
we might have to pay substantial fines and our permits could be suspended
or revoked in which case we might have to suspend operations at one or
more of our manufacturing facilities. We may also not be able to acquire
new permits which we would need in order to expand our operations.
<PAGE> 5
* The Food and Drug Administration regulates the material content of medical
and direct-contact food and beverage containers and packages and
periodically examines our operations. We must also adhere to FDA
regulations governing "good manufacturing practices," including testing,
quality control, and manufacturing and documentation requirements. If
violations of these regulations are noted during inspections of our
manufacturing facilities by public health regulatory officials, we may be
required to cease manufacturing until the violation is corrected or to
recall products that were manufactured under improper conditions.
Any of these circumstances could have a material adverse effect on the
continued marketing of our products and on our business, financial condition and
results of operations.
Year 2000 Problems of Our Significant Customers, Suppliers or Utilities May
Impair Our Operations
We may experience lost revenues if any of our major customers experience
Year 2000 problems which cause them to order less product from us, or which
cause them financial difficulties resulting in a breach of their payment
obligations to us. A mass interruption to our supply chain resulting from the
lack of readiness of our suppliers could result in lost profits, breach of
contract claims against us, or other adverse consequences. In addition, our
customers or suppliers or our own production capabilities could also be
adversely affected in similar ways due to disruptions to the transportation
network or public utilities.
Forward Looking Statements
This prospectus contains forward-looking statements, primarily in the
section captioned "Risk Factors." Forward-looking statements represent our
judgment relating to, among other things, future results of operations, growth
plans, sales, capital requirements and general industry and business conditions
applicable to us. They are based largely on our current expectations. Our
actual results could differ materially from the information contained in the
forward-looking statements due to a number of factors, including the risks
described above, changes in the economy or the plastics industry in general, and
other unanticipated events that may prevent us from competing successfully in
existing or new markets, and our ability to manage our growth effectively.
Description of Securities
The securities covered by this prospectus consist of options to purchase up
to 165,000 shares of Spartech common stock, as well as the 165,000 shares of
common stock issuable by Spartech upon exercise of the options. The options
were issued to David B. Mueller, Spartech's Executive Vice President and Chief
Operating Officer, under Spartech's Restricted Stock Option Plan. The options
and the shares have been included in this prospectus at Mr. Mueller's request,
as a benefit in connection with his employment.
<PAGE> 6
Option Exercise Prices and Exercise Dates.
The options are currently exercisable in full or in any part. They have
varying exercise prices and expire on various dates, as follows:
Number of Exercise Expiration
Shares Price Date
10,000 $3.875 per share July 1, 2000
10,000 $1.250 per share June 30, 2001
60,000 $3.000 per share June 30, 2002
40,000 $4.375 per share December 9, 2003
45,000 $5.375 per share November 30, 2004
Total: 165,000
The exercise prices and expiration dates were determined by the Compensation
Committee of the Company's Board of Directors under the terms of the option
plan, as a part of the normal determination of Mr. Mueller's compensation. The
other terms of the options are substantially the same as the terms of other
options granted under the option plan contemporaneously with Mr. Mueller's
options.
Transfers of Options
Subject to any specific restrictions set out in the option agreement, an
option holder may transfer an option only as follows:
* By last will and testament, or pursuant to the laws of descent and
distribution;
* By gift, or under a domestic relations order, to any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-
in-law, brother-in-law or sister-in-law, including adoptive relationships,
any person sharing the option holder's household (other than a tenant or
employee), a trust in which these persons have more than fifty percent of
the beneficial interest, a foundation in which these persons or the option
holder control the management of assets, and any other entity in which
these persons or the option holder own more than fifty percent of the
voting interests; or
* In any manner other than by gift or under a domestic relations order, to
anyone described in the preceding clause but only with the prior consent
of the Committee, which may grant or withhold its consent in its sole
discretion. However, if an option is transferred for value, the
registration statement may not be used to exercise the option. An option
holder contemplating a transfer of an option for value should discuss with
the Company in advance the possible methods for registering the option
shares in this event, and should expect that even if the Committee
consents to such a registration it will require the option holder to bear
the costs of the registration.
The Company is not required to recognize any transfer until it has recorded
the transfer on its books, and as a condition of recording a transfer the
Company may require appropriate written evidence that the transfer has occurred
and that it is a permitted transfer.
Except as described in this section, an option may not be transferred in any
manner. Also, neither an option nor any interest in the underlying shares prior
to exercise may be pledged, hypothecated, or otherwise used as collateral to
secure the payment of any debt.
