<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 2, 1997
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CARAUSTAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C> <C>
NORTH CAROLINA 2631 58-1388387
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
3100 WASHINGTON STREET
AUSTELL, GEORGIA 30001
(770) 948-3101
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
-------------------------
H. LEE THRASH, III
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CARAUSTAR INDUSTRIES, INC.
3100 WASHINGTON STREET
AUSTELL, GEORGIA 30001
(770) 948-3101
(Address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
WITH COPIES TO:
LAWRENCE F. SHAY, ESQ. PATRICK S. BRYANT, ESQ.
DILWORTH, PAXSON, KALISH & KAUFFMAN LLP ROBINSON, BRADSHAW & HINSON, P.A.
3200 MELLON BANK CENTER 101 NORTH TRYON STREET
1735 MARKET STREET CHARLOTTE, NORTH CAROLINA 28211
PHILADELPHIA, PENNSYLVANIA 19103 (704) 377-2536
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment, please 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 OFFERING AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
SECURITIES TO BE REGISTERED(1) SHARE(1) PRICE(1) FEE(1)
REGISTERED
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, par value
$.10 per share 500,000 $24.00 $12,000,000 $3,637
==============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the high and low prices
of the Common Stock, as reported on the Nasdaq National Market System on
March 26, 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.
================================================================================
<PAGE> 2
CARAUSTAR INDUSTRIES, INC.
CROSS-REFERENCE SHEET PURSUANT TO RULE 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
ITEM
NUMBER FORM S-4 CAPTION LOCATION IN PROSPECTUS
------ ---------------- ----------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside Front Cover of Prospectus
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page of Prospectus; Outside
Prospectus Back Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of Risk Factors; The Company
Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Determination of Offering Price
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Incorporation of Certain Documents by Reference;
Risk Factors
10. Interests of Named Experts and Counsel Experts; Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain Documents by Reference
Reference
13. Disclosure of Commission Position on Indemnification of Directors; Plan of
Indemnification for Securities Act Liabilities Distribution
</TABLE>
<PAGE> 3
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
OFFERS 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 JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
SUBJECT TO COMPLETION
DATED APRIL 2, 1997
CARAUSTAR INDUSTRIES, INC.
COMMON STOCK
This Prospectus relates to the offer and sale from time to time of up to
500,000 shares (the "Shares") of common stock, par value $.10 per share (the
"Common Stock"), of Caraustar Industries, Inc. (the "Company") by certain
shareholders of the Company named herein (the "Selling Shareholders"). See
"Selling Shareholders" and "Plan of Distribution."
The Shares may be sold from time to time by the Selling Shareholders on
the NASDAQ National Market System ("NASDAQ") on terms to be determined at the
time of each sale. The Selling Shareholders also may make private sales from
time to time directly or through a broker or brokers. Alternatively, the
Selling Shareholders may offer Shares from time to time to or through
underwriters, dealers or agents, who may receive consideration in the form of
discounts and commissions. Such compensation, which may exceed ordinary
brokerage commissions, may be paid by the Selling Shareholders and/or the
purchasers of the Shares for whom such underwriters, dealers and agents may
act. See "Selling Shareholders" and "Plan of Distribution."
The Selling Shareholders and any dealers or agents that participate in
the distribution of the Shares may be considered "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any profit on the sale of Shares offered by them and any discounts, commission
or concessions received by any such dealers or agents may be considered
underwriting discounts and commissions under the Securities Act.
The Company will receive no proceeds from the sale of the Shares by the
Selling Shareholders hereunder, but the Company will pay the expenses that it
incurs in connection with the registration of the Shares with the Securities
and Exchange Commission (the "SEC"). See "Plan of Distribution" for
indemnification arrangements between the Company and the Selling Shareholders.
The Common Stock is quoted on the NASDAQ National Market System under the
symbol "CSAR." On March 31, 1997, the closing price per share of the Common
Stock, as reported by NASDAQ, was $24 7/8.
---------------
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES RISKS.
