REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARBO CERAMICS INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 72-1100013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6565 MACARTHUR BLVD.
SUITE 1050
IRVING, TEXAS 75039
(972) 401-0090
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
PAUL G. VITEK
SENIOR VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
6565 MACARTHUR BLVD., SUITE 1050
IRVING, TEXAS 75039
(972) 401-0090
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
STEPHEN H. SHALEN, ESQ.
CLEARY, GOTTLIEB, STEEN & HAMILTON
ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10006
(212) 225-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, 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
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE(3)
----------------------------------------- -------------- ---------------- ------------------ ------------------
COMMON STOCK ............................ 750,000 shares $ 32.525 $ 24,393,750 $ 1,973.45
----------------------------------------- -------------- ---------------- ------------------ ------------------
PREFERRED STOCK PURCHASE RIGHTS(2) ......
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(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended,
and based on the average high and low trading prices of the Common Stock on
the New York Stock Exchange on March 27, 2003.
(2) Rights initially trade together with the Common Stock. The value
attributable to the Rights, if any, is reflected in the market price of the
Common Stock.
(3) The registration fee was previously paid in connection with the
registration of 2,875,000 shares of Common Stock registered under
Registration Statement No. 333-35850 initially filed by the registrant on
April 28, 2000 ($23,955.94 in aggregate fees paid), which unsold securities
are hereby deregistered. Accordingly, pursuant to Rule 457(p) under the
Securities Act of 1933, as amended, $1,973.45 is being offset against the
registration fee due for this Registration Statement.
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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.
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell nor does it seek an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED ________, 2003
750,000 SHARES
CARBO CERAMICS
COMMON STOCK
All of the shares of common stock described in this prospectus are being offered
for sale from time to time by the selling stockholders named in this prospectus.
CARBO Ceramics will not receive any of the proceeds from the sale of the shares.
The selling stockholders may sell shares of common stock at various times and in
various types of transactions, including sales in the open market, sales in
negotiated transactions and sales by a combination of these methods. Shares may
be sold at the market price of the common stock at the time of a sale, at prices
relating to the market price over a period of time or at prices negotiated with
the buyers of shares.
The selling stockholders will pay all brokerage fees and commissions and similar
sale-related expenses. CARBO Ceramics is paying all other costs, fees and
expenses relating to the registration of the shares with the Securities and
Exchange Commission and the sale of those shares.
The common stock is listed on the New York Stock Exchange under the symbol
"CRR". The last reported sale price of the common stock on the New York Stock
Exchange on March 27, 2003 was $32.82 per share.
Investing in our common stock involves risks.
See "Risk Factors" beginning on page 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is , 2003
No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. This prospectus is an offer to sell
or a solicitation of an offer to buy only the shares offered by this prospectus,
but only under circumstances and in jurisdictions where it is lawful to do so.
The information contained in this prospectus is current only as of its date.
TABLE OF CONTENTS
PAGE
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Incorporation of Certain Documents By Reference ......................... 2
Cautionary Statement Regarding Forward-Looking Statements ............... 3
Carbo Ceramics Inc. ..................................................... 3
Risk Factors ............................................................ 4
Use of Proceeds ......................................................... 6
Selling Stockholders .................................................... 7
Plan of Distribution .................................................... 7
Legal Matters ........................................................... 9
Experts ................................................................. 9
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may review
the reports and other information we have filed without charge at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies
may also be obtained from the Public Reference Section of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates or at the SEC's web
site at http://www.sec.gov. For further information on the operation of the
public reference rooms, please call 1-800-SEC-0330.
We have chosen to "incorporate by reference" in this prospectus
information we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we include in this prospectus or that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below:
o Our Annual Report on Form 10-K for the year ended December 31, 2002;
and
o The descriptions of our common stock and our preferred stock purchase
rights contained in our three registration statements on Form 8-A (File
No. 001-15903), and any amendments or reports filed for the purpose of
updating those descriptions.
We also incorporate by reference any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), until the sale of all the shares of common
stock described in this prospectus.
