<PAGE> 1
As filed with the Securities and Exchange Commission on November 6, 1998
REGISTRATION NO. 333-______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CARAUSTAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <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 30106
(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 30106
(770) 948-3101
(Address, including zip code, and telephone number,
including area code, of agent for service)
---------------
WITH COPIES TO:
PATRICK S. BRYANT
ROBINSON, BRADSHAW & HINSON, P.A.
101 NORTH TRYON STREET, SUITE 1900
CHARLOTTE, NORTH CAROLINA 28246
(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 securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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, 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(d) 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. [ ] _______________
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title Of Each Class Of Amount To Be Offering Price Aggregate Offering Amount Of
Securities To Be Registered Registered Per Share(1) Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per 2,000,000 $24.4375 $48,875,000 $13,587.25
share, including preferred stock
purchase rights(2)
====================================================================================================================================
</TABLE>
(1) Estimated for the sole purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low price of the Common Stock, as reported on
the NASDAQ stock market on October 30, 1998.
(2) Each share of Common Stock issued by the Company has one attached
preferred stock purchase right under the Rights Agreement dated as of
April 9, 1995 between the Company and its Rights Agent.
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
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1998
Prospectus
CARAUSTAR INDUSTRIES, INC.
[LOGO]
2,000,000 Shares
Common Stock
- -- We may use this prospectus from time to time to offer and sell our
common stock to the owners of businesses we may acquire in the
future.
- -- The specific terms upon which we will issue these shares will be
determined by negotiation with the owners of the businesses we
acquire.
- -- We expect the price of the shares we issue in an acquisition to be
reasonably related to the prevailing market prices of our common
stock at or near the time we enter an acquisition agreement or
consummate the acquisition.
- -- In addition to certain resale limitations imposed by federal
securities laws, we may require persons receiving our common stock in
connection with an acquisition to agree to hold such stock for a
certain period from the date of acquisition.
- -- We will pay all expenses of this offering. We will not pay
underwriting discounts or commissions in connection with issuing our
stock in acquisitions, although we may pay finders fees in specific
acquisitions. Any person receiving a finder's fee may be deemed an
"underwriter" within the meaning of the Securities Act of 1933.
- -- All of the common stock offered by this prospectus may, subject to
certain conditions, also be offered and resold from time to time
pursuant to this prospectus by the persons who receive this common
stock in acquisitions.
- -- We are based in Austell, Georgia and primarily manufacture packaging
products from recycled paper.
- -- Our common stock is quoted on the NASDAQ Stock Market under the
trading symbol "CSAR."
- --------------------------------------------------------------------------------
Before making any investment in our company, you should
consider carefully the risk factors beginning on page 3.
- --------------------------------------------------------------------------------
Neither the SEC nor any state securities commission has approved any of the
securities offered by this prospectus or determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
_______________, 1998
<PAGE> 3
[Red Herring Legend - to be placed horizontally down left side of cover page]
The information in this 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 prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy (upon the payment of fees prescribed by the SEC) any document
that we file with the SEC at its public reference rooms in Washington, D.C. (450
Fifth Street, N.W. 20549), New York, New York (7 World Trade Center, Suite 1300
10048) and Chicago, Illinois (500 West Madison Street, Suite 1400 60661). You
may call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our filings are also available to the public on the internet,
through the SEC's EDGAR database. You may access the EDGAR database at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with them. This means that we can disclose important
business, financial and other information in our SEC filings by referring you to
the documents containing this information. All information incorporated by
reference is part of this prospectus, unless and until that information is
updated and superseded by the information contained in this prospectus or any
information incorporated later. Any information that we subsequently file with
the SEC that is incorporated by reference will automatically update and
supersede any previous information that is part of this prospectus. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all the securities we offer with this
prospectus:
-- Annual Report on Form 10-K for the year ended December 31,
1997;
-- Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998; and
-- The description of our common stock contained in our
registration statement on Form 8-A that we filed with the
SEC on September 17, 1992 to register our common stock
under the Securities Exchange Act of 1934, along with any
future update of this description that we file.
