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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1998
REGISTRATION NO. 333-49481
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POOL ENERGY SERVICES CO.
(Exact Name Of Registrant As Specified In Its Charter)
<TABLE>
<S> <C>
TEXAS 76-0263755
(State Or Other Jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
G. GEOFFREY ARMS
VICE PRESIDENT AND GENERAL COUNSEL
POOL ENERGY SERVICES CO.
10375 RICHMOND AVENUE
10375 RICHMOND AVENUE HOUSTON, TEXAS 77042
HOUSTON, TEXAS 77042 (713) 954-3000
(713) 954-3000 (Name, address, including zip code, and
(Address, including zip code, and telephone
telephone number, including area number, including area code, of agent for
code, of registrant) service)
</TABLE>
Copy to:
DAVID N. BROWN
COVINGTON & BURLING
1201 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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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.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 20, 1998
769,231 SHARES
POOL ENERGY SERVICES CO.
COMMON STOCK
This Prospectus relates to the offering from time to time by certain
stockholders of the Company identified under "Selling Stockholders"
(collectively, the "Selling Stockholders") of up to an aggregate of 769,231
shares of common stock, no par value ("Common Stock"), of Pool Energy Services
Co., a Texas corporation (the "Company"). The shares of Common Stock offered
hereby (the "Offered Securities") were privately issued by the Company in
connection with the acquisition of all the outstanding capital stock of Sea Mar,
Inc. ("Sea Mar"), which occurred on March 31, 1998 (the "Sea Mar Acquisition").
The purchase price for Sea Mar consisted of approximately $75.9 million in cash
(including an estimated $14.7 million in post-closing adjustments) and 1,538,462
shares of Common Stock. Pursuant to a certain Stock Purchase Agreement among the
Company, Pool Company, Sea Mar, Inc. and the former shareholders of Sea Mar,
dated as of February 10, 1998 (the "Sea Mar Stock Purchase Agreement") the
Company agreed to register 769,231 of the 1,538,462 shares of Common Stock
issued to the Selling Stockholders in the Sea Mar Acquisition. See "Selling
Stockholders" and "Plan of Distribution" for information relating to the Selling
Stockholders and this offering.
The Selling Stockholders have not advised the Company of any specific plans
for the distribution of the Offered Securities. The Offered Securities may be
sold from time to time pursuant to this Prospectus by the Selling Stockholders.
The Offered Securities may be sold by the Selling Stockholders in ordinary
brokerage transactions, in negotiated transactions, or through a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
relating to such prevailing prices or at negotiated prices. See "Plan of
Distribution." The Offered Securities may be sold from time to time in
transactions on the Nasdaq National Market of The Nasdaq Stock Market (the
"Nasdaq Market") at the market price then prevailing, although sales may also be
made in negotiated transactions or otherwise. The Selling Stockholders and the
brokers or dealers through whom the sales of the Offered Securities may be made
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"), and the commissions
or discounts and other compensation in connection with any such sale by the
brokers or dealers may be regarded as underwriters' compensation. The Company
will not receive any part of the proceeds of the sales from the offering by the
Selling Stockholders. See "Plan of Distribution."
All expenses of registration incurred in connection with this offering are
being borne by the Company, except that discounts and commissions incurred by
the Selling Stockholders will be borne by the Selling Stockholders. See "Plan of
Distribution." None of the Offered Securities have been registered prior to the
filing of the Registration Statement of which this Prospectus is a part.
The Common Stock of the Company is traded on the Nasdaq Market under the
symbol "PESC." On May 18, 1998, the last reported price of the Common Stock on
the Nasdaq Market was $21 7/16 per share. The Offered Securities sold pursuant
to this Prospectus are listed on the Nasdaq Market.
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SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), which can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and
at the regional offices of the Commission at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and at Seven World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549 at prescribed rates. The Company is an electronic filer
under the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system
maintained by the Commission. The Commission maintains a Website
(http://www.sec.gov) on the Internet that contains reports, proxy and
information statements and other information regarding companies that file
electronically with the Commission. In addition, documents filed by the Company
can be inspected at the offices of the Nasdaq Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission, a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Offered Securities. This Prospectus
does not contain all of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and the exhibits thereto,
which may be obtained at the public reference facilities maintained by the
Commission as provided in the preceding paragraph, for further information with
respect to the Company and the securities offered hereby. Statements contained
herein concerning the provisions of such documents are necessarily summaries of
such documents, and each such statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 0-18437), are incorporated in
this Prospectus by reference and shall be deemed to be a part hereof:
(a) Annual Report on Form 10-K for the year ended December 31, 1997;
(b) Current Report on Form 8-K filed with the Commission on March 11,
1998;
(c) Current Report on Form 8-K filed with the Commission on April 6,
1998;
(d) the description of the Common Stock appearing in the Company's
Registration Statement on Form 8-A dated April 9, 1990, as
amended, and filed with the Commission under the Exchange Act; and
(e) Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1998.
All documents filed by the Company with the Commission pursuant to sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby (by the
filing of a post-effective amendment to the Registration Statement which
indicates that all securities offered hereby have been sold, or which
deregisters all securities then remaining unsold) shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such document. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
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The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all documents that have
been incorporated herein by reference (not including exhibits to the documents
that have been incorporated herein by reference unless such exhibits are
specifically incorporated by reference in the documents this Prospectus
incorporates). Requests should be directed to Pool Energy Services Co., 10375
Richmond Avenue, Houston, Texas 77042, attention: Mr. David Oatman (telephone
number: (713) 954-3316).
DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION
The statements included in this Prospectus regarding future financial
performance and results of operations and other statements that are not
historical facts are forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Generally, these
statements relate to business plans or strategies, projected or anticipated
benefits or other consequences of such plans or strategies, or projections
involving anticipated revenues, expenses, earnings, levels of capital
expenditures or other aspects of operating results. Statements to the effect
that the Company or management "anticipates," "believes," "estimates,"
"expects," "predicts," or "projects" a particular result or course of events, or
that such result or course of events "should" occur, and similar expressions,
are also intended to identify forward-looking statements. Such statements are
subject to numerous risks, uncertainties and assumptions, including but not
limited to uncertainties relating to industry and market conditions, prices of
crude oil and natural gas, foreign exchange and currency fluctuations, political
instability in foreign jurisdictions, the ability of the Company to integrate
newly acquired operations and other factors discussed in this Prospectus and in
the Company's filings with the Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those stated. Important factors that
could cause actual results to differ materially from the Company's expectations
are disclosed in "Risk Factors" and elsewhere in this Prospectus.
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THE COMPANY
Pool Energy Services Co. is a leading worldwide provider of well-servicing,
workover, drilling and related services for both land and offshore markets to a
diverse group of multi-national, foreign national and independent oil and
natural gas producers. The Company performs the ongoing maintenance and major
overhauls necessary to optimize the level of production from existing oil and
natural gas wells and provides certain ancillary services during the drilling
and completion of new oil and natural gas wells. The Company also provides
contract drilling services in Alaska, the Gulf of Mexico, certain international
locations and on occasion in the lower forty-eight states. Typically, the
Company provides a well-servicing, workover or drilling rig, the crew to operate
the rig and such other specialized equipment as may be needed to meet a
customer's requirements. The Company also owns and operates a fleet of offshore
support vessels.
As of March 31, 1998, the Company's worldwide rig fleet included 791 land
well-servicing/workover rigs, 27 land drilling rigs and 27 offshore rigs (15
platform workover rigs, five platform drilling rigs and seven jack-up rigs). The
Company also owns or leases and operates 370 fluid hauling trucks, 1,060 fluid
storage tanks, 14 salt water disposal wells and other auxiliary equipment used
in its domestic operations. As a result of the Sea Mar Acquisition, the Company
also now operates a fleet of 23 support vessels.
The Company operates both domestically and internationally. In the United
States, the Company operates in several oil and natural gas producing states,
with specific concentration onshore in Texas, California, Oklahoma, New Mexico,
North Dakota, Montana, Utah and Alaska, and offshore in the Gulf of Mexico,
offshore California and in the Cook Inlet of Alaska. Revenues from domestic
operations represented approximately 85% of the Company's pro forma 1997
revenues. International markets where the Company has an established presence
include land operations in Argentina, Ecuador, Guatemala, Oman, Pakistan and
Saudi Arabia and offshore operations in Australia, Malaysia and Saudi Arabia.
Revenues from international operations represented approximately 15% of the
Company's pro forma 1997 revenues.
The Company is a Texas corporation with its principal offices located at
10375 Richmond Avenue, Houston, Texas 77042. Its telephone number is (713)
954-3000.
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RECENT DEVELOPMENTS
SEA MAR ACQUISITION
The Company agreed, on February 10, 1998, to acquire all of the outstanding
capital stock of Sea Mar pursuant to the Sea Mar Stock Purchase Agreement. On
March 31, 1998, the Company acquired Sea Mar for approximately $75.9 million in
cash (including an estimated $14.7 million in post-closing adjustments) and
1,538,462 shares of Common Stock. In addition, the Company agreed to pay
additional cash consideration contingent upon Sea Mar exceeding certain
financial targets for the fiscal years ending December 31, 1998 and 1999, up to
a maximum of $10 million in each year. The Company also repaid Sea Mar's
existing debt of $15.7 million. The Sea Mar Acquisition was accounted for under
the purchase method of accounting.
Of the 1,538,462 shares of Common Stock issued in connection with the Sea
Mar Acquisition, a total of 769,231 shares were delivered directly to the
Selling Stockholders following the closing of the Sea Mar Acquisition. Upon the
Registration Statement becoming effective, these shares will be eligible to be
resold in the public markets. The remaining 769,231 shares are held in escrow to
secure potential claims by the Company for indemnification under the Sea Mar
Stock Purchase Agreement. The shares held in escrow or the proceeds from the
sale thereof must be held in escrow until March 31, 2000. Under the terms of the
Escrow Agreement such shares may not be sold until March 31, 1999.
Sea Mar operates offshore support vessels in the Gulf of Mexico. Sea Mar's
services include the marine transportation of drilling materials, supplies and
crews for offshore rig operations and support for other offshore facilities. Sea
Mar also provides offshore logistical support to drilling and workover
operations, pipelaying and other construction, production platforms and
geophysical operations. Sea Mar's existing fleet consists of 23 support vessels,
including one anchor handling/tug supply vessel, 13 supply vessels, seven
mini-supply vessels and two research vessels. In addition, during 1997 a
contract was entered into with a marine shipbuilder for the construction of ten
additional vessels at an aggregate cost of $77.6 million, net of deposits. These
new vessels are scheduled to be delivered in 1998, 1999 and 2000.
NOTE OFFERING
Initially, the Company considered funding the Sea Mar Acquisition through a
private placement of the Company's debt securities or through borrowings under
the Company's existing syndicated bank revolving credit agreement (the "Credit
Agreement"). In contemplation of the latter possibility and in view of the
Company's increased capital requirements following the Sea Mar Acquisition, the
Credit Agreement was amended to increase the maximum availability thereunder
from $130 million to $180 million. On March 31, 1998, the Company completed a
private placement of $150,000,000 aggregate principal amount of its 8 5/8%
Senior Subordinated Notes due 2008 (the "Notes") pursuant to a purchase
agreement, dated March 26, 1998 by and among SBC Warburg Dillon Read Inc.,
Morgan Stanley & Co., Incorporated, and Johnson Rice & Company L.L.C. (the
"Initial Purchasers"), and the Company and the guarantors named therein (the
"Note Offering"). The net proceeds of the Note Offering were used to effect the
Sea Mar Acquisition, to repay outstanding debt of Sea Mar and to reduce the
outstanding balance under the Credit Agreement. The Notes were issued pursuant
to an Indenture dated March 31, 1998, by and among the Company, the guarantors
named therein and Marine Midland Bank as Trustee (the "Indenture").