You may request a copy of these filings (other than exhibits to these
filings, unless the exhibits are specifically incorporated by reference) at no
cost by writing or telephoning us as follows:
6565 MacArthur Blvd., Suite 1050
Irving, Texas 75039
(972) 401-0090
Information contained on our internet web site will not be deemed to be
a part of this prospectus.
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference "forward-looking
statements," such as statements regarding future events, anticipated financial
performance and other non-historical facts. The words "believe", "expect",
"anticipate", "project" and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, each of which speaks only as of the date the
statement was made. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
statements. These risks and uncertainties include, but are not limited to,
general economic and business conditions, our ability to market existing and new
products successfully, changes in the demand for oil and natural gas, the
development of alternative stimulation techniques or alternative proppants for
use in hydraulic fracturing, our potential exposure to litigation and other
risks and factors set forth in this prospectus and in our Exchange Act filings
that are incorporated by reference in this prospectus.
CARBO CERAMICS INC.
CARBO Ceramics Inc. was formed in 1987 to acquire the assets of
Standard Oil Proppants Company, LP, a joint venture between two ceramics
proppant manufacturers. Since its founding in 1987, CARBO Ceramics has become
the world's largest producer and supplier of ceramic proppant for use in the
hydraulic fracturing of natural gas and oil wells. Demand for ceramic proppant
depends primarily upon the demand for natural gas and oil and on the number of
natural gas and oil wells drilled, completed or recompleted worldwide. More
specifically, the demand for ceramic proppant is dependent on the number of oil
and gas wells that are hydraulically fractured to stimulate production.
3
RISK FACTORS
An investment in our common stock involves a number of risks. You
should consider carefully the following information about these risks, together
with the other information included and incorporated by reference in this
prospectus, before buying shares of common stock.
OUR BUSINESS AND FINANCIAL PERFORMANCE DEPEND ON THE LEVEL OF ACTIVITY IN THE
NATURAL GAS AND OIL INDUSTRIES.
Our operations are materially dependent upon the levels of activity in
natural gas and, to a lesser extent, oil exploration, development and
production. These activity levels are affected by both short-term and long-term
trends in natural gas and oil prices. In recent years, natural gas and oil
prices and, therefore, the level of exploration, development and production
activity, have experienced significant fluctuations. Worldwide economic,
political and military events, including war, terrorist activity, events in the
Middle East and initiatives by the Organization of Petroleum Exporting
Countries, have contributed, and are likely to continue to contribute, to price
volatility. A prolonged reduction in natural gas and oil prices would depress
the level of natural gas and oil exploration, development, production and well
completions activity and result in a corresponding decline in the demand for our
products. Such a decline could have a material adverse effect on our results of
operations and financial condition.
OUR BUSINESS AND FINANCIAL PERFORMANCE COULD SUFFER IF NEW PROCESSES ARE
DEVELOPED TO REPLACE HYDRAULIC FRACTURING.
Substantially all of our products are proppants used in the completion
and recompletion of natural gas and oil wells through the process of hydraulic
fracturing. The development of new processes for the completion of natural gas
and oil wells leading to a reduction in or discontinuation of the use of the
hydraulic fracturing process could cause a decline in demand for our products
and could have a material adverse effect on our results of operations and
financial condition.
WE MAY BE ADVERSELY AFFECTED BY DECREASED DEMAND FOR CERAMIC PROPPANT OR THE
DEVELOPMENT BY OUR COMPETITORS OF EFFECTIVE ALTERNATIVE PROPPANTS.
Ceramic proppant is a premium product capable of withstanding higher
pressure and providing more highly conductive fractures than mined sand, which
is the most commonly used proppant type. Although we believe that the use of
ceramic proppant generates higher production rates and more favorable production
economics than mined sand, a significant shift in demand from ceramic proppant
to mined sand could have a material adverse effect on our results of operations
and financial condition. The development and use of effective alternative
proppant could also cause a decline in demand for our products, and could have a
material adverse effect on our results of operations and financial condition.