Manner of Exercise
An option may be exercised on one or more occasions. Each exercise may be
for all or any part of the shares for which the option is then exercisable.
<PAGE> 7
An option is exercised by delivering to the Chief Financial Officer,
Treasurer or Controller of the Company, prior to the expiration of the option, a
written notice stating the option holder's election to exercise the option and
the number of shares to be purchased, together with full payment for the shares
purchased under the option. Payment may be made in any one or combination of
the following forms:
* A certified or cashier's check in the amount of the aggregate option
price; or
* The delivery of shares of Spartech common stock which the option holder
has owned for at least six months preceding the exercise date and which
have a fair market value equal to the exercise price.
An option holder who is an employee at the time of the option exercise must
also pay the amount of the withholding taxes attributable to the exercise (See
"Tax Effects of Exercise of Options"). Payment of the minimum required
withholding taxes may be in any one or combination of the following forms:
* A certified or cashier's check in the amount of the taxes, or
* The delivery of shares of Spartech common stock which the option holder
already owns and which have a fair market value equal to the amount of the
taxes, or
* The partial surrender and cancellation of the option as to an aggregate
number of shares of Spartech common stock which, if issued, would have a
fair market value equal to the amount of the taxes. Any part of the
option used for this purpose must be exercisable at the time of surrender.
If an option holder wishes to have the Company withhold more than the
minimum required withholding taxes in connection with the exercise of an option,
the excess must be paid in a manner permitted for payment of the exercise price.
For these purposes, the "fair market value" of a share of Spartech common
stock means the closing price on the New York Stock Exchange (or any other
exchange which is then the principal exchange for our common stock) on the last
day on which Spartech shares were traded prior to the date we receive the notice
of exercise.
Shares will not be issued pursuant to the exercise of an option until the
Company has received full payment as described in this section. An option
holder has no right or status as a stockholder because of ownership of an option
until the option has been exercised and the stock has been issued.
Federal Income Tax Effects
Issuance of Option
The issuance of an option will have no tax effects on either the option
holder or the Company.
Exercise of Option by Original Holder
Upon the exercise on an option by the original holder, the holder will
recognize ordinary income in an amount equal to the excess of the aggregate fair
market value of the purchased shares on the exercise date over the aggregate
exercise price for the option. The income recognized by the original holder on
exercise of an option will also be subject to Social Security and Medicare
taxes. The holder's basis in the shares received will equal the fair market
value of the shares as of the date of exercise.
Upon the sale of option shares by the original option holder after exercise,
the selling holder will recognize capital gain or loss in an amount equal to the
sale price less the holder's basis in the shares. The gain or loss will be
short-term if the shares are held 12 months or less after exercise, and long-
term if the shares are held more than 12 months after exercise.
<PAGE> 8
The tax effects of exercise of the option will be different if the holder
surrenders previously-held shares in payment of the exercise price. In that
event, the exercise will generally be treated as a non-taxable, like-kind
exchange of the shares surrendered for the same number of shares received under
the option. The shares received will have the same basis and capital gains
holding period as the shares surrendered. The value of the number of shares
received in excess of the number surrendered will be ordinary income to the
holder.
The Company will receive an income tax deduction corresponding in time and
amount to the taxable income recognized by the option holder.
Gift of Option, Exercise by Donee
The gift of an option will not result in federal income tax consequences to
either the donor or the donee. There may be gift tax consequences to the donor.
Upon the exercise of the option by the donee, the donee will not have
taxable income, but the original holder will recognize ordinary income in an
amount equal to the excess of the aggregate fair market value of the purchased
shares on the exercise date over the aggregate exercise price for the option.
This income will also be subject to Social Security and Medicare taxes. The
donee's basis in the shares will equal the fair market value of the shares as of
the date of exercise.
The Company will receive an income tax deduction corresponding in time and
amount to the taxable income recognized by the option holder.
Upon the sale of the option shares by a donee after exercise, the selling
donee will recognize capital gain or loss in an amount equal to the sale price
less the donee's basis in the shares.
Sale of Option, Exercise by Purchaser
If an option is transferred by sale, the original holder will have ordinary
income equal to the amount of the sale price. The timing of this income will
depend on how and when the sale price is paid.
The Company will receive an income tax deduction corresponding in time and
amount to the taxable income recognized by the option holder.
Upon the subsequent exercise of the option by the purchaser, there will be
no further income recognition by either the original holder or the purchaser,
and no further deduction for the Company.
Upon the sale of the option shares by a purchaser after exercise, the
selling purchaser will recognize capital gain or loss in an amount equal to the
sale price less the purchaser's basis in the shares, which will be the sum of
the exercise price and the amount paid for the option. The gain or loss will be
short-term if the shares are held 12 months or less after exercise, and long-
term if the shares are held more than 12 months after exercise.