This prospectus is part of a registration statement (on Form S-4) we
have filed with the SEC relating to the shares offered by this prospectus. As
permitted by SEC rules, this prospectus does not contain all the information
contained in the registration statement and accompanying exhibits and schedules
we file with the SEC. You may refer to the registration statement, the exhibits
and schedules for more information about us and our common stock. The
registration statement, exhibits and schedules are available at the SEC's public
reference rooms or through its EDGAR database on the internet.
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30106
Attn: Corporate Secretary
Telephone: (770) 948-3101
To ensure timely delivery of these materials, you should make any
request no later than five business days prior to the date on which you intend
to vote on or otherwise consent to or approve our acquisition of your business.
Materials will be sent via first class mail within one business day after we
receive a request.
You should rely only on the information provided in this prospectus
or incorporated by reference. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. Information is accurate only as of
the date of the documents containing the information, unless the information
specifically indicates that another date applies.
2
<PAGE> 5
RISK FACTORS
In addition to the other information contained in this prospectus,
you should consider carefully the following risk factors before investing in any
of our common stock.
Possible Future Increases In Raw Material Costs
Our primary raw material is recycled paper, which is known in our
industry as "recovered fiber." The cost of recovered fiber has at times
fluctuated greatly because of factors such as shortages or surpluses created by
market or industry conditions. Although in the past we have raised the selling
prices of our products in response to raw material price increases, sometimes
raw material prices have increased so quickly or to such levels that we have
been unable to maintain our operating margins or pass the price increases
through to our customers on a timely basis. We cannot assure you that we will be
able to maintain our margins in the face of raw material price fluctuations or
that we will be able to pass such price changes through to our customers on a
timely basis.
Ability To Control Growth; Expansion and Acquisition Risks
We intend to increase our production capacity in the next several
years. This strategy involves risks and depends on the availability of funds to
permit us to make capital expenditures and acquisitions. We have made numerous
acquisitions in recent years and actively seek new acquisitions that meet our
criteria. Acquired businesses may not achieve the same levels of revenue, profit
or productivity as our existing locations and may not otherwise perform as we
expect. To make acquisitions, we might incur additional debt, issue additional
stock (which would dilute the relative stock holdings of our existing
shareholders), or both.
Acquisitions also involve special risks. Some of these risks include:
-- assumption of unanticipated liabilities and contingencies
-- diversion of management's attention
-- possible reduction of our reported earnings because of:
> increased goodwill write-offs
> increased interest costs
> issuances of additional securities
> difficulties of integrating acquired business
As we grow, we can give no assurance that we will be able to:
-- use increased production capacity at our facilities
-- identify suitable acquisition candidates
-- complete additional acquisitions
-- integrate acquired businesses into our operations
Environmental Liabilities or Costs
Compliance with the environmental requirements of federal, state and
local governments significantly affects our business. Among other things, these
requirements regulate the discharge of materials into the water, air
3
<PAGE> 6
and land and govern the use and disposal of hazardous substances. Under
environmental laws, we can be held strictly liable if hazardous substances are
found on real property we have ever owned or operated or used as a disposal
site. In recent years, we have adopted a policy of assessing real property for
environmental risks prior to purchase. We are aware of issues regarding
hazardous substances at some of our facilities and one of our disposal sites,
and we have put into place a remedial plan at each site where we believe such a
plan is necessary. We regularly make capital and operating expenditures to stay
in compliance with environmental laws. Despite these compliance efforts, risk of
environmental liability is part of the nature of our business. We cannot assure
you that environmental liabilities, including compliance and remediation costs,
will not have a material adverse effect on us in the future. In addition, future
events may lead to additional compliance or other costs that could have a
material adverse effect on us. Such future events could include changes in, or
new interpretations of, existing laws or enforcement policies or further
investigation of the potential health hazards of certain products or business
activities.