WE OPERATE IN A COMPETITIVE MARKET.
We compete with two other principal suppliers of ceramic proppant, as
well as with suppliers of sand and resin-coated sand for use as proppant, in the
hydraulic fracturing of natural gas and oil wells. The proppant market is highly
competitive and no one supplier is dominant.
4
WE RELY UPON, AND RECEIVE A SIGNIFICANT PERCENTAGE OF OUR REVENUES FROM, A
LIMITED NUMBER OF KEY CUSTOMERS.
During 2002, our largest customers were, in alphabetical order, BJ
Services Company, Halliburton Energy Services, Inc. and Schlumberger, the three
largest participants in the worldwide petroleum pressure pumping industry.
Although the end users of our products are the operators of natural gas and oil
wells that hire the pressure pumping service companies to hydraulically fracture
wells, these three customers accounted collectively for approximately 79% of our
2002 revenues. We generally supply our pumping service industry customers with
products on a just-in-time basis, with transactions governed by individual
purchase orders. Continuing sales of product depend on our direct customers and
the end user well operators being satisfied with both product quality and
delivery performance. Although we believe our relations with our customers and
the major well operators are excellent, a material decline in the level of sales
to any one of our major customers due to unsatisfactory product performance,
delivery delays or any other reason could have a material adverse effect on our
results of operations and financial condition.
WE RELY ON CERTAIN PATENTS.
We own six issued United States patents and three foreign patents.
These patents generally cover the manufacture and use of our products. The U.S.
patents expire at various times in the years 2003 through 2010, with the two key
product patents expiring in 2006 and 2009. We believe that these patents have
been and will continue to be important in enabling us to compete in the market
to supply proppant to the natural gas and oil industry. There can be no
assurance that our patents will not be challenged or circumvented by competitors
in the future or will provide us with any competitive advantage, or that other
companies will not be able to market functionally similar products without
violating our patent rights. We intend to enforce and have in the past
vigorously enforced our patents. We may be involved from time to time in the
future, as we have been in the past, in litigation to determine the
enforceability, scope and validity of our patent rights. Any such litigation
could result in substantial cost to us and diversion of effort by our management
and technical personnel. Furthermore, the invalidation of our United States
patent rights and the subsequent entry of additional competitors into the market
to supply ceramic proppant could have a material adverse effect on our results
of operations and financial condition.
THE MARKET PRICE OF OUR STOCK MAY DECLINE DUE TO THE LARGE NUMBER OF SHARES
ELIGIBLE FOR FUTURE SALE.
Although we cannot predict the timing or amount of future sales of
common stock or the effect that the availability of such shares will have on the
market price from time to time, sales of significant amounts of common stock in
the public market, or the perception that future sales could occur, could
adversely affect the market price of the common stock.
OUR ORGANIZATIONAL DOCUMENTS, PROVISIONS OF DELAWARE LAW AND OUR SHAREHOLDER
RIGHTS PLAN MAY DELAY, DETER OR PREVENT A CHANGE IN CONTROL OF THE COMPANY.
Various provisions of our organizational documents and of the law of
Delaware, where we are incorporated, may delay, deter or prevent a change in
control of the Company not approved by our board of directors. The authorization
of undesignated preferred stock makes it possible for our board of directors to
issue preferred stock with voting or other rights or preferences that could
impede the success of any attempt to change control of the Company. There also
are a substantial number of authorized but unissued shares of common stock that
could be issued for such purpose.
Section 203 of the Delaware general corporation law imposes
restrictions on mergers and other business combinations between the Company and
any holder of 15% or more of the common stock.
5
In addition, we have adopted a shareholder rights plan under which each
holder of common stock also receives rights. Under the shareholder rights plan,
if any person acquires beneficial ownership of 15% or more of the outstanding
shares of common stock (with certain exceptions), that person will become an
"acquiring person." As a result, holders of rights other than the acquiring
person and some other transferees and related persons will be entitled to
purchase shares of common stock at one-half their market price. While the
shareholder rights plan is designed to protect shareholders in the event of an
unsolicited offer and other takeover tactics which, in the opinion of the board
of directors, could impair its ability to represent shareholder interests, the
provisions of the shareholder rights plan may render an unsolicited takeover of
the Company more difficult or less likely to occur or might prevent such a
takeover.