RISK FACTORS
In addition to considerations bearing on their individual situations, the
information set forth elsewhere in this Prospectus and the documents
incorporated by reference herein, prospective purchasers of the Offered
Securities should carefully consider the risk factors set forth below in
evaluating an investment in the Offered Securities:
SUBSTANTIAL LEVERAGE
As a result of the Sea Mar Acquisition and the Note Offering, the Company
has substantial leverage. At March 31, 1998, after giving effect to the Sea Mar
Acquisition, the Note Offering, and the application of net
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proceeds therefrom, the total debt of the Company was $170 million and its
stockholders' equity was $276 million. Subject to the restrictions in the
Indenture and the Credit Agreement, the Company may incur additional
indebtedness from time to time to provide working capital, to finance
acquisitions or capital expenditures and for other corporate purposes. The level
of the Company's indebtedness may affect owners of the Offered Securities in a
number of ways including: (i) a substantial portion of the Company's cash flow
from operations must be dedicated to debt service and will not be available for
other purposes, (ii) the Company's ability to obtain additional debt financing
in the future for working capital, acquisitions or capital expenditures may be
limited, (iii) certain of the Company's indebtedness contains financial and
other restrictive covenants which, if breached, could result in an event of
default under such indebtedness, (iv) the Company's borrowings under the Credit
Agreement are and will continue to be at variable rates of interest, which
causes the Company to be vulnerable to increases in interest rates and (v) the
Company's level of indebtedness could limit its flexibility in planning for and
reacting to, and make it more vulnerable to, competitive pressures and changes
in industry and economic conditions generally.
The Company's ability to pay interest and principal on the Notes and to
satisfy its other debt obligations will depend upon its future operating
performance. Future operating performance will be affected by prevailing
economic conditions and financial, business and other factors, many of which are
beyond the Company's control. Based on the current level of operations and
anticipated future growth, the Company believes that its operating cash flow,
together with borrowings under the Credit Agreement, will be sufficient to meet
its operating expenses and its capital debt service requirements. There can be
no assurance that the Company's business will continue to generate cash flow at
or above current levels or that anticipated future growth can be achieved. If
the Company is unable to generate sufficient cash flow to service its
indebtedness and fund its capital or other expenditures, it will be forced to
adopt an alternative strategy that may include reducing or delaying capital
expenditures, selling assets or refinancing of its indebtedness (including the
Notes), or seeking additional equity or debt capital. There can be no assurance
that any of these strategies could be effected on satisfactory terms, if at all,
particularly in view of the Company's substantial leverage following the Sea Mar
Acquisition and the Note Offering.
RESTRICTIVE COVENANTS
The terms of the Credit Agreement, the Indenture and the other agreements
governing the Company's indebtedness impose operating and financing restrictions
on the Company. Such restrictions affect, and in many respects limit or
prohibit, among other things, the ability of the Company to incur additional
indebtedness, pay dividends or repurchase stock or make other distributions,
create liens, make certain investments, sell assets, or enter into mergers or
consolidations. The Credit Agreement requires the Company to comply with certain
financial ratios and tests under which the Company is required to maintain a
minimum net worth, a minimum interest coverage ratio, a minimum fixed charge
coverage ratio, a maximum leverage ratio and a maximum debt-to-equity ratio.
During the past year, the Company has been in compliance with each of these
covenants and has not been at risk of not being in compliance. The restrictions
imposed by the Credit Agreement could limit the ability of the Company to plan
for or react to market conditions or meet extraordinary capital needs or
otherwise could restrict corporate activities. There can be no assurance that
such restrictions will not adversely affect the Company's ability to finance its
future operations or capital needs or to engage in other business activities
that would be in the interest of the Company. Moreover, any default under the
documents governing the indebtedness of the Company could have a significant
adverse effect on the market value of the Offered Securities.
VOLATILITY OF OIL AND NATURAL GAS MARKET
Demand for the Company's services depends on conditions in the worldwide
oil and natural gas industry, particularly on the level of development,
production and exploration activity of, and the corresponding spending by, oil
and natural gas companies. Such activity and expenditure levels are directly
impacted by trends in oil and natural gas prices, expectations about future
prices, governmental regulations, global weather conditions (including the
effects of El Nino), worldwide political, military and economic conditions,
including the ability of the Organization of Petroleum Exporting Countries
("OPEC") to set and maintain production
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levels and prices, the level of production by non-OPEC countries, the policies
of various governments regarding the exploration and development of their oil
and natural gas reserves and the level of demand for oil and natural gas in
various countries and geographic regions. These factors have contributed to, and
are likely to continue to contribute to, oil and natural gas price volatility. A
substantial amount of the Company's operations are in United States markets
where, despite occasional upturns, the demand for the Company's well-servicing,
workover and production services has at times been adversely affected by periods
of weakness in oil and natural gas prices during the past decade. Since October
1997, the average prices of oil and natural gas have declined. Prolonged low oil
or natural gas prices would likely depress activity by producers and reduce the
demand for the Company's services. In addition, redeployment or reactivation of
equipment or new construction of equipment could adversely affect the Company's
rates and utilization levels, even in an environment of stronger oil and natural
gas prices and increased activity by producers.