SEE "RISK FACTORS" COMMENCING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is _______________, 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the SEC. The Registration Statement and exhibits and schedules thereto, as
well as such reports, proxy statements and other information, may be inspected
and copied at the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located
at 7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or any
part of such materials may be obtained from any such office upon payment of the
fees prescribed by the SEC. The SEC maintains a World Wide Web site
(http://www.sec.gov), which contains reports, proxy and information statements
and other information filed electronically through the SEC's Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"). The Common Stock is
currently quoted on the NASDAQ National Market System; such reports, statements
and other information also can be inspected at the offices of NASDAQ
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form S-3
under the Securities Act with respect to the Shares (the "Registration
Statement"). As permitted by the rules of the SEC, this Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Shares, reference is made to the Registration Statement,
including the exhibits and schedules filed as part thereof. Statements
contained in this Prospectus, and in any document incorporated herein by
reference, as to the contents of any contract or any other document are not
necessarily complete, and, in each instance, reference is hereby made to the
copy of the contract or document filed as an exhibit to the Registration
Statement or such document, each such statement being qualified in all respects
by this reference thereto. The Registration Statement has been filed through
EDGAR and is also publicly available through the SEC's Web site
(http://www.sec.gov).
-2-
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC pursuant to the
Exchange Act are incorporated herein by reference: (i) Annual Report on Form
10-K for the year ended December 31, 1996; (ii) the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A filed with
the SEC pursuant to Section 12 of the Exchange Act and any amendment or report
filed by the Company for the purpose of updating such description and (iii) all
documents filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
offered hereby.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in any subsequently filed document that also is or is
deemed to be incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
All information appearing in this Prospectus is qualified in its entirety by
information and financial statements (including notes thereto) appearing in the
documents incorporated by reference herein, except to the extent set forth in
the immediately preceding statement.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon written
or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that the Prospectus incorporates). Requests should be directed to Caraustar
Industries, Inc., 3100 Washington Street, Austell, Georgia 30001, Attention:
Corporate Secretary, telephone (770) 948-3101.
THE COMPANY
The Company is a major manufacturer of recycled paperboard and converted
paperboard products. The Company operates 70 facilities in the United States
and Mexico, and manufactures its products primarily from recovered fiber, which
is derived from recycled paperstock. At its 14 paperboard mills, the Company
produces various grades of uncoated and clay-coated recycled paperboard both
for internal consumption and for sale to customers in four principal markets:
(1) tubes, cores and composite containers; (2) folding cartons; (3) gypsum
wallboard facing paper; and (4) miscellaneous other specialty and converted
products. The Company produces converted paperboard products at 39 converting
plants. These plants include 26 tube and core converting plants, two composite
container plants, six folding carton plants and five specialty converting
plants. The Company also operates two plastics manufacturing plants, a
composite extrusion manufacturing plant, eight paperstock recycling and
processing facilities, and three contract manufacturing and contract packaging
plants. In addition, the Company operates special services and other
facilities, which include a transportation facility, a packaging, engineering
and procurement facility and an industrial adhesives manufacturing plant. The
Company has an equity interest as the non-operating partner in a gypsum
wallboard manufacturing plant, which has a related gypsum quarry, and a
specialty paperboard converting plant. The operations of these facilities are
managed by the respective operating partners. The Company's executive offices
are located at 3100 Washington Street, Austell, Georgia 30001, and its
telephone number is (770) 948-3101.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating the Company
and its business before purchasing the Common Stock offered hereby. This
Prospectus, including information incorporated by reference herein, contains
certain "forward-looking statements" within the meaning of Section 27A of the
Securities Act, which represent the Company's expectations or beliefs,
including, but not limited to, statements concerning industry performance, the
Company's operations, performance, financial condition, growth and acquisition
objectives, margins and revenues. For this purpose, any statements contained
in this Prospectus that are not statements of historical fact may be deemed to
be forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond the Company's
control, and actual results may differ materially depending on a variety of
important factors, including those described in this "Risk Factors" section.