These provisions of our organizational documents, Delaware law and our
shareholder rights plan could discourage potential acquisition proposals and
could delay, deter or prevent a change in control of the Company. These
provisions also could make it more difficult for third parties to remove and
replace the members of the board of directors. Moreover, these provisions could
diminish the opportunities for a shareholder to participate in tender offers,
including tender offers at prices above the then-current market price of the
common stock, and may also inhibit increases in the market price of the common
stock that could result from takeover attempts or speculation.
THE MARKET PRICE OF THE COMMON STOCK WILL FLUCTUATE, AND COULD FLUCTUATE
SIGNIFICANTLY.
The market price of the common stock will fluctuate, and could
fluctuate significantly, in response to various factors and events, including
the following:
o the liquidity of the market for our common stock;
o differences between our actual financial or operating results
and those expected by investors and analysts;
o changes in analysts' recommendations or projections;
o new statutes or regulations or changes in interpretations of
existing statutes and regulations affecting our business;
o changes in general economic or market conditions; and
o broad market fluctuations.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM RESULTS ANTICIPATED IN
FORWARD-LOOKING STATEMENTS WE MAKE.
Some of the statements included or incorporated by reference in this
prospectus are forward-looking statements. These forward-looking statements
include statements relating to trends in the natural gas and oil industries, the
demand for ceramic proppant and our performance in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business"
sections of our annual report on Form 10-K for the year ended December 31, 2002.
In addition, we have made and may continue to make forward-looking statements in
other filings with the Securities and Exchange Commission, and in written
material, press releases and oral statements issued by us or on our behalf.
Forward-looking statements include statements regarding the intent, belief or
current expectations of the Company or its officers. Our actual results could
differ materially from those anticipated in these forward-looking statements.
See "Cautionary Statement Regarding Forward-Looking Statements."
6
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of
common stock by the selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth the name of each selling stockholder and
information regarding the beneficial ownership of the common stock by the
selling stockholders as of the date hereof, and as adjusted to reflect the sale
of shares of common stock covered hereby. The information in the table below has
been calculated in accordance with Rule l3d-3 under the Exchange Act. Except as
described below, the persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as beneficially owned by
them.
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO SALE OF SHARES COVERED SHARES AFTER SALE OF SHARES COVERED
BY THIS PROSPECTUS COVERED BY THIS PROSPECTUS
------------------------------- BY THIS ----------------------------
SHARES PERCENT PROSPECTUS SHARES(3) PERCENT
---------- ------- ---------- --------- -------
Susan F. Morris(1) 500,000 3.2% 500,000 -- --
Robert S. Rubin(2) 1,098,900 7.1% 250,000 848,900 5.5%
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(1) Mrs. Morris is the wife of William C. Morris, the Company's Chairman of the
Board. Mr. Morris is the beneficial owner of 3,288,900 shares of common
stock of the Company. Shares shown as beneficially owned by Mr. Morris
include 595,000 shares of Common Stock owned by Mrs. Morris and certain
charitable foundations as to which Mr. Morris disclaims any beneficial
ownership.
(2) Mr. Rubin is a director of the Company.
(3) We do not know when or in what amounts the selling stockholders may offer
shares for sale. Either of the selling stockholders may elect not to sell
any or all of the shares covered by this prospectus.
PLAN OF DISTRIBUTION
The common stock may be sold from time to time:
o directly by any selling stockholder to one or more purchasers;
o to or through underwriters, dealers or brokers;
o through agents on a best-efforts basis or otherwise; or
o through a combination of such methods of sale.
If the selling stockholders sell common stock through underwriters,
dealers, brokers or agents, those underwriters, dealers, brokers or agents may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders and/or the purchasers of the common stock.