INTERNATIONAL RISKS
The Company's foreign operations are subject to various risks associated
with doing business in foreign countries, such as the possibility of armed
conflict and civil disturbance, political instability, the instability of
foreign economies, currency fluctuations and devaluations, adverse tax policies
and governmental activities that may limit or disrupt markets, restrict payments
or the movement of funds or result in the deprivation of contract rights or the
expropriation of property. Additionally, the ability of the Company to compete
overseas may be adversely affected by foreign governmental regulations that
encourage or mandate the hiring of local contractors, or by regulations that
require foreign contractors to employ citizens of, or purchase supplies from, a
particular jurisdiction.
The Company is subject to taxation in many jurisdictions, and the final
determination of its tax liabilities involves the interpretation of the statutes
and requirements of various domestic and foreign taxing authorities. Foreign
income tax returns of foreign subsidiaries, unconsolidated affiliates and
related entities are routinely examined by foreign tax authorities and such
examinations may result in assessments of additional taxes and/or penalties.
RISKS OF FAILURE TO IDENTIFY OR SUCCESSFULLY INTEGRATE FUTURE ACQUISITION
TARGETS
A significant portion of the Company's growth has resulted from the
acquisition of other oilfield services businesses and assets. There can be no
assurance, however, that the Company will be able to continue to identify
attractive acquisition opportunities at reasonable prices, negotiate acceptable
acquisition terms, obtain financing for acquisitions on satisfactory terms or
successfully acquire identified targets. In addition, there can be no assurance
that the Company will successfully integrate the operations and assets of any
acquired business with its own or that the Company's management will be able to
manage effectively the increased size of the Company or operate a new service
line. Any inability on the part of the Company to integrate and manage acquired
businesses could have a material adverse effect on the Company's results of
operations and financial condition. As indicated above under "Substantial
Leverage," the ability of the Company to pursue acquisition opportunities may be
affected by limitations on its financing flexibility imposed by the Credit
Agreement and the Indenture. Moreover, there can be no assurance that the
competition for acquisition opportunities in the industry will not escalate,
thereby increasing the cost to the Company of making further acquisitions or
causing the Company to refrain from making acquisitions. Acquisitions may result
in increased depreciation and amortization expense, increased interest expense,
increased financial leverage or decreased operating income, any of which could
have a material adverse effect on the Company's operating results.
THE SEA MAR ACQUISITION
The Sea Mar Acquisition poses a number of risks that could adversely affect
the Company's operating results. In addition to the risks described under other
captions in "Risk Factors," these risks include:
Seasonality
The Company may be affected by seasonal risks with respect to Sea Mar's
operations. Utilization rates for support vessels typically have reached their
lowest levels in the first quarter, when offshore marine activity
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generally declines as oil and gas companies defer discretionary activity until
more favorable weather conditions are likely. Accordingly, the results of any
one quarter are not necessarily indicative of annual results or continuing
trends.
Age of Fleet
As of March 31, 1998, the average age of Sea Mar's vessels (based on the
date of construction) was approximately 17.4 years. The industry expectation is
that normally after a vessel has been in service in excess of 30 years, repair,
vessel certification and maintenance costs may become no longer economically
justifiable. There can be no assurance that Sea Mar will be able to maintain its
fleet by extending the economic life of existing vessels through major
refurbishment or by acquiring new or used vessels.
Risks of New Construction, Upgrade and Refurbishment Projects
The Company intends to make significant expenditures to construct new
vessels and to construct, upgrade and refurbish, supply vessels and related
equipment. These projects are subject to cost overruns inherent in large
construction and refurbishment projects, including shipyard availability,
shortages of materials or skilled labor, unforeseen engineering problems, work
stoppages, weather interruptions, unanticipated cost increases, nonavailability
of necessary equipment and inability to obtain any of the requisite permits or
approvals. Significant delays could also have a material adverse effect on the
Company's marketing plans for such vessels. In addition, there is no assurance
as to the rates new vessels will earn when placed in service. Although Sea Mar
has entered into term contracts for four of the ten new vessels that it has
under construction,these contracts are subject to a pending legal dispute.
Dependence on Key Personnel
Sea Mar's operations will be dependent in large part on the continued
employment of Mr. Al A. Gonsoulin as Sea Mar's Vice President and General
Manager. Mr. Gonsoulin was formerly the President and Chief Executive Officer of
Sea Mar and, in connection with the Sea Mar Acquisition, entered into a three-
year employment contract with the Company. The loss of Mr. Gonsoulin before the
end of this three-year period could adversely affect Sea Mar's operations.
Additional Risks
The Sea Mar Acquisition also involved the assumption of potential
liabilities, disclosed or undisclosed, associated with the Sea Mar business. In
addition, there is the risk that the Sea Mar operations will not be able to be
successfully integrated into the Company. There can be no assurance that such
operations will ultimately have a positive impact on the Company, its financial
condition or results of operations.
COMPETITION
Although the number of available rigs has substantially decreased over the
past ten years, the well-servicing, workover and drilling industry remains very
competitive. The number of rigs available for contracts continues to exceed
demand, resulting in keen price competition. Many contracts are awarded on a bid
basis, which further increases competition based on price. In all of the
Company's market areas, competitive factors also include the availability and
condition of equipment to meet both special and general customer needs; the
availability of trained personnel possessing the required specialized skills;
the overall quality of service and safety record; and domestically, the ability
to offer ancillary services such as fluid hauling, fluid storage tank rental and
salt water disposal.
In addition, the Company will face significant competition with respect to
the operations of Sea Mar. The marine support services industry is highly
competitive. Competitive factors in the marine support services industry include
(i) price, (ii) service, including the reputation of vessel operators and crews,
(iii) availability of vessels of the types and sizes needed by the customer and
(iv) quality of vessels and related equipment.