Highly Competitive Markets
The manufacture and sale of our products are highly competitive. We
compete with a variety of companies, some of which are larger and have greater
resources than we do. In most of our markets, our competitors are capable of
supplying products that would meet the needs of our customers. We cannot assure
you that we will be able to compete successfully in the future.
Potential Deterrents to Takeovers
Certain provisions of our articles of incorporation and bylaws, as
well as a shareholder rights plan, could make it more difficult for a third
party to acquire, or discourage a third party from acquiring, a controlling
interest in our outstanding voting stock. As a result, these provisions could
discourage bids for our common stock at a premium and might adversely affect the
market price of our common stock.
Our articles of incorporation authorize 5,000,000 shares of preferred
stock, which may be issued in the future without further shareholder approval
with such terms and rights as our board of directors may determine. The rights
of the holders of our common stock may be adversely affected by the rights of
the holders of any preferred stock that may be issued in the future.
Our board of directors is divided into three classes with staggered
terms. This means that, as a general matter, only one-third of our board of
directors must stand for re-election at any annual meeting of shareholders. Our
articles of incorporation provide that directors may be removed only for cause.
These provisions make it more difficult and time consuming for a potential
acquiror of our company to replace our board of directors.
Our shareholder rights plan generally authorize our board of
directors and shareholders to substantially dilute the share ownership position
of any person who acquires 20% or more of our common stock.
Dependence on Key Personnel
We depend on the continued efforts of our executive officers and
senior management. In addition, we depend on the performance and productivity of
our local managers. The loss of executive officers, members of senior management
or key local managers could have a material adverse effect on our operations,
including our ability to establish and maintain customer relationships. We
maintain no key person insurance policies on any of our executive officers or
other senior managers. If we are unable to attract or retain key employees to
perform these services, our business could be materially and adversely affected.
Stock Price Fluctuation
From time to time, there may be significant fluctuations in the
market price of our common stock, which could be caused by the occurrence of, or
announcements or rumors related to:
-- changes in our or our competitors' operating results
-- changes in cost of recovered fiber
-- changes in market conditions for paper industry stocks or
manufacturing stocks in general
4
<PAGE> 7
-- changes in general conditions in the U.S. or foreign
economies or financial markets
-- natural disasters or other newsworthy events, including
developments of a political or social nature
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 types of fluctuations
may adversely affect the market price of our common stock or other securities.
Economic Conditions
Demand for our products generally is dependent upon production levels
and consumer demand, which fluctuate with U.S. and global economic conditions
and cycles. Demand is generally higher during periods of economic strength and
lower during periods of economic weakness or uncertainty. Adverse economic
conditions could have a material adverse effect on us.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus under the caption "Risk
Factors" and the documents incorporated by reference into this prospectus may
constitute "forward-looking statements" within the meaning of federal securities
laws. Forward-looking statements are based on our management's beliefs,
assumptions, and expectations of our future economic performance, taking into
account the information currently available to them. These statements are not
statements of historical fact. Forward-looking statements involve risks and
uncertainties that may cause our actual results, performance or financial
condition to be materially different from the expectations of future results,
performance or financial condition we express or imply in any forward-looking
statements. Some of the important factors that could cause our actual results,
performance or financial condition to differ materially from our expectations
are:
-- Fluctuations in our raw material prices
-- Our ability to identify and complete acquisitions and
successfully integrate the businesses we acquire
-- Changes in government regulations, particularly
environmental regulations
-- Changes in demand for our products
-- Changes in the industrial sector or the general domestic
or global economy
-- Degree and nature of our competition
-- Other factors described in this prospectus or the
documents we file with the SEC and incorporate by
reference into this prospectus
When used in our documents or oral presentations, the words
"anticipate," "estimate," "expect," "objective," "projection," "forecast,"
"goal" or similar words are intended to identify forward-looking statements. We
qualify any such forward-looking statements entirely by these cautionary
factors.