The common stock may be sold from time to time:
o in one or more transactions at a fixed price or prices, which
may be changed;
o at prevailing market prices at the time of sale or at prices
related to such prevailing prices;
o at varying prices determined at the time of sale; or
o at negotiated prices.
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The common stock may be sold:
o in transactions on any national securities exchange or
quotation service on which the common stock may be listed or
quoted at the time of sale;
o in transactions in the over-the-counter market;
o in transactions otherwise than on such exchanges or services
or in the over-the-counter market;
o in block transactions in which the broker or dealer so engaged
will attempt to sell the common stock as agent but may
position and resell a portion of the block as principal to
facilitate the transaction, or in crosses;
o through purchases by a broker or dealer as principal and
resale by such broker or dealer for its own account pursuant
to this prospectus;
o in ordinary brokerage transactions and transactions in which
the broker solicits purchasers;
o through the writing of options; or
o through other types of transactions.
At the time a particular offering of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any underwriters, dealers, brokers or agents and
any discounts, commissions or concessions allowed or reallowed or paid to
brokers or dealers. In connection with sales of the common stock or otherwise,
either selling stockholder may:
o enter into hedging transactions with brokers, dealers or
others, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume;
o sell short and deliver common stock to close out such short
positions; or
o loan or pledge shares of common stock to brokers, dealers or
others that in turn may sell that common stock.
The selling stockholders may pledge or grant a security interest in
some or all shares of common stock owned, and in the event of a default in the
performance of the secured obligations, the pledgees or secured parties may
offer and sell the common stock from time to time pursuant to this prospectus.
The selling stockholders may also transfer and donate shares of common stock in
other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling stockholders for purposes of this
prospectus. The selling stockholders may sell short common stock and may deliver
this prospectus in connection with such short sales and use the common stock
covered by this prospectus to cover such short sales. In addition, any shares of
common stock covered by this prospectus that qualify for sale pursuant to Rule
144, Rule 144A or any other available exemption from registration under the
Securities Act of 1933, as amended, may be sold under Rule 144, Rule 144A or any
such other available exemption.
The selling stockholders and any underwriters, dealers, brokers, or
agents who participate in the distribution of the common stock may be deemed to
be "underwriters" within the meaning of the
8
Securities Act and any profits on the sale of the common stock by them and any
discounts, commissions or concessions received by any such underwriters,
dealers, brokers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in those jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act, and
the rules and regulations thereunder, including, without limitation, Regulation
M which may limit the timing of purchases and sales of the common stock by the
selling stockholders and any other such person. Furthermore, Regulation M under
the Exchange Act may restrict the ability of any person engaged in a
distribution of the common stock to engage in market-making activities with
respect to the common stock being distributed for a period of up to five
business days prior to the commencement of such distribution. All of the
foregoing may affect the marketability of the common stock and the ability of
any person or entity to engage in market-making activities with respect to the
common stock.
The Company will pay all expenses of this registration statement,
provided that the selling stockholders will pay any broker's commission, agency
fee or underwriter's discount or commission.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
will be passed upon by Cleary, Gottlieb, Steen & Hamilton, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2002, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
audited financial statements are incorporated by reference in reliance on Ernst
& Young LLP's report, given on their authority as experts in accounting and
auditing.
9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in
connection with the issuance and distribution of the common stock being
registered, other than underwriting discounts and commissions.
Securities and Exchange Commission registration fee ................ $ 1,973.45
Legal fees and expenses ............................................ $25,000.00
Accounting fees and expenses ....................................... $10,000.00
Miscellaneous ...................................................... $ 5,000.00
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Total ................................................ $41,973.45
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides as follows:
(a) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly
II-1
and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any, as
the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as such person would have respect to such constituent corporation if
its separate existence had continued.