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OPERATING RISKS AND INSURANCE
The Company's operations involve workers conducting activities with and
around machinery and equipment in close proximity to highly flammable oil and
natural gas, and are subject to hazards inherent in the oil and natural gas
industry, including, without limitation, blowouts, fires, explosions and other
casualties. Incidents involving such hazards can cause personal injury or loss
of life, damage to or destruction of property, including equipment, oil and
natural gas production and producing formations and to the environment, and
suspension of operations. The frequency and severity of such incidents affect
the Company's operating costs and its relationship with customers, employees and
regulators, and any significant increase in the frequency or severity of such
incidents, or the general level of compensation awards with respect thereto,
could affect the Company's ability to obtain insurance and could have a material
adverse effect on the Company. Although the Company has generally been able to
obtain insurance on terms it considers to be reasonable, there can be no
assurance that insurance will continue to be available on reasonable terms.
The Company maintains insurance coverage of types and amounts that it
believes to be customary in the industry. The Company also endeavors to
negotiate contractual indemnification provisions in its contracts with customers
to cover risks which are customarily retained by the customer. It is possible,
however, that significant liabilities could arise that would not be covered, and
for which the applicable contract between the Company and its customer would not
provide indemnity protection to the Company for the particular loss involved.
Additionally, it is possible that liabilities could arise that would exceed
applicable policy limits. Liabilities for which the Company is not insured, or
which exceed the policy limits of applicable insurance, and for which the
Company is not otherwise contractually protected through indemnification by
customers, could have a material adverse effect on the Company.
The Company is also subject to operating and insurance risks with respect
to the operations of Sea Mar. Marine support vessels are subject to operating
risks such as catastrophic marine disasters, adverse weather conditions,
mechanical failure, collisions, oil and hazardous substance spills and
navigation errors. The occurrence of any of these events may result in damages
to or loss of Sea Mar's vessels and such vessels' tow or cargo or other property
and injury to passengers and personnel. Such occurrences may also result in a
significant increase in operating costs or liability to third parties. Sea Mar
maintains insurance coverage against certain of these risks, which management
considers to be customary in the industry. There can be no assurance, however,
that Sea Mar's existing insurance coverage can be renewed at commercially
reasonable rates or that such coverage will be adequate to cover future claims
that may arise.
POSSIBLE IMPACT OF ENVIRONMENTAL REGULATION AND CLAIMS AND
OTHER GOVERNMENTAL REGULATIONS
The Company's well-servicing, workover and production services operations
routinely involve the handling of significant amounts of waste materials, some
of which are classified as hazardous substances. The Company's operations and
facilities are subject to numerous state and federal environmental laws, rules
and regulations including, without limitation, laws concerning the containment
and disposal of hazardous substances, oil field waste and other waste materials,
the use of underground storage tanks and the use of underground injection wells.
Sea Mar's operations, like the Company's other operations, also are subject to
federal, state and local laws and regulations which control the discharge of
pollutants into the environment and which otherwise relate to environmental
protection. Sea Mar and the Company are also subject to other laws that regulate
the activities of offshore service vessels, require vessel owners and operators
to demonstrate financial and operational responsibility and provide for certain
limitations on the liability of vessel owners and operators. Failure to comply
with these laws, rules and regulations may result in civil and even criminal
actions against the Company.
Laws protecting the environment generally have become more stringent than
in the past and are expected to continue to do so. Environmental laws and
regulations typically impose "strict liability," which means that in some
situations the Company could be exposed to liability for cleanup costs and other
damages as a result of conduct of the Company that was lawful at the time it
occurred or conduct of, or conditions caused by, prior operators or other third
parties. Cleanup costs, natural resource damages and other damages arising as a
result
6
<PAGE> 11
of environmental laws, and costs associated with changes in environmental laws
and regulations, could be substantial and could have a material adverse effect
on the Company's financial condition. From time to time, claims have been made
and litigation has been brought against the Company under such laws.
Changes in federal and state environmental regulations may also negatively
impact oil and natural gas exploration and production companies, which in turn
could have a material adverse effect on the Company. For example, legislation
has been proposed from time to time in Congress which would reclassify oil and
natural gas production wastes as "hazardous wastes." If enacted, such
legislation could dramatically increase operating costs for domestic oil and
natural gas companies, and this could reduce the market for the Company's
services by making many wells and/or oilfields uneconomical to operate. To date,
such legislation has not made significant progress toward enactment.
With respect to Sea Mar's operations, the Company is affected by additional
government regulations. Under the Merchant Marine Act of 1920, as amended, if
persons other than U.S. citizens own in the aggregate in excess of 25% of the
Company's outstanding stock, Sea Mar's U.S. flagged vessels would lose the
privilege of engaging in the transportation of merchandise in the U.S. coastwise
trade. In addition, Sea Mar's operations are materially affected by federal,
state and local regulation, as well as certain international conventions and
private industry organizations. These regulations govern worker health and
safety and the manning, construction and operation of vessels. Private industry
organizations establish safety criteria and are authorized to investigate vessel
accidents and recommend approved safety standards. The failure to comply with
the requirements of any of these laws or the rules or regulations of these
agencies and organizations could have a material adverse effect on Sea Mar's
operations.
SELLING STOCKHOLDERS
This Prospectus is to be used in connection with the sale by the Selling
Stockholders of a total of up to 769,231 shares of Common Stock which constitute
the "Offered Securities". The Offered Securities to be sold by the Selling
Stockholders were issued to the Selling Stockholders prior to the date of this
Prospectus pursuant to the Sea Mar Stock Purchase Agreement. The Offered
Securities were issued in a transaction exempt from the registration
requirements of the Securities Act pursuant to Regulation D thereunder.