Among the key factors that may have a direct bearing on the Company's operating
results are fluctuations in raw material prices and the economy in general, the
degree and nature of competition, demand for the Company's services, changes in
government regulations, the Company's ability to complete
-3-
<PAGE> 6
acquisitions and integrate the operations of acquired businesses and other
matters described in this "Risk Factors" section and elsewhere in this
Prospectus.
POSSIBLE FUTURE INCREASES IN RECOVERED FIBER COSTS
Historically, the cost of recovered fiber, which is derived from recycled
paperstock and is the Company's only significant raw material, has fluctuated
significantly due to market and industry conditions. For example, the
Company's average recovered fiber cost per ton of paperboard produced increased
from $43 per ton in 1993 to $144 per ton in 1995, an increase of 235%, before
dropping to $66 in 1996. Although the Company raised its selling prices in
response to the increase in raw material costs, it was not able to maintain its
operating margins during the entire period. There can be no assurance that the
Company will be able to recoup any future increases in the cost of recovered
fiber by raising the prices of its products.
ABILITY TO CONTROL GROWTH; EXPANSION AND ACQUISITION RISKS
The Company intends to continue increasing its production capacity in the
next several years. Such expansion entails operating, marketing and financial
risks, and its success is largely dependent upon the availability of working
capital to permit the Company to complete its capital expenditures program and
identify and consummate selected acquisitions. The Company has consummated
numerous acquisitions in recent years and actively seeks acquisition
opportunities. Once integrated, acquisitions may not achieve levels of
revenue, profitability or productivity comparable to those of the Company's
existing locations or may not otherwise perform as expected. The consummation
of acquisitions could result in the incurrence of additional indebtedness, the
issuance of additional capital stock having a dilutive effect on the Company's
shareholders, or both. Acquisitions also involve special risks, including
risks associated with unanticipated liabilities and contingencies, diversion of
management attention and possible adverse effects on earnings resulting from
increased goodwill amortization, increased interest costs, the issuance of
additional securities and difficulties related to the integration of the
acquired business. There can be no assurance that the Company will be able to
utilize increased production capacity at its existing facilities, to
successfully identify additional suitable acquisition candidates, complete
additional acquisitions or integrate acquired businesses into its operations.
UNFORESEEN ENVIRONMENTAL LIABILITIES OR COSTS
Compliance with federal, state and local governmental requirements,
particularly relating to wastewater discharge and air quality, is a significant
factor in the Company's business. Among other things, these laws and
regulations regulate the discharge of materials into the water, air and land
and govern the use and disposal of hazardous substances. The most significant
federal laws are the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act and the Resource Conservation and Recovery Act ("RCRA").
These laws are administered by the United States Environmental Protection
Agency, and in some cases by state and local agencies. In addition, states in
which the Company operates have adopted supplemental environmental laws and
regulations, or have enacted their own parallel environmental programs, which
are enforced through various state and local administrative agencies. Under
CERCLA and other laws and regulations, the Company can be held strictly liable
if hazardous substances are found on real property owned or operated by the
Company or used by the Company as a disposal site. In recent years, the
Company has adopted a policy of assessing real property for environmental risks
prior to purchase. The Company is aware of issues regarding hazardous
substances at some of its facilities and one of its disposal sites, but in each
case a remedial plan is in place where necessary in the Company's opinion, and
the Company has reason to believe that any possible liabilities will not be
material, although there can be no assurance that such liabilities will not be
material. The Company regularly makes capital and operating expenditures to
stay in compliance with applicable environmental laws. Despite these compliance
efforts, risk of environmental liability is inherent in the operation of the
Company's businesses, as it is with other companies engaged in similar
businesses, and there can be no assurance that environmental liabilities,
including compliance and remediation costs, will not have a material adverse
effect on the Company in the future. In addition, future events, such as
changes in or modified interpretations of existing laws or regulations or
enforcement policies, or further investigation or evaluation of the potential
health hazards of certain products or business activities, may give rise to
additional compliance and other costs that could have a material adverse effect
on the Company.