THE COMPANY
Caraustar Industries, Inc. is a major manufacturer of recycled
paperboard and converted paperboard products. Our executive offices are located
at 3100 Washington Street, Austell, Georgia 30106. Our phone number is (770)
948-3101.
ACQUISITION TERMS
This prospectus covers the offer and sale of up to 2,000,000 shares
of our common stock that we may issue from time to time in connection with the
future direct and indirect acquisitions of other businesses, properties or
securities in business combination transactions. We will furnish this prospectus
to the securityholders or owners of the businesses we acquire in exchange for
the shares we offer by this prospectus.
We expect that the terms upon which we issue the shares will be
determined through negotiations with the securityholders or principal owners of
the businesses whose securities or assets we acquire. We expect that the
5
<PAGE> 8
shares we issue in an acquisition will be valued at prices reasonably related to
the market prices for our common stock prevailing at or near the time we enter
into an acquisition agreement or consummate the acquisition.
We will pay all expenses of the offering of these shares. We will pay
no underwriting discounts or commissions in connection with the issuance of
these shares, although we may pay finder's fees with respect to specific
acquisitions. Any person receiving a finder's fee may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933.
We will use this prospectus in connection with the issuance of our
shares only in those acquisitions that would be exempt from registration except
for the possibility of integration with other transactions. If an acquisition
would not be so exempt, we will furnish those offerees this prospectus, as
amended by a post-effective amendment to the Registration Statement (on Form
S-4) of which this prospectus is a part.
If we consummate an acquisition (or series of acquisitions since the
date of our most recently audited financial statements) that would have a
material financial effect on us, we will file a Current Report on Form 8-K
containing the financial and other information about the acquisition(s) that
would be material to subsequent purchasers of the shares we offer through this
prospectus.
Our common stock is quoted on the NASDAQ Stock Market. The shares we
issue in acquisitions may be subject to restrictions on resale imposed by Rules
144 and 145 under the Securities Act of 1933. In addition, we may impose certain
contractual holding period requirements upon persons acquiring our shares in
acquisitions.
SELLING SHAREHOLDERS
This prospectus may also be used for reoffers and resales by persons
who receive our common stock in acquisition transactions and who may be entitled
to reoffer and resale such common stock under circumstances requiring the use of
a prospectus. However, no person will be authorized to use this prospectus for
an offer of such common stock without first obtaining our consent. We may
consent to the use of this prospectus by such selling shareholders for a limited
period of time and subject to limitations and conditions, which may be varied by
agreement between us and such selling shareholders. A supplement to this
prospectus will set forth information identifying any such selling shareholders
and disclosing the information about such selling shareholders and the
securities to be sold as may then be required by the Securities Act of 1933 and
the rules of the Securities and Exchange Commission.
PLAN OF DISTRIBUTION BY SELLING SHAREHOLDERS
Resales of our common stock may be made on NASDAQ or such national
securities exchange or other quotation service on which our common stock may be
listed or quoted at the time of sale, in the over-the-counter market, in private
transactions or pursuant to underwriting agreements. Such resales may be
effected in one or more of the following methods:
-- ordinary brokers' transactions, which may include long or
short sales
-- transactions involving cross or block trades or otherwise
on NASDAQ
-- purchases by brokers, dealers or underwriters as principal
and resale for their own accounts pursuant to this
prospectus
-- "at the market" to or through market makers or into an
existing market for the common stock
-- in other ways not involving market makers or established
trading markets, including direct sales to purchasers or
sales effected through agents
-- through transactions in options, swaps or other
derivatives
-- any combination of the methods listed above, or by any
other legally available means
Agreements with selling shareholders permitting use of this
prospectus may provide that any such offering be effected in an orderly manner
through securities dealers, acting as broker or dealer, selected by us; that
selling shareholders enter into custody agreements with one or more banks with
respect to the common stock offered; and
6
<PAGE> 9
that sales be made only by one or more of the methods described in this
prospectus, as appropriately supplemented or amended when required. The selling
shareholders may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933.