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(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "servicing at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expense proved by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
Reference is made to the Registrant's Certificate of Incorporation and
Bylaws which require the Company to indemnify the persons whom it may indemnify
under Section 145 of the Delaware General Corporation Law. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Company's
Certificate of Incorporation includes a provision that eliminates the personal
liability of its directors, to the fullest extent permitted by Delaware law, for
monetary damages for breach of fiduciary duty as a director. This provision does
not affect the availability of equitable remedies such as injunctive relief or
rescission. Further, such limitation of liability also does not affect a
director's standard of conduct or responsibilities under any other laws,
including the Federal securities laws.
The Registrant also carries liability insurance covering officers and
directors.
ITEM 16. EXHIBITS.
4.1 Specimen Certificate of Common Stock of the Company
(incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-1 (File No. 333-1884) filed by the
Company).
4.2 Certificate of Designations relating to the Series A Preferred
Stock of the Company (incorporated by reference to Exhibit 2
to the Registration Statement on Form 8-A (File No. 001-15903)
filed by the Company).
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the
Company, as to the legality of the shares of Common Stock
being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cleary, Gottlieb, Steen & Hamilton (included in
opinion filed as Exhibit 5.1).
24.1 Powers of Attorney (included on signature pages).
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ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(A) (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 this
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 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
registration statement or any material change to such information in this
registration statement; provided, however, that the undertakings set forth in
clauses (i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered 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.
(B) 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.
(C) 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 provisions described under
Item 15 above, 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
II-4
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.
(D) (1) That, for purposes of determining any liability under
the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to
be part of this registration statement as of the time it was declared effective.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on March 28, 2003.
CARBO CERAMICS INC.
By: /s/ C. Mark Pearson
--------------------------------------------
Name: C. Mark Pearson
Title: President and Chief Executive Officer
By: /s/ Paul G. Vitek
--------------------------------------------
Name: Paul G. Vitek
Title: Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints C. Mark Pearson and Paul G. Vitek,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign (1) any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents or
instruments necessary or advisable in connection therewith, and (2) a
Registration Statement, and any and all amendments thereto, relating to the
offering covered hereby filed pursuant to Rule 462(b) under the Securities Act
of 1933, with the Securities and Exchange Commission, each of said
attorneys-in-fact and agents to have the power to act with or without the others
and to have full power and authority to do and perform in the name and on behalf
of each of the undersigned every act whatsoever necessary or advisable to be
done in and about the premises, as fully to all intents and purposes as any of
the undersigned might or could do in person, and we hereby ratify and confirm
our signatures as they may be signed by our said attorneys-in-fact and agents or
each of them to any and all such amendments and instruments.
This Power of Attorney may be executed in multiple counterparts, each
of which shall be deemed an original, but which taken together shall constitute
one instrument.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ William C. Morris Chairman of the Board March 28, 2003
------------------------
William C. Morris
/s/ C. Mark Pearson President, Chief Executive Officer March 28, 2003
------------------------ and Director
C. Mark Pearson (Principal Executive Officer)
/s/ Paul G. Vitek Senior Vice President, Finance and March 28, 2003
------------------------ Chief Financial Officer
Paul G. Vitek (Principal Financial and
Accounting Officer)
/s/ Claude E. Cooke, Jr. Director March 28, 2003
------------------------
Claude E. Cooke, Jr.
/s/ John J. Murphy Director March 28, 2003
------------------------
John J. Murphy
/s/ Robert S. Rubin Director March 28, 2003
------------------------
Robert S. Rubin
/s/ Jesse P. Orsini Director March 28, 2003
------------------------
Jesse P. Orsini
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Specimen Certificate of Common Stock of the Company (incorporated by
reference to Exhibit 4.1 to the Registration Statement on Form S-1
(File No. 333-1884) filed by the Company).
4.2 Certificate of Designations relating to the Series A Preferred Stock of
the Company (incorporated by reference to Exhibit 2 to the Registration
Statement on Form 8-A (File No. 001-15903) filed by the Company).
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the Company,
as to the legality of the shares of Common Stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cleary, Gottlieb, Steen & Hamilton (included in opinion
filed as Exhibit 5.1).
24.1 Powers of Attorney (included on signature pages).