HIGHLY COMPETITIVE MARKETS
The manufacture and sale of recycled paperboard and converted paperboard
products are highly competitive. The Company competes with a variety of
companies, some of which are larger and have greater resources than the
Company. In most of its markets the Company's competitors are capable of
supplying products that would meet customer needs. There can be no assurance
that the Company will be able to continue competing successfully.
-4-
<PAGE> 7
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN ARTICLES OF INCORPORATION AND BYLAW
PROVISIONS; POSSIBLE ISSUANCES OF PREFERRED STOCK; SHAREHOLDER RIGHTS PLAN
Certain provisions of the Company's articles of incorporation and bylaws,
as well as a shareholder rights plan, could have the effect of making if more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, a majority of the outstanding voting stock of the Company and, as a
result, have the effect of discouraging bids for the Company's Common Stock at
a premium and adversely affecting the market price of the Common Stock. The
Company's articles of incorporation authorize 5,000,000 shares of preferred
stock (the "Preferred Stock"), which may be issued in the future without
further shareholder approval upon such terms and conditions, and having such
rights, privileges and preferences, as the Board of Directors may determine.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred Stock that
may be issued in the future. The Company's Board of Directors is divided into
three classes with staggered terms, and the Company's articles of incorporation
provide that directors may be removed only for cause. The shareholder rights
plan generally provides a mechanism by which the Board of Directors and
shareholders may act to substantially dilute the share position of any takeover
bidder who acquires 20% or more of the Common Stock.
DEPENDENCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of its
executive officers and senior management. In addition, the Company is
dependent on the performance and productivity of its local managers. The loss
of some of the Company's key managers could have an adverse effect on the
Company's operations, including the Company's ability to establish and maintain
customer relationships. If the Company is unable to attract and retain key
employees to perform these services, the Company's business could be adversely
affected.
STOCK PRICE VOLATILITY
From time to time, there may be significant volatility in the market
price of the Common Stock. Factors such as announcements of fluctuations in
the Company's or its competitors' operating results, recovered fiber costs,
market conditions for paper industry stocks or manufacturing stocks in general,
changes in general conditions in the economy or financial markets, natural
disasters or other developments could cause the market price of the Common
Stock to fluctuate substantially. In addition, the stock market in recent
years has experienced extreme price and volume fluctuations that often have
been unrelated or disproportionate to the operating performance of affected
companies. These broad fluctuations may adversely affect the market price of
the Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares.
DETERMINATION OF OFFERING PRICE
This Prospectus may be used from time to time by the Selling Shareholders
who offer the Shares for sale. The offering price of the Shares will be
determined by the Selling Shareholders and may be based on market prices
prevailing at the time of sale, at prices relating to such prevailing market
prices or at negotiated prices.
SELLING SHAREHOLDERS
The following table provides certain information with respect to Common
Stock beneficially owned by each Selling Shareholder as of the dates indicated.
The securities offered in this Prospectus by the Selling Shareholders are the
Shares. Each Selling Shareholder possesses sole voting and investment power
with respect to the shares listed opposite his name, unless noted otherwise.
Except as set forth elsewhere in this Prospectus (including in the documents
incorporated herein by reference), within the past three years none of the
Selling Shareholders has had a material relationship with the Company or with
any of the Company's predecessors or affiliates other than as a result of
issuance of the Shares (subject to adjustment) to the Selling Shareholders as
the sole consideration for the Company's acquisition on March 31, 1997 (the
"Acquisition") of The New General Packaging Service, Inc., a New Jersey
Corporation
-5-
<PAGE> 8
("NGP"). Messrs. Sidney Hofing and Peter Neusch entered into employment and
noncompetition agreements with the Company upon consummation of the
Acquisition and became officers of a wholly owned subsidiary of the Company.