Brokers, dealers, underwriters or agents participating in the sale of
our common stock as principals or agents may receive compensation in the form of
commissions, discounts or concessions from the selling shareholders and/or
purchasers of the common stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). Sales of common stock by such broker, dealer, underwriter or agent
may be made on the NASDAQ Stock Market or any securities exchange from time to
time at prices related to prices then prevailing, at negotiated prices or at
fixed prices, which may be changed. Any such sales may be by block trade. Any
such broker/dealer or agent may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, and any commissions earned by such member
firm may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
Upon our being notified by a selling shareholder that it proposes to
make a block trade, a prospectus supplement, if required, will be filed pursuant
to Rule 424 under the Securities Act of 1933 (or successor rule), disclosing the
name of the broker or dealer, the number of shares of common stock involved, the
price at which such shares of common stock are being sold by such selling
shareholder, and the commissions to be paid by such selling shareholder to such
broker or dealer.
To comply with the securities laws of certain jurisdictions, if
applicable, the common stock will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, such securities may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or any exemption from
registration or qualification is available and is complied with.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for our common stock is The Bank of
New York, located in New York, New York.
LEGAL MATTERS
Robinson, Bradshaw & Hinson, P.A., Charlotte, North Carolina, will
issue an opinion for us regarding the validity of the common stock offered by
this prospectus and certain other legal matters. Russell M. Robinson, II, a
shareholder in the firm of Robinson, Bradshaw & Hinson, P.A., is Chairman of our
Board of Directors. Robinson, Bradshaw & Hinson, P.A. is our principal outside
legal counsel. Certain members of such firm beneficially owned approximately
113,680 shares of our common stock as of the date of this prospectus.
EXPERTS
The financial statements and schedules 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 to such financial statements and schedules, and are
incorporated by reference in reliance upon the authority of such firm as experts
in giving such reports.
7
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TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE ..........2
RISK FACTORS..............................................................3
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS..............5
THE COMPANY...............................................................5
ACQUISITION TERMS.........................................................5
SELLING SHAREHOLDERS......................................................6
PLAN OF DISTRIBUTION BY SELLING SHAREHOLDERS..............................6
REGISTRAR AND TRANSFER AGENT..............................................7
LEGAL MATTERS.............................................................7
EXPERTS...................................................................7
================================================================================
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CARAUSTAR INDUSTRIES, INC.
2,000,000 Shares
COMMON STOCK
[CARAUSTAR LOGO]
----------
PROSPECTUS
----------
___________, 1998
================================================================================
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. 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 Company'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 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 Company's bylaws provide for indemnification to the
fullest extent permitted under the Business Corporation Act, the Company may
indemnify its directors, officers, employees and agents in accordance with
either the statutory or nonstatutory standard. 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 Company has purchased and maintains such insurance.
<PAGE> 12
Item 21. Exhibits.
The following is a list of all the exhibits filed as part of the
Registration Statement. References to the Company mean Caraustar Industries,
Inc.
EXHIBITS
EXHIBIT
NO. EXHIBIT
--- -------
3.01 Amended and Restated Articles of Incorporation of the Company
(Incorporated by reference - Exhibit 3.01 to Annual Report for 1992
on Form 10-K [SEC File No. 0-20646])
3.02 Second Amended and Restated Bylaws of the Company (Incorporated by
reference - Exhibit 3.02 to Registration Statement on Form S-4 [SEC
File No. 333-29937])
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 (included in Exhibit 3.01)
4.03 Article II of the Company's Second Amended and Restated Bylaws
(included in Exhibit 3.02)
4.04 Rights Agreement, dated as of April 9, 1995, between Caraustar
Industries, Inc. and The Bank of New York, as Successor Rights Agent
(Incorporated by reference - Exhibit 1 to Current Report on Form 8-K
dated April 19, 1995 [SEC File No. 0-20646])