The following table sets forth the name of each Selling Stockholder and (i)
the number of shares of Common Stock owned by the Selling Stockholder as of the
effective date of the Registration Statement of which this Prospectus forms a
part, (ii) the maximum number of shares of Common Stock which may be offered for
the account of the Selling Stockholders under this Prospectus, and (iii) the
amount and percentage of Common Stock to be owned by the Selling Stockholders
after completion of this offering assuming the sale of all the Common Stock
which may be offered hereunder. The Selling Stockholders reserve the right to
reduce the number of shares of Common Stock offered for sale or to otherwise
decline to sell any or all of the Offered Securities registered hereunder. Each
of the Selling Stockholders named below was formerly a stockholder of Sea Mar
and acquired the Offered Securities as a result of the Sea Mar Acquisition.
Prior to the Sea Mar Acquisition, none of the Selling Stockholders had any
position, office or other material relationship with the Company or any of its
predecessors within the last three years. Since March 31, 1998 (the date of the
Sea Mar Acquisition), one of the Selling Stockholders, Al. A Gonsoulin has been
employed as the Vice-President and General Manager of Sea Mar. Prior to that
date he was President and Chief Executive Officer of Sea Mar. Gonsoulin
Enterprises, Inc. is controlled by Al A. Gonsoulin and he and members of his
family are its principal shareholders. At March 31, 1998, Al A. Gonsoulin owned
approximately 5.1% of the shares of Common Stock then outstanding and Gonsoulin
Enterprises, Inc. owned approximately 2.2% of the shares of Common Stock then
outstanding. Except as otherwise set forth below,
7
<PAGE> 12
none of the Selling Stockholders owns any shares of Common Stock other than the
Common Stock covered by this Prospectus as set forth opposite each such Selling
Stockholder's name.
<TABLE>
<CAPTION>
COMMON STOCK OWNED
MAXIMUM NUMBER AFTER THE OFFERING
NUMBER OF SHARES OF SHARES WHICH ------------------------------
OWNED PRIOR TO MAY BE SOLD NUMBER OF PERCENTAGE OF
SELLING STOCKHOLDERS OFFERING HEREUNDER SHARES SHARES OUTSTANDING
-------------------- ---------------- ----------------- --------- ------------------
<S> <C> <C> <C> <C>
Al A. Gonsoulin................. 1,076,924 538,462 538,462 2.6
Gonsoulin Enterprises, Inc...... 461,539 230,769 230,769 1.1
Total...................... 1,538,462 769,231 769,231 3.7
</TABLE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Offered
Securities by the Selling Stockholders.
PLAN OF DISTRIBUTION
The Offered Securities were issued to the Selling Stockholders in
connection with the Sea Mar Acquisition. In accordance with the Sea Mar Stock
Purchase Agreement, subject to certain limitations, the Company agreed to
register the Offered Securities for resale under the Securities Act at the
Company's expense. The Company must keep the Registration Statement, of which
this Prospectus is a part, effective at least until the first to occur of (i)
the sale of all the Offered Securities pursuant to such Registration Statement
or (ii) 12 months following the closing of the Sea Mar Acquisition (the
"Closing").
The Common Stock is presently listed for trading on the Nasdaq Market. The
sale of the Offered Securities is not being underwritten. The Offered Securities
may be sold from time to time by the Selling Stockholders on the Nasdaq Market,
at market prices then prevailing. The Offered Securities may also be sold by the
Selling Stockholders in (a) ordinary brokerage transactions and in transactions
in which brokers solicit purchasers, (b) sales to a broker or dealer as a
principal and resales by such broker or dealer for its own account pursuant to
this Prospectus or (c) in a combination of such methods of sale, at market
prices and other terms prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sales of Offered Securities, the Selling
Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, the broker-dealers may engage in short sales
of shares of Common Stock registered hereunder in the course of hedging the
positions they assume with the Selling Stockholders. The Selling Stockholders
may also sell shares of Common Stock short and redeliver the shares to close out
such short positions. The Selling Stockholders may also enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares of Common Stock registered hereunder, which the
broker-dealer may resell or otherwise transfer pursuant to this Prospectus.
Brokers, dealers and agents who participate in the sale of Offered
Securities may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or purchasers of
the Offered Securities for whom they may act as agent. The Selling Stockholders
and any brokers, dealers or agents that participate in the distribution of the
Offered Securities might be deemed to be "underwriters" within the meaning of
the Securities Act, and any profit on the sale of such Offered Securities and
any discounts, commissions or concessions received by any such brokers, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act. Pursuant to the provisions of the Sea Mar Stock Purchase
Agreement, the Selling Stockholders have agreed to pay their costs and expenses
of selling the Offered Securities, including commissions and discounts of
underwriters, brokers, dealers or agents, and the Company has agreed to pay the
costs and expenses incident to the registration and the qualification of the
Offered Securities, including registration and filing fees. In addition,
pursuant the Sea Mar Stock Purchase Agreement, the Company and the Selling
Stockholders have agreed to indemnify each other for certain liabilities arising
from violations of the securities laws in connection with the registration and
sale of the Offered Securities.
8
<PAGE> 13
The Company will inform the Selling Stockholders that the anti-manipulation
rules under Regulation M under the Securities and Exchange Act of 1934 may apply
to their sales in the market and will furnish the Selling Stockholders upon
request of a copy of these Rules. The Company will also inform the Selling
Stockholders of the need for delivery of copies of this Prospectus in connection
with the sale of any of the Offered Securities registered hereunder.