<TABLE>
<CAPTION>
Common Stock Beneficially Number of Common Stock
Name Owned Prior to the Offering(1) Shares Offered Beneficially Owned
After the Offering(2)
Number Percentage Number Percentage
------ ---------- ------ ---------
<S> <C> <C> <C> <C> <C>
Sidney Hofing 399,498 1.6% 399,498 - 0 - - 0 -
Peter Neusch 73,676 * 73,676 - 0 - - 0 -
Sidney Shaw 5,723 * 5,723 - 0 - - 0 -
Raymond Fortier 5,723 * 5,723 - 0 - - 0 -
Martin and Mary Bratman(3) 5,723 * 5,723 - 0 - - 0 -
Thomas Orban 5,723 * 5,723 - 0 - - 0 -
William Gorgone 3,934 * 3,934 - 0 - - 0 -
- -------------------------
</TABLE>
* Less than 1% of the outstanding shares of Common Stock.
(1) Represents all shares of Common Stock beneficially owned prior to the
offering made hereby, and all such shares, as a percentage of the Common Stock
outstanding, as of March 31, 1997.
(2) Represents all shares of Common Stock shown as beneficially owned after
the offering made hereby (assuming the sale of all of the Shares), and all such
shares, as a percentage of the Common Stock outstanding, as of March 31, 1997.
(3) The Bratmans hold these shares as tenants-in-common and share voting and
investment power with respect to these shares.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders on
NASDAQ on terms to be determined at the time of each sale. The Selling
Shareholders also may make private sales directly or through a broker or
brokers. Alternatively, the Selling Shareholders may offer Shares from time to
time to or through underwriters, dealers or agents, who may receive
consideration in the form of discounts and commissions. Such compensation,
which may exceed ordinary brokerage commissions, may be paid by the Selling
Shareholders and/or the purchasers of the Shares offered hereby for whom such
underwriters, dealers and agents may act.
The Selling Shareholders and any dealers or agents that participate in
the distribution of the Shares may be considered "underwriters" within the
meaning of the Securities Act, and any profit on the sale of such Shares
offered by them and any discounts, commissions or concessions received by any
such dealer or agents might be deemed to be underwriting discounts and
commissions under the Securities Act. The aggregate proceeds to the Selling
Shareholders from sales of the Shares offered hereby will be the purchase price
of such Shares less any brokers' commissions required to be paid by the Selling
Shareholders.
To the extent required, the specific Shares to be sold, the names of the
Selling Shareholders, the respective purchase prices and public offering
prices, the names of any such agents, dealers and underwriters and any
applicable commissions or discounts with respect to a particular offer will be
set forth in a supplement to this Prospectus.
The Shares may be sold from time to time in one or more transactions at a
fixed offering price, which may be changed, at varying prices determined at the
time of sale or at negotiated prices.
Under applicable Exchange Act rules and regulations, any person engaged
in the distribution of the Shares may not simultaneously engage in market
making activities with respect to the Common Stock for a period of one business
day prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Shareholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of Common Stock by them.
The Company will pay the expenses that it incurs in connection with the
registration of the Shares with the SEC.
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<PAGE> 9
The Company and each Selling Shareholder have agreed to indemnify each
other against certain liabilities, including liabilities under the Securities
Act.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is First Union
National Bank of North Carolina, Charlotte, North Carolina.