Selling Security Holders
As of the date of this Prospectus, the only selling security holder whose
identity is known to the Company is David B. Mueller. If the identity of other
selling security holders becomes known to the Company, the Company will
supplement this Prospectus accordingly.
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by the selling security holders as of
July 31, 1999 and as adjusted to reflect the sale of all of the options offered
by the selling security holders hereby.
<PAGE> 9
<TABLE>
<CAPTION>
Maximum
Number of Shares
Shares Beneficially Owned Shares Beneficially Owned
Prior to Offering (1)(2) Being After Offering
Name Number Percent (3) Offered(3) Number Percent(4)
<S> <C> <C> <C> <C> <C>
David B. Mueller 460,935 1.7% 165,000 295,935 1.1%
</TABLE>
(1) Represents sole voting and investment power unless otherwise noted,
and includes options which are exercisable on or within 60 days after the
date of this prospectus.
(2) Includes the 165,000 options being offered hereby, which are included
because they are currently exercisable for shares of common stock.
(3) As of the date of this prospectus, the selling security holders have
not determined to exercise or sell any specific number of options or to
sell any specific number of shares resulting from the exercise of the
options.
(4) Percentage ownership is calculated by assuming the exercise or
conversion of all options or convertible securities held by the holder and
the nonexercise or nonconversion of all other outstanding warrants and
convertible securities.
Plan of Distribution
We are registering the shares on behalf of Mr. Mueller or other selling
security holders, including persons who may receive the shares from them as
gifts or pursuant to pledges.
We do not know how the selling security holders will sell the shares. They
may sell the shares from time to time in any of several ways and in any of
several marketplaces, including:
* Through private negotiations directly with purchasers;
* Through agreements with underwriters, dealers or brokers for their own
accounts;
* Through agreements with underwriters or dealers for resale;
* In block trades with brokers or dealers who will attempt to sell the
shares as agent but may resell a portion of the block as principal to
facilitate the transaction; or
* In brokers' transactions on the New York Stock Exchange, subject to its
rules.
In addition, any shares covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act of 1933 may be sold under Rule 144
rather than pursuant to this prospectus.
We do not know at what prices the selling security holders may sell the
options. There is no market for the options, which may in any event be
transferred only to family members. See "Description of Securities."
We do not know at what prices the selling security holders may sell the
shares after exercise of the options. They may sell the shares at market prices
prevailing at the time of the sale, at prices related to the prevailing market
prices, or at negotiated prices. They may pay usual and customary or
specifically negotiated fees, discounts or commissions in connection with these
sales. We will not pay any of those fees, discounts or commissions.
<PAGE> 10
We will file a supplement to this prospectus if a selling security holder
notifies us that it has entered into any material arrangement with a broker-
dealer for the sale of shares, or if a recipient of shares by gift or pledge
notifies us that it intends to sell more than 500 shares. The supplement will
disclose, to the extent applicable,
* The names of the selling security holder and each participating broker-
dealer,
* The number of shares involved,
* The price at which the shares are being sold,
* The commissions paid or discounts or concessions allowed to each broker-
dealer; and
* Other facts material to the transaction.
Because selling security holders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, they will be subject
to the prospectus delivery requirements of the Securities Act.
Spartech will bear the expense of preparation and filing of the registration
statement of which this prospectus is a part. The aggregate amount of all these
expenses is expected to be approximately $5,000.
See "Selling Security Holders" for information concerning the beneficial
ownership of Spartech securities by the selling security holders.
Use of Proceeds
We will not receive any of the proceeds from the sale of shares by the
selling security holders.
Legal Matters; Experts
The validity, authorization and issuance of the shares of common stock
offered by this prospectus has been passed upon for Spartech by Jeffrey D.
Fisher, Esq., an attorney licensed in the State of Missouri. Mr. Fisher has
been employed by Spartech as its Vice President and General Counsel since July,
1999. Before becoming employed by Spartech, he was a partner with Armstrong
Teasdale LLP, St. Louis, Missouri.
Our consolidated financial statements as of November 1, 1997 and October 31,
1998 and for each of the three years in the period ended October 31, 1998,
included in our Annual Report on Form 10-K for the fiscal year ended October 31,
1998, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and are incorporated in this
prospectus by reference in reliance upon the authority of that firm as experts
in accounting and auditing in giving its report.