5.01 Opinion of Robinson, Bradshaw & Hinson, P.A.
10.01 Note Agreement, dated as of October 1, 1992, between the Company and
the Prudential Insurance Company of America, regarding the Company's
7.89% Senior Subordinated Notes (Incorporated by reference - Exhibit
10.02 to Annual Report for 1992 on Form 10-K [SEC File No. 0-20646])
10.02 Amendment Agreement, dated as of June 2, 1995, between the Company
and the Prudential Insurance Company of America regarding the
Company's 7.89% Senior Subordinated Notes (Incorporated by reference
- Exhibit 10.03 to Report on Form 10-Q for the quarter ended
September 30, 1995 [SEC File No. 0-20646])
10.03 Amendment Agreement, dated as of July 23, 1997, between the Company
and the Prudential Insurance Company of America regarding the
Company's 7.89% Senior Subordinated Notes (Incorporated by reference
- Exhibit 10.03 to Report on Form 10-Q for the quarter ended June 30,
1997 [SEC File No. 0-20646])
10.04 Employment Agreement, dated December 31, 1990, between the Company
and Thomas V. Brown (Incorporated by reference - Exhibit 10.06 to
Registration Statement on Form S-1 [SEC File No. 33-50582])
10.05 Asset Purchase Agreement, dated August 7, 1992, between the Company
and Domtar Gypsum Inc. (Incorporated by reference - Exhibit 10.07 to
Registration Statement on Form S-1 [SEC File No. 33-50582])
10.06 Deferred Compensation Plan, together with copies of existing
individual deferred compensation agreements (Incorporated by
reference - Exhibit 10.08 to Registration Statement on Form S-1 [SEC
File No. 33-50582])
10.07 1987 Executive Stock Option Plan (Incorporated by reference - Exhibit
10.09 to Registration Statement on Form S-1 [SEC File No. 33-50582])
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<PAGE> 13
10.08 1993 Key Employees' Share Ownership Plan (Incorporated by reference -
Exhibit 10.10 to Registration Statement on Form S-1 [SEC File No.
33-50582])
10.09 Energy Purchase Agreement, dated December 18, 1989, between Camden
Paperboard Corporation and Camden Cogen, L.P. (Incorporated by
reference - Exhibit 10.11 to Registration Statement on Form S-1 [SEC
File No. 33-50582])
10.10 Incentive Bonus Plan of the Company (Incorporated by reference -
Exhibit 10.10 to Annual Report for 1993 on Form 10-K [SEC File No.
0-20646])
10.11 Agreement and Plan of Merger, dated as of September 13, 1995, among
the Company, CSAR Acquisition, Inc., GAR Holding Company and each of
the stockholders, warrantholders and optionees of GAR Holding
Company, as amended by Amendment No. 1 to Agreement and Plan of
Merger dated as of October 31, 1995 (Incorporated by reference -
Exhibit 10.11 to Report on Form 10-Q for the quarter ended September
30, 1995 [SEC File No. 0-20646])
10.12 1996 Director Equity Plan of the Company (Incorporated by reference -
Exhibit 10.12 to Report on Form 10-Q for the quarter ended March 31,
1996 [SEC File No. 0-20646])
10.13 Credit Agreement, dated as of July 23, 1997, by and among the
Company, as Borrower, the banks listed therein, Bankers Trust
Company, as Administrative Agent, NationsBank, N.A., as Syndication
Agent, SunTrust Bank, Atlanta, as Documentation Agent, First Union
National Bank, as Managing Agent and each of Credit Lyannais, The
Bank of New York, The Bank of Nova Scotia, The Bank of Tokyo -
Mitsubishi, Ltd., and Wachovia Bank, as Co-Agents (Incorporated by
Reference - Exhibit 10.13 to Report on Form 10-Q for the Quarter
Ended June 30, 1997 [SEC File No. 0-20646])
10.14 1998 Key Employee Incentive Compensation Plan (Incorporated by
reference - Exhibit 10.14 to Annual Report for 1997 on Form 10-K [SEC
File No. 0-20646]
23.01 Consent of Arthur Andersen LLP
23.02 Consent of Robinson, Bradshaw & Hinson, P.A. (included in Exhibit
5.1)
24.01 Power of Attorney (included on the signature pages of the
Registration Statement as initially filed).