INDEMNIFICATION OF DIRECTORS
The Company's articles of incorporation eliminate, to the fullest extent
permitted by the North Carolina Business Corporation Act (the "Business
Corporation Act"), the personal liability of each director to the Company or
its shareholders for monetary damages for breach of duty as a director. This
provision in the articles of incorporation does not change a director's duty of
care, but it eliminates monetary liability for certain violations of that duty,
including violations based on grossly negligent business decisions that may
include decisions relating to attempts to change control of the Company. The
provision does not affect the availability of equitable remedies for a breach
of the duty of care, such as an action to enjoin or rescind a transaction
involving a breach of duty; in certain circumstances, however, equitable
remedies may not be available as a practical matter. Under the Business
Corporation Act, the limitation of liability provision is ineffective against
liabilities for (i) acts or omissions that the director knew or believed at the
time of the breach to be clearly in conflict with the best interests of the
Company, (ii) unlawful distributions described in the Business Corporation Act
Section 55-8-33, (iii) any transaction from which the director derived an
improper personal benefit, or (iv) acts or omissions occurring prior to the
date the provision became effective. The provision in no way affects a
director's liability under the federal securities laws. Also, in accordance
with the Business Corporation Act, the Company's bylaws provide, in addition to
the indemnification of directors otherwise provided by the Business Corporation
Act, indemnification of the Company's current or former directors against any
and all liability and litigation expense, including reasonable attorneys' fees,
arising out of their status or activities as directors, except for liability or
litigation expense incurred on account of activities that were at the time
known or believed by such director to be clearly in conflict with the best
interests of the Company. Additionally, the Business Corporation Act
authorizes a corporation to purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such a person, whether or
not the corporation is otherwise authorized by the Business Corporation Act to
indemnify that person. The Company has purchased and maintains such insurance.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed 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.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed on for the Company by Robinson, Bradshaw &
Hinson, P.A., Charlotte, North Carolina. Russell M. Robinson, II, a
shareholder in the firm of Robinson, Bradshaw & Hinson, P.A., is Chairman of
the Board of Directors of the Company. Robinson, Bradshaw & Hinson, P.A. is
the Company's principal outside legal counsel. Certain members of such firm
beneficially owned approximately 118,355 shares of the Company's Common Stock
as of the date of this Prospectus.
EXPERTS
The consolidated financial statements and schedule incorporated by
reference in this Prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts.
-7-
<PAGE> 10
__________________________
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or any Selling
Shareholder. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, to any person in any jurisdiction in which
such offer or solicitation is not authorized, or in which the person making
such offer or solicitation is not qualified to do so, or to any person to whom
it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any date subsequent to the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
REGISTRAR AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
INDEMNIFICATION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
CARAUSTAR INDUSTRIES, INC.
COMMON STOCK
============
PROSPECTUS
-----------
, 1997
=========
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred in connection
with the Offering, all of which are to be borne by the Registrant.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,637
Accounting fees and expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500
Legal fees and expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000
Miscellaneous* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,863
Total* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000
========
</TABLE>
_______________
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 55-2-02 of the North Carolina Business Corporation Act (the
"Business Corporation Act") enables a corporation in its articles of
incorporation to eliminate or limit, with certain exceptions, the personal
liability of a director for monetary damages for breach of duty as a director.
No such provision is effective to eliminate or limit a director's liability for
(i) acts or omissions that the director at the time of the breach knew or
believed to be clearly in conflict with the best interests of the corporation,
(ii) improper distributions as described in Section 55-8-33 of the Business
Corporation Act, (iii) any transaction from which the director derived an
improper personal benefit or (iv) acts or omissions occurring prior to the date
the exculpatory provision became effective. The registrant's articles of
incorporation limit the personal liability of its directors to the fullest
extent permitted by the Business Corporation Act.
Sections 55-8-50 through 55-8-58 of the Business Corporation Act permit
a corporation to indemnify its directors, officers, employees or agents under
either or both a statutory or nonstatutory scheme of indemnification. Under
the statutory scheme, a corporation may, with certain exceptions, indemnify a
director, officer, employee or agent of the corporation who was, is, or is
threatened to be made, a party to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative, or
investigative because of the fact that such person was or is a director,
officer, agent or employee of the corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. This indemnity may include the obligation
to pay any judgment, settlement, penalty, fine (including an excise tax
assessed with respect to an employee benefit plan) or reasonable expenses
incurred in connection with a proceeding (including counsel fees), but no such
indemnification may be granted unless such director, officer, employee or agent
(i) conducted himself in good faith, (ii) reasonably believed (1) that any
action taken in his official capacity with the corporation was in the best
interests of the corporation or (2) that in all other cases his conduct was not
opposed to the corporation's best interests, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of
directors, a committee of directors, special legal counsel or the shareholders
in accordance with Section 55-8-55 of the Business Corporation Act. A
corporation may not indemnify a director under the statutory scheme in
connection with a proceeding by or in the right of the corporation in which a
director was adjudged liable to the corporation or in connection with any other
proceeding in which a director was adjudged liable on the basis of having
received an improper personal benefit.