The consolidated financial statements of Polycom Huntsman, Inc. as of March
31, 1997 and 1998 and for each of the years then ended, which are included in
our Current Report on Form 8-K/A filed with the Commission on June 15, 1998 and
amended on May 21, 1999 and May 27, 1999, have been audited by Ernst & Young
LLP, independent public accountants, as indicated in their report with respect
thereto. They are incorporated in this prospectus by reference in reliance upon
the authority of that firm as experts in accounting and auditing in giving its
report. The financial statements of Polycom SA as of February 28, 1997 and 1998
and for each of the years then ended, included in our Current Report on Form 8-
K/A filed with the Commission on June 15, 1998 and amended on May 21, 1999 and
May 27, 1999, have been audited by Amyot Exco, independent auditors, as
indicated in their report with respect thereto, and are incorporated in this
prospectus by reference in reliance upon the authority of that firm as experts
in accounting and auditing in giving its report.
<PAGE> 11
About Spartech
We are an intermediary processor of thermoplastics. Thermoplastics are
plastics capable of being formed and reformed by heating. We convert base
polymers, or resins, from commodity suppliers into extruded plastic sheet and
rollstock, color concentrates and blended resin compounds, and injection molded
and profile extruded products.
Our principal executive offices are located at 120 South Central Avenue,
Suite 1700, Clayton, Missouri 63105. Our telephone number is (314) 721-4242.
Our web site address is http://www.spartech.com. Information contained on our
web site is not part of this prospectus.
Where You Can Find More Information
We have filed a registration statement on Form S-3 with the Securities and
Exchange Commission in connection with this offering. In addition, we file
annual, quarterly and periodic reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy the
registration statement and any other documents filed by us at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the Public Reference Room. Our
Securities and Exchange Commission filings are also available to the public at
the Securities and Exchange Commission's Internet site at http://www.sec.gov.
This prospectus is part of the registration statement and does not contain
all of the information included in the registration statement. You should refer
to the registration statement and its exhibits for further information.
The Securities and Exchange Commission allows us to "incorporate by
reference" into this prospectus the information we file with it, which means
that we can disclose important information to you by referring you to those
documents. Information incorporated by reference is part of this prospectus.
Later information filed with the Securities and Exchange Commission will update
and supersede this information.
We incorporate by reference the documents listed below and any documents we
subsequently file with the Securities and Exchange Commission under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed:
* Our annual report on Form 10-K for the year ended October 31, 1998;
* Our quarterly reports on Form 10-Q for the quarters ended January 30,
1999, May 1, 1999 and July 31, 1999;
* Our current report on Form 8-K filed April 14, 1998, as amended on June
15, 1998, May 21, 1999 and May 27, 1999, relating to our acquisition of
Polycom Huntsman, Inc.;
* Our current report on Form 8-K filed March 18, 1999, relating to the
issuance of our 6.5% convertible subordinated debentures;
* Our current report on Form 8-K filed May 26, 1999, relating to our second
quarter and six-month operating results;
<PAGE> 12
* Our current report on Form 8-K filed May 27, 1999, relating to our
acquisition of Alltrista's Plastic Packaging Division; and
* The description of our common stock in our Registration Statement on
Amendment No. 1 to Form 8-A dated November 28, 1994, filed with the
Commission on May 17, 1999 under the Securities Exchange Act of 1934.
You may request a copy of these filings, at no cost, by contacting us at:
Spartech Corporation
120 South Central Avenue, Suite 1700
Clayton, Missouri 63105
Attention: Secretary
Our telephone number for copy requests is (314) 721-4242.
<PAGE> II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities registered hereby. All of these
expenses will be borne by the registrant, and not by the selling security
holders.
Securities and Exchange Commission registration fee $ 1,194
Blue sky fees and expenses 0
Transfer agent fees and expenses 500
Printing and engraving fees 0
Legal fees and expenses 1,500
Accounting fees and expenses 1,500
New York Stock Exchange listing fee 0*
Miscellaneous 306
Total $ 5,000
* The listing fee was paid at the time the options were authorized for
issuance under the option plan.
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
settlements actually and reasonably incurred by them in connection with any
civil suit or action, except actions by or in the right of the corporation, or
any administrative or investigative proceeding 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 interest 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 permits a Delaware corporation to grant its
directors and officers additional rights of indemnification through charter or
bylaw provisions and otherwise and to purchase indemnity insurance on behalf of
its directors and officers.
Section Eighth of the registrant's Restated Certificate of Incorporation
provide for indemnification of the registrant's directors and officers in a
variety of circumstances, which may include liabilities under the Securities Act
of 1933, as amended.