Item 22. Undertakings
The undersigned registrant hereby undertakes as follows:
(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, represent 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;
II-3
<PAGE> 14
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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reoffering by persons who may be deemed
underwriters, in addition to the information called for by the other Items of
the applicable form.
(6) That every prospectus (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(7) 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(8) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(9) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-4
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement or amendment thereto to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Austell, State of Georgia on November 5, 1998.
CARAUSTAR INDUSTRIES, INC.
By: /s/ H. Lee Thrash, III
---------------------------------------
H. Lee Thrash, III
Vice President and Chief Financial Officer
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 of 1933, 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 or amendment thereto has been signed by the following
persons and in the capacities indicated on November 5, 1998.
SIGNATURE TITLE
--------- -----
/s/ Thomas V. Brown Director, President and
- ------------------------------------ Chief Executive Officer
Thomas V. Brown (Principal Executive Officer)
/s/ H. Lee Thrash, III Director, Vice President and
- ------------------------------------ Chief Financial Officer
H. Lee Thrash, III (Principal Financial Officer and
Principal Accounting Officer)
/s/ Russell M. Robinson, II Chairman of the Board of Directors
- ------------------------------------
Russell M. Robinson, II
/s/ Bob M. Prillaman Director
- ------------------------------------
Bob M. Prillaman
/s/ Ralph M. Holt, Jr. Director
- ------------------------------------
Ralph M. Holt, Jr.
/s/ James H. Hance, Jr. Director
- ------------------------------------
James H. Hance, Jr.
/s/ John D. Munford Director
- ------------------------------------
John D. Munford
Director
- ------------------------------------
James E. Rogers
II-5
<PAGE> 1
EXHIBIT 5.01
ROBINSON, BRADSHAW & HINSON, P.A.
ATTORNEYS AT LAW
SOUTH CAROLINA OFFICE
101 NORTH TRYON STREET, SUITE 1900 THE GUARDIAN BUILDING
CHARLOTTE, NORTH CAROLINA 28246 ONE LAW PLACE - SUITE 600
TELEPHONE (704) 377-2536 P.O. DRAWER 12070
FAX (704) 378-4000 ROCK HILL, S.C. 29731
TELEPHONE (803) 325-2900
FAX (803) 325-2929
November 6, 1998
Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30106
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-4 filed herewith
(the "Registration Statement") of Caraustar Industries, Inc., a North Carolina
corporation (hereinafter referred to as the "Company"), filed with the
Securities and Exchange Commission for the purpose of registering under the
Securities Act of 1933, as amended (the "Act"), up to 2,000,000 shares of the
Company's Common Stock, par value $.10 per share (the "Shares"), for issuance
from time to time in connection with business acquisitions. We have examined the
Amended and Restated Articles of Incorporation and the Second Amended and
Restated Bylaws, as amended, of the Company, records of proceedings of the Board
of Directors 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 and the
Company's Amended and Restated Articles of Incorporation and Second Amended and
Restated Bylaws not being further amended prior to the issuance of the Shares.
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. In giving such consent, we do not
hereby admit we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
ROBINSON, BRADSHAW & HINSON, P.A.
/s/ Patrick S. Bryant
----------------------------------
Patrick S. Bryant
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-4 of our
reports dated January 29, 1998 included in Caraustar Industries, Inc.'s Form
10-K for the year ended December 31, 1997, and to all references to our firm
included in or made a part of this registration statement.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Atlanta, Georgia
November 3, 1998