In addition to, and notwithstanding the conditions of and limitations
on, the indemnification described above under the statutory scheme, Section
55-8-57 of the Business Corporation Act permits a corporation to indemnify, or
agree to
II-1
<PAGE> 12
indemnify, any of its directors, officers, employees or agents against
liability and expenses (including counsel fees) in any proceeding (including
proceedings brought by or on behalf of the corporation) arising out of their
status as such or their activities in such capacities, except for any
liabilities or expenses incurred on account of activities that were, at the
time taken, known or believed by the person to be clearly in conflict with the
best interests of the corporation.
Because the registrant's bylaws provide for indemnification to the
fullest extent permitted under the Business Corporation Act, the registrant may
indemnify its directors, officers, employees and agents in advance with either
the statutory or nonstatutory standard. Additionally, the registrant is
contractually obligated to indemnify, to the fullest extent permitted by law,
four individuals, three of whom are directors of the registrant, for
liabilities and expenses incurred through service as directors of Standard
Gypsum Corporation, a subsidiary of the registrant. These indemnification
agreements are dated July 1, 1987. Two of the four individuals are no longer
directors of Standard Gypsum Corporation.
Sections 55-8-52 and 55-8-56 of the Business Corporation Act require a
corporation, unless its articles of incorporation provide otherwise, to
indemnify a director or officer who has been wholly successful, on the merits
or otherwise, in the defense of any proceeding to which such director or
officer was, or was threatened to be, made a party because he is or was a
director or officer of the corporation. Unless prohibited by the articles of
incorporation, a director or officer also may make application and obtain
court-ordered indemnification if the court determines that such director or
officer is fairly and reasonably entitled to such indemnification as provided
in Sections 55-8-54 and 55-8- 56 of the Business Corporation Act.
Additionally, Section 55-8-57 of the Business Corporation Act authorizes
a corporation to purchase and maintain insurance on behalf of an individual who
is or was a director, officer, employee or agent of the corporation against
certain liabilities incurred by such a person, whether or not the corporation
is otherwise authorized by the Business Corporation Act to indemnify that
person. The registrant has purchased and maintains such insurance.
II-2
<PAGE> 13
ITEM 16. EXHIBITS.
The following is a list of all the exhibits filed as part of the
Registration Statement.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
<S> <C> <C>
4.01 - Specimen Common Stock Certificate (Incorporated by reference - Exhibit 4.01 to Registration
Statement on Form S-1 [SEC File No. 33-50582])
4.02 - Articles 3 and 4 of the Company's Amended and Restated Articles of Incorporation
(Incorporated by reference - included in Exhibit 3.01 to Annual Report for 1992 on Form 10-K
[SEC File No. 0-20646])
4.03 - Article II of the Company's Second Amended and Restated Bylaws (Incorporated by reference -
included in Exhibit 3.02 to Annual Report for 1992 on Form 10-K [SEC File No. 0-20646])
4.04 - Rights Agreement, dated as of April 9, 1995, between Caraustar Industries, Inc. and First
Union National Bank of North Carolina, as Rights Agent (Incorporated by reference - Exhibit
1 to Current Report on Form 8-K dated April 19, 1995 [SEC File No. 0-20646])
5.1** - Opinion of Robinson, Bradshaw & Hinson, P.A.
23.1** - Consent of Arthur Andersen LLP
23.2** - Consent of Robinson, Bradshaw & Hinson, P.A. (included in its opinion filed as Exhibit 5.1
hereto)
24** - Power of Attorney (included on the signature pages to this Registration Statement).