Item 16. Exhibits
A list of exhibits is set forth in the Exhibit Index appearing elsewhere in
this Registration Statement and is incorporated herein by reference.
Item 17. Undertakings
(a) 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 the information in the
registration statement.
(2) That, for the purposes 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 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.
<PAGE> II-2
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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 therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(h) 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Clayton, State of Missouri, on November 10, 1999.
Spartech Corporation
By:/s/Bradley B. Buechler
Bradley B. Buechler
Chairman of the Board, President
and Chief Executive Officer
<PAGE> II-3
Each person whose signature appears below hereby constitutes and appoints
Bradley B. Buechler and David B. Mueller, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date Signed
/s/BRADLEY B. BUECHLER Chairman of the Board, President, October 15, 1999
Bradley B. Buechler Chief Executive Officer and Director
(Principal Executive Officer)
/s/DAVID B. MUELLER Executive Vice President, October 15, 1999
David B. Mueller Chief Operating Officer,Secretary and Director
/s/RANDY C. MARTIN Vice President-Finance October 15, 1999
Randy C. Martin and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/RALPH B. ANDY Director October 15, 1999
Ralph B. Andy
Director _________, 1999
Thomas L. Cassidy
/s/W.R. CLERIHUE Director October 15, 1999
W.R. Clerihue
Director _________, 1999
John R. Kennedy
/s/CALVIN J. O'CONNOR Director October 15, 1999
Calvin J. O'Connor
/s/JACKSON W. ROBINSON Director October 15, 1999
Jackson W. Robinson
Director _________, 1999
Alan R. Teague
EXHIBIT INDEX
Exhibit Number Description
5 Legal Opinion
23.1 Consent of Independent Public Accountants (Arthur Andersen
LLP)
23.2 Consent of Independent Auditors (Ernst & Young LLP)
23.3 Consent of Independent Auditors (Amyot Exco)
23.4 Consent of Counsel (included in Exhibit 5)
24.1 Power of Attorney (included on Page II-3)
Exhibit 5
Spartech Corporation
120 South Central Avenue
Clayton, Missouri 63105
October 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
I am the Vice President and General Counsel of Spartech Corporation, a Delaware
corporation (the "Registrant"), and I am duly licensed to practice law in the
State of Missouri.
In my capacity as legal counsel for the Registrant I have examined the form of
Registration Statement on Form S-3 (the "Registration Statement") proposed to be
filed by the Registrant with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933, as amended, on or about the date of
this letter relating to:
(1) Options (the "Options") granted pursuant to the Registrant's
Restricted Stock Option Plan (the "Plan"), to purchase 165,000 shares of
the Registrant's common stock, par value $.75 per share, and
(2) The 165,000 shares of the Registrant's common stock, par value $.75
per share which are subject to issuance by the Registrant pursuant to the
exercise of the Options (the "Common Stock"),
and which Options and/or Common Stock would be offered pursuant to the
Registration Statement by the persons named therein as selling security holders.
In this connection, I have examined such records, documents and proceedings of
the Registrant and its board of directors as I have deemed relevant and
necessary as a basis for the opinion expressed herein.
Upon the basis of and in reliance on the foregoing, I am of the opinion that (a)
the Options have been duly authorized and validly issued by the Registrant, and
(b) the Common Stock has been duly authorized, and when issued upon exercise of
the Options pursuant to the terms thereof, will have been duly and validly
issued and will be fully paid and non-assessable.
I hereby consent to filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement.
Very truly yours,
s/Jeffrey D. Fisher
Vice President and General Counsel
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated December 4, 1998,
incorporated by reference in Spartech Corporation's Annual Report on Form 10-K
for the fiscal year ended October 31, 1998, and to all references to our firm
included in or made a part of this registration statement.
s/ARTHUR ANDERSEN LLP
St. Louis, Missouri
November 4, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference to our firm under the caption
"Experts" in the Registration Statement (Form S-3) of Spartech Corporation and
in the related prospectus of our report dated April 17, 1998, with respect to
the consolidated financial statements of Polycom Huntsman, Inc., included in the
Current Report on Form 8-K/A, as filed with the Securities and Exchange
Commission on May 21, 1999.
s/ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
November 2, 1999
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by reference in
this Registration Statement of our report dated April 1, 1998, relating to the
financial statements of Polycom Huntsman S.A. for the year ended February 28,
1998 included in the current report on Form 8-K/A of Spartech Corporation dated
March 31, 1998 and to all references to our firm included in or made a part of
this registration statement.
Paris, France Amyot Exco
November 3, 1999 Member of Grant Thornton International
s/Frederic Blanchot
Frederic Blanchot