DESCRIPTION OF CAPITAL STOCK
As of March 31, 1998 the authorized capital stock of the Company consists
of (i) 40,000,000 shares of Common Stock, no par value, of which, 21,030,293
shares were issued and outstanding, 1,664,654 shares were reserved for issuance
under the Company's stock option and stock incentive plans and 6,430,235 shares
were reserved for issuance upon exercise of rights pursuant to the Shareholder's
Rights Plan and (ii) 1,000 shares of Preferred Stock, no par value, none of
which is outstanding as of the date of this Prospectus. All of the outstanding
shares of Common Stock including the Offered Securities are duly and validly
issued, fully paid and nonassessable. The description below is a summary of and
is qualified in its entirety by the provisions of the Company's Articles of
Incorporation, as amended, a copy of which was filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 1996.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all matters
on which shareholders are entitled or permitted to vote, including the election
of directors. Directors are elected by a plurality of the votes cast. Except for
extraordinary measures, all other matters may be decided by the affirmative vote
of the holders of a majority of the shares present or represented by proxy and
entitled to vote at the Annual Meeting of Shareholders. Each holder of Common
Stock is entitled to participate ratably in any distribution of assets to
shareholders in the event of liquidation, dissolution or winding up of the
Company, subject in all cases to any prior rights of outstanding shares, if any,
of Preferred Stock.
Holders of Common Stock do not have any cumulative voting, redemptive or
conversion rights and have no preemptive rights to subscribe for, purchase or
receive any class of shares or securities of the Company. Holders of Common
Stock also have no fixed dividend rights. Dividends may be declared by the Board
of Directors at its discretion depending upon the earnings, capital
requirements, financial condition of the Company and other relevant factors.
However, the Indenture and the Credit Agreement contain certain restrictions on
the payment of dividends by the Company.
PREFERRED STOCK
The Preferred Stock has preference equal to its stated value of $1.00 per
share over the Common Stock as to the distribution of assets on liquidation,
dissolution or winding up of the affairs of the Company. The Preferred Stock
does not have dividend rights and, except to the extent described below or
provided by Texas law, does not have voting rights. Holders of a majority of the
Preferred Stock must approve any amendment to the Articles of Incorporation of
the Company that would (i) authorize or create, or increase the authorized
amount of, any class of stock which is entitled to voting rights inconsistent
with any outstanding Preferred Stock, (ii) increase the authorized number of
shares of Preferred Stock, (iii) change any of the rights and preferences of any
outstanding Preferred Stock or (iv) materially alter any other provisions of any
outstanding Preferred Stock or the Common Stock. No shares of Preferred Stock
are currently outstanding.
LIMITATION ON LIABILITY OF DIRECTORS
The Company's Articles of Incorporation limit the personal liability of
directors to the fullest extent permitted by Texas law. Specifically, a director
of the Company will not be personally liable to the Company or its shareholders
for monetary damages for an act or omission in the director's capacity as a
director, except for liability: (i) for a breach of the director's duty of
loyalty to the Company or its shareholders, (ii) for an act or omission not in
good faith or that involves intentional misconduct or a knowing violation of the
law, (iii) for a transaction from which the director derived an improper
personal benefit, whether or not the benefit resulted
9
<PAGE> 14
from an action taken within the scope of the director's office, or (iv) an act
or omission for which the liability of the director is expressly provided by an
applicable statute, such as a corporation's unlawful stock repurchase or payment
of a dividend. This provision is intended to afford directors additional
protection from, and limit their potential liability for, suits alleging a
breach of the duty of care by a director. The Company believes that this
provision will assist in its securing and retaining the services of directors
who are not employees of the Company. As a result of the inclusion of this
provision, shareholders may be unable to recover monetary damages against
directors for actions taken by them that constitute negligence or gross
negligence or that are in violation of their fiduciary duties, although it may
be possible to obtain injunctive or other equitable relief with respect to such
actions. If equitable remedies are found not to be available to shareholders for
any particular case, shareholders may not have an effective remedy against the
challenged conduct.
PROVISIONS HAVING ANTI-TAKEOVER EFFECT
Provisions contained in the Company's Articles of Incorporation and Bylaws
that may be deemed, whether or not intended for that purpose, to be
anti-takeover in nature are (i) a provision in the Company's Articles of
Incorporation prohibiting cumulative voting for the election of directors; (ii)
a provision in the Company's Bylaws providing for the existence of a classified
Board of Directors divided into three classes, with the members of each class
serving for staggered periods of three years; (iii) a provision in the Articles
of Incorporation reserving to the directors the power to amend the Bylaws of the
Company and a Bylaw provision requiring a two-thirds vote of the Board to
authorize certain such amendments; and (iv) provisions in the Company's Bylaws
providing that a director may be removed only for cause and only by the
affirmative vote of at least two-thirds of the shares entitled to vote with
respect to the election of directors. Additionally, the Company has an existing
shareholder rights plan providing special rights for the acquisition of Common
Stock and other features designed to deter unfair or abusive takeover attempts,
to prevent a person or group from gaining control of the Company without
offering fair value to all shareholders and to deter abusive takeover tactics
which are not in the best interest of shareholders.
The Company also has change in control agreements with each of its
executive officers (the "Agreements") that set forth certain benefits that the
Company will provide in the event their employment is terminated subsequent to a
change in control of the Company (as defined in the Agreements). The Agreements
continue in effect until terminated by the Company upon specified notice and
continue for three years following a change in control of the Company. The
Agreements each provide that if the officer is terminated or if the officer
elects to terminate employment under certain circumstances within three years
following a change in control of the Company, the officer shall be entitled to a
lump sum severance payment equal to (i) three times the officer's annual base
salary (but not in excess of the aggregate base salary that could be earned up
to the officer's normal retirement date), (ii) an amount equal to the largest
bonus paid to him during the preceding three years, prorated for the current
year, and (iii) the value over exercise price of unexercised stock options. In
addition, the officer shall be entitled to a three-year continuation of certain
employee benefits, two additional years of service credit under the Company's
retirement program, and reimbursement of certain legal fees, expenses, and any
applicable excise taxes.
The Company's Indenture contains a change in control provision which
provides that, upon the occurrence of a change in control in the Company, the
Company will be required to purchase all of the outstanding Notes at 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase. The Company's Credit Agreement also has a change in control
provision which provides, among other things, that if any event of default
should occur after a change in control in the Company, then the Credit Agreement
may terminate and any outstanding borrowings may become immediately due and
payable.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is the First National
Bank of Boston, Boston, Massachusetts.