</TABLE>
**Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement: (i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represents a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; (iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that the undertakings in subparts (i) and (ii) above do not apply if
the information required to be included in a post-effective amendment by such
subparts is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into 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 therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
II-3
<PAGE> 14
(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.
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 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act 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-4
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Austell,
State of Georgia on April 1, 1997.
CARAUSTAR INDUSTRIES, INC.
By: /s/ H. Lee Thrash, III
------------------------------------------
H. Lee Thrash, III
Vice President and Chief Financial
Officer-Finance
POWER OF ATTORNEY
Each of the undersigned hereby constitutes and appoints H. Lee Thrash,
III and Thomas V. Brown, and each of them, with full power to act without the
other and with full power of substitution and resubstitution, his true and
lawful attorneys-in-fact and agents, for him and in his name, place, and stead,
in any and all capacities, to sign on his behalf any and all amendments
(including post-effective amendments and amendments thereto) to this
Registration Statement and any related registration statement (and any
amendments thereto) filed pursuant to Rule 462(b) under the Securities Act, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Commission, and grants unto said 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 in and about the
premises as fully as to all intents and purposes as he might or could do in
person, and hereby ratifies and confirms all that such attorneys-in-fact or
agents, or any of them, or their substitutes shall 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 and in the
capacities indicated on April 1, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C> <C>
/s/ Thomas V. Brown
-----------------------------------------
Thomas V. Brown Director, President and Chief Executive Officer
(Principal Executive Officer)
/s/ H. Lee Thrash, III
-----------------------------------------
H. Lee Thrash, III Vice President and Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer
/s/ Russell M. Robinson, II
-----------------------------------------
Russell M. Robinson, II Chairman of the Board of Directors
/s/ Ralph M. Holt, Jr.
-----------------------------------------
Ralph M. Holt, Jr. Director
/s/ Maxine Francis Forrest Director
-----------------------------------------
Maxine Francis Forrest
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5.1
ROBINSON, BRADSHAW & HINSON, P.A.
ATTORNEYS AT LAW
ONE INDEPENDENCE CENTER SOUTH CAROLINA OFFICE
101 NORTH TRYON STREET, SUITE 1900 THE GUARDIAN BUILDING
PATRICK S. BRYANT CHARLOTTE,NORTH CAROLINA 28246-1900 ONE LAW PLACE -
(704) 377-8366 SUITE 600
P.O. DRAWER 12070
ROCK HILL, SC 29731
TELEPHONE (704) 377-2536
FAX (704) 378-4000
TELEPHONE (803) 325-2900
FAX (803) 325-2929
April 2, 1997
Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30001
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") of Caraustar Industries, Inc., a North Carolina corporation
(hereinafter referred to as the "Company"), to be filed with the Securities and
Exchange Commission for the purpose of registering under the Securities Act of
1933, as amended (the "Act"), up to 500,000 shares of the Company's Common
Stock, par value $.10 per share (the "Shares"), for resale by the Selling
Shareholders named therein. We have examined the Amended and Restated Articles
of Incorporation and the Second Amended and Restated Bylaws, as amended, of the
Company, minutes of applicable meetings of the Board of Directors and
Shareholders of the Company, and other Company records, together with
applicable certificates of public officials and other documents that we have
deemed relevant.
Based upon the foregoing and subject to the conditions set forth
below, it is our opinion that the Shares, when issued and sold as contemplated
by the Registration Statement, will be legally issued, fully paid and
nonassessable.
The opinions expressed herein are contingent upon the Registration
Statement, as amended, becoming effective under the Securities Act.
We hereby consent to the filing of this opinion as an exhibit to said
Registration Statement and to being named therein and in the prospectus that
constitutes a part thereof as attorneys who will pass upon certain legal
matters in connection with the validity of the Shares.
Very truly yours,
ROBINSON, BRADSHAW & HINSON, P.A.
/s/ Patrick S. Bryant
---------------------------------
Patrick S. Bryant
<PAGE> 1
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 February 4, 1997
included in Form 10-K of Caraustar Industries, Inc. for the year ended December
31, 1996 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
March 26, 1997