10
<PAGE> 15
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Covington & Burling, 1201 Pennsylvania Avenue,
N.W. Washington, D.C. 20044.
EXPERTS
The consolidated financial statements of the Company and related financial
statement schedule, as of December 31, 1997 and 1996 and for each of the three
years in the period ended December 31, 1997, incorporated herein by reference to
the Company's annual report on Form 10-K (File No. 0-18437) have been so
incorporated in reliance on the report of Deloitte & Touche LLP, independent
auditors, given upon authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Sea Mar as of December 31, 1997
and 1996 and for each of the two years in the period ended December 31, 1997,
incorporated herein by reference to the Company's Current Report on Form 8-K
dated March 9, 1998 (File No. 0-18437) have been so incorporated in reliance on
the report of Arthur Andersen LLP, independent auditors, given upon authority of
said firm as experts in auditing and accounting.
11
<PAGE> 16
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF ANY OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AND ANY SALE MADE HEREUNDER
SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT
BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. ii
Incorporation of Certain Documents by
Reference........................... ii
Disclosure Regarding Forward Looking
Information......................... iii
The Company........................... 1
Recent Developments................... 2
Risk Factors.......................... 2
Selling Stockholders.................. 7
Use of Proceeds....................... 8
Plan of Distribution.................. 8
Description of Capital Stock.......... 9
Transfer Agent and Registrar.......... 10
Legal Matters......................... 11
Experts............................... 11
</TABLE>
======================================================
======================================================
769,231 SHARES
POOL ENERGY
SERVICES CO.
COMMON STOCK
-----------------
PROSPECTUS
-----------------
, 1998
======================================================
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by the
Company in connection with the offering described in this Registration
Statement.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 5,755
Nasdaq Listing Fee.......................................... 17,500
Printing expenses(*)........................................ 10,000
Accounting fees and expenses(*)............................. 20,000
Legal fees and expenses(*).................................. 20,000
Miscellaneous expenses(*)................................... 10,000
-------
Total(*).......................................... $83,255
=======
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Section of the Prospectus entitled "Limitation on Liability of
Directors" is incorporated herein by reference.
Pursuant to Article 2.02-1 of the Texas Business Corporation Act, Article
XIII of the bylaws of the Company authorizes the Company to indemnify any person
who (1) is or was a director, officer, employee or agent of the Company or (2)
while a director, officer, employee or agent of the Company, or was serving at
the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, to the fullest extent that a
corporation may or is required to grant indemnification to a director under the
Texas Business Corporation Act. The Company may indemnify any person to such
further extent as permitted by law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
4.1 -- Articles of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1996, Commission File No. 0-18437)
4.2 -- Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2.1 of the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1994, Commission File No. 0-18437)
4.3 -- Rights Agreement dated as of June 7, 1994 between Pool
Energy Services Co. and The First National Bank of
Boston, as Rights Agent, which includes as Exhibit A the
form of Rights Certificate and as Exhibit B the form of
Summary of Rights to Purchase Shares (incorporated by
reference to Exhibit 1 to the Company's Current Report on
Form 8-K dated June 7, 1995, Commission File No. 0-18473)
5.1(*) -- Opinion of Covington & Burling
23.1(*) -- Consent of Deloitte & Touche LLP
23.2(*) -- Consent of Arthur Andersen LLP
23.3 -- Consent of Covington & Burling (contained in their
opinion filed as Exhibit 5.1)
24.1(*) -- Powers of Attorney
</TABLE>
- ---------------
(*) Previously filed
<PAGE> 18
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment hereof) 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) of the Securities Act if, in
the aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing 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 Houston, State of Texas, on May 20, 1998.
POOL ENERGY SERVICES CO.
By: /s/ J.T. JONGEBLOED
----------------------------------
J.T. Jongebloed
Chairman, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 20th day of May 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ J.T. JONGEBLOED Chairman, President and Chief Executive
- ----------------------------------------------------- Officer
J.T. Jongebloed
/s/ E.J. SPILLARD Senior Vice President, Finance (principal
- ----------------------------------------------------- financial officer)
E.J. Spillard
/s/ B.G. GORDON Controller (principal accounting officer)
- -----------------------------------------------------
B.G. Gordon
/s/ WILLIAM H. MOBLEY* Director
- -----------------------------------------------------
William H. Mobley
/s/ JOSEPH R. MUSOLINO* Director
- -----------------------------------------------------
Joseph R. Musolino
/s/ JAMES L. PAYNE* Director
- -----------------------------------------------------
James L. Payne
/s/ DONALD D. SYKORA* Director
- -----------------------------------------------------
Donald D. Sykora
</TABLE>
*By: /s/ J.T. JONGEBLOED
-------------------------------
J.T. Jongebloed
Attorney-in-Fact
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
4.1 -- Articles of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1996, Commission File No. 0-18437)
4.2 -- Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2.1 of the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1994, Commission File No. 0-18437)
4.3 -- Rights Agreement dated as of June 7, 1994 between Pool
Energy Services Co. and The First National Bank of
Boston, as Rights Agent, which includes as Exhibit A the
form of Rights Certificate and as Exhibit B the form of
Summary of Rights to Purchase Shares (incorporated by
reference to Exhibit 1 to the Company's Current Report on
Form 8-K dated June 7, 1995, Commission File No. 0-18473)
5.1(*) -- Opinion of Covington & Burling
23.1(*) -- Consent of Deloitte & Touche LLP
23.2(*) -- Consent of Arthur Andersen LLP
23.3 -- Consent of Covington & Burling (contained in their
opinion filed as Exhibit 5.1)
24.1(*) -- Powers of Attorney
</TABLE>
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(*) Previously filed
